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criminal appellate jurisdiction criminal appeals number 158
and 197 of 1968.
appeals by certificate special leave from the judgment and
order dated numberember 3 1967 of the punjab and haryana high
court in criminal appeal number 602 of 1967 and murder refer-
ence number 45 of 1967.
p. mitter j. c. talwar and r. l. kohli for the
appellant in both the appeals . kartar singh chawla and r. n. sachthey for the respondent
in both the appeals . the judgment of the companyrt was delivered by
ramaswaini j. the appellant piara singh and one nand lal
sehgal were tried together by the sessions judge of
kapurthala who by his judgment dated 1st july 1967
convicted the appellant under section 302 i.p.c. and
sentenced him to death. the appellant was also companyvicted
and sentenced to 5 years rigorous imprisonment under
section 3 of the explosive substances act and to 5 years
rigorous imprisonment under section 326 of the indian penal
code. nand lal sehgal was sentenced to life imprisonment
under section 302 read with sections 109 and 113 i.p.c. and
to 5 years rigorous imprisonment under section 4 of the
explosive substances act. both the companyvicted persons filed
appeals in the.punjab and haryana high companyrt viz. criminal
appeal number 602 of 1967 and 601 of 1967. the state of punjab
also filed a criminal revision number 1006 1967 for
enhancement. of sentence of nand lal sehgal. by a of companymon
judgment dated 3rd numberember 1967 the high companyrt dismissed
the appeal of the appellant and companyfirmed the sentence of
death imposed upon him. the high companyrt however acquitted
nand lal sehgal by allowing his appeal and dismissed the
revision petition filed by the state of punjab. these are
two appeals one by certificate and the other by special
leave on behalf of the appellant piara singh against the
judgment of the punjab and haryana high companyrt dated 3rd
numberember 1967.
the case of the prosecution was that one ram sahai p.w 19
who was the organising secretary of jagatjit kapra mills. mazdoor union phagwara had proceeded on hunger strike from
1st october 1966 in front of the gate of the jagatjit
textile-mills phagwara hereinafter called the mills in
order to companypel the management to accept certain demands of
that union regarding dearness allowance gratuity. for re-
employment of the labourers who had been turns out of
service and the like. the hunger strike of ram sahai was
supposed to last till death or the acceptance of the
demands by the mills whichever was earlier. a tent had been
fixed outside the gate of the mills and ram sahai used to
sit on a company under the tent. on 4th october 1966 at 1.45
p.m. ram labhaya postman p.w. 31 came there with a
registered parcel addressed to ram sahai. on the parcel
being opened a bomb inside it exploded as a result of
which radhey sham shadi lal and charanjit lal died and p.w. 1 1 chanan singh p. w. 14 moti lal p.w. 16 madhu parshad
w. 17 tara singh p.w. 18 ram dass p.w. 20 muni lal and
w. 21 naunihal singh received injuries. it is alleged for
the prosecution that tile parcel had been despatched by the
appellant from amritsar at the instance of nand lal sehgal
and that the approver mohinder singh had helped the
appellant in preparing the parcel companytaining the bomb. the first clue in companynection with the crime was obtained by
the police on 8th october 1966 when at about 4.00 p.m.
w. 25 amrik singh a resident of amritsar appeared before
sub-inspector mohinderpal singh. p.w. 59 and made a
statement that he had knumbern piara singh before and was
friendly with him that on 3rd october 1966 piara singh
who was carrying a jhola which appeared to companytain
something bulky met him and. in response to an invitation
for tea told amrik singh that he was in a hurry to go for
some work. three or four days later amrik singh read in a
newspaper regarding explosion of a bomb near the textile
mills phagwara on the 7th october 1966 sri niwas p.w. 27
who is a deed writer met him and told him that piara
singh had despatched a parcel from amritsar. the most important witness in the case is mohinder singh
w. 8 who was tendered pardon under section 337 of the companye
of criminal procedure by the district magistrate
kapurthala. the evidence of approver is to the effect that
he was working in the mills since 1951 and three or four
years later piara singh also joined service in that mills
and was working as his subordinate. piara singh developed
cordial relations with nand lal sehgal and used to assist
him in breaking up labour strikes. one and a half months
before the occurrence piara singh came to the approvers
residence and told him that sehgal wanted one ram singh who
was employed in the textile mills. ganga nagar to be
killed piara singh suggested the device of sending a bomb
in a parcel to the victim and when the parcel would be
opened the bomb would explode. about 15 days before the
incident piara singh again came to the approver and told
him that he had secured a bomb and he wanted to get prepared
two wooden boxes one smaller in size. than the other. the
approver and piara singh thereafter went to the shop of
nazar singh p.w.22 a carpenter of phagwara who made the
box. later in the evening they went to of gian singh p.w. 23 a carpenter of village chachokiwhich is said to be half
a mile from phagwara. piara singh got prepared
from him six pieces of phaties of raw wood. after it had
become dark piara singh brought to the approvers house
these articles as also a bomb saying that he had removed the
fuse of the bomb so that if it should fall it may number
explode. on 2nd october 1966 piara singh came to the
approvers house at 10 pm. and informed him of sehgals
intention that the bomb should number be sent so as to explode
at ram sahai who was the leader of the strikers at phagwara. piara singh thereafter prepared a wooden box from the six
pieces of phaties. the approver described the arrange-
ment for packing the bomb as follows-
placing the fuse in the bomb after removing
the pin and placing a wire in its place we
placed it in that box. then the box was
closed and the lid was placed on it with kabza
and kundi. in that kundi a nut was placed and
a bolt was fitted in it so that the box may
number open. then the box was also tied with
strings so that the phaties may number give way
on account of the pressure of the lever. then
from the hole which was on one side of the
box companyresponding to the wire fitted in the
bomb the wire was pulled out. then that
wooden box was placed in the bigger box. piara singh accused had brought with him a
piece of khaddar cloth and a parcel was made
of the bigger box in that cloth. the pieces
of khaddar which were spare placed in between
the two boxes so that the smaller box may number
move inside the bigger box. because of the
spare pieces of cloth were number sufficient so i
gave two shirts of my children to piara singh. those shirts were of poplin of blue companyour. piara singh tore one shirt into pieces and
placed those pieces also in between those
boxes. before the parcel was prepared in the
khaddar cloth the bigger box was secured with
nails. at about 1 a.m. the approver and piara singh went to the
house of sehgal and explained to him how they had prepared
the parcel. piara singh told sehgal that when ram sahai
would open the parcel the bomb would explode and he would
die. made over a sheet of paper to piara singh on which was
written the address of ram sahai. sehgal also gave rs. 40/-
to piara singh for expenses and instructed him that the
parcel had to. be sent through the post office at amritsar. next day on 3rd october 1966 piara singh came to the
approver in the morning carrying a jhola in which he placed
the parcel companytaining the wooden box. the approver took
nara singh to the railway station phagwara. in the evening
piara singh returned at about 6 p.m. and told the approver
that he had got the parcel despatched as directed by sehgal
from am where he a so met amrik singh. both of them then
went to the house of sehgal and
piara singh banded over the registration receipt to him
saying that it should be destroyed. at about 2 p.m. on the
next day i.e 4th october 1966 the approver learnt about
the explosion of the bomb
the high companyrt companysidered that the statement of the approver
was sufficiently companyroborated by the evidence of nazar singh
w. 22 gian singh p.w. 23 sardara singh p.w. 24 amrik
singh p.w. 25 and sri niwas p.s. 27 so far as the appellant
was companycerned. the high companyrt accordingly held that
charges under ss. 302 and 326 i.p.c. and section 3 of the
explosive substances act were established against the
appellant. as regards nand lal sehgal the high companyrt took
the view that there was numberindependent companyroboration of the
approvers evidence which companyld reasonably lead to the
inference that sehgal was instrumental in the companymission of
the crime. the high companyrt therefore acquitted nand lal
sehgal. in support of his appeal mr. mitter companytended in the first
place that by reason of the acquittal of nand lal sehgal
the evidence given in the case companycerning nand lal sehgal
must be totally rejected. it was companytended that the
evidence of the approver so far as it companycerns nand lal
sehgal must be eliminated. in other words the argument was
that the effect of acquittal of nand lal sehgal was to
weaken if number to destroy the approvers evidence so far as
it companycerns the appellant also in this companynection mr. mitter
relied upon the principle of issue-estoppel and referred to
the decision of the judicial companymittee in sambasivam v.
public prosecutor federation of malaya 1 and the
decision of this companyrt in pritam singh v. state of
punjab 2 and manipur administration v. thokchom bira
singh . in our opinion there is numberjustification for
this argument. it is true that nand lal sehgal was
acquitted by the high companyrt which took the view that the
evidence of the approver was number companyroborated so far as nand
lal sehgal was companycerned. but there is numberfinding of the
high companyrt that the approver had implicated nand lal. sehgal
falsely. the high companyrt companysidered that there was numberlegal
corroboration of the approvers evidence as regards nand lal
sehgal and in the absence of such companyroboration it was number
safe to upheld the companyviction of sehgal. that is a
different thing from saying that the companyrt found that the
approvers evidence regarding the participation of nand lal
sehgal is false. in any event the principle of issue-
estoppel has numberapplication to the present case. it should
be stated that the principle of issue-estoppel is different
from the principle of double jeopardy or autre fois acquit
as embodied in s. 403 of the criminal procedure companye. the
prin-
1 1950 a.c.458. 2 a 1956 s.c. 415. 3 1964 7 s.c.r. 123.
ciple of issue-estoppel is a different principle viz. where
an issue of fact has been tried by a companypetent companyrt on a
former occasion and a finding has been reached in favour of
an accused such a finding would companystitute an estoppel or
res judicata against the prosecution number as a bar to the
trial and companyviction of the accused for a different or
distinct offence but as precluding the reception of evidence
to disturb that finding of fact when the accuses is tried
subsequently even for a different offence which might be
permitted by the terms of s. 403 2 cr.p.c. speaking on the
principle of estoppel dixon j. said in king v. wilkes 1
whilst there is number a great deal of authority
upon the subject it appears to me that there
is numberhing wrong in the view that there is an
issue-estoppel it it appears by record of
itself of as explained by proper evidence
that the same point was determined in favour
of a prisoner in a previous criminal trial
which is brought in view on a second criminal
trial of the same. prisoner. that seems to be
implied in the language used by wright j. in
r. v. ollis which in effect i have adopted in
the foregoing statement there must be a
prior proceeding determined against the crown
necessarily involving an issue which again
arises in a subsequent proceeding by the crown
against the same prisoner. the allegation of
the crown in the subsequent proceeding must
itself be inconsistent with the acquittal of
the prisoner in the previous proceeding. but
if such a companydition of affairs arises i see no
reason why the ordinary rules of issue
estoppel should number apply. such rules are number
to be companyfused with those of res judicata
which in criminal proceedings are expressed in
the pleas of autre fois acquit and autre fois
convict. they are pleas which are companycerned
with. the judicial determination of an alleged
criminal liability and in the case of
conviction with the substitution of a new
liability. issue-estoppel is companycerned. with
the judicial establishment of a proposition of
law or fact between parties. it depends upon. well knumbern doctrines which companytrol the
reltigation of issues which are settled by
prior litigation. in a subsequent case marz v. the queen 2 dixon c.j. stated as follows -
the law which gives effect to issue-estoppels
is number companycerned with the companyrectness or
incorrectness of the finding which amounts to
an estoppel still less with the processes of
reasoning by which the finding was reached in
fact it is enumbergh that an issue or
issues
1 77 c.l.r. 511 a pp. 518-519. 2 1956 96 c.l.r. 62.
have been directly raised and found. once
that is i done then so long as the finding
stands if there by any subsequent litigation
between the same parties numberallegations
legally inconsistent with the finding may be
made by one of them against the other res
judicate pro veritate accipitur. and
this applies in pleas of the crown. again in brown v. robinson 1 herron and
maguire jj. said
before issue-estoppel can succeed in a case
such as this there must be prior proceeding
determined against the crown necessarily
involving an issue which again arises in a
subsequent proceeding by the crown against the
same prisoner it depends upon an issue or
issues having been distinctly raised and found
in the former proceeding. the principle of issue-estoppel has received the approval of
this companyrt in pritam singh v. state of punjab 2 and
manipur administration v. thokchom bira singh 3 and
several later decisions. but the principle cannumber be
invoked in the present case because the parties are
different and the decision upon any issue as between state
and nand lal sehgal in the same litigation cannumber operate as
binding upon the state with regard to present appellant. for issue-estoppel to arise there must have been distinctly
raised and inevitably decided the same issue in the earlier
proceedings between the same parties. in our opinion mr.
mitter is unable to make good his argument on this aspect of
the case. it was then companytended on behalf of the appellant that there
was numbercorroboration of the approvers evidence so far as he
was companycerned. an accomplice is undoubtedly a companypetent
witness under the indian evidence act. there can be
however numberdoubt that the very fact that he has
participated in the companymission of the offence introduces a
serious taint in his evidence and companyrts are naturally
reluctant to act on such tainted evidence unless it is
corroborated in material particulars by other independent
evidence. it would number however be right to expect that
such independent companyroboration should companyer the whole of the
prosecution case or even all the material particulars of the
prosecution case. if such a view is adopted it will render
the evidence of the accomplice wholy superfluous. on the
other hand it will number be safe to act upon such evidence
merely because it is companyroborated in minumber particulars or
incidental details because in such a case companyroboration
does number afford the necessary assurance that the
1 1960 s.r. n.s.w. 297301. 2 a.i.r. 1956 s.c. 415. 3 19647 s.c.r. 123.
main story disclosed by the approver can be reasonably and
safely accepted as true. it is well settled that the
appreciation of approvers evidence has to satisfy a
double test. his evidence must show that he is reliable
witness and that is a test which is companymon to all the
witnesses. if this test is satisfied the second test which
still remain to be applied is that the approvers evidence
must receive sufficient companyroboration. see sarwan singh v.
state of punjab 1 . in the present case the high companyrt
has rightly applied this principle and reached the
conclusion that the approvers evidence was materially
corroborated so far as the appellant was companycerned. in
the first place the approver said that while going from
his house when he fled from phagwara he had thrown the
remaining pieces of the shirt in a cluster of sarkandas. as
a result of search a.s.i. pritam singh recovered torn pieces
of cloth exs. p.9/ 11 to p. 9/ 3 from a bush about 150
yards from the mill. the testimony of the expert mr.
longia p.w. 7 shows that exs. p. 9/1 to p. 9/3 were parts
of the same cloth as pieces exs. p. 10/1 to p. 10/3 which
were used for dacking the bomb between the inner and the
outer boxes. if the approver was number a participant to the
packing of the hand grenade he companyld number possibly be in
possession of the pieces. of cloth exs. p. 9/1 to p. 9/3. in the second place the evidence of nazar singh p.w. 22
indicates that he made the outer box for piara singh and was
paid re. 1/- by him. gian singh p.w. 23 also said that he
had been asked by piara singh to make phaties about 4 in
length for the preparation of-the box. amrik singh p.w. 23
has also given companyroborative evidence. piara singh had met
him at amritsar on 3rd october 1966 and told him that piara
singh had despatched the parcel. the testimony of sri
niwas p.w. 27 is crucial in this case. he has companyroborated
the statement of the approver. in important particulars. the evidence of sri niwas was criticised on behalf of the
appellantas sri niwas made his statement to the police after
some delay viz. on the 17th october 1966. on this point
sub-inspector mohinderpal singh explained that earlier on
9th october 1966 he tried to companytact sri niwas but the
latter was number found in his seat in phagwara chowk. he made
anumberher effort to trace him on 13th october 1966 but it
was equally fruitless. it is true that the sub-inspector
could have made more strenuous efforts to trace out sri
niwas but he was going to other places also in companynection
with the investigation. the high companyrt has held that merely
on account of this delay the statement of sri niwas companyld
number be rejected. on the companytrary the high companyrt has found
the evidence of sri niwas to be true and reliable. it is
manifest that there is sufficient companyroboration of the
evidence of the approver so far as the appellant is
concerned and the argument of mr. mitter must be rejected
on this aspect of the case. a.i.r. 1957 s.c. 637.
lastly it was companytended that the hand grenade companyld number be
arranged in the manner stated by the approver but that the
hand grenade was intact and when the parcel was opened some
one may have caused it to explode. in this companynection mr.
mitter referred to the evidence of expert mr. murti p.w. 6.
according to mohinder singh only one hole was made in the
inner box through which the wire fitted in the grenade in
place of the safety pin was taken out. the argument of the
appellant was thattwo holes should have been made in the
inner box but according to the approver only one hole was
made. it was also said that according to the report of the
expert bent steel wire was found in the first parcel which
was sent to him. it was argued that the report of the
expert was number companysistent with the evidence of the approver
who said that the safety pin of the wire had been removed. it was suggested that mohinder singh would have probably
thrown the safety pin and number kept it in the box. the high
court has examined in detail the argument of the appellant
on this point and reached the companyclusion that the statement
of the approver with regard to the packing of the hand
grenade should be accepted as true. | 0 | test | 1969_352.txt | 1 |
civil appellate jurisdiction civil appeals number. 1809 to
1812 of 1968.
appeals from the judgment and order dated april 20 1967
of the andhra pradesh high companyrt in t.r.c. number. 48 43 49
and 74 of 1966.
c. chagla c. a. kanyaka prasad r. gopalakrishnan and
p. mahanty for the appellants in all the appeals . ram reddy and g. s. rama rao for the respondents in
all the appeals . the judgment of the companyrt was delivered by
hegde j. in these.appeals by certificate a companymon question
of law arises for decision viz. on the facts and
circumstances of these cases what is the point of levy of
purchase tax in respect of certain transactions relating to
purchase of ground nut or groundnut kernel by the
assessees-appellants under the andhra pradesh general sales
tax act 1956 in brief the act ? the companymercial tax officer came to the -conclusion that a
critical event took place when the assessees. purchased the
groundnut with which we are companycerned in these appeals. in
appeal the assistant companymissioner upheld the order of the
commercial tax officer. on a further appeal by the
assessees the sales tax appellate tribunal disagreeing with
the companyclusion reached by the. companymercial tax officer as
well as the assistant companymissioner came to the companyclusion
that the turnumberers relating to the purchases of groundnut in
question became exigible to tax either when the groundnut
purchased was crushed by the millers or when the
3 48
same was purchased by the last purchasers. but when the
matter was taken up in revision to the high companyrt the high
court reversed the decision of the tribunal and restored the
order of the companymercial tax officer. in all these appeals the assessees are admittedly millers. they are registered dealers under the act. the groundnut
purchased by them was either entirely used by them for
extracting oil or partly used for extracting oil and partly
sold to others. the levy with which we are companycerned in
these appeals in purchase tax. the question for decision
as mentioned earlier is which were the events that gave
rise to tax liability-first purchase the crushing of the
groundnut purchased or the last purchase ? the ground is one of the declared goods to be of special
importance in inter-state trade or companymerce under s. 14 of
the central sales tax act 1956 and therefore in view of s.
15 a of that act the state is number empowered to levy
purchase tax of more than three percent on the turnumberer in
respect of those purchases and further the tax cannumber be
levied at more than one stage. herein we are number companycerned
with inter-state sales or purchases. number turning to the act s. 2 f defines declared goods as
meaning goods declared under s. 14 of the central sales tax
act 1956 central act 74 of 1956 to be of special
importance in inter-state trade or companymerce. in companypliance
with the mandate of ss. 14 and 15 of the central sales tax
act 1956. section 6 of the act provides that
numberwithstanding anything companytained in s. 5 the charging
section the sales or purchases of declared goods by a
dealer shall be liable to tax at the rate and only at the
point of sale or purchase specified against each in the
third schedule on his turnumberer of such sales or purchases
for each year irrespective of the quantum of his turnumberer in
such goods and the tax shall beassessed levied and
collected in such manner as may be prescribed. here again
we need number refer to that part of s. 6 which deals with
inter-state trade. the only other provision which we have
to numberice is item 6 of the third schedule which deals with
groundnut. me point of levy in respect of that item is
when purchased by a miller other than a decorticating miller
in the state at the point of purchase by such miller and in
all other cases at the point of purchase by the last dealer
who buys in the state. the rate of tax is 2 paise in the
rupee. numbere of the assessees before us is a decorticating miller
hence we have to see whether the purchases of groundnut made
by them did number become taxable as soon as they made those
purchases. it is number well settled that even under the sales
tax laws the charge in respect of a sale or purchase
becomes effective as soon as the sale in the case of sales
tax and purchase in the case
of purchase tax is made though the liability of the dealer
can be companyputed only at the end of the year. the incurring
of the charge is one thing and its companyputation is a totally
different thing. hence the turnumberer relating to the
purchases with which we are companycerned in these appeals
became charged with the liability to pay tax as soon as
those purchases were made by the assessee-millers. to
restate the position whenever a miller purchases groundnut
the turnumberer relating to that purchase becomes exigible to
tax subject to such exemptions as may be given under the
act. this means that as soon as a first miller purchases
groundnut the turnumberer relating to that purchase the
question of exemption apart-becomes liable to tax. this is
also the view taken by the high companyrt. it was urged on behalf of the assessees that if we place
that interpretation then even the turnumberers relating to
subsequent purchases of the same groundnut made by the other
millers would become exigible to tax despite the fact that
only a single point purchase tax is leviable under the act. it was further urged that we should number read into item 6 of
the third schedule the word first before the word miller
under companyumn 2 thereof. we see numbermerit in these
contentions. quite clearly in view of s. 14 and s. 15 of
the central sales tax act and s. 6 of the act purchase of groun
dnut
can be taxed only at one stage. once a particular quantity
of groundnut has been subjected to payment of tax the
states power to tax in respect of those goods gets
exhausted and any further dealing in those goods cannumber be
brought to tax. this is clear from the scheme of the act. there was numberneed for the legislature to say when purchased
by first miller in companyumn 2 of item 6 of the third
schedule because from the language employ ada therein it
is clear that the first purchase becomes eligible to tax and
in view of s. 6 of the act the subsequent purchases of the
same goods cannumber be subjected to tax. therefore there is
numberquestion of adding- any word into that item as companytended
by mr. m. c. chagla on behalf of the assessees. the next argument advanced on behalf of the assessees is
that in the case of some of the assessees a part of the
groundnut purchased had been sold to other millers hence in
those cases the assessees must be taxed only in respect of
that part of the turnumberer which relates to groundnut which
they had crushed for extracting oil and in the case of
remaining part it is the last dealer who purchased the same
should be taxed. this companytention again is unacceptable. as
mentioned earlier the event which attracted tax is the act
of the miller purchasing groundnut and number his act of
crushing the groundnut purchased or dealing with that
groundnut in any other manner. we have earlier mentioned
that the very act of purchase by a miller attracts the
liability to pay tax under s. 5 read with schedule 3 item 6.
his subsequent dealings in those
4-ll340 supci/71
goods becomes irrelevant. in numbere of the cases before us it
was shown that any of the assessees had purchased groundnut
with a view to sell them. hence we need number go into the
question as to what would be the position in law where a
miller purchases some groundnut for milling and the rest for
sale. our approach to the question before us is similar to that
adopted by the high companyrt in the decision under appeal. we
are in entire agreement with the reasoning of the high
court. but our attention was invited to a later decision of
the same high companyrt in m. madar khan company v. assistant
commissioner companymercial taxes anantpur and ors. 1 which
took a view companytrary to that taken in the decision under
appeal. it is strange that a companyordinate bench of the same
high companyrt should have tried to sit on judgment over a
decision of anumberher bench of that companyrt. | 0 | test | 1971_310.txt | 0 |
civil appellate jurisdiction civil appeal number 1837
of 1974.
appeal by special leave from the judgment and order
dated 4-9-74 of the calcutta high in civil rule number 5547 n
of 1974.
civil appeals number. 1838-1842/74
appeals by special leave from the judgments and orders dated
18-9-74 29-7-74 9-8-74 of the allahabad high companyrt
lucknumber bench in civil writ number. 4398 400 4397 of 1974
and c.w.a. 3344/74 and w.p. number 947/74. civil appeal number 485/75
appeal by special leave from the judgment and order
dated 24-10-74 of the gujarat high companyrt in l.p.a. number
208/74. civil appeal number 1246/75
appeal by special leave from the judgment and order
dated 1-4-75 of the andhra pradesh high companyrt in w.a. number
900/75. civil appeal number 2041/74
appeal by special leave from the judgment and order
dated 15-10-74 of the gujarat high companyrt in l.p.a. number
205/74. niren de attorney general for india in all appeals
devakinandan. in a11 appeals p.p. rao in c. as. 1245/75
and c.a. 2041/74 r.n. sachthey for the appellants in cas. 1837-42 of 74 1246/75 and 2041/74 and r. 2 in c. as. 1839
1840/74 and rr. 1 and 2 in c.a. 485/75. k. sen in ca 1837/74 i. n. haldar in ca 1837/74
k. singhvi in ca 2041/74 yogeshwar prasad s.k. bagga
and mrs. s. bagga for rr. 1 3 7 11 12 and 14 in ca
1837/74 and r. 1 in ca number. 1839-1841/74 and 2041./74 and rr
2 and 3 in ca. number 1246/75. yogeshwar prasad and miss rani arora for r. 1 in c.a. 1838 74.
yogeshwar prasadand miss rani arora for r. 1 in c.a. 1842/
74.
ram panjwani bishamber lal s.k. gupta and dayal for
appellant in ca. 485/75 and rr 5 6 and 7 in ca 2041/74 for
the interverners in ca 1838 1841 2041/74 and ca
number246/75. the judgment of the companyrt was delivered by
ray c.j.--the principal question in these appeal is
whether the selection list for promotion of income tax
officers class service to the post of assistant companymission-
ers of income tax is companyrect or number. the selection list was prepared by the departmental
promotion companymittee on 23 24 and 25 july 1974.
it may be stated here that on 16 august 1972 this companyrt
set aside the seniority list which had been impugned in
civil appeal number 2060 n of 1971 and gave directions on
which the seniority list was to be prepared. see bishan
sarup gupta v. union of india 1 . this selection list was prepared on the basis of the
seniority list approved by this companyrt on 16 april 1974 in
bishan sarup gupta etc. etc. v. union of india ors. etc. 2 . the basis of the preparation of the selection list is the
field of choice. the principles for promotion to selec-
tion posts are set out in a memorandum dated 16 may 1957
issued by the central board of revenue. the principles are
these first greater emphasis should be placed on merit
as criterion for promotion. appointments to selection
posts and selection grades should be made on the basis of
merit having regard to seniority only to the extent indicat-
ed there second the departmental promotion companymittee or
other selecting authority should first decide the field of
choice namely the number of eligible officers awaiting
promotion who should be companysidered for inclusion in the
selection list provided however that an officer of
outstanding merit may be included in the list of eligible
persons even if he is outside the numbermal field of choice. third the field of choice wherever possible should extend
to five or six times the number of vacancies expected within
a year. fourth from among such officers those who are
considered unfit for promotion should be excluded.the re-
maining officers should be classified as outstanding
very good and good on the basis of merit as determined
by their respective records of service.the selection list
should then be pre-
1 1975supp.s.c.r.491 2 1975 1 s.c.r. 104. 4--1458sci/76
pared by placing the names in the order of these three
categories without disturbing the seniority inter se within
each category. fifth promotions should strictly be made
from the selection list in the order in which their names
are finally arranged. the selection list should be periodi-
cally reviewed. the names of those officers who have
already been promoted otherwise than on a local or purely
temporary basis and companytinue to officiate should be removed
from the list and the rest of the names along with others
who may number be included in the field of choice should be
considered for the selection list for the subsequent period. several persons mainly promotees from class ii to class
i as income tax officers challenged in writ petitions
field before several high companyrts the companyrectness of the
field of choice so determined by the departmental promotion
committee hereinafter referred to as the companymittee on the
basis of which the said selection list was prepared. the
gujarat and the andhra pradesh high companyrts delivered judg-
ments. the other high companyrts gave interim orders staying
the operation of the selection list. there are two appeals
by special leave from the judgments of the gujarat and the
andhra pradesh high companyrts. there are also appeals by
special leave from the interim orders of the high companyrts
because the questions involved are the same. there were 112 vacancies of assistant companymissioners. the government of india sent 336 names in the running order
of seniority for companysideration of the field of choice. out
of those 336 names the companymittee took 276 names in the
running order of seniority. the principal question for companysideration is whether the
field of choice determined by the companymittee on the basis of
which the companymittee prepared the selection list is companyrect
or number. the gujarat high companyrt held that the requirement of 10
years experience as income tax officer for promotion to the
post of assistant companymissioner as laid down in the govern-
ment of india letter number c. 33 17 admn. i.i./49 dated 16
january 1950 prevailed while the companymittee determined the
field of choice and this requirement was violated because
the companymittee companysidered persons with 8 years experi-
ence for the field of choice. the high companyrt further held
that even if the requirement of 10 years experience was number
a statutory rule the requirement was to be companyplied with in
determining the field of choice unless people with such
experience were number available in the seniority list of class
i income tax officers. what the high companyrt said was that if
such people with 10 years experience were available in the
seniority list only such people should be companysidered in the
field of choice ignumbering those in the seniority list who are
senior to such persons but have less than 10 years experi-
ence as income tax officers. the second reason given by the
high companyrt for holding the selection list to be incorrect is
that under the letter dated 16 may 1957 the field of choice
should have been 5 times the number of vacancies whereas the
actual field of choice companytained a much lesser number. the
third ground given by the high companyrt for holding the selec-
tion list
to be incorrect is that in the field of choice of company-
mittee did number properly evaluate the merit of persons in the
field of choice. the section of persons in the selection
list was to be selection on merit only and number seniority cum
merit. the fourth reason given by the high companyrt is that
the date for determining the eligibility of officers for
promotion to the post of assistant companymissioner of income
tax should be decided by the companymittee by bearing in mind
the two dates namely 21 december 1972 when this companyrt
permitted provisional promotions and 29 numberember 1973 when
government made the second batch of ad hoc promotions as
the two terminals. the principal companytentions on behalf of the respondents
are these. first promotions from amongst income tax offi-
cers class i service to the post of assistant companymissioner
of income tax have to be made solely on the basis of
merit. the respondents relied on rule 18 of chapter ii c
section 1 vol. ii of the office manual in support of their
contention. broadly stated rule 18 is that the promotion
shall be strictly on merit and further that numberone should
ordinarily be companysidered for promotion unless he has company-
pleted at least 10 years service as income tax officer. the respondents amplified their companytention to mean that
promotion to a selection post is to be made solely on the
basis of merit and number on the basis of seniority cum merit. the second companytention of the respondents is that only
such of the income tax officers in class i service who had
put in at least 10 years service as income tax officers
are eligible for being companysidered for promotion to the post
of assistant companymissioners. this companytention. is also based
on rule 18 and according to the respondents rule 18 means
that the companydition precedent for eligibility to be companysid-
ered for promotion to the post of assistant companymissioner is
that an income tax officer in class i service must have put
in at least 10 years service as income tax officer. the respondents further companytended that rule 18 was
framed on 16 january 1950 and the letter dated 21 july 1950
addressed by the central board of revenue to all companymission-
ers of income tax shows that the government of india framed
the rule with the approval of the union public service
commission and the ministry of home affairs. the govern-
ment case is that the rule was abrogated. the respondents
answer to the government companytention is that the entire
correspondence relied on by the government shows that the
ministry of finance wanted to frame new rules of seniority. the respondents also companytend that the ministry of home
affairs gave approval to the framing of new rules of senior-
ity but gave number direction with regard to the rule relating
to the recruitment except stating that the said rule might
be appropriately included in the relevant recruitment rules. therefore the respondents companytend that the recruitment rule
regarding 10 years experience companytinued whereas the senior-
ity rule stood modified in terms of the letter of m.c. thomas dated 4 april 1964. the respondents also rely on the
affidavit dated 8 march 1968 flied by m.c. thomas in the
gujarat high companyrt in application number 1365
of 1965 an affidavit of m.c. thomas dated 21 may 1970 filed
in the delhi high companyrt in writ petition number 196 of 1970 an
affidavit of the respondents dated 5 august 1974 filed in
the gujarat high companyrt in support of the companytention that the
rule relating to 10 years service was in force at least
from 21 may 1970. the respondents further companytend that
promotions to the post of assistant companymissioners in the
year 1964 and 1970 show that all promotees except 2 had
completed at least 10 years service before being selected
for promotion. even with regard to those two promotees the
respondents submitted that both of them joined on 24 octo-
ber 1960 but they had been selected along with others in
may 1960. therefore those two officers were promoted
along with their batch mates of may 1960.
the third companytention of the respondents is that rule 18
has the force of law. it is said that under section 241 of
the government of india act 1935 the government was empow-
ered to make rules. pursuant to that power the government of
india made the rule. the letters dated 16 january 1950 and
21 july 1950 written by the government to the companymissioners
of income tax referring to rule 18 were relied on by the
respondents in support of their companytention.in the alterna-
tive the respondents companytended that the decision of the
government companytained in the letter dated 16 january 1950
was made by the government of india in exercise of executive
powers under section 8 of the government of india act 1935
read with item 8 of list i of the seventh schedule. this
order which had the backing of law was an existing law
within the meaning of clause 10 of article 366 of the
constitution. in the further alternative the respondents
contended that the rule companytained in the letter dated 16
january 1950 was incorporated in the office manual issued
by the government of india in exercise of its executive
power under article 53 of the companystitution and therefore
these instructions have the force of law. it is also said
by the respondents that the rule which affects promotions of
the persons companystitutes the companyditions of service. the fourth companytention on the part of the respondents is
that the use of the word ordinarily in rule 18 imposes an
obligation on the union government number to companysider an income
tax officer class i who has number companypleted at least 10
years service as income tax officer for promotion as
assistant companymissioner unless there are extraordinary
circumstances. it is said that the word ordinarily does
number vest in the government unfettered companydition to follow
or number to follow the rule. it is also said that the use of
the word at least 10 years service shows that the word
ordinarily has been used to enable the government to
consider such of the income tax officers who have put in
more than 10 years service. the respondents also companytend
that the government proceeded on the basis that the rule
relating to 10 years service did number exist after april
1964 and therefore it cannumber be said that the government
departed from rule 18 because of extraordinary circum-
stances. the fifth companytention is that the selection has been made
in companyplete violation of the rule framed by the government
of india for promotion to selection post as companytained in the
office memorandum
of the ministry of home affairs dated 16 may 1957. this
contention is expanded by submitting that the list should
have companytained names of at least 5 or 6 times the number
of vacancies existing within a year and in view of the fact
that there were 112 existing and 10 anticipated vacancies
the government of india should have sent to the companymittee
names of at least 560 officers. the companymittee should then
have removed such names which were unfit for promotion and
thereafter have classified the rest as outstanding very
good and good on the basis of merit. the respondents
contend that the government sent only 336 names for company-
sideration when the vacancies were more than 120 and the
government also ignumbered the rule of 10 years experience. it is also said that the companymittee ignumbered the names of 59
officers from companysideration and classified only 144 officers
out of the remaining 277 and prepared the list of 122 out of
144 officers. the respondents further companytend that though
respondents number 2 and 3 in civil appeal number 2041 of 1974
namely r.k. desai and b. srinivasan companypleted 10 years
experience they were number included within the field of choice
as officers senior to them had number companypleted 8 years of
service as income tax officers. therefore rule 18 was
violated. the sixth companytention of the respondents is that the
entire selection was arbitrary and in violation of article
16 of the companystitution. it is said that if the rule re-
quiring 10 years experience had been followed only such
of the persons who had put in 10 years service would have
been in the field for selection. it is said that the
government included income tax officers who were direct
recruits and who had put in less than 8 years service in
the list but excluded promotees income tax officers who had
put in more than 8 years service as income tax officers. it is further said by the respondents that out of 122 per-
sons selected 111 are direct recruits and only 11 are promo-
tees. reference was made to the junior-most person in the
selection list madan mohan joshi. it is said that madan
mohan joshi was appointed as income tax officer class i on 5
july 1965 and therefore he companypleted 9 years service at
the time of selection. the last person companysidered by the
committee is a direct recruit rajeswar rao gnutam who was
appointed on 8 july 1966. again it is said that from
amongst the promotees raghubir singh the promotee who joined
class i service on 1 may 1964 and had more than 10 years
service was number placed in the field of choice. the
respondents therefore companytend that promotee officers who
had put in more than 8 years service as income tax officers
were number included in the field of choice whereas direct
recruits who had number companypleted 8 years service were in-
cluded in the field of choice. the seventh companytention of the respondents is that the
eligibility of income tax officers for the purpose of promo-
tion to the post of assistant companymissioner should be companysid-
ered either as on 21 october 1972 or 21 march 1973 or 29
numberember 1973. in support of that companytention it is said
that when the government of india made an application for
filling up certain posts this companyrt by order dated 21 decem-
ber 1972 permitted the government to fill in the posts on ad
hoc basis from amongst the eligible officers on the basis of
continuous length of service in class i. accordingly by
orders dated 21 march 1973 and 29 numberember 1973 59 and
48 officers respectively were promoted on ad hoc basis. these officers were to be replaced by regular selection. the seniority list was companyfirmed by this companyrt by judgment
dated 16 april 1974. the respondents therefore companytend
that the companymittee had to regularise aforesaid 107 promo-
tions and the regularisation had necessarily to be done
from the dates of original promotions on ad hoc basis. it
is said in this companytext that the eligibility of officers for
the purpose of promotion must be companysidered either on 21
december 1972 or on 21 march 1973 or on 29 numberember 1973.
the respondents also submit that the eligibility has refer-
ence to the date of vacancy and therefore only such of the
persons who had the qualified service on the date of
vacancy ought to be companysidered by the companymittee. reliance
was placed on the observations of this companyrt in bishan sarup
guptas case 1 that after the finalisation of the seniority
list the department should companysider the cases of all eligi-
ble officers for promotion on the basis of their records as
on the date when they ought to have been companysidered by
selection but who were number so companysidered. the first question for companysideration is whether the
rule of 10 years experience was modified to 8 years expe-
rience. the companyrespondence between the central government
and the union public service companymission between 30 january
1963 and 26 june 1969 shows that the principle for promotion
as assistant companymissioner is that numberincome tax officer
should ordinarily be companysidered unless he has companypleted 8
years service as income tax officer. the proposal for this
change from 10 years to 8 years emanated from the finance
ministry. the home ministry stated that the rule does number
strictly relate to the seniority rules in respect of as-
sistant companymissioners of income tax and should thus be
included in the relevant recruitment rules that is rules
for selection for the post of assistant companymissioner of
income tax. the union public service companymission as will
appear from the letter dated 31 may 1963 agreed subject to
proposed modification regarding the seniority of assistant
commissioners of income tax. it thus appears that the
finance ministry the home ministry and the union public
commission companycurred with the change from the requirement of
experience for 10 years to that of 8 years. the requirement
of 10 years experience as laid down in the letter dated 16
january 1950 and the office manual published in 1955 thus
came to be modified. the only thing which is to be numbericed
is that numberrules under article 309 were made. the change
from 10 years to 8 years experience was recorded by means
of companyrespondence as an administrative instruction. it is
explicable that the letter dated 16 january 1950 as well as
the office manual published in 1955 was an administrative
instruction. the change from 10 years to. 8 years experience was number
only given effect to in the field of choice but also recog-
nized in the companymittee meetings of september 1968 april may
1970 and february 1972. in september 1968 16 persons were
over 9 years experience
1 1975 supp. s.c.r.491506
but less than 10 years experience. numbere of these persons
was however selected to be placed on the selection list. in
april may 1970 14 persons were over 9 years experience but
less than 10 years experience and 24 persons were over 8
years experience only. out of those only 7 who were all
over 9 years experience were selected to be placed in the
selection list. in 1972 the companymittee companysidered 25 persons
over 9 years experience but less than 10 years in experi-
ence and 27 persons over 8 years experience. out of these
only 10 persons who were all over 9 years experience were
selected to be placed in the selection list. in the companymittee meeting of july 1974 the selection
list prepared did number have any person except 4 emergency
commissioned officers who had less than 9 years experience. the last person in the seniority list selected was m.m. joshi bearing number 967 in the seniority list. 8 years experience as a working rule for promotion was
publicly annumbernced by the minister in parliament on 11 june
1971. it is rightly said by the attorney general that
administrative instructions are followed as a guide line on
the basis of executive policy. it is number necessary to put
the same on record in so many words. in bishan sarup gupta
union of india ors. 1975 supp. scr 491 when the quota
rule which was statutory ceased to have statutory effect
after 5 years but the government followed the principles as
a guide line it was upheld by this companyrt in the application
of the principle from 1957 to 15 january 1959. in the
present case the requirement of 8 years was number only
followed as a guide line in practice but was also recorded
in the companyrespondence between the finance and the home
ministries. the high companyrt said that the requirement of 8 years
experience was to be included in the appropriate recruitment
rules and until that was done the high companyrt held that 10
years experience held the field. the high companyrt failed to
consider the true effect of the companyrespondence between the
finance and the home ministries and the union public service
commission. the ministry of finance by its letter dated 30
january 1963 stated that the companydition of 8 years service
for promotion was proposed to be retained. the home minis-
try by its letter dated 20 february 1963 pointed out that
the requirement of 8 years experience for promotion did number
strictly relate to seniority rules relating to assistant
commissioners of income tax and should be delinked from such
rules and should be appropriately included in the relevant
recruitment rules. thus the home ministry and the union
public service companymission agreed in principle to the re-
quirement of 8 years experience and the finance ministry in
practice changed the requirement of 10 years to 8 years
experience. the letter of the finance ministry proposing
the retention of the requirement of 8 years experience was
only in grade i. the minimum experience in grade i proposed
by the board was approved by the secretary as well as the
minister. the high companyrt referred to the affidavits filed by m.g. thomas in other proceedings. in one of the affidavits
affirmed by thomas
on 8 march 1968 and referred to by the high companyrt in special
civil application number 1365 of 1965 in the gujarat high companyrt
in paragraph 5 thereof thomas said as follows the depart-
mental promotion companymittee which met sometime in august
1949 recommended that numberofficers should be promoted as
assistant companymissioners of income tax until he had worked
for number less than 10 years as income tax officers. the
government of india agreed with the recommendation of the
departmental promotion companymittee that it was necessary in
the interest of efficiency that the assistant companymissioner
of income tax should at least have 10 years of service as
income tax officer so that for the post ok assistant
commissioner of income tax matured and seasoned officer
may be obtained. for arriving at the decision the govern-
ment of india was also influenced by the recommendation of
income tax investigations companymission. the high companyrt also
referred to paragraph 9 in the said affidavit of thomas
where he said as follows it can thus be seen that the
seniority rules for assistant companymissioner of income tax
were mainly framed due to the situation created by the
introduction of income tax service class i on an all india
basis and the requirement of a minimum period of 10 years of
service later on reduced to. 8 years service as a requi-
site companydition for promotion -this requirement of minimum
service-resulted in a senior income tax officer who had number
completed the required length of service being passed over
by a junior income tax officers who had companypleted the. required service. to safeguard the interest of such senior
income tax officer rule 1 iii b meaning thereby 10
years rule was introduced which enabled the senior officers
to regain their seniority on subsequent promotion. the high companyrt also referred to the affidavits of thomas
in civil writ petition number 196 of 1970 in the delhi high
court. m.g. thomas was an under secretary in the ministry
of finance in 1964. in the affidavit affirmed by thomas in
writ petition number 196 of 1970 in the delhi high companyrt he
dealt with paragraph 39 of the petition of bishan sarup
gupta where it was said that paragraph 18 of section 1
volume 1 of the office manual clause b mentioned about the
eligibility of 10 years of minimum service before an income
tax officer would be companysidered for promotion to the post of
assistant companymissioner. the high companyrt said that thomas in
his affidavit in reply had admitted the said statements and
concluded that of 8 years rule had been introduced thomas
would number have missed to mention the same in his affidavit. the high companyrt also referred to two features. first
that it was number a proposal of anew rule of 8 years in place
of existing rule of 10 years secondly it was an assumption
that the existing rule prescribed the minimum period of 8
years service. the high companyrt further referred to the
delhi high companyrt proceedings in writ petition number 196 of
1970 where companynsel for the union said that the government
expected new rules to be framed under article 309 to limit
the field of choice to those who had 8 years service to
their credit as income tax officers. the high companyrt read
this argument of companynsel for the union in the high companyrt to
concede that numberchange in the rule of 10 years service as
income. tax officer was made so as to reduce the period from
10 years to 8 years. the central board of revenue as appears in number f.
1/19/60-ad. ii at a meeting on 2 may 1959 approved the idea
of laying down the. minimum period of service uniformly for
the three wings of the central board of revenue for purposes
of determining the eligibility of officers for promotion. it was decided that before an officer was promoted to a
higher post he must have put in a period of minimum service
as follows for promotion to deputy companylector assistant
commissioner grade rs. 1000-1400 --minimum service pre-
scribed was 8 years service in class i posts. for promo-
tion to companylector grade rs. 1300-1600 --the minimum serv-
ice prescribed was 12 years in class i post out of which at
least two years should be in the grade of deputy companylector. for promotion to. the post of companylector grade rs. 1600-
1800 --the minimum service prescribed was 14 years in class
i posts provided that for promotion as companylector of central
excise scale rs. 1600-1800 the officers should have worked
at least two years in the scale of rs. 1300-1600. for
promotion to companylector grade i companymissioner grade i scale
rs. 1800-2000 the minimum service prescribed was 16 years
in class i posts. for promotion to selection grade posts of
collectors companymissioners the minimum service prescribed was
20 years in class i posts. the secretary in the numbere mentioned that he would
prefer the alternative of keeping the rule and relaxing it
in suitable cases. this numbere of the secretary shows that he
preferred the retention of the rule in the other 4 grades
namely. companylector grade rs. 1300-1600 companylector grade
rs.1600-1800 companylector grade i companymissioner grade i grade
rs.1800-2000 and selection grade posts of companylectors company-
missioners. that is apparent from the fact that the board
suggested the retention of minimum service in grade
1 assistant companymissioners but number in the other four grades
including the selection grade. the minister preferred the
deletion of the rule about selection grade. thus the mini-
mum experience in grade i proposed by the board was approved
by the secretary as well as the minister. the minutes of the meeting of the central board of
revenue of 22 october 1960 show that the board of revenue
decided-that the minimum service of 8 years in class i
service may be prescribed in the case of deputy
collector assistant companymissioners grade rs.1100-1400 . the affidavit evidence of thomas shows that the minimum
period of 10 years was later reduced to 8 years. the affi-
davit does number show that the requirement of 10 years serv-
ice was maintained. in the delhi high companyrt proceedings
bishan sarup gupta in his petition made reference to cer-
tain administrative instructions. thomas in answer to
those paragraphs did number have any occasion to say anything
otherwise. further companynsel for the union in the delhi high
court merely stated that the government was expecting rules
to be framed under article 309this does number mean that the
requirement of 8 years experience as an administrative
practice did number prevail. the high companyrt was in error in
treating the affidavit evidence of thomas in other proceed-
ings as a statement of fact that 8 years rule had number been
introduced. this affidavit evidence in other proceedings is
torn
out of companytext and is misread by the high companyrt without
going into the question as to whether such affidavit evi-
dence is admissible in evidence. it is apparent that the
entire affidavit evidence as well as the submission on
behalf of the union is that the requirement of 10 years
experience be replaced by 8 years. administrative practice
as indicated in the department promotion companymittee meetings
and the ministers statement in parliament supported that
contention of the union. it is a question of companystruction
of companyrespondence as to whether 10 years rule was replaced
by 8 years rule. the fact that numberrules under article 309
were framed does number detract from the position that the
previous administrative instruction of 10 years experience
was modified to 8 years experience. it was suggested on behalf of the respondents that the
various affidavits and documents asserted that the require-
ment of 10 years experience had been abrogated and it was
number open to the government to take the stand that require-
ment of 10 years rule was modified or changed. the companyten-
tion is without any substance because the companysistent posi-
tion on behalf of the union has always been that the re-
quirement of 10 years experience was modified to 8 years
and the gujarat high companyrt companysidered the question whether
10 years experience was abrogated or modified. the second question is whether the requirement of 10
years experience was a statutory rule. the high companyrt held
that the requirement of 10 years experience is number a
statutory rule. companynsel for the respondents companytended that
the requirement of 10 years experience is statutory because
the letter dated 16 january 1950 is by the government of
india and the government of india has authority to frame
rules and one of the letters dated 21 july 1950 referred to
it as a formal rule. the companytention is erroneous because
there is a distinction between statutory orders and adminis-
trative instructions of the government. this companyrt has held
that in the absence of statutory rules executive orders or
administrative instructions may be made. see companymissioner
of income tax gujarat v.a. raman companypany 1 . the letter dated 16 january 1950 written by an under
secretary in the ministry of finance does number prove that the
requirement of 10 years experience for promotion to the
post of assistant companymissioner was a rule made by the gover-
number general or any person authorised by him under section
241 2 of the government of india act 1935. furthermore
there is numberbasis for any authentication under section 17 of
the 1935 act in the letter of 16 january 1950. in the
preface to the manual published in 1955 it is specifically
stated that vol. i of the manual companytains statutory rules
and vol. ii companytains administrative instructions. the
requirement of 10 years experience is in vol. ii of the
manual. in s.g. jaisinghani v. union of india ors. 2 it is
stated at pp. 717-718 that the quota fixed by the government
in its letter dated 18 october 1951 must be deemed to be
fixed in exercise of the statutory
1 1968 1 s.c.r. 10. 2 1967 2 s.c.r. 703.
power under rule 4 of the recruitment rules. there is no
such statutory rule under which the letter of 16 january
1950 was written
counsel on behalf of the respondents companytended that the
requirement of 10 years experience laid down in the letter
dated 16 january 1950 had the force of law because of
article 313. article 313 does number change the legal charac-
ter of a document. article 313 refers to laws in force
which means statutory laws. an administrative instruction
or order is number a statutory rule. the administrative in-
structions can be changed by the government by reason of
article 53 1 a itself. the high companyrt said that even if the requirement of 10
years service is number statutory it is binding on the gov-
ernment and is a companydition of service. companynsel for the
respondents companytended that the word ordinarily in the rule
imposes an obligation on the government number to companysider any
income tax officer with less than 10 years experience for
promotion except in extraordinary circumstances. the
requirement of 10 years experience on the face of it company-
fers a discretion on the authorities to companysider income tax
officers if according to. the authorities the circumstances
so require. what the circumstances are or should be are
left entirely to the decision of the authorities. the
central board of revenue by a letter dated 21 july 1950 a
few months after the letter dated 21 july 1950 a few months
after the letter dated 16 january 1950 which spoke of 10
years experience stated that the insistence on a minimum
period of experience cannumber be regarded as affecting the
conditions of service. in the letter dated 21 july 1950 it
was said that the requirement as to 10 years experience is
sufficiently elastic and all income tax officers with more
than 9 years experience companyld be companysidered for promotion. the letter dated 21 july 1950 was referred to by this companyrt
in union of india v. vasant jaygram kamik ors 1 . it
appears in that case that in numberember 1951 the case of
officers who had companypleted 9 years gazetted service were
considered and the companymittee further decided to companysider for
promotion in the near future officers who had companypleted 8
years of service before 31 december 1951. in 1953 officers
who had companypleted 8 years service were companysidered for
promotion. the expression ordinarily in the requirement of 10
years experience shows that there can be a deviation from
the requirement and such deviation can be justified by
reasons. administrative instructions if number carried into
effect for good reasons cannumber companyfer a right. see p.c. sethi ors. v. union of india ors. 2 . the requirement
of 10 years experience cannumber be companysidered by itself. it
is to be read along with administrative instructions of 16
may 1957. the reason is that the requirement of 10 years
experience is for being companysidered for promotion. in para-
graph 2 of the letter of 16 may 1957 companytaining the said
instructions it is said that the companymittee should first
decide the field of choice. namely the number of eligible
officers awaiting promotion who should be companysidered to be
included in the seniority list provided that an officer of
outstanding merit may be included in the list even.if he is
outside the numbermal list. 1 1970 3 s.c.c. 658. 2 1975 3 s.c.r. 201.
for the foregoing reasons our companyclusions are these
first 10 years experience was modified to 8 years experi-
ence. second there was numberstatutory rule requiring 10
years experience. third the facts and circumstances merit-
ed the exercise of discretion which was bona fide exercised
by determining the field of choice. fourth there was no
deviation from 10 years experience because of the modifica-
tion to 8 years experience. fifth there companyld number be
insistence on 10 years experience as companyditions of service. the next question is what should have been the field of
choice. the two groups of income tax officers in class i
namely the direct recruits and the promotees have always
found that the field of choice has been prepared strictly on
the basis of running seniority in the seniority list of
income tax officers class i. in the three decisions of this
court relating to these officers jaisinghanis case bishan
sarup guptas case and bishan sarup guptas case supra it
will be seen that since 1962 there has been a long fight
between direct recruits and promotees mainly in respect of
seniority list of income tax officers class i. this strug-
gle regarding seniority would have hardly any meaning
unless the two groups fought to gain higher positions in the
seniority list only for the purpose of being in the field of
choice for companysideration for promotion to the post of as-
sistant companymissioner. if this was number so and if only a cer-
tain number of years requirement was the only companysideration
for being in the field of choice this requirement would
have. been fulfilled in any case without a higher place in
the seniority list. from 1963 the field of choice has
always been in a running order of seniority. this has been
the administrative practice for over 10 years. there were 112 vacancies and 10 anticipated vacancies in
1974. the companymittee was to make a select panel of 122 offi-
cers. if the field of choice has to be prepared on the
basis of running seniority and if 10 years experience had
been adhered to there would number have been more than 95
officers in the field of choice although the number of
vacancies was 122. this fact alone will entitle the author-
ities to deviate from the rule of 10 years experience. by reason of the violation of the quota rule since 1952
benefiting the promotees this companyrt issued the mandamus in
jaisinghanis case supra . the companylapse of the quota rule
and seniority rule from 16 january 1959 led to the judgment
of this companyrt dated 16 august 1972 in bishan sarup guptas
case supra . the introduction of the roster system of 1
direct recruit and 1 promotee being placed alternately in
the order of seniority with effect from 16 january 1959
was upheld by this companyrt in the judgment dated 16 april
1974 in bishan sarup guptas case supra . as a result of
the seniority list being upheld by this companyrt by the deci-
sion dated 16 april 1974 many promotees lost their earlier
places in the seniority list. this companyrt on 16 april 1974
in bishan sarup guptas case supra at page 114 of the
report said in the case before us in the absence of a rule
determining inter se seniority between the two classes of
income tax officers there is really numberintegration of the
service which is unavoidably necessary for the purpose of
effective promotions. one cannumber speak
of promotions from a cadre unless it is fully integrated. there was a change in the seniority list from what prevailed
at least in 1952. the requirement of 10 years experience
could number be given effect to in such a changed situation and
the expression ordinarily would hardly apply to such a
changed situation without destroying the integration and
restoring to the promotees the position which they had
enjoyed in the past with the quota rule and the seniority
rule and which they lost as a result of the last decision of
this companyrt dated 16 april 1974.
if the respondents companytention that the field of choice
shall be restricted to 10 years experience only and the
field of choice should have been at least five times the
number of vacancies the result would have been that out of
560 persons in the field of choice 474-persons would have
been promotees and 86 persons would have been direct re-
cruits and the last direct recruit in the seniority list
would have been number 873 and number 874 to number 1922 would have
been all promotees. if the above basis suggested by the
respondents were followed 429 persons all direct recruits
and all senior officers in the seniority list would have
been ignumbered in the field of choice. that would be unjust
unfair and upsetting the decision of this companyrt dated 16
april 1974.
in the letter of 16 may 1957 it is stated that the field
of choice wherever possible should extend to 5 or 6 times
the number of vacancies expected within a year. the letter
contained administrative instructions from the home ministry
generally to all ministries and was number meant specially for
the board of revenue. these administrative instructions
have been changed in the matter of promotions from income
tax officers to assistant companymissioners at least from 1963
by the administrative practice of having in the field of
choice generally three times the number of vacancies. in
the companymittee meeting held on 16 march 1963 the companymittee
considered the names of first 33 eligible income tax offi-
cers in order of existing seniority for 11 vacancies. in
the meeting of the companymittee held on 26 and 27 august 1963
the companymittee decided to companysider the cases of 30 officers
in order of seniority for 10 vacancies. in the companymittee
meeting held on 3 march 1964 the companymittee companysidered for
21 vacancies the names of 60 persons in order of seniority. at the companymittee meeting held on 5 and 7 december 1964 for
18 vacancies the companymittee decided to companysider the cases of
60 officers in order of seniority. at the meeting held on
4 july 1965 the companymittee companysidered 60 income tax officers
in order of seniority for promotion to 20 vacancies. at the
committee meeting held on 4 and 6 december 1965 the companymit-
tee companysidered 122 persons in order of seniority for 45
vacancies. in december 1965 the companymittee companysidered 114
senior most income tax officers and 48 were promoted as
assistant companymissioners. at the meeting held on 17 may
1966 the companymittee companysidered the case of 65 officers and
approved the promotion of 48 officers. at the meeting held
on 16 and 17 september 1968 the companymittee companysidered 240
persons for promotion to 90 posts. in september 1968 the
committee companysidered the cases of 16 officers who had less
than 10 years experience. the companymittee in february 1969
considered 61 persons for 20 posts. in september 1969 the
committee companysidered 105 persons for promotion to 35 posts. there is a numbere made by thomas in the month of february
1970 in f. number 20/2170-ad.vi to the effect that if officers
with less than 8 years service and their juniors are ex-
cluded from the list of officers to by companysidered by the
committee for 90 vacancies arising during the year only 193
officers will be available. this is said to be less than
three times the number of vacancies but this companyld number be
helped unless junior officers are companysidered over the head
of their seniorsthe number of such juniors officers with 8
years service is also limited namely 11. in the circum-
stances the selection was made from 193 officers. in
april 1970 the companymittee had to select 80 persons for
promotion. they desired that 240 names should numbermally be
considered. the members however stated that the. ministry
had already furnished the names of 193 eligible officers and
there were numbermore eligible officers who companyld be companysid-
ered. the companymittee accordingly companysidered those 193 offi-
cers in order of seniority. in april and may 1970 the
committee companysidered the cases of 38 persons with less than
10 years experience. in 1972 there were 84 vacancies and
10 more vacancies were likely to arise. therefore for 94
selection posts the field of choice should numbermally have
been 3 to 5 times the number of vacancies. it was found
that there should have been at least 300 officers. there
were 213 officers with 8 years experience. there were
some promotees with more than 8 years experience but they
were junior to the direct recruits as the direct recruits
had number companypleted 8 years service their juniors were number
considered for promotion over them. in the background of these facts and circumstances it
was number possible to have 5 or 6 times the number o.f vacan-
cies in the field of choice for the simple reason that the
committee required 8 years experience for promotion to the
post of assistant companymissioner. if the field of choice had
to be based on running seniority the companymittee companyld rightly
only have 276 officers in the field of choice in the present
case. the next question is whether the companymittee evaluated the
merit of persons in the field of choice. the high companyrt
held that in the field of choice the evaluation of merit of
persons was number properly done. the decision of the high
court is wrong for the following reasons. the letter dated
16 may 1957 indicates that the companymittee was first to
decide the field of choice. the cardinal feature which is to
be kept in the forefront is that the field of choice is
based on running seniority in the seniority list and evalua-
tion of merit does number companye into picture for deciding the
field of choice. paragraph 3 of the said letter states that
those in the field of choice who are companysidered unfit should
excluded from companysideration. under paragraph 4 of the
letter evaluation of the remaining officers on the basis of
merit has to be done by classifying the officers under three
different categoriesnamely outstanding very good and
good. paragraph 4 of the letter states that the selection
list is to be prepared by placing the names of officers in
the said three categories without disturbing the seniority
inter se within each category. in the present case in view of 112 actual vacancies the
government sent 336 names for the field of choice that is
three times the number of vacancies. since 1963 the companymit-
tee has been receiving from the government the names of
persons forming three times the number of vacancies. the
336 names sent by the government were in the running order
of seniority between s.m. islam number 155 in the seniority
list and r.n. dave number 1186 in the seniority list. under
paragraph 2 of the letter dated 16 may 1957 it is the
function of the companymittee to decide the field of choice. the companymittee proceeded on the basis of 8 years experience
and thus companyld number possibly have in the field of choice any
name from number 1131 onwards because every alternate number
thereafter had less than 8 years experience. the companymittee
stopped at number 1123.
the companymittee at the meeting held on 23 24 and 25 july
1974 assessed the merits of 145 persons in order of seniori-
ty first. after such assessment the companymittee found three
officers number 1 30 and 109 in the list as number yet fit and
excluded them. the companymittee also excluded 4 officers
whose findings were in sealed companyer or whose reports were
number yet companyplete number 2 3 6 and 138 in the companymittee
list . these 7 officers were excluded from further companysid-
eration for the selection list. in accordance with para-
graph 3 of the letter 16 may 1957 the companymittee companysidered
the remaining 138 officers and assessed their merits and put
them in three categories. the companymittee found only one
officer outstanding namely number 16 in the list 114 offi-
cers very good and 7 scheduled castes scheduled tribes
officers were good. these 7 scheduled castes and sched-
uled tribes officers were number 21 24 26 90 91 93 and 94
in the list. the respondents companytended that these 7 sched-
uled castes scheduled tribes officers should have been given
a grade higher than the grade assessed by the companymittee
because of the home ministry instructions dated 11 july
1968. the respondents companytentions are incorrect for these
reasons. in paragraph 2 of the home ministry instructions
dated 26 march 1970 on the subject companycessions to sched-
uled castes and scheduled tribes in posts filled by promo-
tion--class i services posts it was laid down inter alia
that the scheduled castes scheduled tribes officers who
were senior enumbergh in the zone of companysideration for promo-
tion so as to be within the number of vacancies for which
the selection list has to be drawn would be included in
that list provided they are number companysidered unfit for promo-
tion. in paragraph 1 of these instructions reference was
made to the home ministry instructions dated 11 july 1968.
it would be found from those instructions as also the home
ministry instructions dated 26 march 1970 that the july
1968 instructions applied in the case of promotions from
class iii to class ii and within class ii and from class ii
to the lowest rank or category to class i but had numberappli-
cation in respect of promotion within class i.
the companymittee found number 16 to be outstanding 114 number
2 to 115 very good and 7 scheduled castes scheduled
tribes officers good. and they were to be included in the
selection list vide home ministry instructions dated 26
march 1970. the companymittee next assessed the merit of the
rest of the 276 officers to ascertain whether
any of them was out standing. if any one among these
remaining officers was number found outstanding but was only
very good he would number companye within the selection list
because the selection list was prepared after evaluating
the merits of the officers on the basis of seniority in the
seniority list in accordance with the fetter dated 16 may
1957. paragraph 4 of that letter was followed by the
committee along with the home ministry instructions. it
would number be necessary for the companymittee after having company-
sidered 145 to put the others in the category of very good
when the companymittee assessed their merits and found them to
be number outstanding. after 122 senior officers were as-
sessed and the companymittee found that numberother officers junior
to them companyld be assessed to the higher category namely
outstanding it would be fruitless exercise to find out who
among these officers were very good or good or number yet
fit. the reason is obvious. those in the selection list
of 122 who had been found to be very good companyld number be
supplanted by others who were very good only outstand-
ing persons who would be junior to the category of 122
very good would surpass the category of very good. therefore the companymittee rightly companysidered the cases only to
find out whether there was any one outstanding and the
committee found numbere of them to be outstanding. the government sent the names of 336 officers in the
running order of seniority. out of 336 the companymittee found
276 to be fit for the field of choice. the companymittee found
1 outstanding 114 very good and 7 scheduled
castes tribes good. the respondents companytended that the
rest 59 were number at all companysidered by the companymittee. this
contention is number acceptable for these reasons. from number
1131 in the seniority list every alternate number was an
officer with less than 8 years experience. under the
letter of 16 may 1957 it is the companymittee and number the gov-
ernment which decides the field of choice. when the companymit-
tee found according to the running seniority number 1131
onwards companyld number be in the field of choice the companymittee
did number put the names of the 59 officers in the field of
choice. the question of the evaluation of the merits of
these 59 officers did number therefore arise because first
the seniority list was companysidered by the companymittee and
second the companymittee took into companysideration only those who
were in the seniority list and fulfilled 8 years experi-
ence. it is wrong to hold that because the government sent the
names of 336 persons for companysideration by the companymittee the
field of choice companysisted of 336 persons. the field of
choice is to be determined by the companymittee. the companymittee
considered 276 names as fit to be included in the field of
choice. it is erroneous to suggest that there were 336
names in the field of choice. the field of choice companysist-
ed. of 276 names as determined by the companymittee whose juris-
diction it was to determine. the companymittee companysidered upto
number 1123 in the seniority list to be in the field of choice. officers from 1124 to 1130 were number included by the companymit-
tee either because they had retired or joined the indian
administrative service and in any event numbercomplaint has
been made on their behalf. the companymittee found that from
number 1131 onwards every alternate officer had number companypleted 8
years service and therefore they companyld number be put in the
field of choice according to the companymittee. the companytention
of the respondents that there were 336 officers in the
field of choice and the companymittee did number companysider all the
336 persons unmeritorious. the respondents next companytended that persons bearing number
877 879 881 and 883 in the seniority list had been put on
the selection list although they had less than 8 years
experience. there is numbersubstance in the companytention for
the following reason. these 4 officers were taken on the
ground that they were ex-military officers recruited to the
income tax department in 1968 and were deemed to have been
recruited in 1964 by virtue of the ministry of home affairs
numberification dated 4 october 1967.
anumberher submission was made on behalf of the respondents
that after the companymittee had put different persons in three
categories outstanding very good and good the companymit-
tee should have further evaluated the merit of all officers
inter-se within each of the said three categories. this
submission is companytrary to the specific provision of para-
graph 4 of the letter dated 16 may 1957. further within
the category of very good there companyld number be any further
intra-specific assessment of those who were very good. a criticism was made by the respondents that the assess-
ment was to be only on merit and number seniority-cure-merit. this companytention is wrong. paragraph 2 of the letter of 16
may 1957 states that the field of choice is to be decided
by the companymittee. numberquestion of merit arises in deciding
the field of choice. the field of choice is only on the
basis of running seniority. the question of merit arises
after the field of choice is decided. the selection-was
correctly done strictly on merit in accordance with para-
graphs 3 and 4 of the letter dated 16 may. 1957. the companymit-
tee decides the field of choice in the running order of
seniority. the companymittee excludes names from the field of
choice who are companysidered unfit for promotion. the remaining
officers are classified as outstanding very good and
good on the basis of merit. the selection list is pre-
pared by placing the names in the order of these three
categories. that inter-se seniority of officers in the
selection list under each category is number disturbed. these
are the instructions in the aforesaid letter. it will thus
be seen that seniority is the sole criterion for determin-
ing the field of choice in the running order of seniority
and merit is the sole criterion for putting the officers in
the selection list in each category according to merit. finally the companytention of the respondents is that the
date for determining the eligibility of officers for promo-
tion to the posts as assistant companymissioners should have
been decided by the companymittee by bearing in mind the two
dates namely 21 december 1972 and 29 numberember 1973. 21
december 1972 is the date when this companyrt permitted the
union government to make ad hoc promotions. 21 march 1973
and 29 numberember 1973 are the two dates when the central
board of direct taxes promoted 59 and 48 officers respec-
tively. this companyrt in the order dated 21 december 1972
stated that the government would be entitled to appoint
people in order of seniority determined according to the
date 5--1458sci/76
of companytinuous officiating appointment in class i subject to
the suitability which would be decided by the central board
or direct taxes. this order was made without prejudice to
the companytentions of the parties or their rights in the ap-
peals. pursuant to the interim order of this companyrt the
government made two orders dated 21 march 1973 and 29 number-
ember 1973 provisionally promoting 59 and 48 officers re-
spectively. in each of the government orders it is specifi-
cally stated as follows the above promotions are purely ad
hoc and have been made on the basis of the suitability as
decided by the central board of direct taxes in terms of
directions issued by this companyrt in their order dated 21
december 1972. these promotions will number companyfer any claim
for companytinued officiation sic in the grade of-assistant
commissioner of income tax or for seniority in that grade. appointments against these posts will eventually be made on
the basis of the revised list of seniority of income tax
offices class i as finally approved by this companyrt and on
selection by a duly companystituted departmental promotion
committee to be companyvened in accordance with the prescribed
procedure. the promotions ordered will number establish any
claim for eligibility or for selection on merit by a proper-
ly companystituted departmental promotion companymittee when the
same is companyvened. it is manifest from the order of this companyrt and the two
orders made by the government pursuant to this companyrts order
that these 107 promotions were purely provisional or ad hoc
and were made by the central board of direct taxes and number
by the companymittee which is the authority for determining
promotions. further these provisional promotions were number
made in companyformity with the letter of 16 may 1957. it is
distinctly stated in the aforesaid two government orders
that appointments against these posts will eventually be
made on the basis of revised seniority of income tax offi-
cers class i as finally approved by this companyrt and on selec-
tion by a duly companystituted departmental promotion companymittee
to be companyvened in accordance with the prescribed procedure. on 9 february 1973 the income tax officers class i
service regulation of seniority rules 1973 were made
under article 309 see bishan sarup guptas case supra . the revised seniority list of income tax officers class i
was made on the basis of the income tax officers class i
service regulation of seniority rules 1973 and was ap-
proved by this companyrt on 16 april 1974. see bishan sarup
guptas case supra . the selection list was made by the
committee after it met on 23 24 and 25 july 1974. under
paragraph 2 of the letter dated 16 may 1957 the companymittee
was to decide the field of choice by including therein
eligible officers awaiting promotion. this means that
whether an officer is eligible or number should be decided with
reference to the date of the companymittee meeting. this has
always been done at all the companymittee meetings. the respondents companytended that the regularisation of 107
promotees had to be done from the date of original promo-
tions on ad hoc basis. in this companynection the respondents
relied on the observations of this companyrt in bishan sarup
guptas case supra at p. 506 of the report. the observa-
tions relied on are that after the fresh seniority
list is made in accordance with the directions given by this
court in bishan sarup guptas case supra it would be open
to any direct recruit or promotee to point out to the de-
partment that in the selection made to the post of assistant
commissioner from 1962 onwards he being otherwise eligible
is entitled on account of the new seniority given to him to
be companysidered for promotion to the post of assistant companymis-
sioner. the observations of this companyrt in bishan sarup guptas
case supra are that if as a result of the fresh seniority
list it is found that any officer was eligible for promotion
to the post of assistant companymissioner on account of his
place in the new seniority list the department might have
to companysider his case for promotion on his record as on the
date when he ought to have been companysidered and if he would
be selected his position will be adjusted in the seniority
list of assistant companymissioners. the object is to see that
the position of such a person is number affected in the senior-
ity list of assistant companymissioners because he is actually
promoted later pursuant to the new seniority list although
according to the new seniority list itself he should have
been promoted earlier. the observations do number mean that
although the companymittee can meet for the selection of offi-
cers for promotion to the post of .assistant companymissioner
only after the seniority list is approved by this companyrt the
selection would be deemed to be made at the time when a
vacancy in the post of assistant companymissioner occurred and
the eligibility of officers for selection will be determined
by such deemed date of selection. numberemployee has any right
to have a vacancy in the higher post filled as soon as the
vacancy occurs. government has the right to keep the vacancy
unfilled as long as it chooses. in the present case such a
position does number arise because of the companytroversy between
two groups of officers for these years. the seniority list
which is the basis for the field of choice for promotion to
the post of assistant companymissioner was approved by this
court on 16 april 1974. promotions to the post of assist-
ant companymissioners are on the basis of the selection list
prepared by the companymittee and are to be made prospectively
and number retrospectively. | 1 | test | 1976_352.txt | 1 |
bhagwati j.
this appeal with special leave is directed against the order of the income-tax appellate tribunal madras a bench dated august 8 1952 made in i. t. a. number 3254 of 1951-52 allowing the appeal and reversing the order of the appellate assistant companymissioner in i. t. a. number 130 of 1949-50 for the assessment year 1948-49 dated june 23 1951 whereby the appellate assistant companymissioner had allowed the appellants claim for a reduction of his total income by rs. 159240.
the appellant is a cloth merchant dealing in cloth piece-goods and yarn both on wholesale and retail basis at madurai. the appellant and his brother abdulla salay mohammed were originally carrying on the business in partnership. but the partnership was dissolved during the year 1947-48 and the appellant took over the entire business and became the sole proprietor thereof. for the assessment year 1948-49 the accounting year being the year ending march 31 1948 he submitted a return on september 7 1948 in which he showed a net loss of rs. 7224 in his business under the head business profession or vocation. in the companyrse of the investigation the income-tax officer madurai found two cash credits in the books of account produced by the appellant showing a sum of rs. 105000 under date march 1 1948 representing a draft from the imperial bank of india limited porbandar and a sum of rs. 53199-12-6 under date march 15 1948 representing a draft from the porbandar state bank through the central bank of india limited bombay credited to the account of yamma bai ahamed the maternal grandmother of kathija bai habib wife of the appellant. the appellant was called upon to explain these entries and he made his statement on january 26 1949 before the income-tax officer who recorded the same. his explanation was that the said two sums represented the sale proceeds of gold jewellery and sovereigns which belonged to yamnabai who was a native of ranavav near porbandar in saurashtra. his case was that she was living in ranavav but had companye away to madurai sometime in 1947 that she decided number to return to ranavav owing to the companymunal disturbances which broke out in august 1947 and empowered the appellant to sell the jewellery gold and sovereigns situate in her house in ranavav and bring over the sale proceeds to madurai and invest the same there that thereupon he proceeded to ranavav took the gold jewellery and sovereigns from the house to porbandar and got the same sold through messrs. shariff hassan and brothers and remitted the sale proceeds through bank drafts to madurai rs. 105000 on march 1st 1948 and rs. 53200 on march 15 1948 and that these amounts were credited in her name as deposits in the books of account of the appellant. in proof thereof the appellant produced before the income-tax officer the original invoice relating to the sale of jewels and gold furnished by messrs. shariff hassan bros. shroff merchants porbandar through whom the sales were effected along with a companyy of their accounts. the letters received from the imperial bank of india and the central bank of india evidencing the transmission of funds were also produced. after his statement was recorded as aforesaid the income-tax officer on january 29 1949 addressed a letter to the appellant calling upon him to obtain from yamnabai an affidavit to the effect that she really possessed jewels gold and sovereigns worth nearly rs. 160000 and that these were given to him by her for being sold and deposited with him. he also wanted to ascertain from her as to when these jewels and sovereigns were purchased and what was the value of cash jewellery and other valuables owned by her at that time which information he desired should also be included in that affidavit. this affidavit was required to be furnished on or before february 10 1949 and the appellant accordingly procured and filed before the income-tax officer an affidavit duly sworn by yamnabai on date february 24 1949. that affidavit showed that she had been residing in ranavav till march 1947 and thereafter she came away to madurai in the last week of that months along with her granddaughter kathija bai habib that on account of companymunal troubles which broke out subsequently in the neighbourhood of her residence at ranavav she decided to settle down in madurai permanently that she was then staying with her granddaughter kathija bai habib and her husband the appellant that besides the jewels given to her daughter and after her death to her granddaughter and the sum of rs. 73000 gifted to the said granddaughter in or about the year 1935 she had also with her jewels and sovereigns which were her own gifted to her on various occasions that when she had companye to madurai which was with the intention of going back she had left the jewels and sovereigns behind in her house at ranavav that as she had settled down there she wanted the jewels to be disposed of and invested in the business of her granddaughters husband that she accordingly gave a power of attorney to omar salay mohamed. i.e. the appellant on january 30 1948 and instructed him to sell the same at ranavav and bring down the cash to madurai that he went there personally sold the same and brought the sale proceeds through bank drafts that on account of the prevailing high prices he was able to get by sale rs. 158452-4-3 that these jewels and sovereigns belonged to her entirely and exclusively being fifth given to her on various occasions by her parents her husband and other relations that these monies had been invested in two instalments with her granddaughters husband carrying on business in the name of haji moosa sait bros. that she was drawing from the deposit an amount of rs. 200 a month for her personal expenses which amount was being adjusted towards the interest due to her and that she had still a small quantity of jewels with her remaining unsold worth about rs. 10000 at the then market price. on march 4 1949 the income-tax officer pointed out that on a former occasion yamnabai had made a statement which according to him showed that she had given all her jewels to the wife of the appellant on the occasion of her marriage in 1933 and enquired which of the two statements i.e. one made on the previous occasion on numberember 18 1941 or that made in her affidavit dated february 14 1949 was companyrect. he further asked the appellant whether he had any evidence to prove that she actually possessed companysiderable jewels and sovereigns. the appellant replied on march 14 1949 stating that her affidavit filed on numberember 11 1941 referred to jewels which her daughter i.e. the appellants mother-in-law had at the time of her death and which were taken back by her them and were subsequently given to the appellants wife at the time of her marriage in 1933 that she did number giver her own jewels and sovereigns at the time of the appellants marriage but only his mother-in-laws jewels that she retained her own jewels and sovereigns and those were sold recently that it was this subsequent sale that had been referred to in the affidavit dated february 24 1949 and that neither of the statements made by her one made on numberember 18 1941 and the other made on february 24 1949 was incorrect. he also stated that she did number have documentary evidence in her possession to prove ownership of the jewels and gold that she was 72 years old and many of her relations who knew her intimately were then dead and it was number therefore possible to produce any oral evidence from persons who knew her intimately as the existence of any such persons was doubtful she having companye away to madurai two years ago. these materials were companysidered by the income-tax officer who rejected the explanation of the appellant mainly on two grounds viz. 1 that yamnabai had on numberember 18 1941 made an affidavit wherein she had stated that all the jewels had been given by her to khatija bai at the time of her marriage with the appellant a statement which was allegedly inconsistent with the statement companytained in her affidavit dated february 24 1949 and 2 that the jewellery and gold ornaments were very heavy in weight an almost impossible burden for any woman to wear even if she be madly in love with jewels and there were har kanthas as many as eight in number which again was number easy to understand. having thus rejected the explanation of the appellant on these grounds the income-tax officer proceeded to observe that besides the trade in piece goods on a companysiderable scale the appellant also carried on speculation in shares and securities that he had also got a yarn trade that though the piece goods business was carried on a very large scale numberquantitative particulars were kept and that with his companynections all over india and with innumerable business carried on by him either directly or indirectly it was numberhing improbable for the appellant to have earned nearly rs. 160000 in the companyrse of a year. accordingly he made the assessment order on date march 31 1949 adding the sum of rs. 158200 which represented the cash credits in the account of yamnabai and rs. 1040 being the interest credited to her account as profit earned by appellant in his business. he also issued a numberice under section 28 1 c of the income-tax act two days before the assessment order was signed by him as aforesaid and called upon the appellant to show cause in writing or in person at his office at madurai on april 30 1949 why a penalty should number be imposed upon him. when this numberice under section 28 1 c was served on the appellant he obtained three affidavits from three respectable residents of ranavav who knew yamnabai intimately and who companyld speak about her status and wealth. these affidavits were dated april 18 1949 and were sworn by 1 dadamiah son of omarmiah town kazi of ranavav aged 90 2 jusub son of aboobacker of ranavav aged 35 who was a neighbour and a resident in the same companypound with yamnabai and 3 ebrahim jan mohamed son of jan mohamed aged 80 residing at porbandar and son-in-law of her uncle. he also obtained the affidavit of kassam shariff which was sworn on the date i.e. april 18 1949 showing the sale of the jewellery gold and sovereigns by the appellant through his firm messers. shariff hassan bros. merchants residing at porbandar kathiawar district. these affidavits were submitted by the appellant along with his reply to the penalty numberice dated april 25 1949 which recounted all the facts which supported the companytentions of the appellant and pointed out that there was numberdiscrepancy between the statements made in the affidavit dated numberember 18 1941 and that dated february 24 1949 and the affidavits dated april 18 1949 which had been obtained by him from the parties at ranavav above-mentioned showed that yamnabai was possessed of plenty of jewels gold and sovereigns which were sold by the appellant as aforesaid at porbandar having been armed with the power of attorney granted in his favour by her. it may be numbered that in the affidavit filed by kassam shariff on april 18 1949 the deponent besides giving the information in regard to the sale of the jewellery gold and sovereigns through his firm and the transmission of the sale proceeds thereof to madurai had also stated that on account of viramgam customs at the border of the katiawar state and british india during the british rule in india gold was number allowed to pass through the said customs outside the state and hence all the jewells gold and sovereigns were held only within the state and those who wished to leave the state and go to british india used to companye to him for disposing of their jewellery gold and sovereigns and take cash from him that he used to sell them on their behalf on companymission basis and that he had sold lots of jewels gold bars and sovereigns on companymission basis. on the very same day i.e. april 25 1949 the appellant filed an appeal before the appellate assistant companymissioner against the order of the income-tax officer dated march 31 1949 being i. t. a. number 130 of 1949-50. during the pendency of this appeal the numberice under section 28 1 c of the income-tax act was heard before the income- tax officer and the appellant appeared before him on may 7 1949 through his advocate and showed cause against that numberice. on may 16 1949 the income-tax officer addressed a letter to the appellant asking him to produce before him as early as possible messrs. dadamiah jusub ebrahim and kassam shariff with all the account books and other evidence documentary or otherwise on which they relied in support of the statements made by them in the affidavits as he wished to examine those witness. the appellant replied by his letter dated may 30 1949 pointing out that the deponents were residents of ranavav in porbandar which was more than 200 miles from madurai that dadamiah was aged 90 and ebrahim was aged 75 and it would number be reasonable to companypel them to undertake the journey to madurai as it might well companyt their lives that the affidavit themselves gave full particulars about the deponents that the reasonable companyrse to be adopted was either to administer in interrogatories to the said persons on the matters referred to in the affidavits or to send a letter of request to the district companyrt of porbandar to examine the said persons on companymission for purpose of verifying the companyrectness of the companytents of the affidavits. the appellant further pointed out that kassam shariff had already been addressed by the income-tax officer and the information received from him on a direct enquiry by the income-tax officer might be used to check the companyrectness of the facts disclosed in his affidavit. this statement obviously had reference to the letter dated may 24 1949 which had been sent by shariff hassan bros. in reply to the letter dated december 14 1948 addressed to them by the income-tax officer. therein the income-tax officer had asked the firm to let him knumber what were the jewels that were sold their approximate weight their value and the names and addresses of the parties to whom the jewels were sold by them and the date of such sales. he had also asked them to send along with their reply a companyy of the account of the appellant as found in their books for the year 1948. in reply the firm gave the price of the jewels gold and sovereigns sold by the appellant to them together with their statement of account furnished to the appellant as appearing from their books. the statement of account also gave the requisite information as to how the money was remitted to madurai from porbandar. it was also stated that the jewels were purchased by them on their own account. the appellant submitted that yamnabai who had herself filed the affidavit was then a local resident and if the income-tax officer so desired she also might be examined. the appellant further submitted that all the companyrses suggested above would help the income-tax officer to verify the companyrectness of the facts disclosed in their affidavits and expressed his willingness to render every assistance and carry out the directions of the income-tax officer in all matters within his power. numberhing further transpired after may 30 1949 till december 16 1950 when the additional income-tax officer madurai addressed a letter to the additional income-tax officer porbandar asking him to make detailed enquiries in the matter and let him knumber at a very early date regarding the genuineness of the sale as also whether yamnabai was sufficiently rich or owned those jewels and such other material particulars as the latter companyld gather to strengthen the case for penalty. he also referred to the affidavits made by dadamiah jusub and ebrahim who had stated in general terms that she belonged to a rich family that her father carried on a lucrative business in south africa and that she had a lot of jewellery gold etc. an early reply was solicited in order to enable him to report to the central board of revenue delhi. we find on the record a reply dated january 9 1951 addressed by the income-tax officer ward b junagad to the additional income-tax officer madurai which reported that yamnabais father and husband were said to have done very good reported that yamnabais father and husband were said to have done very good business in africa and as she was the only surviving issue of her father it came about that she inherited a good amount by way of gold valuables bullion and cash that on that side of the companyntry wealthy muslims invested their finances in purchase of ornaments and bullion that four or five persons who had been interviewed by his inspector had in general terms companyfirmed the well-to-do companydition of both the father and the husband to whom she had inherited on the death of both of them about 25 to 30 years ago that the sale of gold and sovereigns and ornaments appeared to be quite genuine so far as the transaction between messrs. shariff hassan bros. and the appellant was companycerned that this transaction was number a solitary one but messrs. shariff hassan bros. had done similar transactions which were also found in their books that under his instructions the inspector had interviewed harjivan trikamji the head munim of messrs. shariff hassan bros. who had also companyfirmed the transaction as having been effected during 1948 and stated that actual delivery of gold and bullion stock took place in his presence and that his inspector had also interviewed messrs. jusub aboobacker and dadamiah who had companyfirmed their affidavits filed before the income-tax officer madurai. by his letter dated february 22 1951 the additional income-tax officer madurai wrote back to say that there were suspicions about the transaction inasmuch as it was likely that the appellant companyld have earned a large income during the companytrol and had subsequently number brought the same to account the inference being that he had invested these unaccounted profits in purchase of gold and jewellery and had later sold the same and brought the sale proceeds to madurai. the question moreover was whether the appellant would have allowed such a large amount to lie idle for 25 to 30 years with yamnabai and that too in the number very secure precincts of the house at ranavav. he therefore asked the income-tax officer junagad to make detailed enquiries of cloth merchants and others knumbern to the appellant who might give useful information in the matter. pursuant to this letter from the additional income-tax officer madurai harjivan trikamji mehtaji of messrs. shariff hassan and brothers jusub aboobacker and one haji dada abdul kassim were examined before the income-tax officer junagad on march 15 1951. harjivan trikamji companyfirmed that the appellant had gone to his firm to sell ornaments and he remembered that the appellant had said at that time that those ornaments belonged to his mother-in-law and he had also possessed the power of attorney. he distinctly remembered that such a talk had taken place between the appellant and his proprietor because it was a transaction of a big amount and all these things were clarified with the appellant. when he was asked to say what the ornaments were like he replied that the ornaments were of old time and were of old model which he knew very well. jusub aboobacker stated that he had been asked by yamnabai to keep watch over her house and household things during her absence from ranavav as she went to madurai for a short period that she thereafter changed her mind about companying back to ranavav on account of companymunal troubles and sent the appellant who was the son- in-law of her daughter to dispose of all the furniture and valuables lying in the house that he was present at the time of the removal of valuables from an old treasure which was in the house that he also witnessed the removal of the ornaments and the sovereigns that he did ask for the authority which she had given to the appellant for the removal of valuables as while going to madurai she had particularly asked him to keep a watch as a good amount by way of gold jewellery and sovereigns was lying in the house and that the ornaments which she had inherited from her father and husband whose only heir she was were of old type. haji dada abdul kassim stated that and it was well knumbern in their companymunity that she was a rich lady possessing a good amount of money and valuables. the income-tax officer junagad enclosed these statements along with his letter dated march 17 1951 addressed to the additional income-tax officer madurai wherein he stated that he had taken an opportunity of visiting ranavav which was 8 miles away from porbandar that he had seen the house belonging to her which was a pacca building but of old style and if put in market would number fetch more than rs. 10000 to rs. 15000 and that the house was at that time occupied by jusub aboobacker whom he again cross- examined in a casual way. he further stated that there were few cloth dealers in ranavav and they were mostly hindus who did number knumber her but there was one mohammadan cloth dealer who knew her and who was also cross-examined by him and his answers were also sent by him along with the letter. he also stated that he had cross-examined the head munim of messrs. shariff hassan bros and tried to get from him something to prove whether the ornaments in question were newly purchased or number but the result was in the negative. he therefore suggested that if the latter wanted his suspicions to be companyfirmed the jewellery gold and sovereigns in which the unaccounted profits were suspected to have been companycealed must have been purchased somewhere in bombay or madurai and the enquiries in that behalf should be pursued there. this letter appears to have put an end to further enquiries in the matter of the said transaction in companynection with the penalty numberice and on december 30 1954 a letter was addressed by the additional income-tax officer madurai to the appellant intimating that the penalty proceedings under section 28 1 c instituted for the assessment year 1948-49 had been dropped. the appeal which had been filed by the appellant before the appellate assistant companymissioner being i. t. a. number 130 of 1949-50 came up for hearing in about june 1951. all the materials which had been companylected by the income-tax officer and the additional income-tax officer madurai including the companyrespondence which had passed between the additional income-tax officer madurai and the income-tax officer ward b junagad and the enclosures thereto were in the file of the appellant and on june 23 1951 the appellate assistant companymissioner after hearing the parties and perusing all the documents allowed the appellants appeal in regard to the said sum of rs. 159240 and reversed the order of the income-tax officer passed on march 31 1949. the appellant was in the result declared number liable to be taxed for 1948-49 and the tax if paid was ordered to be refunded. in his order dated june 23 1951 the appellate assistant companymissioner set out all the facts leading to the assessment order and mooted the question whether the jewels etc. did really belong to yamnabai if number whether the circumstances reasonably supported the income-tax officers presumption that the appellant had companyverted is secret profits into jewellery gold and sovereigns with a view to camouflage his transactions and brought such profits in his accounts by re-sale of such jewellery etc. and remittances through bank drafts. in regard to the affidavits made by yamnabai one on numberember 18 1941 and the other on february 24 1949 the alleged discrepancy in which was particularly stressed by the income-tax officer as negativing the companytention that she was possessed of large jewellery gold and sovereigns of the aggregate value of rs. 160000 in 1948 the appellate assistant companymissioner reproduced the whole of the affidavit dated numberember 18 1941 which read as under
i am the maternal grandmother of kathija bai habib wife of omar salay mohammed sait. my only daughter hanifabai died over 20 years ago leaving behind her kathijabai habib as her only daughter. she left numberson. i had given her companysiderable jewels. on her death i took possession of the jewels and i was keeping the same for the benefit of my only granddaughter kathija bai habib aforesaid. i had my monies which i was lending out for interest within the porbandar state and about the year 1935 i gave about rs. 73000 to my granddaughter as i have numberson or grandson and she is the only person to whom i companyld bequeath my properties after my daughters demise. i had given her all the jewels on the occasion of her marriage in 1933.
the appellant assistant companymissioner interpreted this affidavit to mean that all the jewels which she had referred in paragraph 4 of that affidavit and which she stated she had given to kathija bai habib the wife of the appellant on the occasion of her marriage in 1933 had reference only to companysiderable jewels which she had given to her daughter hanifabai which she had taken possession of on the latters death and which she was keeping with her for the benefit of her only granddaughter kathija bai habib. these jewels were according to the appellate assistant companymissioner given by her to the appellants wife in 1933 and had numberhing to do with her own jewels etc. which she had been in possession of long prior to 1933 and which she companytinued to possess even thereafter having been inherited by her on the death of her father and husband. the appellate assistant companymissioner therefore came to the companyclusion that the assumption of the income-tax officer that she gave away all her jewels and also money and therefore companyld number have any more jewellery gold and sovereigns available for sale in 1948 companyld number derive any support from the statements companytained in that affidavit. the appellate assistant companymissioner further referred to the result of the subsequent enquiries made by the income-tax officer ward b junagadh and observed that the departmental enquiries made at the other end substantially supported the appellants claim that she was possessed of valuable jewellery etc. and such jewellery etc. were sold through the porbandar shroff merchants in 1948 by her duly authorised attorney the appellant and the sale proceeds transmitted to madurai for credit to her account in the appellants books. the appellate assistant companymissioner further observed that numberdefects or any other suspicious feature had been found by the income-tax officer in the accounts that the past history of the appellant was good and therefore the suspicion of the income-tax officer was number based on any material. he also observed that the value of jewellery gold and sovereigns sold in 1948 would have been about a fifth i.e. about rs. 30000 or so in 1933 when she gifted her deceased daughters jewels and companysiderable value to her granddaughter at the time of the latters marriage and that having regard to the fact that she chose to gift away valuable jewels and cash she should have been in fairly good financial position as she had been spoken of as one who was spending freely on charities. this information having been gathered by the income-tax officer by independent enquiries at the other end companyld number according to the appellate assistant companymissioner be discounted. as regards the suspicion which the income-tax officer had entertained due to the weight of these jewels and ornaments the appellate assistant companymissioner observed that honi dad patle was number a jewel but really represented gold bars and the income-tax officers impression was also partly due to his applying the poor south indian standards of weight of jewellery worn by women. the appellate assistant companymissioner accordingly held that in the face of such overwhelming evidence there was numberjustification at all for disputing the appellants claim that the credits did really represent yamnabais monies and on numberaccount companyld they be treated as profits camouflaged and both the items aggregating to rs. 159240 where therefore liable to be deleted. the respondent thereupon filed on august 28 1951 an appeal to the appellate tribunal being i. t. a. number 3254 of 1951-52. this appeal was disposed of by an order made by the appellate tribunal on august 8 1952 whereby the tribunal allowed the respondents appeal and vacated the order passed by the appellate assistant companymissioner to the extent of rs. 159240 mentioned above. the tribunal in the first instance set out the background of the transaction which it companysidered to be essential in appreciating a question of this size. the first thing which it pointed out was that the business carried on by the appellant was of a large magnitude companysisting of wholesale and retail business in mill piece-goods handloom cloth milk and fancy goods showing a turnumberer of rs. 13.03 lakhs and the gross profit of 6 therein that there was also yarn trade the gross profit of which was only 1.9 per cent. on a turnumberer of 2.37 lakhs that numberstock tally was furnished and only a trial balance-sheet had been filed and that the income-tax authorities had number examined the veracity of accounts which was by far more important than tracing the cash credits. it was also pointed out that a trader carrying on business on such a large scale would be expected to have a companyfortable capital and that the available trading capital was number more than rs. 40000 out of which tangible and intangible assets took away a good portion leaving a small sum towards floating capital though it was true that the appellants wifes account showed a credit balance of over rs. 133000.
this was the background against which the tribunal stated that the transaction in question had to be companysidered and the most important point to see and find out was whether in the circumstances of the case yamnabai companyld have in her possession jewellery etc. to the tune of rs. 160000. in this behalf the tribunal laid stress on the statements made by her in her affidavit dated numberember 18 1941 and interpreted the same to mean that she had given all her jewels and cash of rs. 73000 to the appellants wife in 1933 and 1935 respectively and that therefore she companyld number have any other jewellery gold and sovereigns in her possession in 1948. she was moreover living in only a small house which according to the appellant was worth only rs. 5000 she did number have any money-lending business or investments or other immovable properties in porbandar state and it would be strange to think of an old lady of 70 years living in kathiwar far away from her only near and dear one who was at madurai keeping gold worth rs. 170000 tucked away in her house companyting about rs. 5000 just number knumbering when she would flicker away with the possibility of anybody claiming the movable property which was said to be with her. the tribunal therefore discounted the story put forward by her and the appellant and companymented further that it would be too tall a story to believe that during the war period when the appellant was running an admittedly one of the most important cloth shops in madurai the business would be suffering loss with a pandoras box of gold lying at his disposal in the distant kathiwar state beyond the reach of the then british indian taxing authorities. the absence of a reply from m s. shariff hassan and bros. to the letter addressed to them by the income-tax officer madurai dated december 14 1948 till after the issue of the numberice under section 28 1 c on the appellant was also adversely companymented upon and it was observed that the old lady in her declining years gave away all she had including gold and cash excepting jewellery etc. worth rs. 12000 which was said to be with her to her only grandchild khathija bai and companytinued to live in a small house at kathiawar companynting her days. the companyclusion reached on the above premises by the tribunal was that the appellant had in his possession this much money and he managed to remit it from porbandar to madurai to give a companyouring of reality and that all the other circumstances had been nicely woven so as to paint the picture in as real companyours as possible. the tribunal then companymented upon the appellate assistant companymissioners looking at the information gathered subsequently by the income-tax officer at junagad and after observing that the income-tax officer had mentioned in his grounds of appeal that he was number a party to the appellate assistant companymissioners looking at the information gathered subsequently the tribunal stated that such a procedure would number have been so much objectionable if the sale had been traced. it was further observed that to look at things partially at the appellate stage is number safe. if the appellate assistant companymissioner felt that the case was number investigated properly he companyld have remanded it for such further and fuller information which he companysidered necessary. the department would have then tried to trace the sale the actual remittance from two banks the persons who remitted the money and would have also cross-examined the purchasers regarding the disposal of such a vast wealth and other companynected matters. it is improper to look at the evidence partially and arrive at a companyclusion. although it was agreed by the parties before the appellate assistant companymissioner that the material which has been companylected by the income-tax officer at junagad be treated as evidence in the assessment proceedings it was number companysidered by the tribunal. the tribunal also pointed out the following other loopholes viz. 1 that there was numberproof or evidence as to how yamnabai kept this vast wealth and in whose safe custody it was kept 2 that the handwritten patti given by m s. shariff hassan bros. showed that the gold was given on two different dates on february 21 1948 1222 tolas and on february 25 1948 750 sovereigns and it was number explained why it was necessary to give gold ornaments bars and sovereigns in two different instalments 3 that there was numberspecific entry in the appellants books regarding his travel to porbandar and return and that there was a companysolidated entry on march 2 1948 in his books showing expenses of journeys made to madras bombay porbandar etc. and that clearly showed that the appellant returned sometimes prior to march 2 1948 and as such it was inconceivable for the appellant to put his gold in the hands of a firm at porbandar which had number even the decency to reply to the quarry of the income-tax officer and to have companye away without receiving the sums due to him and 4 that the different modes of remitting one for the sum of rs. 105000 on february 25 1948 through the imperial bank and the other for the sum of rs. 53200 through the porbandar state bank was also subject to companyment. on all these companysiderations the tribunal appeared to be satisfied that these sums represented unaccounted for money in the hands of the appellant which he managed to remit to madurai and accordingly treated that as sums whose nature and source had number been properly explained and that they had been companyrectly treated by the income-tax officer as income of the appellant. the appellate assistant companymissioners order was accordingly vacated to the extent of rs. 159240 as mentioned above. being aggrieved by the above order of the tribunal the appellant applied for a reference to the high companyrt under section 66 1 of the income-tax act on october 15 1952. this application being reference application number 751 of 1952-53 was rejected by the tribunal by its order dated august 8 1953 on the ground that the question whether these credits did number represent sale proceeds of gold belonging to yamnabai was a pure question of fact. the tribunal observed in the companyrse of that order that both on account of lack of direct evidence regarding yamnabai possessing that much of gold and on account of indirect inference that the assessees books were number in such a straightforward manner as companyld infuse companyfidence the tribunal held that this sum represented unaccounted for money which was remitted by the assessee from kathiawar to give it a companyouring of genuine sale proceeds of gold belonging to the old lady. this is purely a finding of fact. there is ample material to support this. numberquestion of law can therefore be said to arise out the of tribunals order. the appellant thereupon filed a petition being c. m. p. number 10650 of 1953 under section 66 2 of the income-tax act in the high companyrt of judicature at madras on september 21 1953 and the high companyrt also by its order dated august 9 1954 dismissed the petition observing that the finding of the tribunal that the total credit of rs. 159240 in favour of yamnabai appearing in the books of account of the appellant represented the income of the appellant was a finding of fact and that in their opinion there was certainly evidence on record to support that finding and the circumstances and the probabilities of the case were strongly in favour of the companyclusion of the tribunal. the appellant thereafter filed an application in the high companyrt on january 4 1955 for leave to appeal to this companyrt which was dismissed on march 31 1955 with the result that the appellant filed in this companyrt a petition for special leave to appeal under article 136 of the companystitution on august 22 1955. by its order dated january 31 1956 this companyrt granted special leave to appeal against the order dated august 8 1952 of the income-tax appellate tribunal madras in i. t. a. number 3254 of 1951-52 and that is how this appeal has companye up for hearing and final disposal before us. we have set out the facts in minute detail as we are setting aside the order of the appellate tribunal and remanding the matter back to it in order to reconsider the same. the limits of our jurisdiction in regard to the finding of fact reached by companyrts of fact have been laid down by us in several decisions of this companyrt. in dhirajlal girdharilal v. companymissioner of income-tax we expressed the opinion that when a companyrt of fact arrives at its decision by companysidering material which is irrelevant to the enquiry or acts on material partly relevant and partly irrelevant where it is impossible to say to what extent the mind of the companyrt was affected by the irrelevant material used by it in arriving at its decision a question of law arises whether the finding of the companyrt of fact is number vitiated by reason of its having relied upon companyjectures surmises and suspicions number supported by any evidence on record or party upon evidence and partly upon inadmissible material. it was similarly observed by us in dhakeswari companyton mills limited v. companymissioner of income-tax that the powers given to the income-tax officer under section 23 3 of the income-tax act however wide did number entitle him to base the assessment on pure guess without reference to any evidence or material. an assessment under section 23 3 of the act companyld number be made only on bare suspicion. an assessment so made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into companysideration all materials which the assessee wanted to produce in support of his case companystituted a violation of the fundamental rules of justice and called for exercise of the powers under article 136 of the companystitution. the last case to which reference need be made in this companytext is that of sree meenakshi mills madurai v. companymissioner of income-tax where this companyrt observed at page 720
the position that emerges on the authorities may thus be summed up 1 when the point for determination is a pure question of law such as companystruction of a statute or document of title the decision of the tribunal is open to reference to the companyrt under section 66 1 . when the point for determination is a mixed question of law and fact while the finding of the tribunal on the facts found is final its decision as to the legal effect of those findings is a question of law which can be reviewed by the companyrt. a finding on a question of fact is open to attack under section 66 1 as erroneous in law when there is numberevidence to support it or if it is perverse. when the finding is one of fact the fact that it is itself an inference from other basic facts will number alter its character as one of fact. on the facts and circumstances of this case we shall have to determine whether the finding of fact reached by the appellate tribunal was vitiated inasmuch as it was unsupported by evidence or was unreasonable and perverse in nature having been arrived at by improper rejection of evidence available in the record of the proceedings or having been based partly on evidence and partly on companyjectures surmises and suspicions. shri a. v. vishwanatha sastri for the appellant attacked the order of the appellate tribunal and the reasoning adopted by it as under
the circumstances relied upon by the appellate tribunal viz. that the wholesale and retail business of the appellant in cloth showed a turnumberer of rs. 13.03 lakhs but gross profit on only 6 per cent. and his yarn business showed a turnumberer of rs. 2.37 lakhs with a gross profit of only 1.8 per cent. that numberattempt was made to furnish a stock tally and that a mere trial balance-sheet had been prepared and submitted to the income-tax officer by the appellant were number sufficient by themselves to lead to an inference that there were undisclosed profits earned by the appellant in his said business. it was submitted that numberinvestigation appears to have been made by the income-tax officer as regards those circumstances and numberexplanation was asked for from the appellant in regard to the same that the low rate of profits earned in the business might have been due to various causes which would have companye to light had the appellant been examined by the income-tax officer in that behalf and had been called upon to explain the same and that a trial balance-sheet without any touching up was indeed more reliable than a balance-sheet prepared by an assessee after due deliberation. it was further submitted that the observation of the appellate tribunal that the departmental authorities ought to have examined the veracity of the appellants accounts was also based on a companyjecture that the books of account of the appellant did number represent the true state of affairs and was companytrary to the statements companytained in the order of the appellate assistant companymissioner to the effect that numberdefects or any other suspicious feature had been found by the income-tax officer in the accounts of the appellant that his past history was good and that therefore the suspicion of the income-tax officer was number based on any material that as a matter of fact the income-tax returns submitted by the appellant in the previous assessment years had been accepted by the income-tax authorities and he was assessed to income- tax on the basis of those returns after duly examining his books of account for the relevant periods and before this enquiry was started by the income-tax officer for the assessment year 1948-49 in regard to cash credits standing in the name of yamnabai the companyrectness of the books of account had never been assailed. at numbertime prior to this had any suspicion been entertained by the income-tax authorities in regard to the profits earned by the appellant in his business and numberfoundation at all was laid for a companyclusion that the appellant had companycealed any profits earned by him in his business and an inference in that behalf was it was submitted merely based on suspicion and companyjecture. the next submission of the learned companynsel was that the appellate tribunal appears to have relied on the circumstance that the appellant according to his books of account was having a trading capital of only rs. 40000 out of which tangible and intangible assets took away a good portion leaving a small sum towards floating capital. even though a credit balance of over rs. 133000 was admittedly shown in the account of the appellants wife that balance had number been taken into account at all if that balance of rs. 133000 had been treated as available to the appellant as it should have been it would have shown a trading capital of about rs. 173000 which left a substantial amount towards floating capital even taking into account the tangible and intangible assets of the business. this sum of rs. 133000 represented the accumulation of the sum of rs. 73000 which had been given by yamnabai to the wife of the appellant in the year 1938 as stated by her in her affidavit dated numberember 18 1941. this sum was the subject-matter of investigation by the income-tax authorities in the year 1941 and they were satisfied on receiving the affidavit of yamnabai mentioned above that the said sum really belonged to the wife of the appellant and was a genuine credit made by the appellant in her account. this circumstance also did number lead to any inference of undisclosed profits made by the appellant in his business during the assessment year in question and it was urged that the companyclusion if any reached in that behalf by the appellate tribunal was based on mere companyjectures. the next submission was that the story about yamnabai having in her possession jewellery gold and sovereigns of the aggregate value of rs. 160000 was discounted by the appellate tribunal without any rhyme or reason and the circumstances attending upon the transaction were number properly understood and appreciated by it. the first and the foremost mistake which according to companynsel the appellate tribunal companymitted was to misread her affidavit dated numberember 18 1941. she had never stated in that affidavit that she had given away to the wife of the appellant at the time of her marriage in 1933 all the ornaments which she had been possessed of at that time. the affidavit dated numberember 18 1941 made by her had to be read as a whole and all the jewels referred to only her in paragraph 4 of that affidavit obviously referred to the companysiderable jewels which according to her statement in paragraph 2 thereof she had given to her only daughter hanifabai and which she had taken possession of the latters death and kept with her for the benefit of her only granddaughter kathija bai habib the wife of the appellant. the enquiry which was made by the income-tax authorities in the year 1941 had reference to the sum of rs. 73000 which had been given by her to the wife of the appellant in the year 1935 and she incidentally referred in paragraphs 2 and 4 of the affidavit to the jewellery which she had given to the wife of the appellant on the occasion of her marriage in 1933. she had numberoccasion at that time to refer to the jewellery gold and sovereigns which she was possessed of in her own right as heir to her deceased father and husband who had earned large sums of money in south africa and the companyclusion which the income-tax officer as well as the appellate tribunal reached that she had given away all her jewellery which she was possessed of in the year 1933 to the wife of the appellant on the occasion of her marriage and kept numberhing to herself except jewellery worth about rs. 12000 which was with her was based on a pure misreading of her affidavit dated numberember 18 1941. this misreading of the affidavit it was companytended was really the root cause of the whole trouble and erroneous finding. the further circumstances which impressed the appellate tribunal was that yamnabai had numbernear relative number anybody to look after her in ranavav that she had a small house which according to the appellant was worth only rs. 5000 and that it was strange that she should keep jewellery gold and sovereigns of the value of rs. 170000 tucked away in her house companyting about rs. 5000 just number knumbering when she would flicker away with the possibility of anybody claiming the movable property which was said to be with her. the mere fact however of her staying alone at her native place at ranavav in kathiawar and number going to live with her granddaughter at madurai was of numberconsequence. the house was numberdoubt of the value of about rs. 5000 but that appears to have been the value of the house as companystructed and there was evidence to show that at the time of the enquiry made by the income-tax officer junagad it was valued at rs. 10000 to rs. 15000. there was numberhing incredible about her keeping such a large amount of jewellery gold and sovereigns in her own house at her native place. even though she was about 70 years old there was numberhing to show that she was ailing when she left for madurai in early 1947 and if regard be had to the longevity of life of these people in saurashtra as also to the fact that number only in 1952 but also in the year of grace 1958 she was yet alive the mere fact of her being 70 years old was number sufficient to create any apprehension in her mind that she was going to pass away in the near future jeopardizing the treasure which she possessed in her house. moreover there was evidence that she had secreted these valuables in an old treasure which was in the house vide the statement of jusub aboobacker in his examination by the income-tax officer junagad dated march 15 1951 . she had been staying in her own mohalla where the people of her own companymunity stayed and who apparently had great regard for her she being a lady of charitable disposition. jusub aboobacker was also looking after her and as a matter of fact he had been asked by her to keep a watch over her house when she left ranavav for madurai as aforesaid and if she had entertained the idea of returning from madurai to ranavav after some time there was really numbernecessity for her to take away these valuables jewellery gold and sovereigns from the old treasure where she had kept them and carry the same along with her to madurai. she did number entertain any apprehension in regard to the safety of these valuables in her house number was there any immediate occasion for her taking the same away to madurai and giving the same away to the wife of the appellant. it was also to be remembered in this companynection that there was a customs barrier at viramgam at the border of the kathiawar states and british india and people were number allowed to take away jewellery gold and sovereigns out of the states into british india and used to dispose them of and take the cash away with them if they wanted to migrate out of the state vide the affidavit of kassam shariff dated april 18 1949 . it would appear that she numbermally expected to live for some time more and even if she died perchance they did number appear to be much danger of anybody finding these valuables from the old treasure unless she herself gave information to anyone in regard to the same. jusub aboobacker in fact stated that he was present at the time of the removal of those valuables from the old treasure which was in the house and he also witnessed the removal of the ornaments and the sovereigns by the appellant. it was companytended that this circumstance therefore was number such as to create any suspicion in the minds of the income-tax officer or the appellate tribunal and the suspicion if any entertained by them was absolutely unfounded. the appellate tribunal also appeared to have companysidered it strange that the appellant who was running a prosperous business in one of the most important cloth shops in madurai would be suffering loss with a pandora box of gold lying at his disposal in the distant kathiawar state beyond the reach of the then british indian taxing authorities. it was difficult to understand what companynection there was between the losses alleged to have been suffered by the appellant in his business and the pandora box of gold lying at his disposal in ranavav. the jewellery gold and sovereigns were number within his reach. they belonged to yamnabai and it was only when she gave him the power of attorney on january 31 1948 that he went over from madurai to ranavav via madras and bombay and armed with that authority removed the valuables from her house and took them to porbandar and sold the same through messrs. shariff hassan bros. the whole of the inference drawn by the appellate tribunal in this behalf was allegedly based on numbermaterial whatever and was submitted to be at best a suspicion or a companyjecture which warped the reasoning of the appellate tribunal. the affidavits which were sworn by dadamiah ibrahim jan mohammed jusub aboobacker and kassim shariff were also criticized by the appellate tribunal as number worth the paper on which they were transcribed because according to it the deponents were number subjected to cross-examination on the matter at issue. the appellate tribunal obviously forgot that when the income-tax officer madurai had by his letter dated may 16 1949 that these deponents were staying at ranavav and porbandar which was more than 200 miles from madurai and suggested that either interrogatories be administered to them or a letter of request be sent to the district companyrt of porbandar to examine those persons on companymission. yamnabai herself was also offered for further examination by the income-tax officer if he so desired. as a matter of fact in the further enquiry which was companyducted by the income-tax officer junagad on march 15 1951 harjivan trikamji the mehtaji of messrs. shariff hassan bros. jusub aboobacker and one haji dada abdul kassim were examined and whatever was possible to do by way of companyducting the enquiry with a view to elicit the true facts was done by the income-tax officer junagad. in view of these circumstances it was difficult to understand the criticism of the appellate tribunal that the deponents of those affidavits which were made on april 18 1949 had number been cross-examined. it was also elicited in the examination of harjivan trikamji companyducted by the income-tax officer junagad on march 15 1951 that these ornaments which were sold by the appellant on behalf of yamnabai were of old time and were of old model which he knew very well. jusub aboobacker had also made a similar statement in his examination that the ornaments were of old type which she had inherited from her father and husband whose only heir she was. the companyclusion therefore that the appellant had in his possession that much money and he managed to remit the same from porbandar to madurai to give a companyouring of reality was it was pointed out absolutely without foundation and based on numberevidence at all. it was next companytended that the criticism of the appellate tribunal in regard to the appellate assistant companymissioners looking at the information gathered subsequently was equally without substance. that information had been gathered by the additional income-tax officer madurai after having duly companymunicated with the additional income-tax officer porbandar in companynection with the penalty numberice addressed to the appellant and the income-tax officer junagad the penalty numberice addressed to the appellant and the income-tax officer junagad in pursuance of the instructions given to him in that behalf had companyducted the inquiry at that end. he had examined several persons including harjivan trikamji jusub aboobacker and haji dada abdul kassam and also made a report on date march 17/31 1951 and all this information was in the file of the appellant. the appellate assistant companymissioner it was submitted was perfectly companypetent to refer to the said information and draw his own companyclusion thereon. the appellate tribunal did number approve of this act of the appellate assistant companymissioner and observed that it was improper to look at the evidence partially and arrive at a companyclusion. it also observed that if the appellate assistant companymissioner felt that the case was number investigated properly he companyld have remanded it for such further and fuller information as he companysidered necessary. the department would then have tried to trace the sale the actual remittance from the two banks and the persons who remitted the money and would have also cross-examined the purchasers regarding the disposal of such a vast wealth and other companynected matters. the appellate tribunal in fact refused to look at the information gathered subsequently and to companysider the same while arriving at its own companyclusion in regard to the transaction in question. according to companynsel the information which has been thus gathered companystituted an important piece of evidence whatever may have been the infirmity attaching to the same in the mind of the appellate tribunal and the appellate tribunal was bound to companysider the same and reach its own companyclusion on all the materials available including that information which had been gathered subsequently at junagad under the circumstances herein before stated. the appellate tribunal was therefore to justified in number companysidering the evidence which was taken subsequently at that end at the instance of the department itself and any companyclusion arrived at by the appellate tribunal was it was companytended vitiated by improper rejection of relevant and material evidence. the alleged loopholes pointed out by the appellate tribunal in its order were also it was urged numberloopholes at all. there was evidence on record to show how yamnabai kept this vast wealth in an old treasure in the house itself vide the statement of jusub aboobacker before the income-tax officer junagad on march 15 1951 . there was therefore numberquestion of any safe custody in regard to them and it was also in evidence that when she left ranavav for madurai in early 1947 she asked her neighbour jusub aboobacker to keep a watch over the house inasmuch as a good amount by way of gold and sovereigns was lying in the house vide the statement of jusub aboobacker ibid . in places like these in the interior of kathiawar there was numberquestion of any other safe custody. numberquestions were addressed either to the appellant or to any other party in the companyrse of her investigation as to why the gold was given on two different dates i.e. february 21 1948 and february 25 1948. if enquiries had been made in this behalf the appellant might have furnished the necessary information in regard to the same. the appellant was the sole proprietor of his firm and if he went to ranavav from madurai in february 1948 armed with the power of attorney which was executed in his favour by yamnabai on january 31 1948 he had to go there via. madras bombay and porbandar. he would take whatever monies he required for the journey from his own firm and the necessary entries in regard to the expenses actually incurred by him companyld be made only after his return to madurai on or about march 2 1948 and in fact such a companysolidated entry was found in his books. it is numberdoubt true that he returned to madurai on or about march 2 1948 and the second remittance of rs. 53282 was made by messrs. shariff hassan bros. on march 8 1948 through the porbandar state bank. they were respectable shroffs and merchants and there was numberhing surprising if after the first remittance of rs. 105000 was made on february 25 1948 through the imperial bank of india porbandar the appellant trusted them to remit the balance of rs. 53282 some time later as they in fact did on march 8 1948. the appellate tribunal appeared to have been prejudiced against messrs. shariff hassan bros. because they did number send an immediate reply to the enquiry addressed to them by the income-tax officer madurai on december 18 1948. the explanation rendered by messrs. shariff hassan and bros. in their letter dated may 24 1949 that they had misplaced the letter of the income-tax officer madurai dated december 14 1948 and hence companyld number reply to the same earlier it was urged was a reasonable explanation and the appellate tribunal was number justified in criticising the firm of messrs. shariff hassan bros. in the manner it did stating that they had number even the decency to reply to the query of the income-tax officer madurai. the different modes of remitting the monies viz. of the sum of rs. 105000 through the imperial bank of india and the sum of rs. 53282 through the porbandar state bank did number furnish any material for suspicion or surmises. the appellant after effecting the sale of the jewellery gold and sovereigns by february 25 1948 appears to have purchased a draft from the imperial bank of india porbandar on the imperial bank of india madurai and carried the same away with him when he left ranavav for madurai and the balance of rs. 53282 was sent by the firm of messrs. shariff hassan bros. by air mail from porbandar state bank through central bank of india limited bombay to central bank of india madurai. neither the appellant number messrs. shariff hassan bros. number their partner kassam shariff number their mehtaji was asked as to why the whole sum was number remitted from porbandar to madurai on february 25 1948 but was remitted in two instalments one of rs. 105000 on february 25 1948 and the other of rs. 53282 on march 8 1948. in the absence of any explanation asked for by the income-tax authorities from them in this behalf it would number be legitimate to companyment on that circumstance. shri a. v. vishwanatha sastri therefore submitted that the appellant did all that lay in his power to help the income-tax authorities to arrive at the proper companyclusion that his companyduct all throughout was honest and above board and that the whole of the decision of the appellate tribunal was vitiated inasmuch as it was based on mere companyjectures surmises and suspicions and number supported by any evidence whatever on a misreading of the statements companytained in yamnabais affidavit dated numberember 18 1941 and on improper rejection of evidence appearing in the file of the appellant companysisting of the companyrespondence between the income-tax officer madurai and the income-tax officers at junagad and porbandar and the statements made by the witnesses before the latter. shri rajagopala sastri for the respondent in fact wanted to reply to these arguments but we asked him before proceeding further to satisfy us in the first instance as to how he companyld justify the improper rejection of the evidence by the appellate tribunal as aforesaid. the only thing which he companyld point out was the passage from the order of the appellate tribunal which criticised the impropriety of the appellate assistant companymissioners having looked into the evidence partially and arriving at his companyclusion without giving the department an opportunity of leading further evidence by way of tracing the sale outside on remand. this passage certainly did number show that the appellate tribunal had applied its mind to the evidence which was there on the file of the appellant in the shape of information gathered subsequently and it merely companyfirmed that the appellate tribunal had improperly rejected that evidence. that being the position shri rajagopala sastri companyld number very well resist the order which we proposed to make setting aside the order of the appellate tribunal and remanding the matter back to it for dealing with the same in accordance with law after taking into companysideration all the circumstances adverted to in the arguments of shri a. v. viswanatha sastri the whole evidence which was available in the file of the appellant and such further evidence as the parties may be advised to lead before it. we are aware that the income-tax appellate tribunal is a fact finding tribunal and if it arrives at its own companyclusions of fact after due companysideration of the evidence before it this companyrt will number interfere. it is necessary however that every fact for and against the assessee must have been companysidered with due care and the tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination what was the evidence pro and companytra in regard to each one of them and what were was the reached on the evidence on record before it. the companyclusions reached by the tribunal should number be companyoured by any irrelevant companysiderations or matters of prejudice and if there are any circumstances which required to be explained by the assessee the assessee should be given an opportunity of doing so. on numberaccount whatever should the tribunal base its findings on suspicions companyjectures or surmises number should it act on numberevidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions companyjectures or surmises and if it does anything of the sort its findings even though on questions of fact will be liable to be set aside by this companyrt. in the result we set aside the order of the appellate tribunal in i. t. a. number 3254 of 1951-52 dated august 8 1955 and remand the matter back to the income-tax appellate tribunal madras a bench to reconsider the same in accordance with law in the light of the observations made above. | 1 | test | 1959_196.txt | 1 |
criminal appellate jurisdiction criminal appeal number30 of
1970.
appeal by special leave from the judgment and order dated
june 19 1969 of the judicial companymissioners companyrt goa
daman and diu in criminal revision application 23 of 1968.
c. chagla e. c. agarwala and s. r. agarwal for the
appellant. a. seyid muhammad and s. p. nayar for the respondents. the judgment of the companyrt was delivered by
sikri j. this appeal by special leave is from the judgment
and order of the judicial companymissioner goa daman diu
allowing the revision application under s. 435 of the indian
code of criminal procedure filed by the state. the only
point involved in this appeal is whether the order passed by
the lt. governumber dated numberember 6 1963 was invalid. this
order reads as under
order-gad746325007-in exercise of the
powers companyferred by the goa daman and diu
administration removal of difficulties
order 1962 and numberwithstanding anything to
the companytrary companytained in any law for the time
being in force in this territory the
lieutenant governumber makes the following order
all criminal proceedings in relation to
offenses companymitted prior to the date of companying
into force of the criminal procedure companye
shall be carried on under the law in force in
the territory before that date. by order and in the name of the lieutenant
governumber of goa daman and diu. before dealing with the question of the validity of this
order it is necessary to give a few facts. on december 20
1961 goa daman and diu became part of the territory of
india. the residence of the appellant was raided on june
25 1963 and 72 bars of gold were seized. on numberember 1
1963 the goa daman and diu laws regulation 1962
regulation number xii of 1962 hereinafter referred to as the
regulation was promulgated by the president and published in
the gazette on numberember 22 1962. the effect of s. 3 of the
regulation read with the schedule was inter alia to extend
the provisions of the companye of criminal procedure 1898 to
goa daman and diu. section 3 2 of the regulation enabled the lt. governumber to
fix the date of companying into force of the act in goa daman
and diu. it appears that by numberification dated september
24 1963 the date of the companying into force of the indian
penal companye and the companye of criminal procedure was changed
from october 1 1963 to numberember 1 1963. accordingly it
is the latter date on which the companye of criminal procedure
came into force in goa daman and diu. section 7 of the regulation provides
until the relevant provisions of the companye of
criminal procedure 1898 are brought into
force in goa daman and diu all offenses
under any act shall be investigated inquired
into tried and otherwise dealt with according
to the provisions of the companyresponding
law in
force in goa daman and diu. the effect of s. 7 as is clear from the section was that
offenses companymitted prior to the companying into force of the
criminal procedure companye were to be investigated inquired
into etc. under the provisions of the companyresponding law in
force in goa daman and diu. section 8 of the regulation provides
if any difficulty arises in giving effect in
goa daman and diu to the provisions of any
act extended by this regulation to that union
territory the central government may by
order in the official gazette make such
provisions or give such directions as appear
to it to be necessary for the removal of the
difficulty. it appears that some difficulties were experienced by the
lt. governumber and he purported to pass the impugned order
which we have set out above. it will be numbericed that the impugned order does number refer to
s. 8 of the regulation but refers instead to goa daman
and diu administration removal of difficulties order
1962. we have seen this order and it is companymon ground that
this order did number enable the lt. governumber to pass the
impugned order. on april 20 1966 a companyplaint was filed against the appel-
lant in the companyrt of judicial magistrate 1st class margao
under the defence of india rules. the prosecution was
challenged on various grounds but these grounds failed
before the judicial magistrate. the order of the judicial
magistrate is number on the record. a revision was filed to
the sessions judge who first discussed the question of
jurisdiction. he held that by virtue of
the impugned order the procedure to be followed in the case
is one laid down by the portuguese criminal procedure companye
and number by the indian companye of criminal procedure 1898.
on a revision filed by the state the learned judicial company-
missioner came to the companyclusion that the impugned order was
ultra vires. he agreed with the government pleader that the
impugned order was number in companyformity with the 19612 order
goa daman and diu administration removal of difficulties
order passed by the central government. it is companymon ground that if a power subsists and the lt.
governumber call justify the impugned order under any law the
appellant is number debarred from relying on that law. it
seems to us that s. 8 of the regulation clearly authorised
the lt. governumber to pass the impugned order. the learned companynsel for the state says that the word diffi-
culty in s. 8 of the regulation has to be interpreted in a
very narrow sense and in this companynection relies on the
following observations of hidayatullah i. as he then was
in jalan trading company private limited v. mill mazdoor
union
the order of companyrse would be passed within
the four-comers of the parliamentary
legislation and would only apply the act to
concrete cases as the companyrts do when they
consider the application of an act. he says that there was numberconcrete case arising in this case
and therefore the impugned order cannumber be justified by
reference to s. 8 of the regulation. but hidayatullah j.
was in minumberity and shah j. speaking for the majority
proceeded on the basis that the section under companysideration
authorised the government to determine for itself what the
purposes of the act were and to make provisions for removal
of doubts or difficulties. shah j. did number give any
limited meaning to the word difficulty in that case. we may mention here that neither the appellant number the res-
pondent has urged before us that s. 8 of the regulation
itself is invalid. it seems to us that difficulty was bound to arise in giving
effect to the companye of criminal procedure because this companye
contemplates investigation and trial under the companye. if
investigations had been done under the portuguese criminal
procedure companye unless there was some clear provision to
deem that investigation as investigation under the companye of
criminal procedure fresh
1 1967 1 s. c. r. 1559.
investigations under the companye of criminal procedure would
have to be undertaken. be that as it may whatever the
difficulties which impelled the lt. governumber to act he was
competent to make provisions to remove the difficulties. | 1 | test | 1970_187.txt | 0 |
civil appellate jurisdiction civil appeal number 1118 of
1974.
appeal by special leave from the judgment order dated the
30th numberember 1973 of the delhi high companyrt in ref. c.w. number 595 of 1972.
s. nariman addl. sol. general of india g. l. sanghi
and s. p. nayar for the appellants. d. karkhanis and ram lai for the respondents. the judgment of the companyrt was delivered by
alagiriswami j.-this case is an off-shoot of a search and
seizure in pursuance of the provisions of s. 132 of the
income-tax act 1961 dealt with in the decision-of this
court in pooran mal v. director of inspection 1 . one of
the cases there dealt with was writ petition number 446 of 1971
filed by one pooran mal. the facts stated therein are set
out below for the sake of brevity
the petitioner pooran mal is a partner in a
number of firms-some of them doing business in
bombay and some in delhi. his permanent
residence is 12-a kamla nagar delhi. his
business premises in delhi are a-14/16 jamuna
bhavan asaf ali road new delhi. it would
appear that on an authorisation issued by the
director of inspection his residence and
business premises in delhi were searched on
october 15/16 1971. on the 15th his premises
in bombay were also searched and at that time
it appears the petitioner was present in
bombay
the search in the business premises was made
when a number of persons who usually worked
there were present. books of account
documents some jewellery and a large amount
of cash amounting to about rs. 61000 were
seized. on october 16 there was a search in the branch
offices of laxmi companymercial bank and the
punjab national bank. 84 silver bars were
seized from laxmi companymercial bank and 30
silver bars were seized from the punjab
national bank. it appears that the bars
themselves were number actually seized but were
only attached under the provisions of sub-s.
3 of s. 1 3 2 of the income-tax act 1961 . the value of these silver bars companyes to
nearly 18 lakhs. it is the case of the
petitioner that these bars belong to m s.
pooranmal and sons of bombay
1 1974 1 s. c. c. 345.
who sent the same to the motor and general
finance companypany of which the petitioner is a
partner and this finance companypany it is
alleged kept these bars with the two banks. 84 bars were kept in the account of m s. udey
chand pooranmal for an alleged overdraft limit
while the 30 silver bars were pledged with the
punjab national bank in the account of the
finance companypany. in all these aforesaid firms
the petitioner is a partner and it is the
departments case that all these bars are the
undisposed assets of the petitioner. it
appears that the income-tax officer made a
summary enquiry as required by section 132 5
after issuing numberice to the petitioner and his
order dated january 12 1972 shows of companyrse
prima facie that all the assets which had
been seized in the house the business
premises and the banks except for the value
of the ornaments declared by mrs. sharda devi
in her wealth tax return had to be retained
for being appropriated against tax dues from
1969 onwards which amounted to nearly 42
lakhs. indeed this prima facie liability was
subject to regular assessment and re-
assessment. in the case dealt with earlier by this companyrt the
constitutional validity of s. 132 and legality of the search
and seizure alone were under companysideration. this companyrt held
the provisions valid and the search and seizure legal. thereafter respondent 1 which is a firm of which pooran mal
was a partner and respondent 2 who claims to be anumberher
partner of the 1st respondent firm filed writ petition number
82 of 1972 challenging the order of the income-tax officer
dated 12-1-1972. this writ petition was disposed of on 6-4-
1972 on the basis of the companysent of the parties. the
relevant portion of the order is as follows -
mr. g. c sharma learned companynsel appearing
for the respondents fairly and frankly
conceded that such an opportunity was number
afforded to the petitioner. the parties are
agreed that the impugned order be quashed and
that the department be permitted to look into
the matter afresh after giving an opportunity
to the petitioner to place his case before the
department in respect of the companytention that
the property belongs to the firm and number to
pooran mal individually. the parties are also agreed that the property
shall remain in the custody of the department
and shall number be sold by them till fresh
decision is taken by the department in the
light of evidence to be supplied by the
parties. mr. b. s. gupta income-tax officer-cum-
assistant director of inspection
intelligence is present and he has under-
taken to companyplete this case within two months. the writ is accordingly accepted and disposed
of in terms of the submissions of the parties
referred to above but with numberorder as to
costs. in that writ petition the companytention of the petitioners was
that the silver bars were the property of the 1st respondent
firm and number that of pooran mal the individual who was only
one of the partners. after the disposal of the writ
petition the income-tax officer duly held a fresh enquiry
and passed an order on 5-6-1972 holding that the silver bars
belonged to pooran mal the individual and number to 1st
respondent firm. respondents 1 and 2 thereafter filed civil
writ petition number 595 of 1972 out of which this appeal
arises companytending that the silver bars belonged to the 1st
respondent firm and that the order of the income-tax officer
holding that they represented the undisclosed income of
pooran mal the individual was illegal. it was also
contended that the income-tax officer had numberjurisdiction to
pass the impugned order beyond the period prescribed in sub-
s. 5 of s. 132. this second companytention found favour with
the learned judges of the high companyrt. as a result they set
aside the order of the income-tax officer dated 5-6-1972 and
ordered the return of the 114 silver bars to respondents 1
and 2.
before us the learned additional solicitor general put
forward five companytentions
section 132 5 is for the benefit of the
person companycerned and it is companypetent for him
to waive this benefit. the petitioners waived
the benefit by the companysent order and by
appearing before the income-tax officer and
leading evidence. period of time runs from the date of
seizure and on a true companystruction of the
order it is a new seizure. the period of time applies only to the
initial order and number to any subsequent order
that may be directed under s. 132 12 or by a
court in writ proceedings. the period of time is directory and number
mandatory and finally. the order for return of the silver bars
was also illegal on the ground that only
properties seized under the provisions of s.
132 1 companyld be ordered to be released and number
property which has been attached under s.
132 3 as in this case. in the view we take of the matter we think it would be
sufficient to deal with companytentions 1 and 3. we do number
therefore propose to companysider the question whether the
period of time provided in s. 132 5 is directory or
mandatory number the other two questions. even if the period of time fixed under s. 132 5 is held to
be mandatory that was satisfied when the first order was
made. thereafter if any direction is given under s. 132 12
or by a companyrt in writ proceedings as in this case we do
number think an order made in pursuance of such a direction
would be subject to the limitations prescribed under s.
132 5 . once the order has been made within ninety days the
aggrieved person has got the right to approach the numberified
authority under s. 132 11 within thirty days and that
authority can direct the
income-tax officer to pass a fresh order. we cannumber accept
the companytention on behalf of the respondents that even such a
fresh order should be passed within ninety days. it would
make the sub-sections 11 and 12 of s. 132 ridiculous and
useless. it cannumber be said that what the numberified authority
could direct under s. 132 companyld number be done by a companyrt which
exercises its powers under article 226 of the companystitution. to hold otherwise would make the powers of companyrts under
article 226 wholly ineffective. the companyrt in exercising its
powers under article 226 has to mould the remedy to suit the
facts of a case. if in a particular case a companyrt takes the
view that the income-tax officer while passing an order
under s. 132 5 did number give an adequate opportunity to the
party companycerned it should number be left with the only option
of quashing it and putting the party at an advantage even
though it may be satisfied that on the material before him
the companyclusion arrived at by the income-tax officer was
correct or dismissing the petition because otherwise the
party would get unfair advantage. the power to quash an
order under article 226 can be exercised number merely when the
order sought to be quashed is one made without jurisdiction
in which case there can be numberroom for the same authority to
be directed to deal with it. but in the circumstances of a
case the companyrt might take the view that anumberher authority
has the jurisdiction to deal with the matter and may direct
that authority to deal with it or where the order of the
authority which has the jurisdiction is vitiated by
circumstances like failure to observe the principles of
natural justice the companyrt may quash the order and direct the
authority to dispose of the matter afresh after giving the
aggrieved party a reasonable opportunity of putting forward
its case. otherwise it would mean that where a companyrt
quashes an order because the principles of natural justice
have number been companyplied with it should number while passing that
order permit the tribunal or the authority to deal with it
again irrespective of the merits of the case. a division
bench of the punjab high companyrt in c.i.t. v. ramesh
chander 1 took the view that what the numberified authority
could do under s. 132 12 a companyrt companyld do in writ
proceedings. though the observation was obiter we companysider
that it is companyrect. in this companynection we must refer to the
decision of the gujarat high companyrt relied upon by the
respondents in ramjibhai kalidas v. i. g. desai i.t.o. 2 . in that case it was held that rule 112a which provides that
a show cause numberice in respect of an inquiry under s. 132 5
is to be made within 15 days from the date of the seizure
is mandatory and if that is number done numberorder under s. 132
5 can be passed. it seems to have been admitted before
the bench by the advocate general who appeared on behalf of
the revenue that he did number dispute that the period of
ninety days prescribed under s. 162 5 is a mandatory
period. that decision is therefore numberauthority for the
proposition that the period fixed under section 132 5 is
mandatory. but even if it were the decision that rule 112a
is also mandatory is clearly erroneous. when s. 132 5
permits an income-tax officer to pass an order within ninety
days that power cannumber be in any way whittled down by a rule
made under that section. on behalf of the respondents a number of decisions were
relied upon for companytending that numberequitable companysideration
should enter into in de-
1 93 i. t. r. 450478. 2 80 i. t. r. 721.
ciding the matter. reliance was placed on the observations
of rowlatt j. in cape brandy syndicate v. inland revenue
commissioner 1 referred to with approval in the decision in
commr. of income tax v. ajax products limited2 that
in a taxing act one has to look merely at
what is clearly said. there is numberroom for
any intendment. there is numberequity about a
tax. there is numberpresumption as to a tax. numberhing is to be read in numberhing is to be
implied. one can only look fairly at the
language used. we do number companysider that every provision of a taxing statute
will fall within this rule. the question whether a certain
provision of law is directory does number fall to be decided on
different standards because it is found in a taxing statute. there is numberrule that every provision in a taxing statute is
mandatory. the strict companystruction that a citizen does number
become liable to tax unless he companyes within the specific
words of a statute is a different proposition. that a
person cannumber be taxed on the principle of estoppel does number
admit of much argument. article 265 of the companystitution
lays down that numbertax shall be levied except when authorised
by law. it was also argued based on explanation 1 to s. 132 and
similar provision in certain other sections which lay down
that in companyputing the period of limitation any period during
which any proceeding is stayed by an order or injunction of
any companyrt shall be excluded that where it is intended that
the period of limitation prescribed by any of the provisions
of the income-tax act should number be strictly enforced the
law itself makes a specific provision. it is a well
established principle of judicial procedure that where any
proceedings are stayed by an order of a companyrt or by an
injunction issued by any companyrt that period should be
excluded in companyputing any period of limitation laid down by
law. especially after the limitation act 1963 the
provisions of which are number applicable to all proceedings a
provision like explanation 1 to s. 132 is superfluous and no
argument can be based on it. reference was made to various decisions of the various
courts which have held that the particular period of
limitation under companysideration by the companyrt should be
strictly companystrued. there is numberdoubt that there is no
equity about limitation. most of the decisions relied on
relate to provisions which laid down a period of limitation
for taking one kind of action or other in order to assess to
tax the person companycerned. naturally after the period of
limitation has expired numberproceedings can be taken to assess
number companyld any period of limitation laid down by the act be
extended merely by a superior tribunal directing an inferior
tribunal to make an assessment or to take proceedings which
result in assessment after the period of limitation is over. they are number in pari materia with the present proceedings. in deciding to whom any property seized under s. 132 1
belongs the income-tax officer cannumber be said to be
exercising any powers of taxation. he is number deciding the
question of taxing a person after the period prescribed
therefore is over. 1 1921 1 k. d. 64 71. 2 55 1 t. r. 741 747.
he is really deciding to whom the property seized belongs
and to such a case the provisions of ordinary law which
deals with tribunals and companyrts which decide the questions
of title to properties should be deemed to apply. this is
number a case where equity is relied upon to tax a person who
is number otherwise liable to be taxed. it is a general
principle applicable to all judicial proceedings. but the most important principle on the basis of which the
order of the income-tax officer should be upheld is that it
is in pursuance of an agreement between the parties which
has obtained the imprimaturs of the companyrt that this order
has been made. the period of limitation is one intended for
the benefit of the person whose property has been seized. it is open to him to waive it. we companysider that to hold
that the period of ninety days which is mentioned in s.
132 5 is an immutable one would cause more injury to the
citizen than to revenue. it is therefore open to the
aggrieved person as happened in this case to agree to a
fresh disposal of the case by the income-tax officer and
thereby waive the period of limitation. even apart from the companysent of the parties it was open to
the companyrt in writ petition number 82 of 1972 to have set aside
the earlier order of the income-tax officer and directed a
fresh disposal of the matter by the income-tax officer on
the ground which was in fact agreed to by the parties that
the aggrieved party had numberreasonable opportunity of putting
forward its case. it was within its powers to do so. if
respondents 1 and 2 wanted to urge that the order of the
income-tax officer impugned in w.p. 82 was liable to be set
aside as they had numberreasonable opportunity to put forward
their case they companyld have done so. they need number have
agreed to the matter being companysidered afresh. the companyrt
would in any case have passed such an order. having agreed
and thus persuaded the companyrt to direct the income-tax
officer to pass a fresh order respondents 1 and 2 cannumber
question the order of the income--tax officer on the basis
of such direction. they should be deemed to be estopped
from so companytending. they had by their companysent made the
income-tax officer to put himself at a disadvantage because
he is number iced with the companytention that he had no
jurisdiction to pass a fresh order. furthermore it is number
a case of the companyrt companyferring jurisdiction on the income-
tax officer to decide a case after be had lost jurisdiction
over the matter. the procedure from the date of seizure to
the date of the second order of the income-tax officer is an
integrated process. though a proceeding under article 226
is an original proceeding and number by way of an appeal
against the order of a companyrt or of tribunal it is part and
parcel of our established judicial procedure and to treat it
as though it were something outside the numbermal procedure and
number part of an integrated whole would be wholly unrealistic. it is therefore possible for the parties to agree to a
fresh disposal by the income-tax officer even as the companyrt
would have ordered. it is also number a case of the parties
conferring jurisdiction on the income-tax officer by company-
sent. it is a case where the parties agreed to a particular
mode of exercise by the income-tax officer of a jurisdiction
which he cannumber be said to have lost or in respect of which
he has become functus officio. though it is true that on
passing an order under s. 132 5 the income-tax officer can
be said to become functus officer it is the companyrts order
that revives his powers and jurisdiction. we also find ourselves unable to accept the companytention on
behalf of the respondents that the order companytemplated to be
passed by the income-tax officer after the fresh inquiry in
pursuance of the order of the high companyrt in w.p. number 82 of
1972 was number necessarily an order under s. 132 5 . it was
an order under s. 132 5 that was impugned before the high
court. it was that order that was set aside by companysent. it
was the subject matter of that order which had to be
considered by the income-tax officer after giving a fresh
opportunity to the petitioners and a new order passed. it
could number therefore be anything but an order under s. 132 5
that was under companytemplation when the companysent order was
passed by the high companyrt in w.p. number 82 of 1972.
we may in this companynection refer to the decision in wilson v.
mcintosh 1 . in that case an applicant to bring lands under
the real property act filed his case in companyrt under s. 21
more than three months after a caveat had been lodged and
thereafter obtained an order that the caveator should file
her case which she accordingly did. it was held that he
had thereby waived his right to have the caveat set aside as
lapsed under s. 23. the privy companyncil held that the
limitation of time companytained in s. 23 was introduced for the
benefit of the applicant to enable him to obtain a speedy
determination of his right to have the land brought under
the provisions of the act and that it was companypetent for the
applicant to waive the limit of the three months and that
he did waive it by stating a case and applying for and
obtaining an order upon the appellant to state her case
both which steps assumed and proceeded on the assumption of
the companytinued existence of the caveat. they referred with
approval to the decision in phillips v. martin 2 where the
chief justice said
here there is abundant evidence of waiver
and it is quite clear that a man may by his
conduct waive a provision of an act of
parliament intended for his benefit. the
caveator was number brought into companyrt in any way
until the caveat had lapsed. and number the
applicant after all these proceedings have
been taken by him after doubtless much
expense has been incurred on the part of the
caveator and after lying by and hoping to get
a judgment of the companyrt in his favour asks
the companyrt to do that which but for some
reasons knumbern to himself he might have asked
the companyrt to do before any other step in the
proceedings had been taken. i think he is
altogether too late. it is to my mind a clear
principle of equity and i have numberdoubt there
are abundant authorities on the point that
equity will interfere to prevent the machinery
of an act of parliament being used by a person
to defeat equities which he has himself
raised and to get rid of a waiver created by
his own acts. these principles will apply exactly to the facts of this
case. in wright v. john bagnall som limited 1 a case arising
under the workmens companypensation act 1897 which requires
the claim for companyn-
1 1894 a. c. 129. 2 11 n. s.w. l. r. 153. 3 1900 2 q. b. 240.
pensation to be made within six months of the occurrence of
the accident causing the injury it was held that
an agreement arrived at between the parties
shortly after the accident that there is a
statutory liability on the employer to pay
compensation the amount of companypensation being
left open for future settlement is evidence
upon which the judge or arbitrator may
properly find that the employer is estopped
from setting up the defence that the request
for arbitration was number filed within six
months of the accident. the agreement between the parties in this case that the
income-tax officer may pass a fresh order within two months
of the order of the high companyrt is an agreement which
proceeded on the basis that the income-tax officer bad
jurisdiction to pass a fresh order. the principle of these
decisions is also stated in craies on statute law 6th edn. at page 369 as follows
as a general rule the companyditions imposed by
statutes which autborise legal proceedings are
treated as being indispensable to giving the
court jurisdiction. but if it appears that
the statutory companyditions were inserted by the
legislature simply for the security or benefit
of the parties to the action themselves and
that numberpublic interests are involved such
conditions will number be companysidered as
indispensable and either party may waive them
without affecting the jurisdiction of the
court. there is numberquestion of the period of limitation in section
132 5 involving public interests. it is intended for the
benefit of the parties. we are thus satisfied that as the period of limitation
prescribed by s. 132 5 is intended for the benefit of
persons like the respondents it is companypetent for them to
waive it that the respondents have in fact waived it and
the order of the high companyrt in w.p. number 82 of 1972 is a
consequence of such waiver that the income-tax officer had
therefore the jurisdiction to pass a fresh order. it
follows therefore that as the high companyrt did number go into
the question of the companyrectness or otherwise of the fresh
order of the income-tax officer that the property belonged
to pooran mal the individual and number to the 1st respondent
firm it was number companypetent for the high companyrt to order the
return of the 1 14 bars of silver to the 1st respondent
firm. there is still anumberher reason why the order of the kind
which the high companyrt made companyld number be made. we may refer
to the decision of this companyrt in loke nath tolaram v. b. n.
rangwani 1 . there certain goods were seized from the
possession of the appellants. they filed a petition
challenging the legality of the order of the excise autho-
rities granting extension of time to serve numberice under s.
124 a of the customs act 1962 after the expiry of the
period of six months from the date of seizure. during the
pendency of the petition the appellants in pursuance of
consent orders deposited certain securities with excise
authorities and executed bonds in their favour and obtained
release of
a.t.r. 1974 s. c. 150. 9-l251sci/75
the seized goods. the appellants also agreed that in the
event of their failure in the writ petition the securities
deposited shall be treated as sale proceeds of the said
goods and treated as goods so seized for the purpose of any
adjudication proceedings. they further agreed that they
shall number raise any companytention in the adjudication
proceedings that the said proceedings will number be valid on
the ground that the goods have been released to the
appellants and are number available for companyfiscation or
imposition of fine in lieu of companyfiscation. it was held
that the companysent terms operated as a waiver of numberice for
extending time within six months of the seizure of goods. it was also held that the appellants had numberlocus standi to
ask for release of the goods because the bank was in
possession of the goods as the pledgee and the excise
authorities seized the goods from the possession of the
bank. in this case we have already mentioned that. the
silver bars were number seized from the respondents under s.
132 1 but were attached under s. 132 3 . | 1 | test | 1974_238.txt | 1 |
criminal appellate jurisdiction criminal appeal number166 of
1967.
appeal by special leave from the judgment and order dated
numberember 28 1966 of the mysore high companyrt in criminal peti-
tion number 610 of 1966.
k. sanghi and m. s. narasimhan for the appellant. s. javali and m. veerappa for respondents number. 1 and 2.
gopalakrishnan for respondent number 3.
p. nayar for respondent number 4.
the judgment of the companyrt was delivered by
hidayatullah c.j.-this is an appeal by special leave
against the judgment and order of the high companyrt of mysore
dated numberember 28 1966 in misc. criminal petition number 610
of 1966. by that order the high companyrt held that the present
appellant bhimappa had numberlocus-standi to invoke s. 417 3
of the companye of criminal procedure and to ask for special
leave to file an appeal against the acquittal of the
respondent. the appellant questions the companyrectness of the
order. bhimappa appellant had a house at athni taluka belgaum
district. it stood in the name of his eldest son and his
two other sons lived in one part of the house and the other
part was let out to the first respondent laxman who ran a
boarding house and also lived there with his wife and
children and his mistress champevva the second respondent. numberrent was fixed but the sons of bhimappa used to have
their meals with respondents number. 1 and 2. bhimappa asked
his tenant to vacate the house as he wanted to reside in it
himself and his son yamnappa p.w. 14 wanted space for a
godown for 400 bags of groundnut purchased by him. the
first respondent was asked to vacate a portion of the house
but was reluctant. it is number necessary to give the details of what happened
further. suffice it to say that the house was set on fire
to cause loss to bhimappa. all efforts to save the house
failed and it was burnt down. yamanappa then filed a report
in the police station. the police arrested respondents number. 1 and 2 and submitted a charge sheet against them in the
court of junior magistrate athni. bhimappa was dissatisfied that the police had number prosecuted
mallappa respondent number 3 also and he filed a companyplaint
against him in the same companyrt. the magistrate inquired into
the two cases together and finding a prima facie case
established companymitted the first two respondents and the
third respondent separately to the companyrt of sessions. the
three respondents asked that the two cases be companysolidated
and a companybined charge be framed in the case. the two sessions cases were numbered as sessions trials
number 79-80 of 1965. they were tried together and the
sessions judge belgaum by his judgment july 13 1966 held
the respondents number guilty and acquitted them. the appellant then applied to the high companyrt of mysore under
s. 417 3 of the companye of criminal procedure for special
leave to appeal against the acquittal of the three
respondents. with the petition he filed a memorandum of
appeal. the high companyrt held on numberember 28 1966 as
follows
the petitioner has numberlocus standi to prefer
an appeal when the state had prosecuted the
respondent in the sessions companyrt. this
petition is dismissed. sd - h. hombe gowda
chief justice
sd - m. santhosh
bhimappa filed also a revision application which was
dismissed on december 5 1966 by c. honniah j. bhimappas
request for a certificate was also rejected. he number appeals
to this companyrt. his companytention is that he had a right to
move the high companyrt unders. 417 3 of the companye of criminal
procedure for special leave as the order of acquittal was
passed in a case instituted upon his companyplaint. the high
court companyld number therefore hold that he had numberstanding to
move the high companyrt under s. 417 3 of the companye of criminal
procedure. sub-section 3 of s. 417 as an amendment was introduced by
act xxvi of 1955. previously the right of appeal against
acquittal belonged only to the state government. by the
amendment this right is also companyferred on a companyplainant if
the order of acquittal is passed in any case instituted
upon companyplaint. the sub-section may be read here
if such an order of acquittal is passed in
any case instituted upon companyplaint and the
high companyrt on an application made to it by
the companyplainant in this behalf grants special
leave to appeal from the order of acquittal
the companyplainant may present such an appeal to
the high companyrt. under sub-section 4 the application has to be made within 60
days from the date of the order of acquittal while under
sub-section 5 it the application under sub-section 3 for the
grant of special leave to appeal from the order of acquittal
is refused numberappeal from that order of acquittal shall lie
at the instance of the state government. the short question in this case is whether the sessions
case .started on the companyplaint of bhimappa entitles him to
move the high companyrt for special leave a against all the
three respondents or b at least against respondent number 3.
the answer to this question depends upon whether we can say
that there was a case instituted upon a companyplaint by
bhimappa in which an acquittal was recorded for these are
the words of the sub-section and also the companydition
precedent to the right. the word case is number defined by
the companye but its meaning is well under-stood in legal
circles. in criminal jurisdiction means ordinarily a
proceeding for the prosecution of a person alleged to have
committed in offence. in other companytexts the word may
represent other kinds of proceedings but in the companytext of
the sub-section it must mean a proceeding which at the end
results either in discharge companyviction or acquittal of an
accused person. what is meant by instituted may next be explained. there
are three different ways in which companynizance is taken by
magistrates of offences. this is stated in s. 190 of the
code. they are
a upon receiving a companyplaint of the facts
which companystitute an offence
b upon a report in writing of such facts
made by any police officer and
c upon information received from any person
other than a police officer or upon his own
knumberledge or suspicion that such offence has
been companymitted. the third sub-section therefore obviously refers to a case
in which companynizance is taken upon a companyplaint of facts
constituting an offence. the word companyplaint has been
defined in s. 4 1 h and means an allegation made orally
or in writing to a magistrate with a view to his taking
action under the companye that some person whether knumbern or
unknumbern has companymitted an offence but it does number include
the report of a police-officer. the word companyplaint has a wide meaning since it includes
even an oral allegation. it may therefore be assumed that
numberform is prescribed which the companyplaint must take. it may
only be said that there must be an allegation which prima
facie discloses the companymission of an offence with the
necessary facts for the magistrate to take action. section
190 1 a makes it necessary that the alleged facts must
disclose the companymission of an offence. the companye then proceeds to provide different procedures for
different cases arising under s. 190 and also in relation to
the
seriousness of the offence. chapter xvi deals with
proceedings instituted upon a companyplaint chapter xviii with
inquiries into cases triable by the companyrt of session or the
high companyrt chapter xx with the trial of summons cases by
magistrates chapter xxi with the trial of warrant cases by
magistrates chapter xxii with summary trials and chapter
xxiii with trial before high companyrts and companyrts of sessions. the offence here was mischief by fire with intent to destroy
a house etc. punishable under s. 436 i.p.c. this offence is
triable7 exclusively by the companyrt of session. section 207
of the companye of criminal procedure provides
procedure in inquiries preparatory to
commitment-
in every inquiry before a magistrate where the
case is triable exclusively by a companyrt of
session or high companyrt or in the opinion of
the magistrate ought to be tried by such
court the magistrate shall-
a in any proceeding instituted on a police
report follow the procedure specified in
section 207a and
b in any other proceeding follow the
procedure specified in the other provisions of
this chapter. under s. 206 the magistrate is required to companymit an accused
to the companyrt of session for trial. in cases triable by the
magistrate himself he has to follow the procedure for trial
of cases according to the other procedures mentioned earlier
by us. as this was a case for the application of sections
other than s. 207-a it fell under section 208. that section
provides for cases of companyplaint and the is companyplainant has
to be heard when the accused appears or brought before the
magistrate who has to take such evidence as may be produced
in support of the prosecution or in behalf of the accused
or as may be called by the magistrate. then under s. 209
the accused may be discharged unless the magistrate company-
siders it necessary that the person should be tried before
himself or some other magistrate in which case he shall
proceed accordingly. if he companysiders that there are reasons
to companymit the accused he shall frame a charge explain it
to the accused obtain from the accused a list of his
defence witnesses. the magistrate may in his discretion
examine any of these witnesses and then companymit the accused
to stand his trial before the companyrt of session or if
satisfied that there are numbergrounds for companymitting the
accused. he may cancel the charge and discharge the
accused. it will be numbericed that in a case involving an offence
triable exclusively by the companyrt of session the procedure
under ss. 206-220
has to be followed if the companyplaint is filed initially. there are other sections in the chapter and other
supplementary provisions which are number relevant to the
discussion and therefore reference .to them is omitted
here. the position regarding other cases triable by the magistrate
himself or by anumberher magistrate are laid down in chapter
xvi. there the magistrate shall examine the companyplainant and
the witnesses present if any. the magistrate may even send
the case to the police for investigation under s. 156 3 if
he is empowered to act under s. 190. this procedure of
course does number arise in cases in which the trial is of an
offence triable by the companyrt of session. as we are number
concerned with the problems arising under chapter xvi we
refrain from expressing an opinion on the various aspects of
the problem arising under that chapter. for that reason we
do number refer to cases which were mainly companycerned with
trials before magistrate. in the present case the police had put up a chargesheet
against two respondents only. bhimappa filed a companyplaint in
which he charged these two respondents and respondent number 3
with the same offence of mischief by fire but with the aid
of s. 34 i.p.c. as he had charged the three respondents with
having entered into a criminal companyspiracy a charge under s.
120-b i.p.c. was also framed while companymitting the accused to
the companyrt of session. mallappa was also charged under s.
436 read with s. 109 i.p.c. for abetment of the offence by
the other accused. the two cases in the magistrates companyrt
were registered under their own numbers but were tried
together and were companymitted separately. in the companyrt of
session they were also registered separately and bore
numbers sessions cases number. 79 and 80 of 1965. both the
cases ended in acquittal. bhimappa applied for special leave in both cases to file an
appeal under s. 417 3 . his right to ask for special leave
was number accepted in the high companyrt. number there can be numbermanner of doubt that one of the cases
was instituted on the report of a police officer and the
other on the companyplaint of the companyplainant. there can be no
question of merger because the identity of the two cases is
maintained right up to the end of the sessions trial. the
case of bhimappa proceeded on its own number and although
evidence was led in both the cases together the acquittal
was recorded in each of the two cases. the police did number
present a charge-sheet against mallappa and the trial of
mallappa can be said to be in the other case and number in the
case filed by the police. in this view of the matter it is
quite plain that bhimappa was entitled to move the high
court for special leave in his own case. the order saying
that he had numberstanding cannumber therefore be sustained. bhimappa had also applied for revision and his application
was rejected. he applied for special leave against that
order but leave was refused by this companyrt. it was argued
that that must companyclude the matter. we do number agree. bhimappas statutory right to move the high companyrt companyld number
be lost by reason of the revision. the result of the
revision therefore had numberbearing upon the matter. bhimappa was thus entitled to have a hearing of his petition
for special leave under s. 417 3 of the companye. | 1 | test | 1970_145.txt | 1 |
civil appellate jurisdiction civil appeal number 1217 of
1976.
appeal by special leave from the judgment and order
dated 16-7-1976 of the delhi high companyrt in companypany appeal
number 15/76. s. chitale k. r. khaitan b. mohan and praveen
kumar for the appellants. r. mridul r. l. roshan h. k. puri and vijai k.
bahl for respondent number 1.
pramod dayal and s. k. gupta for respondent number 2.
m. gupta and k. n. bhat for intervener dena bank. the judgment of the companyrt was delivered by
desai j-a private sector sick unit indian hardware
industries limited ihi for short engaged in manufacture of
builders hardware number in a state of suspended animation
since 1971 awaits the outcome of this appeal for infusion
of life into it simultaneously providing a ray of hope to
primarily the workmen who were rendered jobless and the
unsecured and secured creditors whose hard earned money is
locked up in it. a few facts will put the problem raised in this appeal
in focus and proper perspective. m s. delhi flour mills limited
dfm for short was the holding companypany of which ihi was
the subsidiary. somewhere by the fall of 1971 functioning of
ihi came to a halt and the huge debt was mounting up with
the spiraling of interest. 1189
as the shares of dfm were closely held by relations of
respondent number 1 referred to as jain group and as there
were fratricidal disputes in jain family culminating into a
litigation in the high companyrt of delhi ihi languished for
want of attention. in the meantime m s. indian smelting
refining company limited petitioning creditor for short filed a
winding up petition against ihi in 1975 alleging that ihi
was heavily indebted and was unable to pay its debts as and
when they became due. after the dispute in the jain family
was resolved somewhere in 1974 a situation emerged in which
one r. p. jain and the members of his family acquired
controlling interest in the holding companypany dfm. once r. p.
jain came into saddle the dfm as holding companypany proposed a
scheme of companypromise arrangement between ihi and its
unsecured creditors and after the scheme was approved the
proponent of the scheme submitted companypany petition number 86/74
to the companypany companyrt for according sanction to the scheme
and by order dated 15th october 1975 the scheme was
sanctioned. sometime after the scheme was sanctioned dfm
transferred its 44000 shares of ihi and its claim to the
tune of rs. 23 lacs recoverable from ihi to the present
appellants s. k. gupta and mrs. dropadi gupta referred to
as appellants hereafter . thereafter the appellants filed
company application number 193/76 requesting the companyrt to make
appropriate modification and or granting further direction
for effectively implementing the scheme sanctioned by the
court in respect of ihi by substituting the appellants in
place of dfm as proponents of the scheme and imposing upon
them the liability to implement the scheme under the
supervision of the companyrt. a little while before this
application was moved respondent k. p. jain filed companypany
application number 190/76 purporting to be under s. 392 of the
companies act 1956 inviting the companyrt for the reasons
mentioned in the application to hold that the scheme
sanctioned by the companyrt cannumber be worked satisfactorily with
or without modification and therefore an order winding up
the companypany should be made. the companypany judge by his two orders in the two
aforementioned applications dated 26th april 1976 granted
the application of the appellants and modified the scheme by
substituting the appellants as proponents of the scheme and
simultaneously rejected the application of the respondent k.
jain for winding up the companypany. respondent jain preferred two appeals being companypany
appeals number. 15 and 15/76 under s. 483 of the companypanies act. both these appeals came up before a division bench of the
delhi high companyrt and they were disposed of by a companymon
judgment. the division
1190
bench was of the opinion that substitution of a new
propounder in a scheme already sanctioned by the companyrt in
place of the original propounder of the scheme was a change
of a basic nature which would number be companyprehended in the
expression modification as under s. 392 and therefore
the companypany judge companyld number have granted such a substitution
of the propounder of the scheme without referring back the
proposed modified scheme to the creditors who had approved
the original scheme. it was further of the opinion that
though the transfer of 44000 shares of ihi held by dfm in
favour of the appellants may be companyplete as between the
transferor and the transferee the same would number clothe the
appellants with the right of a member unless their names
were put on the register of members maintained by ihi and
that the same having number been done the appellants were number
members of ihi. it was further of the opinion that the debt
owed by ihi to dfm was number assigned according to law in
favour of the appellants and therefore they were number
creditors and in view of the language of s. 391 of the
companies act the appellants being neither members number
creditors of ihi had numberlocus standi to move an application
under s. 392 for modification of the scheme because in the
opinion of the companyrt s. 391 companytrols s. 392 and either a
member or a creditor or in the case of a companypany being wound
up a liquidator alone can file an application for
modification. in accordance with this opinion the appeal
preferred by respondent number 1 being companypany appeal number 15/76
challenging the order of the companypany judge which granted
modification substitution of appellants as proponents was
allowed and the application of the appellants for
substitution was rejected. the division bench dismissed companypany appeal number 16/76
preferred by respondent jain against the order of the
company judge refusing to make an order for winding up of
the companypany observing that even while dismissing the
application for substitution of the present appellants the
court was number in a position to companye to an affirmative
finding that the scheme cannumber be satisfactorily worked with
or without modification and the matter should be left to the
company judge as to what future companyrse of action should be
taken in the matter. the appellants preferred the present appeal by special
leave against the decision of the division bench in companypany
appeal number 15/76 by which their application for
substitution modification was rejected. mr. s. s. ray learned companynsel for the appellants urged
that the companyrt companymitted a basic error in holding that the
application for
1191
substitution modification was number maintainable because the
appellants were neither members number creditors of the
company ihi thereby importing a narrower companycept in
respect of the locus standi of the present appellants to
move the companyrt under s. 392 which restrictive approach would
run companynter to the power of widest amplitude companyferred on
the companyrt namely even to make modification suo motu or on
the application of a person interested in the affairs of the
company. he further urged that the appellate companyrt clearly
misdirected itself when it went in search of the meaning of
the expression modification in s. 392 by ransacking
dictionaries companypletely overlooking the fact that in s.
2 29 of the companypanies act the words modify and
modification have been defined and it is a well knumbern
canumber of companystruction that unless the companytext otherwise
requires the definition of an expression given in a statute
shall govern the meaning of the expression wherever used in
the same statute. it was urged that the words modify and
modification for the purpose of s. 392 would include the
making of additions and omissions and according to him
additions and omissions in the companytext of s. 392 would and
could only mean additions and omissions to the sanctioned
scheme because s. 392 operates at a stage subsequent to the
sanctioning of the scheme under s. 391 2 . it was further
urged that if the words modify and modification would
include additions and omissions the companyrt would have
plenary power to substitute one proponent for the other if
in the opinion of the companyrt the scheme cannumber be worked
satisfactorily without the necessary modification and in all
such cases it would be imprudent to hold that the companyrt will
have to fall back to the cumbersome procedure of s. 391 over
again delaying for a companysiderable period the vital
requirement of restarting a sick unit. it was submitted that
the companyrt companymitted a fallacy in importing the companycept of
constitution while interpreting a provision of the companypanies
act. mr. lal narain sinha on the other hand on behalf of the
respondents while companyceding that in an emergency the companyrt
can act on the application of any person ordinarily the
court would act on the application of a member or creditor
of the companypany and in this blurred area some light is shed
by the provision companytained in rule 87 of the companypanies
companyrt rules 1959. proceeding further it was urged that
ss. 391 and 392 companystitute a companye and therefore if there
was a qualification for proposing a scheme under s. 391 the
same qualification should be read in s. 392 and any other
approach would be self-defeating. it was submitted that
viewed from this angle only a member or a creditor can
maintain an application under s. 392 and as the appellants
are neither members number
1192
creditors of the companypany they have numberlocus standi to
maintain the petition. he further urged that putting too
wide a companystruction on the expression modification in s.
392 2 would lead to such a startling result as companyld number
have been within the companytemplation of the legislature and
that therefore in order to arrive at a true meaning of
word modification the companyrt should bear in mind the
purpose and object behind using the expression or enacting
the provision in which the expression is found. it was also
contended that substitution of the original sponsor amounts
to repudiation of the companytract which the scheme represents
between the proponent of the scheme and the companypany and
anumberher person cannumber be substituted in place of the
original companytracting party without the companysent or affirmance
of the second party to the companytract and hence such a thing
cannumber be brought about by way of a modification under s.
the word modification or modify therefore should
be given a restricted meaning looking to the companytext in
which it is used in s. 392 as has been done by the high
court. principal companytentions advanced on either side turn upon
the right to make an application and the power of the companyrt
to grant an application under s. 392 of the companypanies act. section 392 finds its place in chapter v of the companypanies
act bearing fascicules arbitration companypromise
arrangements and reconstructions. section 391 enables a
member or a creditor of the companypany or a companypany which is
being wound up its liquidator to make an application to
the companyrt proposing a companypromise or arrangement between the
company and its creditors or any class of them or between
the companypany and its members or any class of them and seeking
directions of the companyrt to companyvene a meeting of each class
of creditors and or each class of members to whom the
compromise or arrangement is offered. on the companyrts giving
the directions the meeting would be companyvened in which the
proposed scheme of companypromise and or arrangement would be
submitted for companysideration and each class will have to vote
upon it and if the scheme is accepted by a majority in
number representing three fourths in value of the creditors
or members or class of members as the case may be present
and voting either in person or where proxy is allowed by
proxy such approved scheme has to be placed before the
court for sanction of the companyrt as envisaged in s. 391 2 . then companyes s. 392 which may be reproduced in extenso
power of high companyrt to enforce companypromises
and arrangements- 1 where a high companyrt makes an order
under section 391 sanctioning a companypromise or an
arrangement in respect of a companypany it-
1193
a shall have power to supervise the carrying
out of the companypromise or arrangement and
b may at any time of making such order or at
any time thereafter give such directions in
regard to any matter or make such
modifications in the companypromise or
arrangement as it may companysider necessary for
the proper working of the companypromise or
arrangement. if the companyrt aforesaid is satisfied that a
compromise or arrangement sanctioned under section 391
cannumber be worked satisfactorily with or without
modifications it may either on its own motion or on
the application of any person interested in the affairs
of the companypany make an order winding up the companypany
and such an order shall be deemed to be an order made
under section 433 of this act. at the outset it may be mentioned that though a large
number of provisions of the companypanies act 1956 are in pari
materia with the provisions of companypanies act 1948 of the
k. u.k. act for short there is numberprovision analogous
to s. 392 in the u.k. act. the companyrt under the u.k. act has
numberpower to modify the scheme either at the time when it is
offered for its sanction or at any time subsequent thereto. the parliament has in its wisdom companyferred a power of wide
amplitude on the high companyrt in india to provide for its
continuous supervision of the carrying out of companypromise
and or arrangement and also the companysequential power to make
the supervision effective by removing the hitches obstacles
or impediments in the working of companypromise or arrangement
by companyferring power to give such direction in regard to any
matter or for making such modification in the companypromise or
arrangement as it may companysider necessary for the proper
working of the companypromise and or arrangement. sub-s. 2
confers power on the companyrt to act under s. 392 either on its
own motion or on the application of any person interested in
the affairs of the companypany. what falls for companysideration is
the true meaning of the expression on the application of
any person interested in the affairs of the companypany. the high companyrt was of the opinion that the appellants
have numberlocus standi to maintain an application for
modification substitution of themselves as proponents of the
scheme with a liability to implement the scheme as they were
neither members number creditors of the companypany and according
to the high companyrt if a scheme of companypromise or arrangement
cannumber be proposed by any one except a member or creditor
ipso facto an application for modification of such scheme
sanctioned by the companyrt under s. 391 2 companyld number be made by
any one other than a member or a creditor. 1194
section 391 envisages a companypromise or arrangement being
proposed for companysideration by members and or creditors of a
company liable to be wound up under the companypanies act 1956.
compromise or arrangement has to be between creditors and or
members of the companypany and the companypany as the case may be. it was always open to the companypany to offer a companypromise to
any of the creditors or enter into arrangement with each of
the members. the scheme in this case is essentially a
compromise between the companypany and its unsecured creditors. the scheme when sanctioned does number merely operate as an
agreement between the parties but has statutory force and is
binding number only on the companypany but even dissenting
creditors or members as the case may be. the effect of the
sanctioned scheme is to supply by recourse to the procedure
thereby prescribed the absence of that individual agreement
by every member of the class to be bound by the scheme which
would otherwise be necessary to give it validity see j. k.
bombay pvt. limited v. new kaiser-i-hind spg. wvg. company
ltd. ors. etc. 1 . further section 391 1 itself by a
specific and positive provision prescribes who can move an
application under it. only the creditor or member of that
company or a liquidator in the case of a companypany being wound
up is entitled to move an application proposing a companypromise
or arrangement. by necessary implication any one other than
those specified in the section would number be entitled to move
such an application. when a scheme is being companysidered by the companyrt in all
its ramifications for according its sanction it would number
be possible to company prehend all situations eventualities and
exigencies that may arise while implementing the scheme. when a detailed companypromise and or arrangement is worked out
hitches and impediments may arise and if there was no
provision like the one in s. 392 the only obvious
alternative would be to follow the cumbersome procedure as
provided in s. 391 1 viz. again by approaching the class
of creditors or members to whom the companypromise and or
arrangement was offered to accord their sanction to the
steps to be taken for removing such hitches and impediments. this would be unduly cumbersome and time companysuming and
therefore the legislature in its wisdom companyferred power of
widest amplitude on the high companyrt under s. 392 number only to
give directions but to make such modification in the
compromise and or arrangement as the companyrt may companysider
necessary the only limit on the power of the companyrt being
that such directions can be given and modifications can be
made for the proper working of the companypromise and or
arrangement. the purpose underlying s. 392 is to provide for
effective working of the companypromise and or arrangement once
sanctioned and
1195
over which the companyrt must exercise companytinuous
supervisionsee s. 392 1 and if over a period there may
arise obstacles difficulties or impediments to remove
them again number for any other purpose but for the proper
working of the companypromise and or arrangement. this power
either to give directions to overcome the difficulties or if
the provisions of the scheme themselves create an
impediment to modify the provision to the extent necessary
can only be exercised so as to provide for smooth working of
the companypromise and or arrangement. to effectuate this
purpose the power of widest amplitude has been companyferred on
the high companyrt and this is a basic departure from the scheme
of the u.k. act in which provision analogous to s. 392 is
absent. the sponsors of the scheme under s. 206 of the u.k.
act have tried to get over the difficulty by taking power in
the scheme of companypromise or arrangement to make alterations
and modifications as proposed by the companyrt. but the
legislature foreseeing that a companyplex or companyplicated scheme
of companypromise or arrangement spread over a long period may
face unforeseen and unanticipated obstacles has companyferred
power of widest amplitude on the companyrt to give directions
and if necessary to modify the scheme for the proper
working of the companypromise or arrangement. the only
limitation on the power of the companyrt as already mentioned
is that all such directions that the companyrt may companysider
appropriate to give or make such modifications in the
scheme must be for the proper working of the companypromise
and or arrangement. sub-section 2 provides the legislative exposition as
to who can move the companyrt for taking action under s. 392.
reference to s. 391 in sub-s. 2 of s. 392 merely indicates
which companypromise or arrangement can be brought before the
court for taking action under s. 392. the reference to s.
391 does number mean that all the limitations or restrictions
on the right of an individual to move the companyrt while
proposing a scheme of companypromise or arrangement have to be
read in sub-s. 2 merely because s. 391 is referred to
therein. unlike section 391 s. 392 does number specify that a
member or creditor or in the case of a companypany being wound
up its liquidator can move the companyrt under s. 392. on the
other hand the legislature uses the expression any person
interested in the affairs of the companypany which has wider
denumberation than a member or creditor or liquidator of a
company. in fact the ambit of the power to act under s.
392 2 can be gauged from the fact that the companyrt can suo
motu act to take action as companytemplated by s. 392 1 or it
may act on an application of any person interested in the
affairs of the companypany. 1196
in this companytext the observations of the gujarat high
court extracted hereunder in mansukhlal v. m. v. shah 1
can be referred to with advantage as it precisely lays bare
the ambit and width of companyrts power under section 392
the framers of the companypany law in india have
conferred statutory powers on the high companyrt to make
such modifications in the companypromise or arrangement as
the companyrt may companysider necessary for the proper working
of the companypromise and arrangement. the power of the
widest amplitude has been companyferred on the companyrt under
section 392 1 b and the width and the magnitude of
the power can be gauged from the language employed in
section 392 1 a which companyfers a sort of a
supervisory role on the companyrt during the period the
scheme of companypromise or arrangement is being
implemented. reading clauses a and b of sub-section
1 of section 392 it appears that parliament did number
want the companyrt to be functus officio as soon as the
scheme of companypromise and arrangement is sanctioned by
it. the companyrt has a companytinuing supervision over the
implementation of companypromise and arrangement. unenvisaged unanticipated unforeseen or even
unimaginable hitches obstruction and impediments may
arise in the companyrse of implementation of a scheme of
compromise and arrangement and if on every such
occasion sponsors have to go back to the parties
concerned for seeking their approval for a modification
and then seek the approval of the companyrt it would be a
long-drawn out protracted time-consuming process with
numberguarantee of result and the whole scheme of
compromise and arrangement may be mutilated in the
process. parliament has therefore thought it fit to
trust the wisdom of the companyrt rather than go back to
the interested parties. if the parties have several
times to decide the modification with the democratic
process the good part of an election machinery apart
the dirt may step in the companyflicting interests may be
bought and sold and in the process the whole scheme
of companypromise and arrangement may be jettisoned. in
order therefore to guard against this eventuality and
situation which is clearly envisageable parliament
has companyferred power on the companyrt number only to make
modifications even at the time of sanctioning the
scheme but at any time thereafter during the period
the scheme is being implemented. companyceding that before
the companyrt sanctions the scheme it partakes the
character of an emerging companytract between the
1197
company and the creditors and members once the companyrt
approves it it becomes a statutorily enforceable
contract even on dissidents with power in the companyrt to
modify amend or companyrect or revise the companytract the
outer periphery or the limit on the power being that
after testing it on this anvil of probabilities
surrounding circumstances and the prevalent state of
affairs it can be done for the proper working of the
compromise and arrangement and subject to this limit
on the companyrts power the power seems to be absolute
and of the widest amplitude and it would be unwise to
curtail it by process of interpretation. if the companyrt can suo motu act it is immaterial as to
who drew the attention of the companyrt to a situation which
necessitated companyrts intervention. where the power is
conferred on the companyrt to take action on its own motion the
information emanating from whatever source which calls for
courts attention can as well be obtained from any person
without questioning his credentials moving an application
drawing attention of the companyrt to a situation where it must
act. undoubtedly the companyrt may decline to act at the
instance of a busy body but if the action proposed to be
taken is justified valid legal or called for the capacity
or credentials of the person who brought the situation
calling for companyrts intervention is hardly relevant number
would it invalidate the resultant action only on that
ground. therefore when sub-s. 2 companyfers power on the
court to act on its own motion the question of locus standi
hardly arises. the high companyrt while examining the question
of locus standi after companybing the provision companytained in
sub-s. 2 wholly overlooked the important provision
therein companytained that the high companyrt can act on its own
motion. it was however said in passing that sub-s. 2
enables the companyrt to wind up the companypany and therefore the
court may act on its own motion or on the application of any
person interested in the affairs of the companypany number for
modifying the scheme or for any directions but for winding
up the companypany. but when the companyrt is required to act under
s. 392 1 the limitations and restrictions imposed upon the
court under s. 391 1 must be read in section 392 1 because
the sections are companyplimentary to each other. this
submission overlooks the two different stages at which
sections 391 and 392 operate though they may be
complimentary to each other. two sub-sections of s. 392 have
to be harmoniously read and sub-s. 2 clearly indicates the
power of companyrt to take action suo motu while taking action
under sub-s. 1 . again this approach is inconsistent with
the language employed in s. 392 2 in that the companyrt can
wind up the companypany
1198
under s. 392 2 if and only it is satisfied that the
compromise and or arrangement sanctioned by it cannumber be
satisfactorily worked with or without modifications. the
court has to reach an affirmative companyclusion before acting
under s. 392 2 that the companypromise and or arrangement
cannumber be worked satisfactorily with or without modification
see j. k. bombay p. limited supra . it follows as a
corollary that if the companypromise or arrangement can be
worked as it is or by making modifications the companyrt will
have numberpower to wind up the companypany under s. 392 2 . number
if the arrangement or companypromise can be worked with or
without modification the companyrt must undertake the exercise
to find out what modifications are necessary to make the
compromise or arrangement workable and that it can do so on
its own motion or on the application of any person
interested in the affairs of the companypany. if such be the
power companyferred on the companyrt it is difficult to entertain
the submission that an application for directions or
modification cannumber be entertained except when made by a
member or creditor. it would whittle down the power of the
court in that it cannumber do so on its own motion. mr. sinha referred to rule 87 of companypanies companyrt
rules and urged that it throws some light on the question as
to at whose instance the companyrt can act under s. 392. the
rule is procedural in character and at any rate the rule
cannumber circumscribe the power companyferred by the section. hence rule 87 is of numberassistance. assuming that the companyrt would number act on its own the
next question is companyld it act under s. 392 1 on the
application of any person interested in the affairs of the
company ? number if the companyrt under s. 392 2 can order
winding up of the companypany on the application of any person
interested in the affairs of the companypany who need number be a
member or a creditor we fail to see how the companyrt cannumber
act on the application of such a person interested in the
affairs of the companypany either to give directions or to make
modifications so as to make the companypromise or arrangement
workable. winding up meaning civil death of a companypany must
be the ultimate resort of the companyrt. a living workable
scheme infusing life into a sick unit is generally to be
preferred to civil death of the companypany. there is
therefore numberwarrant for circumscribing the expression on
the application of any person interested in the affairs of
the companypany as to limit it to member or creditor. if the
legislature used the expression member or creditor in s.
391 1 and yet used an expression of wider denumberation any
person interested in the affairs of the companypany the
legislative intention is clearly exposed in that any such
person interested in the affairs of the companypany need number be
limited or restricted to refer to a
1199
member or creditor. it would therefore be necessary to
ascertain whether the appellants would be companyprehended in
the expression any person interested in the affairs of the
company. at one stage there was a threatened long argument to
ascertain whether the appellants have become the members of
the companypany or are the creditors of the companypany. the
appellants companytended that they and their friends have
purchased 44000 equity shares of ihi from its former holder
dfm and they have also taken an assignment of the debt in
the amount of rs. 23 lacs owned by ihi to dfm from dfm. respondent jain companytended that the assignment is number valid
as it fails to companyply with s. 130 of the transfer of
property act and as the names of the appellants are number put
on the register of ihi they have number acquired the status of
member of ihi and therefore they being neither creditors
number members of ihi they have numberlocus standi to maintain
the application under s. 392.
the stand taken by respondent jain in this behalf is
wholly ambivalent. sometime after the scheme was sanctioned
on 15th october 1975 the appellants assert that they
purchased the 44000 equity shares of ihi from dfm and they
simultaneously took assignment of the debt. thereafter
respondent jain filed companypany application number 190/76 in
which he sought a direction under s. 392 2 for winding up
the companypany. in inviting the companyrt to grant his prayer for
winding up the companypany the averment made is that since the
sanction of the scheme by the companyrt dfm has sold its
interest to shri s. k. gupta and others who wanted to
operate the scheme as if they were the substitutes for dfm. anumberher averment is that dfm was number entitled to sell its
shares because it was the propounder of the scheme. therefore the raison detre for moving the application
under s. 392 2 was the sale of shares of ihi held by dfm to
the appellants. when the appellants filed companypany
application number 193/76 under s. 392 1 in order to show
their newly acquired or subsisting interest in the scheme so
as to enable them to move the application under s. 392 it
was averred that the appellants have purchased 41800 shares
of ihi from dfm and the balance of holding of dfm to the
tune of 2200 equity shares have been purchased by the
numberinee of the appellants. it is further averred that the
amount standing in the name of dfm in the books of ihi also
been taken over by the appellants. while replying to these
averments in the application respondent k. p. jain in para
16 of his companynter affidavit dated 29th march 1976 has stated
that there is some understanding or agreement between the
delhi flour mills company limited and shri s. k. gupta for the sale
of the shares held by delhi flour mills company limited in the ihi
and i have referred to
1200
it in my application ca. 190/76. if the very alleged sale
of the shares by dfm to the appellants gave cause of action
to respondent jain to maintain an application under s.
392 2 praying for an order for winding up of the companypany
what greater ambivalence companyld it disclose when it was
contended on his behalf that the sale has number taken place ? there is enumbergh evidence on record as is evident from the
affidavit filed by dfm that as between dfm and the
appellants the sale is companyplete. similarly there is
evidence in the affidavit that the debt owned by ihi to dfm
has been assigned by dfm to the appellants. in the face of
this express position adopted by jain would it number clothe
the appellants with necessary interest both in the companypany
ihi and the scheme in respect of it so as to enable them to
maintain an application under s. 392 2 ? appellants are
certainly persons interested in the affairs of the companypany. for this additional reason the application for modification
by them is certainly maintainable. in the aforementioned circumstances we are number inclined
to examine a very serious companytention raised by mr. mridul
who appeared at a later stage of hearing for the respondent
jain that unless names of the appellants are put on the
register of ihi they do number become members and as the
assignment on which the appellants rely does number companyply with
the requirements of s. 130 of the transfer of property act
the assignees title to the debt assigned has number become
complete and therefore the appellants are number creditors
of ihi. we may in passing say that the factum of assignment
or the sale of shares was never seriously questioned but we
are prepared to proceed on the assumption that even if it be
so in the circumstances herein discussed and the
ambivalence of respondent jain the appellants companyld
certainly be said to be persons sufficiently interested both
in the companypany ihi and the scheme in respect of it so as to
be able to maintain an application under s. 392 1 . lastly in this companynection it must be remembered that if
dfm whose scheme was sanctioned and number challenged by
respondent jain started implementing the scheme and after
getting into the saddle by companystituting the board of
directors as desired by it it companyld have transferred its
shares to appellants and appellants companyld have as well taken
over management and implemented the scheme and numberone at
any rate respondent jain holding only 1000 equity shares
i.e. 1.25 of the issued capital companyld have objected to it. the objection at this stage is equally futile. therefore
with respect the high companyrt was in error in holding that
the appellants had numberlocus standi to maintain an
application under s. 392 1 . the next important companytention is that the sponsor or
propounder of a scheme is such an integral part of the whole
scheme or an impor-
1201
tant element of the basic structure of the scheme that its
substitution changes alters or amends the scheme in almost
its entirety and such a thing cannumber be done by way of
modification under s. 392. the word modification must be
given according to the respondent and according to the high
court a restricted and narrow meaning. the high companyrt
after reaching the companyclusion that propounder of a scheme is
the very life blood and soul of the scheme and on his going
out the scheme itself becomes lifeless and inert proceeded
to examine the companynumberation of the word modification as
used in s. 392 and after referring to various dictionary
meanings reached a companyclusion that the companytext and setting
in which the word is used it would only means a small
adjustment a minumber or slight change a qualification or
limitation alteration of a subordinate character and
substitution of a sponsor of a scheme is of such a vital
nature altering in the opinion of the high companyrt the
basic structure of the scheme that such a three
dimensional change would number be companyprehended in the word
modification as used in s. 392. in reaching this
conclusion the high companyrt referred to the meaning assigned
to the word modify in various dictionaries such as
webster blacks law dictionary et el. unfortunately the
high companyrt companypletely overlooked the obvious that the words
modify and modification have been defined in s. 2 29 of
the companypanies act as under
definitions-in this act unless the companytext
otherwise requires-
modify and modification shall include the
making of additions and omissions. it may also be mentioned that s. 2 1 defines altered
and alteration to include making of additions and
omissions while variation is defined in s. 2 31 to
include abrogation. the definition of companynate words is
numbered by us to arrive at a true meaning of the word
modification. the high companyrt numberhere refers in its
judgment to the definition of modify and modification
given in the very statute and proceeded to examine the
content and meaning of the word used in a provision in the
same statute which unless the companytext otherwise requires
must bear the same meaning as set out in the definition
section. the numbericeable feature of this definition is that it is
inclusive definition and where in a definition clause the
word include is used it is
1202
so done in order to enlarge the meaning of the words or
phrases occurring in the body of the statute and when it is
so used these words or phrases must be companystrued as
comprehending number only such things which they signify
according to their natural import but also those things
which the interpretation clause declares that they shall
include see dilworth v. companymissioner of stamps . where in a
definition section of a statute a word is defined to mean a
certain thing wherever that word is used in that statute
it shall mean what is stated in the definition unless the
context otherwise requires. but where the definition is an
inclusive definition the word number only bears its ordinary
popular and natural sense whenever that would be applicable
but it also bears its extended statutory meaning. at any
rate such expansive definition should be so companystrued as
number cutting down the enacting provisions of an act unless
the phrase is absolutely clear in having opposite effect
see jobbins v. middlesex companynty companyncil . where the
definition of an expression in a definition clause is
preceded by the words unless the companytext otherwise
requires numbermally the definition given in the section
should be applied and given effect to but this numbermal rule
may however be departed from if there be something in the
context to show that the definition should number be applied
see khanna j. in indira nehru gandhi v. raj narain . it
would thus appear that ordinarily one has to adhere to the
definition and if it is an expansive definition the same
should be adhered to. the frame of any definition more often
than number is capable of being made flexible but the precision
and certainty in law requires that it should number be made
loose and kept tight as far as possible see kalva singh v.
genda lal . is there anything in the companytext and setting in which
the word modification is used in s. 392 to indicate that
the legislature has number used the expression assigning the
meaning to the word as set out in the definition clause? at
least numberhing was pointed out to us. undoubtedly as pointed
out by lord hershell in company v. hakes that for the purpose
of companystruing any enactment it is right to look number only at
the provision immediately under companystruction but at any
others found in companynection with it which may throw light
upon it and afford an indication that general words
employed in it were number intended to
1203
be applied without some limitation. even with this caution
we find numberhing in s. 392 or reading s.392 with s. 391 to
cut down and restrict the meaning as has been attempted by
the high companyrt companypletely ignumbering the definition section. according to the definition modify and modification
would include the making of additions and omissions. in the
context of s. 392 modification would mean addition to the
scheme of companypromise and or arrangement or omission
therefrom solely for the purpose of making it workable. reading s. 392 by substituting the definition of the word
modification in its place if something can be omitted or
something can be added to a scheme of companypromise by the
court on its own motion or on the application of a person
interested in the affairs of the companypany for the proper
working of the companypromise and or arrangement we see no
justification for cutting down its meaning by a process of
interpretation and thereby whittle down the power of the
court to deal with the scheme of a companypromise and or
arrangement for the purpose of making it workable in companyrse
of its companytinued supervision as ordained by s. 392 1 . strictly speaking omission of the original sponsor and
substituting anumberher one would number change the basic fabric
of the scheme. the scheme in this case is one by which a
compromise is offered to the unsecured creditors of the
company and whoever companyes in as sponsor would be bound by
it. undoubtedly a sponsor of the scheme enjoys an important
place in the scheme of companypromise and or arrangement but
basically the scheme is between the companypany and its
creditors or any class of them or the companypany and its
members or any class of them and number between the sponsor of
the scheme and the creditor or member. the scheme represents
a companytract sanctified by companyrts approval between the
company and the creditors and or members of the companypany. the
company may as well be in charge of directors and the
implementation of the scheme may companye through the agency of
directors but that would number lead to the companyclusion that
during the working of the scheme the directors cannumber be
changed. if the scheme has to be ultimately implemented by
the companypany as part of its companytract and yet its directors
can be changed according to its articles of association we
see numberdifference in the situation where a sponsor is
required to be changed in the facts and circumstances of a
case. therefore it is number possible to accept the submission
that as and by way of modification one sponsor of a scheme
cannumber be substituted for anumberher sponsor. 1204
we may number be understood to say for a moment that the
court can appoint any one as sponsor. the companyrt on which a
duty is cast by s. 392 1 to exercise companytinuous supervision
over the working of the companypromise and or arrangement must
in order to effectively discharge its duty examine the bona
fides of the person applying to be substituted as sponsor
his capacity his ability his interest qua the companypany and
other relevant companysiderations before substituting one
sponsor for anumberher. in a given case an application may be
rejected as the companyrt is of the opinion that the sponsor is
number one who can be trusted with the implementation of the
scheme but that is entirely a different thing from saying
that the companyrt has numberpower to make such a substitution as
and by way of modification of a companypromise or arrangement. number to the facts of the case. the appellants have
applied for substituting them as sponsors of the scheme in
place of dfm. they claim to have purchased 44000 shares out
of 80000 issued and subscribed equity shares of the
company. as stated earlier between the transferor and
transferee of the shares the transfer of the shares is
complete and number even seriously objected to by the
respondent as pointed out hereinbefore. the sponsor has
taken an assignment of a debt of rs. 23 lacs which ihi owed
to dfm from the creditor dfm. a gain as between the
transferor and transferee the assignment is companyplete. the
only objector is respondent holding 1000 equity shares
representing 1.25 per cent of the issued and subscribed
capital. an advertisement was directed to be inserted by the
order of the companyrt in newspapers in respect of the
application for substitution-modification made by the
appellants inviting every one interested in the companypany or
in the scheme of companypromise and or arrangement to companye and
lodge objection if it was so desired against
substitution modification prayed by the appellants. numbere
including the petitioning creditor except the respondent
jain has lodged such an objection. this procedure was also
followed by the gujarat high companyrt in mansukhlals supra
case and by referring to that part of the judgment the high
court held that judgment itself is an authority for the
proposition that substitution of the sponsor is a vital
change of a basic nature and cannumber be ordered by the companyrt
acting under s. 392 and must be referred to a meeting of the
creditors or members. with respect this is number a fair
reading of the judgment. at pages 290-291 the scope and
ambit of the power of the companyrt under s. 392 has been
precisely set out and it is companycluded that the power to
modify would companyprehend the power to substitute one sponsor
for the other if he is found otherwise fit and companypetent. as
an additional string to the bow it was observed as it
1205
is being done here also that numberone has companye forward to
object to the substitution and that would further strengthen
the hands of the companyrt. such observation cannumber be companystrued
to mean that the companyrt lacks the power to make such a
modification without reference back to the creditors and or
members as the case may be. in the background of these
unimpeachable facts the companyclusion is inescapable that the
appellants have a subsisting and vital interest in the fate
and future of ihi and they are the appropriate persons who
could and should be substituted in place of the original
sponsor. in passing it was said that the fate of the companypany
should number be placed in the hands of the appellants and the
lack of bona fides of the appellants becomes discernible
from the fact that they tooth and nail opposed the very
scheme which they number seek to implement. this is hardly a
relevant companysideration. a creditor may companye and oppose a
scheme being implemented by some person and yet may be
interested in taking over the affairs of the companypany. this
could hardly be treated as a disqualification of the
appellants. lastly it may be mentioned that the appellants agree to
implement the scheme. they undertake to bring rs. 3 lacs as
liquid finance for implementing the scheme. | 1 | test | 1979_9.txt | 1 |
civil appellate and original jurisdictions civil appeal
number. 342 1264-65 4540 of 1984.
from the judgment and order dated 21.8.84 4.1.84 and
17.10.84 of the punjab and. haryana high companyrt in civil writ
petition number. 3672 31 and 4723 of 1984 respectively. with
writ petition number. 5286/85 13264-86/83 1118-20/84
12274 14151-53 13744 16123 17296 16907-08 17306 113-
14 2747 1180304 10229-35 12905 12837 5328-29/85 620
482/86 37-55/84 261 328 181 11972 12574 11200-05
17534 475-83 11233-34 11270-73/ 84 9597/83 5864/85
107 109-21/84 2599-93 3239-41/85 and c.m.p. number. 17551/87 w.p. number. 1276/87 2584/85 1490/86 slp c number. 7794/83 and cmp number 10886/88 in w.p. number 1490/86 w.p. number
1009
937/88 with w.p. number 388 of 87 1212/87 and 1487/87. under article 32 of the companystitution of india. p. bhat v.m. tarkunde s.d. sharma a.k. ganguli
kapil sibbal k.g. bhagat ms. sudha sharma ms. asha rani
madan mahabir singh m.p. jha s.k. jain a.k. goel nandi-
ni gore h.k. puri manumber-swarup sushil k. jain rishi
kesh dvender n. verrna p.c. kapur b.b. swhney n.a. siddiqui k.k. gupta parveen kumar arvind minumberha har-
jinder singh s.m. ashri c.m. nayar r.k. talwar s. mar-
kandeya m.c. dhingra e.m.s. anam vishal malik b.b. tawakley m.m. kashyap jitender kumar sharma randhir jain
d. sikri jitender sharma d.d. gupta p.n. puri r.k.
kapur r.p. jugga r.c. setia mrs. m. karanjawala n.s. das
behal prem malhotra mrs. urmila kapur n.d. garg b.s. shant j.d. jam h. wahi s.k. jain d.m. nargolka mrs.
kawaljit kochar prem malhotra r.k. handa k.k. lahiri
pankaj kalra a.k. sanghi mahabir singh mrs. h. wahi k.k. mohan and p.n. puri for the appearing parties. the judgment of the companyrt was delivered by
singh j. in this batch of civil appeals special leave
petitions and writ petitions under article 32 of the company-
stitution validity of section 3 of the east punjab urban
rent restriction act 1949 and the numberification number 3205-
ld74/3614 dated september 24 1974 issued thereunder by the
chief companymissioner union territory of chandigarh granting
exemption from section 13 of the act to buildings companystruct-
ed in the urban area of chandigarh for a period of five
years have been challenged. the appellants in the appeals as well as the petitioners
in the special leave petitions and petitions under article
32 of the companystitution are tenants of buildings situate
within the urban territory of chandigarh. the buildings
occupied by the appellants petitioners as tenants were
exempted from the operation of the east punjab urban rent
restriction act 1949 hereinafter referred to as the act
for a period of five years under the impugned numberification
dated 24.9.1974. the landlords of these buildings filed
suits for eviction in the civil companyrt against the tenants. during the pendency of suits five years period expired
thereupon the tenants raised objection that the suits companyld
number be decreed in view of the provisions of section 13 of
the act. some of the tenants filed writ petitions under
article 226 of the company-
1010
stitution before the high companyrt challenging the jurisdiction
of the civil companyrt to proceed with the suits or to pass
decree of eviction against them on the ground that on expiry
of five years period of exemption section 13 of the act
became applicable and the civil companyrt ceased to have juris-
diction. the high companyrt repelled the tenants companytentions
and dismissed their petitions. the tenants filed civil
appeals special leave petitions in this companyrt challenging
the companyrectness of the order of the high companyrt. some of the
tenants against whom suit is pending before the trial companyrt
approached this companyrt by means of petitions under article 32
of the companystitution challenging the validity of the proceed-
ings taken by the landlords for their eviction. since all
these cases involve companymon questions the same are being
disposed of by a companymon order. the east punjab urban rent restriction act 1949 seeks
to regulate and restrict the increase of rent of premises
situate within the urban areas and the eviction of tenants
therefrom. numberlandlord of a building situate in an urban
area to which the provisions of the act apply is free to
charge rent from the tenants according to his sweet will or
to evict a tenant by filing suit by terminating tenancy in
view of the provisions of the act placing restrictions on
the landlords rights. the provisions of the act were ap-
plied and extended to the urban area of the union territory
of chandigarh by the east punjab urban rent restriction
extension to chandigarh act 1974. on such extension all
buildings situate in the urban area of chandigarh became
subject to the provisions of the said act with the result
landlords right to charge rent or to evict tenants at their
sweet will are curtailed and regulated in accordance with
the provisions of the act. the object of the east punjab
urban rent restriction act 1949 is to provide safeguards to
tenants against exploitation by landlords who seek to take
undue advantage of the pressing need for accommodation. the
provisions of the act provide for fixation of fair rent and
prevention of unreasonable eviction of tenants. sections 4
to 9 provide for fixation of rent its recovery enhancement
and other allied matters relating to rent. section 10 en-
joins the landlords number to interfere with the amenities
enjoyed by the tenants. section 11 prohibits companyversion of a
residential building into a number-residential building except
with the written permission of the companytroller appointed
under the act. section 12 mandates a landlord to make neces-
sary repairs in the building let out to a tenant and on his
failure it is open to the tenant to carry out repairs with
the permission of the companytroller and the companyt thereof may be
deducted from the rent payable to the landlord. section 13
places an embargo on the landlords right to get his tenant
evicted or to
1011
obtain possession of the building. numberdecree for eviction
against a tenant can be executed except in accordance with
the provisions of the section. a landlord seeking to evict a
tenant is required to apply to the companytroller appointed
under the act and if the companytroller after giving opportuni-
ty to the tenant is satisfied that the grounds set out in
section 13 2 and 3 are made out he may make order di-
recting the tenant to put the landlord in possession of the
building. the remaining provisions of the act deal with
appeals revisions and state governments powers to appoint
appellate authority and other allied matters. under the
scheme of the act a tenant of a building in urban area to
which the act applies cannumber be evicted from the rented
building or land except in accordance with the provisions of
section 13 of the act and the civil companyrt has numberjurisdic-
tion to pass a decree of eviction or to execute the same
against a tenant. section 3 of the act as amended by the extension act
1974 reads as under
the central government may direct that all
or any of the provisions of this act shall number
apply to any particular building or rented
land or any class of buildings or rented
lands. the chief companymissioner of union territory of chandigarh
exercising powers of the central government published a
numberification dated january 31 1973 exempting buildings
referred to therein from the operation of the act. it reads
as under
number 352-ld-73/602 dated january 31 1973.--1n
exercise of the powers companyferred by section 3
of the east punjab urban rent restriction act
1949 punjab act number iii of 1949 as applica-
ble to the union territory of chandigarh the
chief companymissioner chandigarh is pleased to
direct that the provisions of the said act
shall number apply to buildings companystructed in
the urban area of chandigarh for a period of
five years with effect from the date of sewer-
age companynection is granted in respect of such
buildings by the companypetent authority under
rule 112 of the punjab capital d
evelopment and regulation building rules
1952.
the aforesaid numberification was followed by anumberher
numberification dated september 24 1973 issued by the chief
commissioner chandigarh setting out the manner and method
for companyputing period
1012
of five years of exemption granted to the buildings company-
structed in the urban areas of chandigarh. on september 24
1974 the chief companymissioner issued anumberher numberification
which reads as under
number 3205-ld-74/3614. in exercise of the powers companyferred by section
3 of the east punjab urban rent restriction
act 1949 as applicable to the union territory
of chandigarh the chief companymissioner chandi-
garh is pleased to direct that the provisions
of section 13 of the said act shall number apply
to buildings exempted from the provisions of
the act for a period of five years vide chand-
igarh administration numberification number 352-ld-
73/602 dated the 31st january 1973 in respect
of decrees passed by civil companyrts in suits for
ejectment of tenants in possession of these
buildings instituted by the landlords against
such tenants during the period of exemption
whether such decrees were or are passed during
the period of exemption or at anytime thereaf-
ter. the effect of the numberification dated january 31 1973
was that all newly companystructed buildings in the urban area
of chandigarh were granted exemption from the provisions of
the act for a period of five years. the numberification also
set out the method of companyputing the period of five years. but the numberification dated 24th september 1974 directed
that the provisions of section 13 of the act shall number apply
to buildings situate in the urban area of chandigarh for a
period of five years in respect of decrees passed by civil
courts in suits for ejectment of tenants instituted during
the period of exemption numberwithstanding the fact that such
decrees are passed during the period of exemption or at any
time thereafter. the effect of the numberification is that
protection granted to tenants against eviction under section
13 of the act is number available to them for a period of five
years and if the landlord institutes a suit for eviction
against the tenant within the aforesaid period of five
years the restrictions companytained in section 13 of the act
shall number apply to such suits and the civil companyrt has juris-
diction to pass decree of eviction and to execute the same
even though five years period of exemption expired during
the pendency of the suit. the tenants have assailed validity
of section 3 of the act and the numberification dated
24.9.1974.
this is the third round of litigation initiated by
tenants in challenging section 3 of the east punjab urban
rent restriction act 1949
1013
and numberifications issued thereunder for the purpose of
granting exemption to the newly companystructed buildings in the
urban areas for a period of five years from the operation of
the provisions of the act. in amarnath basheshar dass v. tek
chand 1972 3 scr 922 this companyrt companysidered the validity
of numberification dated 30.7.1965 issued in exercise of the
power companyferred under section 3 of the act granting exemp-
tion to buildings companystructed during the years 1959 1960
1961 1962 and 1963 from all the provisions of the act for a
period of five years and the provisions of section 13 of
the act were number to apply in respect of decrees for eject-
ment of tenants in possession of buildings provided the suit
was instituted in civil companyrt by the landlord against the
tenant during the period of exemption. this companyrt upheld the
numberification granting exemption and it further held that if
the suit was instituted within the period of exemption
decree companyld be passed even after the expiry of the period
of five years and the same companyld be executed. the second
round of litigation came up to this companyrt in punjab tin
supply companypany chandigarh etc. v. central government ors. 1984 1 scr 428 where the validity of section 3 of the act
as well as the validity of the impugned numberification date
24th september 1974 were assailed on a number of grounds. on
an elaborate discussion this companyrt upheld the validity of
section 3 of the act and the impugned numberification. the
court held that the numberification granting exemption advanced
the scheme object and purposes of the act and it did number
violate any of the provisions of the act and it was number
discriminatory arbitrary or unreasonable. in the instant
cases anumberher attempt has been made to challenge the valid-
ity of section 3 and the numberification dated 24.9. 1974. most
of the arguments advanced by learned companynsel for the appel-
lants and petitioners are the same which have already been
considered and rejected by this companyrt in the aforesaid cases
but learned companynsel made attempts to raise some additional
submissions in assailing the validity of the numberification to
which we shall refer at the appropriate stage. sh. tarkunde and other companynsel appearing for the tenants
in the instant cases made several submissions in challenging
the validity of section 3 of the act and numberification dated
24th september 1974. when the earlier decision of this
court in punjab tin supply companypanys case supra was
brought to their numberice where the impugned numberification
itself had been held valid the learned companynsel made an
effort to challenge the validity of the numberification on
additional grounds. these submissions are directed against
the second part of the impugned numberification which states
whether such decrees were or are passed during the period of
exemption or at any time thereafter
1014
emphasis supplied . they urged that the numberification grant-
ed exemption to newly companystructed buildings from the opera-
tion of section 13 of the act for a period of five years but
the second part of the numberification as extracted and par-
ticularly the expression at any time thereafter enlarged
the exemption for an indefinite period and it tends to amend
section 13 of the act number permissible under the law. the
submissions made by the companynsels are i section 3 is
unconstitutional as it delegates essential legislative
function to the central government without laying down any
guidelines for exercise of the power of exemption ii the
impugned numberification enlarges the period of exemption for
an indefinite period and it tends to amend section 13 of the
act and it is companytrary to the object and purpose of the act
rather it defeats the protection granted to a tenant by the
act iii the numberification is discriminatory as it creates
two class of tenants tenants of old buildings which never
enjoyed the exemption from the provisions of the act and the
tenants of the newly companystructed buildings which are denied
the protection of the act. some of the learned companynsels appearing for the tenants
submitted that we should refer these cases to a companystitution
bench in view of the observations made by a three-judges
bench of this companyrt in narendra kurnar sharmas case naren-
dra kumar sharma v. srnt. kailashwati c.a. number 3994 of
1982 . while granting leave a bench of three-judges passed
the following order on numberember 9 1983
after hearing the companynsel for both the par-
ties at some length it seems to us that the
correctness of the decisions in firms amar
nath bashesh das v. tek chand 1972 3 scr
922 is open to doubt. it appears that the
interpretation placed by the companyrt as to the
scope and effect of the exemption in section 3
of the east punjab urban rent restriction act
1949 which is pari-materia with section 3 of
the east punjab urban rent restriction act
1949 as extended to the union territory of
chandigarh with which we are companycerned in
this appeal requires reconsideration. we do
feel that the second part of the impugned
numberification issued by the chief companymissioner
chandigarh dated september 24 1974 under
section 3 of the act in effect permits the
civil companyrts to pass decrees in suits for
ejectment of tenants instituted by the land-
lords even after the expiry of the period of
exemption companytrary to the statutory bar
contained in section 13 of the act and there-
fore it companyld number be upheld. 1015
let the papers be laid before honble the chief jus-
tice of india for placing the matter before a larger bench. on 23rd april 1986 bhagwati c.j. as he then was presid-
ing over a three-judges bench held that reference to a
larger bench was only in respect of suits for ejectment of
tenants instituted by the landlords after the expiry of
period of exemption and it did number companyer cases where suits
were instituted by the landlords prior to the expiry of the
period of exemption although decrees were passed subsequent
to the period of exemption. in this view narendra kumar
sharmas case wherein suit had been instituted during the
period of exemption was number referred to a companystitution
bench. anumberher bench companysisting of honble khalid and hon-
ble dutt jj. took the same view and directed that the case
of narender kumar sharma is number companyered by the order of
reference. ultimately narendra kumar sharmas case was heard by a
bench of two judges companysisting of honble mukharji and
honble k.j. shetty jj. and it was dismissed on merits on
september 24 1987. it appears that during the pendency of
narendra kumar sharmas case the tenants encouraged by the
observations made in the order dated 9.11.1983 approached
this companyrt again to challenge the validity of the numberifica-
tion by means of the present batch of petitions. in our
view observations made in narendra kumar sharmas case by a
bench of three-judges do number pertain to suits filed by the
landlords during the period of exemption although decree may
have been passed after the expiry of exemption. in the
instant cases numbere of the cases fall into that category
there is therefore numberjustification for referring these
cases to a larger bench. before we companysider the submissions made on behalf of the
tenants we would like to point out that some of the tenants
who were unsucessful before this companyrt in punjab tin supply
companys case have again filed petitions challenging the
validity of section 3 and the impugned numberification on
additional grounds. in our opinion the petitions by such
tenants are number maintainable as the same are barred by
principles of res-judicata. once the petitioners challenged
the validity of the impugned numberification dated 24.9.1974 in
earlier proceedings they ought to have raised all the
grounds which companyld have been raised in impugning the valid-
ity of section 3 and the numberification if they failed to
raise a ground in earlier petition they cannumber raise that
ground number in the present proceedings. finality in litiga-
tion and public policy both require that a litigant should
number be permitted to challenge validity of
1016
the provisions of the act or numberification at different times
on different grounds. once petitioners challenge to section
3 and the impugned numberification was companysidered by the companyrt
and the validity of the same was upheld it must be presumed
that all grounds which companyld validly be raised were raised
and companysidered by the companyrt. learned companynsel for the peti-
tioners urged that the questions which are being raised in
the present proceedings were neither raised number companysidered
by this companyrt in punjab tin supply companypanys case therefore
it is open to them to question the validity of section 3 and
the numberification dated 24.9.1974. this submission is company-
trary to the principles of res judicata and it further
ignumberes the binding effect of a decision of this companyrt under
article 141 of the companystitution. the binding effect of a
decision of this companyrt does number depend upon whether a par-
ticular argument was companysidered or number provided the point
with reference to which the argument is advanced subse-
quentiy was actually decided in the earlier decision see
smt. somavanti and ors. v. state of punjab ors. 1963 2
scr 774 t. govindaraja mudaliar etc. v. state of tamil nadu
ors. 1973 1 scc 336 and anil kumar neotia and ors. v.
union of india others 1988 2 scc 587. it is therefore
numberlonger open to the petitioner-tenants to challenge the
validity of section 3 of the act and the impugned numberifica-
tion dated 24.9.1974 on the ground that some points had number
been urged or companysidered in punjab tin supply companypanys
case. on the principles of res judicata and also in view of
article 141 of the companystitution the law declared by this
court in punjab tin supply companypanys case is binding on the
petitioners. but even otherwise the submissions made on
their behalf in impugning the validity of section 3 and the
numberification dated 24.9.1974 are devoid of any merit as we
shall presently discuss the same. the challenge to the validity of section 3 of the act on
the ground that it suffers from the vice of excessive dele-
gation of legislative power need number detain us long in view
of a number of decisions of this companyrt. similar provision
contained in section 13 of the madras buildings lease and
rent companytrol act 1949 was upheld by a companystitution bench of
this companyrt in p.j. irani v. the state of madras 1962 2
scr 169. in sadhu singh v. the district board gurdaspur
anr. c.a. 2594/66 decided on 29th october 1968 this
court held that section 3 of the east punjab urban rent
restriction act 1949 does number suffer from the vice of exces-
sive delegation of legislative power number it violates article
14 of the companystitution. section 3 2 of the madhya pradesh
accommodation companytrol act 1961 companyferring power on the
government to exempt certain accommodations from all or any
of the provisions of the act was upheld in the state of
madhya pradesh v.
1017
kanhaiyalal 1978 15 mplj 973. in fact validity of
section 3 of the act was again upheld by this companyrt holding
that it does number suffer from the vice of excessive delega-
tion of legislative power in m s punjab tin supply companypanys
case supra . we find numbergood reason to take a different
view we therefore hold that section 3 of the act does number
suffer from vice of companystitutional infirmity and it is a
valid provision. as regards the validity of the impugned numberification
dated 24.9.1974 is companycerned it is necessary to examine the
object and purpose of the exemption granted by the numberifica-
tion. the paramount object of the act like and other rent
control legislations is to safeguard the interest of tenants
against their exploitation by landlords. after the second
world war there has been movement of population from rural
areas to urban areas as a result of which the problem of
accommodation became acute in cities. landlords of the
buildings took full advantage of the situation and they
charged exhorbitant rent from tenants and very often evicted
them by terminating tenancy under the provisions of transfer
of property act. the tenants were helpless as the suits once
filed by the landlord after terminating the tenancy were
bound to succeed. the legislature of different states took
cognizance of the situation and enacted rent companytrol legis-
lations providing safeguards for tenants by making provision
for fixation of reasonable rent and also placing restric-
tions on the landlords right to evict tenants. generally
the rent companytrol legislation of various states exclude the
jurisdiction of civil companyrts to entertain a suit or pass a
decree of eviction against a tenant instead the jurisdic-
tion to evict a tenant is companyferred on rent companytroller or
some designated authority and the statutory grounds for
eviction of a tenant have been laid down. the multiple
restrictions placed on the landlords right to charge rent
from tenants or to evict them from buildings resulted into
shortage of accommodation because those who had money and
capacity to build new houses were discouraged from investing
money in companystructing buildings on account of the restric-
tions placed by rent companytrol legislations. the legislature
stepped in to meet the situation in making provision for
granting exemption to newly companystructed buildings for cer-
tain number of years from the operation of the restrictions
of the rent companytrol legislations. these steps were taken to
meet the acute scarcity of accommodation and to encourage
landlords to companystruct buildings which would ultimately ease
the situation of shortage of accommodation to a large ex-
tent. provisions for exempting the newly companystructed build-
ings from the restrictions of the rent companytrol legislations
for a limited period have been enacted by the punjab uttar
1018
pradesh haryana and madhya pradesh legislature. while
considering the interpretation and validity of the provi-
sions granting exemption either by statutory provision made
in the act or by a numberification issued under the act it is
necessary to bear in mind the object and purpose of exemp-
tion to newly companystructed buildings. the paramount object
and purpose of exemption is to provide incentive for company-
struction of new buildings to meet the shortage of accommo-
dation which would ultimately result in benefitting the
tenants. learned companynsel urged that the impugned numberification
enlarged the period of exemption for an indefinite period
and it tends to amend section 13 of the act and it is company-
trary to the object and purpose of the act. developing the
argument it was submitted that the numberification granted
exemption to newly companystructed buildings in the urban area
of chandigarh for a period of five years only from the
operation of section 13 of the act therefore numberexemption
could be available to newly companystructed buildings after the
expiry of five years. a suit if instituted during the period
of exemption companyld number be decreed number such decree companyld be
executed after the expiry of five years period but the last
portion of the numberification which states that section 13 of
the act shall number apply to decree of civil companyrts whether
such decree was passed during the period of exemption or at
any time thereafter enlarged the period of exemption for an
indefinite period of time and it seeks to amend section 13
of the act. we do number find merit in the submission. as
numbericed earlier section 13 1 imposes a companyplete ban against
the eviction of a tenant in execution of a decree passed by
a civil companyrt before or after the companymencement of the act
and it further lays down that a tenant in possession of a
building or rented land shall number be evicted except in
accordance with the provisions of section 13 or an order
made in pursuance of the provisions of the act. subsection
2 of section 13 sets out statutory grounds on which the
controller an authority companystituted under the act has power
to pass order of eviction against a tenant. section 13 takes
away the jurisdiction of civil companyrt to pass a decree of
eviction or execution thereof against a tenant in respect of
a building which is subject to the provisions of the act. the impugned numberification grants immunity to newly company-
structed buildings from the shackles of section 13 of the
act for a period of five years. while doing so the numberifi-
cation has taken care to make the exemption effective by
providing that the exemption shall be available to the
building even if the decree is passed after the expiry of
the period of five years provided the suit is instituted
during the period of exemption. the emphasis is on the
institution of the suit within the period of exemption of
five years. once the landlord institutes a suit
1019
before the expiry of the period of exemption the decree
even if passed after the period of five years will number be
subject to the provisions of section 13 of the act. this is
the true meaning of the numberification. the numberification does
number enlarge the period of exemption instead it safeguards
the rights of the parties which crystallise on the date of
institution of the suit. section 3 which provides for granting exemption from the
provisions of the act is by way of an exception to section
13 and therefore the two provisions need number be companysistent
in their effect. the object of having a proviso or exemption
is to neutralise the effect of the main provision. if that
is number so it would number be necessary to have an exemption
since public purpose as well as larger interest of tenants
require availability of more and more accommodation in the
shape of new buildings and for that purpose exemption is
necessary to be provided. in ultimate analysis provisions of
sections 3 and 13 both seem to achieve the same result. the
submission that the numberification granting exemption to newly
constructed buildings is companytrary to the object and purpose
of the act ignumberes the resultant effect of exemption. the
object and policy of the act is to mitigate hardship of
tenants. this can be done in several ways and one of them
being to provide incentive to persons having resources to
invest money in the companystruction of new buildings. as dis-
cussed the shackles of the rent companytrol legislation had
chilling effect on the landlords and they were reluctant to
invest their capital in making new companystructions. by grant-
ing holiday from the restrictions of regulations of rent
control laws impetus was given to the landlords to company-
struct new buildings so that after the expiry of period of
exemption the building so companystructed are available for
needy tenants companytrolled by the act. in punjab tin supply
companys case supra similar argument raised on behalf of
the tenants was repelled and the companyrt held that the numberifi-
cation granting exemption was number companytrary to the object and
purpose of the act instead it advanced the ultimate purpose
of the act to provide accommodation to tenants. similarly in
mohinder kumar etc. v. state of haryana anr. 1985 4 scc
221 provisions of the haryana act granting exemption to
newly companystructed buildings for a period of ten years was
held to advance the purpose of rent companytrol legislation. in
our opinion the impugned numberification granting exemption is
number companytrary to the object and purpose of the act number it
destroys protection granted to tenants under the act. the
exemption is for a limited period and after the expiry of
the period of exemption the building would fall within the
purview of the act and it would be regulated by the provi-
sions companytained therein subject to the impugned numberifica-
tion. 1020
in amar naths case supra the numberification granting
exemption did number direct that the decree passed after the
expiry of period of exemption would also be exempted from
the operation of section 13 of the act. in that case similar
argument was raised that number only the suit should be filed
during the period of exemption but the decree of eviction
must also be obtained within the period of five years. this
court rejected the submission saying that the companytention on
the very face of it if accepted would lead to incongruity
and shall nullify the purpose for which exemption was grant-
ed. the companyrt held that while companysidering the purpose of
exemption of building from operation of section 13 the
numberification granting exemption must be interpreted in the
light of the object and purpose of exemption and if the
contention that both the suit and the decree should be
passed within the period of exemption is accepted that would
defeat and nullify the purpose of exemption. it is a matter
of companymon knumberledge that final disposal of suits before the
civil companyrt are time companysuming in view of the heavy work
load of cases and dilatory tactics adopted by the interested
party. having regard to time numbermally companysumed for adjudica-
tion of a suit by the civil companyrt it is too much to expect
that a suit filed within the period of exemption of five
years can be disposed of finally within the period of exemp-
tion. the exemption companytemplated by the numberification permits
the institution of a suit within the period of exemption
taking into account the delay caused in disposal of the
suit it further protects the jurisdiction of the civil
court in passing decree of eviction with a view to make the
exemption effective and meaningful. in this view if the
submission made on behalf of the tenants is accepted it
would render the exemption illusory as in reality it will
be impossible for a landlord to get the suit decreed within
the period of exemption even if he instituted the suit
within the period of exemption. interpretation of the act
and the impugned numberification as suggested on behalf of the
tenants if accepted would defeat the purpose of the benefi-
cial social legislation. it is a settled rule of harmonious
construction of statute that a companystruction which would
advance the object and purpose of the legislation should be
followed and a companystruction which would result in reducing a
provision of the act to a dead letter or to defeat the
object and purpose of the statute should be avoided without
doing any violence to the language. we therefore reject the
submission made on behalf of tenants. learned companynsel for the tenants placed reliance on the
decisions of this companyrt in vineet kumar v. mangal sain
wadhera 1984 3 scc 352 and shiv kumar v. jawahar lal
verma 1988 4 scc 763 in support of their submission that
once five years period of exemption
1021
expired during the pendency of the suit the civil companyrt
ceased to have jurisdiction to pass decree of eviction or to
execute the same. in these decisions section 2 2 of the
p. urban buildings regulation of letting rent and evic-
tion act 1972 granting immunity to newly companystructed
buildings for a period of 10 years from the operation of the
act was companysidered and interpreted. in both of these deci-
sions a bench of two judges held that on the expiry of 10
years period of exemption during the pendency of the suit
the provisions of the act would apply and the tenant is
entitled to the protection of section 39 of the act and no
decree of eviction companyld be passed against him. on behalf of
the landlords it was urged that the view taken in the afore-
said two cases is incorrect and companytrary to the observations
made by a larger bench of this companyrt in om prakash gupta v.
dig vijendrapal gupta 1982 3 scr 491 and also against the
decision in nand kishore marwah v. smt. samundri devi
1987 4 scc 382. it was further urged that section 39 of
the u.p. urban buildings regulation of letting rent and
eviction act 1972 protects the tenant from eviction provid-
ed the suit was pending on the date of companymencement of the
act and number to a suit instituted thereafter. in the afore-
said decisions it was held that a suit for eviction insti-
tuted within period of exemption of 10 years companyld be de-
creed by the civil companyrt even if during the pendency of the
litigation 10 years period of exemption expired. the companyn-
sel for the landlords further placed reliance on the deci-
sion of this companyrt in atma ram mittal v. ishwar singh punja
1988 4 scc 284 wherein section 13 of the haryana urban
companytrol of rent and eviction act 1973 granting exemption
to newly companystructed building for a period of 10 years was
considered. the companyrt held that a suit instituted within the
period of exemption for eviction of the tenant companyld legal-
ly be decreed even if the period of exemption expired during
the pendency of the suit. these decisions numberdoubt support
the view we are taking but we do number companysider it necessary
to companysider these decisions in detail as the provisions of
the rent companytrol legislation which were companysidered in those
decisions were quite different which did number expressly
preserve the jurisdiction of the civil companyrt to decree the
suit after expiry of the period of exemption while the
impugned numberification in express terms maintains the juris-
diction of the civil companyrt to decree a suit for eviction
even if the period of exemption expires during the pendency
of the suit. there is numberprovision under the u.p. urban
buildings regulation of letting rent and eviction act
1972 or the haryana urban companytrol of rent and eviction act
1973 companytaining similar provision as companytained in the im-
pugned numberification. we therefore do number companysider it neces-
sary to discuss the aforesaid decisions in detail or to
express any final opinion about the companyrectness of the same. 1022
it was then urged that the impugned numberification prac-
ticed discrimination between two class of tenants in the
union territory of chandigarh. the two class of tenants are
the tenants of old buildings which were never exempted
from the provisions of the act the tenants of the buildings
entitled to protection of the act and ii the tenants of
newly companystructed buildings exempted from the protection of
the act who are liable to be evicted at any time at the
mercy of the landlord. in mohinder kumar v. state of haryana
anr. supra this companyrt companysidering a similar challenge
to the validity of section 13 of the haryana urban companytrol
of rent and eviction act 1973 held that the classification
of buildings with reference to the date of companypletion for
the purposes of regulating the rent and eviction of tenants
from such buildings has a rational basis and has a clear
nexus with the object to be achieved. classification is
rounded on intelligible differentia which has a rational
nexus with the object of the act. it does number practice any
invidious discrimination between two classes of tenants the
classification is reasonable and it does number violate article
14 of the companystitution of india. it is number necessary to
discuss the question further as we are in full agreement
with the view taken in mohinder kumars case supra . the
object and purpose of the exemption as discussed earlier is
to effectuate the purpose of the act to ensure availability
of more and more accommodation to meet the need of tenants. | 0 | test | 1989_176.txt | 1 |
civil appellate jurisdiction civil appeal number 313 of 1993.
from the judgment and order dated 9.10.1992 of the karnataka
high companyrt in election petition number 8 of 1991.
n. misra for the appellants. n. narasimha murthy e.c. vidyasagar and gopal singh for
the respondents. the judgement of the companyrt was delivered by
p. jeevan reddy j. heard the companynsel for the parties. leave granted. this appeal raises the question whether section 5 of the
limitation act 1963 is applicable to a recrimination numberice
given under section 97 of the representation of people act
1951. the learned single judge of the karnataka high companyrt
has held that it does number. his view is questioned by the
returned candidate first respondent in the election
petition before us. the first respondent in the election petition who shall
hereinafter be referred to as appellant was declared
elected from koppal parliamentary companystituency during the
general elections held for the 10th lok sabha. he companytested
on the companygress 1 ticket. the election-petitioner
referred to hereinafter as the first respondent had also
contested from the said companystituency on the ticket of janata
dal. having lost the election the first respondent filed
an election petition number 8 of 1991 for a declaration that
the election of the appellant from the said parliamentary
constituency was void and for a further declaration that he
himself has been duly elected therefrom. since the
appellant and some other respondents to the election
petition companyld number be served in the ordinary companyrse the
high companyrt directed publication of numberice in a kannada daily
newspaper. it was so published on 4.11.1991 fixing the date
of appearance of the respondents on 25.11.1991. the
appellant first respondent in the election petition ap-
peared before the high companyrt on 4.11.1991 and sought time
for filing his written statement which he did on 6.11.1992.
thereafter on 21.1.1992 he submitted the recrimination
numberice under section 97 of the act. by the said numberice the
appellant expressed his intention to give evidence to prove
that
the election of the first respondent would have been void if
he had been he returned candidate and a petition had been
presented calling in question his election. along with the
recrimination numberice he filed an application under section 5
of the limitation act requesting the high companyrt to companydone
the delay in filing the same for the reasons stated therein. according to the proviso to section 97 j numberice of such
intention should have been given to the high companyrt within
14 days from the date of companymencement of trial. admittedly the appellant gave numberice under section 97 1
beyond the period of 14 days and hence the application under
section 5.
for a proper appreciation of the question arising herein it
would be appropriate to numberice the relevant provisions of
the representation of people act besides section 29 2 of
the limitation act 1963. first the provisions of the
representation of people act. section 97 reads as follows
recrimination when seat claimed.- 1
when in an election petition a declaration
that any candidate other than the returned
candidate has been duly elected is claimed
the returned candidate or any other party may
give evidence to prove that the election of
such candidate would have been void if he had
been the returned candidate and a petition had
been presented calling in question his
election
provided that the returned candidate or such
other party as aforesaid shall number be entitled
to give such evidence unless he has within
fourteen days from the date of companymencement of
the trial given numberice to the high companyrt of
ins intention to do so and has also given the
security and the further security referred to
in sections 117 and 118 respectively. every numberice referred to in sub-section
1 shall be accompanied by the statement and
particulars required by section 83 in the case
of an election petition and shall be signed
and verified in like manner. sub-section 1 of section 97 permits the returned candidate
or any other party to give evidence in an election petition
seeking a declaration that any candidate other than the
returned candidate has been duly elected to
prove that the election of such candidate would have been
void if he had been the returned candidate and a petition
had been presented calling in question his election. sub-
section 2 says that such a numberice shall be accompanied by
a statement and particulars required by section 83 in the
case of an election petition and shall also be signed and
verified in the same manner. proviso to sub-section 1
says that such a numberice shall be given within fourteen days
from the date of companymencement of trial and the security
and further security referred to in sections 117 and 118
respectively is furnished. the expression companymencement of
trial has been defined in explanation to sub-section 4 of
section 86. the explanation reads
for the purposes of this sub-section and of
section 97 the trial of a petition shall be
deemed to companymence on the date fixed for the
respondents to appear before the high companyrt
and answer the claim or claims made in the
petition. according to the said definition the numberice of the
recrimination should have been given in this case within
fourteen days of 4.11.91. admittedly it was submitted
beyond the said period. section 83 deals with companytents of
petition. according to sub-section 1 an election
petition a shall companytain a companycise statement of the
material facts on which the petitioner relies b shall set
forth particulars of any companyrupt practice that the
petitioner alleges including as full a statement as possible
of all the names of the parties alleged to have companymitted
such companyrupt practice and the date and place of the
commission of each of such practice and c shall be signed
by the petitioner and verified in the manner laid down in
the companye of civil procedure 1908 for the verification of
pleadings. the proviso to sub-section 1 says that where a
petitioner alleges any companyrupt practice the petition shall
also be accompanied by an affidavit in the prescribed form
in support of the allegation of such practice and
particulars therein. sub-section 2 says that any schedule
or annexure to the petition shall also be signed by the
petitioner and verified in the same manner as the petition. section 117 requires the election petitioner to deposit in
the high companyrt at the time of presenting an election
petition a sum of rs. 2000 as security for the companyts of
the petition in accordance with the rules of the high companyrt. section 118 says that numberperson shall be entitled to be
joined as a respondent under sub-section 4 of section 86
unless he has given such security for companyts as the high
court may direct. section 86 1 declares that the
high companyrt shall dismiss an election petition which does number
comply with the provisions of section 81 or section 82 or
section 117.
there is numberprovision in the representation of people act
1951 making all or any of the provisions of the limitation
act applicable to the proceedings under the act. the
appellant however relies upon section 29 2 of the
limitation act. according to him by virtue of the said
provision all the provisions companytained in sections 4 to 24
both inclusive apply to the proceedings under the act
including the recrimination numberice under section 97. sub-
section 2 of section 29 which alone is relied upon before
us reads
where any special or local law prescribes for
any suit appeal or application a period of
limitation different from the period
prescribed by the schedule the provisions
of section 3 shall apply as if such period
were the period prescribed by the schedule and
for the purpose of determining any period of
limitation prescribed for any suit appeal or
application by any special or local law the
provisions companytained in sections 4 to 24
inclusive shall apply only insofar as and
to the extent to which they are number expressly
excluded by such special or local law. in h.n. yadav v. l.n. misra 1974 3 s.c.r. 31 this companyrt
held that the words expressly excluded occurring in
section 29 2 of the limitation act do number mean that there
must necessarily be express reference in the special or
local law to the specific provisions of the limitation act
the operation of which is sought to be excluded. it was
held that if on an examination of the relevant provisions of
the special act it is clear that the provisions of the
limitation act are necessarily excluded then the benefits
conferred by the limitation act cannumber be called in aid to
supplement the provisions of the special act. that too was
a case arising under the representation of people act and
the question was whether section 5 of the limitation act is
applicable to the filing of the election petition. the test
to determine whether the provisions of the limitation act
applied to proceedings under representation of people act by
virtue of section 29 2 was stated in the following words
the applicability of these provisions has
therefore to be judged number from the terms of
the limitation act but by the provisions of
the act relating to the fifing of election
petitions and their trial to ascertain whether
it is a companyplete companye in itself which does number
admit of the application of any of the
provisions of the limitation act mentioned in
section 29 2 of that act. on an examination of the provisions of the representation of
people act and the earlier decisions of the companyrt it. was
held that the representation of people act is a self-
contained companye and accordingly it was companycluded that the
provisions of s. 5 of the limitation act do number govern the
filing of election petitions. or their trial. this decision in our view practically companycludes the
question before us inasmuch as the act equates a
recrimination numberice to an election petition. the language
of section 97 makes the said fact abundantly clear. the
relevant words are the returned candidate or any other
party may give evidence to prove that the election of such
candidate would have been void if he had been the returned
candidate and a petition had been presented calling in
question his election. the proviso to sub-section 1
applies the provisions of sections 117 and 118 to such a
recrimination numberice. it may be numbericed that for number-
compliance with the requirement of section 117 an election
petition is liable to be dismissed by virtue of sub-section
1 of section 86. sub-section 2 of section 97 further
says that the numberice referred to in sub-section 1 shall
be accompanied by the statement and particulars required by
section 83 in the case of an election petition and shall be
signed and verified in like manner. we may also say that
the proviso to sub-section 1 of section 97 which requires
such a numberice to be given to the high companyrt within fourteen
days of the date fixed for the respondents to appear before
the high companyrt to answer the claim or claims reading the
definition of companymencement of trial into it has also a
particular meaning and object behind it. the idea is that
the recrimination numberice if any should be filed at the
earliest possible time so that both the election petition
and the recrimination numberice are tried at the same time. the recrimination numberice is thus companyparable to an election
petition. if section 5 does number apply to the filing of an
election petition it does number equally apply to the filing
of the recrimination numberice. in view of the above position we do number think it necessary
to deal with the several decisions cited before us relating
to the interpretation of sub-section 2 of section 29 of
the limitation act. the companynsel for the appellant brought to our numberice a
decision of this
court holding that the provisions of the section 12 2 of
the limitation act 1908 are applicable to an appeal under
section 116 a of the representation of people act 1951
viz. v.c shukla v. khubchand baghel and ors. 1964 6
c.r.129. it is also brought to our numberice that certain
high companyrts have taken the view that both section 5 and
section 12 2 of the limitation act are applicable to the
proceedings under the act. reference is to 1968 rajasthan
145 1968 calcutta 69 and 1976 89 madras la. weekly 32.
so far as the decision of this companyrt in v.c shukla is
concerned it is a decision dealing with the applicability
of the provision in section 12 2 of the limitation act to
an appeal preferred under section 116 a and number with the
filing of an election petition. the said decision was
considered and distinguished in h.n. yadav on the above
basis. at page 42 of the s.c.r. the division bench which
decided h.n. yadav distinguished the decision in v.c. shukla
in the following words
vidyacharan shuklas case supra is one
which dealt with an appeal under the act while
what we have to companysider is whether the
limitation act is at all applicable to elec-
tion petitions under the act. thirdly s.
29 2 of the new limitation act does number number
give scope for this companytroversy whether the
two limbs of the old section are independent
or integrated. numberdoubt s. 5 would number apply
where s. 29 2 is applicable to even
applications and petitions unless they are
expressly excluded. even assuming that the
limitation act applies to election petitions
under the act what has to be seen is whether
s. 5 is excluded from application to such
petitions. the division bench then proceeded to examine whether the
applicability of section 5 is excluded in the matter of
filing of an election petition and came to the companyclusion
that it was so excluded. this aspect has already been dealt
with hereinabove. | 0 | test | 1993_25.txt | 1 |
civil appellate jurisdiction civil appeal number 315 of 1961.
appeal by special leave from the award dated december 29
1960 of the industrial trinal bihar it patna in reference
number 4 of 1960.
k. daphtary solicitor general of india. and
sardar bhadur for the appellants. p. maheshwari for the respondents. 1962. march 9. the judgment of the companyrt was delivered by
gajendragadkarj.-this appeal by special leave is directed
against the order passed by the industrial tribunalpatna
directing the appellant the tatanagar foundry company to pay
to the respondents its workmen 75 of the companysolidated
wages as companypensation for having laid them off for a period
of 45 days companymencing from december 1.5 1959. it is companymon
around that the appellant laid off the respondents for the
said period. the appellants case was that it had paid the
respondents the statutory companypensation for the said lay-off
as prescribed by s.25c of the industrial disputes act number
14 of 1947 hereinafter called the act . the
respondents however companytended that the lay-off was number
justified and so the statutory companypensation paid by the
appellant did number satisfy the ends of justice. it was this
dispute between the parties which was referred for
adjudication by the government of bihar to the industrial
tribunal on february 9 1960. on this reference the
tribunal has held that the lay-off companyld number be held to be
altogether justified. that is why it has awarded
compensation to the respondents in excess of the amount
statutorily fixed in that behalf. the appellant companytends
that the award thus made by the tribunal is companytrary to law
before dealing with the merits of the companytentions raised by
the appellant it would be necessary to state some relevant
facts which led to the lay-off. the appellant is a public
limited companypany and has its factory in jamshedpur. it
manufactures cast iron sleepers pipes general engineering
casting and number-ferrous castings in the said factory. the
raw materials mainly required for the manufacture of
sleepers are pig-iron companye limestone and moulding sand. the railway board is the only buyer of sleepers and the
sleepers are therefore manufactured only on receipt of
orders upon tenders from the said board and number otherwise. the numbermal procedure for procuring raw material was that
after an order was received from the railway board the
appellant submitted its requirement of pig iron to the iron
steel companytroller of the government of india who allocates
the quantity for the said companymodity to the various
manufactures such as tata iron steel company limited and indian
iron steel company limited formerly supply of pig iron used to
come from the said two companycerns to the appellant and the
appellant used to pay cash to tata iron steel company limited
for the pig iron supplied by it and by a letter of credit to
the indian iron steel company limited on which the said companypany
used to supply the raw material made by it. in 1959 both
the companypanies
stopped supply of pig iron in spite of the order issued in
that behalf by the companytroller and they wrote to the
appellant suggesting that the appellant should request the
controller to cancel his order and place the same with some
other suppliers. companyrespondence followed between the said
companies and the appellant and finally in numberember 1959
the appellant was informed by the said companypanies that they
could number supply its requirements of raw material. in june 1959 the bhilai steel works made their first
shipment of pig iron addressed to the appellant. in
august 1959 the said works despatched some wagons of pig
iron to the appellant but out of 20 wagons of the
consignment 14 were lost companypletely and the rest
misdelivered and were subsequently found somewhere in gomoh
and some in tatanagar and they never reached the appellant
in time. in may 1959 the appellant arranged for letter of credit
for a sum of rs. 100000/- for the bhilai steel works. in
august there was a supply of 440 tons and in september
followed a supply of 36 wagons companytaining pig iron to the
extent of 20 to 21 tons each roughly. in all this latter
supply came to about 760 tons. in the two subsequent
months numbersupply was received from bhilai. the letter of
credit which the appellant had opened for bhilai steel works
was revolving with the result that as soon as one
transaction was companypleted the said letter was ready for the
subsequent transaction. the effect of this revolving letter
was that the value of credit of rs.100000/- companytinued to
be outstanding all the time. in spite of this revolving
letter the bhilai steel works failed to supply pig iron in
the two months october and numberember. the appellant reminded
the works that numbersupply of pig iron was received from them
and yet numberadvice of any despatch of pig iron was received
from the
works after july 27 1959. even the 20 wagons which had
been sent in august and september did number arrive at the
factory. these wagons it was later learnt had been
delivered to k. p. docks and some other destinations. in regard to the supply of pig iron from rourkela the
appellant arranged for finance on cash basis. in fact
between august and december a total advance of rs. 175000/- was made to the rourkela steel works. a supply
of pig iron worth about rs. 164000/- was received by the
appellant but the balance of rs. 11000/- was still
outstanding.in addition to the cash advances the appellant
also opened a letter of credit for rs. 100000/- in
numberember 1959 for financing the purchase of steel from the
said works. as early as 1959 tisco informed the appellant that it
regretted that it would number be possible for it to supply the
requirements of the companypany regularly while in regard to
the supply from iisco the position was still worse. the appellant kept its employees and the assistant labour
commissioner fully informed of these unfortunate
developments from time to time. both the assistant labour
commissioner and mr. john president of the respondents
union did what they companyld by moving the government to
assist the appellant in securing the raw material. even so
when the situation did number show any signs of improvement and
the appellant found that numberraw material was available with
which its foundry companyld carry on the manufacture of
sleepers it issued a numberice on december 15- 1959 and laid
off the workers of the sleeper factory. this lay-off company-
tinued until september 11 1960 and from september 12
1960 the appellant closed the sleeper foundry department
and issued numberice of retrenchment. subsequently
retrenchment companypensation was duly paid to the workmen who
had been retrenched. that in short is the background of the lay-off the
validity of which formed the subject-matter of the present
reference. it appears that before the tribunal it was urged by the
respondents that the appellant had deliberately brought
about a situation which led to the lay-off in order to
divert the relevant orders for sleepers to its belur
factory. the argument was that at belur the appellant gets
its work done at cheaper companyt with the help of companytract
labour. number if this companytention had been established then
it would clearly have been a case of malafides on the part
of the appellant and a claim for additional companypensation may
have been justified. but the tribunal has rejected this
contention and has hold that numberevidence had been adduced to
prove such a malafide intention on the part of the
appellant. it was also urged by the respondents that even in the
absence of pig iron the manufacture of sleepers companyld have
been carried on by utilising a substitute and in support of
this case four witnesses were examined by the respondents. the tribunal has rejected this case also. it has found that
the evidence given by the four witnesses was unreliable and
unsatisfactory and the statement made by the general manager
in cross-examination on this point was sufficient to show
that in the absence of pig iron castings with scrap iron
and tin companyld number have been made. in fact the general
manager categorically stated that the appellant had number
casted any sleeper without pig iron at any time. thus the
alternative plea raised by the respondents to suggest that
if the appellant had so desired it companyld have avoided to
lay-off its workmen has also been rejected by the tribunal. the tribunal however was inclined to take the view that if
the management had been more foresighted it companyld have
avoided the unfortunate
position which it had to face at the relevant time and
because the tribunal thought that the situation which faced
the appellant at the relevant time was partly due to its
negligence it reached the final companyclusion that the lay-off
was number altogether justified. the tribunals view appears
to be that if reasonable care had been exercised by the
appellant the situation companyld have been avoided. it is this
part of its finding that is seriously disputed before us by
the appellant. under a. 2 kkk lay-off means inter alia the failure
or inability of an employer on account of shortage of raw
materials to give employment to a workman whose name is
borne on the muster rolls of his industrial establishment
and who has number been retrenched. as we have already seen
there is numberdoubt that raw materials wore number available to
the appellant at the relevant time and so the lay-off which
is the subject-matter of the present dispute satisfies the
test prescribed by the definition. section 25c provides for
the right of workmen laid-off for companypensation and it is
common ground that companypensation equal to 50 of the total
of the basic wages and dearness allowance as therein
prescribed has been paid by the appellant to the
respondents. the issue referred to the tribunal was whether
the action of the management in laying off the workmen was
justified. if number to what relief were the respondents
entitled ? in other words the reference shows that it was
only if the tribunal came to the companyclusion that the lay-off
wag number justified that the question of companysidering what
additional companypensation should be paid to the respondents
could arise. if the lay-off is justified and it satisfies
the requirements of the definition under s. 2 kkk the only
relief to which the workmen laid off are entitled is the
statutory relief prescribed by a. 25c. there is numberdoubt or
dispute about this position. it is also number in dispute that if the lay-off is malafide in
the sense that the employer has deliberately and maliciously
brought about a situation where lay off became necessary
then it would number be a lay-off which is justified under s.
2 kkk and the relief provided to the laid-off workmen under
a. 25c would number be the only relief to which they are
entitled. malafides of the employer in declaring a lay-off
really mean that numberlay-off as companytemplated by the
definition has in law taken place and so a finding as to
malafides of the employer in declaring a lay-off naturally
takes the lay-off out of the definition of s. 2 kkk and as
such a. 25c cannumber be held to be applicable to it so as to
confine the workmens right to the companypensation therein
prescribed. if the lay-off has been declared in order to
victimise the workmen or for some other ulterior purpose
the position would be the same. it would dot be a lay-off
as companytemplated by a. 2 kkk . but when dealing with a lay-off like the one with which we
are companycerned in the present appeal it would number be open to
the tribunal to enquire whether the appellant companyld have
avoided the lay off if he had been more diligent more
careful or more far-sighted. that is a matter relating
to the management of the undertaking and unless malafides
are alleged or proved it would be difficult to assume that
the industrial tribunal has jurisdiction to sit in judgment
over the acts of management of the employer and investigate
whether a more prudent management companyld have avoided the
situation which led to lay- off. the danger involved in
permitting such jurisdiction to the tribunal is illustrated
by the present award itself. the tribunal has found that
the appellant was in financial difficulties at the relevant
time it has found that the appellant was number actuated by
any malafide intention it has companye to the companyclusion that
the lay-off was number the result of any uleriort
motive and yet it has finally companye to the companyclusion that
if the affairs of the appellant it had been better managed
and more foresight had been shown by the appellant prior to
the time when the crisis was reached pig iron companyld have
been secured and lay-off companyld have been avoided. apart
from the fact that this companyclusion does number appear to be
borne out by any evidence on record it seems to us that the
tribunal exceeded its jurisdiction in trying to decide
whether better. management companyld have avoided the crisis. the appellant is numberdoubt expected to manage its affairs
prudently but it would we think number be reasonable or fair
to hold that if the employer is faced with a situation under
which for lack of raw materials he has to lay-off his
workmen it is necessary that he must submit to an enquiry
by the industrial tribunal about the prudence of the
management and the forethought displayed by it in
anticipating and avoiding the difficulties. that is why we
think in embarking upon an enquiry as to whether the
appellant had shown sufficient foresight in managing its
affairs the tribunal has exceeded its jurisdiction. | 1 | test | 1962_384.txt | 1 |
criminal appellate jurisdiction criminal appeal number 126 of
1962.
appeal from the judgment and order dated october 31 1961 of
the punjab high companyrt in criminal appeal number 825 of 1960.
vidya dhar mahajan for the appellant. the judgment of the companyrt was delivered by
sinha c. j.-in this appeal on a certificate of fitness
granted by the punjab high companyrt the only question for
determination is whether the provisions of s. 5 of the
limitation act 9 of 1908 apply to an application for
special leave to appeal from an order of acquittal under
sub-s. of s. 417 of the companye of criminal procedure to be
hereinafter referred to as the companye . the certificate was
granted by the high companyrt because there is a companysiderable
conflict of opinion in the various high companyrts. in this case we are number companycerned with the factual aspect of
the companytroversy between the parties. it is number therefore
necessary to set out in any detail the facts of that
controversy. it is enumbergh to state that the respondent was
committed to the companyrt of sessions to stand his trial under
s. 493 or in the alternative under s. 495 of the indian
penal companye on the charge that he had by deceit caused the
appellant who was number lawfully married to him to believe
that she was so married and in that belief had sexual
intercourse with her. in the alternative it was alleged
that he married the appellant after companycealing the fact that
he was already married. the prosecution was launched by a petition of companyplaint
filed by the appellant before the magistrate. the
respondent was tried by the additional sessions judge
gurdaspur who by his judgment dated december 31 1959
acquitted him on the ground that the prosecution had failed
to prove that there was a marriage between the companyplainant
and the accused. the appellant filed an ap-
application on april 22 1960 very much later than 60 days
from the date of the order of acquittal for special leave
to appeal from that order under s. 417 3 of the companye. in
a numbere appended to the application it was stated that the
time in filing the present petition might be excluded in
view of the fact that the district magistrate gurdaspur
moved the advocate-general in filing the appeal under s.
417 criminal procedure companye which if filed would have
obviated the necessity of filing this petition. but. the
state government declined to file appeal and the intimation
to this effect was received on april 1 1960. the original
letter is attached herewith from this date it is within
time. on this application a division bench of the high
court passed the order admitted on september 1 1960.
when the appeal was placed for hearing before falshaw and
grover jj a preliminary objection was raised on behalf of
the respondent that the appeal was out of time. while it
was admitted on behalf of the appellant that the appeal was
filed long after the period prescribed by sub. s. 4 of s.
417 of the companye it was argued that the delay companyld be
condoned under s. 5 of the limitation act and that the
delay had been so companydoned by the bench when the appeal was
admitted. the bench pointed out that as a matter of fact no
application had been made by the appellant for extension of
the period of limitation for filing the petition for special
leave. the bench further held that it companyld number accede to
the companytention that the bench while admitting the appeal had
condoned the delay. the companyrt on an elaborate examination
of the provisions of the companye and of the limitation act
came -to the companyclusion that the bar of time prescribed by
sub-s. 4 of s. 417 was a special law within the meaning
of s. 29 2 of the limitation act and that therefore s. 5
of the limitation act would number be available to the
appellant for companydoning the admitted delay in filing the
application for special leave. the high companyrt numbericed a
number of decisions of the different high companyrts and
preferred to accept the view that the provisions of sub. s.
4 of s. 417 of the companye were in the nature of a special
law though the companye as a whole was a general law. in that
view of the matter the high companyrt dismissed the appeal on
the ground that the application for
special leave to appeal was barred by time. the appellant
applied to the high companyrt and obtained the necessary
certificate of fitness and has companye up to this companyrt on
appeal from that order of the high companyrt. the high companyrt
naturally did number go into the merits of the companytroversy. we
have therefore to companysider whether the high companyrt. was
right in companying to the companyclusion that s. 5 of the
limitation act companyld number be available to the appellant for
condonation of the delay in filing the application for spe-
cial leave under sub-s. 3 of s. 417 of the companye. before we refer to the different decisions of the high
courts taking companyflicting views on the only question number
before us we would examine the relevant provisions of the
code and the limitation act. section 417 of the companye is in
these terms -
417 1 subject to the provisions of sub-
section 5 the state government may in any
case direct the public prosecutor to present
an appeal to the high companyrt from an original
or appellate order of acquittal passed by any
court other than a high companyrt. if such an order of acquittal is passed in any case in
which the offence has been investigated by the delhi special
police establishment companystituted under the delhi special
police establishment act 1946 xxxv of 1946 the central
government may also direct the public prosecutor to present
an appeal to the high companyrt from the order of acquittal. if such an order of acquittal is passed in any case
instituted upon companyplaint and the high companyrt on an
application made to it by the companyplainant in this behalf
grants special leave to appeal from the order of acquittal
the companyplainant may present such an appeal to the high
court. numberapplication under sub-section 3 for the grant of
special leave to appeal from the order of acquittal shall be
entertained by the high companyrt after the expiry of sixty days
from the date of that order of acquittal. if in any case the application under sub-section
3 for the grant of special leave to appeal from an order
of acquittal is refused numberappeal from that order of
acquittal shall lit under sub-section 1 . 63-2 s. c. india/64
it will appear that the section which was recast by act
xxvi of 1955 for the first time made provision for an
appeal by a private companyplainant from an order of acquittal
if he obtained special leave to appeal from the high companyrt. previous to the amending act aforesaid it was only the
state government which companyld companye up in appeal from an order
of acquittal. the section thus provides for an appeal by
the state government as also by the companyplainant in a cast
instituted upon a companyplaint provided that special leave of
the companyrt is obtained. so far as appeal by the state
government is companycerned s. 417 itself does number provide for
any period of limitation. the period of limitation for such
an appeal is laid down in art. 157 of the limitation act. previous to the amendment of 1955 the period of limitation
for such an appeal by the state government was six months
which was reduced to three months by the act xxvi of 1955
with effect from january 1 1956. hence so far as an
appeal by the state government is companycerned the period of
limitation thus reduced is a part of the general law of
limitation and is amenable to the operation of s. 5 of the
limitation act. but the provisions of sub-s. 3 and 4 of
s. 417 arc in the nature of special provisions introduced
for the first time by the amending act xxvi of 1955. sub-
section 4 in terms is very precise and mandatory
prohibiting the high companyrt from entertaining any application
for special leave to appeal from an order of acquittal after
the expiry of 60 days from the date of such an order. on a
perusal of the bare provisions of the section and the
history of the law on the subject two things are clear
namely 1 that the legislature thought it expedient in the
interest of justice and public policy that the period of six
months allowed to the state government to appeal from an
order of acquittal should be curtailed by half thus
evincing its clear intention to cut short the duration of
the litigation which had already resulted in an order of
acquittal and 2 that in certain cases the high companyrt
should have the power of granting special leave to a
complainant as distinguished from the state government to
come up in appeal from an order of acquittal but at the
same time indicating in clear and unambiguous terms that
such an application must be made within 60
days from the date of the order of acquittal. this rule of
60 days bar of time has been specifically provided for in
the section itself unlike the general rule of limitation
applicable to an appeal against acquittal at the instance
of the state government. in our opinion therefore the
position is clear that so far as appeal by the state
government is companycerned the law of limitation is the
general law laid down in the limitation act art. 157 to
which s. 5 would apply by its own force. but in so far as
an appeal by a private prosecutor is companycerned the
legislature was astute to specifically lay down that the
foundation for such an appeal should be laid within 60 days
from the date of the order of acquittal. in that sense
this rule of 60 days bar is a special law that is to say a
rule of limitation which is specially provided for in the
code itself which does number ordinarily provide for a period
of limitation for appeals or applications. it is the
general law of limitation as laid down in the limitation
act which governs appeals ordinarily preferable under the
code vide arts. 150 154 155 and 157. to such appeals the
provisions of s. 5 would apply. it has been observed in some of the cases decided by the
high companyrts that the companye is number a special or a local law
within the meaning of s. 29 2 of the limitation act that
is to say so far as the entire companye is companycerned because
it is a general law laying down procedure gene-
rally for the trial of criminal cases. but the specific
question with which we are here companycerned is whether the
provision companytained in s. 417 4 of the companye is a special
law. the whole companye is indeed a general law regulating the
procedure in criminal trials generally but it may companytain
provisions specifying a bar of time for particular class of
cases which are of a special character. for example a land
revenue companye may be a general law regulating the
relationship between the revenue-payer and the revenue-
receiver or the rent-payer and the rent-receiver. it is a
general law in the sense that it lays down the general rule
governing such relationship but it may companytain special
provisions relating to bar of time in specified cases
different from the general law of limitation. such a law
will be a special law with reference to the law generally
governing the subject-matter of that kind of re-
64-2 s c india/64
lationship. a special law therefore means a law enacted
for special cases in special circumstances in companytradis-
tinction to the general rules of the law laid down as ap-
plicable generally to all cases with which the general law
deals. in that sense the companye is a general law regulating
the procedure for the trial of criminal cases generally
but if it lays down any bar of time in respect of special
cases in special circumstances like those companytemplated by s.
417 3 4 read together it will be a special law
contained within the general law. as the limitation act has
number defined special law it is neither necessary number
expedient to attempt a definition. thus the limitation act
is a general law laying down the general rules of limitation
applicable to all cases dealt with by the act but there may
be instances of a special law of limitation laid down in
other statutes though number dealing generally with the law of
limitation. for example rules framed under defence of
india act vide s. m. thakur v. the state of bihar 1
canara bank limited v. the warden insurance company 2 dealing with
the special rule of limitation laid down in the bombay land
requisition act bom. xxxiii of 1948 . these arc mere
instances of special laws within the meaning of s. 29 2 of
the limitation act. once it is held that the special rule
of limitation laid down in sub-s. 4 of s. 417 of the companye
is a special law of limitation governing appeals by
private prosecutors there is numberdifficulty in companying to the
conclusion that s. 5 of the limitation act is wholly out of
the way in view of s. 29 2 b of the limitation act. but the question is whether it can be said that even though
the provisions of s. 417 4 are a special law they
prescribe a different period of limitation from that
prescribed by the first schedule of the limitation act
because s. 29 2 applies where there is a difference between
the period prescribed by the limitation act and that
prescribed by the special law. it is said that the
limitation act does number prescribe any period of limitation
for an application for special leave to appeal from an order
of acquittal at the instance of a private prosecutor. in
the first instance the limitation act art. 157 has
prescribed the rule of limitation
i.l.r. 30 pat. 126.
i.i.r. 1952 bom. 1083.
in respect of appeals against acquittal at the instance of
the state. hence it may be said that there is no
limitation prescribed by the limitation act for an appeal
against an order of acquittal at the instance of a private
prosecutor. thus there is a difference between the
limitation act and the rule laid down in s.417 4 of the
code in respect of limitation affecting such an application. section 29 2 is supplemental in its character in so far as
it provides for the application of s. 3 to such cases as
would number companye within its purview but for this provision. and for the purposes of determining any period of limitation
prescribed by any special law it has made the provisions of
the limitation act referred in cl. a of sub-section 2
of section 29 applicable to such cases to the extent to
which they are number expressly excluded by such special or
local law and cl. b of that subsection expressly lays it
down that the remaining provisions of the limitation act
shall number apply to cases governed by any special or local
law. in our opinion therefore the provisions of the companye
supplemented by the provisions of s. 29 2 of the limitation
act make it clear that s. 5 of the limitation act would number
apply to an application for special leave to appeal under s.
417 3 of the companye. that is our companyclusion based on the interpretation of the
statutes in question. but the high companyrts of allahabad
andhra pradesh and madras have taken the companytrary view. on
the other hand earlier decisions of the allahabad high
court at-id the bombay high companyrt to be presently numbericed
have taken the view that what we have indicated is the
correct view of the legal position. a division bench of the allahabad high companyrt in the case of
mohammad ibrahim v. gopi lal 1 bad taken the view that the
words of sub.s. 4 of s. 417 make it clear that the
application under sub.s. 3 must be made within 60 days of
the order of acquittal and that the high companyrt had numberpower
to extend the period of limitation and 5. 5 of the
limitation act did number apply to such cases. they based
their companyclusion entirely on the wording of sub. ss. 3 and
4 of s. 417 of the companye. that bench decision of the
allahabad high companyrt was overruled by a full bench of that
court in rajjan lel v. state 2 . the three honble judges
con-
a.i.r. 1958 all 691 . i.l.r. 1960 2 all. 761.
stituting the full bench in separate but companycurring judg-
ments took the view that the companye was number a local or a
special law and that s. 5 of the limitation act was
applicable to an application under s. 417 3 of the companye. in the andhra pradesh high companyrt a division bench was of the
same opinion as had been held by the full bench of the
allahabad high companyrt but the decision was obiter because
the companyrt dismissed the petition on the ground that the
order of acquittal had been passed before the amending act
xxvi of 1955 came into force so that the order of acquittal
was number amenable to an appeal at the instance of the private
prosecutor. a single judge of the andhra pradesh high companyrt took the
view that s. 5 was applicable to applications for special
leave under s. 417 4 . in the madras high companyrt a single judge decided the case of
viswanathan chettiar. in re 1 and held that section 1
sub-section 2 of the criminal procedure companye makes all
laws applicable to criminal procedure companye including the law
of limitation and numberhing companyld prevent the appellant from
taking advantage of section 5 of the limitation act. he
also held that there was numberdifference between the period
prescribed by the law of limitation and the criminal
procedure companye. both these observations do number appear to be
correct. anumberher single judge of the madras high companyrt decided in the
case of companymbatore municipality v. k. l. narayanan 2 that
s. 5 of the limitation act companyld be availed of by the
private prosecutor but the learned judge did number base his
decision on the reasoning of the previous judgment of that
court but preferred to follow the reasoning adopted by the
andhra pradesh high companyrt in p. f. subbareddi v. d.
papireddi 3 and in re parchuri adeshamma 4 . in our opinion the view taken by the full bench of the
bombay high companyrt in the case of anjanabai v. yeshwantrao
daulatrao dudhe 5 is the companyrect one. in that case it was
1 1957 1 m.l.j 150.
a.i.r. 1958 mad. 416.
a.t.r. 1957 and. pra. 406.
a.i.r. 1958 and. pra. 230.
i.l.r. 1961 bom. 135.
held that the provisions of s. 417 4 were a special law
within the meaning of s. 29 2 of the limitation act. | 0 | test | 1963_208.txt | 1 |
civil appellate jurisdiction civil appeal number 793 of
1966.
appeal by special leave from the judgment and order
dated august 21 1964 of the bombay high companyrt nagpur bench
in special civil application number 353 of 1963.
n. phadke naunit lal and b.p. singh for the
appellant. d. verma and ganpat rai for respondent number 1.
the judgment of the companyrt was delivered by
shelat j. this appeal by special leave is directed
against the order of the high companyrt of bombay nagpur bench
which set aside the orders of the assistant companymissioner of
labour and the industrial companyrt nagpur and remanded the
case to the assistant companymissioner. the appellant-firm companyducts a number of bidi factories
at various places in vidharba including the one at kamptee. its head office is also situate there. the factory at
kamptee and the head office have always been treated as
separate entities though owned by the same firm. companysequently the head office was registered under the
central provinces berar shops and establishment act 1947
and the factory at kamptee was registered under the
factories act. the factory has also its own standing orders
certified under the central provinces berar industrial
disputes settlement act 1947. respondent 1 was originally
employed in the factory at kamptee. two or three years
thereafter he was directed to work at the head office and
worked therein for about six years prior to the impugned
order of dismissal passed against him by the munim of the
head office. aggrieved by the order he flied
an application under s. 16 of the c.p. berar industrial
disputes settlement act alleging that the said order was
incompetent and illegal. the appellant-firm companytended that
at the material time respondent 1 was employed as a clerk in
the head office that the head office was a separate entity
that the dismissal order had number been passed by the
appellant-firm as the owner of the said factory that the
firm as such owner was wrongly impleaded and that the
application was misconceived. the assistant companymissioner dismissed the application
holding that respondent 1 at the material time was number the
employee in the factory but was employed in the firms head
office. he relied on the fact that the head office and the
factory had separate rules that respondent 1 used to sign
his attendance in the register of the head office that he
was being paid his salary by the head office and lastly
that his name was number on the muster roll of the factory. he
also found that whereas the staff of the head office was
governed by the c.p. berar shops establishments act the
factory was governed by the c.p. berar industrial disputes
settlement act. against the dismissal of his application
respondent 1 filed a revision application before the
industrial companyrt nagpur. the industrial dismissed the
application holding that the only question raised before
it was whether respondent 1 was the employee of the head
office and that that being purely a question of fact he
could number interfere with the finding of fact arrived at by
the assistant companymissioner. respondent 1 thereafter filed a
writ petition in the high companyrt challenging the said orders. the high companyrt held that it was possible in law for an
employer to have various establishments where different
kinds of work would be done in which case an employee in
one establishment would be liable to be transferred to
anumberher establishment. but the high companyrt observed that
unless it was established that the employment of respondent
1 in the factory was legally terminated it companyld number be
assumed merely because he was directed to work in the head
office that his employment was changed and the head office
was substituted as his employer in place of the said
factory. as the order passed by the assistant companymissioner
was number clear on this question the high companyrt remanded the
case for disposal according to law. mr. phadke for the appellants raised the following
contentions against the high companyrts order 1 that the
high companyrt made out a new case for respondent 1 in that
respondent 1 had never challenged the validity of the order
of dismissal on the ground that there was numberchange of
employment and that therefore the head office was
incompetent to order his dismissal 2 that the facts of
the case justified the companyclusion that respondent 1 had
ceased to be the employee of the factory and 3 that in
any event he must be held to have given an implied companysent
to
his being treated as the employee of the head office. in
support of these companytentions he relied upon the fact that
respondent 1 had worked at the. head office for the last six
years without any protest that his name was on the
attendance register of the head office that it was the head
office which paid his salary and lastly that he worked in
the head office under the direction and companytrol of the munim
of that office. as to the first companytention it would number be companyrect to
say that the high companyrt made out a new case for the first
time for respondent 1 which was number pleaded by him before
the assistant companymissioner. in para 1 of his application he
had expressly averred that about three years after his
employment in the factory he had been ordered to work in the
head office. in reply to the application the appellants
conceded that though respondent 1 was first employed in the
factory and had worked there for about three years he had
thereafter been transferred to and been working as a clerk
in the head office. there was however numberaverment in that
reply that the companytract of service of respondent 1 with the
said factory was at any time put an end to or that when he
was directed to work in the head office a fresh companytract of
service was entered into. between. him and the head office. the assistant companymissioner in his said order held that the
head office and the factory were two separate establishments
registered under two different acts and therefore
subject to different provisions of law. he further held that
since respondent 1 was number actually working in the factory
and his name did number figure in the factorys muster roll and
was number paid his wages by the factory the applicant companyld
number be said to be an employee of the said factory. in his
revision application before the industrial companyrt respondent
1 made an express plea that when he was directed to work in
the head office he had received numbernumberice from the factory
that his services were terminated there or that he had
henceforth become the employee of the head office. it is
clear from these pleadings that it was number for the first
time in the high companyrt that respondent 1 companytended as to the
incompetence of the head office to take disciplinary action
against him and to pass the order of dismissal. the first
contention of mr. phadke therefore cannumber be accepted. as regards the second and the third companytentions there
is numberdispute that though the head office and the said
factory belong to the same proprietors they were always
treated as two distinct entities registered under two
different acts that respondent 1 was employed first in
the factory where he worked for 2 or 3 years and was
thereafter ordered to work at the head office where
admittedly he worked for about six years before the impugned
order terminating his services was passed. the question
therefore which the assistant companymissioner and the
industrial companyrt had to decide in view of the pleadings of
the parties was whether
respondent 1 had ceased to be the employee of the factory
and was in the employment of the head office at the time
when the impugned order was passed or whether his services
were simply lent to the head office and he companytinued all
along to be the employee of the factory ? the general rule in respect of relationship of master
and servant is that a subsisting companytract of service with
one master is a bar to service with any other master unless
the companytract otherwise provides or the master companysents. a
contract of employment involving personal service is
incapable of transfer. thus where a businessman joins a
partnership firm and takes his personal staff with him into
the firm his staff cannumber be made the staff of the firm
without the companysent of the other partners. of. mersey docks
and harbour board v. companygins griffith liverpool limited 1 . in certain cases however it is. possible to say that an
employee has different .employers as when the employer in
pursuance of a companytract between him and a third party lends
or hires out the services of his employee to that third
party for a particular work. such an arrangement however
does number effect a transfer of the companytract of service
between the employer and his employee but only amounts to a
transfer of the benefit of his services. of. century
insurance company limited v. numberthern ireland road transport
board . in such cases where a third party engages anumberher
persons employee it is the general employer who is numbermally
liable for the tortuous acts companymitted by the employee and
his liability is number affected by the existence of a companytract
between him and the third party under which the services of
the employee are lent or hired out for a temporary period to
such third party. in order to absolve the employer from the
liability and to make the person who. temporarily engages
the employee or hires his services it is necessary to prove
that the relationship of master and servant was temporarily
constituted between such third party and the employee and
that it existed at the time when the tortuous act was
committed by the employee. there is however a
presumption against there being such a transfer of an
employee as to make the hirer or the person on whose behalf
the employee is temporarily working and a heavy burden rests
on the party seeking to establish that the relationship of
master and servant has been companystituted pro hac vice between
the temporary employer and the employee of. mersey docks
and harbour board v. companygins griffith liverpool
ltd. 1 . in cases where an employer has hired out or lent
the services of his employee for a specific work and such an
employee has caused damage to anumberher person by his tortuous
act the question often arises as to who of the two i.e. the employer or the person to whom such services are hired
out or lent is 1947 a.c. 1 at 17. 2
1942 a.c. 509.
vicariously responsible for such damage. in cases
commonly knumbern as cranes and carriage cases companyrts in
england evolved the rule of the employee being temporarily
the employee of such third party to impose the
responsibility on him if it was established that in the
matter of the act in the performance of which the tortuous
act was companymitted such third party had exercised companytrol
and direction over the performance of the act in question
and the manner in which it was to be performed. the classic
case companymonly cited and in which this rule was applied is
quarman v. burnett 1 of. also jones v. scullard 2 where
lord russel applied the test of the power to direct and
control the act in performance of which damage was caused to
anumberher person. the position in law is therefore clear
that except in the case of a statutory provision to the
contrary a right to the service of an employee cannumber be
the subject matter of a transfer by an employer to a third
party without the employees companysent. thus in numberes v.
doncaster amalgamated companylieries limited 3 where an order
was made under s. 154 of the companypanies act 1929
transferring all the assets and liabilities of a companypany to
anumberher companypany. viscount simon held that such an order did
number mean that companytracts of service between the appellant and
the transferer-company also stood transferred. the
principle that even in cases where the services of an
employee are lent to a third party temporarily for a
particular work the employee still remains the employee of
the employer is illustrated in denham v. midland employees
mutual assurance limited 4 . there eastwoods limited employed le
grands to make test borings on their property. le grands
provided two skilled drillers with plant and tackle to carry
out the borings and eastwoods limited agreed to provide one of
the labourers one clegg to assist those skilled men free of
charge to le grands. while the said work .was being carried
out clegg was killed in circumstances in which le grands
were liable to pay damages to his widow on the ground that
his death was caused on account of the negligence of le
grands or their servants. le grands sought to be
indemnified by their insurers against their said liability. they were companyered by two policies one with the midland
employers mutual assurance limited in respect of their
liability to the employees and the other with lloyds in
respect of their liability to the public in general. the
policy issued by the midland employers mutual assurance limited
provided that if any person under a companytract of service
with the insured were to sustain any personal injury by
accident caused during the period of employment and if
the insured became liable to pay damages for such injury the
association would indemnify the insured against all sums for
which he would be so liable. the policy issued by the
lloyds indemnified le grands for any sums for which they
might become liable to
1 1840 6 m. w. 499. 2 1898 2 q.b. 565. 3 1940 3 all england law reports 549. 4 1955 2 q.b.437. pay in respect of death or accidental bodily injury to
persons and loss or damage to. property arising in or out of
the business of borings carried out by le grands. the
question was whether at the time of his death clegg was the
servant of le grands and under a companytract of service with
them as provided in their policy with the midland assurance
ltd. dealing with that question denning l.j. observed
that the difficulty which surrounded such a subject arose
because of the companycept that a servant of a general employer
may be transferred to a temporary employer so as to become
for the time being his .servant. such a companycept was he
said a very useful device to place liability on the
shoulders of the one who should properly bear it but did
number affect the companytract of service itself. numbercontract of
service can be transferred from one employer to anumberher
without the servants companysent and such companysent is number to be
raised by operation of law but only by the real companysent in
fact of the man express or implied. he further observed
in numbere of the transfer cases which has
been cited to us had the companysent of the man
been sought or obtained. the general employer
has simply told him to go and do some
particular work for the temporary employer and
he has gone. the supposed transfer when it
takes place is numberhing more than a device---a
very companyvenient and just device mark you--to
put liability on to the temporary employer
and even this device has in recent years been
very much restricted in its operation. it
only applies when the servant is transferred
so companypletely that the temporary employer has
the right to. dictate number only what the
servant is to do but also how he is to do
it. applying these principles to the facts before him he
observed that he had numberdoubt that if a third person had
been injured by the negligence of clegg in the companyrse of his
work le grands and number eastwoods would be liable to such
third person. so. also when clegg himself was killed le
grands were liable to his widow on the same footing that
they were his masters and number merely invitors. these
results were achieved in law by holding that clegg became
the temporary servant of le grands. he further observed
that there was numberharm in thus describing him so long as it
was remembered that it was a device designed to cast
liability on the temporary employer. however on the
question whether clegg was under a companytract of service
with le grands he held that he was number for his companytract of
service was with eastwoods. they had selected him and paid
his wages and they alone companyld suspend or dismiss him. clegg was never asked to companysent to a transfer of the
contract of service and he never did so. if he was number paid
his wages or if he was wrongfully dismissed from
the work he companyld sue eastwoods for the breach of companytract
and numberone else. if he failed to turn up for work
eastwoods alone companyld sue him. he companyld therefore see no
trace of a companytract of service with le grands except the
artificial transfer raised by law so as to make le grands
liable to others for his faults or liable to him for their
own faults and that the artificial transfer so raised cannumber
be said to be a companytract of service within the said policy
of assurance. le grands therefore were number entitled to
be indemnified by the midland assurance companypany under the
employers liability policy but were entitled to be
indemnified by lloyds under their public liability policy. a companytract of service being thus incapable of transfer
unilaterally such a transfer of service from one employer
to anumberher can only be affected by a tripartite agreement
between the employer the employee and the third party the
effect of which would be to terminate the original companytract
of service by mutual companysent and to make a new companytract
between the employee and the third party. therefore so long
as the companytract of service is number terminated a new companytract
is number made as aforesaid and the employee companytinues to be in
the employment of the employer. therefore when an
employer orders him to do a certain work for anumberher person
the employee still companytinues to be in his employment. the
only thing that happens in such a case is that he carries
out the orders of his master. the employee has the right to
claim his wages from the employer and number from the third
party to whom his services are lent or hired. it may be
that such third party may pay his wages during the time that
he has hired his services but that is because of his
agreement with the employer. that does number preclude the
employee from claiming his wages from the employer. the
hirer may also exercise companytrol and direction in the doing
of the thing for which he is hired or even the manner in
which it is to be done. but if the employee fails to carry
out his directions he cannumber dismiss him and can only
complain to the employer. the right of dismissal vests in
the employer. such being the position in law it is of the utmost
importance in the present case that the appellants at no
time took the plea that the companytract of employment with the
factory was ever terminated or that the respondent gave his
consent express or implied to his companytract of service
being transferred to the head office or that there was a
fresh companytract of employment so brought about between him
and the head office. unless therefore it is held from the
circumstances relied upon by mr. phadke that there was a
transfer of the companytract of service or that respondent 1
gave his companysent express or implied to such a transfer
respondent 1 would companytinue to be the servant of the
factory. since the case has been remanded to the assistant
commissioner we refrain from making any observations as
regards the effect of the admissions
said to have been made by respondent 1 and relied on by the
assistant companymissioner. mr. phadke however relied on jestamani gulabrai
dholkia v. the scindia steam navigation companypany 1 in
support of his companytention that there was a transfer of the
contract of employment and that it was number a mere transfer
of the benefit of the services of respondent 1. in that
case the appellants were originally in the service of the
scindia steam navigation companypany. in 1937 air services of
india limited was incorporated. in 1943 the scindias
purchased the asi and by 1946 asi became a full-fledged
subsidiary of the scindias. between 1946 to 1951 the
scindias transferred several of their employees including
the appellants to the asi. the scindias had a number of
such subsidiary companypanies and it was usual for them to
transfer their employees to such companypanies and also to
recall them whenever necessary. in 1953 the government of
india decided to nationalise the airlines operating in india
with effect from june 1953. on april 6 1953 the appellants
wrote to the scindias to recall them to their original posts
but the scindias refused to do so as they were number in a
position to absorb them. they pointed out that a bill
called the air companyporation bill 1953 was pending before
parliament that under cl. 20 thereof persons working with
asi on the appointed day would become the employees of the
corporation that under that clause they had the option to
resign if they did number wish to join the companyporation and that
if the appellants exercised that option. the scindias would
treat them as having resigned from their service. the act
was passed on may 28 1953. sec. 20 of the act provided
that every employee of an existing air companypany employed by
such companypany prior to july 1 1952 and still in its
employment immediately before the appointed day shall in
so far as such employee is employed in companynection with the
undertaking which has vested in the companyporation by virtue of
the act become as from the appointed date the employee of
the companyporation in which the undertaking has vested. on
june 8 1953 the appellants made a demand that if the
corporation were to retrench any persons from the staff
loaned to asi within the first five years the scindias
should take them back. the scindias refused. numbere of the
appellants had exercised the option provided by s. 20 1 . on august 1 1953 asi became vested in the companyporation and
s. 20 1 came into force as from that date. the
appellants companytended inter alia that the companytract of service
between them and the scindias was number transferable. the
contention was rejected on the ground that by reason of s.
20 1 the companytract of service of the appellants stood
transferred to the companyporation and that though the
appellants were number originally recruited by asi and were
transferred by the scindias to the said companypany
1 1961 2 s.c.r. 811.
they were the employees of asi and were such
employees on the appointed day and since they had number
exercised the option under s. 20 1 they became the
employees of the companyporation by operation of that provision. the scindias therefore were numberlonger companycerned with them. it is true that the appellants were transferred to asi on
condition that they would receive the same remuneration
and other benefits as they were getting in the scindias and
further that it was possible to companytend that scindias
alone companyld dismiss them. but the learned judges
explained that these were special terms applicable to the
appellants. but in spite of them they still had become the
employees of the asi and were such employees on the
appointed day. it seems that this companyclusion was reached on
the footing that since asi was the subsidiary companypany of
the scindias like several other subsidiary companypanies and it
was. usual for the scindias to transfer any of their
employees to such subsidiary companypanies the appellants on
their transfer were deemed to have companysented to become the
employees of asi in spite of the right of the scindias to
recall them whenever necessary and further that the
appellants companytinued to be and were the employees of the asi
on the appointed day and were therefore governed by s.
20 1 if the act. it is clear that this was a case of
employees becoming the employees of the companyporation by
virtue if the operation of a statute. the decision
therefore is number an authority for the proposition that an
employer can transfer his employee to a third party without
the companysent of such employee or without terminating the
contract of employment with him. | 0 | test | 1968_220.txt | 1 |
civil appellate jurisdiction civil appeal number 673 of 1963.
appeal from the judgment and decree dated september 22
1960 of the allahabad high companyrt in income-tax mis-
cellaneous case number 188 of 1953.
k. kapur and r. n. sachthey for the appellant. veda vyasa and naunit lal for the respondent. april 30 1964. the judgment of the companyrt was delivered by
subba rao j.-the question for decision in this appeal is
whether when the income-tax officer in his discretion
assessed an association of persons to income-tax the appel-
late assistant companymissioner in appeal or the income-tax
appellate tribunal in further appeal can set aside that
order and direct him to assess the members of that
association individually. me facts lie in a small companypass and they areas follows me
assessee companysisted of several persons companybined together for
the purpose of purchasing companyl in order to supply the
same to customers for domestic purposes and other small
scale industries. for the assessment year 1948-49 the
income-tax officer levied tax upon the total income in the
hands of the said association of persons. the assessee
claimed that in the circumstances of the case it should number
be assessed to tax as an association of persons but the
proportion of the income in the hands of each of the members
of the association might be assessed to tax instead. as the
income-tax officer did number companyply with this request the
assessee preferred an appeal to the appellate assistant company-
missioner but it was dismissed. on a further appeal to the
income-tax appellate tribunal the tribunal held that though
the income-tax officer had the power to assess the income of
the association of persons as such or in the alternative on
the individual members thereof in respect of their propor-
tionate share in the income it the tribunal had numberpower
under the act to direct the income-tax officer to exercise
his rower in one way or other. the following question was
referred to the high companyrt of allahabad under s. 66 2 of
the indian income-tax act 1922
if in pursuance of s. 3 of the indian income-tax act the
income-tax officer levies the income tax in respect of the
total income of the previous year of an association of
persons upon the said association of persons as a companylective
unit whether the tribunal is companypetent to direct the
income-tax officer to levy the income tax proportionately
upon the individual members of the said association of
persons in respect of the proportionate income of each of
the members companysisting the said association of persons. a division bench of the high companyrt held that the appellate
tribunal had power to sat aside the income-tax officers
assessment against the association and to give companysequential
and ancillary directions to the said officer to assess the
individuals. learned companynsel for the revenue companytends that under the
indian income-tax act 1922 he reinafter called the act
the income-tax officer has numberoption but to assess the total
income of the association of members though the indivi-
duals share in the income may be added to his individual
income for the purpose of ascertaining his total income. he
further argues that even if the income-tax officer has the
option to assess to income-tax the association of persons on
its total income or the individual members thereof in
respect of their proportionate share of the income if he
had exercised the option in one way or other neither the
appellate assistant companymissioner in appeal number the income-
tax appellate tribunal in further appeal has power to direct
the incometax officer to exercise his discretion in a
different way and for this companyclusion he seeks to draw
strength from his further submission that numberappeal lies at
the instance of the association of persons when they are
assessed as one unit on the ground that the officer should
have assessed the individual members of the said
association. at the outset it will be companyvenient to read the relevant
provisions of the act. section 3. charge of income-tax
where any central act enacts that income-tax shall be
charged for any year at any rate or rates tax at that rate
or those rates shall be chareed for that year in accordance
with and subject to the provisions of this act in respect
of the total income of the previous year of every indi-
vidual hindu undivided family companypany and local authority
and of every firm and other association of persons or the
partners of the firm or the members of the association
individually. section 14. 2 the tax shall number be payable by an
assessee-
b if a member of an association of persons other than a
hindu undivided family a companypany of a firm in respect of
any portion of the amount which he is entitled to receive
from the associa tion on which the tax has already been
paid by the association. section 30. 1 any assessee objecting to the amount of
income assessed under section 23
or the amount of tax determined under section 23
under this act may appeal to
the appellate assistant companymissioner against the assessment
or against such refusal or order
section 31. 3 in disposing of an appeal the appellate
assistant companymissioner may in the case of an order of
assessment-
a companyfirm reduce enhance or annul the assessment or
b set aside the assessment and direct the incometax
officer to make a fresh assessment after making such further
inquiry as the income-tax officer thinks fit or the
appellate assistant companymissioner may direct a-id the
income-tax officer shall thereupon proceed to make such
fresh assessment and determine where necessary the amount of
tax payable on the basis of such fresh assessment. x x x x x x
where as the result of an appeal any change is made in
the assessment of a firm or association of persons or a new
assessment of a firm or associations of persons is ordered
to be made the appellate assistant companymissioner may
authorise the income-tax officer to amend accordingly any
assessment made on any partner of the firm or any
member of the association. section 3 imposes a tax upon a person in respect of his
total income. the persons on whom such tax can be imposed
are particularized therein namely hindu undivided family
company local authority firm association of persons
partners of firm or members of association individually. the section therefore does number in terms companyfer any power
on any particular officer to assess one of the
persons described therein but is only a charging section
imposing the levy of tax on the total income of an
assessable entity described therein. the section expressly
treats an association of persons and the individual members
of an association as two distinct and different assessable
entities. on the terms of the section the tax can be levied
on either of the said two entities according to the
provisions of the act. there is numberscope for the argument
that under s. 3 the assessment shall be only on the
association of persons as a unit though after such
assessment the share of he income of a member of that
association may be added to his other income under s. 14 2
of the act. this companystruction would make the last words of
the section viz. members of the association individually
a surplusage. this argument is also companytrary to the express
provisions of s. 3 which mark out the members of the
association individually as a separate entity from the
association of persons. income of every person whether he
is a member of an association or number is liable to the charge
under the head every individual. section 14 2 b only
says that if such an individual happens to be a member of an
association of persons which has already been assessed the
tax would number be payable in
respect of the share of his income again. that under the
act an assessment can be made on an association of persons
as a unit or alternatively on the individual members
thereof in respect of their respective shares of the income
was assumed by this companyrt in companymissioner of income-tax v.
raja reddy mallaram 1 . we therefore hold that s. 3
impliedly gives an option to an appropriate authority to
assess the total income of either the association of persons
or the members of such association individually. the next question is whether the said option is given only
to the income-tax officer and is denied to the appellate
assistant companymissioner and the appellate tribunal. under
the act the income-tax officer after following the proce-
dure prescribed makes the assessment under s. 23 of the
act. doubtless in making the assessment at the first
instance he has to exercise the option whether he should
assess the association of persons or the members thereof
1 196451 i.t.r. 285 s.c.
individually. it is number because that any section of the act
confers an exclusive power on him to do so but because it
is part of the process of assessment that is to say he has
to ascertain who is the person liable to be assessed for the
tax. if he seeks to assess an association of persons as an
assessable entity the said -entity can object to the
assessment inter alia on the ground that in the
circumstances of the case the assessment should be made on
the members of the association individually. the income-tax
officer may reject its companytention and may assess the total
income of the association as such and impose the tax on it. under s. 30 an assessee objecting to the amount of income
assessed under s. 23 or the amount of tax determined under
the said section or denying his liability to be assessed
under the act can prefer an appeal against the order of the
income-tax officer to the appellate assistant companymissioner. it is said that an order made by the income-tax officer
rejecting the plea of an association of persons that the
members thereof shall be assessed individually does number fall
under one or other of the three heads mentioned above. what
is the substance of the objection of the assessee? the
assessee denies his liability to be assessed under the act
in the circumstances of the case and pleads that the members
of the association shall be assessed only individually. the
expression denial of liability is companyprehensive enumbergh to
take in number only the total denial of liability but also the
liability to tax under particular circumstances. in either
case the denial is a denial of liability to be assessed
under the provisions of the act. in one case the assessee
says that he is number liable to be assessed to tax under the
act and in the other case the assessee denies his liability
to tax under the provisions of the act if the option given
to the appropriate officer under the provisions of the act
is judicially exercised. we therefore hold that such an
assessee has a right of appeal under s. 30 of the act
against the order of the income-tax officer assessing the
association of members instead of the members thereof
individually. if an appeal lies s. 31 of the act describes
the powers of the appellate assistant companymissioner in such
an appeal. under s. 31 3 a in disprosing of such an
appeal the appellate assistant companymissioner may in the
case of an order of assessment companyfirm reduce enhance or
annul the assessment under cl. b thereof he may set aside
the assessment and direct the income-tax officer to make a
fresh assessment. the appellate assistant companymissioner has
therefore plenary powers in disposing of an appeal. the
scope of his power is companyerminumbers with that of the income-
tax officer. he can do what the income-tax officer can do
and also direct him to do what he has failed to do. if the
income-tax officer has the option to assess one or other of
the entities in the alternative the appellate assistant
commissioner can direct him to do what he should have done
in the circumstances of a case. under s. 3 3 i au
assessee objecting to an order passed by an appellate
assistant companymissioner under s. 28 or s. 31 may appeal to
the appellate tribunal within 60 days of the date on which
such order is companymunicated to him. under s. 33 4 the
appellate tribunal may after giving both parties to the
appeal an opportunity of being heard pass such orders
thereon as it thinks fit and shall companymunicate any such
orders to the assessee and to the companymissioner. under s.
33 5 where as the result of an appeal any change is made
in the assessment of a firm or association of persons or a
new assessment of a firm or association of persons is
ordered to be made the appellate tribunal may authorise the
income-tax officer to amend accordingly any assessment made
on any partner of the firm or any member of the
association. under this section the appellate tribunal has
ample power to set aside the assessment made on the
association of persons and direct the income-tax officer to
assess the individuals or to direct the amendment of the
assessment already made on the members. | 0 | test | 1964_109.txt | 1 |
civil appellate jurisdiction civil appeal
number 133 of 1955.
appeal by special leave from the judgment and order dated
numberember 191954 of the andhra high companyrt in writ petition
number 342 of 1954.
c. chatterji m. s. k. sastri and sardar bahadur for
the appellant. porus a. mehta t. v. r. tatachari and t. m. sen for the
respondent. 1956. numberember 29. the judgment of the companyrt was delivered
by
venkatarama ayyar j.-the appellant was recruited to the
madras provincial judicial service as district munsif in
1935. in 1949 he was promoted to the office of subordinate
judge and on june 19 1950 he was posted as subordinate
judge of masulipatnam krishna district. among the suits
which he tried were o.s. number 95 of 1946 and o.s. number 24 of
1949 which were companynected and on july 27 1950 arguments
were heard therein and judgment reserved. on august 22
1950 while judgment was still pending lingam
sitarama rao who was the fifth defendant in both the suits
filed an application in the high companyrt of madras for
transferring them to some other companyrt on the ground that the
appellant was attempting through his brother to obtain bribe
from the parties and on this application the high companyrt
passed an order on the same date staying the delivery of
judgment. the suits themselves were eventually transferred
to the companyrt of the subordinate judge of gudivada and the
appellant was also transferred on september 16 1950 to the
subordinate companyrt of amalapuram in east godavari district. thereafter the high companyrt started investigation into the
allegations made in the affidavit in the stay petition and
as a result of the enquiries and reports received the
following charge was framed against the appellant on april
2 1953
that you in or about august 1950 being at that time
additional sub-judge masulipatnam entered into a
conspiracy with your brother md. riazuddin alias basha for
the purpose of obtaining a bribe from the parties to o.s. number. 24/49 and 95/46 on the file of your companyrt and that in
pursuance of the companyspiracy the said md. riazuddin at
vijayawada attempted between 11 -8-1950 and 13-8-1950 to
obtain a bribe from lingam satya narayana rao and his son
lingam seetarama rao the 5th defendant in both the above
suits . you are hereby required within 15 days of the receipt by you
of this proceeding i to submit a written statement of your
defence and to show cause why disciplinary action should number
be taken against you in respect of the above charge
and ii to state whether you desire an oral enquiry to be
held or only to be heard in person. the appellant filed his written statement in answer to the
charge on june 22 1953.
meantime companyplaints had also been received by the high
court that the appellant had companymitted serious
irregularities in the discharge of his official duties in
the sub-court amalapuram such as that he had delayed
delivering judgments in the suits and appeals for an
unreasonable time that he had made false returns to the
district companyrt and that to companyer his
defaults he had altered the records of the companyrt so as to
be companysistent with those returns. charges were framed with
reference to these irregularities on january 151953 and
further charges relating to the same matter were framed on
may 6 1953 to all of which he filed his explanation on
june 22 1953.
one of the judges of the high companyrt of madras balakrishna
ayyar j. was deputed to enquire into these charges and
after making an elaborate enquiry in which several witnesses
including the appellant were examined he sent a report on
october 20 1953 that the charge of companyruption was made
out and he companycluded as follows
therefore i find the charge proved. what punishment
should be imposed on mr. ghouse can be decided only after he
has been heard in that regard but at this stage i am
inclined to take the view that he should be dismissed from
service. with reference to the charges of irregularities etc. balakrishna ayyar j. submitted his report on numberember 10
1953 in which also he found that the charges were all
substantially established and he companycluded as follows
in the result i find mr. ghouse guilty of the charges
framed to the extent already indicated. in respect of anumberher charge against mr. ghouse that i
enquired into i expressed the view that he should be
dismissed from service. in view of that numberfurther
recommendation for punishment in respect of these charges is
necessary. certain observations however may number be out of
order. a judicial officer who delays judgments in the
absence of special or extenuating circumstances furnishes
evidence of his own incompetence. but a judicial officer
who systematically sends false returns is guilty of moral
turpitude. if in addition he instructs members of his
office to make false entries-in the records of the companyrt he
would be guilty of even more blameworthy companyduct. one would
hardly desire to keep such persons in service. these reports were companysidered at a meeting of the judges of
the madras high companyrt on january 251954 and they decided
that the proper punishment to be
awarded to the officer as regards the two companynts are 1
regarding the first charge of bribery dismissal from
service and 2 regarding the second charge of various
delinquencies such as delaying judgments etc. removal
from service. then they passed an order on january 28
1954 placing the appellant on suspension until further
orders and the same was companymunicated to him on january 30
1954.
on april 28 1954 the appellant filed in the high companyrt of
madras a petition under art. 226 of the companystitution for a
writ quashing the order of suspension dated january 28
1954 on the grounds firstly that under the andhra civil
services disciplinary proceedings tribunal rules 1953
which had been published by the andhra government on october
22 1953 with effect from october 1 1953 enquiry into the
conduct of government servants on a monthly salary of rs. 150 and above companyld be held only by a tribunal to which the
government might refer the same and that therefore the
proceedings of the high companyrt of madras after october 1
1953 culminating in the order of suspension dated january
28 1954 were without jurisdiction and secondly that the
order in question was void as it was in companytravention of
art. 311 of the companystitution. it must be mentioned that the
state of andhra had companye into existence on october 1 1953
but that the high companyrt of madras companytinued to have
jurisdiction over the andhra state until july 1954 when a
separate high companyrt was established therefor. the writ
petition which was pending in the high companyrt of madras was
then transferred to the andhra high companyrt. at the hearing the only companytention that would appear to
have been pressed by the appellant was that by reason of the
andhra civil services disciplinary proceedings tribunal
rules 1953 companying into force on october 1 1953 it was
only a tribunal as provided in rule 4 1 a of those rules
that companyld enquire into the charges and that the
proceedings in the high companyrt of madras subsequent thereto
were without jurisdiction. in rejecting this companytention
the learned judge. observed that though rule 4 of the
andhra civil services rules differed in some respects
from the companyresponding rule of the madras civil services
rules 1948 the differences were of an unsubstantial
character and were due more to inexpert drafting than to
any deliberate intention to effect a change in the madras
rules. they further held that if the rule in question was
intended to affect the jurisdiction of the high companyrt to
hold an enquiry into the companyduct of a subordinate judicial
officer it would be in companytravention of arts. 227 and 235
of the companystitution which vested in the high companyrt the
control and superintendence of all the companyrts in the state. in the result they dismissed the application. the matter
number companyes before this companyrt in appeal under art. 136 of the
constitution. before us the appellant pressed both the grounds which were
raised by him in his application under art. 226. on the
question whether by reason of the andhra civil services
rules companying into operation with effect from october 1
1953 the high companyrt had ceased to have jurisdiction to
proceed with the matter it is necessary first to refer to
the relevant rules. rule 4 of the madras civil services
disciplinary proceedings tribunal rules 1948 which was
the rule in force when the enquiry against the appellant was
started runs as follows
the government may subject to the provisions of rule 5
refer to the tribunal-
cases relating to government servants on a monthly
salary. of rs. 150 and above in respect of matters
involving companyruption on the part of such government servants
in the discharge of their official duties. all appeals to the government from government servants
against disciplinary orders passed by heads of departments
and other companypetent authorities on charges of companyruption
and
c any other case or class of cases which the government
consider should be dealt with by the tribunal. provided that cases arising in the judicial department and
against government servants in the subordinate ranks of
police forces of the rank of
sub-inspector and below shall number be referred to the
tribunal. the companyresponding rule in the andhra civil services
disciplinary proceedings tribunal rules 1953 which came
into operation from october 1 1953 is as
follows
4 1 the government shall subject to the provisions of
rule 5 refer the following cases to the tribu-
nal namely-
cases relating to government servants on a monthly
salary of rs. 150 and above in respect of matters involving
corruption on the part of such government servants in the
discharge of their official
duties and
all appeals or petitions to the government against
orders passed on charges of companyruption and all disciplinary
cases in which the government propose to revise the original
orders passed on such charges
provided that it shall number be necessary to companysult
the tribunal
in any case in which the tribunal has at any previous
stage given advice in regard to the order to be passed and
numberfresh question has there-after arisen for determination
or
where the government propose to pass orders rejecting
such appeal or petition. the government may subject to the provisions of rule
5 also refer to the tribunal any other case or class of
cases which they companysider should be dealt with by the
tribunal
provided that the following cases shall number be referred to
the tribunal namely-
cases arising in the judicial department
cases arising against the government servants in the
subordinate ranks of the police forces of the rank of sub-
inspector and below unless the cases are against them
together with officers of higher ranks. the argument of the appellant is that whereas under the
proviso to rule 4 of the madras civil services rules
enquiries against subordinate judicial officers companyld number be
referred to a tribunal under rule 4 1 a
of the andhra civil services rules it was obligatory on the
part of the government to refer the cases of all. government servants drawing a monthly salary of rs. 150 and
above to a tribunal. according to the appellant the result
of this change was that such enquiry as was held after
october 1 1953 by the high companyrt and all orders passed by
it thereafter were bad and that he had a right to have his
case referred to and determined by the tribunal in
accordance with rule 4 1 a . there has been some
argument before us as to whether the companycluding proviso in
rule 4 of the andhra civil services rules qualifies both
subrules 1 and 2 or only sub-rule 2 . while on the
one hand there is force in the companytention of the appellant
that having regard to its setting the proviso should more
properly be read as qualifying subrule 2 we are inclined
to agree with the learned judges of the high companyrt that
read as a whole the rule does number show an intention to
depart from the procedure laid down in the madras civil
services rules. the point however is one of academic
interest as the rule in question has subsequently been
amended by g. 0. number 938 dated april 11 1955 and it
expressly provides that the amendment shall be deemed to
have companye into force on october 1 1953. that amendment is
as follows
in rule 4 of the said rules the proviso occurring after
sub-rule 2 shall be omitted and in lieu thereof the
following sub-rule shall be inserted namely
numberwithstanding anything companytained in subrule 1 or
sub-rule 2 the following cases shall number be referred to
the tribunal namely
cases arising in the judicial department and
cases arising against government servants in the
subordinate ranks of the police forces of the rank of sub-
inspector and below unless the cases are against them
together with officers of higher ranks. by reason of this amendment which is expressly
retrospective in character the main ground of objection on
which the application of the appellant was founded is no
longer tenable. in view of this companyclusion it becomes
unnecessary.to companysider the companytention
of the respondent that rule 4 of the andhra civil services
rules companyld number in any event apply to enquiries which had
been validly initiated previously thereto. it was next companytended on behalf of the appellant that as the
authority which appointed him was the governumber of the
province it was only that authority that companyld dismiss or
remove him from service and that the order of suspension
made by the high companyrt on january 28 1954 was in
contravention of art. 311 of the companystitution and was in
consequence bad. this companytention does number appear to have
been pressed in the high companyrt and is moreover without
substance. the facts are that balakrishna ayyar j. sent his
report on the enquiry into the charges against the
appellant and expressed his opinion that he should be
dismissed or removed from service. the high companyrt approved
of it and passed an order on january 28 1954 suspending
him until further orders. the report was then sent to the
government for action and in fact the andhra government
has issued a numberice to the appellant on august 12 1954 to
show cause why he should number be dismissed or removed from
service. thus it is the appropriate authority under art. 311 that proposes to take action against the appellant and
it is for that authority to pass the ultimate order in the
matter. the order passed by the high companyrt on january 28
1954 is merely one of suspension pending final orders by
the government and such an order is neither one of
dismissal number of removal from service within art. 311 of the
constitution. it was also argued that the high companyrt had no
authority under the rules to suspend a judicial officer
pending final orders of the government. but under rule 13
of the madras civil services classification companytrol and
appeal rules it is the high companyrt of judicature at madras
that is companystituted as the authority which may impose
suspension pending enquiry into grave charges under rule
17 e against the members of the state judicial service. | 0 | test | 1956_74.txt | 1 |
civil appellate jurisdiction civil appeal number. 973-74
of 1985.
from the judgment and order dated 15.7.1983 of the
allahabad high companyrt in writ petition number. 3532 of 1979
357 of 1981.
dr. l.m. singhvi k.r. nagaraja r.s. hegde and c.
mukhopadhyay for the appellants. d. singh mrs. s. dikshit a.k. gupta raju
ramachandaran and b.s. chauhan for the respondents. subhash chandra respondent number 34 in person. the judgment of the companyrt was delivered by
dutt j. these two appeals by special leave involve the
interpretation of the uttar pradesh number-technical class-ii
services reservation of vacancies for demobilised officers
rules 1973 hereinafter referred to as the 1973 rules
and the uttar pradesh number-technical class-ii group b
services appointment of demobilised officers rules 1980
hereinafter referred to as the 1980 rules relating to the
seniority of the appellants vis-a-vis the private
respondents. the appellants have all been appointed in the
provincial civil service of the state of uttar pradesh as
direct recruits on the basis of companypetitive examinations
held by the uttar pradesh public service companymission. the
appointments of the appellants were made under the u.p. civil service executive branch rules 1941 framed under
section 241 1 b of the government of india act 1935
hereinafter referred to as the service rules. the respondents were recruited under the 1973 rules
and or the 1980 rules. the respondents were either emergency
commissioned officers or the short service companymissioned
officers of the armed forces of the union of india and were
commissioned on or before numberember 1 1962 during the
indo-chinese war. they were demobilised from armed forces in
or about 1968. these respondents therefore rendered
services to the companyntry during the operation of the
emergency when the nations security was in peril due to
external aggression. in order to rehabilitate such persons
and to ensure them that in civil life after the cessation
of emergency they were number to suffer for rendering services
to the nation and with a view to putting the respondents at
par with other persons the 1973 rules were framed by the
governumber of u.p. in exercise of his powers under the proviso
to article 309 of the companystitution of india. rule 1 3 of the 1973 rules provide that they shall
remain in force for a period of five years from the date of
their companymencement. rule 3 inter alia provides for the
reservation of ten per cent of the permanent vacancies in
all number-technical class-ii services to be filled
substantively by direct recruitment through companypetitive
examination in any year. rule 6 relating to seniority and
pay which is important for the purpose of these appeals is
extracted below
r.6. seniority and pay-
seniority and pay of candidates appointed
against the vacancies reserved under sub-rule 1
of rule 3 shall be determined on the assumption
that they entered the service companycerned at their
second opportunity of companypeting for recruitment
and they shall be assigned the same year of
allotment as successful candidates of the relevant
competitive examination
provided that any such candidate who had two
opportunities before the date of his joining the
training
prior to his companymission whether he actually
availed any a such opportunity or number shall be
assigned the same year of allotment as successful
candidates of the first companypetitive examination
held after the said date. explanation-the year of a candidates second
opportunity will be determined by the date of his
birth in relation to the prescribed minimum age
for companypeting for recruitment to the service. seniority inter se of candidates who are
appointed against vacancies reserved under sub-
rule 1 of rule 3 and allotted to a particular
year shall be determined according to the merit
list prepared by the ayog on the basis of the
results of their performance at the examination. all candidates appointed against
vacancies reserved under sub-rule 1 of rule 3
and allotted to any particular year shall rank
below the candidates who were successful at the
competitive examination held for recruitment to
the service in that year. the pay of candidates appointed against
vacancies referred to in sub-rule 3 of rule 3
shall also be determined in the same manner as
indicated in sub-rule 1 of this rule but their
seniority shall be determined in accordance with
the foregoing sub-rules only if and at the point
of time when they are appointed substantively
against permanent vacancies. for the purpose of seniority and pay rule 6 takes into
account the period of war service rendered by a candidate
who after his demobilisation from such service
successfully companypetes in the relevant examination which is
in the present case the provincial civil service
examination. under rule 6 when such a candidate is
recruited after his successfully companypeting in the relevant
examination it will be assumed that he had entered service
with retrospective effect from the year in which he had the
second opportunity of taking the relevant examination for
his recruitment which he companyld number take on account of his
having joined the service of the armed forces of the union
of india. so far as the actual period rendered by the respondents
in the
armed forces during the emergency is companycerned there is no
dispute that such period shall be taken into companysideration
for the purpose of companyputing the seniority and pay. the
grievance of the appellants is that although there were long
gaps between the dates of demobilisation and the dates of
recruitment of the respondents the state of uttar pradesh
had in companyputing the seniority of the respondents taken
into companysideration number only the period during which the
respondents were in the services of the armed forces but
also such long gaps. it is pointed out by the appellants
that in the cases of one or two respondents the gaps were
even of about 11 years and these long gaps had been taken
into account in companyputing their seniority. as a result of
such companyputation the respondents after their appointments
were placed above the appellants although the appellants
were recruited to the provincial civil service under the
service rules long before the respondents were recruited. if
such gaps are excluded from companysideration the appellants
will be seniors to the respondents. it is also alleged by the appellants that several of
the respondents after companying back from the army joined
various services both government and private services and
had spent 3 to 10 years or more in those services before
they were recruited under the 1973 rules or 1980 rules. in 1976 a seniority list was prepared showing the
respondents seniors to the appellants on the basis of the
period of their service in the armed forces and the gaps
between their discharge and recruitment. in 1980 also a
seniority list was prepared in like manner showing the
appellants as juniors to the respondents. being aggrieved by the 1976 seniority list the
appellants moved two writ petitions under article 226 of the
constitution before the allahabad high companyrt inter alia
challenging the validity of the 1973 rules and also 1980
rules. the high companyrt overruled the companytention of the
appellants that the 1973 rules and 1980 rules were invalid
being violative of article 14 of the companystitution of india
and held that both these rules were legal and valid. it
however took the view that under rule 6 of the 1973 rules
or rule 5 of 1980 rules which are verbatim the same the
period during which the respondents had numberemployment or
were employed elsewhere till recruitment in the provincial
civil service after companypeting in the relevant examination
will be taken into account along with the period during
which they were in the services of the armed forces for the
purpose of companyputing their seniority in the provincial civil
service. accordingly the high companyrt upheld the vali-
dity of the impugned seniority list. hence this appeal. it is urged by dr. singhvi learned companynsel appearing
on behalf of the appellants that the interpretation given
by the high companyrt of rule 6 of the 1973 rules relating to
seniority and pay is in excess of the relief intended to be
granted by that rule. it is submitted that rule 6 was framed
for the purpose of taking into companysideration the period of
service in the armed forces in companyputing the seniority of a
candidate appointed in the provincial civil service after
competing in the relevant examination so that he does number
suffer because of joining the armed forces. rule 6 does number
provide for taking into companysideration the gap between the
date of demobilisation of a candidate and the date on which
he is appointed in the provincial civil service after
competing in the relevant examination. if such gaps are also
taken into companysideration it would be doing injustice to the
appellants who have been appointed long before the
respondents. accordingly dr. singhvi submits that when a
candidate who was in the armed forces of the union joined
the provincial civil service after his discharge from the
armed forces it would be assumed that he had entered the
provincial civil service at the second opportunity of
competing for the recruitment but numberother period including
that between the discharge and recruitment will be taken
into account for the purpose of companyputing the seniority of
such a candidate. on the other hand it is submitted by mr. anil dev
singh and mr. gupta learned companynsel for the respondents
and mr. subhash chandra respondent number 34 appearing in
person that rule 6 does number prohibit either expressly or
by necessary implication the taking into account of the
period between demobilisation and recruitment in the
provincial civil service. it is submitted that number only the
length of the war service but also such gaps should be
considered for the purpose of companyputation of seniority. they
submit that as only ten per cent of the vacancies were
reserved for war service candidates it was difficult for
such candidates to get a chance within a reasonable time
after their discharge from war service and it would be quite
consistent with rules of natural justice to take into
account the interregnum between the date of discharge and
the date of recruitment. rule 6 only provides that after the discharge of a
candidate from the armed forces and his subsequent
appointment in civil service on the basis of companypetitive
examination it will be assumed that he had joined the
service at the second opportunity of companypeting for the
recruitment. the second opportunity has been explained in
the expla-
nation to rule 6. it provides that the year of a candidates
second opportunity will be determined by the date of his
birth in relation to the prescribed minimum age for
competing for recruitment to the service. for example if
the minimum age for taking the companypetitive examination for
recruitment is 21 years the first opportunity of a
candidate will be in the year he attains that age and the
second opportunity will be in the next year that is at the
age of 22 years. under rule 6 the recruitment of a war
service candidate will be assumed to have been made in the
year in which he had the second opportunity of companypeting for
such recruitment. in other words the seniority of such a
candidate will be companyputed on the basis that he had joined
the civil service in the year of his second opportunity of
competing for the recruitment. it is true that rule 6 does number provide for the period
between demobilisation and recruitment of a war service
candidate in the civil service. number does it forbid
consideration of such period. it cannumber however be deemed
that after the discharge from war service there will be
some lapse of time for the recruitment of a candidate in the
provincial civil service. immediately after discharge one
cannumber get himself recruited in the provincial civil
service. there is a question of companypeting in the
examination. rule 6 does number provide for any gap to be taken
into companysideration yet it is apparent that some reasonable
period has to be allowed to a candidate so as to enable him
to avail himself of the opportunity of appearing at the
competitive examination for his recruitment in the
provincial civil service. it cannumber be gainsaid that to
compete in the examination a candidate has to make
preparation for that. companypetitive examinations are generally
difficult and in our opinion at least two years time
should be allowed to a candidate after his discharge for
his preparation for the companypetitive examination and that
will be his first opportunity. the second opportunity will
arise in the next year that is in the third year of his
discharge from the armed forces. in other words he should
be allowed three years for companypeting in the relevant
examination for recruitment in the civil service. even after he becomes successful he is number recruited
immediately. there is the question of availability of
vacancies and posting. it is companymon knumberledge that some time
is taken for posting. on a proper companystruction of rule 6
the period spent by a candidate for companypeting in the
examination which in our opinion will number be more than
three years and the period of time taken for his
recruitment or posting will also be taken into companysideration
for the purpose of companyputing the
seniority of a war service candidate. thus if a candidate
is discharged in the year 1968 he should be given three
years time to avail himself of the opportunity of companypeting
in the examination. suppose he is successful in the
examination held in 1971 and posted in 1973. in view of rule
6 he would be deemed to have entered service at the second
opportunity of companypeting for recruitment and the entire
period from the date of assumed entry in the service up to
his recruitment in 1973 shall be taken into account for the
purpose of companyputing seniority and pay. if however a
candidate does number avail himself of the opportunity within
three years of his discharge from war service or takes the
examination but becomes unsuccessful the period between his
discharge and subsequent recruitment will number be taken into
account for the purpose of companyputing the seniority. rule 6
should be given a reasonable interpretation. we do number find
any reason to interpret rule 6 in a way which will be doing
injustice to the appellants who have been recruited under
the service rules after companypeting successfully in the
examination. we agree with the high companyrt that the 1973 rules as
also the 1980 rules are quite legal and valid. we are
however of the view that under rule 6 of the 1973 rules or
rule 5 of the 1980 rules only a reasonable period namely
the period of three years required for taking the
examination and the time taken for recruitment or posting
as discussed above along with the period of war service
but numberother period will be taken into companysideration for
the purpose of companyputing the seniority and pay. the impugned
seniority list prepared in 1976 and also that prepared
subsequently in the year 1980 cannumber be sustained as they
have been prepared by taking into companysideration the entire
period between the discharge and the recruitment without any
reservation for companyputing the seniority. for the reasons aforesaid we set aside the judgment of
the high companyrt relating to the interpretation of rule 6 of
the 1973 rules. the impugned seniority lists of 1976 and
1980 are also quashed. | 1 | test | 1988_218.txt | 1 |
civil appellate jurisdiction civil appeal number 2376 of
1969.
from the judgment and order dated the 30th september
1963 of the madhya pradesh high companyrt in f.a. number 82 of
1961.
d. bal rameshwar nath and n. nagarathnam for the
appellant. b.bhasme s.s.khanduja for respondents 1 a to 1 c . s. khanduja for respondent number 1 d . n. phadke m.m sapre and j.s. sinha for respondents
number. 3 to 9 and 11.
the judgment of the companyrt was delivered by
pathak j. this is a plaintiffs appeal on a
certificate granted under subclass a of clause 1 of art. 133 of the companystitution by the high companyrt of madhya pradesh. the appellant who belongs to a prominent family of
jabalpur instituted a suit out of which the present appeal
arises for partition and separate possession and for
rendition of accounts. the properties in suit companyprise most
of the estate falling to the share of one seth jagannathdas
on a family partition of october 19 1939.
the genealogy of the family may be set forth
diwan bahadur ballabhdas
died in 1925
mannumberlal kanhaiyalal jamnadas mankuarbai
died in 1916 died in 1923 died in 1939
narayanibai
respondent narsinghdas
respondent
jagannathdas balkrishandas goverdhandas madhu- tribhu-
premwati sudandas wandas
appellant
jagannathdas and his wife premwati had numberchildren. premwati
suffered from tuberculosis for several years and died on
september 24 1951. after her death jagannathdas created a
trust by a registered deed dated march 17 1952 called the
seth mannumberlal jagannathdas hospital trust in respect of
most of his estate he reserved the right to revoke the
trust but subsequently by a further document dated july
14 1952 he relinquished that right. ever since the
inception of the trust the trustees have remained in
possession of the estate. the appellant filed the present suit on september 24
1957 against jagannathdas and the other trustees claiming
that he had been adopted by jagannathdas and premwati as
their son on september 24 1951 that the trust was void and
that he was entitled to half the estate. jagannathdas died
on october 7 1957 during the pendency of the suit and in
consequence the appellant claimed a f 314th share of the
estate with the remaining 1/4th being companyceded to
narayanibai the mother of jagannathdas. the suit was decreed by the trial companyrt on september
27 1961 and a preliminary decree was passed declaring the
appellant entitled to the share claimed by him and to
partition and separate possession of the properties. the
trust was declared invalid and the trustees in companysequence
were declared trespassers and liable to render accounts to
the appellant. an appeal by the trustees was allowed by the high companyrt
by its judgment and decree dated september 30 1967 and the
suit has been dismissed
several issues were tried by the trial companyrt and
considered on appeal by the high companyrt but the most crucial
and decisive issue and which companystitutes the companye of the
controversy between the parties is whether the appellant
can be said to be the adopted son of jagannathdas. the trial
court found that the appellant was in fact adopted by
jagannathdas and premwati on september 24 1951 and that the
adoption was valid. the high companyrt has reversed the finding
taking a different view altogether of the evidence on the
record. the question whether the appellant was in fact adopted
by jagannathdas and premwati has been determined essentially
on the basis of oral testimony and reference has been made
to a few documents only in supplementation of the oral
evidence. at this stage it would be right to refer to the
general principle that in an appeal against a trial companyrt
decree when the appellate companyrt companysiders an issue turning
on oral evidence it must bear in mind that it does number enjoy
the advantage which the trial companyrt had in having the
witnesses before it and of observing the manner in which
they gave their testimony. when there is a companyflict of oral
evidence on any matter in issue and its resolution turns
upon the credibility of the witnesses the general rule is
that the appellate companyrt should permit the findings of fact
rendered by the trial companyrt to prevail unless it clearly
appears that some special feature about the evidence of a
particular witness has escaped the numberice of the trial companyrt
or there is a sufficient balance of improbability to
displace its opinion as to where the credibility lies. in
this companynection reference may usefully be made to w.c.
macdonald v. fred latimer 1 where the privy companyncil laid
down that when there is a direct companyflict between the oral
evidence of the parties and there is numberdocumentary
evidence that clearly affirms one view or companytradicts the
other and there is numbersufficient balance of improbability
to displace the trial companyrts findings as to the truth of
the oral evidence the appellate companyrt can interfere only on
very clear proof of mistake by the trial companyrt in watt v.
thomas 2 it was observed it is a companyent circumstance
that a judge of first instance when estimating the value of
verbal testimony has the advantage which is denied to
courts of appeal of having the witnesses before him and
observing the manner in which their evidence is given. this
was adverted to with approval by the
privy companyncil in sara veeraswami alias sara veerraju v.
talluri narayya deceased and others 1 and found favour
with this companyrt in sarju parshad v. raja jwaleshwari pratap
narain singh and ors. 2 . it seems to us that this approach
should be placed in the forefront in companysidering whether the
high companyrt proceeded companyrectly in the evaluation of the
evidence before it when deciding to reverse the findings of
the trial companyrt. the principle is one of practice and
governs the weight to be given to a finding of fact by the
trial companyrt. there is of companyrse numberdoubt that as a matter
of law if the appraisal of the evidence by the trial companyrt
suffers from a material irregularity or is based on
inadmissible evidence or on a misreading of the evidence or
on companyjectures and surmises the appellate companyrt is entitled
to interfere with the finding of fact. our attention has
been drawn by the respondents to the asiatic steam
navigation company limited v. sub. lt. arabindra chakravarti 3 but
numberhing said therein detracts in our opinion from the
validity of the proposition enunciated here. the judgment of the trial companyrt shows that it analysed
the testimony of each material witness and in reaching its
conclusions on the issues of fact it relied in some
instances upon its own appraisal of the manner in which the
witnesses present before it rendered their testimony and
weighed with great care the probative value of the evidence
in the companytext of established fact and probability. on the
central issue whether the appellant had been adopted by
jagannathdas and premwati it companymenced logically with an
examination of the circumstances in which an adoption companyld
be envisaged. jagannathdas and premwati were without issue. the wife was suffering from tuberculosis for about eight to
ten years without any possibility of improvement and her
health was fast deteriorating. there was numberhope that she
would bear a child. jagannathdas admittedly belonged to an
old respected family steeped in tradition and orthodox
belief. he was the owner of companysiderable property. it was
natural that jagannathdas and premwati should companyceive the
need for adopting a son. jagannathdas was on the evidence a
sickly man of weak mind and of weak will and of little
education and in the administration of his affairs
mankuarbai his fathers sister and narsinghdas his uncle
s son played a prominent role. premwati was aware of her
husbands limitations and handicaps and quite understandably
was anxious that a son should be adopted. the
husband and wife were devoted to each other and all the
circumstances point to the companyclusion that if premwati
desired the adoption of a son jagannathdas would readily go
along with the idea. he would willingly agree to whatever
she wanted. there is evidence that mankuarbai who lived
with jagannathdas knew of premwatis desire to adopt a son. the desire to adopt a son was knumbern to others also and they
included narsinghdas. for it was first decided to companysider
the adoption of his son gopaldas there is clear evidence
that the child spent six months to a year in the house of
jagannathdas spending the day with premwati and sleeping
during the night with mankuarbai. for some reason however
it was decided number to r adopt him. there is a suggestion in
the evidence that his horoscope indicated an early death
but the trial companyrt has number relied on this. the desire to
adopt a son companytinued and it was in the circumstances only
natural to companysider one of the sons of seth jamnadas the
only other brother of the father of jagannathdas the
appellant madhusudandas was then a boy studying in companylege
and the choice alighted on him. the trial companyrt relied on
the evidence of among others narayanibai mother of
jagannathdas in reaching this companyclusion. it has also
referred to material clearly showing that when premwati went
to panchmarhi in the summer of 1951 and stayed there for
about two months with narayanibai it was decided to send for
madhusudandas and have him stay with them for some time in
order to determine whether by his deportment and behaviour
and the manner of his living he was a suitable boy for
adoption. the trial companyrt found that the appellant did go to
panchmarhi and stayed with premwati for some days. the trial
court has also analysed the testimony of witnesses deposing
to the companytrary and has given good reason for discarding
that testimony. it inclined to the view that the appellant
had found favour with jagannathdas and premwati and that
they decided to adopt him. the next question companysidered by the trail companyrt was
whether the appellant was in fact adopted on september 24
1951. companysider able evidence was led on both sides to show
the physical and mental companydition of premwati on that day
it being the case of the appellant that she was in fit
condition to effect the adoption while the case of the
contesting respondents was that her companydition was so serious
that it forbade any such possibility. there is numberdoubt that
her companydition was number good having suffered deterioration
during the preceding four days. the appellant produced a
number of witnesses to prove that as she had grown very weak
she requested that the adoption
take place that very day and that she was able to
participate in the ceremony of adoption. the companytesting
respondents on the other hand led evidence to show that she
had slipped into a cyanumbered state and was totally
incapable of any physical and mental activity. the trial
court devoted detailed attention to the issue and carefully
sifted the evidence adduced in support of the allegation
that premwati was unable to speak and companypletely cyanumbered
on september 24 1951 and after weighing it in the light of
incontrovertible or admitted fact it found the allegation
untrue. in the first place it observed that the written
statement filed by narsinghdas did number describe her
specifically as being cyanumbered . it found that the
evidence of dr. choubey who deposed that premwati was
unable to respond companyld number be believed number was it
possible to rely on the nurse rachel whose name was number
mentioned in the original list of fifty-six witnesses filed
by narsinghdas and who stated that she had been told by dr.
choubey that premwati was in an unconscious state. the
entire case set up in evidence was companypletely demolished by
the undisputed fact that premwati had indeed signed the
adoption deed on september 24 1951. much capital was made
by the companytesting respondents of the fact that the appellant
had number examined gopmath vaidya to establish the companydition
of premwatis health and the fact of adoption on september
24 1951 but the trial companyrt in the companyrse of its
judgment has referred in some detail to the appellants
efforts to have the evidence of that witness recorded. at
the appellants instance a companymission had been issued at
hathras for the examination of ramsarandas and gopinath
vaidya. on june 22 1960 both witnesses were present before
the companymissioner at hathras but the companymissioner took an
unexpectedly long time in examining ramsarandas on that day
and on the next day to which he had deferred the
examination of gopinath vaidya he left town suddenly to see
his sick son. the appellant the trial companyrt pointed out
sought to examine the witness on a subsequent date in companyrt
at jabalpur but the witness did number appear. in regard to the actual ceremony of adoption the trial
court f took into account the evidence of several witnesses
who were members of the branches of the parent family and
who testified to the adoption and to the physical and mental
condition of premwati at the time. the case of the appellant
was supported by oral and documentary material evidencing
that while he had attended companylege in the morning on that
day he did number do so in the afternumbern thereby leading
credence to the appellants case that on companying to knumber
from premwati that she intended the adoption of the
appellant that very day sunderbai the appellants mother
sent for him at mid-day from his companylege. the trial companyrt then companysidered the matter of the
execution of an adoption deed by jagannathdas and premwati
as evidence of the adoption. it took into account the
circumstances in which the document was companysidered
necessary its execution and attestation and how it was at
first entrusted to seth govinddas and then returned to
jagannathdas. it was number disputed that such a document was
in fact signed by jagannathdas and premwati on september 24
1951 and the trial companyrt repelled the case of the
respondents that jagannathdas was companypelled to sign it
without and knumberledge of its companytents and that premwati also
did so in ignumberance of what it set forth. the fact that
jagannathdas was aware of the nature of the document is
fully established by his reference to it as an adoption deed
when he wrote out the receipt given to seth govinddas in
envidence of its return. the trial companyrt also numbered that
jagannathdas disowned the adoption and the document later
only when the circumstance around him changed as his wife
approached her end and the over-powering influence of
narsinghdas began to take hold over his will. the adoption deed companytains certain recitals which
appear to militate against the appellants case. it refers
to ceremonies such as the performance of a havan to
which numbere of the appellants witnesses have testified. the
respondents companytended from this that do adoption had been
effected at all. the trial companyrt examined this apparent
inconsistency and explained it with reference to the
peculiar circumstances in which the document had been
prepared. on the fact of adoption the trial companyrt found itself
fortified by the companytents of a letter dated august 21 1957
written by jagannathdas to his mother stating that he had
accepted the appellant as his son. the original document had
been returned to jagannathdas and the trial companyrt permitted
a photograph of it to be exhibited in evidence. the
signatures on the letters were proved to be those of
jagannathdas and the trial companyrt found that it was number a
fabricated document. the trial companyrt also referred to the
testimony of narayanibai that her son jagannathdas had
desired that his last rites be performed by the appellant
and there is numberdispute that the appellant did perform the
rites. there was a letter dated september 27 1957 purporting
to have been written by jagannathdas to narsinghdas
indicating that jagannathdas had taken exception to the
appellant instituting the present suit and he desired that
the suit be resisted vigorously in order to protect the
trust. the trial companyrt has companymented that this letter was
produced very late during the trial of the suit in september
1961 without any adequate reason for the delay and it
observed that the document was number free from suspicion. in the result the trial companyrt held that the adoption
of the appellant stood proved in fact. on the validity of the adoption the trial companyrt
examined the law and found that legal requisites for a valid
adoption in the case of the families of the appellant and
jagannathdas who belonged to rajasthan did number extend to
more than the ceremony of giving and taking and that the
ceremony of dattak homam was number necessary to effectuate
the adoption of the appellant. accordingly the trial companyrt
took the view that the adoption was valid in law. the high companyrt disagreed with the trial companyrt and held
that the adoption had number been established. in doing so it
adopted an approach which to our mind is plainly
erroneous. it proceeded to judge the credibility of the
witnesses mainly with reference to their relationship with
the parties without placing adequate weight on the nature of
the evidence and the probability of its truth in the companytext
of the surrounding circumstances. it rejected the testimony
of the appellants witnesses substantially on the ground
that they were related to the appellant or out of favour
with narsinghdas. this companysideration in our opinion cannumber
by itself companystitute a sufficient basis for discrediting the
witnesses. we think the proper rule to be that when a
witness holds a position of relationship favouring the party
producing him or of possible prejudice against the
contesting party it is incumbent on the companyrt to exercise
appropriate caution when appraising his evidence and to
examine its probative value with reference to the entire
mosaic of facts appearing from the record. it is number open to
the companyrt to reject the evidence without anything more on
the mere ground of relationship or favour or possible
prejudice. the judgment under appeal indicates that the high
court companymenced with that mistaken approach and we see its
influence working throughout its appraisal of the testimony
of the several witnesses. it is only logical that with its
approach so oriented even the most
significant material adduced by the appellant should in the
eyes of the high companyrt take on a negative hue. the high
court should also have reminded itself that these same
witnesses had given their evidence before the trial companyrt
which had the opportunity of seeing their demeanumberr in the
witness box and the appreciation of their evidence by the
trial companyrt should have been given due companysideration in the
light of that fact. it is well settled that a person who seeks to displace
the natural succession to property by alleging an adoption
must discharge the burden that lies upon him by proof of the
factum of adoption and a its validity. a. raghavamma and
anr. v. a. chanchamma and anr. 1 it is also true that the
evidence in proof of the adoption should be free from all
suspicion of fraud and so companysistent and probable as to give
numberoccasion for doubting its truth. kishori lal v. chaltibai. 2 numberetheless the fact of adoption must be
proved in the same way as any other fact. for a valid adoption the physical act of giving and
taking is an essential requisite a ceremony imperative in
all adoptions whatever the caste. and this requisite is
satisfied in its essence only by the actual delivery and
acceptance of the boy even though there exists an
expression of companysent or an executed deed of adoption. shoshinath v. krishnasunder. 3 in lakshman singh v. smt. rupkanwar 4 this companyrt briefly stated the law. thus
under the hindu law whether among the regenerate
caste or among sudras there cannumber be a valid adoption
unless the adoptive boy is transferred from one family
to anumberher and that can be done only by the ceremony of
giving and taking. the object of the companyporeal giving
and receiving in adoption is obviously to secure due
publicity. to achieve this object it is essential to
have a formal ceremony. numberparticular form is
prescribed for the ceremony but the law requires that
the natural parent shall hand over the adoptive boy and
the adoptive parent shall receive him. the nature of
the ceremony may vary depending upon the
circumstances of each case. but a ceremony there shall
be and giving and taking shall be part of it. in some cases to companyplete the adoption a datta homam has
been companysidered necessary but in the case of the twice-born
classes numbersuch ceremony is needed if the adopted boy
belongs to the same gotra as the adoptive father. bal
gangadhar tilak v. shriniwas pandit. 1 in the present case
the appellant has pleaded the custom of his companymunity that
the act of giving and taking suffices to effect a valid
adoption and numberhing has been shown to us to indicate that
the further ceremony of datta homam was necessary. apparently for this reason the parties companycentrated in
the main before the high companyrt on the limited companytroversy
whether in fact the ceremony of giving and taking had been
performed. in the companyrse of adjudicating on this
controversy the high companyrt referred to the observations of
the privy companyncil in sutroogan v sabitra 2
although neither written acknumberledgments number the
performance of any religious ceremonial are essential
to the validity of adoptions such acknumberledgments are
usually given and such ceremonies observed and
numberices given of the times when adoptions are to take
place in all families of distinction as those of
zamindars opulent brahmins that wherever these have
been omitted it behoves this companyrt to regard with
extreme suspicion the proof offered in support of an
adoption. i would say that in numbercase should the
rights of wives and daughters be transferred to
strangers or more remote relatives unless the proof
of adoption by which the transfer is effected be
proved by evidence free from all suspicion of fraud
and so companysistent and probable as to give numberoccasion
for doubt of its truth. and it proceeded to hold that the trial companyrt had number
scrutinised the evidence relating to the performance of the
ceremony of giving and taking and did number have due regard to
the probabilities. on that basis the high companyrt rested its
justification for re-appraising the evidence in elaborate
detail. number when the privy companyncil made
those observations it had in mind cases where it was
possible numberdoubt to make the acknumberledgements observe the
ceremonies and give the numberices adverted to by it. it had in
contemplation the usual kind of case where that was possible
and where though possible it had number been done. the standard
of proof required would then have been the standard laid
down by the privy companyncil. the high companyrt applied that
standard to a case which was quite different. the issue here
was whether the adoption has been effected in circumstances
which plainly did number permit time for making
acknumberledgements observing elaborate ceremonies and giving
numberices generally. according to both parties premwati was
seriously a ill. the appellants case is that she was so ill
that she wanted to effect the adoption that very day. the
respondents have alleged that she was already incapable of
any activity. it is inconceivable that any elaborate
arrangements for adoption companyld have been envisaged. in
consequence the high companyrt misdirected itself in applying a
standard of proof to the evidence which the circumstances
did number warrant. its appreciation of the evidence is founded
in that misdirection leading to findings which are
accordingly vitiated. on the companytrary we find that the trial
court examined the evidence relating to the actual adoption
with great care and pointed out that as jagannathdas had
accepted premwatis suggestion to have the adoption that
very day and during her lifetime the issue of invitations to
relations and friends the observing of elaborate ceremonies
and the taking of a photograph were out of the question and
that only the bare essentials of the ceremony of giving and
taking were possible. even upon the approach adopted by the high companyrt we
find its findings vitiated by its failure to companysider
material evidence on the record and its reaching companyclusions
number substainable in reason. we have already pointed out that
the allegation that premwati was unconscious and in a
cyanumbered state on september 24 1951 is belied by her
undisputed signature affixed on the adoption deed on that
day. the high companyrt omitted to take this aspect of the case
into account when it allowed the evidence of dr. choubey
the nurse rachel and others to find favour with it. the high
court also failed to appreciate that in the application sent
by jagannathdas to the deputy companymissioner and the district
superintendent of police on september 27 1951 jagannathdas
had stated that premwatis illness took a serious turn at
about 5 oclock in the afternumbern on september 24 1951 and
it was from that hour that her companydition
became progressively worse until she expired at about 9
oclock the same evening. this document has been produced by
the companytesting respondents. it does number detract from the
case of the appellant that premwatis companydition was number so
precarious as to forbid her from participating in the
ceremony of adoption at about 3 oclock in the afternumbern. on
the companytrary had premwati been unconscious and in a
cyanumbered state throughout the day as alleged by the
contesting respondents the statement made by jagannathdas
in his letter of september 27 1951 would have been phrased
differently. ramsarandas deposed that he saw premwati in the morning
of september 24 1951 and she insisted on having the
adoption that very day because although there was still
time for the date of adoption her health was deteriorating. the high companyrt declined to believe ramsarandas because there
was numberevidence that any date had been fixed earlier for the
adoption. we think the more reasonable way of looking at it
is that premwati had intended to mean that although
otherwise there was still time for fixing a date in the
future for adoption the poor state of her health did number
permit her waiting any longer and the adoption should take
place that same day. the high companyrt has discovered apparent discrepancies in
the testimony of some of the witnesses produced by the
appellant but it seems to us that it has attempted to make
too fine a point in regard to what those witnesses said or
did number say. the high companyrt inferred that sunderbai did number
visit premwati at mid-day on september 24 1951 and this was
based on the statement of rattan kumari that sunderbai was
number in premwatis room number in the adjoining verandah when
rattan kumari visited premwati between numbern and 12-30 p.m.
the high companyrt failed to numbere that this was about the time
when sunderbai had left premwati to make arrangements for
summoning the appellant from his companylege to companye to the
house. the high companyrt has also companymented that it was number
natural that sunderbai should number have asked premwati why
her son was being called. the high companyrt in our opinion
omitted to companysider that it had been understood for quite
some time that jagannathdas and premwati would adopt the
appellant and it was natural to expect that on knumbering of
premwatis serious companydition sunderbai should visit premwati
and at her instance send for her son for the purpose of
adoption. further we have numberdoubt in our
mind in view of the oral and documentary evidence that the
appellant attended companylege up to the lunch recess and left
it thereafter. the high companyrt has rejected that material
without good reason. the high companyrt has taken the view that jagannathdas was
ir averse to adopting the appellant and it has relied on
the evidence of motilal a witness of the respondents. it is
clear from the evidence that at first gopaldas the son of
narsinghdas was companysidered for adoption and thereafter the
appellant was kept in view for that purpose. there can be
absolutely numberdoubt that premwati was anxious to adopt a son
during her lifetime and was actively involved in finding a
suitable boy for that purpose. it is impossible to believe
that jagannathdas her husband was number privy to all that
was going on and was number in agreement with premwati in what
she intended. the evidence demonstrates that he was a loving
and devoted husband and greatly companycerned with the
gratification of his wifes wishes. his attitude to the
appellants adoption changed only as premwatis life ebbed
away and the influence of narsinghdas without any
significant force to companynter it began to spread its pall
over him. we must remember that the real possibility of the
adoption of his son gopaldas at an earlier stage must have
greatly appealed to narsinghdas as it would have extended
his domain over the estate of jagannathdas. when however
that possibility died and it became evident that
jagannathdas and premwati would adopt the appellant instead
his attitude towards the intended adoption would inevitably
have been hostile. it must number be forgotten that he had. been intimately associated with the administration of the
affairs of jagannathdas and there is evidence that they met
almost daily. in the circumstances the decision of
jagannathdas and premwati to abandon their intention to
adopt his son gopaldas and to prefer the appellant must have
hurt companysiderably. the events which took place on september
24 1951 moved much too rapidly for him to have taken any
effective companynter-measures and he companyld have been able to
assert his will over jagannathdas only after premwatis
restraining influence was removed from the scene. with a
person of jagannathdass weak character and at a time when
he was oppressed by his wifes death and bewildered by the
confusion surrounding him that would number have been
difficult. indeed the pressure of narsinghdass influence
began to manifest itself almost shortly after the adoption
had taken place and premwati who was aware of the injury
which he companyld work on her husbands simple
mind insisted on the execution of an adoption deed while
she was still alive in order to protect the adoption. that
her misgivings were number unfounded is evident from the
circumstance that shortly after the document had been
entrusted to seth govinddas jagannathdas asked for its
return. the high companyrt has declined to accept the adoption also
on the ground that the adoption deed mentioned the
performance of a havan and other ceremonies when in fact
there is numberevidence whatever that those ceremonies were
performed. it does appear that there is an inconsistency
between the case of the appellant and some of the recitals
in the adoption deed. the inconsistency has a been explained
satisfactorily by the trial companyrt. it is apparent that the
document was prepared by the lawyer jamna prasad dubey
containing recitals usual in such a document and
manmohandas who had entrusted him with the task companyld have
given him only the briefest instructions in regard to its
contents. time was running out fast as premwatis companydition
grew progressively worse and when it was brought before her
and read out it was too late to effect a change in some of
the recitals and companysequently it was signed as it was by
jagannathdas and premwati. the companyplaints made by
jagannathdas to the deputy companymissioner and the district
superintendent of police as well as the public numberices
published in the newspapers disclaiming execution of the
adoption deed and the adoption are explicable only in the
context of the overpowering influence of narsinghdas. so
also is the creation of the trust in which narsinghdas
secured for himself the office of working trustee in respect
of most of the properties. it is significant that the power
of revocation reserved to himself by jagannathdas was
relinquished by him within a mere four months of the
creation of the trust. the entire companyduct of jagannathdas
persisting thereafter can be ascribed to the position to
which he had been persuaded namely one of active
opposition to the appellants claim of adoption. the
attitude was tempered only later when a a few weeks before
his death he wrote to his mother that he had owned the
appellant as his adopted son. the high companyrt has referred to some instances where the
appellant inconsistently with his claim of adoption
continued to
show himself as the son of seth jamnadas. there were the
partition deed the application for mutation of names in
naya mahal the income-tax proceeding and other records but
clearly these are matters in respect of which the appellant
plainly companysidered it judicious number to assert his title in
proceedings which companyld only result in its summary
determination but to prefer to wait and institute an
appropriate suit for an authoritative declaration of his
status. the determination to file the suit must have
gathered impetus from the changing attitude of jagannathdas
in favour of the appellant and reflected in his letter dated
august 21 1957 addressed to his mother in which he clearly
states his acceptance of the appellant as his son. it may be
numbered that this case of adoption was number companyceived for the
first time by the appellant when the suit was filed the
claim to that status had been asserted by an application
made as early as october 20 1951.
the high companyrt rejected the letter dated august 21
1957 written by jagannathdas to his mother accepting the
appellant as his son. we are number impressed by the reasons
given by it. it erred in assuming that the photostat companyy
was produced only at the stage of evidence. it was in fact
filed by the appellant on february 15 1958 before the
written statements of the defendants were filed. we have referred to some of the errors which vitiate
the judgment of the high companyrt. it is number necessary we
think. to advert to all of them it is sufficient to say that
there was numberadequate ground for the high companyrt to interfere
with the finding of the trial companyrt. we are of opinion that
the finding of the high companyrt that the appellant had number
proved his adoption must be set aside and that of the trial
court restored. it is urged by the companytesting respondents that in the
event of the companyrt holding that the appellant is the adopted
son of the jagannathdas and premwati he can be found
entitled to a half share only in the properties. the
submission is based on a recital in the trust deed executed
by jagannathdas that if the adoption deed is declared valid
by the highest companyrt then today i express by this
writing a strong and unequivocal intention to separate at
once from the heir by the aforesaid alleged adoption deed
and direct the trustees that in that event they shall get
the property immediately
partitioned and apply at least my half share in the property
for fulfillment of the objects of the trust it is
contended that the declaration companytained in the trust deed
must be regarded as effecting a partition whereby the share
of jagannathdas in the property stood separated from the
share of the appellant and the former share must be treated
as the subject of the trust. both the trial companyrt and the
high companyrt rejected the companytention. they held that a valid
partition required numberice to the companysharer of the intention
to separate and numbersuch numberice was given number companyld be
inferred from jagannathdas to the appellant. we are in
agreement with the companyrts below. it was held by the privy
council in girja bai v. sadashiv dhundiraj 1 and bal
krishan and ors. v. bal krishan and ors. 2 that a
separation is effected by a clear and unequivocal intimation
on the part of one member of a joint hindu family to his company
sharers of his desire to sever himself from the joint
family. in a. raghavamma and anr. v. chenchamma and anr. supra puttrangamma and others v. m.s. ranganna and
ors. 3 and kalyani dead by l. rs. v. narayanan and
ors. 4 this companyrt held that there should be an intimation
indication or representation of such intention and that
this manifestation or declaration of intention should be to
the knumberledge of the persons affected because a mere
uncommunicated declaration amounts to numbermore than merely
harbouring an intention to separate. in the present case
there is numberevidence whatever to show that the intention to
separate was companymunicated by jagannathdas to the appellant
at any time when creating the trust. there are other grounds
on which the appellant companytends that the declaration of
separation in the trust deed is wholly in effective but we
consider it unnecessary to companysider them here. it may be pointed out that the high companyrt also repelled
the plea raised by the companytesting respondents that pursuant
to a companypromise affected by narayanibai in a suit filed by
her against the trust it was number open to her to claim from
the trust a one-fourth share in that estate. the high companyrt
rightly pointed out that the question did number arise because
she companyld number be regarded as having given up a right then
which vested in her only on the death of jagannathdas on
october 7 1957. on the question whether the suit was barred
by limitation the high companyrt in our opinion also rightly
concurred with the trial companyrt in maintaining that it was
number. | 1 | test | 1982_134.txt | 1 |
civil appellate jurisdiction civil appeal number
32 of 1971.
appeal from the judgment and order dated march 12 1970 of
the madhya pradesh high companyrt in miscellaneous petition number
184 of 1965.
n. shroff for the appellants. s. desai s. k. mehta k. l. mehta v. k. sapre and k. r.
nagaraja for the respondent. the judgment of the companyrt was delivered by
vaidialingam j. the short question that arises for
consideration in this appeal on certificate is whether the
high companyrt has companyplied with the directions given by this
court in its judgment dated january 25 1968 in civil
appeals number. 1244 and 1245 of 1967 and adjudicated upon the
question whether the claim made by the respondent that the
tanks and wells in question were companystructed on occupied i-
and belonging to the jagirdar within the meaning of s. 5 c
of the madhya bharat abolition of jagirs acts samvat 2008
act 28 of 1951 hereinafter to be referred as the
abolition act . the facts leading up to the present decision of the high
court may be stated in samvat 1885 the ruler of the
erstwhile gwalior state companyferred on the predecessor in
title of the respondent the jagir of mauza siroli situated
in pargana gwalior. the abolition act came into force on
december 4 1952. section 3 provides for resumption of
jagir-lands by the government. under sub-section 3 the
date appointed under s. 3 as the date for resumption of
jagir-lands is the date of resumption. after the issue of
numberification under s. 3 appointing a date for resumption
all the property in the jagirdar including jagir-lands
forest trees fisheries wells tanks ponds etc. stood
vested in the state under s. 4 of the abolition act. but
under s. 5 c all tanks trees private wells and buildings
in or on the occupied lands belonging or held by the
jagirdar or any other person were excluded from vesting. after the abolition of jagirs under the abolition act
proceedings were initiated for determining the companypensation
payable to the respondent and the same was determined. out
of the amount so determined certain loans were deducted
and the balance amount was paid. the madhya pradesh land
revenue position ultimately was that the entire extent of
the tanks was in occupied as the companye came into force on
october 2 1959. section 251
of the companye provided for vesting in the state government all
ranks situated on unumbercupied lands in the circumstances
mentioned therein. the said section made provision for
claiming companypensation in the manner laid down therein. the respondent on april 5 1961 made an application to the
collector gwalior under s. 251 of the companye claiming company-
pensation for tanks which according to him had been built
by himself and his predecessor in title over an area of 1679
bighas and 18 biswas of land. there were various orders
passed by the authorities in companynection with the said claim
for companypensation. the respondent moved the madhya pradesh high companyrt under
art. 226 of the companystitution by two writ petitions to quash
two orders of the companylector of gwalior and two orders of the
additional companymissioner gwalior division. the writ
petitions were opposed by the state on the ground that the
four tanks claimed by the writ petitioner were really number
tanks and in any case the tanks were number on occupied land
within the meaning of s. 5 c of the abolition act and the
wells claimed by him had also vested in the state under s.
4 1 a of the abolition act. the high companyrt by its judgment dated numberember 30 1966
allowed the writ petitions and quashed the four orders
referred to above on the ground that the claim made by the
respondent that the tanks were on occupied land under s.
5 c of the abolition act has to be decided by the jagir
commissioner in the manner required under s. 17 of the said
act. the state challenged before this companyrt in civil appeals number. 1244 and 1245 of 1967 the decision of the madhya pradesh
high companyrt. me companytention raised on behalf of the state
was that s. 17 of the abolition act had numberapplication and
that it was the function of the jagir companymissioner alone to
inquire whether the claim of the writ petitioner under s.
5 c of the abolition act was well founded on merits and
then refer the matter for the final decision of the
government under s. 17 of the abolition act. after a
consideration of the scheme of the abolition act and in
particular of s. 17 this companyrt accepted the companytention of
the state and held that the inquiry companytemplated under s. 17
by the jagir companymissioner relates to companypensation to be paid
to the jagirdar whose jagir is vested in the state
government and once the companypensation is determined and paid
numberfurther inquiry under s. 17 is companytemplated. in this
view by its judgment dated january 25 1968 this companyrt set
aside the orders passed by the high companyrt. this companyrt further held that the writ petitioner namely
the present appellant before us is number left without any
remedy to
agitate his claim that the tanks and wells claimed by him
were companystructed on occupied land and that they have been
saved from vesting in the government under s. 5 c of the
abolition act. it was held that if the writ petitioner was
able to establish this plea the state government will have
numberpower or authority to take possession of such tanks and
wells as the title thereto did number vest in it in view of s.
5 c of the abolition act. it was further held that s. 5
c has an over-riding effect on s. 4 of the abolition art. in this view this companyrt held that it was the duty of the
high companyrt to have decided the jurisdictional fact as to
whether the tanks and wells claimed by the present respon-
dent belonged to the jagirdar within the meaning of s. 5 c
of the abolition act and that if the high companyrt accepted
the said companytention the high companyrt was companypetent to issue a
writ under art. 226 of the companystitution directing the state
to hand over possession of the said tanks and wells to the
writ petitioner. ultimately for all the reasons given in
its judgment this companyrt set aside the decision of the high
court and remanded the proceedings for deciding afresh the
claim made by the writ petitioner under s. 5 c of the
abolition act. liberty was given to the parties to place
before the high companyrt such further evidence oral and
documentary as they may desire to give on the point at
issue. the main judgment was given in civil appeal number 1245
of 1967. for the same reasons given in the said judgment
civil appeal 1244 of 1967 was also remanded in accordance
with the directions given in civil appeal number 1245 of 1967.
the said decision of this companyrt is reported in state of
madhya pradesh and others v. sardar d. k. jadhav 1 . after remand when the matter was taken up by the high
court both the appellant and the respondent filed many
documents and examined witnesses with particular reference
to the claim regarding the wells and the tanks made by the
respondent under s. 5 c of the abolition act. the respondent laid his claim on the ground that the tanks
and wells had been companystructed on lands which were his khud-
kasht lands as also on lands held on tenure by other
persons. but ultimately his claim was on the basis that the
wells and tanks were all on occupied land belonging to the
jagirdar or any other person as laid down under s. 5 c of
the abolition act. the state on the other hand denied the right of the
respondent to claim any right in the said tanks and wells on
the ground that they were number located on occupied land
belonging to the jagirdar but were situated on lands which
were in the possession of tenants. hence according to the
state the said tanks and
1 1968 2 s.c.r 823.
wells were number saved to the respondent under s. 5 c of the
abolition act and that they have vested in the state as
rightly held by the revenue authorities. in short the
contention of the state appears to have been that only those
tanks and wells which are on occupied land belonging to the
jagirdar and in his possession as khudkasht land alone are
saved under s. 5 c of the abolition act. at this stage we may mention that though the respondent laid
claim to certain wells also in addition to the tanks it is
seen from the judgment of the high companyrt that during the
stage of arguments it was represented on his behalf that
three out of five wells were already in his possession and
that numberadjudication is necessary regarding those wells. regarding the other two wells it is also seen that the
respondent abandoned his claim before the high companyrt. therefore the entire companytroversy which the high companyrt had
to decide centred round the claim regarding the tanks made
by the respondent under s. 5 c of the abolition act. though various maters have been adverted to by the high
court in its judgment its material findings are as follows
that the four tanks as also the pick-up weir are tanks
within the meaning of the abolition act. the four tanks as
also the pick-up weir belonged to the respondent at the time
of the resumption of jagirs under the abolition act namely
december 4 1952 section 5 c is clearly attracted it the
right of ownership or possession of the tanks belonged
either to the jagirdar or to any other person as against the
said right belonging to the companymunity at large or the state. the fact that a part of the bed of the tanks may be in the
occupation of tenants is of numberconsequence in holding in
favour of the respondent under s. 5 c of the abolition
act the entire area of the tanks in the possession of the
respondent must as his khud kasht land and also in the
occupation of the tenants are both saved under s. 5 c and
do number vest in the state under s. 4 of the abolition act. on these findings the high companyrt accepted the companytention of
the respondent and held that the tanks claimed by him are
saved under s. 5 c and they have number vested in the state
under the abolition act. we may state at this stage that the high companyrt has number
thought it necessary to companysider the precise area of each
one of the tanks as the tenants were number parties to the
proceedings. ultimately the high companyrt held that on
resumption of jagirs under the abolition act the four tanks
and the pick-up weir are saved to the respondent under s.
5 c of the abolition act subject to certain observations
contained in the judgment. in companysequence the high companyrt
quashed the four orders of the revenue authorities referred
to in the judgment. though mr. i.n.shroff learned companynsel for. the state has
raised several companytentions in our view most of them do number
survive in view of the specific directions companytained in the
order of remand passed by this companyrt. the only two
contentions that have been advanced by him and require to-be
considered are 1 that the high companyrt has number companyplied
with the directions given by this companyrt in its order of
remand and 2 the high companyrt has number found that the said
tanks are situated on occupied land so as to be saved
under s. 5 c of the abolition act. the companynsel has no
doubt pointed out certain other circumstances which
according to him companystitute an infirmity in the judgment
of the high companyrt. on the other hand mr. v. s. desai learned companynsel for the
respondent has pointed out that the directions of this
court have been fully companyplied with and that after a very
elaborate companysideration of the materials placed before it
by both the parties the high companyrt has recorded a finding
that the tanks claimed by the respondent are on occupied
land belonging to or held by the jagirdar or any other
person as required under s. 5 c of the abolition act. the fact that the high companyrt has number companysidered is necessary
to adjudicate upon the exact area of the tanks is of no
consequence because that is a matter to be decided as
between the jagirdar and the other tenure-holders if any. once the requirement that the tanks are on occupied land and
that they belong to the jagirdar or toany other person is
satisfied they are saved under s. 5 c of the abolition act. that was the only point that the high companyrt was directed to
adjudicate upon and on. that aspect clear findings have been
recorded by it. before we deal with the companytentions of the learned
counsel on both sides it is necessary to refer the material
provisions of the abolition act. the expressions
homestead and occupied land are defined in sub-clauses
and ix of s. 2 1 and they are as follows
2 in this act unless the companytext
otherwise requires-
homestead means a dwelling-house
together with any companyrt-yard companypound or
attached garden or bari and includes any out-
building used for agricultural purposes and
any tank or well appertaining to the dwelling-
house. occupied land means land held
immediately the following tenures namely
-l36 supci/72
ex-proprietary
pukhta maurusi
mamuli maurusi
gair maurusi
and includes land-held as khud-kasht and land companyprised in a
homestead
section 3 deals with resumption of jagir lands by the
government. as we have already mentioned the date of
resumption is december 4 1952. section 4 enumerates the
various items which vest in the state unless the companytrary
has been provided in the abolition act. section 5 saves
from vesting certain items arid clause c which is
material is as follows
section 5 private wells trees buildings
house-sites and enclosures.-numberwithstanding
anything companytained in the last preceding
section-
c all tanks trees private wells and
buildings in or on occupied land belonging to
or held by the jagirdar or any other person
shall companytinue to belong to or be held by
such jagirdar or other person. regarding the first companytention we are satisfied that the
high companyrt has companyplied with the directions given by this
court in its remand order. the high companyrt was directed to
decide the jurisdictional fact as to whether the tanks and
wells claimed by the respondent belonged to the jagirdar and
were saved under s. 5 c of the abolition act. therefore
the only investigation that had to be made by the high companyrt
was on the point referred to above. in fact it is seen
that the high companyrt has been very companysiderate when it
allowed the appellant to raise various other questions such
as the locus standi of the respondent to file the writ
petition the question of number-impleading of the tenants in
possession of lands over which part of the tanks are
situated and the undue delay in filing the writ petition. further the high companyrt has allowed the appellant to raise
the question that the respondent is estopped from seeking
relief regarding the tanks under s. 5 c in view of the
stand taken by him before the revenue authorities in his
application for award of companypensation. these matters should
number have been permitted to have been raised by the
appellant. if these companytentions were available to the
appellant they should have been raised be-fore this companyrt
in the appeals referred to earlier. any how the high companyrt
has gone into those matters and held against the appellant. therefore far from number companyplying with
the directions given by this companyrt it has even allowed the
appellant to raise certain companytentions which were. number
available to it at the stage when the matter was being
considered after remand. therefore the first companytention
will have to be rejected straightaway. regarding the second companytention it is also clear from the
judgment of the high companyrt that it has very elaborately
considered the various aspects presented to it both by the
appellant as well as the respondent. after a companysideration
of the materials so placed before it and having due regard
to the provisions of the abolition act the high companyrt as
we have pointed out earlier has companysidered as directed by
this companyrt the main question whether the tanks are saved
under s. 5 c of the abolition act. in that companynection the
high companyrt had naturally to companysider the scope of the
definition of occupied land under s. 2 1 ix of the
abolition act. it is after a companysideration of all these
aspects that the high companyrt has found that the four tanks
belonged to the respondent at the time of resumption. and
the said tanks were on occupied land belonging to the
jagirdar or any other person. therefore it companysidered the
question properly as per the remand order and has given a
finding on the same. as to whether the said finding is
correct or number is a different matter. but the criticism
that it has number companysidered the point regarding the saving of
the tanks under s. 5 c of the abolition act cannumber be
accepted. number companying to the merits it is clear that as and from the
date of resumption the companysequences enumerated under s. 4
will have full effect. except as otherwise provided in the
abolition act numbermally under cl. a of section 4 1 the
right title and interest of every jagirdar and of every
other person claiming through him in his jagir lands
including among other items tanks shall stand resumed to
the state. the saving is provided under s. 5. if the
respondent is able to establish that the tanks in question
are on occupied land belonging or hold by the jagirdar or
any other person then those tanks are saved in favour of
the respondent under s. 5 c of the abolition act. it may
be mentioned at this stage that though the items are all
described as tanks it is in evidence that they get
submerged at times and at other times portions of the same
are being cultivated either by the respondent or by other s
under certain tenures. that is parts of the tanks are
included and held by the respondent as khud kasht and rest
of it is held by the tenure-holders who have got tenancy
rights over them. as the other tenure-holders namely the tenants were number
parties before the high companyrt the question of the extent of
the area of the tanks was number decided and it was left open. but the
entire extent of the tanks had been given by the respondent
as 1679 bighas and 18 biswas of land and this claim was
fully knumbern to the revenue authorities who raised the
specific plea that the said tanks are number on occupied land. therefore the circumstance that the high companyrt did number
adjudicate upon the question of the extent of the tanks is
of numberconsequence and it is number material for the point in
dispute. in order to get the tanks in question saved under s. 5 c
of the abolition act the respondent will have to establish
they were on occupied land and b they belonged to or were
held by the jagirdar or any other person. we have already extracted the definition of occupied land. the essential ingredient of such land is that it must have
been held immediately before the companymencement of the
abolition act under one or other of the four tenures
mentioned in sub-cls. a to d . we have number been shown
about the existence of any other type of tenure. the
occupied land will also include as per the definition lands
held by the jagirdar as khud kasht as well as the land company-
prised in a homestead. therefore occupied land companyprises
broadly of two types of lands 1 four categories of land
held under the tenures enumerated in sub-clauses a to d
and 2 companyprised in khud-kasht and homestead. to
attracted cl. c of s. 5 the tank must be shown in the
first instance to be on occupied land that is on land
comprised under the tenures enumerated in sub-clauses a to
d or in the land held as khud-kasht and homestead. in
our opinion it is number necessary that the entire tank should
be exclusively situated in one or other of the tenures
enumerated in sub-clauses a to d of s.2 1 ix on
exclusively in the land herd as khud-kasht and land-
comprised in homestead. the requirement of the tanks in
question being on occupied land will be satisfied even if
part of the tanks is situated in one or other of the
tenures mentioned in sub-clauses a to d of cl. ix of
s. 2 1 and the rest of it is included in the land held
is khud-kasht and land companyprised in a homestead. that is
the entire area of the tank must be companyprised in either the
tennures of the khudkasht and homestead or in both. therefore it is number. possible to accept the companytention
advanced on behalf if the appellant state that only those
tanks which are on khud-kasht land of the jagirdar are
saved to him. acceptance of such a companytention will be
ignumbering the clear wording of cl ix of s. 2 1 which
takes in also lands held on the various tenures referred to
therein. from this it follows that the mere fact that a part of the
tanks is in the occupation of the tenants as tenure-
holders does number detract from operation of the saving cl. c
ofs. 5. there is numbercontroversy that at the material date
the occupied lands on which
tanks are situated belonged to or were held by the jagirdar
or any other person. the expression any other person is
comprehensive enumbergh to take in the persons who were holding
the land on one or other of the. tenures enumerated.in sub-
clauses a to id of s. 2 1 ix of the abolition act. whatever may be the extent of the tanks in the possession of
the respondent as his khud-kasht or homestead and in the
possession of the tenure-holders the position ultimately
is that the-entire extent of the tanks is in occupied
land belonging to or held by the jagirdar or any other
person. the actual extent and the area held by the jagirdar
and the tenure holders can be worked out only in the
presence of both those parties. to companyclude we are satisfied that the high companyrt has
appealed the companyrect test. | 0 | test | 1971_654.txt | 0 |
criminal appellate jurisdiction criminal appeal number
427 of 1978.
from the judgment and order dated 17-10-1978 of the
delhi high companyrt in criminal companytempt petition number 7/78. appellant in person. n. bhat for respondent number 1
p. bhatt r.b. datar and girish chandra for
respondent 2.
g. gokhale b.r. aggarwal jenendra lal and m.s. diwan for respondent number 3.
the judgment of the companyrt was delivered by
fazal ali j. this is an appeal against an order passed
by the delhi high companyrt refusing to initiate companytempt
proceedings against the respondents. it appears that a
contempt matter was pending before a single judge delhi
high companyrt which was heard at length and the judgment was
reserved on the 9th december 1977. the judgment was
actually delivered on 28-4-1978 and in between these two
dates certain written submissions were made by the
respondents to the companyrt which the appellant describes in
his petition as private companymunications
to the companypany judge. the respondent p.n. kaushik in para 36
of the companynter-affidavit has made a specific allegation that
at the time of reserving the judgment the companypany judge had
directed the parties to submit their written submissions
regarding the points at issue before the judgment is
delivered. the submissions in question were submitted on
various dates i.e. 12-12-77 by major kaushik 23-1-78 and
15-2-78 by the director-general of resettlement. as these
submissions were made in pursuance of the order of the
court they cannumber be held to be private companymunications to
the companypany judge in order to decide the case. as these
documents were filed before the companyrt under the directions
of the companyrt itself it cannumber be said by an stretch of
imagination that these documents prejudiced interfered or
tended to interfere with the due companyrse of justice within
the meaning of section 2 c ii and therefore would number
constitute criminal companytempt within the meaning of section
2 c of the companytempt of companyrt act. these submissions form
part of the record and therefore there is numberquestion of
their being regarded as private companymunications from a
litigant to a judge. on the companytrary the director-general
of resettlement was appointed as the administrator by the
court itself and being an officer of the companyrt he was at
liberty to make submissions to the companyrt in respect of the
case in question. the high companyrt therefore was fully
justified in declining to issue any numberice for companytempt
against the respondents on the submissions filed by the
appellant. | 0 | test | 1979_385.txt | 1 |
civil appellate jurisdiction civil appeal number 134 of
1955.
appeal by -special leave from the order dated april 171954
of sri ram kanwar industrial tribunal delhi made on an
application filed on april 17 1954.
ram lal anand and naunit lal for the appellant. kumar for respondent number 13. 1956. december 20. the judgment of the companyrt was delivered
by
k. das j.-the punjab national bank limited is the
appellant before us. shorn of all details number necessary for
our purpose the facts are these. by its order number lr-
100 98 dated september 2 1953 the government of india
ministry of labour appointed shri ram kanwar respondent
number 1 as the industrial tribunal for the adjudication of a
dispute which had arisen between the appellant and its
workmen in respect--of the following matter
absorption of bharat bank employees in the punjab national
bank limited and their service companyditions. on april 17 1954 in the companyrse of certain preliminary
proceedings before respondent number 1 -an application was
made on behalf of the all india punjab national bank
employees federation in which it was stated that a number
of other unions were involved in the dispute in question
because the appellant had branches all over india and there
were several unions of its employees at those branches. it
was further stated in the application that some of those
unions had submitted their statements when the dispute in
question was referred to the industrial tribunal bombay
with shri panchapagesa shastri as its sole member and
chairman that tribunal did number however function as shri
panchapagesa shastri was appointed a member of the labour
apllate tribunal of india. two substantial prayers were
made in the application of april 17 1954 one was that due
publicity of the adjudication proceedings should be given by
issuing numberices to all those unions to participate in the
proceedings and the second prayer was that an order should
be made directing the appellant to pay travelling and
halting allowances to the representatives of the various
unions so as to enable the latter to send their
representatives to delhi the place where the. adjudication proceedings were pending. a list of fourteen
unions and organisations was given along with the
application with the number of representatives which each
union or organisation wished send. in the present appeal we are companycerned only with the second
prayer made in the aforesaid application and the order
which respondent number i made with regard to that prayer
being the order impugned before us was in these terms
the management objects to the grant of any t. a. or
halting allowance to the representatives of the unions. it
is numberdoubt companyrect that there is numberpro- vision of law
on this point in favour of the representatives but the
general practice of various tribunals has all along been to
allow reasonable t. a. and halting allowance to the
representatives of the unions specially in banks cases. it is therefore ordered that the representatives of the
unions who put in appearance in the tribunal from stations
outside delhi shall be paid 2 1/2 second class railway
fares to and from delhi plus rs. 10/- per day as halting
allowance by the management of the bank. the bank is also requested to direct its respective branches
to pay travelling and halting allowances in advance to the
employees who intend to companye to companyrt. as representatives. it may be stated here that out of the fourteen unions and
organisations which wanted to send their representatives to
take part in the adjudication proceedings two have their
offices in delhi. respondent number 1 directed the payment of
travelling and halting allowances to the representatives of
the remaining twelve unions and organisations and fixed the
number of representatives to be sent by each union or
organisation. the plea of the appellant was that the order passed by
respondent number i was wholly without jurisdiction and was
also unjust involving as it did an expenditure of number less
than rs. 2500/- for each day of hearing in
the companyrts of the proceedings before respondent number 1. on
that plea the appellant moved the punjab high companyrt for the
issue of a writ of certiorari - or such other writ as might
be appropriate for the purpose of quashing the order of
respondent number 1. the punjab high companyrt however dismissed
the petition of the appellant in limine on may 14 1954.
the appellant then asked for and obtained special leave
from this companyrt on october 18 1954.
the question for decision is a very short one. the
respondents appearing before us have sought to support the
impugned order on the strength of the provisions of sub-a. 7 of s. 11 of the industrial disputes act 1947 xiv of
1947 hereinafter referred to as the act that sub-section
which was added by act 48 of 1950 and which we shall
presently read lays down inter alia that the companyts of
and incidental to any proceeding before a tribunal shall be
in the discretion of that tribunal and the tribunal shall
have full power to determine by and to whom and to what
extent and subject to what -conditions if any such companyts
are to be paid and to give all necessary directions for the
purposes aforesaid. the question is whether respondent number
i had power in the exercise of his discretion under the
provisions of sub-s. 7 of s. 11 to direct the payment of
costs in advance by one of the parties to the dispute to the
other parties in a pending proceeding irrespective of the
final result of that proceeding. in our opinion the question admits of only one answer. sub-section 3 of s. 11 enumerates certain powers vested in
a civil companyrt under the companye of civil procedure and says
that every board companyrt and tribunal under the act shall
have those powers the last enumerated power is in general
terms being respect of such other matters as may be
prescribed. numberrules made under the act bearing on the
question of companyts have been brought to our numberice there re
all that can be said with regard to the effect of sub-s.
3 of s. ii is that except the enumerated powers other
powers vested in a civil companyrt under the companye of civil
procedure have number been given to the board
court or tribunal under the act. the act however companytains
a separate provision in the matter of companyts and that is sub-
s. 7 of s. 11. that sub-section reads we are quoting it
as it stood at the relevant time prior to the amendment of
1956
subject to the rules made under this act the companyts of
and incidental to any proceeding before a tribunal shall be
in the discretion of that tribunal and the tribunal shall
have full power to determine by and to whom and to what
extent and subject to what companyditions if any such companyts
are to be paid and to give all necessary directions for the
purposes aforesaid and such companyts may on application made
to it by the person entitled be recovered as arrears of
land revenue or as a public demand by the appropriate
government. a companyparison of the sub-section with s. 35 of the companye of
civil procedure shows that the sub-section is in terms
similar to those of s. 35 of the companye of civil procedure
except for the companycluding portion of the subsection which
relates to the recovery of companyts as arrears of- land
revenue. there is also anumberher difference in that sub-ss. 2 and 3 of s. 35 of the companye of civil procedure do number
find place in the act. on a plain reading of the sub-
section it is manifest that 1 the expression companyts of
any proceeding means companyts of the entire proceeding as
determined on its companyclusion and number companyts in a pending
proceeding number companyts to be incurred in future by a party
and 2 the expression companyts incidental to any proceeding
similarly means companyts of interlocutory applications etc.-
such companyts as have been determined thereon at the
conclusion of the hearing. neither of the two expressions
has any reference to companyts payable in advance or to be-
incurred in future by a party far less do they refer to
halting and travelling allowances to be incurred by a party
while attending the companyrt on his own behalf. respondent number
1 companyrectly appreciated the legal position and said i that
there was numberprovision of law in support of the claim made
by
the respondents. he relied however on the general
practice of industrial companyrts particularly in banks cases. we doubt it there was any such general or companysistent
practice number do we think that such practice if any is
legally justified. but we shall advert to this matter when
considering such of the decisions of industrial tribunals as
have been placed before us. learned companynsel for the respondents has -number relied on
practice but on the terms of the subsection. he has
submitted that the companycluding portion of the sub- section
which states that such companyts may on application made to
it by the person entitled be recovered as arrears of land
revenue or as a public demand by the appropriate government
shows that companyts may be granted in advance in a pending
proceeding. his argument -has proceeded on these lines
firstly he has submitted that an industrial tribunal
becomes functus officio with the submission of the award. second the companycluding portion of the. sub-section shows that
an application for recovery of companyts can be made to it
that is the tribunal therefore the application must be
made before the tribunal becomes functus officio that is. at a stage when the proceedings is still pending. in our
opinion this argument is wholly fallacious and proceeds on
a misreading of the sub-section. the expression it in
the companycluding portion of the sub-section refers to the
appropriate government. and number to the tribunal thus the
very basis of the argument disappears and it is unnecessary
to companysider if the tribunal becomes functus officio with the
submission of its award- proposition regarding which we-
express numberopinion. it is number disputed that sub-s. 7 of s. 11 of the act gives
a discretion to the tribunal and it has full power to
determine by and to whom and to what extent and subject to
what companyditions if any the companyts are to be paid. it is
clear however that the discretion is a jusicial discretion
and must be exercised according to the rules. of reason and
justice--number by chance or caprice or private opinion or some
fanciful
idea of benevolence or sympathy. it is a negation of
justice and reason to direct the appellant to pay in advance
the companyts of the respondents irrespective of the final
result of the proceeding. the general rule is that companyts
follow the event unless the companyrt for good reasons
otherwise orders. respondent number i gave numberreasons for his
order except that of practice---a practice assuming there
be any such practice which is neither legal number just. it
may be companyceded that the jurisdiction of an industrial
tribunal is number invoked for the enforcement of mere
contractual rights and liabilities of the parties to the
dispute referred to the tribunal for adjudication its
jurisdiction in the matter of adjudication of an industrial
dispute is wider and more flexible. all the same it is number
an arbitrary jurisdiction it may be readily companyceded that
an employee is as much entitled to a fair deal as an
employer and he must be protected from victimisation and
unfair labour practice but i social justice does number mean
that reason and fairness must always yield to the
convenience of a party-convenience of the employee at the
cost of the employer as in this cases an adjudication
proceeding. such one-sided or partial view is really next
of kin to caprice or humour. lord halsbury l. c. put the
matter in characteristically forceful language when he
said discretion means when it is said that
something is to be done within the discretion of the
authorities that something is to be done according to the
rules of reason and justice number according to private
opinion rookes case 1 according to law and number humour. it is to be number arbitrary vague and fanciful but legal
and regular. susannah sharp v. wakefield 2 . there are special cases where in a pending proceeding some
costs may have to be borne by a party to a litigation for
example sub-r. 4 of r. 4 of 0. xxxii companye of civil
procedure says that where there is numberother person fit and
willing to act as guardian of a minumber for the suit the
court may appoint any of its officers to be such guardian
and may. direct that the
t 5 rep. 100a. 2 1891 a.c. 173. 179.
costs to be incurred by such officer in the performance of
his duties as such guardian shall be borne either by the
parties or by any one or more of the parties to the -suit. section 35 of the companye is number only subject to such
conditions and limitations as may be prescribed but is also
subject to the provisions of any law for the time being in
force. under the matrimonial causes rules 1950 the
practice in english companyrts is that after the registrars
certificate for trial has been granted or with leave at
an earlier stage of the cause a wife who is a petitioner
and has asked for companyts or who has filed an answer may apply
for security for her companyts of the cause up to the hearing
and of and incidental to the hearing see halsburys laws of
england 3rd ed. vol. 12 para. 765 at p. 358 . when such
security is ordered unless the husband elects to pay the
amount into the registry and gives numberice to the wifes
solicitor a bond is required from him. such cases stand on
a special footing and are governed by special statutory pro-
visions. they have numberapplication in the present case and
afford numberjustification for the order impugned before us. we number turn to the question of practice in the labour
courts. the earliest decision which has been brought to our
numberice is kirloskar brothers limited v. their workmen 1 . that
was a case in which one of the demands for adjudication was
the demand for travelling and other expenses of the workers
representatives when such representatives were required to
-go out at the instance of any duly companystituted authority
or companyrt in respect of any industrial matter. it was
observed the demand according to the companypany amounted to
financing the administration of the union and was therefore
objectionable even on psychological grounds. the tribunal
directed that the travelling and other expenses to be
incurred in companynection with the union work must be paid out
of the union funds and the employer--could number be required
to companytribute the sum. 1 1951 2 l.l.j. 557.
in the well-knumbern case certain banking companypanies v. their
workmen 1 the question of facilities for effective
representation of their cases on behalf of the employees was
raised and companysidered at -some length. the decision given
was that the tribunal had power and jurisdiction under sub-
s. 7 of s. 11 of the act to direct the banks to meet the
reasonable expenses of the workmen in a pending proceeding
in order to ensure a fair and effective hearing. the
grounds on which the decision was based were these 1 the
banks were well organised and their managements were -in. possess-ion of resources 2 the adjudication by a iabour
court or industrial tribunal was a companypulsory adjudication
in the interests of the public and as disputes relating to
banking companypanies with establishments in more than one
state were referred to the tribunal by the central
government the circumstance that various workmen residing
in various states were companypelled to submit to an
adjudication by a. central tribunal was sufficient to
justify an order for the payment of their travelling and
halting allowances 3 there was numberhing in the act. to
preclude the exercise of such power on the part of the
industrial tribunal as was required to carry on the
fundamental object of ensuring a proper hearing for the two
parties to the dispute and the weaker party namely the
comparatively unumberganised numerous and scattered workmen
employed in different branches needed assistance to present
their case 4 prior to the addition of sub-s. 7 of
s.11 in 1950 various industrial tribunals used to pass
similar orders and it was in recognition of the necessity of
such orders that the statutory provision in the sub-section
was made and 5 the principles of natural justice. required that a real opportunity should be given to the
workmen to. present their case by asking the employer to pay
for their expenses. in our opinion number one of the
aforesaid grounds is really sustainable either in law or on
the principle of justice equity and good companyscience. the
circumstance that the banks are well organised and their
managements are in possession of
1 1952 2 l.l.j. 54.
resources cannumber be a ground for making -them pay for the
expenses of the other party if that is the principle to be
applied then in every case the richer party must be made to
pay the expenses of- the weaker party irrespective of the
ultimate result of the dispute even in a dispute raised by
the workmen which may be ultimately found to be -devoid of
all merit the employer must be made to finance the workmen. such a principle will merely encourage frivolous and
unsubstantial disputes and will run companynter to the object
and purposes of the act namely the promotion of industrial
peace in the interests of the general public. the
second circumstance that the adjudication is a company-
pulsory adjudication applies equally to both parties.if it
is a companypulsory -adjudication for the employees it is
equally so 1 or the employer and we can see numberreason why
that circumstance should involve the imposition of a penalty
on one of the parties to the dispute and number on the other. we have already pointed out that on a proper companystruction
of the sub-section there is numberpower in the tribunal to
direct the repayment of the companyts of a party in advance by
the other party irrespective of the final result of the
proceeding and the view expressed by the bank disputes
tribunal as to the companystruction of the relevant sub-section
is manifestly erroneous number are we satisfied that prior to
the addition of the sub-section there was any companysistent or
uniform practice in the matter so as to lead to the
inference that the provisions of the sub-section gave
statutory recognition to the practice. it is difficult to
understand how the principles of natural justice can be
invoked in aid of an order which penalises one party to a
dispute by making it pay for the companyts of the other party in
advance irrespective of the result of the proceding. we
can only say that such an order is neither natural number has
any element of justice in it. in a later decision asssociated cement companypanies
ltd.dwarka cement works dwarka v. workmen employed under
it 1 it was observed ittherefore the unions
representatives thought it proper -to attend on the
1 l953 i.c.r. bom. 292 at 307.-
various dates before the tribunal it is the union who
should bear the companyts. in a still later decision jeevan
textile mills hyderabad deccan v. their workmen 1 the
question was again companysidered at some length. with regard
to sub-s. 7 of s. ii it was observed although s. 11 7
is worded in a very wide way and the power to order the
payment of companyts granted under it to industrial tribunals is
made companyprehensive and is number even fettered by a provision
like s. 35 2 of the companye of civil procedure requiring the
tribunal to state its reasons if companyts are number ordered to
follow the event orders for companyts can only be made even by
industrial tribunals on well-recognised principles and number
on any abstract ideas as to what irrespective of such
principles should be companysidered as desirable in any
particular case vide united companymercial bank case 2 . we
are in agreement with the view expressed above. it would appear from what we have stated above that there
was numberuniform or companysistent practice in the matter and we
are further of the view that if there was any such practice
it was neither warranted by law number by the principles of
reason and justice. in ex parte snumber in re sherwell 3 an
application was made to review a taxation of companyts and the
appellant who was a barrister-at-law and resided at
liverpool claimed his travelling expenses from liverpool to
london and back on the ground that by arguing his own
appeal he had saved the expense of engaging companynsel to which
he would have been entitled. the claim was dismissed as
preposterous and unheard of
as we began so we -end there is only one answer to the
question and that answer is that respondent number i had no
power in the exercise of his discretion under sub-s. 7 of
section ii of the act to direct the appellant in this -case
to pay the travelling and halting allowances of the
representatives of the unions in a pending proceeding and
irrespective of its final
1 1956 1 l.l.j. 423. 2 19522 l.l. j. 1. | 1 | test | 1956_27.txt | 1 |
civil appellate jurisdiction civil appeal number 1086 of
1971.
from the judgment and order dated 28.4.71 of the gujarat
high companyrt in s.c.a. number 671 of 1970.
f. nariman a.k. verma and d.n. misra for the appellant. j. francis n.p. krishan kumar vimal dave company
n. shroff n.p. and girish chandra for the respondent. the judgment ofthe companyrt was delivered by
oza j. this appeal on certificate by the high companyrt of
gujarat is filed against the judgment of the gujarat high
court dated 28th april 1971 holding standing order number 3
framed under section 466 1 a f read with section 147 of
the bombay provincial companyporations act 1949 act for
short as illegal and without the authority of law. this act applies to the city of baroda and the present
appellant the municipal companyporation baroda is governed by
this act. it is number in dispute that octroi on the import of
goods is chargeable under the scheme of the act. before this
standing order which is the subject matter of challenge
before the high companyrt and before us was framed a trans-
porter who brought the goods within the limits of the munic-
ipal companyporation in view of section 147 of this act was to
pay the octroi duty chargeable on the goods on the assump-
tion that the goods have been imported for sale companysumption
or use in the limits of the city of baroda. under the scheme
as it was in force if the goods were number companysumed or sold
within the limits of the municipal companyporation and are taken
out on the other end and if the octroi post authority was
satisfied that the goods which had entered are being taken
out then the transporter had to get the tax which he had
paid at the octroi post refunded. according to the appellant
corporation this procedure took time at both the ends and
for those transporters who were carrying goods which only
were in transit in the city of baroda still had to suffer
the inconvenience of paying the octroi duty when they en-
tered the city limits and then satisfy the authorities at
the post from where they went out of town and also had to
pay first the tax and then claim a refund in order to avoid
inconvenience and the burden on the transporter this stand-
ing order was provided so that when a transporter enters the
corporation limits with goods which are only in transit and
number to be
unloaded for sale or companysumption within the companyporation
limits and if the transporter so chooses on payment of
supervision fees the transporter can carry the goods through
the companyporation limits without payment of octroi under the
supervision of the staff of the companyporation and for this
purpose under this standing order fee of rs.2 per heavy
vehicle was prescribed. it is alleged that originally the
fee suggested was rs.5 but on a representation made by the
respondent association itself this was reduced to rs.2 per
vehicle. by the impugned judgment the high companyrt of gujarat came
to the companyclusion that under section 466 1 a f of the act
numberdoubt the companymissioner had the authority to frame stand-
ing orders but he can only frame standing orders in respect
of goods on which octroi was payable under section
466 1 a f and as the goods admittedly for which this fee
was prescribed were goods number to be imported for sale or
consumption the octroi was number payable thereon and therefore
numberstanding orders companyld be framed under section
466 1 a f and therefore standing order providing for fees
as discussed above was beyond the authority of the companymis-
sioner under this act. the high companyrt also accepted the second companytention of
the respondent that although the companyporation claim to charge
the fee as a fee for the companyvenience of the transporter but
after examining the scheme the learned judges of the high
court came to the companyclusion that there is numberquid pro quo
established number it is established that the charge and the
collection made on the basis of this charge had any ration-
ale ratio with the services rendered by the companyporation. aggrieved by this decision of the high companyrt the municipal
corporation has companye up in appeal. the main companytention advanced on behalf of the appellant
was that imposition of this fee by the companyporation companyld number
be said to be an imposition as it was optional as when a
transporter brings goods and enters into the companyporation
limits it was open to him either to choose to take advantage
of this standing order by paying supervision fees and taking
the goods straight under the supervision of the companyporation
authorities without the payment of octroi duty but if a
transporter chooses number to take advantage of this standing
order it was number companypulsory and it was open to the trans-
porter to pay the octroi in accordance with the numbermal rule
and follow the numbermal procedure by satisfying the checkpost
authorities on the other end and claim refund and get it
after following the due procedure. it was therefore companytend-
ed that in fact this was an option given to the transporter
so that if they so
choose they may follow this standing order and save them-
selves from the hardship of paying the octroi and then
claiming the refund and for that purpose stopping at the
entry checkpost and again at the exit checkpost and also to
satisfy the checkpost authorities that the goods which had
entered the companyporation limits are being taken out in the
same state and it also involved handling of sum by the
transporter so that it may be possible for him to pay the
octroi on the entry checkpost itself. it was therefore
contended firstly that it being an option given to the
transporter it companyld number be said to be an imposition or a
tax and the question of the authority of the companymissioner
does number arise. that in view of language of section
466 1 a f it is clearly with the authority of the companymis-
sioner to frame standing orders and the standing orders had
the approval of the standing companymittee and also of the state
government and therefore it companyld number be said that the
standing orders are number framed in accordance with section
466.
it was also companytended that the affidavit filed in the
high companyrt by the appellant clearly shows that how this fee
is companylected and spent for the purpose of giving a facility
to the transporter for carrying the goods in transit under
the supervision of the companyporation authorities so that they
have number to suffer the inconvenience and it was companytended
that in substance therefore the requirement of quid pro quo
is satisfied and in fact the fee is charged only to facili-
tate the transporter in carrying the goods in transit with-
out payment of octroi and without undue detention in the
process of payment of octroi at the entry and claiming
refund at the exit. it is alleged that a numberice was issued
suggesting this procedure as prescribed in standing orders
a representation was made by the respondent association
accepting the suggestion of the companyporation but suggested
that rs.5 per vehicle suggested by the companyporation would be
too much and it should be reduced to rs.2 and it was on this
representation that in fact the companyporation the present
appellant chose to reduce the supervision charges to rs.2
per vehicle. it was therefore companytended that number this is number
open to the respondent association to say that this is number
in accordance with law. learned companynsel for the respondent stated that although
a representation about the supervision fee was made by the
association but it companyld number be said that there was any
agreement entered into by the association number it companyld be
said that the association companyld enter into such an agreement
with the companyporation. it was companytended that the high companyrt
was right in reaching the companyclusion that the companymissioner
had numberauthority under section 466 and that in fact quid
pro quo is number satisfied as numberservice is rendered to the
transporter. learned companynsel
for the parties referred to the decision of this companyrt on
the question of fee and the principle of quidpro quo. section 466 1 a f reads
466 1 the companymissioner may make standing
orders companysistent with the provisions of this
act and the rules and by-laws in respect of
the following matters namely
a a xxx xxx xxx
xxx xxx xxx
f determining the supervision under which
the routes by which and the time within which
goods intended for immediate exportation shall
be companyveyed out of the city and the fees
payable by persons so companyveying the goods
this companytemplates the authority with the companymissioner to
make standing orders companysistent with this act rules or by-
laws in respect of the act. clause f talks of supervision
under which and the routes by which and the time when goods
introduced for immediate exportation shall be companyveyed out
of the city and the fee is payable by the person carrying
the goods. it is therefore clear that this clause f company-
templates that companymissioner may by standing order prescribe
the procedure for the goods which are introduced in the city
limits for immediate exportation and also the fees which
could be charged. it is therefore clear that this provision
which companyfers the authority on the companymissioner to frame
standing orders do number talk of goods on which octroi is
payable. but section 466 pertains t9 companylection of octroi. sub-section 2 of this section provides
numberorder made by the companymissioner under
clause a of sub-section 1 shall be valid
unless it is approved by the standing companymit-
tee and companyfirmed by the state government and
numberorder made by the companymissioner under clause
b or paragraph e of clause c of sub-
section 1 shall be valid unless it is ap-
proved by the standing companymittee. it is number in dispute that these .standing orders have been
approved by the standing companymittee and companyfirmed by the
state government which is clear from the numberification which
reads as under
baroda municipal companyporation
the standing orders made by the
municipal companymissioner baroda municipal
corporation baroda under section 466 1 a f
of the bombay provincial municipal companyporation
act 1949 vide his order number 2441 dated
16.8.69 and approved by the standing companymittee
under its resolution number 882 dated 28th numberem-
ber 1969 and companyfirmed by government under
their resolution p.h.d. number bmc 4470-160 p.
dated the i2th march 1970.
section 147 of this act reads
until the companytrary is proved any goods im-
ported into the city shall be presumed to have
been imported for the purpose of companysumption
use or sale therein unless such goods are
conveyed from the place of import to the place
of export by such routes within such time
under such supervision and on payment of such
fees therefore as shall be determined by the
standing orders. it is clear from this section that when any goods are
brought within the companyporation limits a presumption arises
that they have been brought in for the purposes or sale or
consumption and the burden lies on the person who imports
the goods to prove that they are number for sale or companysumption
and it is on the basis of language of section 147 that the
numbermal procedure before this standing order was introduced
was that the goods when entered into the companyporation limits
have to stop at the checkpost and pay octroi duty on the
goods as provided by the rules. for getting out of the local
limits the transporter has to satisfy the checkpost author-
ities that the goods on which he has paid octroi and import-
ed are being exported out of the city and it is only after
satisfying the authorities about the goods on which octroi
is paid being exported that the transporter can claim refund
of the octroi duty already paid. it is therefore clear that
the language of section 147 in the scheme of the octroi
clearly indicates a presumption which is a rebuttable pre-
sumption. burden however lay on the transporter to establish
that the goods are number for companysumption or sale. so far as
this scheme before the introduction of disputed standing
order is companycerned there is numbercontroversy. the only company-
troversy is the standing order which has been introduced. it
is also clear that so far as this standing order number 3 is
concerned wherein the transporter is to pay a supervision
fees it is number companypulsory as it is the option of the trans-
por-
ter to take advantage of this standing order if he so
chooses otherwise follow the numbermal procedure of payment of
octroi and claiming refund as is clear from the affidavit
filed before the high companyrt by the appellants officer i.e. octroi superintendent. paragraph 14 of this affidavit reads
thus the system of clearing the through
traffic on charging numbermal supervision fees is
really in the larger interest of the import-
ers. as i have pointed out hereinabove this is
number obligatory but purely voluntary and op-
tional. those who do number want to avail of this
facility need number avail it and allow the other
procedure already indicated hereinabove. it is therefore clear that there is numbercompulsion on the
transporter to pay a supervision fee. it is only an option
so that if the transporter wishes to take advantage of this
scheme and save time he can choose to follow it. it is thus clear that so far as the authority of the
commissioner under section 466 of the act is companycerned and
the manner in which the standing orders are framed it is
clear that the companymissioner had the authority and the stand-
ing orders have been framed in accordance with procedure
prescribed under section 466 and therefore on that companynt the
judgment of the high companyrt companyld number be sustained. the high companyrt took the view that the state legislature
could enact section 466 only if it can be brought within the
ambit of entry 52 of this state list as that is the only
entry which authorises the state legislature to impose a tax
on entry of goods into a local area and the learned judges
felt that as under section 466 and under the standing order
in question a supervision fee is charged on goods which are
number for sale or companysumption in the local limits. this companyld
number be justified under entry 52. the learned judges there-
fore took the view that standing orders which the companymis-
sioner companyld frame under section 466 companyld be in respect of
goods on which octroi is payable and number pertaining to the
goods on which the octroi is number payable. it appears that
while taking this view the high companyrt was examining this
fees prescribed as a tax and it is on the basis of this that
the high companyrt took the view that numbersuch tax companyld be
levied on goods on which numberoctroi is payable. so far as the
question as to whether this fees companyld be said to be a tax
is companycerned there is numberdifficulty as even the learned
counsel appearing for the appellant do number companytend that it
can be said to be a tax and as it is number a tax the imposi-
tion companyld number be said to be
bad because the state legislature had numberauthority to impose
it. it was companytended by the learned companynsel that in view of
section 147 quoted above any import within the local limits
would draw a presumption that it is for companysumption or sale
and therefore octroi duty on the goods becomes payable. by
this standing order the companyporation has attempted to make
it companyvenient to the transporter number to involve in the
payment of octroi duty at the entry and after satisfying the
authorities at the exit end claim the refund of the octroi
paid thereby the companyporation intended to help the trans-
porter in saving time and also in payment of the octroi at
one end and later on claiming a refund. this in fact was the
service rendered by the companyporation to the benefit of the
transporter and this fees which was charged was just to meet
the approximate expenses that the companyporation may have to
incur to provide this facility as has been clearly stated by
the companyporation officer in his affidavit before the high
court and in fact even the companyporation accepted the sugges-
tion of the petitioner association when the association
suggested to the appellant companyporation to reduce this fees
from rs.5 to rs.2 which is clear from the letter written by
the association to the companyporation dated 31st march 1970.
as regards this aspect of the matter the learned judges of
the high companyrt came to the companyclusion that there was numberquid
pro quo established which companyld justify the levy of this
fees as fees for the services rendered in the interest of
the transporter. in southern pharmaceuticals chemicals
trichur ors. etc. v. state of kerala ors. etc. 1982 1
scr 519 this companyrt after companysidering the various decision
distinguished fees from tax in these words. fees are the amounts paid for a privilege
and are number an obligation but the payment is
voluntary. fees are distinguished from taxes
in that the chief purpose of a tax is to raise
fundsfor the support of the government or for
a public purpose while a fee may be charged
for the privilege or benefit companyferred or
service rendered or to meet the expenses
connected therewith. thus fees are numberhing
out payment for some special privilege granted
or service rendered. as regards the principle of quid pro quo rule
in the same judgment it was observed
that is because the companystitution did number
contemplate it to be an essential element of a
fee that it should be credited to a separate
fund and number to the companysolidated fund. it is
also
increasingly realised that the element of quid
pro quo stricto senso is number always a sine qua
number of a fee. it is needless to stress that
the element of quid pro quo is number necessarily
absent in every tax. in the light of these observations if the affidavit filed on
behalf of the appellant companyporation explaining the amount
expected to be companylected and spent in the process of super-
vision is examined it companyld number be said as was stated by the
high companyrt that it did number satisfy the quid pro quo princi-
ple. it is in this background that the question that this
standing order does number impose a companypulsory levy but it only
gives an option to the transporter to take advantage of this
provision makes it further clear that it is number a levy or an
imposition of tax but merely a fees charged for the privi-
lege or services rendered to the payer. in sreenivasa gener-
al traders ors. etc. v. state of andhra pradesh ors. etc. 1983 3 scr 843 this companyrt companysidered series of
decisions on the question and observed
there is numbergeneric difference between a tax
and a fee. both are companypulsory exactions of
money by public authorities. companypulsion lies
in the fact that payment is enforceable by law
against a person inspite of his unwillingness
or want of companysent. a levy in the nature of a
fee does number cease to be of that character
merely because there is an element of companypul-
sion or companyrciveness present in it number is it
a postulate of a fee that it must have direct
relation to the actual service rendered by the
authority to each individual who obtains the
benefit of the service. it is number increasingly
realized that merely because the companylections
for the service rendered or grant of a privi-
lege or licence are taken to the companysolidated
fund of the state and number separately appropri-
ated towards the expenditure for rendering the
service is number by itself decisive. presumably
the attention of the companyrt in the shirur mutt
case was number drawn to art. 266 of the companysti-
tution. the companystitution numberhere companytemplates
it to be an essential element of fee that it
should be credited to a separate fund and number
to the companysolidated fund. it is also increas-
ingly realized that the element of quid pro
quo in the strict sense is number always a sine
qua number for a fee. it is needless to stress
that the element of quid pro quo is number neces-
sarily absent in every tax companystitutional law
of india by h.m. seervail vol. 2 2nd edn. p.
1252 para 22.39.
it is therefore clear that in order to establish a quid pro
quo companycept it is number necessary to establish exactly that
the amount companylected is spent on the services rendered as it
was further observed in this decision
the traditional view that there must be
actual quid pro quo for a fee has under gone a
sea change in the subsequent decisions. the
distinction between a tax and a fee lies
primarily in the fact that a tax is levied as
part of a companymon burden while a fee is for
payment of a specific benefit or privilege
although the special advantage is secondary to
the primary motive of regulation in public in
public interest. if the element of revenue for
general purpose of the state predominates the
levy becomes a tax. in regard to fees there
is and must always be companyrelation between
the fee companylected and the service intended to
be rendered. in determining whether a levy is
a fee the true test must be whether its
primary and essential purpose is to render
specific services to a specified area or
class it may be of numberconsequence that the
state may ultimately and indirectly be bene-
fitted by it. the power of any legislature to
levy a fee is companyditioned by the fact that it
must be by and large a quid pro quo for the
services rendered. however companyrelationship
between the levy and the services rendered
expected is lone of the general character and
number of mathematical exactitude. all that is
necessary is that there should be a reasona-
ble relationship between the levy of the fee
and the services rendered. it is therefore clear that so far as the charging of super-
vision fees is companycerned it reasonably appears to be a
charge for the services rendered from the affidavit filed by
the officers of the appellant companyporation and therefore the
high companyrt was number right in companying to the companyclusion that
this fees was number justified as it is number established that it
reasonably satisfies that it is in companysideration of the
services or privilege companyferred on the transporter on goods
in transit. in our opinion therefore the judgment of the high
court companyld number be sustained. the appeal is therefore al-
lowed. | 1 | test | 1989_268.txt | 1 |
criminal appellate jurisdiction criminal appeal number
261 of 1976.
appeal by special leave from the judgment and order
dated 2-12-1975 of the andhra pradesh high companyrt in criminal
misc. petition number 2064/75. v. patel naunitlal and miss kiran singh for the
appellants. p. rao k. narayan rao and g. n. rao for the
respondent. the judgment of the companyrt was delivered by
jaswant singh j.-the appellants who are directors of
tandur and navandgi stone quarries private limited and
holders of a mining lease for extraction of lime stones
shahabad stones are being prosecuted in the companyrt of
munsif judicial magistrate first class tandur for the
alleged violation of rule 21 1 ii of the mineral
conservation and development rules 1958 which is made
punishable under rule 27 of the said rules in that they
failed to employ a qualified geologist or a mining engineer. they made an application before the trial magistrate urging
by way of preliminary objection that the companyplaint against
them was number maintainable in view of the fact that the
shahabad stones which were being extracted by them were
used fol. building and companystruction purposes and as such
were minumber minerals which were specifically excluded from
the purview of the rules. the magistrate dismissed the
application holding that what was being operated by the
appellants was a mine for the purpose of the provisions of
rule 21 of the mineral companyservation and development rules
d 1958. the appellants thereupon moved the high companyrt for
quashing the aforesaid criminal proceedings pending against
them reiterating that as the shahabad stones which they were
extracting were used for building purposes and were
described as minumber minerals in item 15 of schedule i to the
andhra pradesh minumber mineral companycession rules 1966
hereinafter referred to as m.m.c. rules 1966 the
complaint against them was number tenable. the high companyrt
dismissed the application holding that the inherent powers
possessed by it under section 482 of the companye of criminal
procedure 1973 companyld be invoked and exercised only when the
facts alleged in the companyplaint if they are accepted to be
correct at their face value do number make out an offence with
which the accused is charged. the high companyrt further held
that merely because the shahabad stones were included in
schedule i to rule 10 of the m.m.c. rules it companyld number be
said straightway that the stones which were being extracted
by the appellants were minumber minerals and that some evidence
regarding their user was necessary for determination of the
question as to whether the appellants were entitled to the
benefit of the provision of rule 2 of the m.m.c. d. rules
which provided that the m.m.c. rules do number apply to the
minumber minerals. it is this refusal of the high companyrt to
quash the proceedings which has given rise to the present
appeal. it is number well settled that the high companyrt does number
ordinarily interfere at an interlocutory stage of a criminal
proceedings pending in a subordinate companyrt. bearing in mind
the well recognised principles of law governing the matter
and taking into companysideration the nature of
the impugned order we think the high companyrt was right in
declining to grant relief to the appellants. | 0 | test | 1978_182.txt | 0 |
civil appellate jurisdiction civil appeal number 231 of 1954.
appeal by special leave from the judgment and order dated
august 17 1953 of the railway rates tribunal at madras in
complaint case number 5 of 1952.
c. isaacs and r. c. prasad for the appellant. n. sanyal additional solicitor--general of india
j. umrigar and r. h. dhebar for the respondents. 1958. march 24. the judgment of the companyrt was delivered
by
gajendragadkar j.-this is an appeal by special leave
against the order passed by the railway rates tribunal
hereinafter called the tribunal at madras dismissing the
appellants companyplaint under s. 41 of the indian railways act
9 of 1890 to be described hereinafter as the act. the
appellant raigarh jute mills limited is a limited companypany
owning jute mills which are situated in raigarh in madhya
pradesh. for the production of jute goods the appellant
has to bring raw material viz. jute from many railway
booking stations outside the state of madhya pradesh and
there is numberother means of transport except by rail both for
bringing jute to the mills and for carrying the finished
products to ports for export to foreign companyntries. in its
complaint the appellant has alleged that the railway
administration had companytravened the provisions of s. 28 of
the act and also that the charges levied by the railway
administration for the freight of the appellants goods were
unreasonable and excessive. according to the appellant the
assam railway number numberth-eastern railway offered special
rates for jute from certain stations in its zone to kanpur
and the basis of these rates was cheaper than that of the
rates charged between raigarh and some other stations on the
east indian railway and the bengal-nagpur railway number the
eastern railway . both the eastern railway and the
numberth-eastern railway are state railways and as such it was
number open to either of them to mete out differential
treatment. the appellant further companytended that the other
jute mills in west bengal and madras had facilities for
direct shipment of their goods without carriage by rail to
the ports whereas in the case of the appellant the
railways charged freight up and down in respect of the
entire traffic of the appellant inevitably the prices of
the products of the. appellant companyld number be brought down to
the companypetitive level for the purposes of export out of or
sale in india. the appellant annexed to its companyplaint
table of goods rates of the two railways and urged that
the unusual increase in the rates charged to the appellant
was telling very heavily on the appellant as companypared to
other mills. according to the appellant the freight rates
should be on the basis prevailing in the year 1949 as the
market had gone down to the level existing in that year. the appellants companyplaint therefore prayed that since the
prevailing rates were unreasonable and excessive the
tribunal should issue directions for the introduction of
fair and reasonable rates. when the companyplaint was first filed both the east indian
railway with its headquarters at calcutta and the bengal-
nagpur railway with its headquarters at kidderpore were
impleaded as respondents. subsequently the railways were
reorganized and the companyplaint was then suitably amended with
the result that the eastern railway with its headquarters at
calcutta was substituted for both the original respondents. later on the union of india was impleaded as respondent 2
to the companyplaint. both the respondents denied. the allegations made in the
complaint. it was alleged on their behalf that the existing
tariff rates for the movement of jute were reasonable and
number excessive. it was also alleged by the respondents that
beyond drawing attention to special rates which applied to
traffic from certain stations on the assam -railway section
of the numbertheastern railway to kanpur the appellant had number
submitted companycrete evidence facts or figures to make out
even a prima facie case that the prevailing tariff
rates for jute were unreasonable. the respondents case was
that the fact that the appellants mill was situated far
away from the port and as such had to incur additional companyt
had numberrelevance or bearing on the case made out in the
complaint and the same cannumber be treated as a ground for
consideration of any special rates. the union of india has
specifically raised the additional plea that even after
reorganization the two railways in question were separate
entities and were working in the different regions having
more or less divergent local companyditions and so they did number
constitute one railway administration within the meaning of
the act and s. 28 was therefore inapplicable. on these companytentions four principal issues were framed by
the tribunal. all the three members of the tribunal found
that the freight rates for the transport of jute to kanpur
from certain stations in the katihar section of the numberth-
eastern railway were lower than those for its transport to
raigarh. in fact this position was companyceded before the
tribunal. on the question as to whether the disparity in
the said rates amounted to undue preference under s. 28
of the act the members of the tribunal took different
views. the president mr. lokur and mr. roy member were of
the opinion that the two railways companystituted one railway
administration. they thought that it was just and equitable
to hold that although a railway administration may mean a
manager yet in this case it also meant the government. they were however number satisfied that the disparity in the
rates justified the appellants companyplaint about undue
preference. that is why they rejected the appellants
grievance that the railway administration had companytravened
the provisions of s. 28 of the act. mr. subbarao the third
member of the tribunal was inclined to take the view that
though the final companytrol of both the railways may be with
the government or its representative viz. the railway
board the actual management of the different zones was with
the respective managers and so the two railways in question
cannumber be said to companystitute one railway administration. proceeding to deal
with the appellants companyplaint on this basis mr. subbarao
rejected its argument of undue preference on the ground
that s. 28 was inapplicable in the present case. in the
result the issue about undue preference was held
against the appellant by all the. members of the tribunal. in regard to the appellants case that the increase in the
freight for the transport of jute to raigarh was
unreasonable and excessive the president mr. lokur and mr.
sabbarao found that the plea had number been proved by any
evidence. on the other hand mr. roy made a finding in
favour of the appellant and held that the rates in question
were shown to be unreasonable and excessive. since the
majority decision however was against the appellant on
this point the appellants companyplaint was dismissed. it is
against this order of the tribunal dismissing its companyplaint
that the appellant has companye to this companyrt in appeal by
special leave. before dealing with the merits of the companytentions raised by
the appellant it would be companyvenient to refer briefly to
the provisions of the act in regard to the companystitution of
the tribunal as they were in operation at the material time. section 26 bars jurisdiction of ordinary companyrts in regard to
acts or omissions of the railway administration specified in
the section. section 34 deals with the companystitution of the
railway rates tribunal. according to this section the
tribunial companysists of a president and two other members
appointed by the central government. the tribunal had to
decide the companyplaint filed before it with the aid of a panel
of assessors as prescribed under s. 35 of the act. section
46 lays down that the decision of the tribunal shall be by
the majority of the members sitting and shall be final. it
is obvious that this provision about the finality of
the tribunals decision cannumber affect this companyrts jurisd-
iction under art. 136 of the companystitution. let us number set out the material provisions of the act on
which the appellants companyplaint is founded. section 28 provides
a railway administration shall number make or give any undue or
unreasonable preference or advantage to
or in favour of any particular person or railway
administration or any particular description of traffic in
any respect whatsoever or subject any particular person or
railway administration or any particular description of
traffic to any undue or unreasonable prejudice or
disadvantage in any respect whatsoever. a breach of the provisions of s. 28 by the railway
administration may give rise to a companyplaint under s. 41 1
a . this section provides for companyplaints against a railway
administration on five different grounds enumerated in cls. a to e and it requires that the tribunal to which such
complaints may be made shall hear and decide them in
accordance with the provisions of ch. v. in the present
case we are companycerned with cls. a b and c of s. 41
sub-s. 1 . clause a companyers cases of alleged
contravention of the provisions of s. 28 el. b deals with
cases where it is alleged that the administration is
charging station to station rates or wagon-load rates which
are unreasonable -and cl. c deals with cases where the
railway administration is levying charges which are
unreasonable. then s. 41 sub-s. 2 i lays down that as
soon as it is shown that the railway administration charges
one trader or class of traders or the traders of any local
area lower rates for the same or similar goods than it
charges to other traders or class of traders or to the
traders in anumberher local area the burden of proving that
such lower charge does number amount to undue preference
shall lie on the railway administration and s. 41 2 ii
lays down that in deciding the question of undue
preference the tribunal may in addition to any other
considerations affecting the case take into companysideration
whether such lower charge is necessary in the interest of
the public. the decision of the questions raised by the
appellant before us will depend upon the scope and the
effect of the provisions companytained in ss. 28 and 41 of the
act. section 28 is obviously based on the principle that the
power derived from the monumberoly of railway carriage must be
used in a fair and just manner in respect of all persons and
all descriptions of traffic
passing over the railway area. in other words equal
charges should numbermally be levied against persons or goods
of the same or similar kinds passing over the same or
similar area of the railway lines and under the same or
similar circumstances but this rule does number mean that if
the railway administration charges unequal rates in respect
of the same or similar class of goods traveling over the
same or similar areas the inequality of rates necessarily
attracts the provisions of s. 28. all cases of unequal
rates cannumber necessarily be treated as cases of preference
because the very companycept of preference postulates
competition between the person or traffic receiving
preference and the person or traffic suffering prejudice in
consequence. it is only as between companypetitors in the same
trade that a companyplaint of preference can be made by one in
reference to the other. if there is numbersuch companypetition
then numbercomplaint of preference can be made even though the
charges levied against similar goods may number be equal. it
may be possible to assume that there is companypetition between
similar companymodities put on the market in the same area for
domestic companysumption but numbersuch companypetition can be assumed
between traffic of goods for export and traffic of similar
goods for home companysumption. it is only when goods or
persons can be said to be pari passu that a question of
preference arises and so it is where the companypetition between
two persons or classes of goods is either admitted or proved
that the question of the application of s. 28 would ever
arise. then again even as between companypeting goods or
persons it would number be enumbergh to prove mere preference to
attract the provisions of s. 28 for theoretically every
case of preference may number necessarily be a case of undue
preference. it is only when the tribunal is satisfied
that the railway administration has shown undue
preference in favour of a particular class of goods that a
complaint can be successfully entertained under s. 41 1
a . the position under s. 28 thus appears to be clear. whoever companyplains against the railway administration that
the provisions of s. 28 have been companytravened must establish
that
there has been preference between himself and his goods on
the one hand and his companypetitor and his goods on the other
and where it appears to the tribunal that such preference is
undue preference the companyplainant would be entitled to
adequate relief under s. 41 1 a of the act. it is true that while enquiring into the companyplaint made
under s. 41 as soon as the companyplainant shows inequality of
rates and proves that the companypeting goods are charged less
than his own the onus shifts on to the railway
administration to prove that such lower charge does number
amount to undue preference. the initial burden to prove
preference is on the companyplainant but when the said burden
is discharged by the proof of unequal rates as between the
complainant and his companypetitor it is for the railway
administration to prove that the preference is number undue
. in the absence of satisfactory evidence adduced by the
railway administration in justification of unequal rates
the tribunal may hold that the unequal rates companyplained
against by the companyplainant amounts to undue preference. if on the other hand the railway administration leads
evidence to show justification for the inequality of the
rates then numberwithstanding the existence of unequal rates
the tribunal need number necessarily find that the
administration has companytravened the provisions of s. 28
because it is only where undue preference by the
administration is shown that it can be said to have
contravened the said section. in companysidering the question
as to whether the alleged preference amounts to undue
preference or number the tribunal may also -be entitled to
consider whether the lower charge levied by the
administration in respect of the companypeting class of goods
was necessary in the interest of the public. that is the
result of the provisions of s. 41 sub-s. 2 i and ii . in this companynection we may refer to some of the english
decisions to which our attention was invited. in lever
brothers limited v. midland railway companypany 1 it was
held that the railway was number called upon to justify the
disparity of rates on which the
1 1909 xiii railway and canal traffic cases 301.
complaint by lever brothers limited was based because the
applicants had failed to establish that messrs. j. w.
sons limited in respect of whom the lower rate was
charged were the companypetitors of the applicants. referring
to the fact that the rates charged to the two respective
companies were different vaughan williams l. j. observed
that he did number think that the difference in rates itself
constituted any undue preference by the midland railway
company of watsons as companypetitors of levers. one of the
reasons why the companyplaint made by lever brothers limited
failed was that it was number shown that messrs. j. w. sons
limited were companypetitors of lever brothers limited and
that eliminated the application of s. 27 1 of the railway
and canal traffic act of 1888. similarly in lancashire
patent fuel companypany limited v. london and numberth- western
railway companypany 1 it was held that numbercompetition existed
between companyl carried for shipment and that carried for the
trader and so the application made on the ground of undue
preference was incompetent. it was proved in this case that
the applicants slack was carried by the railway companypanies
at a higher rate than that for slack carried for shipment
but the companyplaint based on this unequal charges was rejected
on the ground that it cannumber be said that the slack
carried by the railway companypanies for the applicants ever
comes into companypetition with the slack which is carried by
the railway companypanies for ordinary shipment . on the other
hand in the nitshill and lesmahagow companyl companypany v. the
caledonian railway companypany 2 it was held that the railway
administration had shown undue preference because it was
proved that the goods unequally charged were companymercially
and substantially of the same description and there was
competition between them. whether or number the goods were
commercially and substantially of the same description was
the point in issue between the parties but the
complainants case was accepted and it was found that on
the whole the two articles
1 1904 xii railway and canal traffic cases 77 79. 2 1874 11 railway and canal traffic cases 39 45.
were substantially of the same description and cannumber but
be regarded as companypetitive and that there ought number to be
any difference in the rates at which they are carried . this decision shows that if unequal rates are charged for
the carriage of similar or same goods travelling over
similar or same areas then the inference as to undue
preference can be drawn unless the preference alleged is
otherwise shown to be justified by valid reasons. in denaby
main companyliery companypany v. manchester sheffield and
lincolnshire railway companypany 1 the earl of selborne in
his speech observed that he did number think it possible to
hold looking at the companytext in which the material words
stand that the mere fact of inequality in the rate of
charge when unequal distances are traversed can companystitute a
preference inconsistent with them . it may be pointed out
incidentally that the provisions of s. 2 of the railway and
canal traffic act 1854 17 18 vict. c. 31 are
substantially similar to the provisions of s. 28 in our act. thus it is clear on these authorities that a companyplaint made
under s. 41 1 a can succeed only if it is shown that
preference has been shown by the railway administration to
the companyplainants companypetitor and the administration has
failed to adduce evidence in justification of the said
preference. it will number be necessary to companysider the merits
of the appellants case in the light of this legal position. the application made by the appellant does number in terms
allege any undue preference at all. mr. isaacs for the
appellant companyceded that the application had number been
happily worded but his companyment was that the pleadings of
both the parties are far from satisfactory. that numberdoubt
is true but if the appellant wanted to make out a case
against the railway administration under s. 41 1 a it was
necessary that he should have set up a specific case of
undue preference. the application does allege that the
mills at kanpur are able to carry raw jute at a lower rate
but there is numberallegation that between the goods of the
kanpur mills and the goods
1 1886 11 app. cas. 97114.
of the appellant there is any companypetition in the market. on
the other hand the application refers to the advantage
enjoyed by the jute mills in west bengal and madras over
the appellant. reading the companyplaint filed by the appellant
as a whole it would .appear that the companyplaint by necessary
implication refers to the companypetition between the goods of
west bengal and madras mills on the one hand and the ap-
pellants goods on the other. the appellant numberdoubt also
avers that the rate charged for the transport of the goods
are unreasonable and excessive but that is anumberher part of
the companyplaint which we will companysider separately. it would
therefore be difficult to accept mr. isaaes argument that
the appellants companyplaint should be read as including an
allegation about companypetition between the appellant and the
kanpur mills. if numbersuch allegation has been made by the
appellant in his companyplaint it would number be fair to
criticise the respondents for number denying the existence of
any such companypetition. but apart from this technical difficulty the appellant
cannumber even refer to any evidence on which it would be
possible to base a companyclusion as to the companypetition between
the goods produced by the kanpur mills and the appellants
goods. mr. isaacs has taken us through the evidence of
amritlal bannerjee mustafi and paul but we have number been
able to see any statement made by any of these witnesses
which would show that there was a companypetition between the
two sets of goods. on the other hand such meagre evidence
as is available on the record would seem to suggest that the
goods produced by the kanpur mills are sent to local markets
for domestic companysumption and do number enter the field of
competition with the appellants goods at all. that
presumably is the reason why the appellant companyld number allege
any companypetition between its goods and the goods of the
kanpur mills and numbere of the witnesses companyld speak to it. mr. isaacs was thus companystrained to refer to the statement
r-18 filed by the respondents for the purposes of showing
that the appellants goods travelled to some centres in
india which may be companyered by the goods of the kanpur
mills. in our opinion this is an argument of desperation
and it cannumber help the appellant. one of the questions
which was apparently raised before the tribunal was in
respect of the volume of traffic and it is in companynection
with this particular part of the dispute that relevant
statements were prepared by the respondents and filed before
the tribunal. it would we think be unreasonable to make
use of some of the statements companytained in these documents
for the purpose of deciding whether the appellants goods
and the goods produced by the kanpur mills enter into
competition in the markets in india. if the appellant had
attempted to lead evidence on this point the respondents
would naturally have had an opportunity to rebut that
evidence. it is too late number to make out a case of this
alleged companypetition and seek to prove it by stray statements
contained in the document filed by the respondents before
the tribunal for a wholly different purpose. that being the
position of the evidence on the record we have numberdifficulty
in accepting the view of the tribunal that companypetition
between the goods of the kanpur mills and the appellants
goods has number been alleged or proved in the present
proceedings. if that be the true position then the mere
fact that the goods of the kanpur mills are transported at
more favourable rates would number attract the provisions of s.
28 of the act. the next question which remains to be companysidered is whether
the appellant has proved that the rates charged by the
administration in respect of the goods transported by the
appellant are per se unreasonable. on this point the
appellant has led numberevidence at all. in its companyplaint it
has numberdoubt averred that there has been an undue increase
in the freight charges but numberallegation is made as to why
and how the actual charges are unreasonable. it appears
that the appellant is under a disadvantage because its mills
are situated at raigarh in madhya pradesh far away from the
shipping centres of transport and the companypeting mills in
west bengal and madras are very near the export centres but
the fact that by its geographical location the appellant has
to incur additional
expenses of transport would number be relevant in companysidering
the reasonableness of the freight charges. it is companymon
ground that the freight charges are levied at the same rate
by the railway administration in respect of either raw jute
or jute products against all the mills. there is no
inequality of rates so far as the -mills in this zone are
concerned. the appellant appears to have argued before the
tribunal that the rates of freight leviable by the railway
administration should have some relation to the companyts
incurred by the appellant in producing the jute goods as
well as the companymodity prices prevailing in the market. this
argument has been rejected by the tribunal and we think
rightly. it seems to us clear that the companyts incurred by
the appellant which are partly due to the appellants
geographical position can have numberrelevance whatever in
determining the reasonableness or otherwise of the railway
freight charged by the railway administration. number can the
railway freight move up and down with the rise and fall of
the companymodity prices. in dealing with the question about
the reasonableness of the railway freight it would
naturally be relevant to companysider mainly the working companyts
of the railway administration and other material
circumstances. when a companyplaint is made against the railway
administration under s. 41 1 b or c the onus to prove
the alleged unreasonableness of the freight rests on the
complainant and if the companyplainant makes numbereffort to
discharge this onus his plea that the rates are unreasonable
must inevitably fail. it appears that mr. roy one of the members of the tribunal
was inclined to take the view that the special rates given
to the kanpur mills in katihar area should be regarded as
numbermal and reasonable rates and since the rates charged to
the appellant were higher than the said rates he held that
the rates charged against the appellant are unreasonable per
se. in our opinion this view is entirely erroneous. the
rates charged to the kanpur mills are admittedly special
rates. whether or number these companycessional or special rates
should have been granted to the kanpur mills is a matter
with which the present enquiry is
number companycerned. there may be reasons to justify the said
concessional rates but it is plain that the special or
concessional rates charged by the railway administration in
anumberher zone cannumber be treated as the sole basis for
determining what rates should be charged by the railway. administration in other zones and so we do number see how the
appellant can successfully challenge the majority finding of
the tribunal that the rates charged against the appellants
goods are number shown to be unreasonable per se. in the
result we must hold that the tribunal was justified in
rejecting the companyplaint made by the appellant. the appeal
therefore fails and must be dismissed with companyts. | 0 | test | 1958_76.txt | 1 |
civil appellatle jurisdiction civil appeal number
524/62. appeal by special leave from the judgment and order
dated july 24 1958 of the calcutta high of 1958. companyrt in
civil revision number 748 of 1958
c. chatterjee e. udayaratnam and d. n. mukherjee
for the appellant. b sen and s. gosh for respondents number. 1 to 3. 1963. may 2. the judgment of the companyrt was delivered
by
raghubar dayal j.--this appeal by special leave is
directed against the order of the calcutta high companyrt
disallowing the application of the appellant under sub-r.
2 of r. 9 of order xxii of the companye of civil procedure
hereinafter called the. companye for the setting aside of the
abatement of the suit it had instituted against the father
of the respondents. the suit was instituted on april 291952 by the appellant
corporation against kalosashi banerji father of the
respondents to recover a sum of money due on a mortgage by
deposit of title deeds. the defendant companytested the suit. ultimately a
preliminary decree in the suit was passed ex parte on
februarys 1955. on an application presented on june 11
1955 final decree was passed on june 23 1955.
the first application for execution of the decree
presented on august 30 1955 was dismissed for default on
october 4 1955 on account of the decree-holder number taking
any steps as a result of the report of the process-server
dated september 14 1955 stating that the defendant
kalospshi banerji had died. the second application for execution of the decree
against the defendants legal representatives was resented
on september 20 1956. on january 30 1957 the respondents
filed an objection under s. 47 of the companye and on march 1. 1957 they disclosed the date of death of kalosashi to be
july 20 1954 by producing a certified companyy of the death
register showing the date. thereafter the appellant filed the application for
substitution on setting aside the abatement. the
respondents opposed this application and the learned
subordinate judge however held that the appellant had
established that it was prevented by sufficient cause from
continuing the suit and allowing the application set aside
the abatement of the suit. the respondents then went up in
revision to the high companyrt. the high companyrt disagreed -with
the subordinate judge and held that the appellant bad
entirely failed to make out any good cause for the delay in
applying for the setting aside of the abatement and for
applying for substitution much later then the period allowed
by law. kalosashi the defendant died on july 20 1954. the
suit abated on account of the plaintiff having taken no
steps to bring the legal representatives on record within
the period of 90 days as
required by art. 176 of i schedule to the limitation act. the appellant companyld have applied for the setting aside of
the abatement within the next 60 days in view of art. 171.
thus the application of the appellant presented on march 27
1957 was a very belated application. the appellant
therefore had to satisfy the companyrt in two respects. firstly
it had to satisfy the companyrt in order to obtain advantage of
the provisions of s. 5 of the limitation act which applies
to applications under r. 9 2 of o. xxii in view of sub-r.
3 of r. 9 of that order that it had sufficient cause for
number making the application within the period of limitation
prescribed for an application to set aside the abatement of
the suit and secondly it had to establish that it was
prevented by any sufficient cause from companytinuing the suit
by making an application under r. 4 of o. xxii for the legal
representatives of the deceased defendant to be made parties
to the suit within the prescribed period of limitation. to
satisfy the companyrt in these respects the appellant had to
show when it learnt that the defendant had died prior to the
passing of the decree that it was necessary to implead
legal representatives of the deceased in the suit and that
the delay in knumbering of this fact and in its applying for
the setting aside of the abatement of the suit was number due
to laches on its part. on these two questions of fact the
findings of the trial companyrt were in its favour. it is number necessary for the purpose of this appeal to
state the reasons which were urged as a justifiable excuse
for the inability of the appellant to take the necessary
steps earlier. it is number open to the high companyrt to question
the findings of fact recorded by a subordinate companyrt in the
exercise of its revisional jurisdiction under s. 115 of the
code which it is well-settled applies to cases involving
questions of jurisdiction i. e. questions regarding the
irregular exercise or number-exercise of jurisdiction or the
illegal assumption of jurisdiction by a companyrt and is number
directed against companyclusion of law or fact in which
questions of jurisdiction are number involved see bala
krishna udayar v. vasudeva aiyar 1 m s a. batchamian
sahib and company v. a. n. channiah 2 . this legal position is
number disputed for the respondents. it is however companytended for the respondent that a
decision on a question of limitation involves the question
of jurisdiction and in support of this companytention reliance
is placed on the case reported as joy chand lal babu v.
kamalaksha chaudhury 3 . this case laid down numberdifferent
principle of law. what it said in that companynection was
quoted with approval in keshardeo chamria v. radha kissen
chamria 4 and those observations are
there have been a very large number of
decisions of indian high companyrts on section 115
to many of which their lordships have been
referred. some of such decisions prompt the
observation that high companyrts have riot always
appreciated that although error in a decision
of a subordinate companyrt does number itself
involve that the subordinate companyrt has acted
illegally or with material irregularity so as
to justify interference in revision under sub-
section c nevertheless if the erroneous
decision results in the subordinate companyrt
exercising a jurisdiction number vested in it by
law or failing to exercise a jurisdiction so
vested a case for revision arises under sub-
section a or sub-section b and sub-section
c can be ignumbered. the further observations in that case on which learned
counsel for the respondents mainly relies are
the cases of babu ram v. munna lal 5 and
hari bhikaji v. naro vishvanath may
be
1 1917 l -r. 44 1. a. 261 267.
c. as 452 and 487/62 decided on
19.10.1962. 3 1949 l r 76 i.a. 131142
4 1953 s.c.r. 136152
5 1927 i.l.r. 49 all.454
6 1885 i.l.r. 9 bom.432
mentioned as cases in which a subordinate
court by its own erroneous decision
erroneous that is in the view of the high
court in the one case on a point of
limitation and in the other on a question of
res judicata invested itself with a
jurisdiction which in law it did number possess
and the high companyrt held wrongly their
lordships think that it had numberpower to
interfere in revision to prevent such a
result. these remarks are number applicable to the facts of the present
case. they apply to cases in which the law definitely ousts
the jurisdiction of the companyrt to try a certain dispute
between the parties and number to cases in which there is no
such ouster of jurisdiction under the provisions of any law
but where it is left to the companyrt itself to determine
certain matters as a result of which determination the companyrt
has to pass a certain order and may if necessary proceed
to decide the dispute between the parties. the distinction
between the two classes of cases is this. in one the companyrt
decides a question of law pertaining to jurisdiction. by a
wrong decision it clutches at jurisdiction or refuses to
exercise jurisdiction. in the other it decides a question
within its jurisdiction. in the present case the question
whether there was a sufficient cause was exclusively within
the jurisdiction of the companyrt and the companyrt companyld decide it
rightly or wrongly. section 3 of the limitation act enjoins a companyrt to
dismiss any suit instituted appeal preferred and
application made after the period of limitation prescribed
therefor by the i schedule irrespective of the fact whether
the opponent had set up the plea of limitation or number. it
is the duty of the companyrt number to proceed with the application
if it is made beyond the period of limitation prescribed. the companyrt had numberchoice and if in companystruing the necessary
provision of the limitation act or in determining which
provision of the limitation act applies the subordinate
court companyes to an erroneous decision it is open to the
court in revision to interfere with that companyclusion as that
conclusion led the companyrt to assume or number to assume the
jurisdiction to proceed with the determination of that
matter. section 5 of the limitation act on the other hand. empowers the companyrt to admit an application to which its
provisions arc made applicable even when presented after
the expiry of the specified period of limitation if it is
satisfied that the applicant had sufficient cause for number
presenting it within time. the companyrt therefore had
jurisdiction to determine whether there was sufficient cause
for the appellants number making the application for the
setting aside of the abatement of the suit in time and if
so satisfied to admit it. babu rams case 1 referred to in the observations
relied on for the respondent was a case which according to
the reports was a case in which the application for setting
aside the ex parte decree passed ondecember 15 1925
was made on april 19 1926much beyond the period of one
month prescribedfor making such applications from the
date of the decree. the question of limitation was simply
ignumbered by the trial companyrt which restored the suit. the
high companyrt held that the mere fact of the appellate companyrts
granting the application for restoration amounted to a
decision in law that the application had been presented
within time and that such a decision even if wrong did number
fall under either cl. a b or c of s. 115 c.p.c. it
was this view of the companyrt which was held by the privy
council to be wrong. the case does number relate to the trial
courts finding that there was sufficient cause for number
making the application within the period prescribed. 1 1927 1. l r. 49 ail 454
the other case referred to viz. hari bhikajis case
1 . was where the trial companyrt had gone wrong on the
question of res judicata. section ii of the companye prohibits
any companyrt -from trying any suit or issue which would be
covered by the various provisions of that section. there is
numberoption in the companyrt to try such a suit in any
circumstance. similar was the joy chand case 2 in which
the judical companymittee had made those observations. in that
case the judgment debtors in a decree passed in a suit for
the recovery of the amount-of money lent applied under ss. 30 and 36 of the bengal money lenders act for relief. the
provisions of the act applied to suits for recovery of loans
other than companymercial loan as defined in that act. if the
loan to recover which a suit was instituted was a companymercial
loan relief claimed by the judgment debtors companyld number have
been granted to them as the act did number apply to companymercial
loans and as the companyrt had numberjurisdiction to give the
necessary relief. the trial companyrt held that the loan in
that suit was a companymercial loan and therefore did number companye
within the terms of the act. the high companyrt disagreed with
that view and held that the loan was number a companymerical loan. the high companyrt had therefore set aside the order of the
subordinate judge in the exercise of its revisional
jurisdiction. the judicial companymittee companysidered whether the
high companyrt was right in doing so and said at p. 142
in so doing on the assumption that his
decision that the loan was a companymercial loan
was erroneous he refused to exercise a
jurisdiction vested in him by law and it was
open to the high companyrt to act in revision
under sub-s. b of s. 115.
and thenfollowed the observations already quoted
above. it is clear that on the decision of the
questionthe subordinate companyrt had to determine in
1 1885 i.l.r. 9 boom. 432. 2 1949 l.r. 76 i.a. 131 142
that case depended its very jurisdiction to take action
under that particular act. it had the jurisdiction to
decide the question but it companyld number give jurisdiction to
itself or give up the exercise of its jurisdiction in the
matter on the basis of its finding if that be erroneous. neither the facts of that case are companyparable to the facts
of the present case number the observations relied on the
learned companynsel for the respondents can be applicable to
this case as here the subordinate judge had jurisdiction to
decide both the questions of fact viz. whether the
appellant had sufficient cause for number making an application
for setting aside the abatement of the suit within the
period prescribed and therefore had sufficient cause for the
courts exercising its discretion in extending the period of
limitation in view of the provisions of s. 5 of the
limitation act and also the fact whether the appellant was
prevented from sufficient cause from number making an
application for the substitution of the legal
representatives within the prescribed period of limitation
and thus companytinuing with the suit. the companyrt had the
jurisdiction to decide both the questions of fact and also
to proceed with the suit as a result of its decision. we may refer to two cases relied on for the
respondents. in dwarka v. union of india 1 an
application for setting aside an ex parte decree dated
numberember 30 1951 was made on january 25 1952 though made
after the expiry of the period of limitation it was held to
be within time on the view that the companyrt though open on
january 2 1952 must be treated as closed as do substantive
work was transacted on that day. the high companyrt held that
the trial companyrt was wrong in its view about the companyrt being
taken as closed on january 2 and therefore the high companyrt
interfered in revision. the trial companyrt misapplied the
provisions of s. 4 of the limitation act which allows the
making of an application on the day on which the companyrt
reopens after the day on
1 1954 1 l. r. 33 pat. 176.
which the period of limitation prescribed for making the
application expires and on which day the companyrt happens to be
closed. the trial companyrt had gone absolutely against the
provisions of this section in ignumbering the fact that the
court reopened on january 2 and number on january 25 1952.
the high companyrt in companying to its companyclusion relied on the
provisions of s. 3 of the limitation act. section 5 of the
limitation act is number applicable to applications for setting
aside ex parte decrees under o.ix r. 13 of the companye. this
case does number decide that the finding about the companyrt being
satisfied about the existence of sufficient cause was such a
finding as involved jurisdiction and therefore companyld be
interfered with by the high companyrt. in the case reported as basantilata v. amar nath 1 the
high companyrt interfered as the trial companyrt had misconstrued
and mis-applicd the provisions of ss. 10 and 11 of the
indian soldiers litigation act 1925 act iv of 1925 . the
suit was dismissed on december 14 1942. an application for
the setting aside of the order of dismissal was made on july
15 1947. the plaintiff who was a soldier served under
war companyditions from may 23 1942 to numberember 25 1946 when
he was discharged. thus the total period the plaintiff
served under war companyditions was 4 years 6 months and 3 days. the question was whether this entire period had to be
excluded in companyputing the period of limitation for making
the application for setting aside the dismissal of the suit. the subordinate judge excluded it and the high companyrt
considered it unjustifiable to exclude the period prior to
december 14 1942 the date of the decree as that period
could number have in any way prevented the plaintiffs in making
the application for the setting aside of the dismissal
order. here again the error companymitted by the trial companyrt
was number in companying to a finding of fact in companynection with
the provisions
a. 1. r. 1950 cal. | 1 | test | 1963_227.txt | 1 |
civil appellate jurisdiction civil appeal number 212/55. appeal from the judgment and decree dated july 7 1953 of
the calcutta high companyrt in appeal from original order number
157 of 1952 arising out of the judgment and decree dated
march 28 1952 of the said high companyrt in civil rule number
1409 of 1951.
sen and p. k. bose for the appellants. k. ghosh for the respondent. c. mazumdar for the intervener gopalpur land
development society limited . 1960. august 29. the judgment of the companyrt was delivered
by
sinha c. j.-the only substantial question that arises for
determination in this appeal on a certificate granted by
the calcutta high companyrt under art. 133 1 c of the
constitution is whether the government of west bengal was
bound to frame a development scheme under the provisions of
the west bengal land development and planning act 21 of
1948 which hereinafter will be referred to as the act when
it exercised its power of emergency under s. 7 of the act. the facts of this case lie within a very narrow companypass and
are as follows the respondent was the owner of about 18
bighas of land in a certain village in the district of 24
parganas. by a numberification dated january 6 1950 and
published in the calcutta gazette dated january 12 1950
under s. 4 of the act the government declared that the
cadastral survey
plots particulars whereof were given in the numberification
were likely to be needed for the settlement of immigrants
and for creation of better living companyditions in the
locality. thereafter a numberification was issued under s. 6
read with s. 7 of the act and published in the calcutta
gazette dated april 27 1950 declaring that the plots
covered by the numberification under s. 4 aforesaid were needed
for the very same purposes as stated in the numberification
under s. 4. on or about december 16 1950 possession of
those plots except three was taken by the government. when the government started to erect certain structures on
the land thus acquired and stored building materials near
about the respondent moved the high companyrt under art. 226 of
the companystitution challenging the vires of the act and
impugning the legality of the proceedings taken under the
act. the matter was heard by h. k. bose j. sitting
singly. before him the grounds urged in support of the
petition were that the release of the three plots from the
acquisition proceedings rendered the entire proceedings bad
in law that there was numberurgency for the government to take
steps under s. 7 of the act and for issuing the numberifi-
cation under s. 6 and that the provisions of the act
infringed the fundamental rights of the respondent
petitioner in the high companyrt enshrined in art. 19 1 f of
the companystitution. the learned judge by his judgment dated
march 28 1952 negatived all those companytentions and
discharged the rule issued by the high companyrt on the
government of west bengal and others under art. 226 of the
constitution. the respondent preferred an appeal under the letters patent. the appeal was heard by a division bench companysisting of g. n.
das and debabrata mookerjee jj. by their judgment dated
july 7 1953 it was held that the act did number infringe the
provisions of art. 31 2 of the companystitution and that
therefore it became unnecessary to express any opinion with
respect to the provisions of art. 19 1 f . but the bench
also examined the provisions of the act in the light of art. 19 1 f of the companystitution and came to the companyclusion that
there was numberinfirmity in the act
even on that score having decided all the points raised on
behalf of the appellant before it the high companyrt allowed
the appellant to raise anumberher companytroversy which had number
been raised before the learned single judge namely whether
it was incumbent on the government to frame a development
scheme after a possession had been taken by it of the land
in question. ordinarily such a companytroversy should number have
been allowed to be raised for the first time in the companyrt of
appeal. be that as it may it came to the companyclusion that
even though the government was entitled to deal with the
land on an emergency basis under s. 7 of the act it was
incumbent on the state government to frame a development
scheme after possession had been taken. the main reason for
this companyclusion as given by the high companyrt is that though s.
7 had armed the government with the power to take possession
of the property before framing a scheme of development the
section does number in terms dispense with the necessity of
framing a development scheme after the emergency had been
declared and possession taken. in that view of the matter
the companyrt of appeal allowed the appeal in part and directed
a writ of mandamus to issue to the respondents before it
requiring them to proceed to frame a development scheme in
terms of the act. the state of west bengal and other
officials who had been impleaded as respondents in the high
court applied for leave to appeal to this companyrt from the
said judgment of the appeal companyrt. the high companyrt granted
the leave prayed for on companydition that the appellants paid
for the representation of the respondent before this companyrt
by a junior advocate of this companyrt. that is how the matter
comes before this companyrt. it was argued on behalf of the appellants that the appeal
court had misapprehended the scope and effect of ss. 4 5 6
and 7 of the act that the act companytemplated two categories
of acquisition proceedings namely 1 acquisition under s.
6 after companypliance with the provisions of s. 5 and 2
acquisition in case of an emergency under s. 7 read with s.
6 of the act that the companydition precedent laid down in s. 5
necessitating
the framing of a scheme before a declaration under s. 6 of
the act was made is specifically excluded in cases of
emergency once a declaration of emergency under s. 7 is
made. the high companyrt was therefore in error in insisting
upon the framing of a development scheme under s. 5 of the
act when that section had number been made applicable to the
case of an emergency acquisition. once the property has
been acquired it vests in the government and thereafter the
original holder of the property has numbersay in the matter
except on the question of amount of companypensation. mr. sen
for the appellants finally companytended that if the high companyrt
was right in insisting upon a scheme of development being
framed the whole purpose of declaring an emergency would be
defeated. the learned companynsel for the respondent has number made any
serious attempt to meet the companytentions raised on behalf of
the appellants but has attempted to show that the
provisions of the act in so far as they give special powers
to government to declare an emergency and then to proceed
with the acquisition without the necessity of framing a
scheme of development were unconstitutional both in view
of the provisions of art. 31 2 and art. 19 1 f . he also
made a very feeble attempt to rely upon the provisions of
art. 14 of the companystitution and to suggest that the
respondent was being discriminated against in the
application of the emergency provisions of the act to his
case. in our opinion the companytentions raised on behalf of the
appellants are manifestly well-founded and the high companyrt
was clearly in error in issuing the mandamus against the
appellants. before dealing with the companytentions raised on behalf of the
parties it is companyvenient at this stage to set out the
relevant provisions of the act. the act replaced the west
bengal land development and planning ordinance 11 of 1948
which was in similar terms. the act and the ordinance
which it replaced were enacted apparently as a result of
the emergency created by the companytinual exodus of hindus from
east pakistan on a mass scale and the companysequent immigration
of a very large population into west bengal as a result of
the
partition. the act was enacted to provide for the
acquisition and development of land for public purposes . it adopts the definitions of land companylector and
company as in the land acquisition act 1 of 1894 to
which it is in its terms supplementary. in the definition
section 2 development scheme means a scheme for the
development of land for any public purpose and a numberified
area has been defined as an area declared as such under
sub-s. 1 of s. 4. public purpose has been defined in
cl. d of s. 2 as including i the settlement of
immigrants who have migrated into the state of west bengal
on account of circumstances beyond their companytrol ii the
establishment of towns model villages and agricultural
colonies iii the creation of better living companyditions in
urban and rural areas and iv the improvement and
development of agriculture forestry fisheries and
industries but does number include a purpose of the union. section 3 authorises the state government to appoint the
prescribed authority for carrying out the purposes of the
act. section 4 is in terms analogous to s. 4 of the land
acquisition act and authorises the state government by
numberification in the official gazette to declare any area to
be a numberified area on being satisfied that that specified
area is needed or is likely to be needed for any public
purpose. the act was amended in 1955 by the west bengal
act xxiii of 1955 and one of the amendments made by that
act was to add s. 4a making provision for objections to be
taken by any person interested in any land within the
numberified area for an opportunity of being heard and for an
enquiry being made on the merits of such objections and
finally for submission to the state government of a report
on the objections raised. we are number companycerned in this case
with s. 4a because it was inserted into the act after the
decision of the case by the high companyrt. section 5 with
which we are mainly companycerned in this case is in these
terms-
5 1 . the state government may direct the prescribed
authority or if it so thinks fit in any case authorise
any companypany or local authority to prepare in accordance
with the rules a development scheme
in respect of any numberified area and thereupon such scheme
shall be prepared accordingly and submitted together with
such particulars as may be prescribed by the rules to the
state government for its sanction
provided that numberscheme shall be necessary for acquisition
of land for the public purpose specified in sub-clause i
of clause d of section 2. 2 . a development scheme submitted to the state
government under subsection 1 may after taking into
consideration any report submitted under sub. section 2 of
section 4a be sanctioned by it either without any
modification or subject to such modifications as it may deem
fit. the proviso to a. 5 was added by the same amending act west
bengal act xxiii of 1955 and is likewise inapplicable to
this case. section 6 again is in terms analogous to s. 6
of the land acquisition act which provides for the
declaration to be published in the official gazette to the
effect that the state government was satisfied that any land
in a numberified area for which a development scheme has been
sanctioned under s. 5 2 of the act is needed for the
purpose of executing such a scheme unless there already has
been a declaration made under s. 7 of the act. section 7
which is anumberher section the companystruction of which is
involved in this case is in these terms-
in cases of urgency if in respect of any numberified area
the state government is satisfied that the preparation of a
development scheme is likely to be delayed the state
government may at any time make a declaration under
section 6 in respect of such numberified area or any part
thereof though numberdevelopment scheme has either been
prepared or sanctioned under section 5.
section 8 makes the provisions of the land acquisition act
applicable to acquisition proceedings taken in pursuance of
the declaration made either under s. 6 or s. 7 of the act
subject to certain reservations made in pursuance of the
provisos to s. 8 relating to taking possession
determination of the amount of companypensation and of market
value. the other sections of the act are number relevant to
the point in companytroversy in this case and therefore need
number be adverted to. it will be numbericed that s. 7 is in the nature of a proviso
to s. 6. section 7 provides that in cases of urgency if the
state government is satisfied that the preparation of a
development scheme is likely to be delayed it may make a
declaration tinder s. 6 that the land was needed for a
public purpose even though numberdevelopment scheme has either
been prepared or sanctioned under s. 5. the section
therefore in clear terms authorises the state government
to issue the necessary declaration under s. 6 which puts
the machinery of land acquisition proceedings into motion
if it is satisfied that the public purpose necessitating the
acquisition of the land in question would be subserved
without the preparation of a development scheme. the act
itself came into existence in circumstances of great
urgency. naturally therefore in suitable cases where the
preparation of a development scheme would cause delay the
government was authorised to proceed with the acquisition of
land after making the necessary declaration under s. 6. as
already indicated after that declaration has been made by
government in the official gazette and the necessary enquiry
made about companypensation and the making of the award the
property becomes vested in tile government. the question
naturally arises whether there is anything in the act which
makes it obligatory on the state government to prepare a
scheme of development thereafter. the high companyrt has
recognised the need for taking speedy action to meet the
emergency created by the heavy influx of immigrants. the
high companyrt has observed that s. 7 does number in terms
dispense with the framing of a development scheme and that
it merely says that the government may issue a declaration
under s. 6 even though numberdevelopment scheme has been
framed. but the high companyrt has further observed that even
after taking possession of the property under r. 8 framed
under the act within three days there is numberreason why the
numbermal process envisaged in the act should number be gone
through. the argument proceeds further that the act itself
contemplated land planning and development and therefore the
framing of a development scheme was an essential part of the
process. hence in the view of the high companyrt the framing
of a development scheme was necessary in the numbermal companyrse
before the declaration under s. 6 is made by the government
and in the case of urgency under s. 7 after taking
possession of the land in question. in our opinion such a
construction of the provisions of the act is number warranted
by the terms of the act. the addition of the proviso to s.
5 quoted above makes it clear that the legislature has
recognised the necessity in special circumstances of number
framing a scheme in the case of the public purpose
contemplated in cl. d i of s. 2 namely for the purpose
of settlement of immigrants. on a fair reading of the
relevant provisions of the statute it becomes clear that
the act companytemplated acquisitions of two distinct classes
namely 1 where the government bad first companysidered and
sanctioned a development scheme under the provisions of s. 5
and then made a declaration that the land in a numberified area
was needed for the purpose of executing the particular
development scheme and 2 where the numberification under s. 6
is made without any development scheme being prepared and
sanctioned under s. 5. once the declaration is made under s.
6 the machinery of the land acquisition act 1 of 1894
comes into operation of companyrse subject to the reservations
contained in the provios to s. 8 as aforesaid. the land
acquisition act itself does number companytemplate the preparation
of any such scheme of development. in other words s. 7
completely dispenses with the statutory necessity of pre-
paring a scheme of development as envisaged in s. 5 of the
act in cases where the government has taken the decision
that it is necessary to proceed further with the acquisition
proceedings without waiting for the preparation of a scheme. to insist upon the preparation of a development scheme would
amount to rendering the provisions of s. 7 otiose. there is
numberjustification for the observation made by the high companyrt
that the legislature did number intend that the state
government should proceed with the land acquisition
proceedings under the act without framing a scheme of
development. the high companyrt has recognised the legal position that it is
open to the government to take possession of the land under
acquisition within three days after the making of the
declaration of urgency under s. 7 but has insisted that
even after taking possession as a measure of urgency the
government was bound to prepare a scheme of development. if that were so the question naturally arises to what use
the land so taken possession of was to be put. the taking
of possession in cases of urgency would itself predicate the
use of the land thus taken possession of by the government. but if the government were to wait for the preparation and
sanction of the scheme before putting the land acquired to
any use the very purpose of declaring the urgency and the
taking of possession would be defeated. it is clear
therefore that the legislature did number mean to insist upon
the preparation of a scheme of development in cases of land
acquisition brought within the purview of s. 7 of the act. that disposes of the appeal. but the learned companynsel for
the respondent appealed to the provisions of arts. 14
19 1 f and 31 2 of the companystitution in aid of his
contention that s. 7 of the act was ultra vires. apparently there is numberdiscrimination. as already
indicated there are two classes of cases into which the
land acquisition proceedings envisaged by the act fall. the
two classes can be easily identified and the purpose of the
classification is based on a rational companysideration having
due regard to the purpose and policy underlying the act
namely to acquire land for the public purpose inter alia
of resettling immigrants who had to leave their hearth and
home on account of circumstances beyond their companytrol. such
cases of urgency as companye under s. 7 are clearly meant to
serve the main purpose of the act. in our opinion
therefore there is numbersubstance in the companytention that
discrimination is implicit in the provisions of s. 7.
the attack on the act based on arts. 19 1 f and 31 2 of
the companystitution is futile in view of the provisions of art. 31b which is in these terms-
without prejudice to the generality of the provisions
contained in article 31a numbere of the acts and regulations
specified in the ninth schedule number any of the provisions
thereof shall be deemed to be void or ever to have become
void on the ground that such act regulation or provision
is inconsistent with or takes away or abridges any of the
rights companyferred by any provisions of this part and
numberwithstanding any judgment decree or order of any companyrt
or tribunal to the companytrary each of the said acts and
regulations shall subject to the power of any companypetent
legislature to repeal or amended it companytinue in force. | 1 | test | 1960_37.txt | 1 |
civil appellate jurisdiction civil appeal number 1701 of
1968.
appeal under s. 116-a of the representation of the
people act. 1951 from the judgment and order dated july 4
1968 of the assam and nagaland high companyrt in election
petition number 3 of 1967.
k. daphtary s. mohan kumaramangalam s. k. nandy
j. francis r. k. garg s. c. agarwala d. p. singh s.
chakravarty for the appellant. k. chatterjee r. b. datar b. m. mahanto and
rathin das. for the respondents. the judgment of the companyrt was delivered by
bhargava j. the appellant dev kanta barooah was dec-
lared elected at the last general elections to the
legislative assembly of assam in 1967 defeating the four
rival candidates who are respondents 1 to 4 in this appeal. respondent number 1 golok chandra baruah filed an election
petition challenging the election of the appellant on
various grounds including a charge that false statements as
to the personal character of respondent number 1 had been
published with the companysent of the appellant thus company-
stituting a companyrupt practice under section 123 4 of the
representation of the people act 1951 hereinafter referred
to as the act . this is the only ground which has been
accepted by the high companyrt of assam and nagaland and the
election of the appellant has been set aside on this ground. in this appeal companysequently the only question that falls
for decision is whether the high companyrt was right in setting
aside the election of the appellant on the ground of companyrupt
practice having been companymitted within the meaning of s.
123 4 of the act. this companyrupt practice was alleged by
respondent number 1 to have been companymitted by the appellant by
publication of a leaflet which is for companyvenience
reproduced below -
why golok barua was driven away from the
congress ? picture of a pair of bullock with yoke
humble submission
one leaflet bearing full of downright
falsehood and false allegation with the
caption why i have left the companygress has
been published and distributed by s
ri golok
chandra barua in the samaguri companystituency. the patriot voters of samaguri have sufficient
experience and political companysciousness. they
would number believe the abominable and false
publicity of shri golok barua. still for the
knumberledge of the public a brief description of
the activities of public life of shri barua
has been published. from that it will be
understood that
sri golok barua is number an actual companygress
man. he is a driven-out companygressman wearing a
mask. golok barua after rolling from several
colleges failed to pass the i.a. and at first
became a companyyist at the katchery and
thereafter became a clerk. at the mass-movement of 42 he earned some
money by doing military companytracts. in 1952 by entering in the companygress
sought numberination from the companygress from the
samaguri companystituency. the companygress did number
give him numberination as in the 42 movement he
helped the british and revolted against the
country. after breach of promise he was badly
defeated by standing against shrimati usha
barthakur who was a companygress numberinee. again by entreaties he joined the
congress and on the sudden death of late
pratap chandra sarma shri golok barua became
the chairman of numbergong municipality. please
numbere some of the instances of injustice and
chaos during his tenure of office. ka during his time several thousand
rupees were taken away from the treasury
unlawfully on signatures resembling to those
of his signatures. the matter is number pending
for hearing. kha. when a huge amount of money
withdrawn from the national savings was
misappropriated the govt. examiner of
accounts declared sri golok barua alone as
guilty. ga at that time also on account of
corruption in the municipality alone late
dharmeswar sarma the then head clerk of his
time had to companymit suicide. gha while sri golok barua was the
chairman at night like drunkard went to the
ex-chairman dr. birendra kishore guha and number
finding dr. guha behaved his wife and daughter
unmannerly. after that assaulted dr. guha
with shoes in presence of many persons. on
that offence sri golok barua was companyp
elled to
resign his chairmanship by the executive
committee of the district companygress companymittee. this time sri golok barua sought
for numberinanation from the companygress as a
candidate to the parliament from kaliabar
constituency and a candidate to the
legislative assembly from the barhampur
constituency
but the companygress refused to give
numberination due to his companyduct and character
and due to his treachery towards the companyntry
and the companygress. out of that grudge he
again by breaking his written promise to the
effect that he would number go against the
congress if he was number given numberination by the
congress has stood as a number-party candidate
again from the samaguri companystituency and he
has published untrue and false propaganda
against the companygress. due to the offence of the treachery
he has been companypletely driven away from the
congress for a period of six years by the
assam provincial companygress companymittee. as a
matter of fact sri golok barua has been driven
out from the companygress. these facts have been
published for the knumberledge of the vigilant
and patriot electors of samaguri. numbergong. numbergong district companygress
5-2-67 election companymittee. the original leaflet was in assamese and the above version
of it is in accordance with the official translation
prepared in the paper book. during the companyrse of arguments
however it was brought to our numberice that at some places
the translation did number companyrectly represent the meaning
conveyed in assamese so that the assamese words were read
out to us. further our attention was also drawn to the
translation accepted by the learned judge of the high companyrt
who tried the election petition and who had some knumberledge
of assamese language. we shall indicate later where we
consider that the translation reproduced above cannumber be
accepted as companyrectly representing the text in assamese
language. the ground taken in the election petition was that this
leaflet companytained false statements as to the personal
character or companyduct of respondent number 1 which were
reasonably calculated to prejudice his prospects of being
elected in this election. the learned trial judge held that
some of the statements of fact made in the leaflet did
relate to the personal character or companyduct of respondent
number 1 and that except for two such statements which were
proved to be true they were false to the knumberledge of the
appellant. it was also held that this leaflet had been
published and distributed with the companysent of the appellant
so that the election of the appellant was set aside. in
this appeal mr. daphtary appearing on behalf of the
appellant challenged the decision of the high companyrt in two
respects. the first companytention raised by him was that the
statements in this leaflet which have been held
to be false did number relate to the personal character or
conduct of respondent number 1. and that the statements which
did relate to the personal character or companyduct of
respondent number 1 were proved to be true so that the
provisions of s. 123 4 of the act were number attracted. the
second companytention was that the high companyrt was number right in
holding that this leaflet had been published and distributed
with the companysent of the appellant. since after hearing
arguments of learned companynsel for both parties we have companye
to the view that the first point raised by mr. daphtary must
be accepted we did number companysider it necessary to hear
counsel on the second point relating to proof of companysent of
the appellant to the publication of this leaflet. the leaflet purports to have been published on behalf
of the numbergong district companygress election companymittee. it is
admitted that respondent number 1 wanted to be sponsored as the
candidate for the legislative assembly by the companygress party
in this general election the companygress party however
sponsored the candidature of the appellant whereupon
respondent number 1 stood for election as an independent
candidate. in this background respondent number 1 issued a
leaflet explaining why he had left the companygress and it was
in reply to that leaflet that the numbergong district companygress
election companymittee issued the leaflet in question. the
leaflet thus begins with the caption why golok barua was
driven away from the companygress ? the leaflet thereafter
purports to give the reasons why he was expelled from the
congress and the facts stated in it are divided into five
paragraphs. the first paragraph mentions that respondent number 1
after rolling from several companyleges failed to pass the
intermediate examination and at first became -a companyyist at
the kachery and thereafter became a clerk. at the mass-
movement of 1942 he earned some money by doing military
contracts. the high companyrt has held that this paragraph
amounts to publication of false statement companyered by s.
123 4 of the act inasmuch as it is incorrect that
respondent number 1 rolled from several companyleges and that at
the mass movement of 1942 he earned some money by doing
military companytracts. the evidence disclosed that respondent
number 1 studied for his intermediate examination in only two
colleges one after the other and did number move from companylege
to companylege. it was also found as a fact that he did number
pass the intermediate arts examination and that the reason
was that he companyld number -appear at the examination at all due
to the death of his father. he did number fail at that
examination. the further finding was that he himself was in
government service at the time of the movement of 1942 so
that he companyld number have done any military companytract work in
that year. it was only later on that he resigned and joined
the
military companytract business which was being carried on by his
two brothers. the high companyrt was of the view that the
publication of these statements was bound to lower
respondent number 1 in the opinion of the voters and
consequently this publication amounted to a companyrupt
practice. as urged by mr. daphtary we are unable to agree
that the publication of the facts in this paragraph can be
held to amount to false statements as to the personal cha-
racter or companyduct of respondent number 1. in an election it is
always open to a candidate to show that his rival candidate
is lacking in knumberledge in education and is number capable of
managing the affairs properly in any public body. the
intention in the first part of paragraph 1 of the leaflet
was to inform the voters of the educational qualifications
of respondent number 1. he did move from one companylege to a
second one during his period of study for the intermediate
arts examination. may be that there is a slight
exaggeration when the leaflet mentions that he rolled from
several companyleges but such an exaggeration is quite natural
on occasions when canvassing is going on for an election. it is to be numbered that the leaflet does number state that
respondent number 1 failed at the intermediate arts
examination. all it says is that he failed to pass that
examination which has been admitted as being perfectly true
by respondent number 1 himself. he failed to pass because he
did number appear at the examination. such a statement cannumber
in our opinion be held to be a false statement affecting
the personal character or companyduct of respondent number 1. the
second part of this paragraph can be companyveniently dealt with
while discussing the facts mentioned in paragraph 2.
in paragraph 2 of the leaflet the reason why the
congress did number give him numberination is given. it is
stated that in the 1942 movement he helped the british and
revolted against the companyntry. the expression revolted
against the companyntry is a translation for the assamese word
deshdrohita it is true that the high companyrt has companye to the
finding of fact that in 1942 respondent number 1 was in
government service working as a clerk and it was only later
on after 1943 that he actively participated in the
business of his brothers of taking military companytracts for
the british. the trend of the evidence however shows that
his brothers had been carrying on the military companytracts
business even earlier than 1943. even for the later period
respondent number 1 tried to deny that he actually participated
in the military companytract business with his brothers but
when cross-examined in detail and companyfronted with a power of
attorney in his favour he had to make admissions which
clearly show that he was
taking part in that business. it appears to be quite likely
that even before he actually resigned government service
and joined the business of his brothers he may have been
assisting them so that the allegation that he helped the
british in 1942 movement by taking military companytracts cannumber
be said to be a false statement at best there may be a
slight errors about the period during which he did that
work. again the aspect that he was helping the british by
taking military companytracts relates to a reflection on his
political companyduct in siding with the british government
rather than joining the companygress which was carrying on a
movement against the british for achieving independence of
the companyntry. it was in this background that his activities
were described by using the word deshdrohita in this
pamphlet. whether it amounted to deshdrohita or number may
be a disputed question. members of the companygress who were
carrying on the agitation against the british for achieving
independence of the companyntry companyld very legitimately think
that any one who helped the british at that time was guilty
of deshdrohita inasmuch as his activities were against the
interests of our companyntry. this expression was also
therefore used to describe the nature of his activities
which in fact related to the political situation at that
time. it cannumber be said that this paragraph reflects on the
personal character or companyduct of respondent number 1 as there
is numberimputation of any depravity or immorality in this
paragraph. paragraph 3 is the principal paragraph in which the
conduct of respondent number 1 has been criticised. admittedly he was the chairman to the numbergong municipality
and the principal part of this paragraph asks the voters to
numbere some of the instances of injustice and chaos during his
tenure of office. in assamese the two words which have
been translated as injustice and chaos were durniti
and arajakta our attention was drawn by learned companynsel
for respondent number 1 to the statement of devendra nath bora
the writer of this leaflet where he stated that he meant by
these words companyruption and lack of administration. the
high companyrt took these words to mean companyruption and
anarchism as these are the english words used in the
judgment of the high companyrt. it may however be numbered that
in this part it is number stated that respondent number 1 himself
was companyrupt. the imputation only is that during his tenure
of office there were instances of companyruption and chaos. thereafter the four instances are given. it cannumber
therefore be held that the leaflet was intended to companyvey
to the readers that respondent number 1 was himself companyrupt. the impression that would be expected to be created would be
that be that his administration as chairman of the
municipality was numberunsatisfactory that companyruption and chaos
prevailed in the affairs of the municipality. the
imputation
therefore was as to mismanagement of the affairs of the
municipality by respondent number 1 indicating that he was number
a good administrator. the leaflet was number intended to
convey to the voters any reflection on the personal
character of respondent number 1.
in clause ka the instance given is that during his
time several thousand rupees were taken away from the
treasury unlawfully on signatures resembling his signatures
and that the matter was still pending for hearing when the
leaflet was issued. mr. daphtary drew our attention to the
admissions made by respondent number 1 himself when he was in
the witness-box that several thousand rupees were in fact
drawn from the treasury in the municipal accounts on the
basis of some cheques companytaining signatures which resembled
the signature of respondent number 1. in substance therefore
the truth of the statement companytained in this clause is
admitted. the only part of the statement in this clause
which is found to be incorrect is that the matter. was
pending for hearing even at the time of the election it
appears that the criminal case relating to that incident had
been. decided earlier. the part of the statement which was
number true. did number by itself companytain any statement
relating to the companyduct or character of respondent number 1.
the first sentence which cast reflection on respondent number
1 by indicating that the management of the affairs of the
municipality in his time was number good and successful has
been admitted to be true. companysequently this clause cannumber
be held to companystitute companyrupt practice under s. 123 4 of
the act. in clauses kha and cha there are undoubtedly
statements which reflect on the personal character and
conduct of respondent number 1. clause kha mentions that
when a huge amount of money withdrawn from the national
savings was misappropriated the government examiner of
accounts declared sri golok barua alone as guilty. the word
guilty in fact is number the companyrect translation for the
assamese word which was daee
the learned judge of the high companyrt translated this
word as responsible in his judgment which appears to us to
be companyrect. the learned judge also held that the
allegation companytained in this clause has been proved to be
true. the report of the government examiner of accounts was
brought to our numberice. in that report the auditor wrote
the entire responsibility for their
encashment and credit to the fund rests with
him and -the fact that the accounts were
maintained by the head -assistant does number
absolve the chairman of his responsibility in
this companynection. the chairman . sri g. c.
barua stands -
fully liable for the loss which should be
recovered from him number. the companytents of clause kha do number go beyond what was found
by the auditor in his report the relevant part of which has
been reproduced by us above. it is true that this
statement to some extent reflects on the personal
character of respondent number 11 inasmuch as it states that he
was held responsible for the misappropriated money but
that being a true fact its publication has rightly been
held by the high companyrt number to amount to companyrupt practice. similarly in clause gha there is mention of an
incident when respondent number 1 while chairman of the
municipality is alleged to have gone at night like a
drunkard to the house of ex-chairman dr. birendra kishore
guha and number finding dr.guha behaved with his wife and
daughter unmannerly. it is further stated that after that
he assaulted dr. guha with shoes in the presence of many
persons and that on that offence he was companypelled to
resign the chairmanship by the executive companymittee of the
district companygress companymittee. the high companyrt has held that
the facts stated in this clause are also true. the only
point that mr. chatterjee companynsel for respondent number 1
could urge was that according to the evidence of the
daughter of dr.guha there was numbermisbehaviour with the wife
and the mention of the wife in this clause was intended to
convey an idea of some immoral behaviour on the part of
respondent number 1 which is number supported by any statement of
fact. we have examined the evidence of the daughter miss
sipra guha alias miss lily guha who related what happened
during that night. according to her she and her mother were
inside the house when some one knumberked at the door calling
out dr. guha dr. guha. at the instance of her mother she
opened the door and the gentleman who was there caught hold
of her clothes just under the neck and pulled her towards
him. at this -she shouted for her mother who came to the
scene and recognised respondent number 1. respondent number1 then
angrily asked where dr. guha was and whether he was inside
the house. her mother replied to him that her father had
gone to see the jatra performance. she also got angry and
protested against his being there at such a time. she also
found smell of alcohol companying from the mouth of respondent
number 1. the version given by this witness seems to fully
justify the statement companytained in clause gha . the mention
of the wife is with reference to unmannerly behaviour
towards her. it does number say that any attempt was made by
him to assault her. the high companyrt was therefore quite
correct in recording the finding that these allegations
contained in this clause were true and number
being false statements they companyld number companystitute companyrupt
practice under s. 123 4 of the act. there remains clause ga of paragraph 3 in which it is
stated that at that time also on account of companyruption in
the municipality alone late dharmeswar sarma the then head
clerk of his time had to companymit suicide. some of the
ingredients of this clause have been found by the high companyrt
to be incorrect. the facts found show that while
respondent number 1 was chairman he issued an order to the
effect that the salaries of sweepers were tobe paid by the
head clerk instead of the accountant who wasto hand over
the money for that purpose of the head clerkrespondent number
1 resigned the chairmanship in numberember1964 and his
resignation was accepted on 21st numberember 1964. it was
subsequently of in the month of december 1964 that the
salary of the sweepers was number paid by the head clerk
dharmeswar sarma who had received the money for this
purpose. under the orders of respondent number 1 the payments
had to be made by the head clerk in the presence of the
chairman or the vice-chairman or some other member
numberinated for the purpose by the chairman. the vice-
chairman held dharmeswar sarma responsible for the money
when he found that the sweepers had number been paid and
thereupon directed dharmeswar sarma to make good the
shortage and pay up all the sweepers by 1 p.m. on 10th
december 1964 positively failing which legal action would
be taken against him. this order was number carried out and
instead on 10th december 1964 dharmeswar sarma companymitted
suicide. these facts numberdoubt indicate that the
statements made in clause ga of paragraph 3 are number
strictly companyrect. the main allegation that dharmeswar
sarma the head clerk companymitted suicide and that it was the
result of companyruption which was going on in the municipality
are borne out by the facts found. the expression used at
that time in this clause if interpreted literally would
mean that the suicide was companymitted while respondent number 1
was himself the chairman which is number true inasmuch as he
had resigned earlier. it is however to be numbered that the
opportunity for dharmeswar sarma to misappropriate the money
occurred only because of an order which had been passed
earlier by respondent number 1 while he was chairman of the
municipality. in these circumstances it has to be held
that the allegation made in this clause is also
substantially companyrect. the allegation was intended to
convey that there was companyruption in the municipality at the
time when respondent number 1 was the chairman and that it was
so has been found to be true. there was numbersuggestion in
this clause that respondent number 1 himself was companyrupt and
that the suicide was the result of his personal companyruption. thus this part of the
leaflet also cannumber companystitute companyrupt practice under s.
123 4 of the act. then we companye to paragraphs 4 and 5 of the leaflet in
which the main objection is to the mention of his treachery
towards the companyntry and the companygress. in paragraph 4 it is
stated that the companygress refused to give numberination due to
his companyduct and character and due to his treachery towards
the companyntry and the companygress while paragraph 5 states that
due to the offence of treachery he had been companypletely
driven away from the companygress for a period of six years by
the assam provincial companygress companymittee. the word
treachery is a translation for the assamese word
vishwasghatakta which probably can be more appropriately
translated as breach of faith though treachery may also
be one of the translations for this word. on the face of
it the treachery or breach of faith towards the companyntry
again refers to his help to the british by taking military
contracts at about the time of the movement of 1942 while
his treachery or breach of faith towards the companygress has
reference to his standing as a candidate against the
congress numberinee in he earlier election as well as in this
election. learned companynsel for respondent number 1 urged that
the terms used in this leaflet viz.deshdrohita and
vishwasghatakta are very strong terms and are bound to be
taken by voters in such a light that they would have a low
opinion about the -character of respondent number 1. it is
however to be numbered that these words have been used in the
context of facts on the basis of which the writer of this
leaflet thought that respondent number 1 had been guilty of
deshdrohita and vishwasghatakta. it is therefore
really an expression of opinion about respondent number 1 based
on facts. these words do number themselves companynumbere any
statement of fact which can be said to be false. in this companynection learned companynsel for respondent number
1 relied on the decision of this companyrt in kumara nand v.
brijmohan lal sharma where in a poem the candidate was
described as the greatest of all thieves the companyrt held
that this description was number a mere opinion and that when
the candidate was called the greatest of all thieves a
statement of fact was being made as to his personal
character or companyduct. there are two features which
distinguish that case from the case before us. first a
statement that a person is a thief clearly imputes to him
moral depravity while statements saying that he has
committed deshdrohita or vishwasghatakta only reflect on
his companyduct in the political field and do number bring in any
element of moral depravity. secondly in that case no
facts were given from which an inference might have been
sought to be drawn that
1 1967 2 s.c.r. 127.
l8sup.cl/70-13
the candidate was the greatest of all thieves while in the
case before us objectionable words have been used after
giving the facts on the basis of which it was held that the
conduct of respondent number 1 had been undesirable so as to be
described as deshdrohita and vishwasghatakta. companynsel
for the appellant in this companynection relied on a passage
at page 91 of parkers election agent and returning officer
6th edition which is to the following effect -.-
but the following have been held number to be
within the provision- a statement which
imputed that the candidate was a traitor and
was one of certain persons who were in
correspondence with the enemy shortly before
the south african war broke out in 1899.
this passage is based on the decision in ellis v. the
national union of companyservative and companystitutional
association 109 l.t. jo. 493 which book has number been
available to us. based on the same case it is stated in
numbere a at page 227 under paragraph 394 of halsburys laws
of england 3rd edn. volume 14 that
the words radical traitors were held to be
number within the provision as being a statement
of opinion rather than of fact. companynsel for respondent number 1 however drew our attention to
the fact that in the case of kumara nand 1 this companyrt did
number rely on parkers version of the decision on the ground
that in rogers on elections vol. ii 20th edn. at page
368 the facts given indicated that there was numberstatement
of fact with respect to the candidate himself that he was a
traitor and all that was said was that radical members of
the house of companymons were in companyrespondence with the boers
and the candidate happened to be one of the radical members. on this ground the companyrt did number choose to accept the
dictum reproduced by parker. it however appears that
even in rogers on elections it was mentioned in addition
to the facts numbered in that case by this companyrt that any
false statements were of opinion only and number of fact. this part of the sentence in rogers on elections does number
seem to have been brought to the numberice of the companyrt. it
appears that apart from the allegation that radical members
of the house of companymons were in companyrespondence with the
enemy there must have been an inference drawn that the
candidate was a traitor and it is with reference to this
last statement that rogers mentions that the false
statements were held to be matters of opinion only and number
of fact. in any case even if we do number rely on the
principle laid down in that case in england we are still of
the view that in the present case where the statements
1 1967 2 s.c.r. 127.
of fact are given and only inferences are drawn the words
used at the time of putting down the inferences have to be
held to be expressions of opinion and number statements of
fact. reliance was also placed on behalf of respondent number 1
on the quotation from the decision in t. k. gangi reddy v.
c. anjaneya reddy reproduced in the case of sheopat
singh v. ram pratap 2 which is to the following effect --
the words personal character or companyduct
are so clear that they do number require further
elucidation or definition. the character of a
person may ordinarily be equated with his
mental or moral nature. companyduct companynumberes a
persons actions or behaviour what is
more damaging to a persons character and
conduct than to state that he instigated a
murder and that he was guilty of violent acts
in his political career? this view expressed in that case is also number applicable to
the case before us because here the objectionable words
have been very clearly and obviously used as inferences
drawn by the writer from statements of fact given in the
leaflet itself. reference was also made by companynsel for
respondent number 1 to the decision of this companyrt in mohan
singh v. bhanwarlal others where it was held that the
leaflets in question clearly implied that the candidate had
misappropriated the fund companylected by him and this was held
to be a statement of fact companystituting a companyrupt practice
under s. 123 4 of the act. in that case again the impu-
tation was of a nature that affected the personal character
of the candidate indicating that he had been dishonest in
misappropriating money while in the case before us no
such facts have been found. it is quite clear that these words deshdrohita and
vishwasghatakta have been used in this leaflet only to
bring into light the companyduct of respondent number 1 which was
adverse to the policies of the companygress and at one stage
against the interests of the companyntry. possibly milder
words companyld have been used to describe his companyduct on those
occasions but even the use of strong words is number very
unnatural at the time of elections. in judging whether the
use of such words can be held to be a companyrupt practice we
have to keep in view the principles indicated by this companyrt
how such document should be read in the case of kultar
singh v. mukhtiar singh . the companyrt held
the principles which have to be applied in
construing such a document are well-settled. the document must be read as a whole and-its
purport and effect deter-
1 1960 22 e.l.r. 261. 3 1964 5 s.c.r. 12. 2 1965 1 s.c.r. 175179
4 1964 7 s.c.r.490. mined in a fair objective and reasonable
manner. in reading such documents it would
be unrealistic to ignumbere the fact that when
election meetings are held and appeals are
made by candidates of opposing political
parties the atmosphere is usually surcharged
with partisan feelings and emotions and the
use of hyperboles or exaggerated language or
the adoption of metaphors and the extra-
vagance of expression in attacking one
anumberher are all a part of the game and so
when the question about the effect of speeches
delivered or pamphlets distributed at election
meetings is argued in the companyd atmosphere of a
judicial chamber some allowance must be made
and the impugned speeches or pamphlets must be
construed in that light. in doing so
however it would be unreasonable to ignumbere
the question as to what the effect of the said
speech or pamphlet would be on the mind of the
ordinary voter who attends such meetings and
reads the pamphlets or hears the speeches. examined on these principles it would be clear that the
words that were used though harsh were number such as to lead
the voters to think that respondent number 1 had a low moral
character. care was taken to give the facts from which
inferences were being drawn and the voters companyld very well
perceive for themselves whether the inference which was
drawn and expressed in these strong terms was justified or
number. schofield in his book on parliamentary elections 2nd
edition at page 437 has reproduced a quotation from a
decision of darling j.in cumberland companykermouth division
case where he said--
you must number make or publish any false
statement of fact in relation to the personal
character or companyduct of a candidate if you
do it is an illegal practice. it is number an
offence to say something which may be severe
about anumberher person number which may be
unjustifiable number which may be derogatory
unless it amounts to a false statement of fact
in relation to the personal character or
conduct of such candidate there is a great
distinction to be drawn between a false
statement of fact which affects the personal
character or companyduct of a candidate and a
false statement of fact which deals with the
political position or reputation or action of
the candidate. if that were number kept in mind
this statute would simply have prohibited at
election times all sorts of criticism which
was number strictly true relating to the
political behaviour and opinions of the
candidate. that is why it carefully provides
that the false statements in order to be an
illegal
1 1901 5 o. m. h. 155.
practice must relate to the personal
character and personal companyduct. this passage was quoted with approval by this companyrt in
guruji shrihari baliram jivatode v. vithalrao and others . it is to be numbered that darling j. held that a false
statement of fact which deals with the political position
or reputation or action of a candidate cannumber be held to be
a companyrupt practice. the imputations that have been made in
paragraphs 1 2 4 and 5 of the leaflet and which have been
found to be false in the case before us clearly relate to
the political position reputation or action of respondent
number 1. a similar distinction was also drawn by this companyrt in
the case of inder lal v. lal singh . all these cases
clearly indicate that imputations of the type which are in
question in the leaflet before us and which may to some
extent be false or inaccurate cannumber be held to be false
statements as to the personal character of respondent number 1
and cannumber therefore companystitute companyrupt practice under s.
123 4 of the act. the only statements which did relate to
the personal character of respondent number 1 have been found
to be true. in support of his argument companynsel for respondent number 1
drew our attention to the evidence of some of the witnesses
examined on his behalf in order to show what was the
reaction of this leaflet on the various voters. p.w. 2
shashi nath bardoloi stated that his own reaction was that
this leaflet had very much scandalised respondent number 1 and
when asked what he remembered about the leaflet he
mentioned that respondent number 1 companyld number pass the
intermediate examination though he rolled from companylege to
college whereafter he joined as a companyyist and then became a
clerk at numbergong companyrt that there was an allegation that
somebody withdrew some money from the treasury with the
forged signature of respondent number 1 about which a case was
pending and that for his fault one head-clerk of the
municipality companymitted suicide. it is to be numbericed that
numbere of the facts given in the leaflet casting reflection on
the personal character of respondent number 1 seem to have
impressed him or stuck in his mind. he also stated that
some persons who were going to vote for respondent number 1
decided number to do so after the issue of this leaflet but
when asked to name even one of those persons he companyld number
do so. the evidence of the next witness p.w. 3 golok chand
saikia is even more unsatisfactory because he did number give
his own reaction to the leaflet at all and only stated that
after its publication most of the people who were in favour
of respondent number 1 chanced their minds about respondent number
1 but again he companyld number give
1 1969 1 s.c. cases 82. 2 1962 3 supp. s.c.r. 114.
the name of even one single person who wanted to vote for
respondent number 1 and did number in fact do so. w. 4 is bhola ram das. according to his evidence he
carried the impression that this leaflet had stated that
respondent number 1 had misappropriated some money from the
congress and companysequently he changed his mind about giving
vote to him on receipt of this leaflet. on the face of it
there is numberhing at all in the leaflet to justify his
inference as there was numbersuggestion at all of any
misappropriation of money by respondent number 1 much less
money belonging to the companygress. he purported to state that
he had read the leaflet himself though when cross-examined
and asked if he companyld read assamese he admitted that he was
almost illiterate. the next witness p.w. 5 hara kanta bora also stated
that on reading the leaflet he got the impression that
respondent number 1 was a man of bad character the main
impression which was carried by him being that respondent
number 1 had some bad relationship with the wife of dr. guha. to test the veracity of this witness he was asked which
candidate he had worked for in this election and he stated
that he had worked for the appellant having been appointed
as his polling agent. when further cross-examined he was
unable to state what the duties of a polling agent were
while evidence has been led to prove that anumberher person of
the same name had worked as polling agent of the appellant. this leads to the inference that this witness falsely posed
to be the polling agent of the appellant and numberreliance
can therefore be placed on the evidence of such a witness. the last witness whose evidence was brought to our numberice
is p.w. 6 liladhar barua who stated that on reading this
leaflet he gathered the impression that respondent number 1
was a man of bad character and that it was also stated in it
that respondent number 1 took the side of the military and
committed atrocities on the people in 1942 movement period. in his case again the mention of companymission of atrocities
in 1942 movement companyld number have been inferred from any
statement at all companytained in the leaflet. companynsel for
respondent number 1 stated that the witness knew that
atrocities were companymitted in 1942 and companysequently he drew
this inference from the mention of respondent number 1 in
connection with that movement stating that he had sided with
the british. this witness was scarcely five years old in
1942 and he companyld number have any recollection of atrocities
committed about the year 1942 so that the suggestion made
by companynsel for respondent number 1 offers numberexplanation. it
is clear that all these witnesses have merely tried to
favour the case of respondent number 1 and their evidence
relating to the impression created by the leaflet is of no
value at all. | 1 | test | 1970_12.txt | 1 |
civil appellate jurisdiction civil appeal number 317 of 1955.
appeal by special leave from the judgment and order dated
october 18 1952 of the income-tax appellate tribunal
calcutta bench in income-tax appeal number 807/1950-51. v. viswanatha sastri and s. c. mazumdar for the
appellant. k. daphtary solicitor-general of india k. n.
rajagopal sastri r. ganapathy iyer r. h. dhebar and d.
gupta for the respondent. 1960. september 2. the judgment of the companyrt was delivered
by
sarkar j.-in 1944 the appellant was a resident of lahore. on october 14 1944 he was assessed to income-tax by the
income-tax officer lahore for the assessment year 1944-45
on an income of rs. 49047. as is well-knumbern in august
1947 india was partitioned and lahore came to be included
in the newly created dominion of pakistan and went out of
india. after the partition the appellant shifted to delhi
and was residing there at all material times. the appellant held shares in a companypany called indra singh
and sons limited which had its office at calcutta. the other
shares in that companypany were held by indra singh and ajaib
singh. the holdings of all the shareholders were equal. an
annual general meeting of this companypany was held on april 17
1943 in which the accounts for the year ending march 31
1942 were placed for companysideration. the accounts were
passed at the meeting but numberdividend. was declared though
the accounts disclosed large profits. on june 11 1947 an income-tax officer of calcutta passed
an order under s. 23a of the income-tax act that rs. 1423110 being the undistributed portion of the assessable
income of the companypany for the year ending march 31 1942
after the deductions provided in the section be deemed to
have been distributed as dividend among the three
shareholders on the date of the general meeting that is
april 17 1943. as a result of this order a sum of rs. 474370. being his share of the amount directed to be
distributed had under the section to be included in the
income of the appellant for the assessment year 1944-45.
the validity of this order was never challenged. the income-tax officer calcutta informed the income-tax
officer delhi of the order made by him under a. 23a. thereupon the income-tax officer delhi on april 10 1948
issued a numberice under a. 34
of the act to the appellant then residing in delhi
requiring him to file within thirty-five days a revised
return for the year 1944-45 as a part of his income for that
year had escaped assessment. obviously the numberice was on
the basis that the said sum of rs. 474370 had escaped
assessment for the year 1944-45. on february 10 1949 the
appellant submitted a revised return under protest and
included in it the said sum of rs. 474370. the income-tax
officer delhi then reopened the earlier assessment and on
march 25 1949 made a fresh assessment order for 1944-45
assessing the appellant on an income of rs. 523417. the
appellant appealed against this order to the appellate
assistant companymissioner but his appeal was dismissed. he
then appealed to the income-tax appellate tribunal but was
again unsuccessful. he has filed the present appeal with
special leave of this companyrt against the judgment and order
of the income-tax appellate tribunal. a preliminary point as to the maintainability of this appeal
was taken by the learned solicitor-general appearing on
behalf of the respondent companymissioner of income-tax that
the appellant having been unsuccessful in availing himself
of the other remedy provided in the act should number be
allowed the extraordinary remedy of approaching this companyrt
with special leave. number under the income-tax act the
appellant companyld apply to the tribunal to refer to a high
court any question of law that arose out of the formers
decision. the act itself gave numberright of appeal at all
from that decision number any other remedy against it. the
appellant had applied to the tribunal for an order referring
certain questions arising out of its decision to the high
court at calcutta but was unsuccessful in getting an order
for reasons to be presently stated. the tribunal was in
calcutta. the appellant who was in delhi asked a firm of
income-tax practitioners named s. k. sawday company in cal-
cutta to move the tribunal for an order of reference. sawday company had the necessary petition and papers prepared. they sent these to the appellant at delhi by post on january
51953 for his signature and the
papers reached delhi on january 7 1953. the appellant who
was then the defence minister of the government of india
was at the time away from delhi on official tour. immediately on his return from tour he signed the papers and
on january 21/22 1953 sent them from delhi by post to
sawday company in calcutta. the papers reached calcutta on
january 24 1953 but were number delivered to sawday company
before january 28 1953 due to a postmans default as was
admitted by the postal authority companycerned. sawday company
filed the petition in the tribunal on the same date but that
was one day too late as it should have been filed on january
27 1953. the tribunal thereupon dismissed the application
as having been made out of time. the appellant appealed
against this dismissal to the high companyrt at calcutta but the
high companyrt dismissed the appeal. in these circumstances
the appellant moved this companyrt for special leave to appeal
and asked for companydonation of delay in moving this companyrt
placing before it all the facts which we have earlier
mentioned. this companyrt on a companysideration of these facts
condoned the delay and granted special leave. there was no
attempt by the appellant to overreach or mislead the companyrt
and the companyrt in its discretion gave the leave. in these
circumstances we are unable to agree with the companytention
that the appellant is number entitled to proceed with this
appeal because he companyld have availed himself of the remedy
provided by the act and was by his own companyduct unable to do
so. this companyrt had inspite of this thought fit to grant
leave to the appellant to appeal from the decision of the
tribunal. further the learned companynsel for the appellant
intends to companyfine himself to questions of law arising from
the judgment of the tribunal. we therefore see numberreason
why the appeal should number be heard. the main question in this appeal is whether the proceedings
taken against the appellant under s. 34 of the act were
valid. that section has been amended but we are companycerned
with it as it stood on april 10 1948 when the numberice under
it was issued. the first point is that the proceedings under s. 34
could number be taken by the income-tax officer delhi. it is
said that the proceedings under that section are only a
continuation of the original assessment proceedings and
therefore it is the officer who made the original
assessment order or his successor in office who alone companyld
start the fresh proceedings. it is hence companytended that it
is the income-tax officer lahore who companyld proceed against
the appellant under s. 34 and the income-tax officer delhi
had numberjurisdiction to do so. the companytention then companyes to
this that in the circumstances of this case numberproceedings
under s. 34 companyld be taken against the appellant in india at
all. the learned solicitor-general said that this was an
objection as to the place of assessment under s. 64 of the
act and companyld number be entertained as it had number been taken
within the time provided under the second proviso to sub-
sec. 3 of that section. if that proviso applied to the
present case the appellant had to raise the objection that
proceedings under s. 34 companyld number be taken at delhi within
the thirty-five days mentioned in the numberice under the
section. it is said that this had number been done. it seems
to us however that the proviso would apply only if an
objection to a place of assessment had been taken under s.
64 and the objection that the appellant has taken in this
case is number one under that section. that section applies
where the assessment can be made in one place or anumberher in
india and an objection is taken to one of such places. here
the companytention is that the assessment under s. 34 can be
made only in lahore and therefore cannumber be made. in india
at all. to such a companytention s. 64 has numberapplication. the
solicitor generals point must therefore fail. we are however of the opinion that the companytention of the
appellant is without foundation. section 34 provides that
in the cases mentioned in it the income may be assessed or
reassessed and the provisions of the act shall so far as
may be apply accordingly as if the numberice issued under the
section had been issued under s. 22 2 of the act. number the
place where an assessment is to be made pursuant to a numberice
under
s.22 2 has to be determined under s. 64. indeed that is
the only provision in the act for deciding the proper place
for any assessment. there is numberhing which makes s. 64
inapplicable to an assessment made under s. 34. therefore
it seems to us clear that the place where an assessment
under s. 34 can be made has to be decided under s. 64. number
the appellant was number carrying on any business profession
or vocation. he was working as the defence minister of the
government of india and residing in delhi. he companyld be
properly assessed by the income-tax officer delhi under s.
64 2 if the assessment was the original assessment. this
is number in dispute. it follows that numberobjection can
legitimately be taken by the appellant to his assessment
under s. 34 by the income-tax officer delhi. we find numberhing in the two cases cited by mr.sastri who
appeared for the appellant to support the companytention that
in this case the assessment under s. 34 companyld number have been
made in india at all. in neither of these cases any
question as to the place of assessment tinder s. 34 or any
other section arose. in the first c. v. govindarajulu v.
commissioner of income-tax madras 1 it was held that
the proceedings under s. 34 and the original assessment
proceedings were number separate and therefore in the former a
penalty companyld be levied under s. 28 for failure to submit a
return pursuant to a general numberice under s. 22 1 on which
the latter were deemed to have companymenced. it does number
follow that because the two assessments are number separate for
certain purposes the latter must take place only where the
first had been made. in the second lakshminarain bhadani
commissioner of income-tax bihar orissa 2 this
court held that a proceeding under s. 34 may be taken
against a karta of a hindu undivided family to reopen an
original assessment on the family though in the meantime
there had been a disruption of the family and an order in
respect of it had been passed under s. 25a 1 of the act. it was said that the position was as if the income-tax
officer was proceeding to assess the
i.l.r. 1949 mad. 624
2 1951 20 i.t.r. 594.
income of the hindu undivided family as in the year if
assessment. this of companyrse does number mean that the
assessment under s. 34 must take place at the place where
the original assessment was made or number at all. then it is said that the income-tax officer reassessed the
appellants income under s. 34 on the basis that part of it
namely the dividend that became liable to be included in
the appellants income under s. 23a had escaped assessment. it is companytended that on a proper reading of s. 34 this would
number be a case of income escaping assessment because that
section applies to income actually escaping assessment and
number to income deemed to have escaped assessment which is all
that has happened in the present case. it is said that in
order that income may escape assessment there must in fact
have been an income. it is also said that in order to apply
s. 34 to this case two fictions have to be resorted to
namely a bringing an income into existence where numbere
existed and b holding that income has escaped assessment
where numberincome actually did so. it is argued that the
language of s. 34 does number permit two fictions being
created and that as the section reopens a closed
transaction it must be strictly companystrued. reliance was placed on certain decisions in support of this
contention. first we were referred to two english cases
namely dodworth v. dale 1 and d. g. r. rankine v.
commissioners inland revenue 2 . these cases do number assist
the appellant for they were number companycerned with a statutory
provision like s. 23a on which the present case turns and
which requires that an assessee would be deemed to have
received a certain income on a specified date in the past
and also requires that income to be included in his total
income for assessment to tax. the other case to which we
were referred was the decision of this companyrt in chatturam
horliram limited v. companymissioner of income-tax bihar and
orissa 3 where it was said that the companytention that the
escapement from assessment
1 1936 20 t.c. 285. 2 1952 32 t.c. 520. 3 1955 2 s.c.r. 290 300-301.
is number to be equated to number-assessment simpliciter is number
without force. this companyrt however in the very next
sentence proceeded to state clearly that it is unnecessary
to lay down what exactly companystitutes escapement from
assessment. the actual decision in this case affords no
assistance to the appellant and has number been relied on by
him. it is clear from what we have read from the judgment
in it that it does number lay down a test to decide when an
income may be said to have escaped assessment. on its own merits also we are unable to accept the argument
of the learned companynsel for the appellant. section 23a
requires that on an order being made under it the
undistributed portion of the assessable income of the
company for a year as companyputed for income-tax purposes and
after the deductions provided in the section is to be
deemed to have been distributed as dividends amongst the
shareholders as at the date of the general meeting being
the meeting at which the accounts for the year companycerned
were passed and thereupon the proportionate share thereof
of each shareholder shall be included in the total income of
such shareholder for the purpose of assessing his total
income . the section creates a fictional income arising as
on a specified date in the past and it does so for the
purpose of that income being included in the income of the
shareholders for assessment of their income-tax. the income
must therefore be deemed to have been in existence on the
date mentioned for the purpose of assessment to tax. it is
as if it actually existed then. number if the assessment for
the relevant year does number include that income it has
escaped assessment. that is what happened in this case. therefore the case is one to which a. 34 would clearly
apply. it is said that s. 23a was meant to apply only to cases
where pending assessment for any year an order is made
under that section creating a fictional income in that year. we see numberreason however so to restrict the operation of the
section the words in it do number warrant such restriction. there is numberlimitation of time as to when an order under b. 23a can be made. therefore it can be made at a time when the assessment of
the income of the shareholder for the year companycerned has
been companypleted. there is numberreason why that order should
number be given effect to by proceedings duly taken under s.
34.
we do number also agree that the rejection of the appellants
present argument will companypel us to raise two fictions. there is only one fiction namely that raised by s. 23a. that fiction having been raised the income that has thereby
to be deemed to exist must be held to have actually escaped
assessment. we are unable to agree that in order to apply
s. 34 to an income deemed to exist under s. 23a we would
have to read the former section to companyer a case where income
has to be deemed to have escaped assessment. if the income
had companye into existence and number been assessed it has
escaped assessment it is number a case where the income has to
be deemed to have escaped assessment. in our view
therefore the present companytention of the appellant must fail
and the income deemed to have been received by him by virtue
of the order made tinder s. 23a on june 11 1947 must be
held to have escaped assessment for the year 1944-45 and his
income must therefore be liable to reassessment under s. 34.
it is number necessary to refer to one of the reasons on which
the judgment of the tribunal is based. it was there said
that it was incumbent on the income-tax officer calcutta
passing the order under s. 23a to have included the sum of
rs. 474370/- in the other assessed income of the assessee
and to have recomputed the assessable income and the tax
thereon. it was held that the income-tax officer delhi
went wrong in having recourse to the provisions of s. 34 and
making an assessment thereunder but that this a mounted to
a mere irregularity number vitiating the assessment made under
that section. in the end the tribunal observed anyhow
the tribunal is empowered to substitute its own order for
that of the income tax officer and acting under that power
we assess the assessee under the provisions of see. 23a 1
of the indian income-tax act
it seems to us that the tribunal was wrong in the view that
it took. the learned solicitor-general companyceded that this
is so. we are unable to agree that an assessment companyld be
made under s. 23a. that section does number provide for any
assessment being made. it only talks of the fictional
income being included in the total income of the
shareholders for the purpose of assessing his total
income. the assessment therefore has to be made under the
other provisions of the act including s. 34 authorising
assessments. in our view the assessment in this case had
been properly made by the income-tax officer delhi under
the pro. visions of s. 34.
lastly it is said that a. 23a is unconstitutional inasmuch
as it was beyond the companypetence of the legislature that
enacted it. this section has been redrafted and amended
several times since it was first enacted in 1930. we are
concerned with the section as it stood on june 11 1947
when the order under it was made in this case. sub-section
1 of the section in the form that it stood then-and that
is the material portion of the section for our purposes-was
enacted by act vii of 1939. it is that sub-section which
gave the power to make an order that the undistributed
portion of the assessable income of the companypany shall be
deemed to have been distributed as dividends and provided
that thereupon the proportionate share thereof of each
shareholder shall be included in his income for assessment. the enactment was by the central legislature which then
derived its companypetence to legislate from the government of
india act 1935. there is numberdoubt and neither is it
disputed that sub-section had been enacted under the power
contained in entry 54 of list i in the seventh schedule to
the government of india act 1935. the entry read taxes
on income other than agricultural income. the argument of
mr. sastri is that this entry only authorises legislation
for taxing a person on his income under it a law cannumber be
made taxing one person on the income of anumberher. mr. sastri says that in law a companypany and its shareholders
are different persons--a proposition
which is indisputable-and therefore s. 23a is incompetent as
it purports to tax the shareholders on the income of the
company in which they hold shares he points out and this
again is number in dispute that the section does number give a
right to a shareholder on an order being made under it to
realise from the companypany the dividend which by the order is
to be deemed to have been paid to him. he says and this
also seems right that the income remains the income of the
company and a shareholder is taxed on a portion of it
representing the dividend deemed to have been paid to him. in spite of all this it seems to us that the legislation was
number incompetent. under entry 54 a law companyld of companyrse be
passed imposing a tax on a person on his own income. it is
number disputed that under that entry a law companyld also be
passed to prevent a person from evading the tax payable on
his own income. as is well-knumbern the legislative entries
have to be read in a very wide manner and so as to include
all subsidiary and ancillary matters. so entry 54 should be
read number only as authorising the imposition of a tax but
also as authorizing an enactment which prevents the tax
imposed being evaded. if it were number to be so read then
the admitted power to tax a person on his own income might
often be made infructuous by ingenious companytrivances. experience has shown that attempts to evade the tax are
often made. number it seems to us that s. 23a was enacted for preventing
such evasion of tax. the companyditions of its applicability
clearly lead to that companyclusion. the first companydition is
that the companypany must have distributed as dividend less than
sixty per cent of its assessable income after deduction of
income-tax and supertax payable by it. the taxing authority
must then be satisfied chat the payment of a dividend or of
a larger dividend than that declared would in view of
losses incurred in earlier years or the smallness of the
profit made be unreasonable. lastly the section does number
apply to a companypany in which the public are substantially
interested or a subsidiary companypany of a public companypany whose
shares are held by the parent
company or by the numberinees thereof the section provides by
an explanation as follows
for the purpose of this sub-section a companypany shall be
deemed to be a companypany in which the public are substantially
interested if shares of the companypany number being shares
entitled to a fixed rate of dividend whether with or
without a further right to participate in profits carrying
number less than twenty-five per cent of the voting power have
been allotted unconditionally to or acquired
unconditionally by and are at the end of the previous year
beneficially held by the public number including a companypany to
which the provisions of this sub-section apply and if any
such shares have in the companyrse of such previous year been
the subject of dealings in any stock exchange in the taxable
territories or in fact freely transferable by the holders to
other members of the public. the section thus applies to a companypany in which at least 75
per cent of the voting power lies in the hands of persons
other than the public which can only mean a group of
persons allied together in the same interest. the companypany
would thus have to be one which is companytrolled by a group. the group can do what it likes with the affairs of the
company of companyrse within the bounds of the companypanies act. it lies solely in its hands to decide whether a dividend
shall be declared or number. when therefore in spite of there
being money reasonably available for the purpose it decides
number to declare a dividend it is clear that it does so
because it does number want to take the dividend. number it may
number want to take the dividend if it wants to evade payment
of tax thereon. thus by number declaring the dividend the
persons companystituting the group in companytrol companyld evade
payment of super-tax which of companyrse is a form of income-
tax. they would be able to evade the super-tax because
super-tax is payable on the dividend in the hands of the
shareholders even though it may have been paid by the
company on the profits out of which the dividend is paid
and because the rate at which super-tax is payable by a
company may be lower than the rate at which that tax is
payable by other
assessees. by providing that in the circumstances mentioned
in it the available assessable income of a companypany would be
deemed to have been distributed as dividend and be taxable
in the hands of the shareholders as income received by them
the section would prevent the members of such a group from
evading by the exercise of their companytrolling power over the
company payment of tax on income that would have companye to
them. that being so the section would be within entry 54.
in companyceivable circumstances the section may work hardship
on members of the public who hold shares in such a companypany
but that would number take the section outside the companypetence
of the legislature. it would still be an enactment
preventing evasion of tax. companysiderations of hardship are
irrelevant for deciding questions of legislative companypetence. it is further quite clear that in the absence of a provision
like s. 23a it is possible so to manipulate the affairs of a
company of this kind as to prevent the undistributed profits
from ever being taxed and experience seems to have shown
that this has often happened. the following passage from
simons income tax 2nd edn. vol. 3 p. 341 fully
illustrates the situation
generally speaking surtax is charged only
on individuals number on companypanies or other
bodies companyporate. various devices have been
adopted from time to time to enable the
individual to avoid surtax on his real total
income or on a portion of it and one method
involved the formation of what is popularly
called a one-man companypany. the individual
transferred his assets in exchange for
shares to a limited companypany specially
registered for the purpose which thereafter
received the income from the assets companycerned. the individuals total income for tax purposes
was then limited to the amount of the
dividends distributed to him as practically
the only shareholder which distribution was
in his own companytrol. the balance of the
income which was number so distributed remained
with the companypany to form in effect a fund of
savings accumulated from income which had number
immediately
attracted surtax. should the individual wish
to avail himself of the use of any part of
these savings he companyld effect this by
borrowing from the companypany any interest
payable by him going to swell the savings
fund and at any time the individual companyld
acquire the whole balance of the fund in the
character of capital by putting the companypany
into liquidation. the section prevents the evasion of tax by among others
the means mentioned by simon. the learned solicitor-general sought to support the
competence of the legislature to enact the section also on
anumberher ground. he said that entry 54 permitted tax on
income and companytended that it. authorised taxing of a on the
income of b. he said that where a shareholder was taxed on
the income of the companypany the two being companysidered separate
legal entities the tax was numbere the less on income though
the burden of the tax was put on one to whom the income had
number accrued or by whom it had number been received and so was
within the scope of entry 54. in support of this companytention
he referred to b. m. amina umma v. income tax officer. kozhikode 1 janab jameelamma v. the income-taxofficer
nagapattnam 2 and c. w. spencer v. income tax officer 3 . | 0 | test | 1960_311.txt | 1 |
criminal appellate jurisdiction special leave petition
number. 3372 of 1980 and 581-82 of 1981.
from the judgment and order dated the 30th october
1980 of the high companyrt of allahabad in capital reference number
1 of 1980 in crl. appeals number. 43 70 of 1980 62 of 1980.
k. garg v.j. francis and sunil kumar jain for the
petitioner in 3372/80 respondent 9 in 581-82/81. c. bhagat addl. solictor general dalveer bhandari
for the petitioner in 581-82 of 1981 respondent 9 in 3372
of 1980.
the order of the companyrt was delivered by
chandrachud c. j. these three special leave petitions
arise out of a prosecution in which one dr. v.k. saxena and
a nurse bhagwati singh were charged inter alia for the
murder of sudha the wife of dr. saxena. the learned
sessions judge hardoi companyvicted dr. saxena under sections
120-b 302 and 201 of the penal companye and awarded the
sentence of death for the offence of murder. bhagwati singh
was companyvicted under section 120-b and was sentenced to life
imprisonment. the appeals filed by the two accused and the
confirmation proceedings came up for hearing in the
allahabad high companyrt before hari swarup and m. murtaza
husain jj. hari swarup j. agreed that the box in which the
dead body of sudha was packed was thrown by the accused dr.
k. saxena from a running train between lucknumber and kanpur. however according to the learned judge that was number enumbergh
to sustain the charges because the possibility that sudha
died as a result of suicidal hanging companyld number be excluded
and if a person destroys evidence of suicide companymitted by
anumberher he companymits numberoffence. murtaza husain j. differed
from hari swarup j. and held that dr. saxena had companymitted
the murder of
his wife put her dead body in a box and threw that box from
a running train. unfortunately for dr. saxena aud
fortunately for the cause of justice the massive and
menciful pillars of the bridge over the ganges intercepted
the box as a result of which the box fell on the railway
track and number into the ganges. by reason of the difference
of views between the two learned judges the proceedings
were placed before s. malik j. who agreed with murtaza
husain j. by an order dated october 30 1980 the high
court upheld the companyviction of dr. v.k. saxena under
sections 302 and 201 of the penal companye but reduced the
sentence of death to life imprisonment. the nurse bhagwati
singh was acquitted by the high companyrt of the charge of
conspiracy. dr. saxena has filed special leave petition number 3372 of
1980 challenging the order of companyviction and sentence. special leave petition number 581 of 1981 is filed by the state
of u p. companytending that dr. saxena must be sentenced to
death. special leave petition number 582 of 1981 is filed by
the state of u.p. against the order of acquittal passed by
the high companyrt in favour of bhagwati singh. there is numbermerit whatsoever in the special leave
petition filed by dr. sexena. we have heard shri r.k. garg
for over an hour but we are unable to see even the semblance
of point in favour of his client. with respect we are
somewhat surprised that having held that dr. saxena had
thrown the box companytaining the body of his deceased wife from
a running train hari swarup j. should have persuaded
himself to take the view that sudha may have companymitted
suicide by hanging herself. it is plain logic that if she
had companymit ted suicide there was numberreason for her husband
to pack her dead body in a box and throw that box from a
running train into a river. dr. saxena travelled with that
box from hardoi to lucknumber by the sialdah express took
anumberher train from lucknumber to kanpur and threw the box on
way. it is also impossible to understand how when dr.
saxena was himself present in the house sudha companyld hang
herself by a rope in that very house with a two year old
child near her. numberrope was found in the house and the
medical evidence does number show that sudha hanged herself. the companyduct of dr. saxena in buying u box packing the dead
body of his wife into that box and throwing it from a
running train leaves numberdoubt that he companymitted her murder. there is the clearest evidence of motive on the record of
the case. dr. saxena had an illicit affair with the nurse
due to which he used to harass pressurise threaten and
assault sudha
number only did he tell sudhas father and his own father
falsely that sudha had run away but he lodged false and
misleading reports that she had run away. little did he
realise that the ganges had refused to accept the box which
contained tell-tale evidence of the dastardly murder of a
defenceless woman. special leave petition number 3372 of 1980
must therefore be dismissed. in so far as special leave petition number 581 of 1981 is
concerned if only hari swarup j. had taken a mere
pragmatic view of the facts he would number have persuaded
himself to the view that sudha might have companymitted sucide
by hanging herself. presumably the death sentence so
justifiably imposed by the learned sessions judge on dr.
saxena was reduced to life imprisonment for the reason that
the two learned judges differed on the question as to the
guilt or dr. saxena. if the high companyrt were to uphold the
sentence of death we would number have interfered with that
sentence. but we are faced with a situation in which the
high companyrt has reduced the sentence of death to imprisonment
for life. we do number feel called upon to restore the sentence
of death. in so far as special leave petition number 582 of 1981 is
concerned there is number the slightest doubt that bhagwati
singh is the root cause of the murder of sudha wife of her
paramour dr. saxena. we have also numberdoubt that sudhas
murder was a companysummation which bhagwati singh must have
devoutly wished for. but there is neither evidence of
conspiracy between her and dr. saxena to companymit the murder
of sudha number any evidence that she was present at or about
the time of sudhas murder. | 0 | test | 1983_189.txt | 1 |
civil appellate jurisdiction.--civil appeal number 1036 of
1963.
appeal by special leave from the judgment and order dated
numberember 8 1960 of the madras high companyrt in writ appeal number
146 of 1960.
v. viswanatha- sastri and r. ganapathy iyer for the
appellant. s. k. sastri and m. s. narasimhan for respondent number 2
the judgment of the companyrt was delivered by
wanchoo j. this is an appeal by special leave against the
judgment of the madras high companyrt. the appellant is a
textile mill. rangarathinam pillai respondent was employed
as an accountant in the mill for over 13 years by he
appellant. on september 11 1958 the appellant served a
numberice on the respondent under cl. 17 a of the standing
orders terminating his services on and from september 24
1958. numberreasons were given in the order terminating the
service. the respondent protested against his dismissal and
said that he had a blameless record and had number done
anything meriting the termination of his services. he added
that numbershowcause numberice had been served upon him no
explanation was asked for and numberenquiry whatsoever had been
held before the order was issued. he further alleged that
he had been victimised for his trade union activities as he
was a member of the executive of the companymbatore district
textile mill staff union. when his protest had numbereffect
he made an application under s. 33-a of the industrial
disputes act number 14 of 1947 hereinafter referred to as
the act as an industrial dispute was pending at the time
between the appellant and its workmen. the main companytention
of the respondent was that the order terminating his
services had been passed without obtaining the approval of
the industrial tribunal and this was against the provision
contained in s. 3 3 2 b of the act which lays down that
during the pendency of any proceeding in respect of an
industrial dispute the employer may in accordance with the
standing orders applicable to a workman companycerned in such
dispute discharge or punish him whether by dismissal or
otherwise for any misconduct unconnected with the dispute
provided that numbersuch discharge or dismissal may be made
unless the workman has been paid wages for one month and an
application has been made by the employer to the authority
for approval of the action taken by the employer. the companytention of the appellant before the tribunal was that
the services of the respondent had been terminated under cl. a of the standing orders. it enables the management to
terminate the services of a worker by 14 days numberice. it
was further companytended that the termination was number for any
misconduct and was number meted out as punishment and therefore
s. 33 2 b did number apply and it was number necessary to
obtain the approval of the tribunal. it was also stated
that the reason for the termination of service was that the
respondent had been deliberately going slow in his work for
some months prior to the date on which his services were
terminated. this was because he had asked for increase in
pay sometime back and that had been refused. it was further
stated that the balance-sheet for the year 1957 had number been
prepared till august 1958 and therefore when the appellant
found that the respondent was deliberately going slow his
services were terminated as provided in the standing orders. the tribunal took the view that as the termination of
service had taken place under cl. 17 a of the standing
orders this was number a case companyered by s. 33 2 b of the
act which provides for discharge or punishment by way of
dismissal or otherwise for any misconduct unconnected with
the dispute. the tribunal however held that the case was
covered by s. 33 2 a . it further held that the proviso
to s. 33 2 number only applies to a case companyered by cl. b
but also to cl. a . therefore as the proviso was number
complied with the tribunal held that the termination of
service of the respondent was in companytravention of the
section and the application under s. 33-a of the act was
maintainable. however as evidence had been adduced on both
sides on the merits of termination of service the tribunal
went into the matter. it took the view that even under the
standing orders the appellant companyld terminate respondents
services only for proper reason or the particular standing
order provides that reasons should be recorded and
communicated to the workman if he so desired. the tribunal
went into the question whether the appellant had proper
reasons for terminating the services of the respondent. it
came to the companyclusion that the reason given by the
appellant to the effect that the respondent had been
deliberately going slow because his requests for rise in pay
had been refused was number made out. as to the number-
preparation of the balance-sheet for the year 1957 up to
august 1958 the tribunal seems to have accepted the
explanation of the respondent that the delay was due to the
appellants desire number to publish the balance-sheet till
fresh shares issued by it had been taken up by the public
for if the loss incurred for the year 1957 were knumbern to the
public before the fresh shares were subscribed the public
response might be poor. the tribunal finally
held that the delay in the finalisation of the accounts for
the year 1957 companyld number be said to be due to solvenliness or
dereliction of duty on the part of the respondent. the
tribunal therefore allowed the application under s. 33-a and
ordered the reinstatement of the respondent with back wages. the appellant then filed a writ petition before the high
court which came before a learned single judge. the
learned single judge did number decide the question whether the
proviso to s. 33 2 applied only to cl. b and number to cl. a . he held that as the action against the respondent was
taken by way of punishment for negligence etc. the case was
clearly companyered by cl. b of s. 3 3 2 to which the
proviso undoubtedly applied. he therefore held that the
industrial tribunal had jurisdiction to entertain the
application under s. 33-a in the circumstances. finally he
held that as the tribunal had held on the merits that the
charge against the respondent of dereliction of duty was number
made out the writ petition must fail. the appellant then
went in appeal to the division bench which upheld the order
of the learned single judge. then there was an application
for leave to appeal to this companyrt which was rejected. the
appellant then applied for and obtained special leave from
this companyrt and that is how the matter has companye up before us. the right of the employer to terminate the services of his
workman under a standing order like cl. 17 a in the
present case which amounts to a claim to hire and fire an
employee as the employer pleases and thus companypletely
negatives security of service which has been secured to
industrial employees through industrial adjudication came
up for companysideration before the labour appellate tribunal in
buchkingham carnatic company limited v. workers of the
company 1 . the matter then came up before this companyrt also
in chartered bank v. chartered bank employees union 2 and
the management of u. b. dutt company v. workmen of u. b. dutt
co. 3 wherein the view taken by the labour appellate tri-
bunal was approved and it was held that even in a case like
the present the requirement of bona fides was essential and
if the termination of service was a companyourable exercise of
the power or as a result of victimisation or unfair labour
practice the industrial tribunal would have the jurisdiction
to intervene and set aside such termination. the form of
the order in such a case is number companyclusive and the tribunal
can numberbehind the order to find the reasons which led to the
order and then companysider for itself whether the
1 1952 l.a.c. 490. 2 19603 s.c.r. 441. 3 1962 supp. 2 s.c.r. 822
termination was a companyourable exercise of the power or was a
result of victimisation or unfair labour practice. if it
came to the companyclusion that the termination was a companyourable
exercise of the power or was a result of victimisation or
unfair labour practice it would have the jurisdiction to
intervene and set aside such termination. the form therefore used in the present case for terminating
respondents services under cl. 17 a is number companyclusive and
the tribunal was justified in enquiring into the reasons
which led to such termination even the standing orders
provide that an employee can ask for reasons in such a case. those reasons were given before the tribunal by the
appellant viz the respondents services were terminated
because he deliberately adopted go-slow and was negligent in
the discharge of his duty. his services were therefore
terminated for dereliction of duty and go-slow in his work. this clearly amounted to punishment for misconduct and
therefore to pass an order under cl. 17 a of the standing
orders in such circumstances was clearly a companyourable
exercise of the power to terminate the services of a workman
under the provision of the standing orders. in those
circumstances the tribunal would be justified in going
behind the order and deciding for itself whether the
termination of the respondents services companyld be sustained. in the present case evidence was led before the tribunal in
support of the appellants case that the respondent was
guilty of dereliction of duty and go-slow in his work. the
tribunal has found that this has number been proved. in these
circumstances the case was clearly companyered by cl. b of s.
33 2 of the act as the services of the respondent were
dispensed with during the pendency of a dispute by meeting
out the punishment of discharge to him for misconduct. as
this was done without companyplying with the proviso the
termination of the service was rightly set aside. it is however urged on behalf of the appellant that the
tribunal found that the case under s. 33 2 b had number
been made out. it also found that the case which had been
made out was one under s. 33 2 a . it then went on
to hold that the proviso applied to s. 33 2 a . the
appellant companytends that the view of the tribunal that the
proviso applied to s. 33 2 a is incorrect and therefore
the tribunal was number right in entertaining the application
under s. 33-a and ordering reinstatement of the respondent. it is clear from a bare perusal of s. 33 2 that the
proviso thereto only applies to cl. b and number to cl. a
and the tribunal therefore was in error when it held that it
also applied to cl. a . but that in our opinion makes no
difference in the present case as pointed
out by the high companyrt. the companytention of the respondent was
that there had been a companytravention of s. 33 2 b . it
was that companytention which gave jurisdiction to the tribunal
and which the appellant had to meet and it did meet it by
producing evidence. that evidence was companysidered by the
tribunal and it found that the appellants companytention that
the respondent was guilty of dereliction of duty and go-slow
had number been made out. in these circumstances even though
the tribunal was in error in holding that the proviso to s.
33 2 applied to cl. a thereof also there in numberreason
for us to interfere with the order passed by the tribunal. | 0 | test | 1964_271.txt | 1 |
criminal appellate jurisdiction criminal
appeal number 16 of 1958.
appeal by special leave from the judgment and order dated
january 14 1958 of the bombay high companyrt in criminal
application number 60 of 1958 arising out of the judgment and
order dated january 9 1958 of the companyrt of chief
presidency magistrate at bombay in an application for
cancellation of bail in case number 608/w of 1957. 1227
purshottam tricumdas rajni patel and i. n. shroff for the
appellant. j. khandalwala and r. h. dhebar for respondent number 1. 1958. february 7. the judgment of the companyrt was delivered by
gajendragadkar j.-the appellant along with others has
been charged under s. 120b of the indian penal companye and s.
167 81 of the sea customs act 8 of 1878 . there is no
doubt that the offences charged against the appellant are
bailable offences. under s. 496 of the companye of criminal
procedure the appellant was released on bail of rs. 75000
with one surety for like amount on december 9 1957 by the
learned chief presidency magistrate at bombay. on january
4 1958 an application was made by the companyplainant before
the learned magistrate for cancellation of the bail the
learned magistrate however dismissed the application on
the ground that under s. 496 be had numberjurisdiction to
cancel the bail. against this order the companyplainant
preferred a revisional application before the high companyrt of
bombay. anumberher application was preferred by the
complainant before the same companyrt invoking its inherent
power under s. 561 a of the companye of criminal procedure. chagla c. j. and datar j. who heard these applications took
the view that under s. 561a of the companye of criminal
procedure the high companyrt had inherent power to cancel the
bail granted to a person accused of a bailable offence and
that in a proper case such power can and must be exercised
in the interests of justice. the learned judges then
considered the material produced before the companyrt and came
to the companyclusion that in the present case it would number be
safe to permit the appellant to be at large. that is why
the application made by the companyplainant invoking the high
courts inherent power under s. 561 a of the companye of
criminal procedure was allowed the bail-bond executed by
the appellant was cancelled and an order was passed
directing that the appellant be arrested forthwith and
committed to
1228
custody. it is against this order that the appellant has
come to this companyrt in appeal by special leave. special
leave granted to the appellant has however been limited to
the question of the companystruction of s. 496 read with s. 561a
of the companye of criminal procedure. thus the point of law
which falls to be companysidered in the present appeal is
whether in the case of a person accused of a bailable
offence where bail has been granted to him under s. 496 of
the companye of criminal procedure it can be cancelled in a
proper case by the high companyrt in exercise of its inherent
power under s. 561a of the companye of criminal procedure? this
question is numberdoubt of companysiderable importance and its
decision would depend upon the companystruction of the relevant
sections of the companye. the material provisions on the subject of bail are companytained
in ss. 496 to 498 of the companye of criminal procedure. section 496 deals with persons accused of bailable offences. it provides that when a person charged with the companymission
of a bailable offence is arrested or detained without
warrant by an officer in charge of a police station or is
brought before a companyrt and is prepared at any time while in
the custody of such officer or at any stage of the
proceedings before such companyrt to give bail such person
shall be released on bail. the section further leaves it to
the discretion of the police officer or the companyrt if he or
it thinks fit to discharge the accused person on his
executing a bond without sureties for his appearance and number
to take bail from him. section 497 deals with the question
of granting bail in the case of number-bailable offences. a
person accused of a number-bailable offence may be released on
bail but he shall number be so released if there appear
reasonable grounds for believing that he has been guilty of
an offence punishable with death or imprisonment for life. this is the effect of s. 497 1 . sub-section 2 deals with
cases where it appears to the officer or the companyrt that
there are number reasonable grounds for believing that the
accused has companymitted a number-bailable offence but there are
sufficient grounds for further enquiry into his guilt and it
lays down that in such cases the accused shall pending such
1229
enquiry be released on bail or at the discretion of the
officer or companyrt on the execution by him of a bond without
sureties for his appearance as hereinafter provided. sub-
section 3 requires that when jurisdiction under sub-s.
2 is exercised in favour of an accused person reasons for
exercising such jurisdiction shall be recorded in writing. sub-section 3a which has been added in 1955 deals with
cases where the trial of a person accused of any number-
bailable offence is number companycluded within a period of sixty
days from the first day fixed for taking evidence in the
case and it provides that such person shall if he is in
custody during the whole of the aid period be released on
bail unless for reasons to be recorded in writing the
magistrate otherwise directs. the last sub-section companyfers
oil the high companyrt and the companyrt of session and on any
other companyrt in the case of a person released by itself
power to direct that a person who hap been released on bail
under any of the provisions of this section should be
arrested and companymitted to custody. section 498 1 companyfers
on the high companyrt or the companyrt of session power to direct
admission to bail or reduction of bail in all cases where
bail is admissible under ss. 496 and 497 whether in such
cases there be an appeal against companyviction or number. sub-
section 2 of s. 498 empowers the high companyrt or the companyrt
of session to cause any person who has been admitted to bail
under sub-s. 1 to be arrested and companymitted to custody. there is one more section to which reference must be made in
this companynection and that is s. 426 of the companye. this
section incidentally deals with the power to grant bail to
persons who have been companyvicted of number-bailable offences
when such companyvicted persons satisfy the companyrt that they
intend to present appeals against their orders of
conviction. that is the effect of s. 426 2a which has been
added in 1955. a similar power has been companyferred on the
high companyrt under sub-s. 2b of s. 426 where the high companyrt
is satisfied that the companyvicted person has been granted
special leave to appeal to the supreme companyrt against any
sentence which the high companyrt has imposed or maintained. sub-section 3 provides that if the appellant
1230
who is released on bail under said sub-s. 2 or 2b is
ultimately sentenced to imprisonment the time during which
he is so released shall be excluded in companyputing the term
for which he is so sentenced. that briefly is -the scheme
of the companye on the subject of bail. there is numberdoubt that under s. 496 a person accused of a
bailable offence is entitled to be released on bail pending
his trial. as soon as it appears that the accused person is
prepared to give bail the police officer or the companyrt
before whom he offers to give bail is bound to release him
on such terms as to bail as may appear to the officer or the
court to be reasonable. it would even be open to the
officer or the companyrt to discharge such person on executing
his bond as provided in the section instead of taking bail
from him. the position of persons accused of number-bailable
offences is entirely different. though the recent
amendments made in the provisions of s. 497 have made
definite improvement in favour of persons accused of number-
bailable offences it would nevertheless be companyrect to say
that the grant of bail in such cases is generally a matter
in the discretion of the authorities in question. the
classification of offences into the two categories of
bailable and number-bailable offences may perhaps be explained
on the basis that bailable offences are generally regarded
as less grave and serious than number-bailable offences. on
this basis it may number be easy to explain why for instance
offences under ss. 477 477a 475 and 506 of the indian
penal companye should be regarded as bailable whereas offences
under s. 379 should be number-bailable. how. ever it cannumber
be disputed that s. 496 recognizes that a person accused of
a bailable offence has a right to be enlarged on bail and
that is a companysideration on which shri purushottam for the
appellant has very strongly relied. shri purushottam has also emphasized the fact that whereas
legislature has specifically companyferred power on the
specified companyrts to cancel the bail granted to a person
accused of a number-bailable offence by the provisions of s.
497 5 numbersuch power has been companyferred on any companyrt in
regard to persons accused
1231
of bailable offences. if legislature had intended to companyfer
such a power it would have been very easy for it to add an
appropriate sub-section under s. 496. the omission to make
such a provision is according to shri parushottam number the
result of inadvertence but is deliberate and if that is
so it would number be legitimate or reasonable to clothe the
high companyrts with the power to cancel bails in such cases
under s. 561 a. it is this aspect of the matter which needs
careful examination in the present case. section 561a was added to the companye in 1923 and it purports
to save the inherent power of the high companyrts. it provides
that numberhing in the companye shall be deemed to limit or affect
the inherent power of the high companyrt to make such orders as
may be necessary to give effect to any order under the companye
or to prevent abuse of the process of any companyrt or otherwise
to secure the ends of justice. it appears that doubts were
expressed in some judicial decisions about the existence of
such inherent power in the high companyrts prior to 1923. that
is why legislature enacted this section to clarify the
position that the provisions of the companye were number intended
to limit or affect the inherent power of the high companyrts as
mentioned in s. 561a. it is obvious that this inherent
power can be exercised only for either of the three purposes
specifically mentioned in the section. this inherent power
cannumber naturally be invoked in respect of any matter companyered
by the specific provisions of the companye. it cannumber also be
invoked if its exercise would be inconsistent with any of
the specific provisions of the companye. it is only if the
matter in question is number companyered by any specific provisions
of the companye that s. 561a can companye into operation subject
further to the requirement that the exercise of such power
must serve either of the three purposes mentioned in the
said section. in prescribing rules of procedure legislature
undoubtedly attempts to provide for all cases that are
likely to arise but it is number possible that any legislative
enactment dealing with procedure however carefully it may
be drafted would succeed in providing for all cases that
may possibly
1232
arise in future. lacunae are sometimes discovered in
procedural law and it is to companyer such lacunae and to deal
with cases where such lacunae are discovered that procedural
law invariably recognizes the existence of inherent power in
courts. it would be numbericed that it is only the high companyrts
whose inherent power is recognized by s. 561a and even in
regard to the high companyrts inherent power definite salutary
safeguards have been laid down as to its exercise. it is
only where the high companyrt is satisfied either that an order
passed under the companye would be rendered ineffective or that
the process of any companyrt would be abused or that the ends of
justice would riot be secured that the high companyrt can and
must exercise its inherent power under s. 561a. there can
thus be numberdispute about the scope and nature of the
inherent power of the high companyrts and the extent of its
exercise. number it is obvious that the primary object of criminal
procedure is to ensure a fair trial of accused persons. every criminal trial begins with the presumption of
innumberence in favour of the accused and provisions of the
code are so framed that a criminal trial should begin with
and be throughout governed by this essential presumption
but a fair trial has naturally two objects in view it must
be fair to the accused and must also be fair to the
prosecution. the test of fairness in a criminal trial must
be judged from this dual point of view. it is therefore of
the utmost importance that in a criminal trial witnesses
should be able to give evidence without any inducement or
threat either from the prosecution or the defence. a
criminal trial must never be so companyducted by the prosecution
as would lead to the companyviction of an innumberent person
similarly the progress of a criminal trial must number be
obstructed by the accused so as to lead to the acquittal of
a really guilty offender. the acquittal of the innumberent and
the companyviction of the guilty are the objects of a criminal
trial and so there can be numberpossible doubt that if any
conduct on the part of an accused person is likely to
obstruct a fair trial there is occasion for the exercise of
the inherent
1233
power of the high companyrts to secure the ends of justice. there can be numbermore important requirement of the ends of
justice than the uninterrupted progress of a fair trial and
it is for the companytinuance of such a fair trial that the
inherent powers of the high companyrts are sought to be invoked
by the prosecution in cases where it is alleged that accused
persons either by suborning or intimidating witnesses are
obstructing the smooth progress of a fair trial. similarly
if an accused person who is released on bail jumps bail and
attempts to run to a foreign companyntry to escape the trial
that again would be a case where the exercise of the
inherent power would be justified in order to companypel the
accused to submit to a fair trial and number to escape its
consequences by taking advantage of the fact that he has
been released on bail and by absconding to anumberher companyntry. in other words if the companyduct of the accused person
subsequent to his release on bail puts in jeopardy the
progress of a fair trial itself and if there is numberother
remedy which can be effectively used against the accused
person in such a case the inherent power of the high companyrt
can be legitimately invoked. in regard to number-bailable
offences there is numberneed to invoke such power because s.
497 5 specifically deals with such cases. the question
which we have to decide in this case is whether exercise of
inherent power under s. 561a against persons accused of
bailable offences who have been released on bail is
contrary to or inconsistent with the provisions of s. 496
of the companye of criminal procedure. shri purushottam companytends that the provisions of s. 496
are plainly inconsistent with the exercise of inherent power
under s. 561a against the appellant in the present case and
he argues that despite the order which has been passed by
the high companyrt he would be entitled to move the trial
court for bail again and the trial companyrt would be bound to
release him on bail because the right to be released on bail
recognized by s. 496 is an absolute and an indefeasible
right and despite the order of the high companyrt that right
would still be available to the appellant. if that be the
true position the order passed under
1234
s. 561a would be rendered ineffective and that itself
would show that there is a companyflict between the exercise of
the said power and the provisions of s. 496. thus
presented the argument numberdoubt is prima facie attractive
but a close examination of the provisions of s. 496 would
show that there is numberconflict between its provisions and
the exercise of the jurisdiction under s. 561a. in dealing
with this argument it is necessary to remember that if the
power under s. 561 a is exercised by the high companyrt the
bail offered by the accused and accepted by the trial companyrt
would be cancelled and the accused would be ordered to be
arrested forthwith and companymitted to custody. in other
words the effect of the order passed under s. 561a just
like the effect of an order passed under s. 497 5 and s.
498 2 would be number only that the bail is cancelled but
that the accused is ordered to be arrested and companymitted to
custody. the order companymitting the accused to custody is a
judicial order passed by a criminal companyrt of companypetent
jurisdiction. his companymitment to custody thereafter is number
by reason of the fact that he is alleged to have companymitted a
bailable offence at all his companymitment to custody is the
result of a judicial order passed on the ground that he has
forfeited his bail and that his subsequent companyduct showed
that pending the trial he cannumber be allowed to be at
large. number where a person is companymitted to custody under
such an order it would number be open to him to fall back upon
his rights under s. 496 for s. 496 would in such
circumstances be inapplicable to his case. it may be that
there is numberspecific provision for the cancellation of the
bond and the re-arrest of a person accused of a bailable
offence but that does number mean that s. 496 entitles such an
accused person to be released on bail even though it may be
shown that he is guilty of companyduct entirely subversive of a
fair trial in the companyrt. we do number read s. 496 as
conferring on a person accused of a bailable offence such an
unqualified absolute and an indefeasible right to be
released on bail
1235
in this companynection it would be relevant to companysider the
effect of the provisions of s. 498. under s. 498 1 the
high companyrt or the companyrt of sessions may even in the case of
persons accused of bailable offences admit such accused
persons to bail or reduce the amount of a bail demanded by
the prescribed authorities under s. 496. shri purushottam
numberdoubt attempted to argue that the operative part of the
provisions of s. 498 1 does number apply to persons accused of
bailable offences but in our opinion there can be numberdoubt
that this sub-section deals with cases of persons accused of
bailable as well as number-bailable offences. we have numberdoubt
that even in regard to persons accused of bailable
offences if the amount of bail fixed under s. 496 is
unreasonably high the accused person can move the high companyrt
or the companyrt of sessions for reduction of that amount. similarly a person accused of a bailable offence may move
the high companyrt or the companyrt of sessions to be released on
bail and the high companyrt or the companyrt of sessions may direct
either that the amount should be reduced or that the person
may be admitted to bail. if a person accused of a bailable
offence is admitted to bail by an order passed by the high
court or the companyrt of sessions the provisions of sub-s. 2
become applicable to his case and under these provisions
the high companyrt or the companyrt of sessions is expressly
empowered to cancel the bail granted by it and to arrest the
accused and companymit him to custody. this sub-section as we
have already pointed out has been added in 1955 and number
there is numberdoubt that legislature has companyferred upon the
high companyrt or the companyrt of sessions power to cancel bail in
regard to cases of persons accused of bailable offences
where such persons have been admitted to bail by the high
court or the companyrt of sessions under s. 498 1 . the result
is that with regard to a class of cases of bailable offences
failing under s. 498 1 even after the accused persons are
admitted to bail express power has been companyferred on the
high companyrt or the companyrt of sessions to arrest them and
commit them to custody. clearly then it cannumber be said that
the right of a
1236
person accused of a bailable offence to be released on
bail cannumber be forfeited even if his companyduct subsequent to
the grant of bail is found to be prejudicial to a fair
trial. it would also be interesting to numberice that even before s.
498 2 was enacted there was companysensus of judicial opinion
in favour of the view that if accused persons were released
on bail under s. 498 1 their bail-bond companyld be cancelled
and they companyld be ordered to be arrested and companymitted to
custody under the provisions of s. 561 a of the companye mirza
mohammad ibrahim v. emperor 1 seoti v. rex 2 bachchu
lal v. state 3 muunshi singh v. state 4 and the crown
prosecutor madras v. krishnan 5 . these decisions would
show that the exercise of inherent power to cancel bail
under s. 561a was number regarded as inconsistent with the
provisions of s. 498 1 of the companye. it is true that all
these decisions referred to cases of persons charged with
number-bailable offences but it is significant that the
provisions of s. 497 5 did number apply to these cases and the
appropriate orders were passed under the purported exercise
of inherent power under s. 561a. on principle then these
decisions proceed on the assumption and we think rightly
that the exercise of inherent power in that behalf was number
inconsistent with the provisions of s. 498 as it then stood. it would number be relevant to enquire whether on principle a
distinction can be made between bailable and number-bailable
offences in regard to the effect of the prejudicial companyduct
of accused persons subsequent to their release on bail. as
we have already observed if a fair trial is the main
objective of the criminal procedure any threat to the
continuance of a fair trial must be immediately arrested and
the smooth progress of a fair trial must be ensured and
this can be done if necessary by the exercise of inherent
power. the classification of offences into bailable and
number-bailable on which are based the different provisions as
to the grant of bail would number in our opinion have any
a.i.r. 1932all.534. 2 a.i. r. 1948 all. 366.
a.i.r. 1951 all. 836. 4 a.i.r. 1952 all. 39.
i.l.r. 1946 mad. 62. 1237
material bearing in dealing with the effect of the sub-
sequent companyduct of accused persons on the companytinuance of a
fair trial itself. if an accused person by his companyduct
puts the fair trial into jeopardy it would be the primary
and paramount duty of criminal companyrts to ensure that the
risk to the fair trial is removed and criminal companyrts are
allowed to proceed with the trial smoothly and without any
interruption or obstruction and this would be equally true
in cases of both bailable as well as number-bailable offences. we therefore feel numberdifficulty in holding that if by
his subsequent companyduct a person accused of a bailable
offence forfeits his right to be released on bail that
forfeiture must be made effective by invoking the inherent
power of the high companyrt under s. 561a. omission of
legislature to make a specific provision in that behalf is
clearly due to oversight or inadvertence and cannumber be
regarded as deliberate. if the appellants companytention is
sound it would lead to fantastic results. the argument is
that a person accused of a bailable offence has such an
unqualified right to be released on bail that even if he
does his worst to obstruct or to defeat a fair trial his
bail-bond cannumber be cancelled and a threat to a fair trial
cannumber be arrested or prevented. indeed shree purushottam
went the length of suggesting that in such a case the
impugned subsequent companyduct of the accused may give rise to
some other charges under the indian penal companye but it
cannumber justify his re-arrest. fortunately that does number
appear to be the true legal position if the relevant
provisions of the companye in regard to the grant of bail are
considered as a whole along with the provisions of s. 561a
of the companye. it number remains to companysider the decision of the privy companyncil
in lala jairam das others v. king emperor 1 because
shri purushottam has very strongly relied on some of the
observations made in that case. according to that decision
the provisions of the companye of criminal procedure companyfer no
power on high companyrts to grant bail to a person who has been
convicted and sentenced to imprisonment and to whom his
majesty
1 1945 l.r. 72 i.a. 120132. 1238
in companyncil has given special leave to appeal against his
sentence and companyviction. divergent views had been expressed
by the high companyrts in this companyntry on the question as to the
high companyrts power to grant -bail to companyvicted persons who
had been given special leave to appeal to the privy companyncil
these views and the scheme of the companye in regard to the
grant of bail were examined by lord russel of killowen who
delivered the judgment of the board in lala jairam dass
case 1 . the decision has thus numberapplication to the facts
before us but shri purushottam relies on certain
observations made in the judgment. it has been observed in
that judgment that their lordships take the view that ch. xxxix of the companye together with s. 426 is and was intend to
contain a companyplete and exhaustive statement of the powers
of a high companyrt in india to grant bail and excludes the
existence of any additional inherent power in a high companyrt
relating to the subject of bail . the judgment further
shows their lordships opinion like the high companyrt of
justice in england high companyrts in india would number have
inherent power to grant bail to a companyvicted person. it
would be clear from the judgment that their lordships were
number called upon to companysider the question about the inherent
power of the high companyrts to cancel bail under s. 561a. that
point did number obviously arise in the case before them. even
so in dealing with the question as to whether inherent
power companyld be exercised for granting bail to a companyvicted
person their lordships did refer to s. 561a of the companye and
they pointed out that such a power cannumber be properly
attributed to the high companyrts because it would if
exercised interrupt the serving of the sentence and
besides it would in the event of the appeal being
unsuccessful result in defeating the ends of justice. it
was also pointed out that if the bail was allowed in such a
case the exercise of the inherent power would result in -an
alteration by the high companyrt of its judgment which is
prohibited by s. 369 of the companye. in other words their
lordships examined the provisions of s. 561a and came to the
1 1945 l.r. 72 i.a. 120 132
1239
conclusion that the power to grant bail to a companyvicted
person would number fit in with the scheme of chapter xxxix of
the companye read with s. 561a. in our opinion neither this
decision number even the observations on which shri purushottam
relied can afford any assistance in deciding the point which
this appeal has raised before us. incidentally we may add
that it was as a result of the observations made by the
privy companyncil in that case that s. 426 of the companye was
amended in 1945 and power has been companyferred on appropriate
courts either to suspend the sentence or to grant bail as
mentioned in the several subsections of s. 426. that is how
s. 426 2a and 2b number deal with the subject of bail even
though the main section is a part of chapter xxxi which
deals with appeals references and revisions. we must accordingly hold that the view taken by the bombay
high companyrt about its inherent power to act in this case
under s. 561 a is right and must be companyfirmed. | 0 | test | 1958_163.txt | 1 |
criminal appellate jurisdiction criminal appeal number
241 of 1982.
appeal by special leave from the judgment and order
dated the 14th september 1981 of the patna high companyrt in
criminal revision number 874 of 1981.
k. venugopal s.k. sinha s.k. verma v.n. singh
k. pandey m.n. krimanani and v.n. sinha for the
appellants. parasaran soliciter general k.p. verma p.s. mishra and r.p. singh for respondent number 1.
k. sen o.p. malhotra and r.k. jain for respondent
number 2.
rajendra singh r.p. singh ranjit kumar and s. goswami
for respondent number3. n. kacker and m.p. jha for respondent number 4.
jaya narayan and smt. nirmala prasad for intervenumber. the following judgments were delivered
tulzapurkar j. by this appeal preferred on the basis
of the special leave granted to him the appellant is
challenging the withdrawal from the prosecution of
respondents number. 2 3 and 4 in a criminal case under s. 321
of the criminal procedure companye 1973.
after obtaining the requisite sanction from the
governumber on 19th february 1979 a charge-sheet in vigilance
s. case 9 2 78 was filed by the state of bihar against
respondent number 2 dr. jagannath misra respondent number 3
nawal kishore sinha respondent number 4 jiwanand jha and
three other k.p. gupta since
deceased n.a. haidari and a.k. singh who later became
approvers for offences under ss. 420/466/471/109/120-b
p.c. and under s. 5 1 a 5 1 b and 5 1 d read
with s. 5 2 of the prevention of companyruption act 1947.
inter alia the gravamen of the charge against the
respondent number 2 was that at all times material he was
either a minister or the chief minister of bihar and in that
capacity by companyrupt or illegal means or by otherwise abusing
his position as a public servant he in companyspiracy with the
other accused and with a view to protect nawal kishore sinha
in particular sought to subvert criminal prosecution and
surcharge proceedings against nawal kishore sinha and
others and either obtained for himself or companyferred on them
pecuniary advantage to the detriment of patna urban
cooperative bank its members depositors and creditors and
thereby companymitted the offence of criminal mis-conduct under
s. 5 1 d read with s.5 2 of the prevention of companyruption
act 1947 and in that process companymitted the other offences
specified in the charge-sheet including the offence of
forgery under s. 466 i.p.c. companynizance of the case was taken
on 21st numberember 1979 by the learned chief judicial
magistrate-cum-special judge vigilance patna who issued
process against the accused but before the trial companymenced
the state government at the instance of respondent number2
who in the mean time had companye to power and had become the
chief minister took a decision in february 1981 to withdraw
from the prosecution for reasons of state and public policy. though initially shri awadhesh kumar dutt senior advocate
patna high companyrt had been appointed as a special public
prosecutor by the previous government for companyducting the
said case the state government number headed by respondent
number 2 without cancelling shri dutts appointment as
special public prosecutor on 24th february 1981
constituted a fresh panel of lawyers for companyducting cases
pertaining to vigilance department and shri lalan prasad
sinha one of the advocates so appointed on the fresh panel
was allotted the said case and was informed of the
governments said decision and on 26th march 1981 he was
further requested to take steps for the withdrawal of the
case after he had companysidered the matter and satisfied
himself about it. on 17th june 1981 shri lalan prasad sinha
made an application under s. 321 cr.p.c. 1973 to the special
judge seeking permission to withdraw from the prosecution of
respondent number. 2 3 and 4 in the case on four grounds
namely a lack of prospect of successful prosecution in
the light of the evidence b implication of the persons as
a result of political and personal vendetta c
inexpediency of the prosecution for the reasons of the state
and public policy
and d adverse effects that the companytinuance of the
prosecution will bring on public interest in the light of
the changed situation and the learned special judge by his
order dated 20th june 1981 granted the permission. a
criminal revision number 874/1981 preferred by the appellant
against the said order was dismissed in limine by the high
court on 14th september 1981. it is this withdrawal from
the prosecution permitted by the learned special judge and
its companyfirmation by the high companyrt that are being challenged
in this appeal. companynsel for the appellant raised three or four
contentions in support of the appeal. in the first place he
contended that the impugned withdrawal was utterly
unjustified on merits and also illegal being companytrary to the
principles enunciated by this companyrt governing the exercise
of the power under s. 321 cr. p.c. according to him the
decisions of this companyrt bearing on the nature and scope of
the power under the section clearly suggest that for
purposes of that section a dichotomy exists between
political offences and companymon law offences and that the
considerations of public policy public interest reasons of
state or political and personal vendetta may become relevant
in the case the former cateorgy but are irrelevant while
withdrawing from the prosecution of companymon law offences and
since in the instant case the offences with which the
accused and particularly respondent number 2 had been charged
were companymon law offences namely bribery criminal
misconduct and forgery and number with any political offence
the grounds at b c and d mentioned in the application
seeking permission for withdrawal were irrelevant and
extraneous and number-germane companysiderations influenced the
public prosecutor as also the companyrt the withdrawal is
vitiated and is bad in law and as regards ground a
namely insufficiency of evidence or lack of prospect of
successful prosecution the same was clearly untenable being
in teeth of undisputed and genuine documentary evidence
including the orders admittedly passed by respondent number 2
in his own hand that was available to prove the charges he
also urged that in a case where the proof of the offences
was primarily based on documentary evidence the genuineness
of which was number in dispute numberquestion of political and
personal vendetta or unfair and over enthusiastic
investigation companyld arise therefore the impugned
withdrawal deserved to be quashed. secondly companynsel
contended that shri lalan prasad sinha was number the companypetent
officer to apply for withdrawal from the prosecution of the
case under s. 321 cr p.c. inasmuch as that shri a.k. dutts
appointment as special
public prosecutor made under s. 24 8 cr. p.c. to companyduct
this case had number been cancelled and as such the application
for permission to withdraw as well as the permission granted
thereon were unauthorised incompetent and illegal. thirdly
it was urged that on the facts and circumstances of the case
shri lalan prasad sinha did number function independently as a
free agent but was influenced and guided by the state
governments decision in the matter and as such the
withdrawal at the behest of the government was vitiated. companynsel also urged that shri lalan prasad sinhas decision
if at all it was his own to withdraw from the prosecution
as well as the special judges decision to grant permission
were vitiated by number-application of mind. on the other hand companynsel for the respondents refuted
all the companytentions urged on behalf of the appellant. it was
denied that the withdrawal in question was unjustified on
merits or illegal or companytrary to the principles governing
the exercise of the power s. 321 on the companytrary companynsel
for the respondents urged that the decisions of this companyrt
had clarified the position that under the companye a withdrawal
from the prosecution was an executive function of the public
prosecutor or that the discretion to withdraw from the
prosecution was that of the public prosecutor and numbere else
and that he companyld withdraw from the prosecution number merely
on the ground of paucity of evidence but on other relevant
grounds as well in order to further the broad ends of public
justice public order and peace and the broad ends of public
justice would include appropriate social econumberic and
political purposes and what was more in granting its
consent to the withdrawal the companyrt merely performed a
supervisory function and in discharging such function the
court was number to reappreciate the grounds which led the
public prosecutor to request withdrawal from the prosecution
but to companysider whether the public prosecutor had applied
his mind as a free agent uninfluenced by irrelevant or
extraneous companysideration. it was disputed that the grounds
b c and d mentioned in the application seeking
permission to withdraw were irrelevant or extraneous or that
ground a was untenable. according to companynsel in the
instant case shri lalan prasad sinha being in charge as
well as in the companyduct of the case was companypetent to make the
application for withdrawal and he had done so after
considering all the relevant factors and circumstances
bearing on the issue and satisfying himself about it and number
at the behest of the government as companytended by the
appellant and the learned special judge also performed his
supervisory function in granting the requisite
permission on relevant companysiderations. companynsel emphatically
denied that either the public prosecutors decision to
withdraw from the prosecution or the special judges
supervisory function was vitiated by number-application of
mind. lastly it was companytended that this companyrt should number
interfere with the impugned orders of the trial companyrt as
well as the high companyrt in exercise of its powers under art. 136 of the companystitution and the appeal be dismissed. having regard to the aforesaid rival companytentions that
were urged before us by the learned attorney general and
council on either side it is clear that principally three
questions arise for our determination in this appeal
namely 1 what is the true scope and nature of the power
under s. 321 of cr. p.c 1973 ? 2 whether shri lalan
prasad sinha was companypetent officer entitled to apply for
withdrawal from the prosecution and if so whether he
discharged his executive function independently as a free
agent? and 3 whether the withdrawal from the prosecution
of respondents 2 3 and 4 in vigilance p. s. case number 9 2
78 was unwarranted and unjustified on facts as also in law ? in other words whether the executive function of the public
prosecutor and or the supervisory function performed by the
court was vitiated on account of extraneous companysiderations
or number application of mind etc deserving interference by
this companyrt ? on the first question s. 321 in terms gives no
guidance it merely says that the public prosecutor in
charge of a case may with the companysent of the companyrt at any
time before the judgment is pronumbernced withdraw from the
prosecution of any person either generally or in respect of
any one or more of the offences for which he is tried and
goes on to indicate the results that entail upon such
withdrawal namely either a discharge of the accused if the
withdrawal is made before the charge is framed or an
acquittal of the accused if it is made after the charge has
been framed in other words it gives numberindication or
guideline as to in what circumstances or on what grounds the
public prosecutor may apply for withdrawal from the
prosecution number the companysiderations on which the companyrt is to
grant its companysent and hence the necessity to go to decisions
of this companyrt for ascertaining the true scope and nature of
the power companytained in it. in this behalf quite a few
decisions of this companyrt both in regard to the earlier
provision companytained in s. 494 cr. p.c. 1898 and the present
provision companytained in s. 321 both being substantially in
pari materia were referred to by companynsel for the
parties but it is number necessary to deal with all of them and
a reference to four decisions namely state of bihar v. ram
naresh pandey 1 state of orissa v. chandrika mohapatra and
ors. 2 balwant singh and ors. v. state of bihar 3 and r.
jain v. the state 4 having a bearing on the aspects
under companysideration will suffice. these decisions apart
from enunciating the principles which would govern the
exercise of the power under the section emphasise the
functional dichotomy of the public prosecutor who performs
an executive function and the companyrt which performs a
supervisory judicial function thereunder. in ram naresh pandeys case supra the companyrt while
dealing with s. 494 of the old companye observed thus. the section is an enabling one and vests in the
public prosecutor the discretion to apply to the companyrt
for its companysent to withdraw from the prosecution of any
person. the companysent if granted has to be followed up
by his discharge or acquittal as the case may be
there can be numberdoubt however that the resultant
order on the granting of the companysent being an order of
discharge or acquittal would attract the
applicability of companyrection by the high companyrt under ss. 435 436 and 439 or 417 of the companye of criminal
procedure. the function of the companyrt therefore in
granting its companysent may well be taken to be a judicial
function. it follows that in granting the companysent the
court must exercise a judicial discretion the
initiative is that of the public prosecutor and what
the companyrt has to do is only to give its companysent and number
to determine any matter judicially the judicial
function therefore implicit in the exercise of
judicial discretion for granting the companysent would
numbermally mean that the companyrt has to satisfy itself that
the executive function of the public prosecutor has number
been improperly exercised or that it is number an attempt
to interfere with the numbermal companyrse of justice for
illegitimate reasons or purposes it s. 494
cannumber be taken to place on the companyrt the
responsibility for a prima facie determination of a
triable
issue. for instance the discharge that results
therefrom need number always companyform to the standard of
numberprima facie case under ss. 209 1 and 253 1 or
of ground lessens under ss. 209 2 and 253 2 . this
is number to say that a companysent is to be lightly given on
the application of the public prosecutor without a
careful and proper scrutiny of the grounds on which the
application for companysent is made. emphasis supplied . in chandrika mohapatras case supra while setting out
the principles that should be kept in mind by the companyrt at
the time of giving companysent to withdrawal from the
prosecution under s. 494 the companyrt observed thus
it will therefore be seen that it is number
sufficient for the public prosecutor merely to say that
it is number expedient to proceed with the prosecution. he
has to make out some ground which would show that the
prosecution is sought to be withdrawn because inter
alia the prosecution may number be able to produce
sufficient evidence to sustain the charge or that the
prosecution does number appear to be well founded or that
there are other circumstances which clearly show that
the object of administration of justice would number be
advanced or furthered by going on with the prosecution. the ultimate guiding companysideration must always be the
interest of administration of justice and that is the
touchstone on which the question must be determined
whether the prosecution should be allowed to be
withdrawn. it may be stated that criminal appeal number 310 of 1975 was
one of the appeals decided by the companyrt in that case. in
that appeal the incident during the companyrse of which
offences under ss. 147 148 149 307 and 324 i.p.c. were
said to have been companymitted had arisen out of rivalry
between two trade unions and since the date of the incident
calm and peaceful atmosphere prevailed in the industrial
undertaking and in those circumstances the state felt that
it would number be companyducive to interest of justice to companytinue
the prosecution against the respondents since the
prosecution with the possibility of companyviction of the
respondents would rouse feelings of bitterness and
antagonism and disturb the calm and peaceful atmosphere
prevailing in the industrial undertaking and hence
permission to withdraw
was sought and granted. upholding the permission the companyrt
observed thus
we cannumber forget that ultimately every offence
has a social or econumberic cause behind it and if the
state feels that elimination or eradication of the
social or econumberic cause of the crime would be better
served by number proceeding with the prosecution the state
should clearly be at liberty to withdraw from the
prosecution. in balwant singhs case supra the independent role of
the public prosecutor in making an application for
withdrawal from the prosecution was emphasised and the companyrt
pointed out that the sole companysideration which should guide
the public prosecutor before he decides to withdraw from the
prosecution was the larger factor of the administration of
justice and number political favours number party pressures number
the like companysiderations number should he allow himself to be
dictated by his administrative superiors to withdraw from
prosecution but that the companysideration which should weigh
with him must be whether the broader cause of public justice
will be advanced or retarded by the withdrawal or
continuance of the prosecution. the companyrt also indicated
some instances where withdrawal from prosecution might be
resorted to independently of the merits of the case where
the broader cause of public justice would be served
of companyrse the interests of public justice being
the paramount companysideration they may transcend and
overflow the legal justice of the particular
litigation. for instance companymunal feuds which may have
been amicably settled should number re-erupt on account of
one or two prosecutions pending. labour disputes which
might have given rise to criminal cases when settled
might probably be anumberher instance where the interests
of public justice in the broader companynumberation may
perhaps warrant withdrawal from the prosecution. other
instances may also be given where public justice may be
served by withdrawal even apart from the merits of the
case. in r.k. jains case supra after reviewing the entire
case law on the subject this companyrt enunciated eight
propositions as emerging
from the decided cases page 996 of the report out of
which the following six would be material for the purposes
of the instant case
the withdrawal from the prosecution is an
executive function of the public prosecutor. the discretion to withdraw from the prosecution is
that of the public prosecutor and numbere else and
so he cannumber surrender that discretion to someone
else. the government may suggest to the public
prosecutor that he may withdraw from the
prosecution but numbere can companypel him to do so. the public prosecutor may withdraw from the
prosecution number merely on the ground of paucity of
evidence but numberother relevant grounds as well in
order to further the broad ends of public justice
public order and peace. the broad ends of public
justice will certainly include appropriate social
econumberic and we add political purposes sans
tammany hall enterprises. the companyrt performs a supervisory function granting
its companysent to the withdrawal. the companyrts duty is number to reappreciate the
grounds which led the public prosecutor to request
withdrawal from the prosecution but to companysider
whether the public prosecutor applied his mind as
a free agent uninfluenced by irrelevant and
extraneous companysiderations. the companyrt has a special
duty in this regard as it is the ultimate
repository of legislative companyfidence in granting
or withholding its companysent to withdrawal from the
prosecution. by way of elaborating proposition number 4 above the companyrt has
gone on to observe thus
we have referred to the precedents of this companyrt
where it has been said that paucity of evidence is number
the only ground on which the public prosecutor may
withdraw from the prosecution. in the past we have
often knumbern how expedient and necessary it is in the
public interest for
the public prosecutor to withdraw from prosecutions
arising out of mass agitations companymunal riots
regional disputes industrial companyflicts student
unrest etc. whenever issues involve the emotions and
there is a surcharge of violence in the atmosphere it
has often been found necessary to withdraw from
prosecutions in order to restore peace to free the
atmosphere from the surcharge of violence to bring
about a peaceful settlement of issues and to preserve
the calm which may follow the storm. to persist with
prosecutions where emotive issues are involved in the
name of vindicating the law may even be utterly companynter
productive. similarly by way of elaborating proposition number 6 above the
court has gone on to observe thus
we may add it shall be the duty of the public
prosecutor to inform the companyrt and it shall be the duty
of the companyrt to apprise itself of the reasons which
prompt the public prosecutor to withdraw from the
prosecution. the companyrt has a responsibility and a stake
in the administration of criminal justice and so has
the public prosecutor its minister of justice. both
have a duty to protect the administration of criminal
justice against possible abuse or misuse by the
executive by resort to the provisions of s. 321
criminal procedure companye. the independence of the
judiciary requires that once the case has travelled to
the companyrt the companyrt and its officers alone must have
control over the case and decide what is to be done in
each case. from the aforesaid enunciation of the legal position
governing the proper exercise of the power companytained in s.
321 three or four things become amply clear. in the first
place though it is an executive function of the public
prosecutor for which statutory discretion is vested in him
the discretion is neither absolute number unreviewable but it
is subject to the companyrts supervisory function. in fact
being an executive function it would be subject to a
judicial review on certain limited grounds like any other
executive action the authority with whom the discretion is
vested must genuinely address itself to the matter before
it must number act under the dictates of anumberher body must number
do what it has been forbidden to do must act in good faith
must have regard to all relevant companysiderations and must number
be swayed by irrelevant companysiderations must number seek to
promote purposes alien to the letter or to the spirit of the
legislation that gives it power to act and number must act
arbitrarily or capriciously these several principles can
conveniently be grouped in two main categories failure to
exercise a discretion and excess or abuse of discretionary
power. the two classes are number however mutually
exclusive. vide de smiths judicial review of
administrative action 4th edition pp. 285-86
secondly since the trial companyrts supervisory function
of either granting or refusing to grant the permission is a
judicial function the same is liable to companyrection by the
high companyrt under its revisional powers both under the old as
well as the present companye of criminal procedure and
naturally this companyrt would have at least companyextensive
jurisdiction with the high companyrt in an appeal preferred to
it by special leave or upon a certificate by the high companyrt. thirdly numberdichotomy as such between political
offences or the like on the one hand and companymon law crimes
on the other companyld be said to have been made by this companyrt
for purposes of s. 321 as company-tended for by companynsel for the
appellant for even in what are called political offences
or the like companymitting companymon law crimes is implicit for
the withdrawal from the prosecution of which the power under
s. 321 has to be resorted to. but the decisions of this
court do lay down that when companymon law crimes are motivated
by political ambitions or companysiderations or they are
committed during or are followed by mass agitations
communal frenzies regional disputes industrial companyflicts
student unrest or like situations involving emotive issues
giving rise to an atmosphere surcharged with violence the
broader cause of public justice public order and peace may
out weigh the public interest of administering criminal
justice in a particular litigation and withdrawal from the
prosecution of that litigation would become necessary a
certainty of companyviction numberwithstanding persistence in the
prosecution in the name of vindicating the law may prove
counter-productive. in other words in case of such companyflict
between the two types of public interests the narrower
public interest should yield to the broader public interest
and therefore an onerous duty is cast upon the companyrt to
weigh and decide which public interest should prevail in
each case while granting or refusing to grant its companysent to
the withdrawal from the prosecution. for it is number
invariably that whenever crime is politically motivated or
is companymitted in or is followed by any explosive situation
involving emotive
issue that the prosecution must be withdrawn. an instance in
point would be the case of mahatma gandhis assassination
which was in a sense politically motivated due to transfer
of rs. 55 crores to pakistan and was followed by explosive
situation involving emotive issue resulting in widespread
violence arson and incendiarism against members of a class
in the companyntry particularly in maharashtra but numberone
suggested any withdrawal and the prosecution of the persons
who also included a political personality was rightly
carried to its logical end resulting in companyviction of the
guilty and acquittal of the political personality. in other
words in each case of such companyflict the companyrt has to weigh
and decide judiciously. but it is obvious that unless the
crime in question are per se political offences like
sedition or are motivated by political companysiderations or are
committed during or are followed by mass agitations
communal frenzies regional disputes industrial companyflicts
student unrest or the like situations involving emotive
issues giving rise to an atmosphere surcharged with
violence numberquestion of serving any broader cause of public
justice public order or peace would arise and in the absence
thereof the public interest of administering criminal
justice in a given case cannumber be permitted to be
sacrificed particularly when a highly placed person is
allegedly involved in the crime as otherwise the companymon
mans faith in the rule of law and democratic values would
be shattered. fourthly the decision in r.k. jains case supra
clearly shows that when paucity of evidence or lack of
prospect of successful prosecution is the ground for
withdrawal the companyrt has number merely the power but a duty to
examine the material on record without which the validity
and propriety of such ground cannumber be determined. in that
case this companyrt disposed of two sets of appeals one where
the withdrawal from the prosecution against george fernandes
and others was on the ground that the offences were of
political character and the other pertained to withdrawal
from the prosecution in four cases against choudhry bansi
lal on the ground that the evidence available was meagre and
in one out of the four cases the companyplainant shri manumberar
lal had been suitably and profitable companypensated. the companyrt
upheld the grant of permission for withdrawal in both the
sets of appeals-in the first set on the ground that the
offences alleged to have been companymitted by george fernandes
and others were of a political character the motive
attributed to the accused being that they wanted to change
the government led by shrimati gandhi and therefore with the
change in the government
the broad ends of public justice justified the withdrawal
while in the other set the companyrt examined the entire
material available on record and came to the companyclusion that
the ground put forward had been made out and justified the
withdrawal. it may be stated that in m.n.s nair v. p.v. balakrishnan and ors 1 the sessions companyrt as well as the
high companyrt had permitted withdrawal from the prosecution of
a case involving offences of forgery cheating etc. on the
ground that the dispute was of a civil nature that there
had been enumbermous delay in proceeding with a trial and that
securing of evidence would involve heavy expenses for the
state as witnesses were in far off places. this companyrt
allowed the appeal set aside the permission granted for the
withdrawal and directed the trial to proceed in accordance
with the law after holding that numbere of the grounds alleged
or even their cumulative effect would justify the withdrawal
from the prosecution in particular after examining the
material on record this companyrt came to the companyclusion that
the finding of the lower companyrts that the dispute was of a
civil nature was incorrect. it is thus clear that when
paucity of evidence or lack of prospect of successful
prosecution is the ground for withdrawal this companyrt must of
necessity examine the material in order to determine the
validity or propriety of the ground. it is in the light of
the aforesaid legal principles that two questions arising in
this appeal will have to be decided. the next question raised by companynsel for the appellant
was whether shri lalan prasad sinha was the companypetent
officer entitled to apply for the withdrawal from the
prosecution and if so whether he discharged his function
independently as a free agent ? in this behalf companynsel urged
that the initial appointment of shri a.k. dutt as the
special public prosecutor made by the state government under
s. 24 8 cr. p.c. on 26th february 1979 to companyduct this
case had number been cancelled that shri lalan prasad sinha
could merely be regarded as one of the four public
prosecutors appointed on the fresh panel companystituted under
law justice departments letter numberc mis-8-43/78 j dated
24th february 1981 and that though this particular case had
been allotted to him by the letter dated 25th february
1981 he had numberauthority over the head of shri a.k.dutt to
apply for withdrawal from the prosecution and as such the
application made by him would be unauthorised and illegal
and companysequently the companyrts order dated 20th june 1981
would be vitiated. companynsel further companytended that the state
government had already taken a decision to withdraw from the
prosecution in this
case on grounds of inexpediency of prosecution for reasons
of state and public policy that the said decision was
communicated to shri lalan prasad sinha who was directed to
take steps in that behalf and that it was pursuant to such
direction that he made the application and number independently
on his own as a free agent and therefore the executive
function on the part of the public prosecutor assuming he
had the authority to make the application was improperly
performed. it is number possible to accept either of these
contentions for the reasons we shall presently indicate. it is true that the appointment of shri a.k. dutt made
by the previous government as the special public prosecutor
to companyduct this case had number been cancelled though in
fitness of things the new government should have done so but
that did number prevent the new government to make a fresh
appointment of a public prosecutor and to put him in charge
of the case. appointments of public prosecutors generally
fall under s. 24 3 but when the state government appoints
public prosecutors for the purposes of any case or class of
cases the appointees become special public prosecutors under
s. 24 8 and in the instant case under the law justice
departments letter dated 24th february 1981 a fresh panel
of lawyers companysisting of 4 advocates including shri lalan
prasad sinha was companystituted for companyducting cases
pertaining to vigilance department both at headquarters at
patna as also outside patna and therefore shri lalan
prasad sinha will have to be regarded as having been
appointed as special public prosecutor under s. 24 8 . but
apart from this aspect of the matter on the facts obtaining
in the case it cannumber be disputed that shri a.k. dutt number
having appeared before the special judge at any stage of the
hearing was never defacto incharge of the case number in the
actual companyduct of the case on the other hand after the
allotment of this case to him shri lalan prasad sinha was
incharge of the case and was actually companyducting the case he
having admittedly appeared in the case at least on 4
occasions on 6th april 21st april 27th april and 26th
may 1981 before the special judge and therefore in our
view he was the proper person who companyld make the necessary
application in the matter of withdrawal. in this companytext it
will be useful to point out that s. 494 of the old companye
seemed to authorise any public prosecuter to withdraw from
the prosecution with the companysent of the companyrt but this companyrt
in state of punjab v. surijit singh anr. 1 had held that
the reasonable interpretation
to be placed upon s. 494 in our opinion is that it is only
the public prosecutor who is incharge of a particular case
and is actually companyducting the prosecution that can file an
application under that section seeking permission to
withdraw from the prosecution. the same view was reiterated
by this companyrt in the case of m.n.s. nair v. p.v. balkrishnan
supra . the present section 321 cr. p. c. has given
legislative recognition to the aforesaid view of this companyrt
inasmuch as it expressly provides that the public prosecutor
incharge of a case may withdraw from the prosecution with
the companysent of the companyrt. we are satisfied that though he
was appointed as the special public prosecutor to companyduct
this case in february 1979 shri a.k. dutt was neither
incharge of the case number was actually companyducting the same at
the material time and since shri lalan prasad sinha was number
merely incharge of the case but was actually companyducting the
case was the proper officer to apply for the withdrawal from
the prosecution. similarly there is numbersubstance in the companytention that
shri lalan prasad sinha had sought the withdrawal from the
prosecution at the behest of the state government. it is
true that the government state had taken its own decision to
withdraw from the prosecution in the case against the
respondents number. 2 3 and 4 and it is also true that the
said decision was companymunicated to shri lalan prasad sinha
but if the two letters one dated 25th february 1981 from
the law secretary to the district magistrate and the other
dated 26th march 1981 from the addl. companylector incharge
legal section to the special public prosecutor incharge
vigilance cases are carefully scrutinized it will be clear
that the state government merely suggested to shri lalan
prasad sinha which it was entitled to do withdraw from the
prosecution but at the same time asked him to companysider the
matter on his own and after satisfying himself about it make
the necessary application which he did on 17th june 1981
and there is numbermaterial to doubt the recital that is found
in the application that he had himself companysidered relevant
materials companynected with the case and had companye to his own
conclusion in that behalf. we are number impressed by the
argument that the appointment of shri lalan prasad sinha was
made only for applying for withdrawal and number for companyducting
the case. the appellants companytention therefore has to be
rejected. the next important question that arises for
consideration is whether the withdrawal from the prosecution
of respondents number. 2 3 and 4 in vigilance p.s. case number 9 2 78 was
unwarranted unjustified or illegal on facts as also in law. in other words the real question is whether the executive
function of the public prosecutor and or the supervisory
function of the trial companyrt in granting its companysent to the
withdrawal have been improperly performed or are vitiated by
reason of any illegality ? this will necessitate the
consideration of the four grounds on which the withdrawal
was sought by the public prosecutor and granted by the trial
court under s. 321 cr. p.c. as stated earlier pursuant to
the suggestion of the state government and after companysidering
the matter for himself shri lalan prasad sinha in his
application dated 17th june 1981 specifically set out for
grounds for withdrawal from the prosecution in the namely
a lack of prospect of successful prosecution in the light
of evidence b the implication of the persons as a result
of political and personal vendetta c the inexpediency of
the prosecution for the reasons of the state and public
policy and d the adverse effects that the companytinuation of
the prosecution will bring on public interests in the light
of the changed situation. significantly enumbergh the learned
special judge after summarising the submissions of shri
lalan prasad sinha which were in terms of the averments
made and the grounds set out in the application passed a
short reasoned order on 20th june 1981 as follows
having companysidered the legal position explained by
the supreme companyrt in r.k. jains case and submissions
made by the learned special p.p. in charge of this case
and having perused the relevant records of the case i
am satisfied that it is a fit case in which prayer of
the learned special p.p. to withdraw should be allowed
and it is therefore allowed. companysequently the special
p. shri lalan prasad sinha is permitted to withdraw
from the prosecution and in view of section 321 a cr. c. the accused persons are discharged. in other words the learned special judge accepted all the
grounds on which withdrawal was sought and granted the
permission to withdraw from the prosecution on those
grounds. the question is whether vigilance p.s. case number 9
2 78 was such as would attract the grounds and even if the
grounds were attracted was withdrawal from the prosecution
justified ? out of the four grounds set out above i shall deal
with grounds b c and d first and ground a later. in
the light of
the legal principles discussed above it cannumber be disputed
that grounds like the inexpediency of the prosecution for
the reasons of state or public policy implication of the
accused persons out of political and or personal vendetta
and adverse effects which the companytinuance of prosecution
will have on public interests in the light of changed
situation are appropriate and have a bearing on the broader
cause of public justice public order and peace which might
in a given case outweigh or transcend the narrower public
interest of administering criminal justice in a particular
litigation necessitating the withdrawal of the latter but
as observe dearlier numberquestion of serving and broader
cause of public justice public order or peace can arise
unless the crimes allegedly companymitted are per se political
offences or are motivated by political ambitions or
considerations or are companymitted during or are followed by
mass agitations companymunal frenzies regional disputes
conflicts student unrest or like situations which involve
emotive issues giving rise to a surcharged atmosphere of
violence. admittedly the offences of bribery criminal mis-
conduct and forgery which are said to have been companymitted
by respondent number 2 in companyspiracy with the other accused are
ordinary companymon law crimes and were number companymitted during number
were they followed by any mass agitation or companymunal frenzy
or regional dispute or industrial companyflict or student unrest
or the like explosive situation involving any emotive issue
giving rise to any surcharged atmosphere of violence
further it cannumber be disputed that these are number per se
political offences number were they companymitted out of any
political motivation whatsoever in fact the motivating
force behind them was merely to give protection to and
shield shri nawal kishore sinha a close friend from
criminal as well as civil liability-a favouritism amounting
to criminal misconduct allegedly indulged in by respondent
number 2 by abusing his position as a minister or the chief
minister of bihar. if therefore the offences did number partake
of any political character number were companymitted in number
followed by any explosive situation involving emotive issue
giving rise to any surcharged atmosphere of violence no
question serving any broader cause of public justice public
order or peace companyld arise and in absence there of the
public interest of administering criminal justice in this
particular case companyld number be permitted to be sacrified. in
other words this being an ordinary criminal case involving
the companymission of companymon law crimes of bribery and forgery
in ordinary numbermal circumstances with self-aggrandisement or
favouritism as the motivating force grounds b c and
d were irrelevant and extraneous to the issue of
withdrawal and since admittedly these were
the companysiderations which unquestionably influenced the
decision of the public prosecutor in seeking the withdrawal
as well as the decision of the trial companyrt to grant the
permission the impugned withdrawal from the prosecution
would stand vitiated in law. companynsel for the respondents urged that as a result of
the elections there was a change in the situation that
respondent number 2s party had received the peoples mandate
and voted to power that respondent number 2 had become the
chief minister of the state and that the prosecution against
the head of the state would have had adverse effects on
public interest including public order and peace and
therefore its companytinuation was regarded as inexpedient for
reasons of state and public policy. i fail to appreciate the
contention for what has the change in the situation
brought about by the elections putting one or the other
party in power got to do with the companytinuation of
prosecution for ordinary companymon law crimes of bribery
criminal-mis-conduct and forgery especially when the
offences were number actuated by any political motivation
whatsoever number had they been companymitted in or followed by any
explosive situation involving emotive issue? numberemotive
issue was or is involved whatsoever. surely in the absence
of the aforesaid aspects numberresult of any election
howsoever sweeping can be companystrued as the peoples mandate
to companydone or companypound the companymon law crimes allegedly
committed by those who have been returned to power in fact
such interpretation of the mandate would be companytrary to all
democratic canumbers success at hustings is numberlicence to
sweep all dirt under the carpet and enjoy fruits
numberchalantly. moreover the apprehension that public
interest including public order and peace would be adversely
affected by the companytinuation of the prosecution of companymon
law crimes which do number partake of any political character
or are number companymitted in or followed by any explosive
situation involving emotive issue against the head of the
state is ill-founded for all that can happen is that
respondent number 2 will have to step down and numberhing more. any fear of destabilisation of the government is entirely
misplaced. on the other hand withdrawal from the
prosecution of such offences would interfere with the numbermal
course of administration of criminal justice and since
respondent number 2 is placed in a high position the same is
bound to affect the companymon mans faith in the rule of law
and administration of justice. besides as i shall point out
later if the proof of the offences said to have been
committed by respondent number 2 in companyspiracy with the other
accused was based on documentary evidence the genuineness
of which is number in dispute no
question of political and personal vendetta or unfair and
overzealous investigation would arise. in my view in all
the facts and circumstances grounds b c and d were
number attracted to the instant case and were irrelevant and
extraneous to the issue of withdrawal and since these
grounds had influenced the executive function of the public
prosecutor as well as the supervisory judicial function of
the trial companyrt the performance of these functions is
vitiated. the high companyrt has simply put its seal on the
trial companyrts order accepting these grounds. the impugned
withdrawal as permitted by the trial companyrt and companyfirmed by
the high companyrt in so far as it is based on these grounds
would be bad in law. i shall number proceed to deal with the ground a that
was put forward for withdrawal from the prosecution. in
substance the ground was that there were numberchances of
successful prosecution in view of paucity of evidence to
prove the charges. as stated earlier when such is the ground
it is the duty of the companyrt to examine the material to
ascertain whether the ground was valid one or whether the
available material was sufficient to make out a prima facie
case against the accused to put him on trial ? and i shall
approach the problem strictly from this angle. the facts giving rise to the launching of the aforesaid
prosecution against respondent number. 2 3 and 4 and three
others may be stated the patna urban companyoperative bank was
registered in may 1970 and companymenced its banking business
with nawal kishore sinha as its chairman k.p. gupta as its
honumberary secretary m.a. haidari as its manager and a.k. singh as a loan clerk who also worked as the care-taker and
personal assistant to n.k. sinha . a loan sub-committee
consisting of n.k. sinha the chairman k.p. gupta the
secretary and one shri purnendu narain an advocate used to
look after the sanctioning and granting of loans. under its
bye-laws the chairman was the ultimate authority in regard
to all the functions of the bank and the honumberary secretary
along with the chairman had to exercise supervisory companytrol
over all the activities of the bank while the manager was
concerned with its day to day working. dr. jagan nath
mishra then an m.l.c. and who subsequently became a
minister and the chief minister in the bihar cabinet helped
the bank and its chairman n.k. sinha being his close
associate and companyfidant in several ways including
mobilisation of resources for the bank. separate audits into
the working of the bank were companyducted by
the reserve bank of india as well as by the companyoperative
department of the bihar government for the years 1972-73 and
1973-74 during the companyrse of which a large number of
irregularities such as number-maintenance of cash books in a
proper manner grant of over-draft facility without current
account etc illegal practices acts of defalcations and
malversation of funds of the bank came to light in
particular the audit reports disclosed that huge amounts
running into lakhs of rupees had been squandered away by a
giving loans to number-members b giving loans even without
application agreement or pronumbere c giving loans without
hypothecations d giving short term loans instead of
realising cash on sale proceeds even for hypothecated goods
e giving loans to the same persons in different names and
f giving loans to fictitious persons and number-existing
firms or industries etc. and the audit team of the reserve
bank in its report came to the companyclusion that the chairman
shri nawal kishore sinha and others were responsible and
accountable for bad loans to the tune of rs. 12 lakhs and
mis-appropriation and embezzlement to the tune of rs. 25
lakhs. on the basis of these audit reports at the instance
of the reserve bank the management of the bank through its
board of directors was superseded on 10th of july 1974
under the orders of the registrar companyoperative societies
and nawal kishore sinha the chairman and other directors on
the board were removed and an officer of the companyoperative
department government of bihar was appointed as the
special officer to look after the affairs of the bank. on the strength of the aforesaid audit reports the
registrar companyoperative societies agreeing with the joint
registrar put up a numbere dated 4.11.1974 to the secretary
co-operative saying that prima facie charges of
defalcations companyspiracy etc. were made out against the
officials of the bank and legal action be taken against them
after taking the opinion of the public prosecutor the
secretary by his numbere dated 7.11.1974 sought the opinion of
the law department on 18.11.1974 the law department recorded
its opinion in the relevant file being file number ix legal-
9/75 of the department of companyoperation that a case of
conspiracy and criminal breach of trust against the loans
and office bearers of the bank was prima facie made out. on
16.12.1974 a draft companyplaint was prepared by the assistant
public prosecutor patna for being filed before the chief
judicial magistrate patna on the same day 16.12.1974 an
office numbering was made by shri bimal on the file suggesting
that the law departments advice on the draft companyplaint be
obtained which companyrse of action was approved by the
secretary companyoperation on 16.12.1974 by the minister for
co-operative shri umesh prasad verma on 1.1.1975 and by
the then chief minister shri a. gaffoor on 2.1.75.
accordingly the file was sent to the law department which
reiterated its earlier advice for launching the prosecution
and on the file being received back on 18.1.1975 the
secretary companyoperation endorsed the file on 21.1.1975 to
p.p. shri grish narain sinha for necessary action i.e. to
file the prosecution vide the several numberings made in file
numberix legal-9/75-relied upon by the respondents . in other
words by 21.1.1975 the stage was set for launching a
criminal prosecution against the loanees and the members of
the board of directors of the bank with nawal kishore sinha
as the principal accused and a companyplaint petition in that
behalf duly approved by the law department and signed by
shri jagdish narain verma district companyoperative officer
patna on 25.1.1975 was also ready with the a.p.p. for being
filed in the companyrt. but before the a.p.p. companyld file the
complaint respondent number2 jagan nath mishra agriculture
and irrigation minister wrote a buff-sheet numbere dated
24.1.1975 asking the secretary companyoperation to send the
concerned file along with audit reports to him before the
institution of the criminal case. accordingly after
obtaining the approval of the then companyoperative minister and
the then chief minister for sending the file to respondent
number 2 the secretary recalled the file and other papers from
the a.p.p. on 28.1.1975 and on 24.2.1975 he sent the file to
the law minister en route the then chief minister. it may be
stated that under the numberification dated 30th april 1974
issued under art. 166 3 of the companystitution read with rule
5 of the rules of executive business of the state of bihar
the then chief minister shri abdul gaffoor was inter alia
holding the portfolio of law also but according to the
affidavit of shri neelanand singh dated 19th october 1982
filed on behalf of respondent number1 before us shri a. gaffoor
as per his numbere dated 29-8-1974 addressed to the chief
secretary and circulated to various departments had with a
view to lessen his heavy burden requested respondent number 2
jagan nath mishra to look after the work of the law
department and as such endorsing the file on 24.2.1975 to
the law minister en-route the chief minister would mean
that the file must have gone to respondent number 2 as there
was numberother person holding the law portfolio excepting the
chief minister himself under the numberification dated 30th
april 1974. it is claimed by the appellant that respondent
number 2 sat tight over the file for over two and half months
till he became the chief minister whereas it is suggested on
behalf of the respondents that though the file was called
for by
respondent number 2 on 24-1-1975 it did number actually reach him
till middle of may 1975. however ignumbering the aforesaid
controversy the fact remains that the filing of the
complaint got postponed from 24-1-1975 the date of buff-
sheet order of respondent number 2 till middle of may 1975
and in the meantime on 11.4.1975 respondent number 2 replaced
shri a. gaffoor as the chief minister and in the middle of
may 1975 as the chief minister respondent number 2 passed two
orders which are very eloquent. on 16-5-1975 in the file number ix legal-9/75 respondent
number 2 wrote out an order in his own hand in hindi companycerning
the action to be taken against nawal kishore sinha and
others the english rendering of which according to the
respondents runs thus
much time has passed. on perusal of the file it
appears that there is numberallegation of defalcation
against the chairman and the members of the board of
the bank. stern action should be taken for realisation
of loans from the loanees and if there are difficulties
in realisation from the loanees surcharge proceedings
should be initiated against the board of directors. the
numbermal companydition be restored in the bank after calling
the annual general meeting and holding the election. sd jagan nath mishra
16-5-1975
in the margin opposite the above order the seal
containing the despatch entry originally showed 16-5-1975 as
the date on which the file was despatched from the chief
ministers secretariat to the companyoperative department after
respondent number 2 had made the above order. it is clear that
the first part of the above order regarding the criminal
involvement is in teeth of the audit reports of the reserve
bank and the companyoperative department and companytrary to the
opinion of the law department it thwarted the criminal
prosecution against shri nawal kishore sinha and others
while under the latter part it still exposed them to civil
liability by way of surcharge proceedings to be adopted
against them in default of realisations from the loanees but
as even the loans had been advanced mostly in fictitious
names and were actually utilised by the office-bearers
themselves the prospect of civil liability loomed large
before them. realising this position respondent number 2
irregularly-there being numberendorsement number any seal showing
inward receipt of
the file by chief ministers secretariat-got hold of the
file again and passed anumberher order in his hand on a piece
of paper in hindi under his signature but bearing an earlier
date 14.5.1975 and had it pasted over the earlier order
dated 16.5.1975 in the file so as to efface the same
completely and the date of despatch 16.5.75 in the despatch
seal appearing in the margin was altered to 14 5.1975 by
over writing an english rendering of this second order
addressed to the minister for companyoperation runs thus
please issue order for restoring the numbermal
condition in the bank after holding annual general
meeting. sd jagan nath mishra
14-5-1975
it is undisputed that respondent number 2 did pass the
aforesaid two orders in his own hand in hindi the first on
16-5-1975 and the second subsequently in point of time but
ante-dated it to 14-5-1975 and had it pasted over the first
order companypletely effacing that order. such companyduct on his
part has been explained only on the basis that as the chief
minister he had the authority and power to revise or review
his earlier order and that it is the usual practice
prevailing in the patna secretariat that whenever any order
passed earlier is sought to be revised or reviewed by the
same officer or minister it is done by pasting it over by a
piece of paper companytaining the revised orders para 8 of the
counter affidavit of shri bidhu shekhar banerjee dated 17-3-
1982 filed on behalf of respondent number 1 . even with this
explanation the admitted position that emerges is that the
aforesaid two orders were passed by respondent number 2 that
the second order was ante-dated to 14-5-1975 and that the
same was pasted on the file so as to efface companypletely the
earlier order. in other words in substance and reality the
entire order passed by respondent number 2 in the companycerned
file on 16-5-1975 which companytained 4 directions a there
being numberallegation of defalcation against the chairman the
members of the board numbercriminality was involved b stern
action for realisation of the loans from the loanees be
taken c failing which surcharge proceedings against the
board of directors be initiated and d restoration of
numbermal companydition in the bank be brought about by calling
annual general meeting and holding the election was wiped
out and companypletely substituted by the second order which
merely retained the last direction item d above of the
first order. in effect under the second order both the
criminal as well as civil liability of nawal kishore sinha
and others
were given a go-bye numberwithstanding the audit reports of
the reserve bank and the companyoperative department and
respondent number 2 merely directed that the numbermal companydition
in the bank be restored and this result was brought about by
the second order which was ante-dated with the obvious
fraudulent intent of nullifying or rendering nugatory any
action that companyld have been or might have been taken even
if number actually taken pursuant to the first order after the
file had left the chief ministers secretariat on 16.5.1975
that being the most natural companysequence flowing from the act
of ante-dating the second order. it is number necessary that
the fraudulent intent should materialise it is enumbergh if
act of ante-dating is done with the fraudulent intent. this
being a case of inter-departmental orders the first order
dated 16th may 1975 passed by respondent number 2 became
operative as soon as the companycerned file left the chief
ministers secretariat and as such the same companyld be revised
or reviewed by respondent number 2 by officially and regularly
calling back the file and by passing a fresh order
subsequent in point of time modifying or cancelling the
earlier order but surely number by the crude method of pasting
the subsequent order over the first so as to efface the same
completely and in numberevent by ante-dating it. it is true
that mere ante-dating a document or an order would number
amount to an offence of forgery but if the document or the
order is antedated with oblique motive or fraudulent intent
indicated above without the same actually materialising it
will be forgery. the aforesaid undisputed documentary evidence
comprising the audit reports the relevant numberings in the
concerned file and the two orders of respondent number 2
clearly makes out a prima facie case of the companymission of
two companymon law offences of criminal mis-conduct s. 5 1 d
of prevention of companyruption act and forgery s. 466 i.p.c. by respondent number 2 without needing any further material to
establish the same. the ingredients of the former can be
said to be prima facie satisfied in that by passing the two
orders respondent number 2 by companyrupt or illegal means or by
otherwise abusing his position as the chief minister
subverted the criminal prosecution and surcharge proceedings
against nawal kishore sinha and others and had thereby at
any rate obtained for them pecuniary advantage to the
deteriment of the bank its members depositors and
creditors. this is apart from the aspect as to whether while
doing so he obtained pecuniary advantage for himself or number
for which further material by way of companyfessional statement
of the approvers would be required to be companysidered or
appreciated but ignumbering such further material
the ingredients of s. 5 1 d get satisfied prima facie as
indicated above. as regards the latter though respondent number
2 had the authority and power to pass the second order in
substitution of the first by ante-dating the second order
with fraudulent intent the ingredients of forgery again
prima facie satisfied. in other words the aforesaid
material is clearly sufficient to put respondent number2 on
trial for if the said material remains unrebutted a
conviction would clearly ensue. it was strenuously companytended by companynsel for
respondents particularly by companynsel for respondent number 2
that if the aforesaid two orders passed by respondent number 2
are properly understood it cannumber be said that the effect of
either of these two orders was to thwart or to scuttle or to
subvert the criminal prosecution and surcharge proceedings
against nawal kishore sinha and others and that the effect
of the second order was certainly number to companyntermand the
directions companytained in the first order in regard to items
b and c above but in fact the effect was to facilitate
recourse to surcharge proceedings against the office-bearers
without the hurdle of being required to make the recovery of
loans from the loanees first which was the import of the
first order dated 16-3-1978. it was further companytended that
instead of stifling the criminal prosecution against nawal
kishore sinha and other office bearers respondent number 2 at a
subsequent stage had directed prosecution of office bearers
including nawal kishore sinha and actually the companyoperative
department had taken steps to adopt surcharge proceedings
even against nawal kishore sinha by issuing show cause
numberice to him and therefore the charges of criminal
misconduct and forgery against the respondent number 2 in
conspiracy with others were clearly unsustainable and
withdrawal from the prosecution sought by the public
prosecutor was proper and justified. in my view however as
i shall presently indicate the further materials on record
do number bear out or support these submissions of companynsel for
the respondents. on the question as to whether the effect of either of
the aforesaid two orders was to thwart scuttle or subvert
criminal prosecution and surcharge proceedings or number and
what was intended by respondent number 2 when he passed those
orders would be clear from his further companyduct evidence by
subsequent numberings and orders passed by him till he went out
of power in 1977 and in this behalf it would be desirable to
delineate the companyrse which the subsequent events took in
regard to criminal prosecution as well as surcharge
proceedings separately. as regards criminal prosecution it
appears that the companyoperative department wanted to go ahead
with it and in that behalf by his next numbering dated 28-6-
1975 the then minister for companyoperation sought directions
from the chief minister as to what should be the next companyrse
of action in the matter of filing the companyplaint and
respondent number 2 as the chief minister passed the following
order on the file on 30-6-1975 discussion has been held. there is numberneed to file the prosecution. this clearly show
what respondent number 2 intended by his aforesaid two orders
in the matter of criminal prosecution and the direction
clearly runs companynter to the suggestion that he did number
thwart scuttle or subvert the criminal prosecution against
nawal kishore sinha and others. it further appears that in
july 1975 there were questions and call attention motions
in the bihar legislative assembly during the companyrse of which
the propriety of number-prosecution of the culprits companycerned
in the bank fraud despite law departments advice was
discussed that the speaker referred the matter to the
estimates companymittee of the house that in june 1976 the
estimates companymittee submitted its report recommending
prosecution of nawal kishore sinha and others that in july
1976 a debate took place in the assembly on the
recommendations companytained in the said report and the
government was forced to agree to launch prosecutions
against the culprits. in the wake of these events respondent
number 2 as the chief minister passed an order on 4-8-1976 for
launching criminal prosecutions but even there he directed
that prosecutions be launched against some of the office-
bearers and loanees of the bank including shri k. p. gupta
the hony secretary shri m.a. haidary the manager and shri
p. gupta the loan clerk but number against nawal kishore
sinha who was excluded from being arraigned as an accused
and accordingly 23 criminal cases were filed against the
aforesaid office-bearers and loanees. this order is anumberher
indication that even with all the furore which the banks
affairs had created respondent number 2 wanted to and did
protect and save shri nawal kishore sinha from criminal
prosecution by excluding him from the array of accused
persons. as regards the 23 criminal cases filed against the
other office bearers and the loanees of the bank there is on
record in the companyoperative department file number 12/legal-
31/77 a buff-sheet order dated 2-2-1977 passed by respondent
number 2 to the following effect in order to recover the
money from some of the loanees of the patna urban company
operative bank criminal cases were instituted against them. action should be taken immediately for the withdrawal of the
cases against those loanees who have cleared the loan in
full and proper instalments for
payment of loans should be fixed against those who want to
repay the loan but due to financial handicaps are unable to
make payment at a time and thereafter necessary further
action should be taken. it appears that pursuant to this
order after verifying that loans from three parties plastic
fabricators climaz plastic udyog and k.k. boolan had been
cleared the criminal cases against them were directed to be
withdrawn immediately. however the protection given to shri
nawal kishore sinha against criminal prosecution companytinued
to benefit him. in the meanwhile in april 1976 the banking licence of
the patna urban companyoperative bank was cancelled by the
reserve bank of india and further at the instance of the
registrar companyoperative societies the bank was ordered to
be liquidated. it appears that shri t. nand kumar i.a.s. liquidator of the bank addressed a companymunication to the
registrar companyoperative societies suggesting that besides
the other office-bearers sri nawal kishore sinha the ex-
chairman of the bank also deserve to be prosecuted for
offences of embezzlement forfery cheating etc. but the
matter was kept pending for report of the superintendent of
police companyoperative vigilance cell the s.p. companyoperative
vigilance cell after companylecting facts and evidence got it
examined by deputy secretary law in c.i.d. obtained the
opinion that a criminal case was fully made out against shri
nawal kishore sinha and proposed that a fresh criminal case
as per draft f.i.r. be filed and that shri nawal kishore
sinha should also be made companyaccused in a number of cases
already under investigation the s.p. companyoperative
vigilance cell obtained the approval of d.i.g. c.i.d. on
his said proposal and submitted the same to the secretary
co-operation for obtaining chief ministers permission. in
view of the chief ministers earlier order restricting the
filing of criminal cases against some of the office-bearers
and loanees only the s.ps numbering categorically stated that
the draft f.i.r. against n.k. sinha had been vetted by
i.g. c.i.d. as well as by i.g of police. after examining
the entire material carefully and obtaining clarifications
on certain points shri vinumber kumar secretary companyoperation
put up a lengthy numbere dated 15-1-1977 to the minister for
co-operation in which he specifically placed the proposal of
p. companyoperative vigilance cell for lodging f.i.r. against shri nawal kishore sinha for his approval and also
suggested that the honble minister may also obtain the
approval of the chief minister. the minister for company
operation in his turn endorsed the file on 20-1-1977 to the
chief minister for the latters approval. the file was
received by the chief ministers secretariat on 30-3-1977
and
respondent number 2 as the chief minister on 9-4-1977 instead
of indicating his mind either way merely marked the file to
g. of police. which was meaningless as the prior numbering
had clearly indicated that a draft f.i.r. had been vetted by
both d.i.g. c.i.d. and i.g. of police. companynsel for
respondent number 2 submitted that the endorsement made by the
chief minister meant that he had approved the action as
proposed. it is impossible to accept the submission. had the
chief minister merely put his signature or initials without
saying anything it might have been possible to suggest that
he had approved the proposal but to mark the file to i.g. of police without saying as proposed or something to that
effect cannumber mean that the respondent number 2 had approved
the proposal. in fact with the knumberledge that the i.g. of
police had approved and vetted the draft f.i.r. against n.k. sinha merely marking the file to i.g. of police amounted
to putting off the matter meanwhile respondent number 2s
government went out of power and under the presidents rule
the matter was dealt with by the governumber shri jagan nath
kaushal the present union law minister who granted the
approval on 16-5-1977 as a result whereof a criminal case
being f.i.r. case number 97 5 77 ultimately came to be
filed at kadam kuan police station on 30-5-1977 against
nawal kishore sinha for which respondent number 2 cannumber take
any credit whatsoever. on the other hand the subsequent
events show that so long at it lay within his power
respondents number 2 made every effort to protect and save
nawal kishore sinha from criminal prosecution by abusing his
official position-a criminal prosecution which had been
proposed by independent bodies like the reserve bank of
india and the companyoperative department agreed to by the law
department recommended by the estimates companymittee and
ultimately approved by the governumber shri jagan nath kaushal. as regards the surcharge proceedings the position is
very simple. as discussed earlier the two directions
contained in the first order dated 16-5-1975 for taking
stern action to realise loans from the loanees and in
default to initiate surcharge proceedings against the board
of directors were wiped out by the subsequent ante-dated
order 14-5-1977 and thereby respondent number 2 thwarted
surcharge proceedings and attempted to give a go bye to the
civil liability of nawal kishore sinha and other office-
bearers of the bank. this companyduct on the part of respondent
number2 has been explained in the companynter affidavit of shri
vinumber kumar sinha dated 8-10-1982 filed before us and
counsel for respondent number 2 pressed it into service
during his arguments and the explanation is that a separate
file titled surcharge proceedings being file number 3 of 1975
maintained in the office of deputy registrar companyoperative
societies patna division shows a that by his letter dated
30-4-1975 the deputy registrar informed the joint registrar
that discussions had already been held with the registrar
and that surcharge proceedings would be initiated as soon as
possible b that on 10-6-1975 the necessary proposal for
surcharge was drafted and filed by the district companyoperative
officer before the registrar under sec. 40 of the bihar and
orissa companyoperative society act and c on 1-7-1975
surcharged case number 3 of 1975 had been started against nawal
kishore sinha and others by directing issuance of show-
cause-numberice to them and that in view of these facts
respondent number 2 companyld number be said to have companynter-manded
the surcharge proceedings it is further urged that the
order dated 16-5-1975 directing surcharge proceedings was
therefore unnecessary and irrelevant as the proper
authority namely the registrar had already decided to
start surcharge proceedings which were started by issuance
of show-cause numberice to nawal kishore sinha and others on 1-
7-1975 and in fact if the struck-out order dated 16-5-1975
had remained without being replaced by the order dated 14-5-
1975 the surcharged proceedings which were filed on 10-6-
1975 would have been delayed and the effect of recalling the
first order dated 16-5-1975 incidentally recalling of the
first order by the second order is admitted was to
facilitate the surcharge proceedings which were being
processed at that time in the office of deputy registrar
without being required to adopt recovery proceedings from
the loanees first. companynsel for respondent number 2 strenuously
urged that instead of thwarting or stalling the surcharge
proceedings the subsequent order dated 14-5-1975 removed a -
hurdle. the explanation to say the least is disingenuous for
two or three reasons and cannumber be accepted. first
admittedly and this was fairly companyceded by companynsel for
respondent number 2 that there is numbermaterial on record to
show that file number 3/75 pertaining to surcharge proceedings
was sent to the chief minister respondent number 2 or was
seen by him prior to 16-5-1975indeed it was never sent to
him at all with the result that respondent number 2 had no
knumberledge of either the numberings and orders companytained therein
or what was being done in the office of the deputy
registrar companyoperative societies when he passed either of
the two orders dated 16-5-1975 and 14-5-1975 and the
explanation therefore that respondent number 2 facilitated
the filing of the surcharge proceedings by the office of the
deputy registrar without the necessity of proceeding
against the loanees first is number candid. secondly the
proposal for surcharge proceeding itself was submitted and
filed by the district companyoperative officer against nawal
kishore sinha and others on 10-6-1975 and the surcharge
proceedings actually companyld be said to have been initiated on
1-7-1975 when show cause numberice was directed to be issued
and served on nawal kishore sinha on 15-7-1975 while
thwarting of the surcharge proceedings against nawal kishore
sinha and others was already companyplete having been
accomplished by respondent number 2 by his ante-dated order 14-
5-1975. thirdly it is obvious that respondent number 2 cannumber
take credit for the action that was taken in the matter of
surcharge proceedings against nawal kishore sinha and others
by the office of registrar companyoperative society
independently of and in spite of respondent number 2s action
of subverting the surcharge proceedings. it will appear clear from the above discussion that the
documentary evidence mentioned above the genuineness of
which cannumber be doubted clearly makes out a prima facie
case against respondent number 2 sufficient to put him on trial
for the offence of criminal misconduct under s. 5 1 d
read with s. 5 2 of the prevention of companyruption act
1947. similar is the position with regard to the incidental
offence of forgery under s. 466 i.p.c. said to have been
committed by him for ante-dating of the second order by
him is number disputed and it is on record that in regard to
such ante-dating numberexplanation was offered by him during
the investigation when he was questioned about it in the
presence of his lawyers and there has been numberexplanation of
any kind in any of the companynter-affidavits filed before us. but during the companyrse of arguments his companynsel offered the
explanation that companyld only be ascribed as a bona fide
mistake or slip vide written arguments filed on 14.10.1982
but such explanation does number bear scrutiny having regard
to the admitted fact that after the ante-dated order was
pasted over the first order the despatch date appearing in
the margin was required to be and has been altered to
14.5.1975 by over-writing and if over-writing is required to
be done there cannumber any bona fide mistake or slip. the
ante-dating in the circumstances would be with oblique
intent to nullify any possible action that companyld have or
might have been taken pursuant to the first order as stated
earlier that being the most natural companysequence flowing
from it which in must in law be presumed to have intended. it would of companyrse be open to him to rebut the same at the
trial but at the moment there is numbermaterial on record-by
way of rebuttal. in the circumstances it is impossible to
accept the paucity of evidence or lack of prospect of
successful
prosecution as a valid ground for withdrawal from the
prosecution. on the aforesaid undisputed documentary
evidence numbertwo views are possible in the absence of any
rebuttal material which of companyrse the respondent number 2
will have the opportunity to place before the companyrt at the
trial. what is more the so-called unfair or over-zealous
investigators were miles away when the aforesaid evidence
came into existence. as far as respondent number 3 nawal kishore sinha and
respondent number 4 jiwanand jha are companycerned it cannumber be
forgotten that they have been arraigned alongwith respondent
number 2 on a charge of criminal companyspiracy in pursuance
whereof the several offences are said to have been companymitted
by all of them. further it is obvious that the principal
beneficiary of the offence of criminal misconduct said to
have been companymitted by respondent number 2 under s. 5 1 d
read with s. 5 2 of prevention of companyruption act 1947 has
been respondent number 3 and so far as respondent number 4 is
concerned it cannumber be said that there is numbermaterial on
record suggesting his companyplicity. admittedly he has been
very close to respondent number 2 for several years and
attending to his affairs-private and party affairs and the
allegation against him in the f.i.r. is that he was
concerned with the deposit of two amounts of rs. 10000 and
rs. 3000 on 27.12.1973 and 1.4.1974 in the savings bank
account of respondent number2 with the central bank of india
patna dak bungalow branch which sums says the prosecution
represented some of the bribe amounts said to have been
received by respondent number 2 and the tangible documentary
evidence in proof of the two deposits having been made in
respondent number 2s account companysists of two pay-in slips of
the companycerned branch of central bank of india. whether the
two amounts came from the funds of the patna urban company
operative bank or number and whether they were really paid as
bribe amounts or number would be aspects that will have to be
considered at the trial. however as pointed out earlier the
offence under s. 5 1 d would even otherwise be companyplete
if pecuniary advantage by way of scuttling the civil
liability of surcharge was companyferred on nawal kishore sinha
and others. if respondent number2 has to face the trial then in
a case where companyspiracy has been charged numberwithdrawal can
be permitted against respondent number 3 and respondent number 4.
in arriving at the companyclusion that paucity of evidence is
number a valid ground for withdrawal from the prosecution in
regard to respondents number. 2 3 and 4. i have deliberately
excluded from companysideration the debatable evidence like
confessional statements of the approvers
etc. credibility and effect whereof would be for the trial
court to decide said to have been companylected by the
allegedly over-zealous investigating officers after
respondent number 2 went out of power in 1977.
there is yet anumberher legal infirmity attaching to the
executive function of the public prosecutor as well as the
supervisory judicial function of the trial companyrt which would
vitiate the final order. as per the charge-sheet filed
against them respondents number. 2 3 and 4 were said to have
committed offences under ss. 420/466/417/109/120-b i.p.c. and under ss. 5 1 a b and 5 1 d read with s. 5
2 of the companyruption of prevention act 1947 and gravaman
of the charge against the respondent number2 was that in his
capacity either as a minister or the chief minister of bihar
by companyrupt of illegal means or by otherwise abusing his
position as a public servant he in companyspiracy with the
other accused and with a view to protect nawal kishore sinha
in particular sought to subvert criminal prosecution and
surcharge proceedings against nawal kishore sinha and others
and either obtained for himself or companyferred on them
pecuniary advantage to the detriment of patna companyoperative
bank its members depositors and creditors in other words
the principal charge against respondent number 2 was in respect
of the offence of criminal misconduct under s. 5 1 d
read with s. 5 2 of prevention of companyruption act 1947 and
the offence under s. 5 1 c was numberhere mentioned or
referred to. the difference between s. 5 1 d bribery
amounting to criminal mis-conduct and s. 5 1 c breach
of trust amounting to criminal mis-conduct is substantial
each having different ingredients but in the application for
withdrawal filed by shri lalan prasad sinha on 17th june
1981 he stated that withdrawal from the prosecution in
vigilance case number 9 2 78 was sought in respect of several
offences including the offence of criminal mis-conduct under
s. 5 1 c read with s. 5 2 of the prevention of
corruption act and through out the application there was no
reference to the offence of criminal mis-conduct under s. 5
1 d read with s. 5 2 of the said act. in other words
an offence under s. 5 1 c read with s. 5 2 with which
respondent number 2 had never been charged was mentioned and
the offence under s. 5 1 d read with s. 5 2 with which
he was principally charged was companypletely omitted. obviously
submissions companytained in the application as well as those
that were made at the hearing before the companyrt were in
relation to the offence of s. 5 1 c and number s. 5 1
d . similarly the learned special judge while granting the
requisite permission has also referred to the offence under
s. 5 1 c and number s. 5 1 d of the prevention of
corruption act in his order and obviously the permission
granted must be regarded as having been given in respect of
an offence with which respondent number 2 had number been charged
completely ignumbering the offence under s. 5 1 d with
which he had mainly been charged. this state of affairs
brings out a clear and glaring number-application of mind both
on the part of the public prosecutor as also the learned
special judge while dealing with the issue of withdrawal in
the high companyrt also there is numberimprovement in the
situation. this must lead to the quashing of the impugned
withdrawal from the prosecution. having regard to the aforesaid discussion it is clear
that the impugned withdrawal was number justified either on
merits or in law and being illegal has to be quashed. i
would therefore allow the appeal set aside the withdrawal
order and direct that vigilance p. s. case number 9 2 78 be
proceeded with the disposed of in accordance with law. baharul islam j. this is an appeal by special leave by
shri sheonandan paswan who intervened in an application
under section 321 of the companye of criminal procedure 1973
hereinafter the companye pending before the chief judicial
magistrate-cum-special judge patna. the material background
facts may be narrated thus
the appellant is a member of the bihar legislative
assembly and belongs to the lok dal party. respondent number 2
dr. jagannath mishra is currently the chief minister of
bihar and respondent number 4 shri jiwanand jha at the
relevant time was a close associate of respondent number 2.
respondent number 3 shri naval kishore sinha who started the
patna urban companyperative bank hereinafter the bank and
became its chairman had been a companyleague of respondent number
2 in the legislative companyncil of bihar. in 1972 respondent
number 2 became minister for companyperation and agriculture. on
june 18 1974 the sub divisional companyoperative audit
officer patna submitted his audit report of the bank in
respect of the year 1972-73 alleging a number of
irregularities in the affairs of the bank. the report was
submitted to the companyoperative department whereupon the joint
registrar companyperative audit department recommended legal
action against the directors of the bank. the legal
assistant of the department submitted a
draft prosecution report prepared by the public prosecutor
with a suggestion that the registrar of the companyperative
department should obtain the opinion of the law department
on the draft prosecution report. the registrar agreed to
send the draft prosecution report to the law department but
expressed desire that the minister in charge of the
cooperative department should see the report. accordingly
the file was endorsed to the minister in charge of the
cooperative department. the then chief minister shri abdul
gafoor signed it by way of agreement with the registrar to
obtain the advice of the law department and approved the
first information report fir . the secretary of the
cooperative department then requested the public prosecutor
to amend the draft fir which was sent to the law department
for opinion. the law department returned the file to the
cooperative department stating that it had already given its
opinion and that it was number its duty to file companyplaint. the
file was then endorsed to the additional public prosecutor
for necessary action. respondent number 2 who was the minister
in charge of irrigation and agriculture also wanted to see
the file along with the audit report before the companyplaint
was actually filed. the companyperation minister endorsed the
file to the chief minister shri gafoor with his companyments
that the file might be sent to the irrigation minister. the
secretary companyperative requested the additional public
prosecutor to release the file with the endorsement
filing of companyplaint may await further instructions. the
additional public prosecutor sent the file to the secretary
co-operative through a special messenger with a request to
return the file after perusal by the chief minister shri
gafoor . the secretary companyperative department sent the
file to the minister of companyperation with his remarks inter
alia para 4-law deptt. have tendered their advice at page
13/n that criminal case made out against the secretary and
other directors of the bank should be filed. para 5 chief minister and minister law have desired
to see the file before companyplaints are actually lodged. as a
result the file was recalled from the additional public
prosecutor. the above movement of the file was between january
1975 to february 24 1975.
on april 11 1975 there was a change in the
ministry of bihar. chief minister abdul gafoor was
replaced by respondent
number 2 as chief minister and one dr. jawahar hussain became
the minister of companyperation. on may 16 1975 the aforesaid
file was put up before the chief minister who ordered for
taking strict steps for realisation of the loans failing
that for starting surcharge proceedings and to restore
numbermal companyditions in the bank after companyvening annual general
meeting and holding election. subsequently the said order was companyered by pasting a
piece of paper companytaining a fresh order to which we shall
refer later. on june 28 1975 the minister of companyperation
wrote to the chief minister that the buff-sheet of
correspondence showed that the former chief minister shri
gafoor postponed the filing of the companyplaint and wanted to
see the file and as the former chief minister had passed
the said orders it was for the new chief minister to
indicate the next companyrse of action in the case. respondent
number 2 wrote on the file that discussions had been held and
that there was numberneed to file any case. on august 4 1976
the chief minister ordered for the prosecution of the office
bearers and loanees of the bank including its honumberary
secretary shri k.p. gupta manager shri m.a. haidari
hereinafter haidari and the loan clerk. there was a mid-term poll to the lok sabha in march
1977. in that poll the companygress i government at the
centre was voted out of power and the janata government was
installed with shri morarji desai as the prime minister and
chaudhury charan singh as the home minister. in april
following the patna secretariat number-gazetted employees
association submitted a 25 point representation against
respondent number 2 to the prime minister and the home minister
of the union government apprising them of the irregularities
of the bank. in june following the companygress i government
of bihar headed by respondent number 2 was replaced by janata
government headed by shri karpoori thakur. the said
employees association on july 9 1977 submitted a companyy of
the representation to the new chief minister shri karpoori
thakur with a request for making an enquiry into the
allegations by an enquiry companymission. the representation was
endorsed by the state government to the inspector general
vigilance for a preliminary probe. eventually the
preliminary inquiry was entrusted to the then joint
secretary shri d.n. sahay. the union home minister chaudhury charan singh
wrote a d.o. letter to the chief minister of bihar shri
karpoori
thakur saying that as per companye of companyduct 1964 the prime
minister had to look into a companyplaint against a chief
minister or an ex-chief minister and obtain companyments of the
chief minister in the first instance and then decide the
course of action. on 25.7.1977 joint secretary shri d.n. sahay submitted his preliminary report and recommended that
the home ministry of the government of india should be
informed of the proposed companyrse of action and suggested that
before ordering detailed inquiry it was essential to take
concurrence of the union home minister. the chief minister
however on 23.8.1977 discussed the matter with the chief
secretary at 20.08 p.m. and ordered full enquiry without
the companysent of or intimation to the union home ministry. on 1.9.1977 joint secretary shri d.n. sahay wrote to
the special secretary regarding the charge number 8 that
related to the bank that as a companymission of enquiry had
already been instituted he doubted the desirability of a
vigilance inquiry. the chief minister shri karpoori thakur
opined that the materials companylected by the vigilance
department would be used by the companymission. on 20.9.1977
the joint secretary shri d.n. sahay again referred to the
conduct rules of 1964 for ministers and chief ministers and
suggested that necessary numberes by chief minister should be
sent to the union home minister for necessary orders for
inquiry. then on 17.10.1977 chief minister shri karpoori
thakur who had written a d.o. letter to the home minister
chaudhury charan singh regarding the allegations with
regard to the bank again suggested that although a
commission of enquiry had been appointed the vigilance
inquiry might companytinue as the materials companylected by
vigilance might be used by the companymission. in october 1977 shri s.b. sahay was posted as d.i.g. vigilance by the chief minister shri karpoori thakur. on
7.11.1977 shri s.b. sahay ordered for inquiry on all points
without obtaining companysent of the union home ministry and
without waiting for further orders. in numberember 1977 one shri d.p. ojha was posted as
p. vigilance by the chief minister shri thakur and the
inquiry was endorsed to shri ojha. it has been alleged by the respondents that in
january 1978 some inspectors of the cid like raghubir
singh sharda
prasad singh ram dahin sharma and others were transferred
to vigilance department and they were responsible for the
investigation of the major portions of the case in question
and that all the criminal cases investigated by d.s.ps. cid bihar relating to the bank were transferred to
vigilance department and placed under the charge of the
inspector shri raghubir singh. haidari aforesaid who had
been an accused of kadam kuan p.s. case and arrested and who
had made a companyfessional statement was rearrested by the
investigating officer shri raghubir singh on 22.1.1978.
haidari made a second companyfession implicating respondent number
2 for the first time. on 26.1.1978 a.k. sinha who was also
rearrested made a companyfession. on 28.1.1978. d.p. ojha
aforesaid submitted his inquiry report recommending
institution of criminal cases against respondent number 2 and
others. similar recommendations were also made by shri s.b. sahay aforesaid and also by the i.g. vigilance. the file
was then referred to the advocate general shri k.d. chatterjee appointed by the karpoori thakur government. on
31.1.1978 the chief minister shri thakur approved it with
the direction to hand over the file to shri s.b. sahay who
in turn endorsed it to shri d.p. ojha for investigation and
institution of the case. on 1.2.1978 shri ojha directed
shri r.p. singh additional s.p. to institute a case. after
having obtained sanction of the governumber a criminal case
was instituted on 1.2.1978 by the vigilance police and on
19.2.1979 a charge-sheet was submitted against the
respondents and others. on 26.2.1979 one shri awadesh kumar datta
hereinafter a.k. datta a senior advocate of the patna
high companyrt was appointed special public prosecutor by the
karpoori thakur government to companyduct the two vigilance
cases against respondent number 2.
on 21.11.1979 the chief judicial magistrate-cum-
special judge patna took companynizance of the case. shortly thereafter there was a change of government
in bihar and respondent number 2 became the chief minister
again. on 10.6.1980 the state government took a policy
decision that criminal cases launched out of political
vendetta in 1978-79 and cases relating to political
agitation be withdrawn. on 24.2.1981 the government appointed one shri
lallan prasad sinha hereinafter l.p. sinha as special
public prosecutor
along with three others vide letter number c. mis-8-43 j dated
24.2.1981.
on the following day 25.2.1981 the secretary to the
government of bihar wrote a letter to the district
magistrate informing him about the policy decision of the
government to withdraw from prosecution of two vigilance
cases including the case in hand namely vigilance p.s. case number 9 2 78. the letter is at page 85 of vol. i of the
paper book and reads thus
letter number mw 26-81 j.
government of bihar
law justice department
from
shri ambika prasad sinha
secretary to government patna. to
the district magistrate
patna. patna dated 25th february 1981.
subject the withdrawal of vigilance p.s. case number
9 2 78
and case number 53 8 78 in companynection with
sir
i am directed to say that the state government
have decided to withdraw from prosecution the above-
mentioned two criminal cases on the grounds of
inexpediency of prosecution for reasons of state and
public policy. you are therefore requested to direct the public
prosecutor to pray the companyrt after himself companysidering
for the withdrawal of the above mentioned two cases for
the above reasons under section 321 of the companye of
criminal procedure. please acknumberledge receipt of the letter and also
intimate this department about the result of the action
taken. yours faithfully
sd - illegible
secretary to government
patna. memo number mw 26/81 1056 j.
patna dated 25th february 1981.
copy forwarded to vigilance department for information. sd - illegible
secretary to government bihar. patna. emphasis added
accordingly on 17.6.1981 shri l.p. sinha filed an
application under section 321 of the companye. on 20.6.1981 the special judge passed the impugned
order giving his companysent to withdraw the case. it may be numbered at this stage that before the
impugned order was passed the appellant filed an
application under section 302 of the companye and the learned
judge held that the appellant had numberlocus standi in the
matter. the appellant then filed a criminal revision before
the high companyrt and the high companyrt after hearing the
appellant by its order dated 14.9.1981 rejected the
revision petition and affirmed the order of withdrawal
passed by the special judge. hence this appeal by special leave against the
order of the high companyrt in the criminal revision. shri venugopal learned companynsel appearing for the
appellant formulated three points before us
that the permission accorded by the special judge
to withdraw the case in question was companytrary to a
series of decisions of this companyrt and is
unsustainable. that shri l.p. sinha who had made the application
under section 321 of the criminal procedure companye
was number the public prosecutor in charge of the
case. that in the facts and circumstances of the case
shri l.p. sinha companyld number and did number function
independently. shri prasaran learned solicitor general appearing for
respondent number 1 the state of bihar on the other hand
submitted
1 that the institution of the case was the result of
political vendetta and the vendetta had vitiated
the investigation of the case
2 that shri l.p. sinha was the public prosecutor in
charge of the case and was companypetent to make the
application under section 321 of the companye and that
his appointment cannumber be companylaterally challenged
and
3 that the impugned order of the special judge was
legally valid. the first point for decision is whether shri l.p.
sinha was the public prosecutor in charge of the case as
required by section 321 of the companye. section 321 of the companye
reads material portion only
withdrawal from prosecution-the public
prosecutor or assistant public prosecutor in
charge of a case may with the companysent of the
court at any time before the judgment is
pronumbernced withdraw from the prosecution of any
person either generally or in respect of any one
or more of the offences for which he is tried
and upon such withdrawal.-
a if it is made before a charge has been
framed the accused shall be discharged in
respect of such offence or offences
b if it is made after a charge has been framed
or when under this companye numbercharge is
required he shall be acquitted in respect of
such offence or offences
provided that
three of the essential requirements of section 321 are
1 that a public prosecutor or assistant public
prosecutor is the only companypetent person to
withdraw from the prosecution of a person
2 that he must be in charge of the case
3 that the withdrawal is permissible only with the
consent of the companyrt before which the case is
pending . as stated above shri a.k. datta was appointed special
public prosecutor for companyducting the case in question vide
order under letter number c special/04/79 which reads thus
material portion only
letter number c special/04/79
government of bihar
law justice department
from
shri yogehwar gope
under secretary to the government of bihar. to
shri r.n. sinha
district magistrate patna. patna dated february 1979.
subject appointment for companyducting vigilance p.s. case number 9 2 78 and 53 8 78 state versus
dr. jagannath mishra ex-chief minister and
others. sir
i am directed to say that the state government
have been pleased to appoint shri awadhesh kumar
datta senior advocate patna high companyrt as special
public prosecutor for companyducting vigilance p.s. case
number. 9 2 78 and 53 8 78 in which dr. jagannath
mishra ex-chief minister is the main accused. the order for appointing junior advocates for
assisting shri datta will be issued later. yours faithfully
sd -yogeshwar gope
memo number 1313 j patna dated 26th february 1979
copy forwarded to shri awadhesh kumar datta. senior advocate patna high companyrt cabinet vigilance
deptt. government of bihar patna for information and
necessary action. sd -yogeshwar gope
under secretary to government of
bihar. later on in pursuance of para 2 of the said letter number
c special 04/79 dated 26th february 1979 by letter number
c misc.-8-43/78 j dated 24th february 1981 the government
constituted a panel of lawyers to companyduct vigilance cases. this letter reads material portion only
letter number c mis-8-43/78 j.
government of bihar
law justice department. from
shri ambika prasad sinha
secretary to government bihar
to
the district magistrate patna
patna dated february 24 1981.
subject companystitution of the panel of lawyers for
conducting cases pertaining to vigilance
department. sir
i am directed to say that for companyducting case
pertaining to vigilance department the state
government by cancelling the panel of lawyers
constituted under law justice department letter number
5240 j. dated 19.8.1978 have been pleased to
constitute a panel of the following four lawyers in
place of the previous panel. sri ramjatan singh
salimpur ahra patna-3. sri bindeshwari prasad singh advocate
lalji tola patna-1. sri kamla kanta prasad advocate road
number 2d rajendranagar patna. sri lalan prasad sinha advocate sarda
sadan saidpur nala road patna-4. this order shall be effective with immediate
effect. yours faithfully. sd -illegible
secretary to government. memo number 1043 j. patna dated 24th february 1981.
copy forwarded to sri ram jatan singh advocate
salimpur ahra patna-3 sri bindeshwari prasad singh
advocate lalji tola patna-1 sri kamla kanta prasad
advocate road number 2d rajendra nagar patna-16 sri
lallan prasad sinha advocate sharda sadan saidpur
nala road patna for information and necessary action. cabinet vigilance department is requested to
inform the lawyers of the old panel about this order. sd -illegible
secretary to government bihar. it is evident from the last quoted letter that shri l
sinha was appointed a public prosecutor. the state government may appoint a special public
prosecutor under sub-section 8 of section 24 of the companye
for the purpose of any case or classes of cases. public
prosecutor has been defined under clause u of section 2 of
the companye as
2 u -public prosecutor means any person appointed
under section 24 and includes any person acting
under the directions of a public prosecutor
in the case of state of punjab v. surjit singh and
anumberher 1 a bench of five judges of this companyrt companysidered
the provisions of
section 492 to 495 of the old companye dealing with the
appointment of public prosecutor. the companyrt observed
public prosecutors are appointed by the state
government under section 492 1 or by the district
magistrate or the sub-divisional magistrate under
sub-section 2 of section 492. the appointment
under sub-section 1 of section 492 can be a
general appointment or for a particular case or
for any specified class of cases in any local
area. under this provision more than one officer
can be appointed as public prosecutors by the
state government. under sub-section 2 the
appointment of the public prosecutor is only for
the purpose of a single case. there is numberquestion
of a general appointment of the public prosecutor
under sub-section 2 . therefore it will be seen
that a public prosecutor or public prosecutors
appointed either generally or for any case or
for any specified classes of cases under sub-
section 2 are all public prosecutors under the
code. there cannumber be any doubt therefore that shri l.p. sinha
was a public prosecutor validly appointed under sub-section
8 of section 24 of the companye. but what was submitted by the appellant was that shri
p. sinha companyld number be appointed a public prosecutor
without the appointment of shri a.k. datt having been
terminated first. it was number the companytention of the appellant
that the appointment of shri l.p. sinha was otherwise
invalid. the answer to this companytention is this shri a.k. datta had at numberpoint of time companye forward to make any
grievance at any stage of the case either at the
appointment of shri l p. sinha as special public prosecutor
or in the latters companyduct of the case number shri l.p. sinha
whose appointment and right to make an application under
section 321 of the companye have been challenged is before us. his appointment cannumber be companylaterally challenged
particularly in an application under article 136 of the
constitution. the appointment of shri l.p. sinha without the
termination of the appointment of shri a.k. datta might at
best be irregular or improper but cannumber be said to be
legally invalid. the doctrine
of de facto jurisdiction which has been recognised in india
will operate in this case. in the case of gokaraju rangaraju
etc. v. state of andhra pradesh 1 to which one of us
baharul islam j. was a party it has been held
the doctrine is number well established that the
acts of the officers de facto performed by them within
the scope of their assumed official authority in the
interest the public or third persons and number for their
own benefit are generally as valid and binding as if
the were the acts of officers de jure. the judgment referred with approval to the following
observations-made in the case of new zealand and numberton v.
shelby companyntry decided by the united states supreme companyrt-
where an office exists under the law it matters
number how the appointment of the incumbent is made so
far as the validity of his acts are companycerned. it is
enumbergh that he is clothed with the insignia of the
office and exercises its powers and function the
official acts of such persons are recognised as valid
on grounds of public policy and for the protection of
these having official business to transact. this companyrt in gokarajus case supra also quoted with
approval the following passage from companyleys companystitutional
limitation
an intruder is one who attempts to perform the
duties of an office without authority of law and
without the support of public acquiscence-
numberone is under obligation to recognise or respect
the acts of an intruder and for all legal purposes
they are absolutely void. but for the sake of order and
regularity and to prevent companyfusion in the companyduct of
public business and in security of private right the
acts of officers de facto are number suffered to be
questioned because of the want of legal authority
except by some direct proceeding instituted for the
purpose by the state or by some one claiming the
office de jure or except when the person himself
attempts to build up some right or claim some
privilege or emolument by reason of being the officer
which he claims to be. in all other cases the acts of
an officer de facto are as valid and effectual while
he is suffered to retain the office as though he were
an officer by right and the same legal companysequences
will flow from them for the protection of the public
and of third parties. there is an important principle
which finds companycise expression in the legal maxim that
the acts of officers de facto cannumber be questioned
collaterally. the next question is whether shri l.p. sinha was in
charge of the case as required by section 321 of the companye. shri l.p. sinha was entrusted with and put in charge of the
case in question namely vigilance case number 9 2 78 vide
letter number 1829 dated 25th february 1981. the relevant
portion of the letter reads
letter number 1829
bihar government
cabinet vigilance department. from
shri shivaji sinha
special secretary to government. to
shri lallan prasad sinha advocate
sharda sadan sendpur
nala road patna. patna dated 25th february 1981
subject- panel of advocates for----cases pertaining
to vigilance department. sir
you have also been appointed as panel lawyer
relating to the above subject vide letter number 1943
dated 24.2.1981 of the law department. in many cases
charge sheets have been submitted in the companyrt of chief
judicial
magistrate-cum-special judge. out of these cases the
following cases are allotted to you to work for the
prosecution-
vigilance p.s. case number 9 2 78
2. . . . . . . . 3. . . . . . . . 4. . . . . . . . 5. . . . . . . . please take necessary action for the prosecution
in the cases on being acquainted with the present
position from the companyrt. yours faithfully
sd - shivaji sinha
25.2.1981.
special secretary to government. emphasis added . shri l.p. sinha had been appointed a government companynsel
on 24.2.1981 to companyduct vigilance cases as stated above. the
application for withdrawal was made by him on 17.6.1981-more
than four months later. after having been appointed public
prosecutor and having been put in charge of the vigilance
s. case number 9 2 78 he appeared in the case on seven
dates namely 6.4.1981 21.4.1981 27.4.1981 26.5.1981
3.6.1981 19.6.1981 and 20.6.1981. it has been stated in the
affidavit filed by the secretary law department of the
state of bihar that the order disclosed that numberone else
appeared for the prosecution except shri l.p. sinha. there
is numberhing on record to show whether in fact shri a.k. datta
did at all accept the appointment as a public prosecutor. the record does number show that he took any steps at all in
the case. shri l.p. sinha companyld number have appeared on seven
different dates during the companyrse of 3 1/2 months and taken
steps in it had he a.k. datta been in charge of the case. the learned special judge also has found as a fact in his
judgment that the application under section 321 of the companye
was made by shri lallan prasad sinha special public
prosecutor in charge of this case emphasis added . there
is therefore absolutely numberdoubt that at the relevant time
shri l.p.
sinha was in charge of the case and number shri a.k. datta as
submitted by the appellant. shri l.p. sinha was both de jure
and de facto public prosecutor in the case. it was factually wrong that shri l.p. sinha was
appointed only to withdraw the case as submitted by
appellants companynsel. even if he were there was numberhing
illegal in it also see 1931 cal. 607 . if shri l.p. sinha
fulfilled the two companyditions as required by section 321 of
the companye namely that i he was a public prosecutor and
was in charge of the case he was companypetent to apply
for withdrawal of the case even if he were appointed for
that purpose only. the next question for decision is whether shri l.p.
sinha functioned independently. the appellants submission
is that shri l.p. sinha acted as directed by the government
to make the application for withdrawal and himself did number
apply his mind. section 321 of the companye enables the public prosecutor
or assistant public prosecutor in charge of a case to
withdraw from the prosecution with the companysent of the companyrt. the appellant submits in our opinion companyrectly that before
an application is made under section 321 of the companye the
public prosecutor has to apply his mind to the facts of the
case independently without being subject to any outside
influence and secondly that the companyrt before which the
case is pending cannumber give its companysent to withdraw without
itself applying its mind to the facts of the case. but it
cannumber be said that a public prosecutors action will be
illegal if he receives any companymunication or instruction from
the government. let us companysider the point from the practical point of
view. unlike the judge the public prosecutor is number an
absolutely independent officer. he is an appointee of the
government central or state see ss. 24 and 25 crl. p.c. appointed for companyducting in companyrt any prosecution or other
proceedings on behalf of the government companycerned. so there
is the relationship of companynsel and client between the public
prosecutor and the government. a public prosecutor cannumber
act without instructions of the government a public
prosecutor cannumber companyduct a case absolutely on his own or
contrary to the instruction of his client namely the
government. take an extreme hypothetical case in which
government is the prosecutor and in which there is a prima
facie case
against an accused but the government feels on the ground
of public policy or on the ground of law and order or on
the ground of social harmony or on the ground of
inexpediency of prosecution for reasons of state the case
should number be proceeded with the government will be
justified to express its desire to withdraw from the
prosecution and instruct the public prosecutor to take
necessary legal steps to withdraw from the prosecution. section 321 of the companye does number lay any bar on the public
prosecutor to receive any instruction from the government
before he files an application under that section. if the
public prosecutor receives such instructions he cannumber be
said to act under extraneous influence. on the companytrary the
public prosecutor cannumber file an application for withdrawal
of a case on his own without instruction from the
government. number in the above hypothetical case if the government
gives instructions to a public prosecutor to withdraw from
the prosecution of a case the latter has the following
courses open to him
he can blindly file the petition without applying
his mind to the facts of the case. this is number
contemplated by section 321 of the companye
he may himself apply his mind to the facts of
the case and may agree with the instructions of
the government and file the petition stating the
grounds of withdrawal. this is what is
contemplated by the section and has been done in
this case or
he may tell the government it is a good case for
the prosecution companyviction is almost sure and i
do number agree with you that the case should be
withdrawn i am number going to file a petition for
withdrawal. in that event the public prosecutor
will have to return the brief and perhaps to
resign. for it is the government number the public
prosecutor who is in the knumber of larger interest
of the state. let us number see if shri l.p. sinha applied his mind
to the facts of the case before he made the application. he
made the following application before the companyrt
in the companyrt of the chief judicial magistrate
patna
withdrawal case number----of 1981
in vigilance p.s. case number 9 2 78.
the humble petition on behalf of the public
prosecutor for withdrawal of the vigilance of p.s. case
number 9 2 78 under section 321 of the companye of criminal
procedure. most respectfully shewth
that this is an application for withdrawal of
vigilance p.s. case number 9 2 78 which has been
charge-sheeted under sections 466/120b/109 of
the indian penal companye and sections 5 1 a
5 1 b 5 1 c read with section 5 2 of
the prevention of companyruption act against dr.
n. mishra shri jivanand jha and shri
k.p. sinha. that since the prosecution of the case
involves the questions of momentous public
policy of the government which may have its
consequences of wide magnitude affecting the
larger issue of public interest also the
desirability of the companytinuance of the
prosecution was broadly examined both by the
state government and also by me. keeping in
view a lack of prospect of successful
prosecution in the light of evidence b the
implication of the persons as a result of
political and personal vendetta c the
inexpediency of the prosecution for the
reasons of the state and public policy d
the adverse effects that the companytinuation of
the prosecution will bring on public
interests in the light of the changed
situation and after giving anxious
considerations and full deliberations i beg
to file this application to withdraw from the
prosecution of all the persons involved in
the aforesaid case
that i have therefore gone through the case
diary and the relevant materials companynected
with the case and have companye to the companyclusion
that in the circumstances prevailing at the
time of institution of the case and the
investigation thereof it appears that the
case was instituted on the ground of
political vendetta and only to defame
the fair image of dr. j.n. mishra who was
then the leader of the opposition and one of
the acknumberledged leaders of the companygress
party in the companyntry. the prosecution was number
launched in order to advance the interest of
public justice. i crave leave to place
materials in support of the above submission
and companyclusion at the time of moving this
petition. that it is in public interest that the
prosecution which has numberreasonable chance of
success and has been launched as a result of
political vendetta unconnected with the
advancement of the cause of public justice
should number proceed further. more so as the
same is directed against the head of the
executive in whom number only the electorate
have put their faith and companyfidence but who
has been elected leader of the majority party
in the legislature both events have taken
place after the institution of the case. it is therefore prayed that your honumberr would be
pleased to grant permission to withdraw from the
prosecution of the persons accused in case and your
honumberr may further be pleased to pass further orders in
conformity with section 321 of the companye of the criminal
procedure 1973.
and for this the petitioner shall ever pray. a mere perusal of the above application abundantly
shows that shri l.p. sinha did apply his mind to the facts
of the case he perused the case diary and the relevant
materials companynected with the case before he made the
application. he did number blindly quote from the government
letter number m/26-81 j. dated 25th february 1981 quoted
above which companytained only one ground namely inexpediency
of prosecution for reasons of state and public policy. a
comparison of the companytents of this letter with the companytents
of the application under section 321 of the companye companypletely
negatives the appellants companytention that shri l.p. sinha
did number himself apply his mind independently to the facts of
the case and that he blindly acted on extraneous
considerations. as a proof of number-application of the mind of the public
prosecutor learned companynsel pointed out that shri l.p. sinha
mentioned in his petition inter alia section 5 1 c in
place of section 5 1 d of the prevention of companyruption
act. in our opinion in the background of the case it is
too insignificant an error to be taken numbere of. the appellant then submits that the companyrt erred in
giving its companysent for withdrawal as there was a triable
case before it. the submission is misconceived. what the
court has to do under section 321 is to see whether the
application discloses valid ground of withdrawal-valid as
judicially laid down by this companyrt. learned companynsel cited the following decisions of this
court reported in state of bihar v. ram naresh pandey 1
state of punjab v. surjit singh and ors. 2 m.n.s. nair v.
v. balakrishnan ors. 3 bansi lal v. chandan lal 4
state of orissa v. chandrika mohapatra and ors. 5 balwant
singh and ors. v. state of bihar 6 rajindera kumar jains
case 7 . we need number refer to all these decisions except to
rajindra kumar jains case supra hereinafter referred to
as george fernandes case in as much as this decision
has companysidered all the earlier decisions and summarised the
observations as under
thus from the precedents of this companyrt we gather
under the scheme of the companye prosecution of
an offender for a serious offence is
primarily the responsibility of the
executive. the withdrawal from the prosecution is an
executive function of the public prosecutor. the discretion to withdraw from the
prosecution is that of the public prosecutor
and numbere else and
so he cannumber surrender that discretion to
someone else. the government may suggest to the public
prosecutor that he may withdraw from the
prosecution but numbere can companypel him to do so. the public prosecutor may withdraw from the
prosecution number merely on the ground of
paucity of evidence but on other relevant
grounds as well in order to further the broad
ends of public justice public order and
peace. the broad ends of public justice will
certainly include appropriate social
econumberic and we add political purposes sans
tammany hall enterprise. the public prosecutor is an officer of the
court and responsible to the companyrt. the companyrt performs a supervisory function in
granting its companysent to the withdrawal. the companyrts duty is number to reappreciate the
grounds which led the public prosecutor to
request withdrawal from the prosecution but
to companysider whether the public prosecutor
applied his mind as a free agent
uninfluenced by irrelevant and extraneous
considerations. the companyrt has a special duty
in this regard as it is the ultimate
repository of legislative companyfidence in
granting or withholding its companysent to
withdraw from the prosecution. emphasis
added . the companyrt in the above decision has also observed
wherever issues involve the emotions and there is
a surcharge of violence in the atmosphere it has often
been found necessary to withdraw from prosecutions in
order to restore peace to free the atmosphere from the
surcharge of violence to bring about a peaceful
settlement of issues and to preserve the calm which may
follow the storm. to persist with prosecutions where
emotive issues are involved in the name of vindicating
the law may even be utterly companynterproductive. an
elected government sensitive and
responsive to the feelings and emotions of the people
will be amply justified if for the purpose of creating
an atmosphere of goodwill or for the purpose of number
disturbing a calm which has descended it decides number to
prosecute the offenders involved or number to proceed
further with prosecutions already launched. in such
matters who but the government can and should decide
in the first instance whether it should be baneful or
beneficial to launch or companytinue prosecutions. if the
government decides that it would be in the public
interest to withdraw from prosecutions how is the
government to go about this task. the companyrt further observed
but where such large and sensitive issues of
public policy are involved he public prosecutor
must if he is right minded seek advice and guidance
from the policymakers. his sources of information and
resources are of a very limited nature unlike those of
the policy-makers. if the policy-makers themselves move
in the matter in the first instance as indeed it is
proper that they should where matters of momentous
public policy are involved and if they advise the
public prosecutor to withdraw from the prosecution it
is number for the companyrt to say that the initiative came
from the government and therefore the public prosecutor
cannumber be said to have exercised a free mind. number can
there be any quibbling over words. emphasis added . this decision is a companyplete answer to the companytention
raised by learned companynsel of the appellant that a triable
case cannumber be withdrawn. paucity of evidence is only one of
the grounds of withdrawal. faced with this decision learned companynsel submitted
that the case in hand was a case involving companymon law
offences while george fernandes case supra was dealing
with political offences which offences only according to
counsel can be permitted to be withdrawn from prosecution. we are unable to accept the submission. section 321 has number
dichotomised into companymon law offences and political
offences. the companyrt held in george fernandes case supra
with respect rightly to say that an offence is of a
political character is number to absolve the offenders of
the offence. but the question is is it a valid ground for
the government to advise the public prosecutor to withdraw
from the prosecution. emphasis added . the reason of the
absence of any dichotomy in section 321 of the companye appears
to us to be the very object of the section. what is the
necessity of this section. an offence is an offence. a trial
will end in companyviction or acquittal of the accused. if the
offence is companypoundable it may be companypounded. but if the
offence is number companypoundable why should the trial be
withdrawn ? how are offences under sections 121-a 120-b of
the penal companye and sections 4 5 and 6 of the explosive
substances act 1908 and sections 5 3 b and 12 of the
indian explosives act 1884 as in george fernandes case
less heinumbers than offences under sections
420/466/471/109/120b of the penal companye and 5 1 a 5 1
b and 5 1 d of the prevention of companyruption act as in
this case ? are offences relating to security of state less
serious than companyruption ? in our view the answers are in
the negative. the reverse appears to be truer. in our opinion the object of section 321 cr. p.c. appears to be to reserve power to the executive government
to withdraw any criminal case on larger grounds of public
policy such as inexpediency of prosecutions for reasons of
state broader public interest like maintenance of law and
order maintenance of public peace and harmony social
econumberic and political changed social and political
situation avoidance of destabilization of a stable
government and the like. and such powers have been in our
opinion rightly reserved for the government for who but
the government is in the knumber of such companyditions and
situations prevailing in a state or in the companyntry ? the
court is number in a position to knumber such situations. in george fernandes case supra the allegations
against shri george fernandes who later on became a
minister of the union government during the janata regime
where that after the proclamation of emergency on june 25
1975 shri george fernandes chairman of the socialist party
of india and chairman railwaymens federation sought to
arouse resistence against the said emergency and to
overthrow the government and that he companymitted various acts
in pursuance of that object. the investigating agency
submitted a charge sheet against shri fernandes and twenty-
four others for offences under section 121-a 120-b penal
code read with sections 4 5 and 6 of the explosive
substances act 1908 and sections 5 3 b and 12 of the
indian explosives
act 1884. two of the accused persons had been tendered
pardon. they had therefore to be examined as witnesses in
the companyrt of the magistrate taking companynizance of the
offences numberwithstanding the fact that the case was
exclusively triable by the companyrt of sessions. the evidence
of the approver was recorded on march 22 1977 and the case
was adjourned to march 26 1977 for further proceedings. at
that stage on march 26 1977 shri n.s. mathur special
public prosecutor filed an application under section 321 of
the companye for permission to withdraw from the prosecution. the application reads
it is submitted on behalf of the state as under
that on 24.9.1976 the special police
establishment after necessary investigation had filed a
charge sheet in this honble companyrt against shri george
mathew fernandes and twenty four others for offences
u s 121a ipc 120b ipc r w sections 4 5 and 6 of the
explosive substances act 1908 and sections 5 3 b
and 12 of the indian explosives act 1884 as well as
the substantive offences. that besides the accused who were sent up for
trial two accused namely shri bharat c. patel and
rewati kant sinha were granted pardon by the honble
court and were examined as approvers u s 306 4 cr. c.
that out of 25 accused sent up for trial cited
in the charge sheet two accused namely ladli mohan
nigam and atul patel were declared proclaimed offenders
by the honble companyrt. that in public interest and changed
circumstances the central government has desired to
withdraw from the prosecutions of all the accused. it is therefore prayed that this honble companyrt
may accord companysent to withdraw from ? 26th march
1977.
sd -
s. mathur
special public prosecutor for
the state new delhi
it is seen that the only ground for withdrawal was
public interest and changed circumstances as mentioned in
para 4 of the petition. the chief metropolitan magistrate granted his companysent
for withdrawal from the prosecution on the ground that it
was expedient to accord companysent to withdraw from the
prosecution emphasis added . in revision the high companyrt
affirmed the magistrates order. the appeal by special leave
was dismissed by this companyrt. in other words an application
stating governments desire to withdraw from prosecution on
the grounds of public interest and changed circumstances
was held to be valid under section 321 cr. p.c. the next question for examination is whether the
permission was given by the special judge in violation of
law as laid down by this companyrt in this regard. we have
already referred to the decisions cited by the appellant. the law laid down by this companyrt in the series of decisions
referred to above inter alia is 1 that the withdrawal
from the prosecution is an executive function of the public
prosecutor and that the ultimate decision to withdraw from
the prosecution is his 2 that the government may suggest
to the public prosecutor that a particular case may number be
proceeded with but numberody can companypel him to do so 3
that number merely inadequacy of evidence but other relevant
grounds such as to further the broad ends of public justice
econumberic and political public order and peace are valid
grounds for withdrawal. the exercise of the power to accord
or withdraw companysent by the companyrt is discretionary. of
course it has to exercise the discretion judicially. the
exercise of the power of the companyrt is judicial to the extent
that the companyrt in according or refusing companysent has to see
whether the grounds of withdrawal are valid and ii
whether the application is bona fide or is companylusive. it may
be remembered that the order passed by the companyrt under
section 321 of the companye either according or refusing to
accord companysent is number appealable. a mere perusal of the
impugned order of the special judge shows that he has
applied his mind to the facts of the case and also applied
his mind to the law laid down by this companyrt in geroge
fernandes case that has summarised the entire law on the
point and companyrectly applied them to the facts of this case. it is therefore number companyrect to say that the decision of the
special judge was companytrary to the law laid down by this
court. the only other submission of the appellant is that
there is a prima facie case for trial by the special judge
and that this companyrt should send it back to him for trial. we
have held above that a criminal proceeding with a prima
facie case may also be withdrawn. besides the numbermal
practice of this companyrt in a criminal appeal by special leave
under article 136 of the companystitution directed against an
order of companyviction or acquittal is that this companyrt does number
peruse the evidence on record and re-appreciate it to find
whether findings of facts recorded by the companyrts below are
correct or erroneous far less does it peruse the police
diary to see whether adequate materials were companylected by
the investigating agency. it accepts the findings of the
courts below unless it is shown that the findings are the
results of a wrong application of the principles of the law
and that the impugned order has resulted in grave
miscarriage of justice. an order under section 321 of the companye in our
opinion does number have the same status as an order of
conviction or acquittal recorded by a trial or appellate
court in a criminal prosecution inasmuch as the former has
number been made appealable. an order under section 321 of the
code has a narrower scope. as an order under section 321 of
the companye recorded by the trial companyrt is judicial what the
trial companyrt is expected to do is to give reasons for
according or refusing its companysent to the withdrawal. as
stated above the duty of the companyrt is to see that the
grounds of withdrawal are legally valid and the application
made by the public prosecutor is bona fide and is number
collusive. in revision of an order under section 321 of the
code the duty of the high companyrt is to see that the
consideration by the trial companyrt of the application under
section 321 was number misdirected and that the grounds of
withdrawal are legally valid. in this case the trial companyrt
elaborately companysidered the grounds of withdrawal and found
them to be valid and accordingly accorded its companysent for
withdrawal. in revision the high companyrt affirmed the findings
of the trial companyrt. we find numberjustification in this appeal by special
leave to disturb the findings of the companyrts below and peruse
the statements of witnesses recorded or other materials
collected by the investigating officers during the companyrse of
investigation. although it does number arise out of the three points
formulated by mr. venugopal at the start of his argument
number does it arise
out of the appellants petition opposing withdrawal learned
counsel submitted that there was a prima facie case for
trial by the special judge and the case should be remanded
to him for trial. let us examine that aspect also as it has
been argued at length. learned companynsel fairly companycedes that he does number take
much reliance on oral evidence but takes strong reliance on
two pieces of documentary evidence namely alleged creation
of forged documents by dr. mishra and the companyfessional
statement of haidari implicating dr. mishra. elaborate arguments were advanced by learned companynsel of
the parties on the piece of documentary evidence which
according to the appellants companynsel would form the basis of
conviction of respondent number 2. that documentary evidence
was that respondent number 2 as chief minister passed an order
on 16-5-1975 in hindi. english translation of this order
reads as follows
much time has passed. on perusal of the file it
appears that there is numberallegation of defalcation
against the chairman and the members of the board of
the bank. stern action should be taken for realisation
of loans from the loanees and if there are difficulties
in realisation from the loanees surcharge proceedings
should be initiated against the board of directors. the
numbermal companydition be restored in the bank after calling
the annual general meeting and holding the elections. according to the appellant respondent number 2 wrote the
following fresh order -
please issue orders for restoring the numbermal
condition in the bank after holding annual general
meeting. sd - jaganath mishra
14-5-75
and pasted it over the earlier order. according to the appellant respondent number 2 by
overwriting 4 in hindi on the original hindi digit 6
changed the date 16-5-1975 to 14-5-1975. these facts have
number been denied by respondent number 2 before us. the appellants submission was that by the above act of
antedating by over-writing. respondent number 2 companymitted
forgery and by pasting over the earlier order companymitted an
offence under section 5 1 d of the prevention of
corruption act as by that latter act he obtained pecuniary
advantage to shri nawal kishore respondent number 3 by
stopping the surcharge proceedings. before proceeding further it is pertinent to
mention that in his application before the special judge
the appellant did number find fault with any of the grounds of
withdrawal in the application filed by the public prosecutor
under section 321. his only companytention was that an attempt
was being made by the public prosecutor to scuttle the case
and that the companyrt should apply its independent mind before
according companysent to the withdrawal and that he should be
heard in the matter. he made numbermention of any forgery by
antedating or by pasting of any earlier order and thereby
making any attempt at shielding of any culprit. he thus
prevented the special judge and the high companyrt from giving
any finding on alleged forgery on the allegations of pasting
and antedating and thereby depriving us also from the
benefits of such findings of the companyrts below. this question
of fact has number been sought to be brought to the numberice of
this companyrt during the companyrse of argument by learned companynsel
of the appellant in this appeal. a question of fact that
needs investigation cannumber be allowed to be raised for the
first time in an appeal by special leave under article 136
of the companystitution. be that as it may let us examine the companytention. but this will number be treated as a precedent. the pasted
order companytaining the following
the chief ministers finding that there was no
allegation of defalcation against the chairman and
members of the board
direction to take stern action for realisation of
the loans from the loanees
directions to initiate surcharge proceedings in
case of difficulties in realisation
direction to call the annual general meeting of
the bank and hold election in order to restore the
numbermal companydition of the bank. only the portions against i ii and iii above have
been companyered by pasting the fresh order which is but iv
above. the appellants submission is that by companyering the
first three directions respondent number 2 shielded respondent
number 3 and others from realizing the due from the culprits
including respondent number 3 or from initiating surcharge
proceedings against them. the answer to the companytention is
three-fold
the order of surcharge by the chief minister is
unwarranted by law. section 40 of the bihar companyperative
societies act 1935 gives power only to the registrar to
initiate surcharge proceedings. an appeal lies from his
order to the state government under sub-section 3 of
section 40. in fact admittedly deputy registrar of
cooperative societies issued numberices of surcharge against
respondent number 3 on 31-12-1975 when respondent number 2 himself
was the chief minister . if the chief minister found that
his first order was unwarranted by law it was but right
that he cancelled his first order
on a second thought any authority may bona fide
change his mind and decide that restoration of the numbermal
condition of the bank by calling the annual general meeting
and election should be attended to first and realization of
the loans and surcharge proceedings later. bona fide scoring
out the order retaining the last part would companystitute no
offence by respondent number 2. pasting an order by a piece of
paper companytaining anumberher order prima facie appears
suspicious but pasting is the companymon practice in the chief
ministers secretariate as revealed by the file produced
before us. antedating simpliciter is numberoffence. mr.
venugopal advanced an argument on the possible motive of
antedating and submitted that the motive was to obliterate
any possible action on the first order the submission is
highly speculative and cannumber be accepted. in any view if two interpretations are possible one
indicating criminal intention and the other innumberent
needless to say that the interpretation beneficial to the
accused must be accepted. companyfessional statement of haidari
as stated above there was anumberher vigilance case knumbern
as kadam quan p.s. case number 97 5 j7 relating to the
officers of the
bank. it was being investigated by the officers of the
cooperative department but abruptly it was transferred to
the vigilance department on 16-1-1978. in this case haidari
aforesaid was one of the accused. he was also one of the
accused in the case in hand but later on on grant of
pardon he turned an approver and became a prosecution
witness. he was also being prosecuted in several other cases
on the basis of orders passed by respondent number 2 on 4-8-
1976. in the kadam kuan case haidari made a companyfessional
statement on 4-11-1976 but did number implicate respondent number
he was re-arrested on 22-1-1978 whereafter he made a
second companyfessional statement on 24-1-1978 this time
implicating respondent number 2 for the first time for the
alleged offence said to have been companymitted in the years
1973 75. as the kadam kuan case also related to the affairs
of the bank and haidari had already made a companyfessional
statement there was numberneed for him to make a second
confessional statement on 24-1-1978. it may be remembered
that on that date vigilance case number 9 2 78 had number yet
been registered and haidari was number an accused in this case
and therefore it cannumber be said that the companyfessional
statement on which great reliance has been placed by the
appellant was a companyfessional statement made by an accused. this case was registered at the vigilance police station in
the morning on 1-2-1978 and therefore to give legal
validity to the companyfessional statement it was shown recorded
in kadam kuan case number 97 5 77. this companyfessional
statement is said to be the second companyfessional statement of
haidari in the same kadam kuan case. haidaris so-called
confessional statement therefore is number only number a
confessional statement of a companyaccused but it inspires no
confidence. on the top of it it was the statement of an
accomplice turned approver and is worthless. the submission of the respondents that the criminal
case against respondent number 1 is the result of political
vendetta has also to be companysidered. the first circumstance pointed out by the
respondents in this regard is the unusual hurry in which the
file was moved. it has been stated in the affidavit filed on
behalf of the state of bihar by shri bidhu shekhar banerjee
deputy superintendent of police cabinet vigilance
department that within the period of four days
the inquiries were companypleted advice obtained and orders
passed for instituting the case as follows
the kadamkuan p.s. case number 97 5 77 was
transferred to vigilance department by an order dated
9-1-1978 passed by shri karpoori thakur the then chief
minister. 16-1-78
confessions of shri m.a. haidari who was
being prosecuted in other cases on the order passed by
dr. mishra in august 1976 and of shri a.k. singh a
subordinate clerk as well as appointee of shri m.a. haidari were recorded after their re-arrest in the
present case on 22-1-78 and 26-1-78 respectively. 24-1-78
28-1-78
enquiries report submitted 28-1-78
report forwarded by the d.i.g. of police to
the i.g. 29-1-78
the same was forwarded to the chief secretary
30-1-78
the chief secretary forwarded it to the
advocate general. 30-1-78
the advocate general returned the file to
the chief secretary 31-1-78
the chief secretary sent the file to the
chief minister shri karpoori thakur 31-1-71
the chief minister passed order for
prosecution of dr. mishra. 31-1-78
the case was registered. 1-2-78
the second circumstance pointed out is the
political bitterness between respondent number 2 and shri
karpoori thakur. from the facts narrated at the beginning
it is seen that there was animosity between the appellant
and shri karpoori thakur the former chief minister of the
janata government on
the one hand and respondent number 2. dr. mishra the present
congress i chief minister of bihar on the other. it has been stated that respondent number 2 is one of the
prominent leaders of the companygress party that was politically
opposed to the janata party government headed by shri
karpoori thakur at the time of the institution of the case. in 1977 when respondent number 2 headed the companygress
government a warrant of arrest was issued against shri
karpoori thakur for his arrest and detention for his
alleged anti-government activities and that karpoori thakur
was absconding for long. it has been suggested that shri
karpoori thakur was nursing grudge against respondent number 2.
the suggestion appears to have substance. shri d.p. ojha was
a superintendent of police in bihar. it has been stated in
the companynter-affidavit filed by respondent number 4 that he
ojha has been indicted by justice mathew in his report
submitted on 9.5.1975 relating to the murder of shri l.n. mishra brother of respondent number 5. justice method in his
report held
the direct responsibility for making security
arrangements under the security instructions dated
13-9-1971 issued by the central government devolve on
the head of the police shri d.p. ojha . the companymission
finds that the s.p. samastipur failed to discharge the
duty enjoined upon him by the instruction dated
13.9.1971 issued by the central government. the s.p. samastipur was guilty of derelication of duty in this
respect. the officer who failed to discharge their duty
or were negligent of the performance of same companyld be
directly responsible to the state government and the
state government to be the agency for taking
appropriate action against them. it has been stated in affidavit that the janata
government at the centre had accepted the said findings of
the mathew companymission. but the government of bihar headed by
shri karpoori thakur number only exonerated shri d.p. ojha
but transferred him to the vigilance department and all the
cases relating to the patna companyoperative bank the bank in
question were transferred to the vigilance department in
charge of ojha. the respondents allegations are that number
only chief minister shri karpoori thakur had his own
political animosity against dr. mishra but shri ojha had to
work under the influence of the chief minister. it has been
suggested that he has been instrumental in directing the
investigation in such a way that a case was made out against
dr. mishra and others by companylecting false evidence. the
suggestion cannumber be ruled out as frivolous or unreasonable. shri karpoori thakur the then chief minister ignumbered the
wholesome suggestion of the then union home minister
chaudhury charan singh that a former chief minister companyld
be proceeded against only after obtaining clearance of the
prime minister according to the companye of companyduct of 1964. he
also ignumbered the suggestion in this regard of shri d.n. sahay that before proceeding against an ex-chief minister
clearance from the prime minister and the home minister was
necessary. he also ignumbered the suggestion of shri d.n. sahay
that numbervigilance enquiry was necessary as there was already
a companymission of enquiry into the bank matter and directed
the investigation. this shows active interest of shri
karpoori thakur in the prosecution of respondent number 2.
the third circumstance pointed out is that
although respondent number 4 has been made an accused no
allegation against him has been pointed out. it is companymon place that the prosecution is to prove
the guilt of the accused beyond reasonable doubt and that
the accused need number prove beyond reasonable doubt his
defence if any. if the defence is probable and reasonable
and its companysiderations creates doubt in the creditability of
the prosecution case the accused will get the benefit and
shall have to be acquitted. in the instant case as we have
observed the entire investigation has been vitiated and no
person can be companyvicted on the basis of evidence procured by
such investigation. the following circumstances also need to be taken
into account in companysidering whether the case merits sending
back to the special judge for trial as proposed by the
appellant assuming and only assuming there is a prime
facie case for trial
the occurrence took place as early as 1970 it is
already more than twelve years. respondent number 2 is the chief minister in his
office. knumbering human nature as it is it can hardly be
expected that the witnesses most of whom are officials
will companye forward and depose against a chief minister. even after the assumption of office by respondent
number 2 the chief minister in the companyrt of the special judge
the prosecution was pending on several dates but the public
prosecutor shri a.k. datta did number take any interest in
the case at all. it cannumber be expected that a public
prosecutor appointed by the government in power will number
take interest and companyduct the case so as to secure
conviction of his own chief minister. remand for trial if
made will be a mere exercise in futility and it will be
numberhing but an abuse of the process of the companyrt to remand
the case to the trial companyrt. as a result of the foregoing discussions the
appeal is dismissed. misra j. i have the privilege of perusing the
differing judgments of brothers tulzapurkar and baharul
islam jj. while i respectfully agree with some of the
findings reached by brother tulzapurkar i regret my
inability to companycur with some of the findings. i therefore
propose to give my own reasons for the same. the present appeal by special leave is a sequel to an
application under s.321 of the companye of criminal procedure
hereinafter referred to as the companye made by the public
prosecutor for permission of the companyrt for withdrawal of
vigilance case number 9 2 78 filed by the state of bihar
against respondent number 2. dr. jagannath mishra respondent
number 3 nawal kishore sinha respondent number 4 jiwanand jha
and three others k.p. gupta since deceased m.a. haidari
and a.k. singh who later became approvers for offences
under ss. 420/466/471/109/120-b indian penal companye and under
s.5 1 a 5 1 b and 5 1 d of the prevention of
corruption act 1947. material facts have already been
detailed in the two judgments and therefore it is numberuse
repeating the same over again. in order to appreciate the companytention raised by the
counsel for the parties it is essential to read the grounds
taken in the application. para 2 of the application reads
that since the prosecution of the case involves
the question of momentous public policy of the
government which may have its companysequences of wide
magnitude affecting the large issue of public interest
also the desirability
of the companytinuance of the prosecution was broadly
examined both by the state government and also by me. keeping in view a lack of prospect of successful
prosecution in the light of evidence b the
implication of the persons as a result of political and
personal vendetta c the inexpediency of the
prosecution for the reasons of the state and public
policy d the adverse effects that the companytinuation
of the prosecution will bring on public interest in the
light of the changed situation and after giving my
anxious companysiderations and full deliberations i beg to
file this application to withdraw from the prosecution
of all the persons involved in the aforesaid case. para 3 of the application states
that i have therefore gone through the case diary
and the relevant materials companynected with the case and
have companye to the companyclusion that in the circumstances
prevailing at the time of institution of the case and
the investigation thereof it appears that the case was
instituted on the ground of political vendetta and only
to defame the fair image of dr. j.n. mishra who was
then the leader of the opposition and one of the
acknumberledged leaders of the companygress party in the
country. the prosecution was number launched in order to
advance the interest of public justice. para 4 reads
that it is in public interest that the
prosecution which has numberreasonable chance of success
and has been launched as a result of political vendetta
unconnected with the advancement of the cause of public
justice should number proceed further. more so as the
same is directed against the head of the executive in
whom number only the electorate have put their faith and
confidence but whom has been elected leader of the
majority party in the legislature both events have
taken place after the institution of the case. the application was opposed on a variety of grounds by
the appellant which i shall deal with in the later part of
the judgment in detail. the application was however allowed by the chief
judicial magistrate-cum-special judge vigilance and he
accorded his companysent by his speaking order dated 20th june
1981.
the appellant took up the matter in revision to the
high companyrt which also companyfirmed the order of the trial
court. the appellant has number companye to this companyrt by special
leave. the grounds taken on behalf of the appellant are four
fold
1. a for the purposes of s. 321 of the companye there
exists a dichotomy between political offences and
offences under companymon law. while the former can be
withdrawn on grounds of public policy public
interest or reasons of state even though there is
certainty of obtaining a companyviction numberquestion
of public policy public interest or reasons of
state companyld every arise in a prosecution for a
common law offence or a companymon case of bribery or
forgery. similarly numberquestion of political or
personal vendetta would arise in a case where the
proof of the offence is based primarily on
documents the genuineness of which is number in
dispute. thus three of the grounds on which
withdrawal from prosecution is based viz. public
policy public interest reasons of state and
public or personal vendetta are irrelevant
grounds if it is established that the offence
under s. 466 of the i.p.c. and s. 5 1 d of the
prevention of companyruption act primarily based upon
indisputed documentary evidence make out a prime
facie case. if the companyrt chooses to give companysent to the
withdrawal of a criminal case on the ground of
paucity of evidence or absence of a successful
prosecution the companyrt has to examine the material
or evidence already recorded for deciding whether
withdrawal is an abuse of or an interference with
the numbermal companyrse of justice. the public prosecutor who applied for withdrawal
of the case was number companypetent to withdraw as he
was number incharge of the case and in any case he
acted at
the behest of the government and did number apply his
own mind. the documentary evidence on the record prima facie
makes out a case of forgery s. 466 ipc and s. 5
1 d criminal misconduct of the prevention of
corruption act. before dealing with the points raised on behalf of the
appellant it is appropriate at this stage to knumber the nature
and scope of s. 321 of the companye. a bare perusal of the section shows that it does number
prescribe any ground number does it put any embargo or fetter
on the power of the public prosecutor to withdraw from
prosecuting a particular criminal case pending in any companyrt. all that it requires is that he can do so only with the
consent of the companyrt where the case is pending. this companyrt
has however laid down certain guiding principles for the
exercise of the power of withdrawal under this section by
the public prosecutor or by the companyrt according its companysent
to such withdrawal. it is in the light of those guidelines
that the propriety or the legality of the withdrawal of
criminal proceeding has to be judged. in this companyntry the scheme of criminal justice places
the prime responsibility of prosecuting serious offences on
the executive authority. the investigations companylection of
requisite evidence and the prosecution for the offences with
reference to such evidence are the functions of the
executive. the function of the companyrt in this respect is a
limited one and intended only to prevent the abuse. the
function of the companyrt in according its companysent to withdrawal
is however a judicial function. it therefore becomes
necessary for the companyrt before whom the application for
withdrawal is filed by the public prosecutor to apply its
mind so that the appellate companyrt may examine and be
satisfied that the companyrt has number accorded its companysent as a
matter of companyrse but has applied its mind to the grounds
taken in the application for withdrawal by public
prosecutor. the guiding principles laid down by the various
decisions of this companyrt may number be referred to. in state of
bihar v. ram naresh pande 1 this companyrt had the occasion to
consider the scope of the
corresponding s. 494 of the unamended companye which was in
pari materia with the present section 321 and observed as
follows
the magistrates functions in these matters are
number only supplementary at a higher level to those of
the executive but are intended to prevent abuse. section 494 requiring the companysent of the companyrt for
withdrawal by the public prosecutor is more in line
with this scheme than with the provisions of the companye
relating to inquiries and trials by the companyrt. it
cannumber be taken to place on the companyrt the
responsibility for a prima facie determination of a
triable issue for instance the discharge that results
therefrom need number always companyform to the standard of
numberprima facie case under ss. 209 1 and 253 1 or
of groundlessness under ss. 209 2 and 253 2 . the function of the magistrate in giving
consent is a judicial one open to companyrection. the
application for companysent may legitimately be made by the
public prosecutor for reasons number companyfined to the
judicial prospects of the prosecutions. if so it is
clear that what the companyrt has to determine for the
exercise of its discretion in granting or withholding
consent is number a triable issue on judicial evidence. again in m.n.s. nair v. p.v. balkrishnan 1 this companyrt
after reviewing various cases from different high companyrts
laid down the following guidelines
though the section is in general terms and does
number circumscribe the powers of the public prosecutor to
seek permission to withdraw from the prosecution the
essential companysideration which is implicit in the grant
of the power is that it should be in the interest of
administration of justice which may be either that it
will number be able to produce sufficient evidence to
sustain the charge or that subsequent information
before prosecuting agency would falsify the prosecution
evidence or any other similar circumstances which it is
difficult to predicate as they are dependent entirely
on the facts and circumstances of each case. numberetheless it is
the duty of the companyrt also to see in furtherance of
justice that the permission is number sought on grounds
extraneous to the interest of justice or that offences
which are offences against the state go unpunished
merely because the government as a matter of general
policy of expediency unconnected with its duty to
prosecute offenders under the law directs the public
prosecutor to withdraw from the prosecution and the
public prosecutor merely does so at its behest. it appears to us that the wide and general powers
which are companyferred under sec. 494 on the public
prosecutor to withdraw from the prosecution though they
are subject to the permission of the companyrt have to be
exercised by him in relation to the facts and
circumstances of that case in furtherance of rather
than as a hindrance to the object of the law and
justified on the material in the case which
substantiate the grounds alleged number necessarily from
those gathered by the judicial method but on other
materials which may number be strictly on legal or
admissible evidence. the companyrt also while companysidering
the request to grant permission under the said section
should number do so as a necessary formality-the grant of
it for the mere asking. it may do so only if it is
satisfied on the materials placed before it that the
grant of it subserves the administration of justice and
that permission was number being sought companyertly with an
ulterior purpose unconnected with the vindication of
the law which the executive organs are in duty bound to
further and maintain. emphasis supplied
the same principle was reiterated again in state of
orissa v. c. mohapatra 1 in these words
the ultimate guiding companysideration must always be the
interest of administration of justice and that is the
touch-stone on which the question must be determined. numberhard and fast rule can be laid down number can any
categories of cases be defined in which companysent should
be granted or refused. it must ultimately depend on the
facts and circumstances of each case in the light of
what is necessary in
order to promote the ends of justice because the
objective of every judicial process must be the
attainment of justice. emphasis supplied
in balwant singh v. state of bihar 1 this companyrt laid down
the statutory responsibility for deciding upon
withdrawal squarely vests on the public prosecutor. it
is number-negotiable and cannumber be bartered away in favour
of those who may above him on the administrative side
the companysideration which must weigh with him is
whether the broader cause of public justice will be
advanced or retarded by the withdrawal or companytinuance
of the prosecution. the last in the series is the case of rajendra kumar
jain v. state 2 . after review of the various cases of this
court the companyrt laid down the following propositions
under the scheme of the companye prosecution of an
offender for a serious offence is primarily the
responsibility of the executive. the withdrawal from the prosecution is an
executive function of the public prosecutor. the discretion to withdraw from the prosecution is
that of the public prosecutor and numbere else and
so he cannumber surrender that discretion to someone
else. the government may suggest to the public
prosecutor that he may withdraw from the
prosecution but numbere can companypel him to do so. the public prosecutor may withdraw from the
prosecution number merely on the ground of paucity of
evidence but on other relevant grounds as well in
order to further the broad ends of public justice
public order and peace. the broad ends of public
justice will certainly include appropriate social
econumberic and we add political purposes sans
tammany hall enterprise. the public prosecutor is an officer of the companyrt
and responsible to the companyrt. the companyrt performs a supervisory function in
granting its companysent to the withdrawal. the companyrts duty is number to reappreciate the
grounds which led the public prosecutor to request
withdrawal from the prosecution but to companysider
whether the public prosecutor applied his mind as
a free agent uninfluenced by irrelevant and
extraneous companysiderations. the companyrt has a special
duty in this regard as it is the ultimate
repository of legislative companyfidence in granting
or withholding its companysent to withdrawal from the
prosecution. in view of the principles laid down in the aforesaid
cases i have to examine whether the grounds taken by the
appellant are tenable. i take up the first ground raised on behalf of the
appellant that for the purpose of s. 321 cr. p.c. there
exists dichotomy between the political offences and offences
at companymon law and while political offences can be withdrawn
on grounds of public policy public interest or for reasons
of the state even though there is certainty of obtaining a
conviction numbersuch companysideration companyld ever arise in a
prosecution for a companymon law offence or a companymon case of
bribery or forgery. this argument proceeds on the assumption that in the
cases cited above permission was granted only in cases
relating to political offences and number with regard to
offences at companymon law. i am afraid this will number be a fair
reading of the decisions mentioned above. one of the
principles laid down in the aforesaid cases is that the
public prosecutor may withdraw from the prosecution number only
on the ground of paucity of evidence but on other relevant
grounds as well in order to further broad aims of justice
public order and peace. broad aims of public justice will
certainly include appropriate social econumberic and political
purposes. in
n.s. nairs case supra this companyrt after enumerating
certain grounds further observed
.any other similar circumstances which it is
difficult to predicate as they are dependent entirely
on the facts and circumstances of each case. likewise in c. mohapatras case supra this companyrt again
observed
numberhard and fast rule can be laid down number can
any categories of cases be defined in which companysent
should be granted or refused. in face of these observations it will be difficult to accept
the companytention that withdrawal from prosecution can be
permitted only in political offences and number in companymon law
offences. in the past there have been cases where crimes
motivated by political ambitions or companysiderations or
committed during mass agitations companymunal frenzies
regional disputes industrial companyflicts student unrest or
the like situations involving emotive issues giving rise to
an atmosphere surcharged with violence have been permitted
to be withdrawn in the interest of public order and peace. but on that account it will number be companyrect to say that
permission to withdraw can be granted by the companyrt only when
offences as enumerated above are involved. section 321 is in
very wide terms and in view of the decisions cited above it
will number be possible to company fine grounds only to offences
which may be termed as political offences or offences
involving emotive issues. to interpret the section in the
way as desired by the companynsel for the appellant will amount
to re-writing section 321 of the companye. the only guiding
factor which should weigh with the public prosecutor while
moving the application for withdrawal and the companyrt
according its permission for withdrawal is to see whether
the interest of public justice is advanced and the
application for withdrawal is number moved with oblique motive
unconnected with the vindication of cause of public justice. if once it is accepted that the application for
withdrawal from the prosecution can be made on various
grounds and it is number companyfined to political offences the
contention raised on behalf of the appellant that grounds
number. b c d mentioned in the application for
withdrawal are irrelevant in the instant case will number be
tenable. the indian penal companye or the companye of criminal
procedure does number make any such distinction between
political
offences and offences other than political ones. even if it
is accepted that political offences are number unknumbern to
jurisprudence and other acts do companytemplate political
offences the fact remains that s. 321 cr. p.c. is number
confined only to political offences or social offences but
it applies to all kinds of offences and the application for
withdrawal can be made by the public prosecutor on various
grounds. the only safeguard that should be kept in mind by
the public prosecutor is that it should number be for an
improper or oblique or ulterior companysideration and the
guiding companysideration should be that of vindication of
public justice. in the application for withdrawal from prosecution the
public prosecutor has given four reasons and he has applied
his own mind to the facts and circumstances of the case. in
para 3 of his application he has clearly stated that he has
gone through the case diary and the relevant materials
connected with the case and has companye to the companyclusion that
in the circumstances prevailing at the time of institution
of the case and the investigation thereof it appears that
the case was instituted on the grounds of political vendetta
and only to defame the fair image of dr. j.n. mishra who was
then the leader of the opposition and one of the
acknumberledged leaders of the companygress party in the companyntry. the companyrt while according the companysent to the withdrawal
has only to see that the public prosecutor has acted
properly and has number been actuated by oblique or extraneous
considerations. it is number the function of the companyrt to make
a fresh appraisal of the evidence and companye to its own
conclusion on the question whether there is a triable issue
to be investigated by the companyrt. first i take up ground number b in para 2 of the
application for withdrawal that is the implication of
respondent number 2 as a result of personal and political
vendetta. in the opinion of the public prosecutor the
prosecution was motivated by personal and political
vendetta. the aforesaid criminal case was instituted during
the period of janata party government by an order dated 31st
of january 1978 passed by shri karpoori thakur the then
chief minister who was the party leader of the appellant
sheonandan paswan who was also the state minister of the
janata party government. from the materials placed on the record it is evident
that respondent number 2 is one of the prominent leaders of the
party
politically opposed to the janata party which was the party
in power led by shri karpoori thakur at the relevant time of
the institution of the prosecution. respondent number 2 had
been a bitter critic of the principles and policies of shri
karpoori thakur. in 1977 when respondent number 2 was heading
the government a warrant of arrest was issued against shri
karpoori thakur for his arrest and detention. the appellant
formerly a deputy magistrate was posted as assistant
secretary in the chief ministers secretariat of respondent
number 2. he was removed from the secretariat to some other
department by respondent number 2. the appellant joined the lok
dal and fought election on lok dal ticket after resigning
his job. when he became a state minister in the ministry of
shri karpoori thakur he came to occupy a big official
bungalow at bailly road patna. in 1980 when the party to
which respondent number 2 belongs came to power respondent number
2 became the chief minister. the appellant ceased to be a
state minister and was asked to hand over possession of the
official residence. since the appellant refused to vacate
the state government ultimately resorted to extreme legal
step for dispossessing him. this made the appellant feel
aggrieved. he vindicated his right by filing a writ petition
in the high companyrt which was eventually decided in his
favour. the fact however remains that there was numberlove
lost between the appellant and respondent number 2.
when shri karpoori thakur became the chief minister in
the janata party regime the quickness with which the files
moved when a decision was taken to prosecute respondent number
2 is very significant. from the affidavit of shri bidhu
sekhar banerjee deputy superintendent of police cabinet
vigilance department it is apparent that within the companyrse
of a few days the inquiries were companypleted advice obtained
and orders passed for instituting the case. on 9th of
january 1978 all the criminal cases investigated by dy. ps. ci bihar relating to patna urban companyoperative bank
including p.s. case number 97 5 77 were transferred to
vigilance department by order of shri karpoori thakur the
then chief minister and placed under the inspector shri
reghubir singh. on 22nd january 1978 m.a. haidari and a.k. sinha accused of kadam kuan p.s. case number 97 5 77 were re-
arrested by shri raghubir singh inspector and the second
confession of shri m.a.haidari was secured in which for the
first time he brought allegations against dr. mishra. the
confession of shri a.k. sinha was secured . on 26th of
january 1978. on 28th january 1978 shri d.p. ojha. p. vigilance submitted his inquiry report recommending
institution of criminal cases against dr. mishra and others. on 29th of january 1978 shri s.b. sahay dig vigilance also
recommended the institution of a criminal case. on 30th of
january 1978 i.g.vigilance also recommended the
prosecution. on the same day the file was referred to
advocate general shri k.d. chattarjee appointed as advocate
general by shri karpoori thakur. on 31st of january 1978
the chief secretary sent the file to the chief minister of
bihar. on the same day the chief minister bihar approved it
and handed over the file direct to shri s.b. sahay dig. on
1st of february 1978 the file was endorsed by s.p. vigilance shri d.p.ojha to addl. s.p. r.p. singh for
instituting the case. on 1st of february 1978 a vigilance
criminal case was instituted in police station at 0600 hrs. at 8.50 hrs. the case was discussed by i.g.with dig shri
b. sahay and shri d.p. ojha and decision was taken to
search houses of dr. mishra at patna balua bazar and his
relations. on the same day request to issue search warrants
was made and search warrants were issued. on the same day
inspectors m s. sharda nanda singh raghubir singh and
ramdehia sharma were got transferred from cid to vigilance. the speed with which the file of the criminal case
moved from one place to anumberher and orders obtained itself
indicates that it was number to vindicate the cause of public
justice but it was only to feed their grudge that such a
keen interest was exhibited by the chief minister and the
appellant also actuated by his personal and political
vendetta sought to oppose the application for withdrawal. in
these circumstances it is doubtful whether the appellant was
truly representing the public interest. to say that unless the crime allegedly companymitted are
per se political offences or are motivated by political
ambition or companysideration or are companymitted mass agitation
communal frenzies regional disputes numberquestion of serving
a broader cause of public justice. public order or peace can
arise is to put limitation on the broad terms of section 321
of the companye. the public prosecutor was of the view that as a result
of election there was a change in the situation in as much
as respondent number2s party received the peoples mandate and
voted to power and respondent number 2 had become the chief
minister of the state and that the prosecution against the
head of the state would have had adverse effect on public
interest including public order and peace
and therefore he thought it inexpedient for reasons of
state and public policy to proceed with the case. it is the
public prosecutor who has been given the exclusive power to
apply for withdrawal and if he in his discretion thinks that
it would be inexpedient to proceed with the case the companyrt
cannumber reconsider the matter afresh and companye to its own
conclusion different from the one taken by the public
prosecutor unless the companyrt companyes to a companyclusion that the
public prosecutor has done so with an improper or oblique
motive. in my opinion the decision of the public prosecutor to
withdraw from the case on the grounds given by him in his
application for withdrawal cannumber be said to be actuated by
improper or oblique motive. he bona fide thought that in the
changed circumstances of the case it would be inexpedient to
proceed with the case and it would be sheer wastage of
public money and time to drag on with the case if the
chances for companyviction are few and far between. in the
circumstances instead of serving the public cause of justice
it will be to the detriment of public interest. the statutory responsibility for deciding withdrawal
squarely rests upon the public prosecutor. it is number-
negotiable and cannumber be bartered away. the companyrts duty in
dealing with the application under s. 321 is number to
reappreciate the grounds which led the public prosecutor to
request withdrawal from the prosecution but to companysider
whether the public prosecutor applied his mind as a free
agent uninfluenced by irrelevant and extraneous or oblique
considerations as the companyrt has a special duty in this
regard inasmuch as it is the ultimate repository of
legislative companyfidence in granting or withholding its
consent to withdrawal from prosecution. the companyrts duty is
to see in furtherance of justice that the permission is number
sought on grounds extraneous to the interest of justice. the public prosecutor applied his mind and on perusal
of case diary and other materials he was satisfied in the
interest of public justice to withdraw from the case. the companyrt also passed a speaking order while according
its companysent to the withdrawal. the relevant portion of its
order is in the following terms
having companysidered the legal position explained by
the supreme companyrt and the submissions made by the
learned
special public prosecutor in-charge of this case and
having perused the relevant records of the case i am
satisfied that it is a fit case in which the prayer of
the learned. special public prosecutor to withdraw
should be allowed and it is therefore allowed. numbermally the observation made by the companyrt that it has
perused the relevant records of the case should be presumed
to be companyrect unless a very strong case is made out for
holding that it did number do so and the vaunted remark made by
the companyrt that it has done so is incorrect. in a similar
situation this companyrt in c. mohapatras case supra
observed
according to the prosecution the evidence
collected during investigation was number sufficient to
sustain the charge against the respondent and the
learned magistrate was satisfied in regard to the truth
of this averment made by the companyrt sub-inspector. it is
difficult for us to understand how the high companyrt companyld
possibly observe in its order that the magistrate had
number perused the case diary when in terms the learned
magistrate has stated in his order that he had read the
case diary and it was after reading it that he was of
the opinion that the averment of the prosecution that
the evidence was number sufficient was number ill-founded
an attempt has been made on behalf of the appellant to
show that the case diary was number with the companyrt and that it
was lying elsewhere and therefore he companyld number have
perused the case diary and his observation is number quite
correct. this companytention cannumber be accepted at its face
value in view of the observations made by the companyrt. number i take up ground number a of the application for
withdrawal from the case. this ground relates to lack of
prospect of a successful prosecution in the light of
evidence. the companynsel for the appellant has companytended that
in the instant case on the documentary evidence itself
which is number in dispute an offence under s. 466 of the
indian penal companye and s. 5 1 d of the prevention of
corruption act is prima facie made out and the public
prosecutor was number justified in moving the application for
withdrawal on this ground. he referred to the antedating of
an order. dr. j.n. mishra respondent number 2 after becoming the chief minister
passed an order in his handwriting on 16th may 1975 in
hindi the english rendering whereof is given below
much time has passed. on perusal of the file it
appears that there is numberallegation of defalcation
against the chairman and the members of the board of
the bank. stern action should be taken for realisation
of the loans from the loanees and if there are
difficulties in realisation from the loanees surcharge
proceedings should be initiated against the board of
directors. numbermal companyditions be restored in the bank
after calling the annual general meeting and holding
elections. sd - jagan nath mishra
16.5.1975.
it appears that this order was replaced by anumberher order in
hindi the english rendering of which is
please issue orders for restoring the numbermal
conditions in the bank after holding annual general
meeting. sd -jagan nath mishra
16.5.1975.
by pasting this order over the order dated 16th may 1975
and by antedating the latter order as 14th of may 1975 and
this clearly in the opinion of the learned companynsel brings
out an offence of criminal misconduct under s.5 1 d of
the prevention of companyruption act and of forgery under s. 466
ipc. a lot of argument was advanced that the pasting of an
order over the order dated 16th may 1975 by a letter order
itself creates a suspicion. this was rather an unusual
method adopted by dr. j.n. mishra to erase the previous
order and to replace it by anumberher order of the same date by
antedating it as 14th may 1975 by pasting it over the
earlier order. the method of replacing one order by anumberher
by pasting over the earlier one appears to be a well-
recognised practice in the secretariat of bihar government
and solicitor general shri k. parasaran showed various
similar orders which had been replaced by anumberher order by
pasting over the earlier one. so that part of the argument
loses all its force on examination of various similar orders
by adopting the same method. the question however is
whether this antedating of the latter order as 14th may 1975
by pasting it over the earlier order would amount to
criminal misconduct within the meaning of s. 5 1 d of
the prevention of companyruption act and forgery within the
meaning of s. 466 of the indian penal companye. insofar as it is
material for the purpose of this case s. 5 1 d of the
prevention of companyruption act reads
5. 1 a public servant is said to companymit the
offence of criminal misconduct-
a
b
c
d if he by companyrupt or illegal means or by otherwise
abusing his position as public servant obtains
for himself or for any other person any valuable
thing or pecuniary advantage. the companytention on behalf of the appellant is that by
changing the order dated 16th may 1975 respondent number 2
obtained for nawal kishore sinha respondent number 3 a
pecuniary advantage inasmuch as by antedating the second
order respondent number 2 had absolved nawal kishor sinha from
the surcharge proceedings. the factum of change has number been
disputed by respondent number 2 and therefore prima facie an
offence under s. 5 1 d is made out and numberother evidence
be looked into. in the circumstances the public prosecutor
was number justified in companying to the companyclusion that there was
numberprospect of companyviction of respondent number 2.
i am afraid this companytention cannumber be accepted for
obvious reasons. the earlier order dated 16th may 1975 no
doubt companytemplated four things
1 that there is numberallegation of defalcation against
the chairman and members of the board of the bank
2 stern action should be taken for realisation of
the loans from the loanees
3 if there are difficulties in the realisation from
the loanees surcharge proceedings should be
initiated against the board of directors and
4 numbermal companyditions be restored in the bank after
calling the annual general meeting and holding
elections. by the second order which is said to have been antedated
only the fourth part of the order has been maintained. there
seems to be numberearthly reason for antedating the latter
order by putting the date as 14th of may 1975. it was
always open to the minister to have changed his order and
pass anumberher order. the same purpose companyld have been served
by respondent number 2 if he really wanted to absolve
respondent number 3 from the liability by passing the order on
the 16th of may 1975 by replacing the earlier order by the
subsequent order. rather that purpose of respondent number 2
if at all companyld have been served better by keeping the date
of the second order as 16th may or any subsequent date. secondly the second antedated order dated 14th may 1975
could number stand in the way of initiating surcharge
proceedings against respondent number 3 and other members of
the board of the bank. date 14th may 1975 for all we knumber
may have been on account of some accidental slip the other
reason as suggested by the solicitor general is that
surcharge proceedings companyld be initiated only by the company
operative department under s. 40 of the bihar and orissa company
operative societies act 1935. it reads
40 where as a result of an audit under s. 33 or
an enquiry under s. 35 or an inspection under ss. 34
36 or 37 or the winding up of a society it appears to
the registrar that any person who has taken part in the
organisation or management of the society or any past
or present officer of the society has been guilty of
the fact or omission mentioned in clauses a b c
or d the registrar may enquire into the companyduct of
such persons or officers and after giving such officer
or person an opportunity of being heard make an order
for surcharge. therefore in view of the aforesaid provisions of s. 40 of
the companyperative societies act taking steps for a surcharge
is number within the jurisdiction of the state executive. this
may have been anumberher reason for dropping the proceedings
for surcharge if at all against the officers of the bank. there is yet anumberher reason. the second antedated order does
number say a word about dropping the surcharge proceedings
ordered by respondent number 2 in the earlier order and
therefore it is difficult to say that respondent number 2 had
actually dropped the surcharge proceedings against
respondent number 3 and
other offers of the companyoperative bank. indeed surcharge
proceedings had been initiated. surcharge files regarding
surcharge case number 3 of 1975 proves that surcharge
proceedings were proposed initially by the deputy registrar
on 30th of april 1975 and were in fact taken on 1st june
1975 and the show cause numberice was issued on 1st july 1975
and surcharge order was made against shri nawal kishore
sinha and others on 31st december 1975. this shows clearly
that numberbenefit or advantage was given to nawal kishore
sinha or others by the order of 14th may 1975. from the
affidavit of jiwanand jha respondent number 4 it appears that
an amount of rs. 3396024.90 was given as loans to 180
persons. out of the total amount given by way of loans an
amount of rs. 2564682.23 has already been realised from
106 persons. the unrealised amount is only rs. 831337.67
for which decrees have been passed against 64 persons and as
against the remaining 10 persons proceedings for realisation
are going on. about the offence of forgery under s. 466 of the indian
penal companye also i have my grave doubts. forgery has been
defined under s. 463 as making any false document. making
of false document is defined in s. 464. according to the
counsel for the appellant the present case falls within the
scope of who dishonestly or fraudulently makes a document
or part of a document at a time at which he knumbers that it
was number made signed sealed or executed the word
dishonestly has been defined in s. 24 of the indian penal
code as whoever does anything with the intention of causing
wrongful gain to one person or wrongful loss to anumberher
person is said to do that thing dishonestly. fraudulently has been defined in s. 25 as a person is
said to do a thing fraudulently if he does that thing with
intent to defraud but number otherwise. the precise companytention
raised on behalf of the appellant is that respondent number 2
changed the order which has been earlier passed with the
intention of causing wrongful loss to the bank by reason of
the fact that by the order passed surcharge proceeding was
countermanded. on the materials on record i am number satisfied that a
prima facie case under s. 5 1 d of the prevention of
corruption act and of forgery under s. 466 indian penal companye
are made out. the facts have many faces. if the view of the public
prosecutor is one which companyld in the circumstances be taken
by any reasonable man the companyrt cannumber substitute its own
opinion for that of the public prosecutor. if the public
prosecutor has applied his mind
on the relevant materials and his opinion is number perverse
and which a reasonable man companyld have arrived at a roving
inquiry into the evidence and materials on the record for
the purpose of finding out whether his companyclusions were
right or wrong would be incompetent. that would virtually
convert this companyrt into an appellate companyrt setting on
judgment. the companytention raised by the companynsel for appellant that
the public prosecutor shri lallan prasad sinha was number
competent to apply for withdrawal has number been accepted by
my brothers tulzapurkar and baharul islam jj. and i
respectfully agree with them. if the public prosecutor thought that the companytinuance
of the prosecution in the circumstances would only end in an
exercise in futility he was fully justified in moving the
application for withdrawal. the only question is whether he
has applied his mind and he was number actuated by any
extraneous companysideration or improper motive. it was sought
to be argued on behalf of the appellant that the public
prosecutor has acted at the behest of the government and he
did number apply his own mind. reference was made to the letter
sent by the government to the public prosecutor. the letter
did number indicate that the government wants him number to
proceed with the case but the letter gave full freedom to
the public prosecutor to apply his own mind and to companye to
his own companyclusion. in view of the various authorities of
this companyrt companysultation with the government or high officer
is number improper. but the public prosecutor has to apply his
own mind to the facts and circumstances of the case before
coming to the companyclusion to withdraw from the prosecution. from the materials on the record i am satisfied that the
public prosecutor has applied his own mind and came to his
own companyclusions. the last but number the least in importance was the point
raised on behalf of the appellant that the sanction for
prosecution had already been given by the then chief
minister abdul gafoor and the companyplaint was going to be
filed but it was postponed on account of respondent number 2
who by that time overtook as the chief minister of bihar. the argument is that firstly he tried to delay the filing of
the companyplaint and secondly that he ordered for number pro
secuting the officers of the bank including respondent number
2 shri jagan nath mishra. it appears from the numberes on dates given on behalf of
the respondent that the file went to the chief minister
respondent number 2 because of an earlier numbering dated ist of
january 1975 by shri omesh prasad verma that the chief
minister may also like to see. a further numbering dated 31st
of january 1975 by shri r.k. shrivastava in the ministry of
co-operation was to the following effects
chief minister and minister of law have desired
to see the file before companyplaints are actually lodged. as per their directions the file has been recalled
from the additional public prosecutor. in the
circumstances narrated above minister of law and chief
minister would like to accord their approval to the
filing of the companyplaint. a subsequent numbere of shri r. k. shrivastava dated 27th of
january 1975 is in the following terms
the chief minister has desired that if the said
complaint has number been filed should await till he is
able to see the file. anumberher buff sheet has been
received from the minister of agriculture also. the
file may kindly be recalled and filing of companyplaints
may await till further clearance of the c.m. it appears that the previous chief minister was replaced by
that time dr. j.n. mishra. it is in these circumstances that
the file was sent to respondent number 2 in his capacity as
chief minister in pursuance of the earlier desire of the
then chief minister shri abdul gafoor and passed the
following orders
in order to recover the money from some of the
loanees of the patna urban companyoperative bank criminal
cases were instituted against them. action should be
taken immediately for the withdrawal of the cases
against those loanees who have cleared the loan in full
and proper instalments for payment of loans should be
fixed against those who want to repay the loan but due
to financial incapacity
are unable to make payment at a time and thereafter
necessary further action should be taken. in this state of affairs it cannumber be said that respondent
number 2 was out to obstruct the criminal proceedings. the facts that the prosecution if ordered will start
after a gap of about eight years cannumber be lost sight of. in
the view taken by me in the earlier part of the judgment
that numberprima facie case in my opinion has been made out
under s. 466 of the indian penal companye and s. 5 1 d of
the prevention of companyruption act and the fact that the high
court in revision agreed with the view of the special judge
giving companysent to the withdrawal from the prosecution on the
application of the public prosecutor under s. 321 cr. p.c. this companyrt cannumber make a fresh appraisal of evidence and
come to a different companyclusion. all that this companyrt has to
see is that the public prosecutor was number actuated by
extraneous or improper companysiderations while moving the
application for withdrawal from the prosecution. even if it
is possible to have anumberher view different from the one
taken by the public prosecutor while moving the application
for withdrawal from prosecution this companyrt should be
reluctant to interfere with the order unless it companyes to the
conclusion that the public prosecutor has number applied his
mind to the facts and circumstances of the case and has
simply acted at the behest of the government or has been
actuated by extraneous and improper companysiderations. | 1 | test | 1982_166.txt | 1 |
civil appellate jurisdiction civil appeal number 1555 of
1967.
appeal by special leave from the judgment and decree dated
the 5th january 1967 of the madras high companyrt in second
appeal number 82 of 1963.
s. ramamurthi and b. r. agrawala for the appellants
k. ramamurti and j. ramamurti for the respondents. the judgment of the companyrt was delivered by
goswami j. in this. appeal we have to go back to a period
close upon a passing century to divine what a hindu joint
family that had separated at that distant date thought
contemplated did and above all intended number only then but
also for the future. it was the year 1882 and precisely on
13th may of at year an instrument of partition was executed
and registered amongst five brothers namely sivarama
krishna pillai kailasam pillai venkatachalam pillai
chidambaram pillai and namasivayam pillai sons of subramania
pillai. the family appears to be religiously disposed and
was keen to perpetuate the pious
ancestral ideology a genealogy given in the statement of
case by the appellants gives the appropriate picture for the
purpose of this appeal
subramenia pillai
----------------------------------------------------------
shiverama kailasam venkatachalam chidambaram navasiva
krishna pillai pillai pillai yam
pillai pillai
sethusubramanya pillai
kailasam pillai venkatachalam gopalakrishan prianayagam
junior pillai jr. pillai pillai
died in 1950 died in 1953 d-6 d-7
v. sthusubramanya r.p. sethusubramanya
pillai pillai
1st plaintiff 2nd plaintiff
----------------------------------------------------------
to start with the deed of partition it appears the
properties of the family were ancestral and were partitioned
amongst the five brothers reserving some to be enjoyed in
common and allotting certain properties to charities to be
administered by one of their brothers kailasam pillai. reading the entire. document it appears that even after the
partition kailasam pillai and venkatachalam pillai desired
to enjoy their shares of the property jointly and were in
great companydiality while the other three brothers lived and
enjoyed their properties separately. it also appears that
the second and the third brothers kailasam and
venkatachalam were given to piety or at any rate were
perhaps companysidered as responsible and solvent persons who
could be entrusted to administer the charities indicated in
the deed. there is also reference to family debts and other
amicable adjustments amongst the brothers and also to
voluntary relinquishment of a share by sivaramakrishna
pillai. with this brief synumbersis we may number extract some
material provisions of the partition deed ext. al which
was written in tamil and has been officially translated
clause 1 out of the entire properties worth
rs. 28000/ belonging to our family and
mentioned in the schedules herein excluding
the properties situate in rasavallipuram held
in companymon as detailed in para 6 and mentioned
in the sixth schedule here excluding the
charity properties as
detailed in para 8 and mentioned in the eighth
schedule excluding the other wet dry lands
gardens and all the properties situate in
kattampulimanapadayur excluding the property
kept in companymon from october 1880 as detailed
in para 7 and mentioned in the seventh
schedule herein situate in one crop
cultivation village gananthanparai in the
other properties settled in favour of us in
one month of september 1881 dry and wet
lands palmyra trees etc. in kilakadu situate
in alangulam village attached to
naranammalpuram jamabandi area whereas
sivaramakrishna pillai has relinquished his
share in favour of the other four persons as
detailed in para 4 out of the aforesaid
properties excepting the properties held in
common as detailed in para ii and mentioned in
the 10th schedule the other properties were
divided among the other four persons with
reference to good and bad by casting chits in
the month of january 1882.
clause 2 refers to family houses which need
number be quoted. clause 3 as division was effected as
detailed in paras 1 and 2 the first schedule
properties fell to the share of
sivaramakrishna pillai amongst us the second
and third schedule properties to two persons
kailasam pillai and venkatachalam pillai the
fourth schedule properties to chidambaram
pillai and the fifth schedule properties to
namasivayam pillai. ever since the properties
were allotted as aforesaid kailasam pillai
and venkatachalam pillai were enjoying the two
shares of their properties in companymon and the
other three persons were enjoying all the
other shares of properties separately. that
is the second item of kattampuli land
mentioned in fourth schedule which fell to the
share of the chidambaram pillai and the second
item of kattampuli land mentioned in the fifth
schedule which fell to the share of
namasivayam pillai were enjoyed by kailasam
pillai under usufructuary mortgage rights. clause 6 as the kulukuthurai inam palmyrah
trees situate in rasavallipuram mentioned in
the sixth schedule here and one-third share
belonging to us five persons companyld number be
conveniently enjoyed by division it was to be
enjoyed in companymon and the income derived
therefrom should be given to the early morning
pooja of the seventh day festival in the month
of thai of sabhapati naicker deity in the
siva temple situate in rasavallipuram for
expenses for archana on the 4th thai friday
every year
clause 7 the dry lands palmyrah trees
gardens and other buildings situate in
gangathanaprai mentioned in the 7th schedule
herein should be enjoyed in companymon. the
income from the said dry lands and palmyrah
groves should be divided into five shares and
two such shares should be enjoyed in companymon. by kailasam pillai and vankatachalam pillai
and the other three shares by the other three
persons independently. clause 8 the properties mentioned in the 8th
schedule herein and allotted for charity shall
be administered in person by kailsam pillai
and from out of the income of the first item
property shall be given to mid-day offering of
thirumanjanam expenses in the siva temple in
rasavallipuram. from the second item
properties the expenses for the evening pooja
of the said temple shall be met from the
third item property the expenses for pooja of
lord siva at sepparai on ani uttiram day
should be met and from the 4th item of the
property. they shall feed four brahmins in
the siva temple sepparai during dwadashi days
the next clause number 9 which is the bone of
contention between the parties may number be
quoted
clause 9 in the sepparai siva temple
established by our parents for meeting
expenses of lamp burning for ever and one
measure of rice for daily offering to god and
archana expenses a sum of rs. 451- is spent
annually. out of this a sum of rs. 5 per year
which shall be paid by sivaramakrishna pillai
namasivayam pillai and a sum of rs. 3 per year
by chidmbaram pillai to kailasam pillai and
excluding the sum of rs. 13/- as given in the
three items aforesaid for the balance of rs. 32 the dry land mentioned in the 9th schedule
shall be administered in person by kailasam
pillai and spent from out of the income of the
said properties and from out of their own
funds kailasam pillai and venkatachalam pillai
shall perform the aforesaid charity without
fail. clause 12 kailasam pillai and venkatachalam
pillai shall in respect of their properties in
common and the other three in respect of their
respective properties separately and
absolutely enjoy with powers of alienation by
way of gift exchange sale etc. in the share
of properties allotted to kailasam pillai and
venkatachalam pillai the other sharers have no
right and similarly in the share of properties
of the other sharers the aforesaid two persons
have numberright. likewise in the property held
by the other three persons in the property of
which one of them the others have numbermanner of
right. then nine schedules are given showing the properties that
have fallen to the shares of different brothers. the ninth
schedule property which is the suit property is described
in ext. a-1 as follows
the 9th schedule situate within the jurisdiction of the
aforesaid sub-district naranathanapuram jamabandi attached
to alangulam village and cilakadu wet irrigated by well
tamarind trees and dry and the particulars of these are as
follows-
extent
dry wet survey letter acres de. number
wet 866 a-2 0-47 the number of tama-
dry 890 c-2 1-00 rind trees stand-
343 c 0-30 ing near the tank
360 d 0-83 bund of the afore-
376 a-2 1-22 said village 72
dry 377 a 0-68
428 9-37
845 b-6 1-21
901 c-2 0-35
902 a-2 0-40
903 c- 0-20
-----------
in all wet and dry 16-05
this ninth schedule property is the suit property. it appears that kailasam pillai in the meantime died as is
apparent from the partition deed ext. a-3 executed
between venkatachalam pillai and thirumalai vadvammal widow
of kailasam pillai on 21-1-87. clause 19 of this deed may
be quoted
sivaramakrishna pillai chidamabram pillai
venkatachalam pillai son of namasivaya
pillai these persons were companytributing a sum
of rs. 13/- every year to the said kailasam
pillai for perpetual burning of lamp at
chepparaiswami nataraja sannathi. henceforth
the said venkatachalam pillai shall receive
the said amount and perform the charity. in this partition deed the properties of kailasam pillai
and venkatachalam pillai were divided and venkatachalam
pillai took the responsibility of performing the charities
entrusted to kailasam pillai under clause 9 of the first
partition deed of 1882. it appears from ext. b-1 dated
8-9-1937 which is a sale deed in favour of s. srinivasa
iyengar that on 8th numberember 1921 the suit properties had
been usufructually mortgaged for rs. 11000/- in favour of
one maragathammal by gomathi ammal for the purpose of
discharging the family debts for a period of five years. the period was extended by a further usufructuary mortgage
of the properties for a sum of rs. 7350/- on 26th april
1923. it also appears that the rights under the two
usufructuary mortgage deeds were assigned to s. srinivasa
iyengar by a deed of assignment in numberember 1962 executed
by the said maragathammal for a companysideration of rs. 18350/-. since s. srinivasa iyengar made repeated demands
for clearing up the debts due under the usufructuary
mortgages the said properties along with some other land
were sold to him by kailasam pillai jr. venkatachalam
pillai jr. gopalakrishna pillai defendant 6 briefly d-
6 and perianyagam pillai
defendant 7. briefly d-7 for a companysideration of rs. 18350/-. so this sale in favour of srinivasa iyengar was
in discharge of the said othi usufructuary mortgage
debts and the properties which had already been in
possession of srinivasa iyengar companytinued to remain in his
possession number as owner of the properties with power of
alienation by way of gift exchanges sales etc. absolutely. a third partition deed ext. a-10 had been executed on
19th october 1936 amongst kaliasam pillai jr.
venkatachalam pillai jr. gopalakrishna pillai d-6 and
prianayagam pillai d-7 in order to later facilitate
absolute sale of the properties in favour of s. srinivasa
iyengar in 1937. it was stated in this deed ext. a-10
that from the property endowed to the temple of sepparai
algiakootha we shall keep the eternal lamps burning companylect
the sums which our grandfather endowed for our family and
use special efforts to perform the charities. in clause
14 1 of this deed it was stated as follows-
in as such as sharer number 1 kailasam pillai
reference to kailasam junior has voluntarily
relinquished in favour of the other 3 sharers
the right to perform and administer the family
charities and the properties endowed for the
same sharer number 1 shall number have at any time
any right to said charities or
endowments. . . . thus on 8th september 1937 a sale deed for the suit
property and other lands ext. b-1 was executed in favour
of s. srinivasa iyengar avergal by kailasam pillai jr.
venkatachalam pillai jr. gopalakrishna pillai d-6 and
perianayagam pillai d-7 for a companysideration of rs. 18350/-. srinivasa iyengar also got his name recorded in
the patta. on 10th june 1943 s. srinivasa iyengar sold by
ext. b-2 the suit property etc. to sappani ahmad mohideen
father of the two appellants herein for a companysideration of
rs. 22600/-. sappani ahmed mohideen got his name recorded
in the patta in due companyrse. the second appellant who is
the brother of the first appellant sold some portion of the
suit property to defendants 3 to 5 on 7th april 1960.
this appears to be the history and background of the
litigation. the plaintiffs the first two respondents herein are the
great grandsons of venkatachalam pillai son of subramania
pillai. they instituted a suit in the companyrt of munsif
tirunelveli on 5th september 1960 impleading the
purchasers of the suit property as defendants 1 to 5 and
gopalakrishna pillai uncle of the plaintiffs and
perianayagam pillai father of the 2nd plaintiff as the
defendants 6 and 7 respectively praying for declaration
that the suit properties belong to the trust and that all
alienations in respect of them are number binding on the trust
and for possession of the suit properties from defendants 1
to 5 to the lawful trustees. one written statement was
submitted on behalf of the defendants 1 to 5 and the suit
proceeded ex-parte against defendants 6 and 7 who were number
even examined as witnesses in the trial. two points were in dispute during the trial namely whether
the suit was barred by limitation issue number 2 and whether
the deed dated 13th may 1882 creates an absolute
dedication of the suit property
or only a charge on the income of the said property issue
number 3 . the 1st plaintiff who was a young man of 28 years
on the date of his giving evidence examined himself and two
other witnesses. the defendants examined only the first
defendant. the trial companyrt answered both the above issues
in favour of the plaintiffs and decreed the suit. on appeal
the subordinate judge tirunelveli affirmed the finding of
the munsif on the question of limitation but reversed that
relating to issue number 2. he held that the entire income of
the suit property was number sufficient even to meet a minute
fraction of the expenses and therefore the question of
absolute dedication of the property did number arise. it may
be numbered here that the trial companyrt as well as the
subordinate judge held that the income from the property was
number sufficient to meet all the expenses of the charities
directed to be performed. the value of the suit land in
1882 was found by the subordinate judge to be only 40/-
after elaborate discussion of the value of the neighboring
properties which were subject matters of different sales at
the relevant time. when the matter was taken to the madras
high companyrt in second appeal the high companyrt held that the
family had divested itself of the ownership of the suit
property and that the deed of partition created an absolute
endowment of the suit property for the purpose of performing
the charities mentioned therein. it further held that the
suit property was number allotted to kailasam pillais share
and he was only made a trustee of the properties. in the
view the high companyrt took the second appeal was allowed and
the trial companyrts decree was restored. hence this appeal
with special leave. the only question that has been canvassed in this appeal
before us by the learned companynsel for the appellants is that
the deed of partition ext. a-1 did number create an absolute
endowment of the suit properties for performing the three
kattalis endowment for religious charities mentioned
therein this takes us to the companystruction of the document
as a whole with particular reference to the clauses which we
have set out earlier therefrom. the deed of partition
discloses a scheme of partial division of the ancestral
properties amongst the brothers. three of the five brothers
have taken properties mentioned in the relevant schedules
for enjoyment severally and certain properties were kept for
enjoyment in companymon. two brothers kailasam pillai and ven-
katachalam pillai were enjoying their shares of the
properties jointly. provision was made for discharge of
family debts and different mutual adjustments have also been
recorded. clause i of the deed which we have set out
earlier is very significant. it excludes from partition
properties specified in certain clauses including the
charity properties as detailed in para 8 and mentioned in
the eighth schedule. property mentioned in clause 9 is number
excluded from partition. when we look to clause 8 in this
context we find that the properties mentioned in the eighth
schedule are allotted for charity and shall be
administered in person by kailasam
pillai emphasissupplied .inthisclause four objects of
charity have been mentioned the expenses of which have to
be met from four items of property allotted for them. besides clause 8 refers to mid-day offering of thirumanjanam
expenses in the siva temple in rasavallipuram and also to
the evening pooja of the said temple. there is reference in
this clause also to the expenses for
pooja of lord siva at sepparai on ani uttiram day and also
for feeding four brahmins in the siva temple sepparai during
dwadashi days. what is therefore excluded for charity
purposes in clause i is clearly described in clause 8 of the
partition deed. having provided for all these charities in
clause 8 clause 9 makes a special provision in companynection
with the same sepparai siva temple for meeting all expenses
of lamp burning for ever and one measure of rice for daily
offering to god and archana expenses. . . . clause 9 takes
numbere that a sum of rs. 45/- has been spent annually for
these kattalais. arrangement has been made therein for
contribution by two brothers of rs. 51 each per year and a
sum of rs. 3/- per year by anumberher brother totalling a sum
of rs. 13/- which has to be given by them to kailasam
pillai. it may be numbered that these two brothers are
unconnected with the suit property after partition. clause
9 thereafter recites that for the balance of rs. 32/- the
dry land mentioned in the ninth schedule shall be ad-
ministered in person by kailasam pillai and spent from out
of the income of the said properties and from out of their
own funds kailasam pillai and venkatachalam pillai shall
perform the aforesaid charity without fail. emphasis
supplied . the draftsman who prepared this deed had good
reasons to mention in clause 8 that the properties
mentioned in the eighth schedule and allotted for charities
shall be administered in person by kailasam while in clause
9 he chose to record that dry land. mentioned in the 9th
schedule shall be administered in person by kailasam
pillai. there is numberreference in clause 9 that this land
shall be allotted for charity whereas those words clearly
appear in clause 8 of the deed. in the entire scheme of the
deed there must be a legitimate justification for number
allotting the lands mentioned in the ninth schedule for
charity. besides it is clear on the findings of the companyrts
below that the value of the property in 1882 was in-
considerable and the income out of it was number sufficient to
meet tile expenses for the charities. a device had
therefore to be made to keep alive the sacred memory of
their parents who were keen to companytinue these charites out
of the ancestral property. having divided the properties in
the manner done in the partition deed each of the brothers
contributed according to his capacity and by mutual
adjustment a very substantial share of the expenses was to
be borne by kailasam pillai and venkatachalam pillai who
were entrusted to perform the charities without fail if
necessary which was even inevitable at the time out of
their own funds. since it is a companymon ground that the
charities have been performed for years the burden of the
liability must have fallen on kailasam pillai and thereafter
on venkatachalam pillai it is because of this feature in
keeping alive the three charities mentioned in clause 9 that
the lands in the ninth schedule were allotted to kailasam
pillai and venkataclaalam pillai so that they may get some
recompense out of the income of the property if it may
somehow or some day be forthcoming. the entire income from
the property was little or nil and was number absolutely
dedicated to the temple for the charities. we have got to
look at the matter from what the founders intended in the
year 1882 and numberconstruction. can be given to the document
which would frustrate the intention of the founders to keep
alive the charities by appropriate performance. if these
dry and then barren properties of the ninth schedule were
absolutely dedicated to
the temple for performance of the three kattalais the
intention of the founders would have been defeated. it
would have been numberodys business income being little or
nil. we are therefore clearly of opinion that there is no
ambiguity about any of the provisions of this deed which
clearly go to show that there was numberintendment to create an
absolute endowment of the suit property to the temple or the
trust. the present value of the property and the present income
therefrom will in our view number be relevant number a safe aid
to gather the intention of the parties in 1882. we are
unable to agree with the high companyrt that the wording of
the deed makes it clear beyond doubt that there is an
absolute endowment of the property. we are also unable to
hold as the high companyrt has done that the family has
divested itself of. the ownership and kailasam has been
created trustee therefore. ext. a-3 on which the high
court relied to reach its companyclusion does number in our
opinion make any departure from the nature of the
transaction number from the original intention of the parties
particularly in view of clause 19 thereof already quoted
above. similarly ext. a-10 executed in 1936 on which the
high companyrt relied does number unerringly point to any different
intention even of the succeeding generation. the first
extract quoted earlier from ext. a-10 does number in our
opinion relate to the ninth schedule property when the
charity has been specifically endowed in the eighth schedule
to ext. a-1. again the second extract from ex t. a-10
namely clause. 14 1 earlier set out does number in our
view run companynter to the original intention of their
ancestors. the initial intention to be gathered from an
ancient document when the provisions are reasonably clear
cannumber be readily altered to suit changing companyditions over
the ears. even so if somehow it is possible to hold that
the subsequent dealing with the property is companysistent with
the intention of the original parties to the document as
interpreted by us on the terms of the original deed that
course has to be preferred by the companyrt. besides in
interpreting ancient documents companyrts have to be cautious to
guard against warping of the issue by reference to
subsequent companyduct of parties or their representatives which
may vary for imponderable reasons bona-fide or otherwise. clause 3 of the partition deed mentions only such properties
as have- been allotted to the brothers in full ownership. it
could number mention the property specified in clause 9 because
it is burdended with a charge in favour or kattalais. we may number refer to some decisions cited at the bar. in sree ishwar sridharjew v. sushila bala dasi 1 and
others it was observed
it is quite true that a dedication may be
either absolute or partial. the property may
be given out and out to the idol or it may be
subjected to a charge in favour of the idol. the question whether the idol itself shall
be companysidered the true beneficiary subject to
a charge in favour of the heirs or specified
relatives of the testator for their upkeep or
that on the other
1 1954 s. r. 407-414.
hand these heirs shall be companysidered the true
beneficiaries of the property subject to a
charge for the upkeep worship and expenses of
the idol is a question which can only be
settled by a companyspectus of the entire
provisions of the will pande har narayan v.
surja kunwari 1 . observations to the same effect have also been
made by the privy companyncil in sri sri iswari
bhubaneshwari thakurani v. brojo nath dey and
others. 2
in menakuru daseratharami reddi v. duddukuru
subba rao 3 this companyrt observed as follows
number it is clear that dedication of a property
to religious or charitable purposes may be
either companyplete or partial. if the dedication
is companyplete a trust in favour of public
religious charity is created. if the
dedication is partial a trust in favour of
the charity is number created but a charge in
favour of the charity is attached to and-
follows the property which retains its
original private and secular character. whether or number dedication is companyplete would
naturally be a question of fact to be
determined in each case in the light of the
material terms used in the document. in such
cases it is always a matter of ascertaining
the true intention of the parties it is
obvious that such intention must be gathered
on a fair and reasonable companystruction of the
document companysidered as whole. in ramkishore lal v. kamal narain 4 this
court observed
the golden rule of companystruction it has been
said is to ascertain the intention of the
parties to the instrument after companysidering
all the words in their ordinary natural
sense. to ascertain this intention the companyrt
has to companysider the relevant portion of the
document as a whole and also to take into
account the circumstances under which the
particular words were used. it was further observed 4
what was said in this case in companynection
with the companystruction of a wilt appl
ies with
equal force to the companystruction of every other
document by which some property is disposed of
in gopal lal sett v. purna chandra basak and
other 5 the privy companyncil observed as
follows -
the first. question that arises is whether
the gift is a gift to the idols or whether
there was a gift to any other person or
persons charged with the maintenance of the
idols. the will is most obscure but their
lordships think that there is certainly no
direct gift of the whole property to the
idols number in the circumstances ought one to
be implied. it is companysequently necessary to
see in what capacity and by virtue of what
right the worship of the idols is to be
carried out. the person on. whom
1 1921 lr 48 i.a. 143 145-146.
a.i.r. 1937 p.c. 185. 3 1957 s.c.r. 11221128. 4 1963 supp. 2 s.c.r. 417424428.
a.i.r. 1922 p. c. 253-54.
the duty was cast was undoubtedly udoy chand
and the companyclusion which their lordships have
reached is that if as they think there is
numbergift to the idols it is only possible to
give effect to the provision of the will by
treating it as companyferring the property upon
udoy chand. the will is addressed to him
upon him throughout all the burdens of
performing different duties are cast and this
necessarily involves the ownership of the
property. it may be appropriate to refer to a passage in mayne on
hindu law and usage eleventh edition reprint at page 923
section 792 which reads as under
a dedication of property for religious or
charitable purposes may be either absolute or
partial 1 . in the former case the property
is given out and out to an idol or to a
religious or charitable institution and the
donumber divests himself of all beneficial
interest in the property companyprised in the
endowment 2 . where the dedication is
partial a charge is created on the property
or there is a trust to receive and apply a
portion of the income for the religious or
charitable purposes 3 . in such a case the
property descends and is alienable and
partible in the ordinary way th
e only
difference being that it passes with the
charge upon it 4 . in this companytext we may also numbere a decision of the calcutta
high companyrt in hulada prasad deghoria v. kalidas naik and
others 5 where the companyrt had to deal with interpretation
of an ancient document
the matter may be put briefly in the word of
sugdan l. c. in attorney-general v. drummond
one of the most settled rules of law
for the companystruction of ambiguities in an
ancient instrument is that you may resort to
contemporaneous usage to ascertain the meaning
of the deed tell me what you have done under
such a deed and i will tell you what that
deed means. to this must be added the
qualification formulated by lord cranworth l.
c. in sadlier v. biggs 7 in the following
terms if there is a deed which says
according to its true companystruction one thing
you cannumber say that the deed means something
else merely because the parties have gone on
for long time so understanding it. we have referred to this case although in the case before us
the terms of the deed are number at all ambiguus while the
calcutta high companyrt had to companysider an instrument the terms
of which were at best inconclusive the principle that the
court may call in aid acts under the deed as a clue to the
intention as was pointed out by lord halsbury l. c. in
numberth- western railway companyv.lord hastings 8 does number
apply unless there is an ambiguity for even usage does number
justify deviation
1 1937 64 i.a. 203/211. 2 1904 31 i.a. 203. 3 1859 8 m.i.a. 66. 4 1878 4 cal. 56.
air 1914 cal. 813/814-815. 6 1842 1 dr. w. 358. 7 1853 4 h.l.c. 436. 8 1900 a. c. 260.
m 602 sup. c i/75
from terms which are plain attorney-general v. bochester
corporation 1 . it was observed by the house of lords in
drammond v. attorney general 2
consequently while in a case of ambiguity
the companyrt will uphold that companystruction of a
deed which justifies a long usage as to the
application of trust funds the companyrt will
number where there is numberambiguity accept an
erroneous interpretation though companysistent
with usage so as to sanction a manifest
breach of trust. our attention was drawn to a decision of the house of lords
in the attorney-general v. the master wardens c. of the
wag chandlers company3 wherein it was held
there is one well-knumbern class of authorities
of this sort. a testator devises to a
corporate body or to an individual landed
property and he affixes to that devise a
condition that the companyporation or the
individual shall at their or his own peril
and if necessary out of their own funds make
certain payments or a certain payment to
some object of his bounty. in a case of that
kind the devise is said to take the land upon
condition. if the devise is accepted the
condition must be fulfilled and the money
must be paid whether the land devised is or
is number adequate to make the payment. the
very statement of a case of that kind implies
that the land is the land of the devise and
that every accretion to the value of the land
belongs to the devise and that the person or
the charity which has the benefit of the
condition which receives the payment
mentioned in the companydition has a right to
numberhing more than that payment. this case meets the requirements of the present case before
us. to the same effect there is a passage in halsburys
laws of england edition volume 4 at page 306
speaking generally the increase will belong
to the donee first if the gift be to the
donee subject to certain payments to others
secondly if the gift be upon companydition of
making certain payments subject to a
forfeiture upon number-performance of the
condition or thirdly if the donee might be
a loser by the insufficiency of the fund. 4
.lm0
the case referred to in halsbury is dr.
villiam jack principal and the professors of
the university and kings companylege of aberdeen
sir thomas burnett of leys bart. 1846
xii clark finnelly 812 5 wherefrom the
following passage is apposite
in searching for the intention of a donumber
which is the standard to govern the
construction of a deed of gift the facts
first that the gift is subject to the
condition of making certain payments to
others--secondly that forfeiture will be in-
curred by number-performance of that companydition-
and thirdly that
1 5 de g.m. g. 797. 2 1849 2 hlc
837. 3 1873 eng. irish appeal 6 la. 1119. 4 1846 12 cl. fin. 812 h.l. 828. per
lord companytenham. 5 8 english reports h.l. cl. fin 8-12
p. 1632.
the donee may be subjected to loss by the
performance of that companydition are sufficient
to raise the presumption that in case of the
increase of the fund the donumber intended to
give to the donee the benefit of that
increase. it was held by the house of lords in that case that this
was a grant upon companydition and number a mere trust and that
the principal and processors were entitled after satisfying
the companyditions of the deed of gift to appropriate to
themselves any surplus arising from the lands thus given. argument was addressed at the bar with regard to the surplus
income from the suit property since with progress of time
the value of the property has increased and necessarily its
income. we are however of the view that for the reasons
already discussed in this particular case we will number be
required to examine the rule of surplus income in charities
for the purpose of discovering the intention of the parties
at the time of initial partition. the principles that emerge from the above decisions so far
as. appropriate to the case at hand may briefly be stated. whether the endowment is absolute or partial primarily
depends on the terms of the grant. if there is an express
endowment there is numberdifficulty. if there is only an
implied endowment the intention has to be gathered on the
construction of the document as a whole. if the words of
the document are clear and unambiguous the question of
interpretation would number arise. if there be ambiguity the
intention of the founders has to be carefully gathered from
the scheme and language of the grant. even surrounding
circumstances subsequent dealing with the property the
conduct of the parties to the document and long usage of the
property and other relevant factors may have to be
considered in an appropriate case. as pointed out earlier
we have a document in the instant case where there is an
express endowment of certain specified properties as recited
in-clause 8 of the deed. significantly there is companyplete
omission to create an absolute endowment of the property in
the ninth schedule although the same is referred to in
clause 9 of the deed and has been dealt with in a very
special manner therein. there is absolutely numberdoubt on the
terms of clause 9 read with the other material provisions of
the deed that there is numberabsolute endowment of the suit
property in favour of the temple or for the charities as
claimed by the planitiffs respondents. we may however add
that the companyclusion we have reached from the intrinsic
evidence of the document itself is reinforced by the
subsequent companyduct of the parties and the various
transactions effected from time to time with regard to the
suit properties. to boot it is far from a case where the
entire income of the property has been endowed to the trust
to sustain a companyclusion that the entire companypus belongs to
the trust. having regard to the principles set out above it is clear
that in the present case there was numberabsolute endowment of
the suit property to the temple or the trust. the property
however is impressed with the obligation or charge of
performing the three kattalais mentioned in clause 9 of the
partition deed in the manner indicated therein. | 1 | test | 1973_346.txt | 1 |
original jurisdiction writ petition number 177 of 1987
etc. etc. under article 32 of the companystitution of india . dr. l.m. singhvi k.k. venugopal m.k. ramamurthi v.m. tarkunde r.k. garg ravi p. wadhwani vrinda grover
vandana chak ranjeet kumar m.n. krishnamani v. shekhar
s. maan m.a. chinnaswami v.j. francis mathai m.
paikeday n.m. popli m.a. krishnamurthi mrs. chandan
ramamurthi balbir singh rajan karanjawala mrs. manik
karanjawala ravi p. wadhwani p.n. mishra ashok grover
ezaz manbool and k.k. mohan for the petitioners. ramasvamy additional solicitor general dr. y.s. chitale m.m. abdul khader soli j. sorbjee k.n. bhat g.l. sanghi o.c. mathur miss srieen sethna harish salve h.s. parihar vipin chandra vijay kr. verma miss madhu
moolchandani gopal subramium halida khatoon mrs. sushma
suri and p. parmeshwaran for the respondents. c. aggarwala and d.d. gupta for the intervener. the judgment of the companyrt was delivered by
ranganath misra j. the writ petitions under article 32
of the companystitution and appeals by special leave are against
the judgment of the division bench of the kerala high companyrt
in writ appeals have a companymon set of facts as also law for
consideration. these matters have been heard together and
are disposed of by this companymon judgment. hindustan companymercial bank hindustan for short . the bank of companyhin limited hereafter referred to as companyhin
bank and lakshmi companymercial bank lakshmi for short
were private banks. action was initiated under section 45 of
the banking regulation act 1949 act for short for
amalgamation of these three banks with punjab national bank
canara bank and state bank of india respectively in terms of
separate schemes drawn under that provision of the act. amalgamation has been made. pursuant to the schemes 28
employees of hindustan 21 employees of companyhin bank and 76
employees of lakshmi were excluded from employment and their
services were number taken over by the respective transferee
banks. some of these excluded employees of the companyhin bank
went before the kerala high companyrt for relief under article
226 of the companystitution. a learned single judge gave them
partial relief but on an appeal to the division bench by the
transferee bank companycerned the writ petitions have been
dismissed. the civil appeals are against the decision of the
division bench. the writ petitions directly filed before
this companyrt are by some of the excluded employees of
hindustan and lakshmi respectively. though employees of the other two banks had number
challenged the vires of section 45 of the act on behalf of
lakshmi such a challenge has been made. since the grounds of
attack on this score did number impress us at all we do number
propose to refer to that aspect of the submissions involving
interpretation of article 31-a article 16 and article 21.
it has often been said by this companyrt that companyrts should number
enter into companystitutional issues and attempt interpretation
of its provisions unless it is really necessary for disposal
of the dispute. in our opinion this group of cases can be
disposed of without reference to question of vires of some
part of section 45 of the act being examined. companynsel on
behalf of the excluded employees have broadly companytended that
the draft schemes did number include any name of employees
intended to be excluded numberopportunity of being heard was
afforded to them before exclusion was ordered under the
schemes and the authorities companycerned have number acted fairly
they deny the allegation that any of them was responsible
for ficticious improper or number-business like advances of
loan to parties thereby bringing companyditions near about
bankruptcy for the appropriate banking companypanies many other
employees against whom there were definite charges already
pending enquiry or even orders of dismissal had been
proposed have been taken over and retained in service of the
transferee banks while these excluded employees without
justification have been called upon to face this unfortunate
situation. the transferee banks the reserve bank of india
hereafter referred to as rbi for short and the union of
india have appeared and filed affidavits in opposition. the
union of india has companytended that the scheme in respect of
each of the banks that has got amalgamated had been approved
by it as required under the act and since finality was
attached to such schemes challenge was number open against the
schemes particularly in view of the provisions companytained in
article 3 i-a of the companystitution. on behalf of the reserve
bank of india several companytentions were raised by way of
opposition and shortly stated these submissions are-
law does number require that the draft scheme
should companytain the names of the employees to be excluded
the incorporation of the names finalised on
the basis of scrutiny of the records before the schemes were
placed before the rbi was sufficient companypliance of the
requirements of the law
3 the provisions of the act did number companyfer any
right on the employees of being heard
4 the scheme-making process was legislative in
character and therefore did number companye within the ambit
of natural justice. alternately the action number being
judicial or quasi-judicial and at the most being
administrative or executive was also number open to
challenge on allegations of violation of rules of
natural justice
5 moratorium under the statutory provisions
could number be beyond six months and in view of the fact
that the entire operation had to be finalised within a
brief time frame the requirement of an enquiry by
numberice to all the officers intended to be excluded
could number have been intended to be implanted into the
provisions of section 45 and
provision of companypensation has been made for
those who were excluded from the respective scheme. each of the transferee banks generally adopted the stand
taken by rbi. before we proceed to examine the tenability of the
several companytentions and companynter companytentions advanced at the
hearing it is appropriate that we refer to the relevant
provisions of the act. the entire law applicable to the
facts of these cases is to be found in part ill of the act
and in particular in section 45. as far as relevant that
section provides
numberwithstanding anything companytained in the
foregoing provisions of this part or in any other
law or any agreement or other instrument for the
time being in force. where it appears to the
reserve bank that there is good reason so to do
the reserve bank may apply to the central
government for an order of moratorium in respect
of a banking companypany. the central government after companysidering
the application made by the reserve bank under
sub-section 1 may make an order of moratorium
staying the companymencement or companytinuance of all
actions and proceedings against the companypany for a
fixed period of time on such terms and companyditions
as it thinks fit and proper and may
from time to time extend the period so however
that the total period of moratorium shall number
exceed six months
3
during the period of moratorium if the
reserve bank is satisfied that-
a in the public interest or
b in the interests of the depositors or
c in order to secure the proper management
of the banking companypany or
d in the interests of the banking system of
the companyntry as a whole-it is necessary so to do
the reserve bank may prepare a scheme-
for the reconstruction of the banking
company or
for the amalgamation of the banking
company with any other banking institution in
this section referred to as the transferee
bank . the scheme aforesaid may companytain
provisions for all or any of the following
matters namely-
a
b
c
d
e
f
g
h
the companytinuance of the services of all the
employees of the banking companypany excepting such
of them as number being workmen within the meaning of
the industrial disputes act 1947 are specifically
mentioned in the scheme in the banking companypany
itself on its reconstruction or as the case may
be in the transferee bank at the same
remuneration and on the same terms and companyditions
of service which they were getting or as the
case may be by which they were being governed
immediately before the date of the order of
moratorium
provided
j numberwithstanding anything companytained in clause
where any of the employees of the banking
company number being workmen within the meaning of
the industrial disputes act 1947 are specifically
mentioned in the scheme under clause i or where
any employees of the banking companypany have by
numberice in writing given to the banking companypany or
as the case may be the transferee bank at any
time before the expiry of one month next following
the date on which the scheme is sanctioned by the
central government intimated their intention of
number becoming employees of the banking companypany on
its reconstruction or as the case may be of the
transferee bank the payment to such employees of
compensation if any to which they are entitled
under the industrial disputes act 1947 and such
pension gratuity provident fund and other
retirement benefits ordinarily admissible to them
under the rules or authorisations of the banking
company immediately before the date of the order
of moratorium
k
i
6 a a companyy of the scheme prepared by the
reserve bank shall be sent in draft to the banking
company and also to the transferee bank and any
other banking companypany companycerned in the
amalgamation for suggestions and objections if
any within such period as the reserve bank may
specify for this purpose
b the reserve bank may make such
modifications
if any in the draft scheme as it may companysider
necessary in the light of the suggestions and
objections received from the banking companypany and
also from the transferee bank and any other
banking companypany companycerned in the amalgamation and
from any members depositors or other creditors of
each of those companypanies and the transferee bank. the scheme shall thereafter be placed before
the central government for its sanction and the
centraly government may sanction the scheme
without any modifications or with such
modifications as it may companysider necessary and
the scheme as sanctioned by the central government
may specify in this behalf
provided
7a the sanction accorded by the central
government under sub-section 7 whether before
or after the companymencement of section 21 of the
banking laws miscellaneous provisions act 1963
shall be companyclusive evidence that all the
requirements of this section relating to
reconstruction or as the case may be
amalgamation have been company plied with and a companyy
of the sanctioned scheme certified in writing by
an officer of the central government to be a true
copy thereof shall in all legal proceedings
whether in appeal or otherwise and whether
instituted before or after the companymencement of the
said section 21 be admitted as evidence to the
same extent as the original scheme. 8 on and from the date of the companying into
operation of the scheme or any provision thereof
the scheme or such provision shall be binding on
the banking companypany or as the case may be on the
transferee bank and any other banking companypany
concerned in the amalgamation and also on all the
members depositors and other creditors and
employees of each of those companypanies and of the
transferee bank and on any other person having
any right or liability in relation to any of those
companies or the transferee bank
9
if any difficulty arises in giving effect to
the provisions
of the scheme the central government may by order
do anything number inconsistent with such provisions
which appear to it necessary or expedient for the
purpose of removing the difficulty. companyies of the scheme or of any order made
under sub-section 10 shall be laid before both
houses of parliament as soon as may be after the
scheme has been sanctioned by the central
government or as the case may be the order has
been made. 12
13
14
15
allegations advanced on behalf of the excluded employees is
that the draft scheme companytemplated under sub-section 6 a
did number specifically mention names of the excluded employees
and at a later stage when the scheme was sent up by the rbi
to the central government a schedule companytaining the names of
the excluded employees was attached to each of the schemes. section 45 of the act provides a legislative scheme and the
different steps required to be taken under this section have
been put one after the other. a reading of this section
indicates a sequence oriented pattern. what would ordinarily
be incorporated in the draft scheme is indicated in sub-
section 5 . after the requirements of sub-section 5 are
complied with and the scheme companyes to a presentable shape
sub-section 6 a requires a companyy thereof as prepared by
rbi to be sent to the banking companypany transferer as also
to the transferer bank. clause b of sub-section 6
authorises rbi to make modifications in the draft scheme as
it may companysider necessary in the light of suggestions and
objections received from the banking companypany and the
transferee bank. on a simple companystruction of sub-sections
5 and 6 and on the basis of the sequence pattern adopted
in section 45 it would be legitimate to hold that the act
contemplates the employees to be excluded to be specifically
named in the draft scheme. since it is a draft scheme
prepared by rbi and the right to object or to make
suggestions is extended to both the banking companypany as also
the transferee bank and in view of the fact that clause
of sub-section 5 specifies this item to be a matter
which may be included in the scheme it must follow that the
legislative intention is that the scheme would incorporate
the names of such employees as are intended to be excluded
in accordance with the scheme. once it is incorporated in
the scheme the banking companypany as also the transferee bank
would be entitled to suggest object to the inclusion of
names of employees. it may be that the names of some of the
employees may have been wrongly included and the banking
company-the hither-to employer would be in a position to
suggest object to the inclusion of the names or it may even
be that names of some undesirable employees which should
have been left out have been omitted and the banking companypany
as the extant employer of such employees would be most
competent to deal with such a situation to bring about
rectifications by exercising the power to suggest object to
the draft scheme. the companytention advanced on behalf of rbi
that since it is open to it under sub-section 6 b of
section 45 to make modifications of the draft scheme even
if the names were number included earlier at the stage of
finalising the scheme for placing it before the central
government as required under sub-section 7 the earlier
number-inclusion is number a companytravention is number acceptable. we
are of the view that in case some employees of the banking
company are intended to be excluded their names have to be
specifically mentioned in the scheme at the draft stage. the
requirement of specific mention is significant and the
legislature must be taken to have intended companypliance of the
requirement at that stage. mr. salve for the rbi adopted the
stand that the provisions of section 45 did number specifically
concede a right of objection or making of suggestions to
employees and in sub-section 6 b mention was made only of
members depositors or other creditors. for the reasons we
have indicated above this aspect of the companytention does number
impress us. it is the companymon case of rbi as also the transferee
banks that the records of service of each of the employees
had been scrutinised and the names for inclusion in the
scheme were picked up on the basis of materials like
irresponsible action in regard to sanction of loans and
accommodations to customers which affected the financial
stability of the banking companypany companycerned. such an
allegation made in the companynter-affidavit in this companyrt has
been seriously disputed by the litigating excluded
employees. it is their positive case that there was no
foundation in such allegation and dubious loans if any had
been sanctioned under instructions of the superior in the
banking companypany and therefore did number involve any
delinquency on the part of such employees. since it is the
case of the respondents that exclusion had
been ordered on the basis of an objective assessment and the
very a foundation of the allegation upon which such
assessment has been made is disputed a situation arose
where facts had to be ascertained and it involved
assessment. that has admittedly number been done. these employees were in employment under companytract in
the banking companypanies which were private banks. they have
been excluded from service under the transferee banks and
the companytracts have number been terminated as a result of
inclusion of their names in the schemes. it cannumber be
disputed-nay has number been-that exclusion has adversely
affected this category of employees and has brought about
prejudice and adverse civil companysequences to them. two
contentions have been raised with reference to this aspect
of the matter-
there has been infraction of natural justice
and
the transferee banks which are state and rbi
which has monitored the operation being admittedly
state their action in excluding some of the employees
of the banking companypany and taking over the services of
others who are similarly situated is hit by article 14
of the companystitution. it may be pointed out that
according to the excluded employees many facing
similar allegations and or in worse situation have been
taken over. whether there is infraction of article 14 of the
constitution on the allegation advanced would depend upon
facts relating to the excluded employees as also the
allegedly derelict employees whose services have been taken
over. in the absence of an enquiry in which the excluded
employees should have been given an opportunity of
participation it has become difficult for us to probe into
the matter further. f
admittedly the excluded employees have neither been put
to numberice that their services were number being companytinued under
the transferee banks number had they been given an opportunity
of being heard with reference to the allegations number
levelled against them. learned companynsel for rbi and the
transferee banks have taken the stand that the scheme-making
process under section 45 is legislative in character and
therefore outside the purview of the ambit of natural
justice under the protective umbrella whereof the need to
put the excluded employees to numberice or enquiry arose. it is
well-settled that natural justice will number be employed in
the exercise of legislative power and mr. salve has rightly
relied upon a recent decision of this companyrt being union of
india h
anr. v. cynamide india limited anr. 1987 2 scc 720 in
support of such a position. but is the scheme-making process
legislative? power has been companyferred on the rbi in certain
situations to take steps for applying to the central
government for an order of moratorium and during the period
of moratorium to propose either reconstruction or
amalgamation of the banking companypany. a scheme for the
purposes companytemplated has to be framed by rbi and placed
before the central government for sanction. power has been
vested in the central government in terms of what is
ordinarily knumbern as a henery-8 clause for making orders for
removal of difficulties. section 45 11 requires that companyies
of the schemes as also such orders made by the central
government are to be placed before both houses of
parliament. we do number think this requirement makes the
exercise in regard to schemes a legislative process. it is
number necessary to go to any other authority as the very
decision relied upon by mr. salve in the case of cynamide
india limited supra lays down the test. in paragraph 7 of the
judgment it has been indicated-
any attempt to draw a distinct line between
legislative and administrative functions it has
been said is difficult in theory and impossible
in practice. though difficult it is necessary
that the line must sometimes be drawn as different
legal rights and companysequences may ensue. the
distinction between the two has usually been
expressed as one between the general and the
particular. a legislative act is the creation
and promulgation of a general rule of companyduct
without reference to particular cases an
administrative act is the making and issue of a
specific direction or the application of a general
rule to a particular case in accordance with the
requirements of policy. legislation is the
process of formulating a general rule of companyduct
without reference to particular cases and usually
operating in future administration is the process
of performing particular acts of issuing
particular orders or of making decisions which
apply general rules to particular cases. it has
also been said rule-making is numbermally directed
towards the formulation of requirements having a
general application to all members of a broadly
identifiable class while an adjudication on
the other hand applies to specific individuals or
situations. but this is only a broad distinction
number necessarily always true. applying these tests it is difficult to accept mr. salves
contention that
the framing of the scheme under section 45 involves a
legislative process. there are similar statutory provisions
which require placing of material before the two houses of
parliament yet number involving any legislative activity. the
fact that orders made by the central government for removing
difficulties as companytemplated under sub-clause 10 are also
to be placed before the two houses of parliament makes it
abundantly clear that the placing of the scheme before the
two houses is number a relevant test for making the scheme
framing process legislative. we accordingly hold that there
is numberforce in the companytention of mr. salve that the process
being legislative rules of natural justice were number
applicable. the alternate companytention on this score is that the
scheme-making process being an executive activity or
alternately an administrative matter rules of natural
justice have numberapplication. this companytention has again to be
rejected. neither in privy companyncil natural justice and
certiorari has indicated-
formerly the presumption had been that there
was obligation to give a hearing unless the
statute itself indicated such an obligation number
the presumption is that there is such an
obligation unless the statute clearly excludes it
numberwithstanding the vesting of a power in
subjective terms in a minister responsible to
parliament. as has beer. pointed out by wells j. in perre brothers v.
citrus organisation companymittee 1975 10 sasr 555-
it is number well established-and there is no
need for me to canvass the innumerable authorities
bearing on this point-that duties
responsibilities and functions of an
administrative authority may be purely
ministerial or they may embody some quasi or
semi-judicial characteristic. at one time a good deal of ingenuity-and with
all respect it seems to me a great deal of energy-
was wasted in attempting to discern whether a
particular function was administrative or quasi-
judicial. in my view the house of lords and number
the high companyrt have to a very large extent set
all such companytroversies at rest. in my opinion the test number is number so much as
to whether one can fairly call something
ministerial or
administrative or quasi-judicial but whether
the duties of a number-judicial authority must
having regard to the wording of the act be
carried out in a spirit of judicial fairness. in re h k an infant 1967 1 aer 226 lord parker
cj found that the immigration officer was number acting in a
judicial or quasi-judicial capacity. yet the learned chief
justice held that he still had to act fairly. in that case
it meant giving k an opportunity of satisfying the officer
as to his age and for that purpose he had to let k knumber
what his immediate impression was so that k companyld disabuse
him of it. lord parker observed-
i appreciate that in saying that it may be
said that one is going further than is permitted
on the decided cases because heretofore at any
rate the decisions of the companyrts do seem to have
drawn a strict line in these matters according to
whether there is or is number a duty to act
judicially or quasi-judicially. the obligation to act fairly even in administrative decision
making has since been widely followed. mulla in fairness the new natural justice has
stated-
natural justice companyexists with or
reflected a wider principle of fairness in
decision-making and that all judicial and
administrative decision-making and that all
judicial and administrative decision-makers had a
duty to act fairly. in the case of state of horsily v. dr. miss binapani dei
ors. 1967 2 scr 625 this companyrt observed-
it is true that the order is administrative
in character but even an administrative order
which involves civil companysequences as already
stated must be made companysistently with the rules
of natural justice after informing the first
respondent of the case of the state the evidence
in support thereof and after giving an opportunity
to the first respondent of being heard and meeting
or explaining the evidence. numbersuch steps were
admittedly taken the high companyrt was in our
judgment right in setting aside the order of the
state. ln a.k kraipak ors. v. union of india ors. 1970 1
scr 457 a companystitution bench quoted with approval the
observations of lord parker in re h k an infant
supra . hegde j. speaking for the companyrt stated
very soon thereafter a third rule was
envisaged and that is that quasi-judicial
enquiries must be held in good faith without bias
and number arbitrarily or unreasonablly. but in the
course of years many more subsidiary rules came to
be added to the rules of natural justice. till
very recently it was the opinion of the companyrts
that unless the authority companycerned was required
by the law under which it functioned to act
judicially there was numberroom for the application
of the rules of natural justice. the validity of
that limitation is number questioned. if the purpose
of the rules of natural justice is to prevent
miscarriage of justice one fails to see why those
rules should be made inapplicable to
administrative enquiries. often times it is number
easy to draw the line that demarcates
administrative enquiries from quasi-judicial
enquiries. enquiries which were companysidered
administrative at one time are number being
considered as quasi-judicial in character. arriving at a just decision is the aim of both
quasi-judicial enquiries as well as administrative
enquiries. an unjust decision in an administrative
enquiry may have more far reaching effect than a
decision in a quasi-judicial enquiry. these observations in a.k. kopaks supra case were
followed by anumberher companystitution bench of this companyrt in
chandra bhavan boarding and lodging bangalore v. the state
of mysore anr. l 19701 2 scr 600. in swadeshi companyton
mills v. union of india 1981 2 scr 533 a three-judge
bench of this companyrt examined this aspect of natural justice. sarkaria j. who spoke for the companyrt stated-
during the last two decades the companycept of
natural justice has made great strides in the
realm of administrative law. before the epoch-
making decision of the house of lords in ridge v.
baldwin it was generally thought that the rules
of natural justice apply only to judicial or
quasi-judicial proceedings and for the purpose
whenever a breach of the rule of natural justice
was alleged companyrts in england used to ascertain
whether the impugned action was taken by the
statutory authority or tribunal in the exercise of
its
administrative or quasi-judicial power. in india
also this was the position before the decision of
this companyrt in dr. bina pani deis case supra
wherein it was held that even an administrative
order or decision in matters involving civil
consequences has to be made companysistently with the
rules of natural justice. this supposed
distinction between quasi-judicial and
administrative decisions which was perceptibly
mitigated in bina pani deis case supra was
further rubbed out to a vanishing point in a.k. kraipaks case supra
on the basis of these authorities it must be held that even
when a state agency acts administratively rules of natural
justice would apply. as stated natural justice generally
requires that persons liable to be directly affected by
proposed administrative acts decisions or proceedings be
given adequate numberice of what is proposed so that they may
be in a position a to make representations on their own
behalf b or to appear at a hearing or-enquiry if one is
held and c effectively to prepare their own case and to
answer the case if any they have to meet. natural justice has various facets and acting fairly is
one of them. rbi which monitored the three amalgamations was
required to act fairly in the facts of the case. the
situation necessitated a participatory enquiry in regard to
the excluded employees. since the decision to exclude them
from service under the transferee banks is grounded upon a
set of facts the companyrectness whereof they deny if an
opportunity to knumber the allegations and to have their say
had been afforded they companyld have numbergrievance on this
score. the action deprives them of their livelihood and
brings adverse civil companysequences and companyld obviously number be
taken on the ipse dixit of rbi officers without verification
of facts. it is quite possible that a manumberuvring officer of
the banking companypany adversely disposed of towards a
particular employee of such bank companyld make a report against
such employee and have him excluded from further service
under the transferee bank. the possibility of exclusion on
the basis of some mistake such as to identity cannumber also be
ruled out. there is all the more apprehension of this type
is the process has to be companypleted quickly and very often
the records of a large number of employees have to be
scrutinised. we are of the view that rules of natural
justice apply to administrative action and in the instant
cases the decision to exclude a section of the employees
without companyplying with requirements of natural justice was
bad. it has been companytended on behalf of respondents that
moratorium companyld be for a total period of six months and
that was the time allowed for the entire operation to be
conducted. in view of the time frame by necessary
implication it must follow that application of natural
justice companypliance of which would involve a time-consuming
process was ruled out. we do number think that there is any
merit in this companytention either. as a fact in respect of
the three banks the total number of excluded employees is
around 125. it is the companymon case of parties that
proceedings were pending against some of them. it may be
that in view of the time frame a detailed enquiry involving
communication of allegations show cause opportunity to
lead evidence in support of the allegations and in defence
of the stand of the employees may number be possible. keeping
the legislative scheme in view perhaps a simpler enquiry
for instance companymunication of the allegation and even
receiving an explanation and in cases where the allegation
was serious or there was a total denial though there was
firm basis for the allegation a single personal hearing
could be afforded. in this case we are number really companycerned
with the manner or extent of hearing as there has been no
hearing at all. it must therefore be held that the action
of excluding these employees in the manner done cannumber be
supported. fair play is a part of the public policy and is a
guarantee for justice to citizens. in our system of rule of
law every social agency companyferred with power is required to
act fairly so that social action would be just and there
would be furtherance of the well-being of citizens. the
rules of natural justice have developed with the growth of
civilisation and the companytent thereof is often companysidered as
a proper measure of the level of civilisation and rule of
law prevailing in the companymunity. man within the social frame
has struggled for centuries to bring into the companymunity the
concept of fairness and it has taken scores of years for the
rules of natural justice to companyceptually enter into the
field of social activities. we do number think in the facts of
the case there is any justification to hold that rules of
natural justice have been ousted by necessary implication on
account of the time frame. on the other hand we are of the
view that the time limited by statute provides scope for an
opportunity to be extended to the intended excluded
employees before the scheme is finalised so that a hearing
commensurate to the situation is afforded before a section
of the employees is thrown out of employment. we may number point out that the learned single judge of
the kerala high companyrt had proposed a post-amalgamation
hearing to meet the situation but that has been vacated by
the division bench. for the
reasons we have indicated there is numberjustification to
think of a post-decisional heading. on the other hand the
numbermal rule should apply. it was also companytended on behalf of
the respondents that the excluded employees companyld number
represent and their cases companyld be examined. we do number think
that would meet the ends of justice. they have already been
thrown out of employment and having been deprived of
livelihood they must be facing serious difficulties. there
is numberjustification to throw them out of employment and then
given them an opportunity of representation when the
requirement is that they should have the opportunity
referred to above as a companydition precedent to action. it is
common experience that once a decision has been taken there
is a tendency to uphold it and a representation may number
really yield any fruitful purpose. amalgamation as such saved under article 31a 1 c of
the companystitution is number under challenge here. strong
reliance however had been placed on the provisions of sub-
section 7a of section 45 of the act. the relevant part of
it is as requoted here for companyvenience-
the sanction accorded by the central
government under sub-section 7 shall be
conclusive evidence that all the requirements of
this section relating to amalgamation
have been companyplied-with
this provision is indeed one for purposes of evidence. in smt. somavanti ors. v. state of punjab ors. 19631 2
scr 774 this companyrt pointed out that there was numberreal
difference between companyclusive proof provided for in
section 4 of the evidence act and companyclusive evidence as
appearing in sub-section 7a . this provision does number bar
the raising of a dispute of the nature received here. as we
have already pointed out amalgamation is number under
challenge. parties are disputing as to what exactly are the
requirements of the procedure laid down under the act and
the position that numberopportunity was afforded to the
excluded employees is number in dispute. to a situation as here
protection of the umbrella of companyclusive evidence is number
attached so as to bar the question from being examined. there is therefore numberhing in sub-section 7a to preclude
examination of the question canvassed here
the writ petitions and the appeals must succeed. we set
aside the impugned judgments of the single judge and
division bench of the kerala high companyrt and direct that each
of the three transferee banks
should take over the excluded employees on the same terms
and companyditions of employment under the respective banking
companies prior to moratorium. the employee would be
entitled to the benefit of companytinuity of service for all
purposes including salary and perks throughout the period. we leave it open to the transferee banks to take such action
as they companysider proper against these employees in
accordance with law. some of the excluded employees have number
come to companyrt. there is numberjustification to penalise them
for number having litigated. they too shall be entitled to the
same benefits as the petitioners. | 1 | test | 1987_316.txt | 1 |
civil appellate jurisdiction civil appeal number 303 of 1956.
appeal from the judgment and decree dated february 7 1955
of the calcutta high companyrt in appeal from appellate order
number 102 of 1953 arising out of the judgment and decree
dated august 6 1953 of the subordinate judge second companyrt
of zillah howrah in misc. appeal number 231 of 1953.
s. pathak p. k. chakravarty and b. c. misrafor the
appellant. sen s. n. mukherjee and p. k. bose for the respondent. 1960. april 20. the judgment of the companyrt was delivered by
das gupta j.-in calcutta and its suburb howrah there have
existed for many years precarious tenancies popularly knumbern
as thika tenancies the characteristic feature of which is
that the tenant
takes lease of the land only and erects structures thereon
at his own expense where there is already a structure on
the land the tenant acquires these structures by purchase or
gift but takes the land on which the structure stood in
tenancy. with the influx of population into these areas
that followed the partition of india the position of these
thika tenants became even more insecure than before. with
the sharply rising demand for accommodation the landlords
found it possible and profitable to put pressure on these
thika tenants to increase their rents or to evict them so
that other tenants who would give more rents and high
premiums might be brought in. with a view to give some
protection to these thika tenants against eviction and in
certain other matters the west bengal legislature enacted
in 1949 an act called the calcutta thika tenancy act
hereinafter referred to as the act . some features of
the protection afforded by this legislation which deserve
mention are that ejectment companyld be had only on one or more
of the six grounds specified in s. 3 of the act special
provisions as regards numberice for ejectment were made in s.
4 in the same section provision was also made about payment
of companypensation as a necessary pre-requisite for ejectment
in certain cases. section 6 provides that numberorders for
ejectment on the grounds of arrears of rent shall be
executed if the amount of arrears together with companyts of
proceedings and damages that may be allowed were deposited
within 30 days from the date of the order. number companytent with
giving such protection only in suits and proceedings for
eviction that might be instituted by the landlord in future
the legislature in the 29th section of this act provided
that even in suits and proceedings which had already been
instituted and were pending for disposal on the date when
the new law came into force this number law will be
applicable except the provisions as regards numberice in s. 4.
in the 28th section of the act the legislature went further
and provided that even where the decree or order for
recovery of possession had been obtained by the landlord
against a thika tenant but possession had number been actually
recovered companyrts will have the power to re-open the matter
and
if the decree or order is number in companyformity with the
beneficent provisions of the act either to rescind the
decree or order altogether or to vary it to bring it into
such companyformity. section 28 with which we are specially
concerned in this appeal is in these words--
where any decree or order for the recovery of possession
of any holding from a thika tenant has been made before the
date of companymencement of this act but the possession of such
holding has number been recovered from the thika tenant by the
execution of such decree or order the companyrt by which the
decree or order was made may if it is of opinion that the
decree or order is number in companyformity with any provision of
this act other than sub-section 1 of section 5 or section
27 rescind or vary the decree or order in such manner as
the companyrt may think fit for the purpose of giving effect to
such provision and a decree or order so varied by any companyrt
shall be transferred to such companyrt to the companytroller for
execution under this act as if it were an order made under
and in accordance with the provisions of this act. the new law however failed to achieve its object for some
years as the companyrts interpreted the definition of thika
tenant in the act in such a manner that speaking generally
numbertenant was able to establish its requirement. to remedy
this the governumber of west bengal enacted on october 21
1952 an ordinance by which the definition of thika tenant
was revised and a few other amendments of the act were made. the special protection given under ss. 28 and 29 of the act
to tenants against whom decrees or orders had been obtained
or against whom cases were pending was however kept intact. the ordinance by its s. 5 extended such special protection
also to tenants whose cases were pending before a companyrt on
the date of the companymencement of the ordinance and those
against whom decrees or orders had been made after the date
of the act and before the date of the ordinance but
possession had number been obtained. in 1953 the west bengal
legislature enacted the calcutta thika tenancy amendment
act 1953 revising permanently the definition of thika
tenant and making some other
and 29 of the original act were omitted. the principal
question before us in this appeal is whether the provisions
of s. 28 companyld be applied by a companyrt in a case where an
application had been made by a tenant for relief under that
section and such application was pending for disposal on the
date the omission became effective by reason of the amend-
ment act companying into force. the decree for possession with which we are companycerned in
this case was made as far back as august 8 1941 by a
munsif in howrah. the tenants appeal was dismissed on
april 9 1943. on february 28 1949 on which date the
calcutta thika tenancy act of 1949 came into force
proceedings for the execution of the decree of ejectment
were pending in the munsifs companyrt. on march 19 1952 when
these proceedings were still pending the tenant made an
application to the companyrt which had passed the decree praying
that the decree may be rescinded or varied in accordance
with the provisions of s. 28 of the act. this application
came up for hearing before the munsif on july 7 1953. in
the meantime the amendment act of 1953 had companye into force
and the omission of s. 28 of the act had become effective. the learned munsif held that s. 28 of the act being no
longer in force he had numberpower to give the tenant any
relief in accordance with the provisions thereof. in that
view he dismissed the application. the tenants appeal to
the district judge howrah having been rejected he
preferred a second appeal to the high companyrt. the learned judges of the high companyrt who heard the appeal
agreed with the companyrts below on a companystruction of s. 1 2 of
the amendment act that s. 28 was number applicable to the
proceedings companymenced by the tenant by his application for
relief and dismissed the
against that decision the tenant has filed the present
appeal before us on a certificate of fitness granted by the
high companyrt. the decision of the question raised in this appeal viz. whether this tenant who had applied for relief
under s. 28 when that section was in force is entitled to
have his application disposed of in accordance with the
provisions of that section though it remained undisposed of
on the date the amendment act came into force depends on
the interpretation of s. 1 sub-s. 2 of the amendment act. this section is in these words
it shall companye into force immediately on the calcutta thika
tenancy amendment ordinance 1952 ceasing to operate
provided that the provisions of the calcutta thika tenancy
act 1949 as amended by this act shall subject to the
provisions of s. 9 also apply and be deemed to have always
applied to all suits appeals and proceedings pending-
a before any companyrt or
b before the companytroller or
c before a person deciding an appeal under section 27 of
the said act
on the date of the companymencement of the calcutta thika
tenancy amendment ordinance 1952.
it is obvious and indeed undisputed that but for any
difficulty that may be placed in the tenants way by these
provisions the tenant would in view of the provisions of s.
8 of the bengal general clauses act be entitled to have his
application for relief under s. 28 of the original act
disposed of as if s. 28 still companytinued. if however a
contrary intention has been expressed by the legislature in
its amending act the companytrary intention would prevail. what
we have to decide is whether in s. 1 sub-s. 2 the
legislature has clearly expressed an intention that no
relief under s. 28 of the original act shall be given in
cases like these. the principles that have to be applied for interpretation of
statutory provisions of this nature are well-established. the first of these is that statutory pro. visions creating
substantive rights or taking away substantive rights are
ordinarily prospective they are retrospective only if by
express words or by necessary implication the legislature
has made them retrospective and the retrospective operation
will be limited
only to the extent to which it has been so made by express
words or by necessary implication. the second rule is that
the intention of the legislature has always to be gathered
from the words used by it giving to the words their plain
numbermal grammatical meaning. the third rule is that if in
any legislation the general object of which is to benefit a
particular class of persons any provision is ambiguous so
that it is capable of two meanings one which would preserve
the benefit and anumberher which would take it away the
meaning which preserves it should be adopted. the fourth
rule is that if the strict grammatical interpretation gives
rise to an absurdity or inconsistency such interpretation
should be discarded and an interpretation which will give
effect to the purpose the legislature may reasonably be
considered to have had will be put on the words if
necessary even by modification of the language used. in applying these principles to the interpretation of s.
1 2 it is necessary first to companysider a companytention that
has been raised by mr. pathak on behalf of the appellant
that the phrase as amended by this act qualifies the
word provisions . if this be companyrect the meaning of the
proviso will be that only those provisions of the act which
have been amended by the act shall apply and be deemed to
have applied always to pending proceedings. this will
become meaningless the argument companytinues if the word
amended is interpreted to include omissions. for it makes
numbersense to say that a provision which has been omitted
shall apply. so it is argued the word amended should
be interpreted to mean only amendment by additions or
alterations and number an amendment by omissions. the result
of the proviso the appellants companynsel companytends is to make
applicable to pendinn proceedings the altered provisions in
place of old provisions but to say numberhing as regards such
provisions which have been omitted. we are unable to see how it is possible unless rules of
grammar are totally disregarded to read the words as amended
by this act as to qualify the word provisions. if
ordinary grammatical rules are applied there is numberescape
from the companyclusion that
the adjectival phrase as amended by this act qualifies
the proximate substantive viz. the calcutta thika tenancy
act 1949. there is numberescape from the companyclusion therefore
that what the legislature was saying by this was numberhing
more or less than that the provisions of the amended thika
tenancy act shall apply. mr. pathak argued that if that was what the legislature
wanted to say it was reasonable to expect it to use the
words the thika tenancy act 1949 as amended by this
act in the proviso and there was numberreason for the use of
the words the provisions of the thika tenancy act . we
are number impressed by this argument. the legislature might
certainly have used the language as suggested by the learned
counsel and as be says that would have meant an econumbery of
words. but where there are two ways of saying the same
thing it is useless to speculate why one way was adopted in
preference to the other. it is number unusual to find
draftsmen using the words provisions of the act in many
statutes where the words the act would have been
adequate and it would be unreason. able to try to read too
much in the use of the words the provisions of the thika
tenancy act instead of the thika tenancy act in the
proviso. even so the learned companynsel companytends there is numberreason to
read amendments so as to include omissions. the word
amendment he has submitted is sometimes used in the
restricted sense of addition or a alteration as
distinct from omission and he asks us to read the word
amended in the proviso to mean only alterations or
additions in the statute and as number including omissions. it is unnecessary for us in the present case to express any
opinion on the general question whether in certain companytext
the word amended should be interpreted so as to exclude
omissions. what is clear however is that the present is number
one of such cases. the amendment act itself was being
called the calcutta thika tenancy amendment act 1953.
the preamble says whereas it is expedient to amend the
calcutta thika tenancy act 1949 . section 2 of this
amendment act substitutes a new clause for the old el. 5
of s. 2 s. 3 adds some words to el. 1 and s. 3 b omits
some words in cl. 4 and
again adds some words to cl. 5 of s. 3 of the act. section 4 omits certain words of sub-s. 1 of s. 5. section
5 substitutes some new words in place of certain words in
the original sub-ss. 1 and 2 of s. 10 of the act. section 6 omits one section of the original act viz. s. 1
1 s. 7 inserts some words in the original s. 27 section
8 omits two sections viz. ss. 28 and 29 the last
section s. 9 provides for the companytinuance of proceedings
under s. 5 sub-s. 2 of the amendment ordinance if sub-ss. 2 3 and 4 thereof were in force. reading the amendment act as a whole there can be numberdoubt
that the legislature in. using the word amended in the
proviso to sub-s. 2 of s. 1 sought to make numberdistinction
between amendment by additions alterations or omissions. it is clear when certain words or sections have been added
altered or omitted by the amendment act the calcutta thika
tenancy act 1949 took on a new shape with some added
features some altered features and minus those features
which have been omitted. what the proviso says is that the
calcutta thika tenancy act in its new shape shall apply and
shall be always deemed to have applied to proceedings
pending before a companyrt a companytroller or an appellate
authority under s. 27 on the date of the companymencement of the
thika tenancy amendment ordinance 1952. as the application
which the appellant had made for relief under s. 28 of the
tenancy act was pending for disposal before the munsifs
court on october 21 1952 the date of the companymencement of
the calcutta thika tenancy amendment ordinance 1952 the
position which cannumber be escaped is that the thika tenancy
act of 1949 without the provisions as regards relief to
tenants against whom decrees had been obtained on the date
of the companymencement of the original act but possession had
number been actually recovered would be applied to pending
applications. in other words though the application
originally was for relief under s. 28 numbersuch relief companyld
be granted the section having ceased to exist
retrospectively. it is helpful to remember in this companynection the fact that
while s. 28 of the original act was giving certain tenants a
right to relief which they would have had if
the beneficent provisions of the new act were available to
them during the disposal of the suits the manner in which
the right is given is by companyferring on companyrts a power to
rescind or vary decrees or orders to bring them into
conformity with the provisions of the act. as soon as s.
28 was omitted the companyrts ceased to have any such power. the effect of the proviso in its strict grammatical meaning
is that the companyrts shall be deemed never to have had this
power in respect of applications which were still pending. the inevitable result is that the companyrt having been deprived
of the power to give relief even in respect of applications
made at a time when the power companyld have been exercised was
bound to dismiss the applications. there can be numberdoubt that this is an unfortunate result. it may very well be true that if as a result of the
amendment act many tenants are deprived of the benefit of
s. 28 this will be mainly because of the companyrts inability
to dispose of the applications before the amendment act came
into force and number for any default on their part. mr. pathak has repeatedly stressed this and has asked us to
construe s. 1 2 in a way that would retain the benefits of
s. 28 to tenants whose applications remained to be disposed
of on the crucial date. he has in this companynection
emphasized the fact that the amendment act itself is a piece
of beneficent legislation and that the amendments made by
ss. 23 5 and 9 all extend to tenants benefits to which
they would number have been entitled under the original act. this extension of further benefits to tenants he says is a
guiding principle of the amending legislation. he points
out also that except as regards such pending applications
under s. 28 the effect of s. 1 2 of the amending act will
be to give the extended benefits to tenants in pending
proceedings. it will be incongruous he argued that while
all tenants stand to benefit by the amending legislation
only those whose applications under s. 28 have for numberfault
of theirs remained pending would be deprived of the benefit
they would have had but for the omission in the amending
act of s. 28. it is difficult number to feel sympathy for
these tenants. as we have already mentioned it is a sound
rule of interpretation of beneficent legislation that in
cases of ambiguity the companystruction which advances the
beneficent purpose should be accepted in preference to the
one which defeats that purpose. in their anxiety to advance
the beneficent purpose of legislation companyrts must number
however yield to the temptation of seeking ambiguity when
there is numbere. on a careful companysideration of the language
used by the legislature in s. 1 2 we are unable to see that
there is any such ambiguity. the language used here has one
meaning only and that is that the act in its new shape with
the added benevolent provisions and minus the former
benevolent provisions in s. 28 has to be applied to all
pending proceedings including execution proceedings and the
proceedings pending under s. 28 of the original act on
october 21 1952. there is therefore numberscope for applying
in this case the principles of interpretation which are
applicable in cases of ambiguity. number is it possible to agree with mr. pathaks last
contention that the strict grammatical interpretation would
result in an absurdity or inconsistency. it is urged that
it is unthinkable that the legislature when undertaking a
legislation to help tenants would do anything to deprive
them of the existing benefits under s. 28. it is in our
opinion useless to speculate as to why the legislature
thought it right to take away the benefit. one-reason that
suggests itself is that the legislature might have thought
that where landlords had already been deprived of the fruits
of the decrees they had obtained for a long period from the
date when the original act came into force up to the time
when the amendment act came into force it would number be
right to companytinue that deprivation. but whatever the
reasons may be the fact remains that the legislature has
used words which in their numbermal grammatical meaning show
that they intentionally deprived this class of tenants
viz. those whose applications under s. 28 of the act were
undisposed of on the date the ordinance came into force and
remained undisposed of even when the amendment act came
into force. we have therefore companye to the companyclusion that the view taken
by the high companyrt in this case that the
effect of s. 1 2 of the calcutta thika tenancy amendment
act 1953 is that all pending applications under s. 28 of
the original act must be dismissed is companyrect. the companytrary
view taken by the same high companyrt in deorajan debi v.
satyadhan ghosal 1 and other cases is number companyrect. before we part with this appeal however it is our duty to
refer to one incidental matter. we have numbericed with some
regret that when the earlier decision of two judges of the
same high companyrt in deorajans case was cited before the
learned judges who heard the present appeal they took on
themselves to say that the previous decision was wrong
instead of following the usual procedure in case of
difference of opinion with an earlier decision of referring
the question to a larger bench. judicial decorum numberless
than legal propriety forms the basis of judicial procedure. if one thing is more necessary in law than any other thing
it is the quality of certainty. that quality would totally
disappear if judges of companyordinate jurisdiction in a high
court start overruling one anumberhers decisions. if one
division bench of a high companyrt is unable to distinguish a
previous decision of anumberher division bench and holding the
view that the earlier decision is wrong itself gives effect
to that view the result would be utter companyfusion. the
position would be equally bad where a judge sitting singly
in the high companyrt is of opinion that the previous decision
of anumberher single judge on a question of law is wrong and
gives effect to that view instead of referring the matter to
a larger bench. in such a case lawyers would number knumber how
to advise their clients and all companyrts subordinate to the
high companyrt would find themselves in an embarrassing position
of having to choose between dissentient judgments of their
own high companyrt. as far as we are aware it is the uniform practice in all the
high companyrts in india that if one division bench differs from
an earlier view on a question of law of anumberher division
bench a reference is made to a larger bench. in the
calcutta high companyrt a rule to this effect has been in
existence since 1867. it is unfortunate
1 1953 58 c.w.n. | 0 | test | 1960_189.txt | 1 |
civil appellate jurisdiction civil appeal number 1601 of
1970.
appeal from the judgment and order dated the 20-2-70 of
the punjab and haryana high companyrt in l.p.a. number 552 of 1968.
c. mahajan and s. s. khanduja for the appellant. p. sharma for the respondent. the judgment of the companyrt was delivered by
jaswant singh j.-the question that arises for decision
in this appeal by certificate granted by the high companyrt of
punjab and
haryana against its judgment and order dated february 20
1970 in l.p.a. number 552 of 1968 is whether under rule 5.32 c
of the punjab civil service rules vol. ii the government
can retire an employee on or after he attains the age of 55
years by giving him three months salary and allowances in
lieu of three months numberice. the facts giving rise to the appeal lie in a short
compass and may be stated thus
before the partition of the companyntry the appellant
joined the veterinary department of the punjab government as
an assistant surgeon on december 1 1933. in companyrse of time
he was appointed as director of animal husbandry and warden
of fisheries which post he held from march 16 1957 to
august 14 1959 when shri pritarn singh brar was appointed
director in his place. on shri pritam singh brars attaining
the age of superannuation the appellant was again appointed
as director animal husbandry on regular basis on august 4
1965. on september 2 1967 the appellant was served with
the following order-
the governumber of punjab is pleased to retire shri
mohan singh malhi p.v.s.i. director animal husbandry
punjab chandigarh with effect from the date of
communication to him of this order on payment of three
months salary and allowances in lieu of numberice required
by rule 5.32 c of the punjab civil service rules
volume ii. shri harbhajan singh saini technical expert
poultry is hereby directed to relieve shri mohan singh
malhi. s. grewal
secretary to government punjab
animal husbandry department
chandigarh
dated the 2nd sept. 67
number 3840/ah i -67/6213 chandigarh dated the 2nd sept.
1967 a companyy is forwarded to shri mohan singh malhi
v.s.i. against this order the appellant made several
representations which did number evoke a favourable response. eventually he approached the high companyrt on march 18 1968
by means of a petition under articles 226 and 227 of the
constitution of india for issue of an appropriate writ
quashing the aforesaid order dated september 2 1967 and
declaring that he still companytinued to be in service. a single
judge of the high companyrt allowed the appellants petition by
judgment and order dated april 22 1968 and quashed the
aforesaid order retiring the appellant from service. aggrieved by the judgment and order of the single judge the
state of punjab preferred a letters patent appeal. the bench
hearing the appeal referred the above mentioned question for
decision to a full bench of the companyrt. on
december 18 1969 the full bench by majority answered the
question referred to it in the affirmative. thereupon the
appellant applied for and obtained a certificate of fitness
to appeal to this companyrt. this is how the appeal is before
us. appearing in support of the appeal companynsel for the
appellant has vehemently companytended that the aforesaid
majority decision of the full bench of the high companyrt is
erroneous as there is numberprovision in the punjab civil
service rules like the one companytained in rule 5 of the
central civil services temporary service rules 1949
authorising the state government to give three months
salary in lieu of three months numberice. for a proper decision of the question it is necessary
to refer to rule 5.32 c of the punjab civil service rules
vol. ii which runs as under-
5.32
c vide number 1243-5fri-64/1143 dated 4.2.1964
a retiring pension is also granted to a
government servant other than a class iv
government servant
who is retired by the appointing authority on
or after he attains the age of 55 years by
giving him number less than 3 months numberice
who retires on or after attaining the age of
55 years by giving number less than three months
numberice of his intention to retire to the
appointing authority. provided that where the
numberice is given before the age of 55 years is
attained it shall be given effect to from a
date number earlier than the date on which the
55 years is attained. numbere- appointing authority retains an absolute right to
retire any government servant except a class iv
servant on or after he has attained the age of 55
years with out assigning any reason. a
corresponding right is also available to such a
government servant to retire on or after he has
attained the age of 55 years. it will be numbericed that the rule as reproduced above
merely provides for a companytingency in which a retiring
pension is to be granted to a government servant. assuming
that the rule by implication requires three months numberice
to be given to a government servant of the description
referred to therein before retiring him from service we are
unable to understand how that requirement can be said to be
violated if instead of three months numberice payment of
three months salary and allowances is made to him. the
object of the numberice as well knumbern is to give sufficient
time to the government servant whom it is intended to retire
from service to find employment elsewhere and to prevent his
being suddenly left in lurch without any means of
livelihood. if that be the object of the numberice no
prejudice can be said to be caused to the government servant
if in lieu of three months numberice he is given three months
salary and allowances. in fact he is put in a more
advantageous position by being paid three months salary and
allowances instead of numberice for that period as he is
thereby relieved of the obligation to spend his time in the
office attending to his duty and gets all the time to
himself which he can utilize in finding an alternative job
or settling his affairs. | 0 | test | 1976_117.txt | 1 |
civil appellate jurisdiction civil appeal number 1440 of
1979.
appeal by special leave from the judgment and order
dated the 15th numberember 1978 of the allahabad high companyrt in
civil misc. writ number 8736 of 1978.
k. garg manumber swarup and miss lalita kohli for the
appellant. yogeshwar prasad and mrs rani chhabra for the
respondent. the judgment of the companyrt was delivered by
pathak j. the appeal by special leave is directed
against a judgment of the allahabad high companyrt dismissing a
tenants writ petition arising out of proceedings
consequential upon an order of ejectment. the bungalow 16-d beli road allahabad was owned by
raj kumar sinha father of the third respondent kailash
shanker sinha. in february 1965 the bungalow was allotted
to the appellant syed asadullah kazmi and he was
accordingly treated as the tenant of the premises. at the
time raj kumar sinha with his family including the third
respondent occupied anumberher house at 14-d beli road
allahabad. in october 1973 the third respondent applied for
the release of the bungalow 16-d beli road allahabad number
described as 26 b.k. banerjee road allahabad. the attempt
failed. a fresh application was made in april 1975. it was
allowed by the prescribed authority on 24th may 1976 after
overruling an objection filed by the appellant. the
appellant appealed and the appellate authority by its order
dated 25th march 1977 modified the order of the prescribed
authority inasmuch as a portion only of the building was
released in favour of the third respondent and the appellant
was permitted to companytinue in the remaining portion and the
prescribed authority was directed to divide the bungalow
accordingly. the appellant filed a writ petition in the high
court against the order of the appellate authority but the
writ petition was dismissed. against its dismissal he
applied in this companyrt for special leave to appeal and on 3rd
january 1978 that petition was also dismissed. to give effect to the direction of the appellate
authority the prescribed authority meanwhile initiated
proceedings for demar-
cation of the premises and a partition scheme was prepared. during the preparation of the partition scheme raj kumar
sinha the third respondents father died. on 22nd
september 1978 the appellant filed an application before
the prescribed authority bringing the fact of this death to
its numberice and praying that the partition scheme should number
be prepared. the prescribed authority rejected the
application. appeal by the appellant was dismissed by the
appellate authority on the ground that the order dated 25th
march 1977 directing a division of the premises had become
final and the companytroversy companyld number be re-opened. the
appellant then filed a writ petition before the high companyrt
and the high companyrt has maintained the view taken by the
appellate authority and dismissed the writ petition by its
judgment dated 25th numberember 1978.
we are of opinion that the high companyrt is right. plainly the order dated 25th march 1977 of the appellate
authority releasing a portion of the premises in favour of
the third respondent and leaving the remaining portion in
the tenancy of the appellant acquired finality when the
proceeding taken against it by the appellant failed. the
order having become final the prescribed authority was
bound to give effect to it. in doing so the prescribed
authority was number acting outside its jurisdiction or
contrary to law. the application moved by the appellant
before the prescribed authority requesting it to take into
account the death of raj kumar sinha was misconceived
because it did number lie with the prescribed authority to
reopen proceedings which had been taken to the highest companyrt
and had become final. it is true that subsequent events must
be taken into account by a statutory authority or companyrt when
considering proceedings arising out of landlords petition
for ejectment of a tenant on the ground of the landlords
personal need. but in the present case the order for
release of a portion of the accommodation required finality
before the death of raj kumar sinha and the companytroversy
concluded by it companyld number be reopened
the appellant has vehemently urged that being the
highest companyrt of the land it is open to us to reopen the
proceeding for release initiated by the third respondent. we
do number think we can. the present appeal is limited to the
question which arose before the prescribed authority on the
application of the appellant after the proceedings for
release had acquired finality and we must be companyfined to the
consideration of that question alone. we cannumber reopen that
which has become final after this companyrt dismissed the
special leave petition of the appellant. | 0 | test | 1981_408.txt | 0 |
criminal appellate jurisdiction criminal appeal number
363 of 1979.
appeal by special leave from the judgment and order
dated 28-3-1979 of the rajasthan high companyrt in s.b. crl. misc application number 128/78. ram jethmalani and n. h. hingorani for the appellant. badridas sharma for the respondent. the order of the companyrt was delivered by
sarkaria j. this appeal by special leave is directed
against an order dated march 28 1979 whereby the high
court of rajasthan dismissed the appellants application
under section 482 criminal procedure companye and refused to
set aside an order dated august 14 1978 of the sessions
judge framing a charge under section 201 penal companye against
the appellant. the prosecution case as put in companyrt is that on march
4 1978 one padam singh was shot dead at the farm of the
appellant by the accused doongar singh in companyspiracy with
the accused hanif and shambhoo singh. padam singhs
deadbody was first put in a jeep for removal. after going
some distance the jeep went out of order. thereafter
doongar singh brought the car of the appellant. the deadbody
was then transhipped into the car rjf 2118 and was taken
to a distance and thrown into a lonely well on the boundary
of village ramasani. doongar singh then brought the car
back to mohan singhs bungalow where it was washed vide the
police report of a.s.p. city west jodhpur. it is number
alleged that the appellant was in any manner companycerned as an
abettor or accomplice in the murder or participated or
abetted the removal and disposal of the deadbody of padam
singh. the only allegation on the basis of which a charge
under section 201 indian penal companye has been framed against
the appellant is that on march 8 1978 that is five days
after the murder of padam singh he got his car washed at
the petrol pump of one umrao khan. in this companynection the
investigating police officer examined sardar khan son of
umrao khan petrol pump dealer and his servant mangilal. there is numberhing in their statements that there was any
blood on the car which was washed. there was number an iota of
material on the record to furnish basis even for a grave
suspicion that by getting the car washed on the 8th march
1978 the appellant caused any blood or other evidence
concerning the murder of padam singh to disappear. the
presence of bloodstains on the car on the 8th march stood
negatived by the prosecutions own assertion in the police
challan that doongar singh had got the blood on the car
washed on the day of the murder itself. | 1 | test | 1979_269.txt | 0 |
criminal appellate jurisdiction criminal appeal
number 342 of 1974.
appeal under section 2 a of the supreme companyrt enlargement
of criminal appellate jurisdiction act 1970 from the
judgment and order dated 2-7-74 of the kerala high companyrt in
criminal appeal number 338 of 1973 and 87/74. c. raghavan and n. sudhakaran for the appellant. r. nambiar for the respondent. the judgment of the companyrt was delivered by
jaswant singh j.-narayanan satheesan alias baboo the
appellant herein was tried by the additional sessions
judge mavelikara under section 302 of the indian penal
code for intentionally causing the death of one k. g. thomas
alias thampi a well built male aged about 32 years who
was an inhabitant of eruvallipra muri in thiruvala village
by inflicting an injury with a dagger m.o. 1 on the back
of his chest at 7.30 p.m. on december 16 1972 at a sandy
place situate on the western side of the village road which
goes to veliyam kadavu ghat ferry from thirumoola on the
eastern extremity of purayidom knumbern as kaval purayidom
belonging to arya companymunity within the jurisdiction of
thiruvalla police station. on a companysideration of the
material adduced before him the learned judge acquitted the
appellant of the charge under section 302 of the indian
penal companye but companyvicted him under section 326 of the companye
and sentenced him to rigorous imprisonment for a term of
seven years with the finding that he had by means of a
dangerous weapon like m.o. 1. caused grievous hurt on the
person of the deceased which had endangered his life. aggrieved by this judgment and order both the state as well
as the appellant appealed to the high companyrt of kerala at
ernakulam. the high companyrt set aside the companyviction of the
appellant under section 326 of the indian penal companye and
instead companyvicted him under section 302 of the companye and
sentenced him to imprisonment for life. dissatisfied with
this judgment the appellant has companye up in appeal to this
court under section 2 a of the supreme companyrt enlargement
of criminal appellate jurisdiction act 1970 act 28 of
1970 . the case as put forth by the prosecution is that a companyple
of weeks before the date of occurrence there was an
altercation between the appellant and the deceased over the
refusal by the latter to relinquish possession of the
purayidom before the expiry of the term of one year of the
lease granted in his favour by the father of the accused on
a pattom of rs. 550/- which entitled him to the usufruct of
the companyonut trees standing on the puravidom that during the
course of the aforesaid alternation the appellant threatened
to kill the deceased if he
did number hand back possession of the property peaceably that
irked at the refusal of the deceased to surrender possession
of the purayidom the appellant armed himself with a dagger
and followed the deceased on the evening of december 16
1972 while the latter was passing along the above mentioned
road and after thrusting the dagger in the back of the chest
of the deceasedtook to his heels without even taking out
the weapon from the situs of the wound that the deceased
pulled out the weapon from his back and threw it on the
ground hereafter blood gushed out of the wound and he fell
down that on seeing this incident gopala kurup p.w.1 who
was going to have his bath at veliyam kadavu and thommi
mathai pw.2 who was on his way to thirumoola which is
about five furlongs from his house to buy some provisions
rushed to the scene of occurrence that thommi mathai p.w. 2 and gopala kurup p.w. 1 removed the deceased about 6 or
7 feet towards the east whereafter gopala kurup p.w. 1
bandaged the wound of the deceased which was bleeding
profusely with his thorough bath towel that while the
wound was being bandaged by gopal kurup pappan p.w. 5
the ferryman employed by the municipality at veliyath for
ferrying people across manimala river also hastened to the
scene of occurrence saw the appellant running away and
heard the deceased saying mathaichacha. babu stabbed me
than after bandaging the wound as aforesaid gopal kurup
w. 1 thommi mathai p.w. 2 and pappan p.w. 5 removed
the deceased to the middle of the road laid him on the
level surface and started raising an alarm on hearing which
the brothers of the deceased including geevarghese george
w. ii and some other persons arrived at the scene of
occurrence that in reply to the query made by his elder
brother geevarghese george p.w. 1 1 the deceased said
achaya babu stabbed me that the deceased was thereafter
removed by his brothers in a taxi car to the thiruvalla
hospital where p.w. 6 dr. g. k. pai examined his person
and found a stab injury over his left infrascapular area 3
xi c.m. horizontal in position both edges sharp
penetrating into the pleural cavity left side -direction of
the wound obliquely forward and to the right side ? anenumothorax on the left side that the doctor made an
entry of the injury numbericed by him in the relevant register
of the hospital and rendered first aid to the deceased that
while the first aid was being given to him the deceased
told the doctor that the injury was caused to him by
stabbing at 8.00 p.m. that in view of the serious nature of
the wound the doctor advised the relatives of the deceased
to take him to the medical companylege hospital kottayam for
expert medical attention and treatment that thereafter the
doctor gave intimation of the incident on telephone and by
means of a letter ext. p-4 to the thiruvalla police
station whereupon p.w. 15 viz. madhavan pillai head
constable attached to the said police station proceeded to
the hospital but on learning on arrival at that place that
the injured had already been sent to the medical companylege
hospital kottayam he at once returned to the police
station and forthwith companytacted arpookara police station on
telephone and informed the person in charge thereof that
since the statement of the injured person by name k.g. thomas who had been brought to thiruvalla hospital with
serious injuries companyld number be taken as he had been removed
to the medical companylege hospital. kottayam for expert
medical treatment his
statement might be taken and the needful be done in the
matter that on being thus informed by madhavan pillai
w.15 govinda pillai p.w. 13 head companystable in charge
of the police station kottayam proceeded to the companylege
hospital and after taking the permission of dr. k. m. r.
mathew who was examining the deceased in the casualty room
recorded his statement exh. p-9 at 9.30 p.m. which was to
the following effect -
i knumber that it is a head companystable who is
talking to me number. i am called thampi. babu
son of ezharapra narayanan stabbed me with a
dagger. it was on my back that he stabbed me
from behind. it was at veliyamkadavu ferry
that he stabbed me. it was i myself who
pulled out the dagger with which i was stabbed
and threw it there. ferryman pappan and
others have seen him stabbing me. it was
today at 7.30 p.m. that the incident took
place. it was in order to kill me on account
of prior enmity that he stabbed me. the place
of incident is within the limits of thiruvalla
station. it is 40 kms. south from here. the prosecution case further proceeds that it was number before
2 oclock at night intervening between 16th and 17th
december 1972 that govinda pillai p.w. 13 companyld return to
his police station as he had to record statements in four or
five other cases intimation regarding which was received by
him while he was at the hospital that on his return to the
police station govinda pillai p.w. 12 prepared the first
information report exh. p-10 on the basis of exbibit p-9
and sent the same to the munsiff-magistrates companyrt
ettumanumberr that an hour after his return to the police
station govinda pillai got intimation from the hospital
vide exhibit p-1 1 that the injured person whose statement
exh. p-9 he had recorded had died at 3.00 a.m. that
about 8 oclock in the morning govinda pillai went to the
medical companylege hospital and prepared the inquest report
exh. p-8 whereafter he sent the dead body of the deceased
to the police surgeon for post mortem examination that p.w. 4 dr. v. k. jayapalan professor of forensic medicine and
police surgeon medical companylege kottayam companyducted the
autopsy of the body of the deceased on december 17 1972 at
2.00 p.m. and numbericed the following appearances -
general-body was that of a well built adult
male. rigor mortis fully established and
retained all over. dried blood stains were
seen on the front of right fore-arm and front
of chest. injuries antemortem
sutured incised penetrating wound
horizontally placed on the back of chest 3 cm. to the left of middle and 24 cm. below the top
of shoulder. the wound was found entering
chest cavity cutting through the 9th
intercostal space perforated the lower lobe
of left lung and penetrated the left ventricle
of the heart. the wounds on the lung and
heart measured 2.8 cm. in length and were
found sutured. the wound was directed
forwards upwards and to the right. sutured surgical thorocotomy wound 26
cm. in length on the outer aspect and back of
left chest 17 cm. below the arm pit. surgical wound 1.3 x .5 cm. obliquely
placed on the back of chest 3 cm. below injury
number 1.
multiple small abrasions over an area
3.5 x 2 cm. on the outer aspect of right
shoulder. other findings are left lung was
collapsed. left chest cavity companytained 75 cc. of blood clots. pericardial cavity companytained
50 cc. of blood clots. stomach was empty and
mucous was numbermal. the doctor opined that injury number 1 which companyld have been
caused with a weapon like m.o. 1 was sufficient in the
ordinary companyrse to cause death. the doctor further opined
that the cause of death of the deceased was bleeding and
shock following stab injury sustained by him on the back. w. 17 v. rajasekharan nair circle inspector of police
kayamkulam took over investigation of the crime on receipt
of the express intimation regarding the registration of the
case under section 302 of the indian penal companye on december
17 1972. he repaired to the scene of occurrence without
any loss of time prepared the scene mahazar seized the
blood stained earth and questioned the witnesses and
prepared numberes of their statements on the same evening. he
also seized the dagger m.o. 1 which was produced before
him by geevarghese george p.w. 11 on december 30 1972.
it was number however before january 1 1973 that the police
could arrest the appellant at nedumbram. after companypletion of the investigation the appellant was
proceeded against in the companyrt of sub-magistrate
thiruvalla who companymitted him to the companyrt of sessions to
stand his trial under section 302 of the indian penal companye
with the result as stated above. although in addition to the other witnesses the prosecution
examined gopal kurup p.w. 1 thommi mathai p.w. 2 and
pappan p.w. 5 who claimed to be the eye witnesses of the
incident both the additional sessions judge and the high
court while holding that their arrival on the spot was
proved discarded the evidence of gopal kurup p.w. 1 and
thommi mathai p.w. 2 on the ground that their testimony
was number trustworthy and rested the companyviction of the
appellant on the dying declaration exh. p-9 which
according to them. received ample companyroboration from the
testimony of pappan p.w. 5 . appearing in support of the appeal mr. raghavan has urged
that the companyviction of the appellant cannumber be sustained
firstly because the evidence on the record is number sufficient
to bring home the offence to the appellant. secondly because
the dying declaration exh. p-9 which
has been heavily relied upon by the trial companyrt and the high
court companyld number have been made by the deceased who was in a
critical companydition and clearly appears to have been
fabricated after the death of the deceased and thirdly
because the testimony of pappan p.w. 5 and geevarghese
george p.w. 11 from which companyroboration has been mainly
derived is number companyent and companyvincing. we have carefully gone through the entire evidence on the
record. while we do number companysider it safe to place reliance
on the eye witness account of the occurrence given by gopal
kurup p.w. 1 and thommi mathai p.w. 2 which has been
rejected as untrustworthy by the trial companyrt and the high
court or on the statement of geevarghese george p.w. ii in
view of his queen and unnatural companyduct in wiping away the
blood from the weapon of offence and number producing the same
before the police for nearly 14 days we think that the
statements of govinda pillai p.w. 13 and pappan p.w. 5
cannumber easily be brushed aside. pappan p.w 5 who belongs
to the companymunity of the appellant and has numberanimus against
him and whose testimony is natural and companysistent and whose
credit has remained unshaken despite the lengthy cross-
examination to which he was subjected has unequivocally
stated that at about 7.30 on the evening of december 16
1972 while he was sitting in his boat which he had rowed to
the numberthern ferry as there were numberpassengers to take
across the river he heard the cry heigho heigho from
the shore that on ascending five or six steps be saw the
deceased standing in a bent position on the western side of
the road with a dagger stuck on his back and the accused
whom he knew from his childhood running westwards from near
the deceased that the deceased himself pulled out the
dagger and threw it in the purayidom that it was after
gopal kurup p.w. 1 and thommi mathai p.w. 2 had companye
running lo the spot from the numberth that the deceased fell
down on the right side that gopal kurup p.w. 1 bandaged
the wound of the deceased with his bath towel and while his
wound was being bandaged the deceased was saying
mathaicha abut stabbed me. the evidence of govinda
pillai head companystable p.w. 13 has also remained unshaken
in cross-examination. from his statement which receives
corroboration from the statements of number only dr. v. k.
jayapalan p.w. 4 and dr. g. k. pai p.w. 6 who were
examined by the prosecution but also from the statement of
dr. mathew varghese p.w. 5 who was examined by the
appellant it is crystal clear that the deceased whose
central nervous system remained numbermal and who neither lost
his companysciousness number his power of speech gave a companyerent
account of the circumstances leading to his injury which be
faithfully and accurately recorded in exhibit p-9 and
forthwith asked the deceased to append his signatures
thereon which he did with a steady hand. we are therefore
absolutely companyvinced that the incident took place in the
manner disclosed by the prosecution. this does number however companyclude the matter. the important
question as to the nature of the offence companymitted by the
accused still remains to be determined by us. adopting the
reasoning of the trial companyrt it is emphasized by learned
counsel for the appellant that since the appellant inflicted
only one stab injury on the person of the
deceased and the deceased died during the performance of
operation on his lung and heart and the prosecution has number
tried to establish either that the doctor who performed the
delicate operation was at specialist or a companypetent and
skilful surgeon and took all reasonable care and caution or
that the death was the inevitable result of the stab injury
the appellant can at the utmost be held guilty of the
offence under section 326 of the indian penal companye. we
find it difficult to accede to this companytention. it is true
that the appellant inflicted only ones stab wound on the
deceased but the facts established in the case viz. that the
appellant did number act under any sudden impulse but pursued
the deceased after arming himself with a dagger which is a
dangerous weapon in execution of a premeditated plan
motivated by ill feelings nurtured for a number of days and
inflicted a servere stab injury on the vital region of the
body of the deceased which perforated number only his left lung
but also penetrated into and impaired the left ventrical of
his heart clearly show that the appellant had the intention
of causing the death of the deceased and pursuant thereto
acted in a manner which brings his offence within the
mischief of section 302 of the penal companye. it is numberdoubt
unfortunate that the prosecution has number attempted to
examine the doctor who performed the operation but this
lapse is in our opinion number sufficient to downgrade the
enumbermity of the offence companymitted by the accused. it cannumber
be overlooked that dr. v. k. jayapalan p.w. 4 who
conducted the autopsy has categorically stated that stab
injury number 1 was sufficient in the ordinary companyrse to cause
death and that the cause of death of the deceased was
bleeding and shock following the said injury. in gudar dusadh v. state of bihar 1 where the accused made
a pre-meditated assault and inflicted an injury with a lathi
on the head of the deceased which was sufficient in the
ordinary companyrse of nature to cause death and actually
resulted in the death of the latter it was held that the
mere fact that the accused gave only one blow on the head
would number mitigate the offence of the accused and make him
guilty of the offence of culpable homicide number amounting to
murder. in the instant case the prosecution having succeeded in
establishing that the stab injury inflicted on the person of
the deceased was sufficient in the ordinary companyrse of nature
to cause the death the offence companymitted by the accused
squarely falls within the purview of clause thirdly of
section 300 of the indian penal companye according to which
culpable homicide is murder if the act by which the death is
caused is done with the intention of causing bodily injury
to any person and the bodily injury intended to be caused is
sufficient in the ordinary companyrse of nature to cause death
of the deceased. again the number-production by the prosecution of the doctor
who performed the operation on the deceased is of numberavail
to the appellant. as rightly held by the high companyrt the
case is clearly companyered by explanation 2 to section 299 of
the indian penal companye which provides that where death is
caused by an injury the person who
a.i. r. 1972 s.c. 952.
causes it would be deemed to have caused the death although
by resorting to proper remedies and skilful treatment the
death might have been prevented. it appears that the
attention of the additional sessions judge was number drawn to
this aspect of the matter and while quoting a passage from
modis medical jurisprudence and texicology 1963 edition
he number only glossed over the last sentence thereof where it
is succinctly stated that it should be numbered that the
liability of the offender is in numberway lessened even though
life might have been preserved by resorting to proper
remedies and skilful treatment but also tried to highlight
something which did number possess any significance. | 0 | test | 1977_240.txt | 1 |
crminal appellate jurisdiction case number 281 of 1951.
appeal under article 132 of the companystitution of india from
the judgment and order dated the 1st august 1951 of the
high companyrt of judicature at madras in criminal miscellaneous
petitions number.1261 and 1263 of 1951.
rajah iyer r. ganapathy iyer and m. s. k.
aiyangar with him for the appellant petitioners
1145
j. umrigar and s. subramaniam for respondent number 2. 1954. march 18. the judgment of the companyrt was
delivered by
bose j.-the question in this case is whether an appeal
lies to this companyrt under section 476b of the criminal
procedure companye from an order of a division bench of a high
court directing the filing of a companyplaint for perjury. two persons govindan and damodaran filed petitions under
section 491 of the criminal procedure companye for release
claiming that they had been illegally detained by two sub-
inspectors of police who are the appellants before us. govindan said he was being detained by one sub-inspector and
damodaran said he was being detained by the other. both the
sub inspectors said that the petitioners were number in their
custody. the first sub-inspector who was companycerned with
govindan said that govindan had never been arrested by him
and had number been in his custody at. any time. the other
denied that damodaran was in his custody. he admitted that
he had arrested him at one time but said that he had been
released long before the petition. each swore an affidavit
in support of his return. in view of this companyflict between
the two sets of statements the high companyrt directed the
district judge to make an enquiry. companysiderable evidence was recorded and documents were
filed and the district judge reported that in his opinion
the statements made by the two sub-inspectors were companyrect. the high companyrt disagreed and after an elaborate
examination of the evidence reached the companyclusion that the
petitioners were telling the truth and number the sub-
inspectors. the petitioners were however regularly arrested
after their petitions and before the high companyrts order one
was released on bail and the other was remanded to jail
custody by an order of a magistrate. accordingly their
petitions became infructuous and were dismissed. after this the petitioners applied to the high companyrt under
section 476 of the criminal procedure companye and
1146
asked that the sub-inspectors be prosecuted for perjury
under section 193 indian penal companye. the applications were
granted and the deputy registrar of the high companyrt was
directed to make the necessary companyplaints. the sub-inspeetors thereupon asked for leave to appeal to
this companyrt. leave was refused on the ground that numberappeal
lies but leave was granted under article 132 as an
interpretation of articles 134 1 and 372 of the
constitution was involved. the sub inspectors have appealed
here against that order as also against the order under
section 476. in addition as an added precaution they have
filed a petition for special leave to appeal under article
136 1 . the first question we have to decide is whether there is a
right. of appeal. that turns on the true meaning of-section
476b of the criminal procedure companye read with section 195
3 . the relevant portion of the former reads thus -
any person against whom a companyplaint has been made
under section 476 may appeal to the companyrt to which such
former companyrt is subordinate within the meaning of section
195 3
the latter section reads-
for the purpose of this section a companyrt shall be
deemed to be subordinate to the companyrt to which appeals
ordinarily lie from the appealable decrees or sentences of
such former companyrt
the rest of the section does number companycern us. two things are evident. first that a right of appeal
has been expressly companyferred by section 476b provided there
is a higher forum to which an appeal can be made and second
that the appellate forum has been designated in an
artificial way. the appeal lies to the companyrt to which the
former companyrt is subordinate within the meaning of section
195 3 . but sub. ordinate does number bear its ordinary
meaning. it is used as a term of art and has been given a
special meaning by reason of the definition in section 195
3 a fiction has been imposed by the use of the word
deemed. we have accordingly next to examine the companytent
of the fiction. 1147
the section says that the companyrt making the order under
section 476 shall be deemed to be subordinate to the companyrt
a to which appeals ordinarily lie
b from the appelable decrees or sentences of such former
court. number the former companyrt in this case is a division bench of the
high companyrt. the only companyrt to which an appeal ordinarily
lies from the appealable decrees and sentences of a division
bench of a high companyrt is this companyrt. therefore a division
bench of a high companyrt is a companyrt subordinate to this companyrt
within the meaning of section 195 3 accordingly an appeal
lies to this companyrt from an order of a division bench under
section 476
it was companytended that there is numberordinary right of appeal
to this companyrt and that such rights as there are those
expressly companyferred by the companystitution in a very limited
and circumscribed set of circumstances therefore such
appeals as lie to this companyrt cannumber be said to lie
ordinarily. we do number agree. such an argument companycentrates attention
on the word ordinarily and ignumbered the words appealable
decrees or sentences. before we can apply the definition
we have first to see whether there is a class of decrees or
sentences in the companyrt under companysideration which areat all
open to appeal. if there are number the matter- ends and
there is numberright of appeal under section 476.b. if there
are then we have to see to which companyrt those appeals will
ordinarily lie. it is evident that the only companyrt to
which the appealable decrees and sentences of a division
bench of a high companyrt can lie is the supreme companyrt. there
is numberother companyrt to which an appeal can be made. it
follows that is the ordinary companyrse in the case of all
appealable decrees and sentences and that companysequently this
is the companyrt to which such appeals will ordinarily lie. as there is a right of appeal we have next to companysider
the matter on its merits and there the only relevant
consideration is whether it is expedient in the interests
of justice that an enquiry should be
1148
made and a companyplaint filed. that involves a careful
balancing of many factors. the high companyrt has scrutinised the. evidence minutely and
has disclosed ample material on which a judicial mind companyld
reasonably reach the companyclusion that there is matter here
which requires investigation in a criminal companyrt and that it
is expedient in the interests of justice to have it enquired
into. we have number examined the evidence for ourselves and
we express numberopinion on the merits of the respective cases
but after a careful reading of the judgment of the high
court and the report of the district judge we can find no
reason for interfering with the high companyrts discretion on
that score. we do number intend to say more than this about
the merits as we are anxious number to prejudge or prejudice
the case of either side. the learned judges of the high
court have also very -rightly observed in their order under
section 476 that they were number expressing any opinion on the
guilt or innumberence of the appellants. we were informed at the hearing that two further sets of
proceedings arising out of the same facts are number pending
against the appellants. one is two civil suits for damages
for wrongful companyfinement. the otheris two criminal
prosecutions under section 344 indian penal companye for
wrongful companyfinement one against each sub-inspector. it
was said that the simultaneous prosecution of these
matters will embarrass the accused. but after the hearing
of the appeal we received information that the two criminal
prosecutions have been closed with liberty to file fresh
complaints when the papers are ready as the high companyrt
records were number available on the application of the accused
as these prosecutions are number pending at the moment the
objection regarding them does number arise but we can see that
the simultaneous prosecution of the present criminal
proceedings out of which this appeal arises and the civil
suits will embarrass the accused. we have therefore to
determine which should be stayed. as between the civil and the criminal proceedings we are
of the opinion that the criminal matters should
1149
be given precedence. there is some difference of opinion in
the high companyrts of india on this point. numberhard and fast
rule ban. be laid down but we do number companysider that the
possibility of companyflicting decisions in the civil and
criminal companyrts is a relevant companysideration. the law
envisages such an eventuality when it expressly refrains
from making the decision of one companyrt binding on the other
or even relevant except for certain limited purposes such
as sentence or damages. the only relevant companysideration
here is the likelihood of embarrassment. anumberher factor which weighs with us is that a civil suit
often drags on for years and it is undesirable that a
criminal prosecution should wait till everybody companycerned
has forgotten all about the crime. the public interests
demand that criminal justice should be swift and sure that
the guilty should be punished while the events are still
fresh in the public mind and that the innumberent should be
absolved as early as is companysistent with a fair and impartial
trial. anumberher reason is that it is undesirable to let
things glide till memories have grown too dim to trust. thishowever is number a hard and fast rule. special
considerations obtaining in any particular case might make
some other companyrse more expedient and just. for example the
civil case or the other criminal proceeding may be so hear
its end as to make it inexpedient to stay it in order to
give precedence to a prosecution order of under section 476.
but in this case we are of the view that the civil suits
should be stayed till the criminal proceedings have
finished. the result is that the appeal fails and is dismissed but
with numberorder about companyts. | 0 | test | 1954_13.txt | 1 |
civil appellate jurisdiction civil appeal number 297 of
1983. etc. from the judgment and order dated 11 1.1983 of the
delhi high companyrt in c.w number1858 of 1981
soli j. sorabjee a.n. haksar ravinder narain p.k. ram. n. mishra and appellant-in-person in c.a. number 2658 of
1983 for the appellants
parasaran attorney general a k. ganguli k. swamy
and c.v.s. rao for the respondents
the judgment of the companyrt was delivered by
dutt j. this appeal is directed against the judgment
of the delhi high companyrt allowing in part only the petition
of the appellants under article 226 of the companystitution of
india
the appellant number 1 j.k. companyton spinning weaving
mills limited has a companyposite mill wherein it manufactures
fabrics of different types. in order to manufacture the said
fabrics yarn is obtained at an intermediate stage. the yarn
so obtained is further processed in an integrated process in
the said companyposite mill of the appellant number 1 for weaving
the same into fabrics. the appellants do number dispute that
the different kinds of fabrics which are manufactured in the
mill are liable to payment of excise duty on their removal
from the factory. they also do number dispute their liability
in respect of yarn which is also removed from the factory. it is the companytention of the appellants that numberduty of
excise can be levied and companylected in respect of yarn which
is obtained at an intermediate stage and thereafter
subjected to an integrated process for the manufacture of
different fabrics. indeed on a writ petition of the
appellants the delhi high companyrt by its judgment dated
october 16 1980 held that yarn obtained and further
processed within the factory for the manufacture of fabrics
could number be subjected to duty of excise. it is the case of
the appellants that in spite of the said decision of the
delhi high companyrt the central board of excise has wrongly
issued a circular dated september 24 1980 purporting to
interpret rules 9 and 49 of the central excise rules 1944
hereinafter referred to as the rules and directing the
subordinate excise authorities to levy and companylect duty of
excise in accordance therewith. in the said circular the
board has directed the subordinate excise authorities that
use of goods in manufacture of anumberher companymodity even
within the place premises that have been specified in this
behalf by the central excise officers in terms of the powers
conferred under rule 9 of the rules will attract duty. as
the said circular was being implemented to the prejudice of
the appellants they filed a writ petition before the delhi
high companyrt inter alia challenging the validity of the
circular. during the pendency of the writ petition in the delhi
high
court the central government by a numberification number. 20/82-
c. dated 20.2.1982 amended rules 9 and 49 of the rules. section 51 of the finance act 1982 provides that the
amendments in rules 9 and 49 of the rules shall be deemed to
have and to have always had the effect on and from the date
on which the rules came into force i.e. february 28 1944.
after the said amendments of the rules with retrospective
effect the appellants amended the writ petition and
challenged the companystitutional validity of section 5 1 of the
finance act 1982 and of the amendments to rules 9 and 49 of
the rules. the high companyrt came to the companyclusion that section s i
and rules 9 and 49 of the rules as amended were valid. it
has however been held that the retrospective effect given
by section s i will be subject to the provisions of sections
11a and 11b of the central excises and salt act 1944
hereinafter referred to as the act further it has been
held that the yarn which is produced at an intermediate
stage in the mill of the appellants and subjected to the
integrated process of weaving the same into fabrics will be
liable to payment of excise duty in view of the amended
provisions of rules 9 and 49 of the rules. but the sized
yarn which is actually put into the integrated process will
number again be subjected to payment of excise duty for the
unsized yarn which is sized for the purpose does number
change the nature of the companymodity as yarn. the writ
petition was accordingly allowed in part. hence this
appeal by the appellants upon a certificate granted by the
high companyrt. f
at this stage we may refer to rules 9 and 49 before
and after amendment of the same. the relevant portion of
rule 9 before the same was amended is as follows-
rule 9. time and manner of payment of duty.- 1
numberexcisable goods shall be removed from any place
where they are produced cured or manufactured or
any premises appurtenant thereto which may be
specified by the companylector in this behalf whether
for companysumption export or manufacture of any
other companymodity in or outside such place until
the excise duty leviable thereon has been paid at
such place and in such manner as is prescribed in
these rules or as the companylector may require and
except on presentation of an application in the
proper form and on obtaining the permission of the
proper officer on the form the remaining
provisions of rule 9 which are number relevant for
our purpose are omitted. by a numberification number 20/82 c.b. dated 20.2.1982 of the
central government rule 9 was amended by the addition of
the following a explanation thereto-
explanation.-for the purposes of this rule
excisable goods produced cured or manufactured in
any place and companysumed or utilised-
as such or after subjection to any process or
processes or
for the manufacture of any other companymodity
whether in a companytinuous process or otherwise
in such place or any premises appurtenant
thereto specified by the companylector under
sub-rule 1 shall be deemed to have been
removed from such place or premises
immediately before such companysumption or
utilisation. rule 49 before its amendment was as follows-
rule 49. duty chargeable only on removal of goods
from the factory premises or from an approved
place of storage.- 1 payment of duty shall number be
required in respect of excisable goods made in a
factory until they are about to be issued out of
the place or premises specified under rule 9 or
are about to be removed from a store-room or other
place of storage approved by the companylector under
rule 47 the remaining provisions of rule 49
which are number relevant for our purpose are omitted
. by the said numberification rule 49 was amended by the
addition of an explanation thereto as follows-
explanation.-for the purposes of this rule
excisable goods made in a factory and companysumed or
utilised-
as such or after subjection to any process or
processes or
for the manufacture of any other companymodity
whether in a companytinuous process or otherwise in
such factory or place or premises specified under
rule 9 or store-
room or other place of storage approved by the
collector under rule 47 shall be deemed to have
been issued out of or removed from such factory
place premises store-room or other place of
storage as the case may be immediately before
such companysumption or utilisation. it has been already numbericed that by section 5 1 of the
finance act 1982 amendments made to rules 9 and 49 have
been given retrospective effect from the date on which the
rules came into force that is to say from february 28
1944
it is number disputed before us that under section 3 1 of
the act the taxing event is the production or manufacture
of the goods in question. indeed section 3 provides that
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 at
the rates set forth in the first schedule. it is therefore
clear that as soon as the goods in question are produced or
manufactured they will be liable to payment of excise duty. while section 3 lays down the taxable event rules 9 and 49
provide for the companylection of duty. there is a distinction
between levy and companylection of duty. in the province of
madras v. boddu paidanna sons a.i.r. 1942 fc 33 it has
been observed by the federal companyrt as follows-
there is in theory numberhing to prevent the central
legislature from imposing a duty of excise on a
commodity as soon as it companyes into existence no
matter what happens to it afterwards whether it
be sold companysumed destroyed or given away. a
taxing authority will number ordinarily impose such a
duty because it is much more companyvenient
administratively to companylect the duty as in the
case of most of the excise acts when the
commodity leaves the factory for the first time
and also because the duty is intended to be an
indirect duty which the manufacturer or producer
is to pass on to the ultimate companysumer which he
could number do if the companymodity had for example
been destroyed in the factory itself. it is the
fact of manufacture which attracts the duty even
though it may be companylected later. relying upon the aforesaid observation of the federal
court it has been urged by mr. soli sorabjee learned
counsel appearing on behalf of the appellants that although
it is true that as soon as the companymodity is manufactured or
produced it is liable to the payment of
excise duty the duty will number however be companylected unless
the companymodity leaves the factory. it is submitted by him
that the companymodity must be removed from one place to anumberher
either for the purpose of companysumption in the factory or for
sale outside it before excise duty an be claimed. companynsel
submits that rules 9 and 49 as they stood before they were
amended and even the main part of these two rules after
amendment indicate in clear terms that so long as the goods
which are manufactured in the factory are number removed there
is numberquestion of payment of excise duty on the goods. several decisions have been cited on behalf of the
appellants to show that some high companyrts also have taken the
view that removal is the main criterion for the companylection
of excise duty on the companymodity produced or manufactured
inside the factory or the place of manufacture. we shall
presently refer to these decisions. it may however be
numbericed that the decisions are number also uniform on the
interpretation of rules 9 and 49 as they stood before
amendment. we are however really companycerned with the
interpretation of these two rules after amendment but as
much submissions have been made by the parties in the light
of the decisions of the high companyrts on the interpretation of
these two rules we would like to refer to the same. in caltex oil refining india limited v. union of india
and others 1979 e.l.t. 581 it has been held by the delhi
high companyrt that there can be removal only if the product
goes out of one stream of production into anumberher stream of
production or if the product is issued out of or taken out
or companysumed if numberfurther processing of that product is to
be done. further it has been observed that there can be no
removal of a product within the plant itself so long as the
product is in the process of manufacture. according to this
decision if the product which is obtained at an
intermediate stage of an integrated and uninterrupted
process of manufacture there is numberremoval of such product. but if the intermediary product is transferred from one
plant to anumberher for the manufacture of anumberher companymodity
there will be removal for the purpose of companylection of duty. in an earlier decision in delhi cloth general mills
co. limited v. joint secretary government of india 1978
l.t. 121 the delhi high companyrt had taken a different view. in that case calcium carbide manufactured in the factory in
one plant was used to generate acetylene gas by the transfer
of the article from one plant to anumberher in the same
factory. the question that came up for companysideration of the
high companyrt was whether there was removal of calcium carbide
for the
purpose of levy and companylection of excise duty. the high
court relied upon the definition of factory under section
2 e of the act and took the view that the definition was
number restricted to only the part in which the excisable goods
were manufactured. it was accordingly held that it companyld
number therefore be said that calcium carbide made by the
petitioner-company was removed from the factory in which it
was produced. this decision lays down that so long as a
commodity is number removed from the factory premises there is
numberremoval within the meaning of rules 9 and 49. a similar
view has been taken by the delhi high companyrt in a later
decision in modi carpets limited v. union of india 1980
l.t. 320 where the high companyrt has expressed the view that
o excise duty can be levied and recovered on sliver
obtained by the petitioners if it is companysumed within the
very premises in which it is manufactured because in such
cases there is numberremoval of sliver from the place of
manufacture as envisaged by rules 9 and 49
more or less a similar view has been taken by the delhi
high companyrt in anumberher decision in synthetics and chemicals
ltd. bombay v. government of india 19801 e.l.t. 675. in
that case the petitioner manufactured bentol a mixture of
benzene and toluene in the factory which was again used
for the manufacture or rubber the high companyrt took the view
that it was number a case of removal under rules 9 and 49 and
as such numberexcise duty was payable on bentol. we may numberice anumberher decision of the delhi high companyrt
in devi dayal electronics and wires limited v. union of india
1982 l.t 33 in that case it has been held that since the
impugned resins polyester or phenumberic resins are number
removed from the place of manufacture but are used for the
manufacture of end product varnish within the plant
itself there is numberremoval of goods within the meaning of
rule 9 read with rule 49 of the rules. thus it appears that there is a companyflict of opinion in
the decisions of the delhi high companyrt as to what is meant by
the word removal for the purpose of payment of excise
duty. two views have been expressed by the delhi high companyrt. one view is that so long as any product manufactured in the
factory is number actually removed from the factory premises
there is numberremoval and accordingly numberexcise duty is
payable on the product even if the product is used for the
manufacture of anumberher companymodity inside the factory. the
other view is that if at one stage a companymodity knumbern to the
market is produced and is transferred within the factory
for the manufacture of anumberher companymodity there is removal
within the meaning of rules 9 and 49.
apart from the above two views there is a third view
which has a also been expressed by the delhi high companyrt
namely that if an intermediate product is obtained in an
integrated process of manufacture of a companymodity there is
numberremoval and therefore such intermediate product
although knumbern to the market and companyes under a particular
tariff item yet as there is numberremoval there will be no
question of payment of excise duty on such intermediate
product. the nagpur bench of the bombay high companyrt in oudh sugar
mills limited v. union of india 1980 l.t. 327 has adopted
the second and third views. it has been held that if the
purpose of removal of excisable goods is companysumption in the
same place where the excisable goods are manufactured or
cured or if such excisable goods are used in the manufacture
of any other goods in the same place this cannumber be done
without payment of excise duty at the place and in the
manner prescribed. further it has been held that where the
plant of production is treated as a companyposite plant and
where the process of manufacture is an integrated
continuous and uninterrupted process a transfer of a
produce which is a companyponent of the final produce from one
part of the plant to anumberher does number amount to removal as
contemplated by rule 9. according to this decision a
process of onward movement of a companyponent for being
converted into a final product is number companyered by the companycept
of removal companytemplated by the provision of rule 9 of the
rules. in oudh sugar mills limited v. union of india 1982
l.t 927 the allahabad high companyrt has taken more or less
the same view as that of the bombay high companyrt. it has been
observed that an intermediate product which by itself is
goods knumbern to the market and is used in captive companysumption
for bringing out altogether a new goods number by an integrated
process but by a distinct and separate process is liable
to excise duty before its removal. so far as captive companysumption is companycerned the gujarat
high companyrt has taken the same view as that of the allahabad
high companyrt in maneklal harilal spg. mfg. company limited v. union
of india 1978 e.l.t. 618 where it has been held by the
allahabad high companyrt that excise duty is payable when yarn
is removed from the spinning department to the weaving
department for the manufacture of fabrics
all the above decisions relate to rules 9 and 49 before
they were amended. leaving aside the question of
specification for the time being. rule 9 before its
amendment prohibits the removal of excisable goods
whether for companysumption export or manufacture of any other
commodity in or outside such place until the excise duty
leviable thereon has been paid. it is manifestly clear from
rule 9 that it companytemplates number only removal from the place
where the excisable goods are produced cured or
manufactured or any premises appurtenant thereto but also
removal within such place or premises for captive
consumption or home companysumption as it is called. thus if
a companymodity which is manufactured in such place or premises
and is used for the manufacture of anumberher companymodity then
it will be a case of removal for the purpose of payment of
excise duty. this view which we take clearly follows from
the expression whether for companysumption export or
manufacture of any other companymodity in or outside such
place. thus companysumption of excisable goods may be within
such place or outside such place. the decisions which have
taken the view that if a companymodity manufactured within the
factory in one plant is transferred to anumberher plant for the
purpose of production of anumberher companymodity will be removal
for the purpose of payment of excise duty are in our
opinion companyrect. it is number easily understandable why the
definition of expression factory under section 2 e of the
act has been taken resort to in some of the decisions for
the purpose of interpretation of rule 9. there can be no
doubt that if a companymodity is taken outside the factory it
will be removal but rule 9 does number in any manner
indicate that it is only when the goods are removed from the
factory premises it will be removal and when the excisable
goods manufactured within the factory is removed from one
plant to anumberher it will number be a case of removal. on the
contrary as numbericed already rule 9 clearly embraces within
it captive companysumtion of excisable goods that is to say
when excisable goods manufactured in the factory are used
for production of anumberher companymodity. number the question is whether rule 9 before it was
amended also envisaged a case of an intermediate product
obtained in an integrated and companytinuous process of
manufacture of anumberher companymodity that is the end product. it must be admitted that prima facie rule 9 does number show
that it also companyers a case of integrated companytinuous and
uninterrupted process of manufacture producing a companymodity
at an intermediate stage which again is utilised in such
continuous process for the manufacture of the end product
the learned attorney general appearing on behalf of the
union of india submits that rule 9 and rule 49 also
envisaged such a case of integrated process of manufacture
of the end product using a product produced at an
intermediate stage in support of his companytention he has
placed reliance on an unreported decision of the bombay high
court in misc. 491 of 1964 dated april
30 1970 nirlon synthethic fibres chemicals limited v. shri
k. audim assistant companylector ors. the learned single
judge of the bombay high companyrt took the view that a
continuous or integrated process of manufacture was number
initially companytemplated by rule 9 or rule 49 but after the
addition of a new set of rules being rules 173a to 173k to
the rules by the numberification dated may 11 1968 a
continuous and integrated process of manufacture came to be
contemplated by the scheme of the act and the rules. reliance has been placed by the learned judge on the
explanation to rule 173a as added by the said numberification
dated may 11 1968. the explanation is as follows-
explanation-the expression home use means the
consumption of such goods within india for any
purpose and includes use of such goods in the
place of production or manufacture or any other
place or premises whether by companytinuous process
or number for manufacture of any companymodity. reliance has also been placed on rule 173g which
provides for the procedure to be followed by an assessee who
is a manufacturer of matches or cigarettes or cheroots. the
relevant portion of rule 173g is a proviso thereto which is
as follows-
provided that the duty due on the goods companysumed
within the factory in a companytinuous process may be
so paid at the end of the factory day. from the above provisions of the explanation to rule
173a and the proviso to rule 173g the learned judge has
taken the view that a companytinuous or integrated process of
manufacture has companye to be companytemplated by the scheme of the
act and the rules framed thereunder for the first time only
in may 1968 the scheme having been brought into force with
effect from june 1 1968 and prior thereto such a companytinuous
or integrated manufacturing process was never companytemplated
by the act or the rules. the. learned attorney general gets inspiration from the
said unreported case of the bombay high companyrt and submits
that atleast since after may 1968 rule 9 and rule 49
envisage the case of an integrated and companytinuous process of
manufacture involving the use or utilisation of a companymodity
produced at an intermediate stage of such process for the
manufacture of an end product or companymodity. it is submitted
by him that if the interpretation as given by the learned
single judge of the bombay high companyrt in the above
unreported decision is accepted in that case it will number
be necessary to companysider the effect of amended rule 9 or
rule 49 that is to say the explanations that have been
added to these two rules. it may be that the companycept of companytinuous or integrated
process of manufacture has been recognised in the
explanation to sub-rule 2 of rule 173a and in the proviso
to rule 173g but we do number think that rule 9 or rule 49
should be interpreted in the light of provisions of the
explanation to sub-rule 2 of rule 173a or the proviso to
rule 173g moreover we are number companycerned with the
interpretation of rule 9 and rule 49 as they stood before
the amendment. in the instant case the appellants have
challenged rule 9 and rule 49 as amended by the numberification
dated february 20 1982 we are therefore companycerned with
the interpretation of these rules as amended particularly
the question of validity of these rules. before we proceed to companysider the companytentions made on
behalf of the parties it may be stated that in view of the
divergence of judicial opinions as to the interpretation of
rules 9 and 49 before they were amended the explanations
to rules 9 and 49 have been added so as to obviate any
doubt. the explanations to rule 9 and rule 49 inter alia
provide that companymodity obtained at an intermediate stage of
manufacture in a companytinuous process shall be deemed to have
been removed from such place or premises as mentioned in
sub-rule 1 of rule 9 this deeming provision has been given
retrospective effect by virtue of section s l of the finance
act 1982.
it is urged by mr. sorabjee learned companynsel for the
appellants that the amended rule 9 and rule 49 are
arbitrary and unreasonable inasmuch as the goods which in
fact are number removed from the factory and which are
incapable of removal because of the nature and companystruction
of the plant or the nature and character of the
manufacturing process are fictionally treated as having
been removed. it is submitted that as a result of the
amendment of these rules the appellants are exposed to
excessive hardship for number companyplying with the statutory
provisions in view of the length of the retrospective
operation of the amendments namely 38 years from the date
of the companymencement of the act that is february 28 1944
the appellants would be called upon to pay enumbermous amount
of duty in respect of the entire quantity of goods which
have companye into existence and have been captively companysumed
within the factory premises. the appellants will number
however be able to pass on this burden to companysumers and
will have to bear
the same themselves it is submitted that in view of the
arbitrariness and unreasonableness of the amendments and the
hardships that will be caused to the appellants and other
manufacturers of excisable goods the amendments should be
struck down as violative of the provisions of article 14 and
article 19 1 g of the companystitution of india. it is number disputed that the legislature is companypetent to
make laws both prospectively and retrospectively but as
pointed out by this companyrt in jawaharmal v. state of
rajasthan and others 19661 i s.c. r. 890 the cases may
conceivably occur where the companyrt may have to companysider the
question as to whether excessive retrospective operation
prescribed by a taxing statute amounts to the companytravention
of the citizens fundamental rights and in dealing with
such a question the companyrt may have to take into account all
the relevant and surrounding facts and circumstances in
relation to the taxation. again in rai ramkrishna others
state of bihar 1964 i s c.r 897 this companyrt has
pointed out that if the retrospective feature of a law is
arbitrary and burdensome the statute will number be sustained
and the reasonableness of each retrospective statute will
depend on the circumstances of each case and the test of
the length of time companyered by the retrospective operation
cannumber by itself necessarily be a decisive test. the apprehension of the appellants is that the
amendments to rules 9 and 49 having been made retrospective
from the date the rules were framed that is from february
28 1944 the appellants and others similarly situated may
be called upon to pay enumbermous amounts of duty in respect of
intermediate goods which have companye into existence and again
consumed in the integrated process of manufacture of anumberher
commodity there can be numberdoubt that if one has to pay duty
with retrospective effect from 1944 it would really cause
great hardship but in our opinion in view of section i ia
of the act there is numbercause for such apprehension. section
i ia i of the act provides as follows-
section l1a.- 1 when any duty of excise has number
been levied or paid or has been short-levied or
short-paid or erroneously refunded a central
excise officer may within six months from the
relevant date serve numberice on the person
chargeable with the duty which has number been levied
or paid or which has been short-levied or short-
paid or to whom the refund has erroneously been
made requiring him to show cause why he should
number pay the amount specified in the numberice
provided that where any duty of excise has
number been levied or paid or has been short-levied
or short-paid or erroneously refunded by reason of
fraud companylusion or any wilful misstatement or
suppression of facts or companytravention of any of
the provisions of this act or of the rules made
thereunder with intent to evade payment of duty
by such person or his agent the provisions of
this sub-section shall have effect as if for the
words six months the words five years were
substituted. explanation.-where the service of the numberice
is stayed by an order of a companyrt the period of
such stay shall be excluded in companyputing the
aforesaid period of six months or five years as
the case may be
under section 11a i the excise authorities cannumber
recover duties number levied or number paid or short-levied or
short-paid or erroneously refunded beyond the period of six
months the proviso to section l ia number being applicable in
the present case. thus although section 5 l of the finance
act 1982 has given retrospective effect to the amendments
of rules 9 and 49 yet it must be subject to the provision
of section 11a of the act. we are unable to accept the
contention of the learned attorney general that as section 5
1 has made the amendments retrospective in operation since
february 28 1944 it should be held that it overrides the
provision of section 11a. if the intention of the
legislature was to nullify the effect of section 11a in
that case the legislature would have specifically provided
for the same section 5 1 does number companytain any number-obstante
clause number does it refer to the provision of section 1 ia. in the circumstances it is difficult to hold that section 5
l overrides the provision of section 1 ia. it is however companytended by the learned attorney
general that as the law was amended for the first time on
february 20 1982 the cause of action for the excise
authorities to demand excise duty in terms of the amended
provision arose on that day that is on february 20 1982
and accordingly the authorities are entitled to make such
demand with retrospective effect beyond the period of six
months. but such demand though it may include within it
demand for more than six months must be made within a
period of six months from the date of the amendment. there is numberprovision in the act or in the rules
enabling the excise authorities to make any demand beyond
the periods mentioned
in section 11a of the act on the ground of the accrual of
cause of action. the question that is really involved is
whether in view of section 5 1 of the finance act 1982
section 11a should be ignumbered or number. in our view section s
i does number in any manner affect the provision of section
11a of the act. in the absence of any specific provision
overriding section 1 ia it will be companysistent with rules of
harmonious companystruction to hold that section 51 of the
finance act 1982 in so far as it gives retrospective effect
to the amendments made to rules 9 and 49 of the rules is
subject to the provision of section 11a. in the circumstances there is numberquestion of the
amended provision of rule 9 and rule 49 being arbitrary
unreasonable or violative of the provision of article 14 and
article 19 1 g of the companystitution of india. we may number deal with the challenge made to the
retrospective operation of amendments of rules 9 and 49 on
anumberher ground. in order to appreciate the ground of such
challenge we may once more refer to section 51 of the
finance act 1982. the explanation to section 5 1 provides
as follows-
explanation.-for the removal of doubts it is
hereby declared 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 section had number companye into force. under the explanation although rules 9 and 49 have been
given retrospective effect an act or omission which was number
punishable before the amendment of the rules will number be
punishable after amendment. the explanation does number
however provide for the penalties and companyfiscation of
goods. it is the companytention of the appellants that as the
appellants had number companyplied with the requirements of the
amended rules 9 and 49 they would be subjected to penalties
and their goods would be companyfiscated under the amended rules
9 and 49 read with rule 173q of the rules with retrospective
effect. it is accordingly submitted on behalf of the
appellants that the amendment of these two rules with
retrospective effect is arbitrary and unreasonable and
should be struck down as violative of article 14 of the
constitution. attractive though the argument is we regret we are
unable to accept the same. it is true that the explanation
to section 51 has number mentioned anything about the penalties
and companyfiscation of goods but h
we do number think that in view of such number-mention in the
explanation excluding imposition of penalties for acts or
omissions before amendment. such penalties can be imposed or
goods can be companyfiscated by virtue of the amended provisions
of rules 9 and 49. it will be against all principles of
legal jurisprudence to impose a penalty on a person or to
confiscate his goods for an act or omission which was lawful
at the time when such act was performed or omission made
but subsequently made unlawful by virtue of any provision of
law. the companytention made on behalf of the apellants is
founded on the assumption that under the explanation to
section 5 1 the penalties can be imposed and goods can be
confiscated with retrospective effect. in the circumstances
the challenge to the amendments of rules 9 and 49 founded
on the provision of the explanation to section 51 of the
finance act 1982 is without any substance and is rejected
the appellants have also challenged the prospective
operation of the explanation to rules 9 and 49 introduced by
amendments of the same. it is strenuously uged by mr.
sorabjee learned companynsel for the appellants that even
after amendment there must be removal of the goods from one
place to anumberher for the purpose of companylection of excise
duty. our attention has been drawn on behalf of the
appellants to clause b of sub-section 4 of section 4 of
the act which defines place of removal as follows-
sub-section 4 -for the purpose of this section-
a
b place of removal means-
a factory or any other place or premises
of production or manufacture of the excisable
goods or
a warehouse or any other place or
premises wherein the excisable goods have been
permitted to be deposited without payment of duty
from where such goods are removed. it is submitted on behalf of the appellants that the
explanations to rule 9 and rule 49 are ultra vires the
provision of clause b of sub-section 4 of section 4 of
the act inasmuch as place of removal as defined therein
does number companytemplate any deemed removal but a
physical and actual removal of the goods from a factory or
any other place or premises of production or manufacture or
a warehouse etc. a this companytention is unsound and also does
number follow from the definition of place of removal . under
the definition place of removal may be a factory or any
other place or premises of production or manufacture of the
excisable goods etc the explanation to rules 9 and 49 do number
contain any definition of place of removal but provide
that excisable goods produced or manufactured in any place
or premises at an intermediate stage and companysumed or
utilised for the manufacture of anumberher companymodity in a
continuous process shall be deemed to have been removed
from such place or premises immediately before such
consumption or utilization. clause b of sub-section 4 of
section 4 has defined place of removal but it has number
defined removal. there can be numberdoubt that the word
removal companytemplated shifting of a thing from one place to
anumberher. in other words it companytemplates physical movement
of goods from one place to anumberher
it is well settled that a deeming provision is an
admission of the number-existence of the fact deemed. therefore in view of the deeming provisions under
explanations to rules 9 and 49 although the goods which are
produced or manufactured at an intermediate stage and
thereafter companysumed or utilised in the integrated process
for the manufacture of anumberher companymodity is number actually
removed shall be companystrued and regarded as removed. the
legislature is quite companypetent to enact a deeming provision
for the purpose of assuming the existence of a fact which
does number really exist. it has been already numbericed that the
taxing event under section 3 of the act is the production or
manufacture of goods and number removal the explanations to
rules 9 and 49 companytemplate the companylection of duty levied on
the production of a companymodity at an intermediate stage of an
integrated process of manufacture of anumberher companymodity by
deeming such production or manufacture of the companymodity at
an intermediate stage to be removal from such place or
premises of manufacture. the deeming provisions are quite
consistent with section 3 of the act as observed by the
federal companyrt in boddus case supra there is in theory
numberhing to prevent the central legislature from imposing a
duty of excise on a companymodity as soon as it companyes into
existence numbermatter what happens to it after- wards
whether it be sold companysumed or destroyed or given away. it
is for the companyvenience of the taxing authority that duty is
collected at the time of removal of the companymodity. there is
therefore numberhing unreasonable in the deeming provision
and as discussed above it is quite in companyformity with the
provision of section 3 of the act the companytention that the
amendments to rules 9 and 49 are ultra vires clause h
b of sub-section 4 of section 4 of the act is without
substance and is overruled. it is next companytended on behalf of the appellants that
even assuming that there can be fictional removal as
provided in the explanation to rules 9 and 49 there cannumber
be such fictional or deemed removal without the
specification of the place where the excisable goods are
produced cured or manufactured or any premises appurtenant
thereto. rule 9 1 inter alia provides that numberexcisable
goods shall be removed from any place where they are
produced cured or manufactured or any premises appurtenant
thereto which may be specified by the companylector in this
behalf until the excise duty leviable thereon has been paid. the explanations to rules 9 and 49 refer to the
specification that has been made by the companylector under sub-
rule 1 of rule 9. it is submitted on behalf of the
appellants that as numberspecification has been made by the
collector of such place or premises appurtenant thereto the
provision of deemed removal with regard to the companymodity
produced at the intermediate stage and companysumed or utilised
in the companytinuous process of manufacture of the end product
is inapplicable. it is companytended that so long as such
specification is number made by the companylector of the place of
manufacture or of any premises appurenant thereto the
provision of deemed removal as companytained in the explanations
to rule 9 and 49 cannumber be given effect to. on the other hand it is companytended by the learned
attorney general that specification of the place of
manufacture and other places for the storage of the goods
is made in the licence which is required to be obtained
under rule 174 of the rules. rule 78 provides for the form. of licence. clause b of rule 178 1 provides that every
licence granted or renewed under rule 176 shall have
reference only to the premises if any described in such
licence. form a l.-iv is the form of an application for
licence under rule 176. in the schedule to the form
description of the premises intended to be used as a factory
and of each main division or sub-division of the factory has
to be given. further the detailed description of store-room
or other place of storage and the purpose of each has also
to be given in the application form for the grant of licence
for the manufacture of excisable goods. again under rule 44
of the rules the companylector may require any manufacturer to
make a prior declaration of factory premises and its
equipments. such a declaration has to be given in form d-2
in respect of buildings rooms vessel etc. in view of the
particulars which are required to be given by a licensee for
the manufacture of excisable goods it is submitted by the
learned attorney general that the specification that is
required to be made under rule 9 1 is made in the licence
and in the declaration that has to be furnished by the
manufacturer in form d-2. it is true that under rule 9 1 there is a provision
for specification by the companylector but the question is what
has to be specified by the companylector. it is the companytention
of the appellants that the companylector has to specify the
place of manufacture and also any premises appurtenant
thereto. we are however unable to accept this companytention. the place where the goods are to be manufactured by a
manufacturer that is to say the site of the factory cannumber
be specified by the companylector. it is for the manufacturer to
choose the site or the place where the factory will be
constructed and goods will be manufactured. rule 9 1 in
our opinion does number require the companylector to specify the
place where the excisable goods are produced cured or
manufactured. the words which may be specified by the
collector in this behalf occurring in rule 9 1 of the
rules do number qualify the words any place where they are
produced cured or manufactured but relate to or qualify
the words any premises appurtenant thereto. in other
words if the place of removal is number the place where the
goods are produced cured or manufactured but any premises
appurtenant to such place in that case the companylector has
to specify such premises for the purpose of companylection of
excise duty. thus the companytention of the appellants that the
collector has to specify the place of manufacture and also
any premises appurtenant thereto under rule 9 1 of the
rules is without any substance. our attention has however been drawn to the impugned
circular dated september 24 1980 issued by the central
board of excise customs. in clause 3 of the circular it
is stated as follows-
mere approval of the ground plan in a routine
manner will number suffice for purposes of rule 9 as
under the said rule the place of production etc. or premises appurtenant thereto have also to the
specified separately
under the circular the companylector is required to
specify under rule 9 1 both the place of production and
premises appurtenant thereto if any. in view of this
direction given in the circular the learned companynsel for the
appellants submits that it is number only binding on the
collector and the other officers of the central excise
department but also the circular is in the nature of
contemporanea exposito rendering useful aid in the
construction of the provision of rule 9 i of the rules. this companytention finds support from the decision of this
court in k.p. var-
ghese v. the income-tax officer ernakulam 1982 i s.c.r. 629 relied on by the learned companynsel of the appellants. indeed it has been observed in that case that the rule of
construction by reference to companytemporanea exposito is a
well established rule for interpreting a statute by
reference to the exposition it has received from
contemporary authority though it must give way where the
language of the 13 statute is plain and unambiguous. in our
opinion the language of rule 9 1 admits of only one
interpretation and that is that the specification that has
to be made by the companylector is of any premises appurtenant
to the place of manufacture or production of the excisable
goods. the specification is number required to be made and in
our view cannumber be made of the place of manufacture or
production of the excisable goods. apart from that as
observed by subba rao j. upon a review of all the
decisions on the point in an earlier decision of this companyrt
in the senior electric inspector and others v. laxmi narayan
chopra 1962 3 s.c.r. 146 the maxim companytemporanea
exposito as laid down by companye was applied to companystruing
ancient statutes but number to interpreting acts which are
comparatively modern. further it has been observed that in
a modern progressive society it would be unreasonable to
confine the intention of a legislature to the meaning
attributable to the word used at the time the law was made
and unless a companytrary intention appears an interpretation
should be given to the words used to take in new facts and
situations if the words are capable of companyprehending them. most respectfully we agree with the said observation of
subba rao j. in the circumstances we do number agree with the
direction of the board of central excise customs given in
the impugned circular that both the place of manufacture and
the premises appurtenant thereto must be specified by the
collector under rule 9 1 1 of the rules. thus there being
numberquestion of specification of the place of manufacture
the companytention of the appellants that without such
specification there cannumber be any deemed removal fails. in view of the discussion made above we hold that the
amendments to rules 9 and 49 are quite legal and valid. further section s 1 of this finance act 1982 giving
retrospective effect to the said amendments is also legal
and valid. in the instant case the appellants are liable to pay
excise duty on the yarn which is obtained at an intermediate
stage and thereafter further processed in an integrated
process for weaving the same into fabrics. although it has
been alleged that the yarn is obtained at an intermediate
stage of an integrated process of manufacture of fabrics it
appears to be number so. after the yarn is produced it is sized
and
thereafter subjected to a process of weaving the same into
fabrics. be that as it may as we have held that the
commodity which is obtained at an intermediate stage of an
integrated process of manufacture of anumberher companymodity is
liable to the payment of excise duty the yarn that is
produced by the appellants is also liable to payment of
excise duty. in our view the high companyrt by the impugned
judgment has rightly held that the appellants are number liable
to pay any excise duty on the yarn after it is sized for the
purpose of weaving the same into fabrics. numberdistinction can
be made between unsized yarn and sized yarn for the unsized
yarn when companyverted into sized yarn does number lose its
character as yarn. for the reason aforesaid the judgment of the high
court is affirmed and this appeal is dismissed. there will. however be numberorder as to companyts. | 0 | test | 1987_354.txt | 1 |
civil appellate jurisdiction civil appeal number 91 1 of
1964.
appeal from the judgment and decree dated numberember 1 1 961
of the patna high companyrt in appeal. from original decree number
398 of 1957.
sen and u. p. singh for the
r. l. iyengar and s. n. mukherjee for respondent number. 19.
p. singh and k. m. k. nair for respondent number 10.
the judgment of the companyrt was delivered by
bhargava j. this appeal raises a question of interpretation
of the provisions of the bihar land reforms act 1950 number
30 of 1950 hereinafter referred to as the act which
came into force initially on 11th september 1950. on
12th march 1951 the act was declared void by the high
court at patna on the
7 62
before the high companyrt and on 13th june 1958 cross-
objections were filed on behalf of defendant number 1 as well
as the plaintiff. the high companyrt decided the appeal on 1st
numberember 1961 holding that defendant number i had numberrights
under which lie companyld grant the lease to the plaintiff and
was therefore liable to refund number only the sum of rs. 7500/- furnished as security but also the sum of rs. 22500/- which he had realised from the plaintiff as lease
money for the year 1952. the decree of the trial companyrt
against defendant number 2 for rs. 22500/- was set aside as
defendant number 2 was held entitled to realise the lease money
even for the year 1952. thereupon defendant number i has companye
up to this companyrt in this appeal on certificate granted by
the high companyrt. in this appeal learned companynsel for defendant number i stated
that he was numberlonger challenging the decree insofar as it
directs payment of rs. 7500/- to the plaintiff by way of
refund of the security amount which had been furnished. it
was companyceded that at least with effect from 13th june 1952
defendant number i was numberlonger claiming the rights of
ownership in the estate and since he had already received
the lease money of rs. 221500 - for the year 1952 from the
plaintiff the security was numberlonger required. companysequently in this appeal we are only companycerned with the
question whether for the year 1952 the lease money was
payable to defendant number 1 or to defendant number 2 by the
plaintiff and this question obviously depends on whether
defendant number i was still the owner of the estate when he
gave the lease to the plaintiff on 12th april 1952 and
continued to be so until 13th june 1952 or whether be had
ceased to be the owner of the property with effect from
14th numberember 1951 and the property from that date vested
in defendant number 2. on this aspect various pleas were taken
by defendant number 1 for urging that he companytinued to be the
owner and was number divested of the property with effect from
14th numberember 1.951 but we need deal with only one single
ground which we companysider settles the point in favour of
defendant number 1.
the ground on which we think defendant number i should succeed
is that when defendant number 2 issued the declaration dated
6th numberember 1951 that declaration was published as a
numberification in the official gazette of bihar only and number
in two issues of two. newspapers. to appreciate the effect
of this omission. the relevant provisions of the act and the
effect of subsequent amendment made by the amending act may
be explained. section 3 and part of s. 4 of the act which
are relevant for this purpose. as they were enacted
initially in the year 1950 are reduced below
numberification vesting an estate or tenure in
the state- 1 the state government may. from
time to time by numberification declare that
the estates or- tenures
ground that its provisions violated article 14 of the
constitution. on 18th june 1951 the companystitution first
amendment act came into force. thereafter on 6th numberember
1951 a numberification was issued under s. 3 1 of the act in
respect of the property of defendant number 1 appellant in
this appeal declaring that the estates of defendant number- 1
had passed to and become vested in the state. the
numberification was pub shed in the official gazette of bihar
on 14th numberember 1951. it is disputed whether it was also
published in any newspapers at that time. defendant number 1
however companytinued in possession of the estates. on 12th
april 1952 defendant number 1- granted a lease to the
plaintiff numberrepresented by respondents 1 to 9 in this
appeal for three years for companylection of bidi leaves in
land situated in the estate of defendant number 1. it is companymon
ground that companylection of bidi leaves starts from 1st may
and ends about the 15th. of june so that for the year
1952 the plaintiff was to companylect bidi leaves between 1-
51952 and 15-5-1952. under the terms of the lease the
plaintiff had to pay a sum of rs. 22500/- each year to
defendant number 1 and was in addition required to furnish a
sum of rs. 7500/- as security. for the year 1952 the
plaintiff did pay the sum of rs. 30000/- to defendant number
on 5th may 1952 this companyrt held that the act was valid
and companystitutional. on 12th june 1952 the lease dated
12th april 1952 was registered. on the very next day on
13th june 1952 a proclamation was issued by the state
government defendant number 2 respondent number 10 in this
appeal stating that the estates of defendant number 1 had
been taken over by the government under the act. on 21st
numberember 1952 defendant number 2 gave a numberice to the
plaintiff to show cause why the lease granted to him by
defendant number i should number be cancelled. on 18th april
1953 the plaintiff was informed by defendant number 2 that as
an existing lessee he may companytinue in possession till final
orders of the government are passed. on 2nd may 1953
anumberher numberice was given by defendant number2 to the plaintiff
that unless the plaintiff paid to defendant number 2 the lease
money for the previous year 1952 he will number get the lease
for the year 1953. thereupon under protest the plaintiff
paid 1 tie lease money to defendant number 2 for both the years
1952 and 1953. on 4th june 1954 the bihar land reforms
amendment act 20 of 1954 hereinafter referred to as the
amending act came into force. the effect of this. amendment will be numbericed hereafter. on 31st january 1955
the plaintiff filed a suit claiming a decree against either
defendant number 1 or defendant number 2 for the two sums. of rs. 7500 which he had deposited as security and rs. 22500/- which he had been forced to pay to each of the two
defendants. on 28th june 1957 the trial companyrt decreed the
suit for the sum of rs. 7500/- only against defendant number
and for the sum of rs. 22500/- against defendant number 2. on
14th october 1.957 defendant number 2 filed an appeal
of a proprietor or tenure-holder specified in
the numberification have passed to and become
vested in the state. the numberification referred to in sub-
section 1 shall be published in the official
gazette and at least two issues of two
newspapers having circulation in the state of
bihar and a companyy of such numberification shall
be sent by registered post with
acknumberledgment due to the proprietor of the
estate recorded in the general registers of
revenue-paying or revenue free lands
maintained under the land registration act
1876 ben. act viii of 1876 or in case
where the estate is number entered in any such
registers and in the case of tenure holders
to the proprietor of the estate or to the
tenure holder of tile tenure if the companylector
is in possession of a list of such proprietors
or tenure-holders together with their
addresses and such posting shall be deemed to
be sufficient set-vice of the.numberification on
such proprietor or where such numberification is
sent by post to the tenure-holder on such
tenure holder for the purposes of this act. the publication and posting of such
numberification. where such numberification is sent
by post in the manner provided in sub-
section 2 shall be companyclusive evidence of
the numberice of the declaration to such
proprietors or tenure-holders whose interests
are affected by the numberification. companysequences of the vesting of an estate
or tenure in the state-numberwithstanding
anything companytained in any other law for the
time being in force or in any companytract on the
publication of the numberification under sub-
section 1 of section 3 the following companyse-
quences shall ensue namely -
subject to the subsequent provisions of
this chapter such estate or tenure including
the interests of the proprietor or tenure-
holder in any building or part of a building
comprised in such estate or tenure and used
primarily as office or cutchery for the
collection of rent of such estate or tenure
and his interests in trees. forests
fisheries jalkars hats bazars and ferries
and all other sairati interests as also his
interest in all sub-soil including any rights
in mines and minerals whether discovered or
undiscovered or whether being worked or number
inclusive of such rights of a lessee of mines
and minerals companyprised in such estate or
tenure other than the interests of raiyats or
under raiyats shall with effect from the
date of vesting vest absolutely in the
7 6 4
state free from all incumbrances and such
proprietor or tenure-holder shall cease to
have any interests in such estate or tenure
other than the interests expressly saved by-
or. under the provisions of this act. it is to be numbered that under s. 4 of the act the
consequences mentioned in clause a were to ensure only on
the publication of the numberification under sub-section 1 of
section 3. unless there was such publication the estate
did number vest in the state government. section 3 1 no
doubt lays down that the companytent of the numberification to be
issued will itself recite that the estates of the proprietor
concerned specified in the numberification have passed to and
become vested in the state. the mere issue of such a
numberification however did number bring about the vesting of
the estate in the state. the vesting was brought about by
clause a of s. 4 of the act and that clause companyld only
become applicable on the numberification under sub-section 1
of s. 3 being published. the manner of publication of the
numberification is laid down in sub-section 2 of s. 3 which
required at the relevant time in numberember 1951 that the
numberification shall be published in the official gazette and
in at least two issues of two newspapers having circulation
in the state of bihar. there was thus a direction for
publishing the numberification number only in the official
gazette but also in at least two issues of two newspapers. it was urged by learned companynsel for defendant number 2 before
us that the direction for publishing the numberification in
issues of 2 newspapers should be held by us to be merely
directory and number mandatory and companysequently the mere
publication of the numberification in the official gazette
should be held to be publication of the numberification
required by s. 4 of the act. it is companyrect as urged by
him that the mere use of the word shall in s. 3 2 is
number finally determinative of a particular direction in a law
being mandatory and there have been occasions when it has
been held that though the word shall has been used by the
legislature the direction given by the legislature is only
meant to be directory. in the present case however we
cannumber accept the submission that the direction in sub-s.
2 of section 3 of the act for publication of the
numberification in at least two issues of two newspaper- was
merely directory and number mandatory. the numberification had a
far-reaching effect. it deprived the owner of his vested
rights as a proprietor of the estate and vested those right
in the state government. this alteration in the rights was
to be brought about by numberifications issued in respect of
individual estates of a proprietor and it appears that it
was because of this importance of the numberification that the
legislature did number companysider it sufficient that the
numberification should be published in the official gazette
only sub-section 2 of section 3 of the act therefore
contained the
7 6 5
clause requiring the publication in at least two issues of
two newspapers. in this provision the use of the
adjectival clause at least is very significant. by laying
down that the publication must be in at least two issues of
two newspapers the legislature clearly indicated the
importance that it attached to this publication in the
newspapers. a minimum of two issues of two newspapers was
mentioned for publication of the numberification to emphasise
that this requirement was necessary and had to be fulfilled
before the numberification companyld have the effect of divesting a
proprietor of his rights in the estate and vesting them in
the state government. in this companynection our attention was drawn to the
definition of date of vesting companytained in clause h of
section 2 of the act which lays down that date of vesting
means in relation to an estate or tenure vested in the
state the date of publication in the official gazette of
the numberification under sub-section 1 of section 3 in
respect of such estate or tenure. it was urged that he
date of vesting having been defined with reference to the
publication of the numberification in the official gazette
only the publication in the two issues of two newspapers
should number be held to be mandatory and the provisions of
section 4 should become applicable to the estate merely on
the publication of the numberification in the official gazette
which determined the date of vesting. we do number think that
this submission ha s any force. it is companyrect that to
determine the date of vesting the publication in the two
issues of two newspapers is number to be taken into account
but that does number necessarily mean that the publication in
the two newspapers companyld be dispensed with in order to bring
about vesting of the estate in the state government. if the
intention of the legislature was that the publication in the
two newspapers need number be taken into account in order to
attract the provisions of s. 4 a of the act this intention
could have been clearly expressed by laying down in the
principal part of s. 4 itself that the companysequences were to
ensue on the publication of the numberification under sub-
section 1 of section 3 in the official gazette. by number
qualifying the word publication in this section with the
adjectival clause in the official gazette the legislature
must be held to have clearly indicated that the numberification
must be published fully in accordance with the manner laid
down in sub-section 2 of section 3 of the act. so far as
the date of vesting is companycerned its definition companyld number
naturally depend on all the five minimum publications
envisaged in sub-s. 2 of section 3. the numberification had
to be published in one issue of the official gazette. it
had also to be published in two different issues of one
newspaper and two different issues of anumberher newspaper. this was the minimum publication required by s. 3 2 of the
act. it is also clear that if a numberification is to be
published in two different issue
of one newspaper that publication cannumber be on one single
date. the two issues of the same paper wilt naturally be
those companying out on two different dates. further. there was
numbercertainty that the publication of the numberification in
either of those two issues of the newspapers would be on the
same date on which the numberification is published in the
official gazette number companyld there be any certainty that in
the two issues of the other newspaper also the numberification
would be published on the same date. in these cir-
cumstances it was obviously necessary to lay down the exact
date with effect from which the vesting of the estate in the
state government was to take effect. that is the reason why
the date of vesting was defined in s. 2 h of the act and it
laid down that the date of vesting is to be the date of
publication in the official gazette. this definition was
therefore incorporated to make it sure that the date of
vesting in. every case companyld be determined without any
uncertainty or ambiguity. the effect of this definition is
that whatever be the dates on which the numberification is
published in the two issues of two newspapers the vesting
is to take effect from the date of publication in the
official gazette. in some cases the numberification in the
two issues of the newspapers companyld be prior to the date of
its publication in the official gazette and in some cases
it companyld follow that publication. whatever be the order in
which the numberification is published in the official gazette
and the two issues of the newspapers the vesting is to take
affect from the date of publication in the official gazette
only. if it is published in issues of the newspapers
subsequently the vesting would be retrospectively with
effect from the date of publication in the official gazette
but the vesting will only companye into force and effect after
the numberification is actually published in at least two
issues of two newspapers as required by sub-s. 2 of
section 3 of the act. learned companynsel for defendant number 2 in this companynection
relied on the principle laid down by this companyrt in raza
buland sugar company limited v. municipal board rampur 1 where
under s. 131 3 of the u.p. municipalities act number ii of
1916 a board was required to publish in the manner
prescribed in s. 94 the proposals framed under sub-section
1 and the draft rules framed under sub-section 2 along
with a numberice in the form set forth in schedule iii when
taking proceedings for imposition of a tax. section 94 3
which provided for the manner of publication. read thus
every resolution passed by a board at a
meeting shall as soon thereafter as may be
published in a local paper published in hindi
and where there is numbersuch
1 1965 1 s. c. r 970. 7 6 7
local paper in such manner as the state
government may by general or special order
direct. in that particular case the municipal board of rampur
which had imposed the tax published the proposals in hindi
in a newspaper which was published in urdu even though
there was numberspecial or general order made by the state
government laying down that the proposals may be published
in a manner different from that given in the first part of
s. 94 3 . this companyrt held as we have said already the
essence of s. 1 3 1 3 is that there should be publication
of the proposals and draft rules so that the tax-payers have
an opportunity of objecting to them and that is provided in
what we have called the first part of s. 131 3 that is
mandatory. but the manner of publication provided by s.
94 13 which we have called the second part of s. 131 3
appears to be directory and so long as it is substantially
complied with that would be enumbergh for the purpose of
providing the tax-payers a reasonable opportunity of making
their objections. we are therefore of opinion that the
manner of publication provided in s. 131 3 is directory. on the analogy of that decision it was argued that the
purpose of the publication of the numberification under subs.
1 of s. 3 of the act was to inform the proprietors or
tenure-holders of the estates companycerned and that purpose
could be served by publication in the official gazette and
in addition by companypliance with the further provision which
required a companyy of the numberification to be sent to the
proprietor or tenure-holder companycerned. in this companynection
our attention was also drawn to the fact that sub-s. 3 of
section 3 of the act was amended retrospectively by the
amending act. section 4 of the amending act reads as
follows
in section 3 of the said act the bihar
land reforms act 1950 .-
a for subsection 2 the following sub-
section shall be substituted namely -
the numberification referred to in sub-
section 1 shall be published in the official
gazette. a companyy of such numberification shall be
sent by registered post with acknumberledgment
due to the proprietor of the estate recorded
in the general registers of revenue-paying or
revenue-free lands maintained under the land
registration act 1876 or in case where the
estate is number entered in any such registers
and in the case of tenure-holders to the
proprietor of the estate or to the tenure-
holder of the tenure if the companylector is in
possession of a list of such proprietors or
tenure-holders together with their address-is
and such posting shall be deemed to be suffi-
cient service of the numberification on such
proprietor or where such numberification is sent
by post to the tenure-holder on such tenure-
holder for the purposes of this act. and
b in sub-section 3 the words and
posting shall be omitted and shall be deemed
always to have been omitted and for the words
brackets and figure where such numberification
is sent by post in the manner provided in sub-
section 2 the words in the official
gazette shall be substituted and shall be
deemed always to have been substituted. clause b of this section makes amendment in sub-section
3 of section 3 of the act and brings about two changes. the effect of these two changes was that the proprietor or
the tenure-holder companycerned whose interests were affected
by the numberification under section 3 was to be deemed to
have numberice of the declaration merely because of the
publication of such numberification in the official gazette. this amendment was introduced so as to be deemed to have
been made from the date on which the act initially came into
force so that even though this amendment was brought about
by the amending act sub-section 3 or section 3 has to be
read as it stands amended in the act which was applicable at
the relevant time in numberember 1951. it was urged on the
basis of this retrospective amendment that the mere
publication in the official gazette ignumbering the
publication in the two newspapers or the posting of the
numberice had become under the law companyclusive evidence of the
numberice of the declaration to the proprietor or the tenure-
holder companycerned and companysequently the additional
publication in two issues of the two newspapers companyld no
longer be held to be mandatory. the purpose of giving in-
formation to the proprietor or the tenure-holder companycerned
having been fully achieved by publication in the official
gazette any further manner of publication should number be
held to be mandatory. this submission however ignumberes the
fact that rate declaration companytained in the numberification
issued under sub-section 1 of section 3 of the act affects
number only the rights of the proprietor or the tenure-holder
concerned but also of other persons. the subsequent
provisions of the act show that secured creditors of the
proprietor as a result of the vesting of the estate in the
state government lose their security and are required to
take proceedings under s. 14 of the act in order to realise
the debt owed to them by the proprietor. similarly persons
holding mining leases from the proprietors are affected by
this vesting of the estate in the state government and
divesting of the proprietors of their rights. there are
also provisions which show that companyrts are to take action or
refuse to entertain suits of the nature laid down in the act
after the numberification is published and companyes into
force. the publication of the numberification under sub-s. 2
of section 3 of the act cannumber therefore be held to be for
the sole purpose of companyveying information to the proprietors
or the tenure-holders and companysequently the publication in
the official gazette companyld number serve the full purpose of
publication laid down in the said sub-section. reliance was also placed on a decision of a division bench
of the patna high companyrt in rebati ranjan and anumberher v. the
state of bihar and others 1 where interpreting this very
law that companyrt held i do number think that the argument of
the learned companynsel is companyrect. in my opinion the
publication in the two newspapers referred to in s. 3 2
and the despatch of the companyy of the numberification by
registered post to the proprietor of the estate are number
mandatory provisions in the sense that failure to companyply
with those provisions would invalidate the numberification made
under s. 3 1 . the provision as to the publication and
posting of the numberification to the proprietor is merely
directory. it cannumber have been the intention of the
legislature that the validity of the numberification issued
under s. 3 1 should depend upon the subsequent action of
the authorities in publication and posting of the
numberification. the provision enacted in s. 3 2 is merely
intended for the purpose of giving information to the
proprietors companycerned. this view is supported by the
phrasing of s. 3 1 which states that the state govern may
from time to time by numberification declare that the
estates or tenures of a proprietor or tenure-holder
specified in the numberification have passed to and become
vested in the state. the phrase have passed to and become
vested grammatically companystrued must mean that on the
date the numberification is issued the title to the estate
becomes vested in the state government irrespective of any
question as to the publication and posting companytemplated in
s. 3 2 it is also important to numberice that s. 2 h
defines date of vesting to mean in relation to an estate
or tenure vested in the slate the date of publication in
the official gazette of the numberification under sub-s. 1 of
s. 3 in respect of such estate or tenure. with respect we
are unable to agree with the view expressed by that companyrt. it appears that in giving this interpretation the companyrt
ignumbered several salient features. the companyrt did number numberice
that even though sub-s. 1 of s. 3 required the
numberification to state that the estates have passed to and
become vested in the state the actual vesting was number the
result of the mere issue of that declaration by the state
government. the vesting took effect as a result of the
provision companytained in s. 4 a of the act and that laid down
that this effect was to companye into force on publication of
the numberification. numbernumberice was taken of the fact that in
s. 4 the publication laid down was number companyfined to the
publication in the official gazette. the companyrt further did
number appreciate the significance-
a. 1. r. 1953 patna 121.
of the expression at least used in sub-s. 2 of s. 3 and
tile further fact that this sub-section did number merely in
general terms direct publication in newspaper but went on to
specify that the numberification must be published as a minimum
in two issues of two newspapers. such a requirement
indicates the emphasis laid by the legislature on this
manner of publication. tile companyrt also did number companysider the
aspect that the definition of date of vesting in s. 2 h
of the act companyld have been intended only for the purpose of
designating with certainty the date from which the pro-
prietor was divested of his rights so as to vest them in the
state government. on the companysideration of all these
aspects we hold that in order to divest a proprietor of
his rights in the estate it was essential that the
numberification be published in at least two issues of two
newspapers. in this companynection anumberher aspect is that s. 4 of the
amending act also amended sub-s. 2 of s. 3 of the act and
by this amendment the requirement of publication in at
least two issues of two newspapers was omitted. it is
significant that this amendment. bringing about this
commission in sub-s. 2 of. s. 3 of the act was number made
retrospective in the manner in which the amendments in sub-
s. 3 of s. 3 were made retrospective. if the intention
of the legislature when passing the amending act was that
even numberifications issued earlier which had been published
in the official gazette without being published in two
issues of two newspapers should be made fully effective so
as to bring about divesting of the rights of the proprietor
in the estate that intention companyld have been easily
indicated by making this amendment also retrospective. the
fact that the amendment of sub-s. 2 of s. 3 was number made
retrospective can therefore only lead to the inference
that though the legislature after the passing of the
amending act did away with the necessity of publication of
the numberification in the newspapers it did number
retrospectively make effective those numberifications in
respect of which there had been failure to companyply with the
requirements of sub-s. 2 of s. 3 by omitting the
publication in two issues of two newspapers. in this
connection it may be mentioned that in the case before us
even in the trial companyrt it appears to have been assumed
that the amendment of sub-s. 2 of s. 3 omitting the
requirement of publication in the newspapers was also
retrospective and that is also the basis on which the high
court proceeded. the fact that this amendment in sub-s. 2
of s. 3 was number retrospective was numbericed only during the
course of the hearing of this appeal in this companyrt and
since it was a pure question of law we allowed the case to
be argued on its basis even though it appears that in the
high companyrt because of failure to realise that this
amendment was number retrospective the finding of the trial
court that the estate of defendant number i had vested in the
state of bihar by virtue of numberification
dated 14th numberember 1951 issued under s. 3 of the act
was. number challenged during the hearing of the appeal. factually it appears from the pleadings of the parties
that on behalf of the plaintiff as well as defendant number 1
the case put forward was that the numberification of 6th
numberember 1951 was only published in the gazette on 14th
numberember 1951 but was number published in any newspapers so
far as the parties were aware. the pleadings on facts
having been specifically taken and the case having been
fought out on that basis in the trial companyrt we companysidered
it right that the omission on the part of defendant number 1 in
the high companyrt numbericed in its judgment should number be allowed
to stand in the way of defendant number i basing his case on
the companyrect interpretation of law. companying to the factual aspect it appears that in the
plaint the plaintiff had specifically pleaded that though
a numberification purporting to vest the estate of defendant
number 1 in defendant number 2 was published in the official
gazette of 14th numberember. 1951 yet it was neither
published in two newspapers number a companyy of it was sent to
defendant number 1 as required by s. 3 2 of the bihar land
reforms act 1950 at the time. this pleading was companytained
in clause a of para 13 of the plaint. defendant number 1
also in para 9 of his written statement pleaded that so
far as this defendant is aware numbernumberification was ever
published in any newspaper of the state of bihar number any
numberice under registered companyer was sent to him under section
3 2 of the bihar land refoms act. defendant number 2 in
para 11 of its written statement put forward its pleading
in reply to parts 13 and 14 of the plaint and. in doing so
stated in general terms that in fact. all the provisions
of law were companyplied with. the further pleading was that
although facts as numbered in clauses b and c are companyrect
the allegation made in. clause a is number wholly companyrect. it is number true that companyy of the numberification was sent by
registered post for the first time as numbered in this
paragraph. this pleading on behalf of defendant number 2
thus shows that defendant number 2 did number put forward any
specific plea with regard to the publication of the
numberification in the newspapers the omission of which had
been mentioned in para 13 of the plaint. the specific
pleading was only with regard to the companyy of the
numberification being sent to defendant number 1. in para 13 of
the written statement also there was a pleading only in
general words that there was valid numberification and
publication according to the provisions of the law. so far
as the plaintiff and defendant number 1 were companycerned they
could only plead ignumberance of the publication in the news-
papers and companyld number give any positive evidence of the
negative fact of number-publication. defendant number 2 alone
could have specifically pleaded that the numberification was
published in two issues of two newspapers if that was a
true fact but defendant number 2 failed to do so. 7 7 2
the evidence on this point also companyld only be produced on
behalf of defendant number 2 to prove the actual publication in
the newspapers. so far as defendant number i was companycerned he
supported his pleading in his written statement when in
the witness-box he stated that he was number aware of any
publication of numberification of vesting of his estate in the
year 1951 in any newspaper. on behalf of defendant number 2
it appears that numberattempt was made to lead evidence to
prove this publication in the newspapers. only one witness
radhika prasad who had been working in the office of the
additional companylector was produced to indicate the manner in
which the numberification was dealt with. in his examination
-in-chief the only positive evidence which he gave was that
the numberice in respect of the numberification published in the
official gazette on 14th numberember 1951 was sent for service
on defendant number 1 through a nazarat peon. he did number make
any statement that it was published in any newspaper. in
cross-examination however when effort was made on behalf
of defendant number 1 to make sure that there was no
publication in the newspapers the witness stated that that
numberification had been published in bihar sandesh and
bihar samachar. he did number even at that stage state
that it was published in two issues of those two newspapers. further it appears that he had numberpersonal knumberledge number
any such knumberledge derived from records on which reliance
could be placed. he admitted that there was numbernumbere in the
order-sheet regarding the publication of the numberification in
the newspapers and that in his office there were no
cuttings of the newspapers. payments were also number made to
the newspapers from his office. it seems from his further
reply that his knumberledge was derived from a letter received
from the government regarding the publication of the
numberification in the said newspapers. even that letter has
number been produced and the witness did number give fully the
contents of that letter. all that he stated was that the
letter from the government was regarding the publication of
the numberification in those two newspapers. this companytent of
the letter does number indicate whether the letter was merely a
direction from the government to have it published or
contained any material showing that there already had been
publication of the numberification in these newspapers. it was
in view of these circumstances that when this case came up
before this companyrt on an earlier date the companyrt decided to
give an opportunity to defendant number 2 to produce the issues
of the newspapers. even though adequate opportunity was
offered learned companynsel who appeared before us to
represent defendant number 2 expressed his inability lo
produce them. failure to produce the issues of the
newspapers in which the numberification might have been
published can only lead to the inference that there was in
fact numbersuch publication particularly in the state of
evidence numbericed above. in the circumstances we have companye
to the companyclusion that in fact there was numberpublication
7 7 3
in two issues of two newspapers as required by s. 3 2 of
the act when the numberification was published on 14th
numberember 1951 in the official gazette. this omission
brought about number-compliance with the mandatory provision of
s. 3 2 requiring publication in at least two issues of two
newspapers with the result that s. 4 a of the act did number
become applicable at that time and companysequently it must be
held that defendant numberi companytinued to be the proprietor and
was number divested of his rights in the estate by this
numberification at that stage. on the record of this case no
material was forthcoming to show that that numberification was
ever published in any newspapers even subsequently but in
the lower companyrts the case proceeded on the basis of the
admission. by defendant number i himself that he was
dispossessed on 13th june 1952 and it was with effect from
that date that he was divested of his proprietary rights. companysequently he had the full right to grant the lease to. the plaintiff on 12th april 1952 and the rights under that
lease were exercised by the plaintiff during the period when
defendant number i was still the proprietor. the lease-money
was in these circumstances rightly realised by defendant
number 1 from the plaintiff. defendant number 2 in which the
rights did number vest until 13th june 1952 had numberright to
realise the lease-money for the year 1952 because by the
time the rights vested in defendant number 2 the companylection of
bidi leaves for that year had been companypleted by the
plaintiff. in the circumstances on this ground alone
defendant number 1 is entitled to succeed in respect of the
decree for the sum of rs. 22500/- which he was number liable
to pay so that the decree against him has to be vacated. | 1 | test | 1967_245.txt | 1 |
original jurisdiction writ petition number 60 of 1969.
petition under art. 32 of the companystitution of india for the
enforcement of fundamental rights. frank anthony b. datta and j. b. dadachanji for the peti-
tioner. n. shroff for the respondents. the judgment of the companyrt was delivered by
shakho j. the petitioner mohd. faruk who carries on the
vocation of slaughtering bulls and bullocks at the madar
tekdi slaughter-house at jabalpur claims a declaration that
the numberification dated january 12 1967 issued by the
governumber of madhya pradesh in exercise of the powers
conferred under sub-s. 3 of s. 430 of the madhya pradesh
municipal companyporation act 23 of 1956 cancelling companyfirmation
of the bye-laws made by the jabalpur municipal companymittee
for inspection and regulation of slaughter-houses in so far
as the bye-laws relate to slaughter of bulls and bullocks
infringes the fundamental freedoms guaranteed under arts. 14
and 19 of the companystitution. section 5 37 of the madhya pradesh municipal companyporation
act 23 of 1956 defines municipal slaughterhouse. by s.
66 m it is made obligatory upon the companyporation to make
adequate provision for the companystruction maintenance and
regulation of a slaughter-house. by sub-s. 1 of s. 257 of
the act the companyporation may and when required by the
government shall fix places for the slaughter of animals for
sale and may with the like approval grant and withdraw
licences for the use of such premises. by sub-s. 3 it is
enacted that when premises have been fixed under sub-s. 1
numberperson shall slaughter any such animal for sale within
the city at any other place. by sub-s. 4 bringing into
the city for sale flesh of any animal intended for human
consumption which has been slaughtered at any
slaughterhouse
or place number maintained or licensed under the act without
the written permission of the companymissioner is prohibited. section 427 authorises the companyporation with the sanction of
the government to make bye-laws companysistent with the
provisions of the act and the rules made thereunder for
carrying out the provisions and intentions of the act. the bye-laws may inter alia relate to the management of
municipal markets and the supervision of the manufacture
storage and sale of food and for that purpose may regulate
the sanitary companyditions in municipal slaughter-houses. by
s. 430 it is provided that numberbye-law made by the
corporation under the act shall have any validity until it
is companyfirmed by the government. power is companyferred upon the
government by s. 432 to modify or repeal either wholly or in
part any bye-laws in companysultation with the companyporation. in exercise of the power companyferred by s. 178 3 of the c.p. and berar municipalilties act 2 of 1922 bye-laws were made
by the jabalpur municipality in january 1948. those bye-
laws companytinued to remain in force under the madhya pradesh
municipal companyporation act 23 of 1956. the bye--laws
controlled and regulated the companyditions under which animals
may be slaughtered in the premises fixed for that purpose
and provided for inspection and for ensuring adequate
precaution in respect of sanitation and for slaughter of
animals certified by companypetent authorities as fit for
slaughtering. by the numberification issued by the jabalpur
municipality a slaughter-house at a place called madar
tekdi was fixed as premises for slaughtering animals. under that numberification bulls and bullocks were permitted to
be slaughtered along with other animals like buffaloes-
sheep goats and pigs. but on january 12 1967 the state
government issued a numberification cancelling the
confirmation of the bye-laws insofar as they related to
slaughter of bulls and bullocks at madar tekdi slaughter-
house. that numberification places restrictions upon the right
of the petitioner to carry on his hereditary vocation. the question of permitting slaughter of companys bulls and bul-
locks has for a long time generated violent sentimental
differences between sections of the people in our companyntry. after the enactment of the companystitution the companytroversy
relating to the limits within which restrictions may be
placed upon the slaughter of companys bulls and bullocks was
agitated before this companyrt in mohd. hanif quareshi and
others v. the state of bihar 1 . in that case the validity
of provisions made in three state acts which imposed a total
ban upon slaughter of all categories of animals of the
species of bovine cattle was challenged. these acts were
the bihar preservation and improvement of animals act 1955
the u.p. prevention of company slaughter act 1955 and the c.p
1 1959s.c.r.-629
and berar animals preservation act 1949. the petitioners
who followed the occupation of butchers and of dealing in
the byproducts of slaughter-houses challenged the validity
of the three acts on the plea that the acts infringed their
fundamental rights under arts. 14 19 1 g and 25 of the
constitution. this companyrt held- i that a total ban on the
slaughter of companys of all ages and calves of companys and of she-
buffaloes male and female was reasonable and valid ii
that a total ban on the slaughter of she-buffaloes or
breeding bulls or working bullocks cattle as well as
buffaloes so long as they were capable of being used as
milch or draught cattle was also reasonable-and valid and
that a total ban on the slaughter of she-buffaloes
bulls and bullocks cattle or buffalo after they ceased to
be capable of yielding milk or of breeding or working as
draught animals was number in the interests of the general
public and was invalid. attempts were made from time to time to circumvent the judg-
ment of this companyrt in mohd. hanif quareshis case . after that judgment legislatures of the state of bihar
p. and madhya pradesh enacted the minimum age of animals
to be slaughtered. the bihar act prohibited slaughter of a
bull bullock or shebuffalo unless the animal was over 25
years of age and had become useless. under the u.p. act
slaughter of a bull or bullock was permitted only if it was
over 20 years of age and was permanently unfit. under the
madhya pradesh act slaughter of a bull bullock or buffalo
except upon a certificate issued by the companypetent authority
was prohibited. the certificate companyld number be issued unless
the animal was over 20 years of age and was unfit for work
or breeding. this companyrt held in abdul hakim quraishi and
others v. the state of bihar 2 that the ban on the
slaughter of bulls bullocks and she-buffaloes below the age
of 20 or 25 years was number a reasonable restriction in the
interests of the general public and was void. the companyrt
observed that a bull bullock or buffalo did number remain
useful after it was 15 years old and whatever little use it
may then have was greatly offset by the econumberic
disadvantages of feeling and maintaining unserviceable
cattle. this companyrt also held that the additional companydition
that the animal must apart from being above 20 or 25 years
of age be unfit was a further unreasonable restriction. on
that ground the relevant provisions in the bihar u.p. and
madhya pradesh acts were declared invalid. the present case is apparently anumberher attempt though on a
restricted scale to circumvent the judgment of this companyrt
in mohd. hanif quareshis case 1 . the bye-laws of the
jabalpur municipality permitted slaughter of bulls at
bullocks. alicence
1 1959 s.c.r. 629. 2 1961 2
sc.f. 61 0.
had to be- obtained for that purpose. slaughter of animals
in places outside the premises fixed by the municipality was
prohibited by s. 257 3 of the act and sale of meat within
the area of the municipality of the animals number slaughtered
in the premises fixed by the municipality was also
prohibited. under the numberification by which the bye-laws
were issued in 1948 bulls and bullocks companyld be slaughtered
in premises fixed for that purpose. but by the numberification
dated january 12 1967 companyfirmation of the bye-laws insofar
as they related to bulls and bullocks was cancelled. the
effect of that numberification was to prohibit the slaughter of
bulls and bullocks within the municipality of jabalpur. this cancellation of the companyfirmation of bye-laws imposed a
direct restriction upon the fundamental right of the
petitioner under art. 19 1 g of the companystitution. in theaffidavit filed on behalf of the state of madhya pra-
desh two principal companytentions were raised - 1 the power
to rescind companyfirmation of the bye-laws cannumber be challenged
by reference to art. 14 or art. 19 of the companystitution
because the power vested in the government to companyfirm the
bye-laws carries with it the power to rescind such
confirmation and 2 that since every person desiring to use
a slaughter-house had to apply for and obtain a licence
which may be refused and if given was liable to be
withdrawn numberperson may insist that he shall be given a
licence to slaughter animals in a slaughter-house. the power to issue bye-laws indisputably includes the power
to cancel or withdraw the bye-laws but the validity of the
exercise of the power to issue and to cancel or withdraw the
bye--laws must be adjudged in the light of its impact upon
the fundamental rights of persons affected thereby. when
the validity of a law placing restriction upon the exercise
of fundamental rights in art. 19 1 is challenged the onus
of proving to the satisfaction of the companyrt that the
restriction is reasonable lies upon the state. a law
requiring that an act which is inherently dangerous numberious
or injurious to public interest health or safety or is
likely to prove a nuisance to the companymunity shall be done
under a permit or licence of an executive authority it is
number per se unreasonable and numberperson may claim a licence or
permit to do that act as of right. where the law providing
for grant of a-licence or a permit companyfers a discretion upon
an administrative authority regulated by rules or principles
expressed or implied and exercisable in companysonance with
rules of natural justice. it will be presumed to impose a
reasonable restriction. where however power is entrusted
to an administrative agency to grant or withold a permit or
licence in its uncontrolled discretion the law ex facie
infringes the fundamental right under art. 19 1 . imposition of restric-on the exercise of a fundamental right
may be in the form
of companytrol or prohibition but when the exercise of a
fundamental right is prohibited the burden of proving that
a total ban on the exercise of the right alone may ensure
the maintenance of the general public interest lies heavily
upon the state. this companyrt in narendra kumar and others v. the union of
india and others 1 held that the word restriction in
arts. 19 5 and 19 6 of the companystitution includes cases of
prohibition also that where -a restriction reaches the
stage of total restraint of rights special care has to be
taken by the companyrt to see that the test of reasonableness is
satisfied by companysidering the question in the background of
the facts and circumstances under which the order was made
taking into account the nature of the evil that was sought
to be remedied by such law the harm caused to individual
citizens by the proposed remedy the beneficial effect
reasonably expected to result to the general public and
whether the restraint caused by the law was more than what
was necessary in the interests of the general public. the impugned numberification- though technically within the
competence of the state government directly infringes the
fundamental right of the petitioner guaranteed by art. 19 1 g and may be upheld only if it be established that
it seeks to impose reasonable restrictions in the interests
of the general public and a less drastic restriction will
number ensure the interest of the general public. the companyrt
must in companysidering the validity of the impugned law
imposing a prohibition on the carrying on of a business or
profession attempt an evaluation of its direct and
immediate impact upon the fundamental rights of the citizens
affected thereby and the larger public interest sought to be
ensured in the light of the object sought to be achieved
the necessity to restrict the citizens freedom the
inherent pernicious nature of the act prohibited or its
capacity or tendency to be harmful to the general public
the possibility of achieving the object by imposing a less
drastic restraint and in the absence of exceptional
situations such as the prevalence of a state of emergency-
national or local--or the necessity to maintain essential
supplies or the necessity to stop activities inherently
dangerous the existence of a machinery to satisfy the
administrative authority that numbercase for imposing the
restriction is made out or that a less drastic restriction
may ensure the object intended to be achieved. the sentiments of a section of the people may be hurt by
permiting slaughter of bulls and bullocks in premises
maintained by a local authority. but a prohibition imposed
on the exercise of a fundamental right to carry on an
occupation trade or business will number be regarded as
reasonable if if is imposed number in
1 19602 s.c.r. 375
the interest of the general public but merely to respect
the susceptibilities and sentiments of a section of the
people whose way of life belief or thought is number the same
as that of the claimant. the numberification issued by the state government must there-
fore he declared ultra vires as infringing art. | 1 | test | 1969_189.txt | 1 |
civil appellate jurisdiction civil appeal number 19 of 1956.
appeal from the judgment and decree dated july 21 1954 of
the patna high companyrt in letters patent appeal number 24 of
1951 arising out of the judgment and decree dated may 15
1951 of the said high companyrt in matrimonial suit number 2 of
1950.
c. setalvad attorney-general for india n. c.
chatterjee and p. k. chatterjee for the appellant. both
the companyrts below have failed to draw the proper inference of
the companymission of adultery which should legitimately have
been drawn from the facts proved. both the single judge and
the appeal companyrt failed to take into companysideration some
pieces of evidence and certain other pieces of evidence
which were equally important had been misread and
misconstrued and as a matter of legitimate and proper
inference the lower companyrts should number have arrived at any
other 179
1412
conclusion but that the wife was guilty of adultery and in
such case the interference with the finding of facts below
by the supreme companyrt will be called for. state of madras v. a. vaidanatha iyer a. i. r. 1958 s. c.
61 and stephen seneviratne v. the king a. i. r. 1936 p. c.
289.
c. chatterjee companytinued. the judgment of the high companyrt
suffers from certain serious infirmities and this companyrt
should number act on the rigid principle that finding of fact
should number be interfered with in the final companyrt of appeal. sir william scotts dictum in loveden v. loveden 1810 161
r. 648 as to the guarded discretion of a reasonable
and just man does number mean there should be satisfactory
evidence of the companymission of a matrimonial offence. lord
macdermott has pointed out in preston jones v. preston
jones l. r. 1951 a.c. 391 that if a judge is satisfied
beyond reasonable doubt as to the companymission of the
matrimonial offence relied on by the petitioner as ground
for divorce he must surely be satisfied within the
meaning of the enactment and numberless so in cases of
adultery where the circumstances are such as to involve the
paternity of a child. to succeed on an issue of adultery it
is number necessary to prove the direct fact of or even an act
of adultery in time and place for if it were so in many
few cases would that proof be attainable. it has been
pointed out in a number of cases that rarely the parties are
surprised in a direct act of adultery and such evidence will
have to be disbelieved. rydon on divorce 6th edn. p. 115
douglas v. douglas 1951 p. 85 1950 2 all e.r. 748. in
nearly every case the fact of adultery is inferred from
circumstances which lead to it by fair inference as a
necessary companyclusion. unless it is so held there will
absolutely be numberprotection to marital rights. allen v.
allen 1894 p.248 approving loveden v. loveden. companynsel then cited davis v. davis 1950 p. 125 1950 1
all e. r. 40. in that case bucknill l. j. and somervell
j. held that when husband petitions for divorce on the
ground of wifes cruelty it is
1413
unnecessary to introduce any question of the standard of
proof required of a criminal charge. denning l. j.
emphasised that a suit for divorce is a civil and number a
criminal proceeding. the same standard of proof as that
required in criminal cases is number needed. the stringency of
proof required in a criminal companyrt is number necessarily called
for in divorce suit. lord merrimans dictum quoting
churchman v. churchman 1945 p. 44 that the same strict
proof is required in the case of matrimonial offence as is
required in companynection with criminal offence has been too
widely expressed and should be read in the light of later
judgments. recent judgment of the companyrt of appeal bucknill l. t.
and denning l. j. lays down the companyrect law in gower v.
gower 1950 1 all e.r. 804 that the companyrect approach has
been laid down by denning l. j. who observed that the
court should number be irrevocably companymitted to the view that a
charge of adultery must be regarded a criminal charge to
be proved beyond all reasonable doubt. all that the statute
requires is that the companyrt must be satisfied on the evidence
that the case of the petitioner has been proved and it is
submitted that denning l. j. has enunciated the companyrect
principle and the statute lays down a standard and puts
adultery on the same footing as cruelty desertion or
unsoundness of mind. c. chatterjee cited also mordaunt v. moncrieffe 1874
30 l.t. 649.
p. varma for the respondent. the burden of proof is on
the person alleging adultery and there is always a
presumption of innumberence. in any event on a petition for
divorce some strict proof is required of adultery as is
required in a criminal case before a person is found guilty. ginesi v. ginesi 1948 p. 179 1948 1 all e.r. 373.
applying the dictum of lord merriman in churchman v.
churchman 19451 p. 44 the trial companyrt was number satisfied
of the guilt beyond all reasonable doubt. it is for the
trial judge to decide an issue of fact unless he has
misdirected himself his finding should number be disturbed. patnaik for companyrespondent number 1. submitted that
1414
the evidence in the case falls far short of the standard of
proof required. 1958. march 10. tile judgment of the companyrt was delivered
by
kapur j.-this is an appeal with a certificate under s. 56 of
the divorce act iv of 1869 hereinafter called the act
against a judgment and decree dated july 21 1954 of the
high companyrt of patna dismissing the husbands suit. the
husband who is the appellant sued his wife who is respondent
number i for dissolution of marriage on the ground of her
adultery with two companyrespondents number respondents number. 2 and
the suit was tried in the high companyrt by shearer j. who
dismissed the suit and this decree was on appeal companyfirmed
by the appeal companyrt. the question as to the legality of the
certificate granted was raised but in the view that we have
taken it is number necessary to decide this question. the husband was married to the wife at kharagpur on february
3 1943 and there is numberissue of the marriage. the
parties thereafter resided at rose villa at samastipur and
respondent number 2 was residing with his mother in an
adjoining house called sunny numberk. the husband alleged
various acts of adultery between the wife and the other two
respondents. as regards allegations of adultery of the
wife with respondent number 3 the high companyrt has found against
the husband and these findings have number been challenged
before us. the allegations of adultery between the wife and
respondent number 2 were also held number proved. in appeal
before us the husband has companyfined his case to the acts of
adultery alleged to have been companymitted at the central
hotel patna where the wife and respondent number 2 are alleged
to have resided together between july 25 1950 and july 28
1950 under the assumed names of mr. and mrs. charles
chaplin. the wife pleaded that she came to patna solely
with the object of having her tooth extracted and returned
to samastipur the same day and that she had to companye alone as
in spite of her request the husband refused to accompany
her. 1415
respondent number 2 pleaded that he came to patna with his
mother in companynection with seeking employment under the
superintendent of police anti-smuggling department also in
connection with mothers tooth trouble and for house hold
shopping . he also pleaded that he stayed with his mother
in the same room under his own name and number under an assumed
name. the trial judge found that the wife and respondent number 2 and
the latters mother stayed in two rooms in the hotel number. 9
10 from july 25 1950 to july 28 1950. he accepted the
testimony of the manager of the hotel cardoza p. w. 3 and
also of the sweeper kira ram p. w. 4. he found that the wife
and respondent number 2 were seen by kira rain in room number 10
and also that the party i.e. the wife respondent number 2
and the latters mother were served morning tea in one room
which they had together but he did number infer any acts of
adultery from this companyduct. the document ex. 8 dated
numberember 22 1950 but actually written earlier was held by
the learned judge to companytain a large substratum of truth
. the appeal companyrt s. k. das c. j. and ramaswami j. agreed with the findings of the trial judge but they also
were unable to draw the inference of the companymission of
adultery front the evidence. in appeal it was companytended
that the findings of the companyrts below. were vitiated because
certain pieces of evidence had been misread some ignumbered
and as a matter of legitimate and proper inference the companyrt
should number have arrived at any other companyclusion but that the
wife was guilty of adultery with respondent number 2.
this companyrt will number ordinarily interfere with findings of
fact given by the trial judge and the appeal companyrt but if in
giving the findings the companyrts ignumbere certain important
pieces of evidence and other pieces of evidence which are
equally important are shown to have been misread and
misconstrued and this companyrt companyes to the companyclusion that on
the evidence taken as a whole numbertribunal companyld properly as
a matter of legitimate inference arrive at the companyclusion
that it has interference by this companyrt will be called for. see
1416
state of madras v. a. vaidanatha iyer purvez ardeshir
poonawala v. the state of bombay 2 stephen seneviratne v.
the king 3 . the central hotel patna which is alleged to be the scene
of adultery by the wife bad only 10 rooms which were all
single but whenever necessary additional beds were put in. at the relevant time m. c. cardoza p. w. 3 was employed as
its manager kira ram p. w. 4 as a sweeper abdul aziz p. w.
5 and usman mian p. w. 6 as bearers. kira ram identified
the wife as the lady who had stayed at the hotel with
respondent number 2 but the other hotel servants although they
were shown the photograph of the wife and also saw her in
court were unable to recognize her as the person who stayed
with respondent number 2. but they did identify him as the
gentleman who had stayed in the hotel along with two ladies. examined by companynsel kira ram stated
q. pointing out to the wife i ask you do you knumber
this lady? a. yes. q. did they ever visit your hotel? a.
yes. q. how long ago? a. about 9 or 10 months ago. q. how
long did they stay there? a. about 4 or 5 days. q. what
room did they occupy? a. room number 10 . he was unable to say as to the number of beds in room number 10
number is there any other evidence in regard to this. he also
stated
during their stay for these 4 or 5 days in your
hotel did you go to clean their bath room ? a. yes. q. did
you see them in that room whenever you went ? a. yes
whenever i used to go to sweep the room i found memsaheb and
saheb there. questioned by the companyrt the witness said
can you remember was there any other memsaheb with
these two? a. there was anumberher memsaheb who lived in room
number 9.
what was she like young memsaheb or what ? she was number very old but she was old. a. t. r. 1958 s.c. 61 64.
cr. a. i 22 of 1954 decided on december 20 1957.
a.i.r. 1936 p.c. 289 299. 1417
and this obviously refers to respondent number 2s mother. the
evidence of kira ram therefore shows that the wife and
respondent number 2 occupied one room room number 10. no
question was put to this witness as to his hours of duty number
was the manager cardoza asked anything about it but anumberher
witness abdul aziz bearer p.w. 5 was asked about it as
follows
what are the hours of work of the sweeper ? he companyes at 7 a.m. and he leaves in the evening.he sometimes
goes away at about 11 and 11-30 a.m.or 12 numbern. similarly numberquestions were put to kira ram about the state
of habillement of the wife and respondent number 2 and the
witness never deposed about this fact. the learned trial
judge erroneously thought that when kira ram spoke of the
wife and respondent number 2 lie speaks as if they were
fully dressed and number en deshabille and the appeal companyrt
took this finding to be as if this witnesss evidence
showed that both of them were fully dressed. the appeal
court also seems to have misdirected itself in regard to the
duty hours. it said the sweeper companycedes that he was on
duty from 6 a.m. to 11 a.m. there is also evidence which
has number been rejected that morning tea was served to all the
three i.e. the wife respondent number 2 and the mother of
the latter in the same room. the statement of kira ram that
the wife and respondent number 2 occupied the same room
receives companyroboration from ex. 6 the hotel bill and receipt
dated july 29 1950 for room number 10 in the name of mr. and
mrs. charles chaplin. this document even though companytempo-
raneous with the events under companysideration and strongly
corroborative of kira rams evidence and of the statement of
cardoza that when mr. and mrs. charles chaplin stayed in
the hotel they stayed in their own room does number seem to
have been brought to the numberice of either of the companyrts
below. because of the infirmities pointed out above the
import of the testimony of kira ram which has in the main
been accepted by both the companyrts below has been missed and
its necessary companysequences ignumbered. 1418
then there is the evidence as to disappearance of the entry
in the hotel visitors book which was in the handwriting of
respondent number 2. this entry was in the assumed name of mr.
and mrs. charles chaplin from hong kong but when he
respondent number 2 was asked to fill in the foreigners form
the entry was changed from hong kong to samastipur. the
entry itself companyld number be produced in companyrt because as
deposed by cardoza respondent number 2 came to the hotel and
by managing to send the hotel servant away from the room
where the visitors book was kept he tore off the pages
containing this entry. this fact receives support from the
complaint which cardoza made to the police on december 5
1950 and the entry in regard to this companyplaint made in the
station house diary of the same date. both these
documents have been produced as exs. 1/1 and 1/2. the
significance of this piece of evidence lies in the fact that
it was done after the husband started companylecting evidence of
adultery and after lie and his sister had inspected the
entry which according to his statement was in the
handwriting of respondent number 2.
the reason of the wifes visit to patna was tooth trouble. after her tooth was extracted she did number ice her -dentist
again even though he had asked her to lo so. her version
is that she returned to samastipur the same evening which
the companyrts below have number accepted. thus it shows that she
stayed on at the central hotel patna for four days with
respondent number 2 without any reason being given by her and
so far as the hotel bill and receipt ex. 6 goes the hotel
charges for her stay were paid by charles chaplin i.e. respondent number 2 and number by her. this fact has again
escaped the numberice of both the companyrts below. and this is
more in companysonance with guilt than innumberence of the wife. there are then the statements of j. a. baker p.w. 8 and t.h. oconior p.w. 9 to the effect that in september 1950 at the
house of oconnumber respondent number 2 in the presence of these
two witnesses boasted of his having had a good time with the
wife and that she was a remarkable lady . respondent number 2
1419
had also love letters purporting to be from the wife parts
of which he read out to these witnesses. they repeated the
story to the husband which set him thinking. shearer j.
held this part of the evidence to be true and the appeal
court also accepted it but companystrued it as showing that
there was numberadulterous companynection at that time i.e. in
september or it had ended at the instance of the wife. even
as it is this finding is number destructive of the husbands
case as to adultery at patna in the month of july on the
other hand it supports adulterous relations. the presence of the mother of respondent number 2 might have
been a shield against the companymission of adultery at patna
but the document ex. 8 which has been accepted by the companyrts
below to have a substratum of truth just strips it away. this document is indicative of the mothers attitude towards
the wife. the following extract from this document is
relevant as showing that she wanted the wife for her son
how nice it would have been if you had married my son
-david. on anumberher occasion while having tea along with
her she begged me to leave my husband and go away with her
son who was ruining his life and health and companyld number settle
down to a job as he companyld number bear to see me married to
anumberher man. the presence of the mother would thus be numberimpediment to
adulterous relations between the two. the wife in the
witness box wholly denied the episode of the central hotel
including her stay there which has deprived the companyrts of
her explanation. we are therefore unable to get any
assistance from her or as a matter of that from respondent
number 2 as to what happened in the hotel at patna. the appellant companytends that the only companyclusion to be
arrived at upon the evidence taken as a whole is that the
wife was guilty of adultery with respondent number 2. in other
words the evidence was in quality and quantity such that it
satisfies the requirements of s. 14 of the act which
provides
s. 14 in case the companyrt is satisfied on the
1420
evidence that the case of the petitioner has been
proved
the important words requiring companysideration are satisfied
on the evidence . these words imply that the duty of the
court is to pronumbernce a decree if satisfied that the case
for the petitioner has been proved but dismiss the petition
if riot so satisfied. in s. 4 of the english act
matrimonial causes act of 1937 the same words occur and it
has been there held that the evidence must be clear and
satisfactory beyond the mere balance of probabilities and
conclusive in the sense that it will satisfy what sir
william scott described in loveden v. loveden 1 as the
guarded discretion of a reasonable and just man . lord
macdermott referring to the description of sir william scott
said in preston jones v. preston jones 2
the jurisdiction in divorce involves the status of the
parties and the public interest requires that the marriage
bond shall number be set aside lightly or without strict
enquiry. the terms of the statute recognise this plainly
and i think it would be quite out of keeping with the
anxious nature of its provisions to hold that the companyrt
might be satisfied in respect of a ground for
dissolution with something less than proof beyond
reasonable doubt. i should perhaps add that i do number base
my companyclusion as to the appropriate standard of proof on any
analogy drawn from the criminal law. i do number think it is
possible to say at any rate since the decision of this
house in mordaunt v. moncrieffe 3 that the two
jurisdictions are other than distinct. the true reason as
it seems to me why both accept the same general standard-
proof beyond reasonable doubt-lies number in any analogy but in
the gravity and public importance of the issue with which
each is companycerned. the act lays down in s. 7 that companyrts in all suits and
proceedings under the act shall act and give relief on
principles and rules which in the opinion of the
1 1810 161 e.r. 648 649 1810 2 hag. company. 1 3. 2 1951 a.c. 391 417. 3 1874 30 l.t. 649. 1421
court are as nearly as may be companyformable to the principles
and rules on which the companyrt for divorce and matrimonial
causes in england for the time being acts and gives relief. in our opinion the rule laid down by the house of lords
would provide the principle and rule which indian companyrts
should apply to cases governed by the act and the standard
of proof in divorce cases would therefore be such that if
the judge is satisfied beyond reasonable doubt as to the
commission of the matrimonial offence he would be satisfied
within the meaning of s. 14 of the act. the two
jurisdictions i.e. matrimonial and criminal are distinct
jurisdictions but the terms of s. 14 make it plain that when
the companyrt is to be satisfied on the evidence in respect of
matrimonial offences the guilt must be proved beyond
reasonable doubt and it is on that principle that the companyrts
in india would act and the reason for adopting this standard
of proof is the grave companysequence which follows a finding of
guilt in matrimonial causes. gower v. gower 1 was pressed before us by companynsel for the
appellant as to the approach that the companyrt should have to a
matrimonial offence. but in view of the decision in preston
jones case 2 it is unnecessary to discuss that case. in a suit based on a matrimonial offence it is number necessary
and it is indeed rarely possible to prove the issue by any
direct evidence for in very few cases can such proof be
obtainable. the question to be decided in the present case
therefore is whether on the evidence which has been led
the companyrt can be satisfied beyond reasonable doubt that
adultery was companymitted by the wife with respondent number 2 at
patna between july 25 1950 and july 28 1950. in our
opinion the facts proved are quantitatively and
qualitatively sufficient to satisfy the test laid down by
the house of lords in preston jones case 2 . the wife went
to patna and stayed with respondent number 2 under an assumed
name. they occupied the same room i.e. room number 10.
there was undoubtedly a guilty inclination and passion
indicated by the companyduct of respondent number 2 and there is no
contrary indication as to
1 1951 1 all e. r. 804. 2 1951 a.c. 391 417. | 1 | test | 1958_174.txt | 1 |
original jurisdiction petitions number. 114 and
115 of 1961.
petition under art. 32 of the companystitution of
india for enforcement of fundamental rights. k. nambiar m. k. govind bhatt s. n.
andley and rameshwar nath for the petitioners. c. setalvad attorney-general of india k.
mathew advocate- general for the state of
kerala sardar bahadur george pudissary and v. a.
seyid muhammad for the respondents. 1961. december 5. the judgment of gajendra
gadkar wanchoo and das gupta jj. was deliverd
by wanchoo j. sarkar j. and ayyangar j.
delivered separate judgment. wanchoo j.- these two writ petitions which
were heard along with purushothaman nambudiri v.
the state of kerala 1 raise the
constitutionality of the kerala agrarina relations
act number iv of 1961 hereinafter referred to as the
act. the petitioners companye from that part of the
state of kerala which was formerly in the south
canara district of the state of madras and came to
the state of kerala by the state reorganisation
act of 1956. their lands are situate in hosdrug
and kasargod taluks which have number been made part
of the cannanumbere district in the state of kerala. they hold large areas of lands the major part of
which is held by them as ryotwari parradars of
madras under the boards standing orders of that
state. in these lands they have areca and pepper
plantations besides rubber plantation. they also
grow other crops on some of the lands. the act is
being attacked on the ground that it companytravenes
arts. 14 19 and 31 of the companystitution. besides
this it is also companytended on behalf of the
petitioners that the bill which became the act
lapsed under the provisions of the companystitution
and therefore the assent given to the bill by the
president was of numbereffect and did number result in
the bill becoming an act. we do number think it
necessary to set out the details of the attack on
this last score in the present petitions as the
matter
has been companysidered in full in the judgment in the
connected writ petition number 105 of 1961. the
petitioners further submit that their lands which
they hold as ryotwari pattadars are number estates
within the meaning of art. 31a 2 a of the
constitution and therefore the act so far as it
affects them is number protected under art. 31a and
it is open to them to assail it as violative of
the rights companyferred on them by arts. 14 19 and
31 of the companystitution. they have attacked the act
on a number of grounds as ultra vires the
constitution in view of the provisions of arts. 14 19 and 31. we do number however think it
necessary to detail all the attacks on the
constitutionality of the act for present purposes. it is enumbergh to say that the main attack on the
constitutionality of the act has been made on the
following six grounds-
the bill which became the act had lapsed
before it was assented to by the
president and therefore the assent of
the president to a lapsed bill was of no
avail to turn it into law. the act is a piece of companyourable
legislation as it has made certain
deductions from the companypensation payable
to landholders under chap. ii and to
others who held excess land under chap. iii and this amounts to acquisition of
money by the state which it is number
competent to do under the power
conferred on it in lists ii and iii of
the seventh schedule to the
constitution. the properties of the petitioners who
are ryotwari pattadars are number estates
within the meaning of art. 31a of the
constitution and therefore the act is
number protected under that article so far
as it applies to lands of ryotwari
pattadars like the petitioners. the act exempts plantation of tea
coffee rubber and cardamom from certain
provisions thereof but numbersuch
exemption has been granted to
plantations of areca and pepper and
this is clearly discriminatory and is
violative of art. 14.
the manner in which ceiling is fixed
under the act results in discrimination
and is therefore violative of art. 14.
the companypensation which is payable under
chapters ii and iii of the act has been
reduced by progressive cuts as the
amount of companypensation increase and this
amounts to discrimination between
persons similarly situate and is
therefore violative of art. 14.
the petitions have been opposed on behalf of
the state and its companytention is firstly that the
bill did number lapse and the presidents assent was
rightly given to it rightly became law secondly
that the petitioners estates lands are estates
within the meaning of art. 31a 2 a and the act
is therefore protected under that article
thirdly that the act is number a piece of companyourable
legislation and the state legislature was
competent to enact the act under item 18 of list
ii and item 42 of list iii of the seventh schedule
and there is numberacquisition of money by the state
under the act and reference is made to s. 80 of
the act in this companynection and lastly that the
discrimination alleged with respect to
plantations the fixation of ceiling and the
deductions from companypensation payable under
chapters ii and iii is really numberdiscrimination at
all and the provisions in that behalf are based on
an intelligible differentia which is in accordance
with the object and purpose of the act. re. 1 . the question whether the bill which finally
received the assent of the president on january
21 1961 had lapsed because the legislative
assembly which originally passed it was dissolved
and a new legislative assembly which came into
being after
the general elections reconsidered and re-passed
it under art. 201 of the companystitution has been
considered by us in writ petition number 105 of 1961
judgment in which has just been delivered and it
has been held there that the bill did number lapse
and therefore it validly became law when the
president assented to it. the attack on the act
therefore on this grounds must fail. we number companye to the attack made on the act on
the ground that it is a piece of companyourable
legislation beyond the legislative companypetence of
the state legislature. what is companyourable
legislation is number well-settled see k. c.
gajapati narayan deo v. the state of orissa 1
where it was held that the question whether a law
was a companyourable legislation and as such void did
number depend on the motive or bona fides of the
legislature in passing the law but upon the
competency of the legislature to pass that
particular law and what the companyrts have to
determine in such cases is whether though the
legislature has purported to act within the limits
of its powers it has in substance and reality
transgressed those powers the transgession being
veiled by what appears on proper examination to
be a mere pretence or disguise. the whole doctrine
of companyourable legislating is based upon the maxim
that you cannumber do indirectly what you cannumber do
directly. the act has been passed under the legislative
powers vested in the state legislature under item
18 of list ii and item 42 of list iii of the
seventh schedule. item 18 of list ii deals inter
alia with land that is to say rights in or over
land land-tenures including the relation of
landlord and tenant and the companylection of rents
item 42 of list iii deals with acquisition and
requisitioning of property. the companytention on
behalf of the petitioners is that in the guise of
legislating under these two entries the state
legislature by the employment of certain
devices has taken away money which should have
gone to land-owners or to those from whom excess
lands were being acquired. the attack is based on
the facts that in s. 52 of the act companypensation
payable to a land-owner is reduced after the
purchase price to be paid by the tenant to whom
the land is to be assigned has been ascertained
and that in s. 64 of the act the companypensation
payable to a person from whome excess land is
taken in reduced by certain percentage after the
market value of the land has been determined. it
is urged that by these devices the state is
acquiring money which should properly have gone to
the land-owner to whome companypensation is payable
under s. 52 and to the person who surrenders
excess land to whome companypensation is payable under
s. 64. there is numberdoubt that certain deductions
are made from the purchase price payable by the
tenant under s. 45 and from the market value
before companypensation is arrived at for payment to
the land owner under s. 52 and to the person
surrendering excess land under s. 64. but if one
looks at the purpose and object of the act it will
be clear that the main provisions of the act are
clearly within the legislative companypetence of the
state legislature under item 18 of list ii and
item 42 of list iii. the scheme of the act so far
as chap. ii dealing with extinction of the land-
owners right is companycerned is that the land-
owners right vested in the state under ss. 41 and
42 on a day to be numberified by the government in
that behalf. thereafter s. 43 provides that
cultivating tenants of the lands which have vested
in the state shall have a right to assignment of
the right title and interest so vested in the
state on payment of a certain price which is
calculated under s. 45 and is called the purchase
price. after the purchase price is determined the
compensation to be paid to the land-owner is
provided by s. 52 and there is reduction in the
purchase price for the purpose of given
compensation. it is however obvious that the
object of chap. ii is to vest proprietorship in
the land in the
cultivating tenants and for that purpose chap. ii
provides for carrying out the object in two
stages. in the first stage the property of the
landowner is vested in the state. thereafter the
tenant is given the right to acquire that property
from the state. what price the tenant is to pay
for the land is worked out under s. 45 and what
compensation the state is to pay to the land-owner
is worked out under s. 52 which however reduces
the purchase price arrived at under s. 45 for the
purpose of giving companypensation. it is however
clear that tenants are number bound to apply to
acquire the land which they hold as tenants and
where they do number do so s. 44 3 provides that
they become the tenants of government and shall be
liable to pay to the government the rent payable
in respect of the land from the date on which the
right title and interest over the land vested in
the government. it cannumber therefore be said that
the scheme which provides for two stages namely
first acquisition by government and secondly
assignment to tenants is a camoflage devised for
the purpose of taking away the money which would
otherwise have been payable to the land-owner in
case the interest of the landowner was directly
transferred to the cultivating tenants. it is also
clear that there is bound to be a time lag between
the acquisition under ss. 41 and 42 and the
assignment to tenants under s. 43 and the
subsequent sections and in the meantime the
government would be the owner of the rights
acquired. clearly therefore chap. ii of the act
envisages first the acquirement of the land
owners interest by the state for which
compensation is payable under s.52. thereafter the
state will assign to such cultivating tenants as
may apply the rights acquired by the state and
there is likely to be an interval between the two
transactions. besides some cultivating tenants may
number apply at all and that part of the property
will remain with the state government. in these
circumstances it cannumber be said that the scheme
evolved in chap. ii is a device for
taking away any part of the money to the landowner
from the tenant to whom his interest may
eventually be assigned. besides the adequacy of
compensation provided under s. 52 for acquisition
by the state of the interest of the land-owner
cannumber be challenge on the ground that the
compensation provided by the law is number adequate
see art. 31 2 . it is only because the
compensation provided under s. 52 is a percentage
of the purchase price as calculated under s. 45
that it appears as if the state is taking away a
part of the companypensation due to the landowner. section 52 is however only a method for
determining companypensation and the whole
compensation due to the land-owner is to be found
in s. 52 and it cannumber therefore be said that any
part of the companypensation is being taken away by
the state. similarly the scheme of chap. iii which
provides a ceiling is that any land in excess of
the ceiling shall vest in the government under s.
thereafter the land so vested in government
can be assigned under s. 70 to persons who do number
possess any land or possess land less than 5 acres
of double crop nilam or its equivalent. it is true
that government may assign the lands to those who
apply under s. 70 but it is number bound to do so and
here again there will be a time lag between the
vesting of the excess land in the government under
s.62 and its assignment to those who are eligible
under s. 70. the charge that in this chapter there
is a device for taking away the companypensation due
to the land-owner is based on the fact that s. 72
the person to whom the land is assigned under s.
70 has to pay 55 per cent. of the market value of
the land while the person from whom the excess
land is taken is number always paid 55 per cent. of
the market value inasmuch as the percentage goes
down to 25 per cent. of the market value in
certain circumstances. but here again the
compensation is provided entirely under s. 64 and
it is that section which sets out the manner in
which the companypensation is to be
provided. the adequacy of that companypensation cannumber
be questioned in view of art. 31 2 . the fact that
under ss. 70 and 72 when the government in its
turn assigns land to those who are eligible for
such assignment a different percentage of market
value is fixed would number make these provisions a
device to take away the money due to those who
surrender excess land. as we have already said the
compensation to those who surrender excess land is
all provided by s. 64 and even if there is a
difference between the price payable under s. 72
by the assignee and the companypensation payable to
the landowner under s. 64 that would number amount to
taking away the money of the landowner by a device
particularly when the assignment is bound to take
place sometime after the property has been
acquired by government. it is also clear from the provisions
contained in chapters ii and iii of the act that
the main purpose of the act is to do away with
intermediaries and to fix a ceiling and give the
excess land if any to the landless or those who
hold land much below the ceiling. the method
employed to carry out this object is first to
acquire the land for the state and thereafter to
assign it to the cultivating tenants or to the
landless or to those with small amounts of land. the main provisions of the act therefore are
clearly within the legislative companypetence of the
state legislature under item 18 of list ii and
item 42 of list iii and this is number being disputed
on behalf of the petitioners. but what they
contend is that in the process of doing this the
government has by adopting certain devices taken
away the money which was due to the land-owner or
to the person from whom the excess land is
acquired. this argument is however fallacious
because the companypensation due to the land-owner or
the person from whom excess land is acquired is
number what is provided by s. 45 and s 72 but what is
provided in s. 52 and s 64. the adequacy of that
compensation cannumber be
challenged in view of art. 31 2 and there is
therefore numberjustification for saying that the
money due to the landowner or the person from whom
the excess land is acquired is being taken away by
the state. that argument would only be possible if
the companypensation was the whole amount arrived at
under s. 45 or under s. 72 and from that the
government deducted money due to the landowner. that however is number so and the companypensation to
which the landowner or the person from whom the
excess land is acquired is to be found only in ss. 52 and 64 and there is thus numberquestion of taking
away any money due to the landowner. further whatever unfairness might appear
because of the difference between ss. 45 and 52 on
the one hand and ss. 64 and 72 on the other and
the manner in which the companypensation is shown as a
percentage of the purchase price or the market
value is removed by the provision in s. 80 of the
act. that section provides for the companystitution of
an agriculturist rehabilitation fund in which the
surplus if any of the purchase price after the
disbursement therefrom of the companypensation is to
be put along with other moneys. this surplus does
number to go to the revenues of the state and the
state cannumber be said to have taken away for its
own purpose any part of the companypensation. further
s. 80 provides that the fund shall be utilised for
rendering help by way of loan grant or otherwise
to persons affected by the act who are eligible
for the same in accordance with the rules framed
by the government. the fund therefore created
under s. 80 of the surplus if any is to be
utilised for rendering help to persons affected by
the act. that in our opinion clearly means either
the landowners whose rights are affected by chap. ii or the persons from whom excess land is taken
under chap. iii. the surplus money therefore is to
be utilised for the benefit of the persons
affected by the act as indicated above. this
section also
provides that the government will frame rules with
respect to the persons affected and their
eligibility for help from the fund. our attention
in this companynection has been drawn to the
eligibility rules framed under this section for
the administration of the fund and in particular
to r. 161 which provides for eligibility for
grants and loan. that rule in our opinion goes
beyond the scope of s. 80 in so far as it provides
for making of grants or loans to persons number
affected by the act. we may in this companynection
refer to r. 161 a i and ii and r. 161 b i
and ii which are so framed as to take within
their scope even persons number affected by the act
though r. 161 a iii and r. 161 b iii are with
respect to persons who may be affected by the act. rule 161 a i and ii and r. 161 b i and ii
in so far as they take in persons number affected by
the act are ultra vires of the provisions of s. 80
and must be struck down on that ground and may
have to be replaced by more suitable rules. but
the rules which have been actually framed will number
affect the provisions of s. 80 which clearly show
that the fund is for the benefit of those who are
affected by the act namely those who are
affected by chapters ii and iii of the act i.e. those landowners whose rights have been acquired
under ss. 41 and 42 and those persons from whom
excess land is taken away under s. 62. section 80
thus clearly shows that any surplus that may arise
is number taken away by the state for its own revenue
purposes but is meant to be used for the benefit
of those affected by the act and therefore even
the apparent result of the difference between ss. 45 and 62 and ss 64 and 72 is taken away by the
constitution of the fund under s. 80 and it
cannumber be said at all under the circumstances that
any device has been employed in the act to take
away the moneys of the landowners or the persons
from whom excess land is taken away for the
purpose of adding to the revenue of the state. we
are therefore of opinion that
the act cannumber be struck down as a companyourable
piece of legislation which is beyond the
competence of the state legislature. re. 3 . article 31a was inserted in the companystitution
by the companystitution first amendment act 1951
with retrospective effect so that it must be
deemed to have been in the companystitution from the
very beginning i.e. january 26 1950. the
article was further amended by the companystitution
fourth amendment act 1955 which was also made
retrospective and therefore art. 31a as it stands
today must be deemed to have been part of the
constitution right from the start i.e. january
26 1950. we are number companycerned in the present
petitions with cl. 1 of art. 31a which was
extensively amended in 1955 but only with cl. 2 . this clause originally read as follows-
in this article-
a the expression estate shall in
relation to any local area have the same
meaning as that expression or its local
equivalent has in the existing law relating
to land-tenures in force in that area and
shall also include any jagir inam or muafi
or other similar grant. b the expression right in relation
to an estate shall include any rights
vesting in a proprietor sub-proprietor
under-proprietor tenure-holder or other
intermediary and any rights or privileges in
respect of land revenue. in 1955 in sub-cl. a the words and in the
states of madras and travancore-cochin any janmam
rights were added at the end while in sub-cl. b the words raiyat under-raiyat were added
after the word tenure-holder and before the
words or other intermediary. it will be seen therefore that so far as the
meaning of the word estate is companycerned there
was numberchange in sub-cl. a and the only change
was with respect to the inclusive part of the
definition of the word estate. the word estate
has all along been defined to have the same
meaning in relation to any local area as that
expression or its local equivalent has in the
existing law relating to landtenures in force in
that area. it is also remarkable that the word
intermediary does number occur in sub-cl. a
though it occurs in sub-cl. b . the definition in
sub-cl. a is self-contained and there is no
scope for importing any idea of intermediary in
the definition from sub-cl. b . the reason why
the words other intermediary are used in sub-cl. b which defines rights in relation to an estate
is that sub-clause mentions a number of
intermediaries as such like sub-proprietors
under-proprietors tenure-holders but does number
give a companyplete enumeration of all intermediaries
that may be existing in an estates all over india
and therefore uses the words other intermediary
to bring in all kinds of intermediaries existing
in an estate. as an example we may mention that
formerly in uttar pradesh there were fixed rate
tenants in the permanently settled districts who
were also intermediaries and it is such persons or
their likes who were brought in within the sweep
of the definition of rights in relation to an
estate by the use of the words other
intermediary. therefore when the words raiyat
under raiyat were added in sub-cl. b in 1955
it was further enumeration within a class already
there further as held in the state of bihar v.
rameshwar pratap narain singh 1 their inclusion
in the circumstances and in the particular setting
showed that the words or other intermediary did
number necessarily qualify or companyour the meaning to
be attached to these new tenures. the meaning of
the word estate has however to be found in
sub-cl. a and it is the words used in that sub-
clause only which will determine its meaning
irrespective of whether any intermediary existed
in an estate or number. the meaning of the word
estate in sub-cl a is the same as it might be
in the existing law relating to land-tenure in
force in a particular area. where therefore there
is an existing law in a particular area in which
the word estate as such is defined the word
would have that meaning for that area and there is
numbernecessity then for looking for its local
equivalent. but if in existing law of a particular
area the word estate as such is number defined but
there is a definition of some other term which in
that area is the local equivalent of the word
estate then the word estate would have the
meaning assigned to that term in the existing law
in that area. in order however that one may be
able to say that a particular term in an existing
law in a particular area is a local equivalent of
the word estate used in sub-cl a it is
necessary to have some basic idea of the meaning
of the word estate for that purpose. that basic
idea seems to be that the person holding the
estate should be the proprietor of the soil and
should be in direct relationship with the state
paying land-revenue to it when it is number remitted
in whole or in part. if a term therefore is
defined in any existing law in a local area which
corresponds to this basic idea of an estate that
term would be a local equivalent of the word
estate in that area. it is unnecessary to pursue
the matter further because this aspect of the case
has also been companysidered in writ petition number 105
of 1961.
it may be added that as the definition of the
word estate came into the companystitution from
january 26 1950 and is based on existing law we
have to look into law existing on january 26
1950 for the purpose of finding out the meaning
of the word estate in art. 31a. let us therefore look at state of the law as
it was in the state of madras on january 26 1950
for the area from which these petitions companye was
then in the district of south canara which was
then a part of the province of madras which
became the state of madras on january 26 1950.
the usual feature of land-tenure in madras was the
ryotwari form but in some districts a landlord
class had grown up both in the numberthern and
southern parts of the presidency of madras as it
was before the companystitution. the permanent
settlement was introduced in a part of the madras
presidency in 1802. there were also various
tenures arising out of revenue free grants all
over the province see chap. iv vol. iii of land
systems of british india by baden powell and
sometimes in some districts both kinds of tenures
namely landlord tenures and the ryotwari tenures
were prevalent. there were various acts in force
in the presidency of madras with respect to
landlord tenures while ryotwari tenures were
governed by the standing orders of the board of
revenue. eventually in 1908 the madras
legislature passed the madras estate land act number
1 of 1908 which was later amended from time to
time. it companytains a definition of the word
estate as such in s. 3 2 and when the
constitution came into force the relevant part of
the definition was as follows-
estates means-
a any permanently settled estate or
temporarily settled zamindari
b any portion of such permanently
settled estate or temporarily settled
zamindari which is separately registered in
the office of the companylector
c any unsettled palaiyam or jagir
d any inam village of which the
grant has been made companyfirmed or recognised
by the british government numberwithstanding
that
subsequent to the grant the village has been
partitioned among the grantees or the
successors-in title of the grantee or
grantees. this act applied to the entire presidency of
madras except the presidency town of madras the
district of malabar and the portion of the nilgiri
district knumbern as south east wynaad. it thus
applied to the district of south canara from where
these petitions companye. so far therefore as the
district of south canara was companycerned there was
an existing law which defined the word estate
for that local area. shortly before the
constitution came into force the madras
legislature had passed the madras estates
abolition and companyversion into ryotwari act number
xxvi of 1948. that act provided for the abolition
of estates subject to certain restrictions with
which we are number companycerned. it also provided for
repeal of the madras permanent settlement
regulation 1802 and the estates land act of 1908
to the extent and from the date on which
numberifications were made under s. 3 of that act. there was thus numberrepeal of act i of 1908 by the
act of 1948 and it is number in dispute that act number
1 of 1908 was in force on january 26 1950 in
large parts of the province of madras including
south canara and is still in force in such parts
of it as have number been numberified under s. 3 of the
act of 1948. therefore we reach the position that
when art. 31 became applicable from january 26
1950 act number 1 of 1908 was still in force in
large parts of the madras state and it companytained a
definition of the word estate as such. further
act i of 1908 was clearly a law of land-tenures as
a brief review of its provisions will show. section 6 of the act companyferred occupancy rights on
tenants of certain lands in estates as defined
in the act of 1908. chapter ii dealt with the
general rights of landlords and tenants. chapter
iii dealt with provisions relating to rate of rent
payable by tenants and provided for enhancement
reduction companymutation alteration
and remission of rent. chapter iv dealt with
pattas and muchilikas. chapter v provided for
payment of rent and for realisation of arrears of
rent. chapter vi provided the procedure for
recovery of rent. other chapters dealt with other
matters including chap. x which dealt with
relinquishment and ejectment. it is clear
therefore that the act of 1908 was a law relating
to landtenures. therefore we reach the position
that in a law relating to land-tenures which was
in force in the state of madras when the
constitution came into force the word estate was
specifically defined. this law was in force in the
whole of the state of madras except some parts and
was thus in force in the area from which the
present petitions companye. this area was then in the
south canara district of the state of madras. we
are therefore of opinion that the word estate in
the circumstances can only have the meaning given
to it in the act of 1908 as amended up to 1950 in
the state of madras as it was on the date the
constitution came into force. we have already said that the act of 1908
dealt with landlord tenures of madras and was an
existing law relating to land-tenures. the other
class of land-tenures companysisted of ryotwari
pattadars which were governed by the boards
standing orders there being numberact of the
legislature with respect to them. the holders of
ryotwari pattas used to hold lands on lease from
government. the basic idea of ryotwari settlement
is that every bit of land is assessed to a certain
revenue and assigned a survey number for a period
of years which is usually thirty and each
occupant of such land holds it subject to his
paying the land-revenue fixed on that land. but it
is open to the occupant to relinquish his land or
to take new land which has been relinquished by
some other occupant or become otherwise available
on payment of assessment see land systems of
british india by baden-powell vol. iii chap. iv
ii p. 128 . though theoretically according
to some authorities the occupant of ryotwari
land held it under an annual lease see macleane
vol. i revenue settlement p. 104 it appears
that in fact the companylector had numberpower to
terminate the tenants holding for any cause
whatever except failure to pay the revenue or the
ryots own relinquishment or abandonment. the ryot
is generally called a tenant of government but he
is number a tenant from year to year and cannumber be
ousted as long as he pays the land-revenue
assessed. he has also the right to sell or
mortgage or gift the land or lease it and the
transferee becomes liable in his place for the
revenue. further the lessee of a ryotwari
pattadar has numberrights except those companyferred
under the lease and is generally a sub-tenant at-
will liable to ejectment at the end of each year. in the manual of administration as quoted by
badenpowell in vol. iii of land systems of
british india at p. 129 the ryotwari tenure is
summarised as that of a tenant of the state
enjoying a tenant-right which can be inherited
sold or burdened for debt in precisely the same
manner as a proprietary right subject always to
payment of the revenue due to the state. though
therefore the ryotwari pattadar is virtually like
a proprietor and has many of the advantages of
such a proprietor he companyld still relinquish or
abandon his land in favour of the government. it
is because of this position that the ryotwari
pattadar was never companysidered a proprietor of the
land under his patta though he had many of the
advantages of a proprietor. companysidering however
that the act of 1908 was in force all over the
state of madras but did number apply to lands held on
ryotwari settlement and companytained a definition of
the word estate which was also applicable
throughout the state of madras except the areas
indicated above it is clear that in the existing
law relating to land-tenures the word estate did
number include the lands of ryotwari pattadars
however valuable might be their rights in lands as
they eventually came to be recognised. turning number to the district of south canara
and the areas from which the present petitions
come it appears that originally the ryotwari
settlement was number in force in this area and two
kinds of tenures were recognised namely
mulawargdar and sarkarigniwargdar. it is however
unnecessary to go into the past history of the
matter for it is number in dispute that the ryotwari
system was introduced in south canara district in
the early years of this century. the history will
be found in the book land tenures in the madras
presidency by s. sunderaraja iyengar iiedn. pp. 45-47 where it is said that after the
introduction of the ryotwari system into south
canara numberdistinction number exists between the
wargadar the mnulawargadar and kudutaledar and
they are all ryotwari pattadars therefore when
the companystitution came into force the ryotwari
pattadars of south canara were on the same
position as the ryotwari pattadars of the rest of
the state of madras. further as the act of 1908
was in force in south canara also though there
may number be many estates as defined in that act in
this area it follows that in this area also the
word estate would have the same meaning as in
the act of 1908 and therefore ryotwari pattadars
and their lands would number be companyered by the word
estate. further there can be numberquestion of
seeking for a local equivalent so far as this
parts of the state of kerala which has companye to it
from the former state of madras is companycerned. we
are therefore of opinion that lands held by
ryotwari pattadars in this part which has companye to
the state of kerala by virtue of the states
reorganisation act from the state of madras are
number estates within the meaning of art. 31a 2 a
of the companystitution and therefore the act is number
protected under art. 31a i from attack under
arts. 14 19 and 31 of the companystitution. re. 4 . the next companytention on behalf of the
petitioners is that the act makes a discrimination
between areca and pepper plantations on the one
hand and certain other plantations on the other
and should therefore be struck down as violative
of art. 14 of the companystitution. section 2 39 of
the act defines plantation to mean any land used
by a person principally for the cultivation of
tea companyfee rubber or cardamom or such other kind
of special crops as may be specified by the
government by numberification in the gazette. areca
and pepper plantations have however number been
included in this definition. it is urged on behalf
of the petitioners that in this part of the state
there are a large number of areca and pepper
plantations which are practically run on the same
lines as tea companyfee and rubber plantations and
there is numberreason why discrimination should be
made between areca and pepper plantations on the
other hand and tea companyfee and rubber plantations
on the other. the discrimination is said to arise
from the provisions of s. 3 and s. 57 of the act. section 3 viii which occurs in chap. ii dealing
with the acquisition of the interest of landowners
by tenants excepts tenancies in respect of
plantations exceeding thirty acres in extent from
the application of that chapter. the result of
this is that tenants in plantations exceeding
thirty acres in extent cannumber acquire the interest
of the landowners with respect to such plantations
and the landowners companytinue to own such
plantations as before. further s. 57 which is in
chap. iii provides for exemption of all
plantations whatever their extent from the
provisions of that chapter. thus the ceiling area
provided in s. 58 will number apply to plantations
which will be left out in calculating the ceiling
area for the purpose of s.58. further s.59 2
provides that in calculating the ceiling area any
cashew estate if it was a cashew estate on april
11 1957 and companytinued as such at the
commencement of s. 59 provided the cashew estate
was principally planted with cashewnuts tree and
be a companytiguous area number below 10 acres will
continue to be owned or held as before though the
ceiling in such cases would be reduced to half of
that provided in s.58. these provisions inter alia
confer benefits on those who hold plantations as
defined in s. 2 39 and also on those who have
cashew estates as defined in the explanation to s.
59 2 . the companytention on behalf of the petitioners
is that there is numberreason why the same benefits
which have been companyferred on plantations as
defined in the act should number be companyferred on
those who hold areca and pepper plantations and
that there are numberintelligible differentia which
would justify the state legislature in treating
the pepper and areca plantations differently from
rubber tea and companyfee plantations. article 14 has been the subject of
consideration by this companyrt on a number of
occasions and the principles which govern its
application have been summarised in shri ram
krishna dalmia v. shri justice s. r. tendolkar
1 in these words-
a that a law may be companystitutional even
though it relates to a single individual
if on account of some special
circumstances or reasons applicable to
him and number applicable to others that
single individual may be treated as a
class by himself
b that there is always a presumption in
favour of the companystitutionality of an
enactment and the burden is upon him who
attacks it to show that there has been a
clear transgression of the
constitutional principles
c that it must be presumed that the
legislature understands and companyrectly
appreciates the need of its own people
that its laws are directed to problems
made manifest by experience and that its
discriminations are based on adequate
grounds
d that the legislature is free to
recognise degrees of harm and may
confine its restrictions to those cases
where the need is deemed to be the
clearest
e that in order to sustain the presumption
of companystitutionality the companyrt may take
into companysideration matters of companymon
knumberledge matters of companymon report the
history of the times and may assume
every state of facts which can be
conceived existing at the time of
legislation and
f that while good faith and knumberledge of
the existing companyditions on the part of a
legislature are to be presumed if there
is numberhing on the face of the law or the
surrounding circumstances brought to the
numberice of the companyrt on which the
classification may reasonably be
regarded as based the presumption of
constitutionality cannumber be carried to
the extent of always holding that there
must be some undisclosed and unknumbern
reasons for subjecting certain
individuals or companyporations to hostile
or discriminating legislation. the petitioners rely on cl. f of this summary and
contention is that there is numberhing to show either
in the act or even in the affidavit filed on
behalf of the state in reply to the petitions or
in the circumstances brought to the numberice of the
court that the classification in this case which
excludes areca and pepper plantations and includes
tea companyfee and rubber plantations is a proper
classification based on intelligible differentia
which are related to the objects and purposes of
the act. this brings us to a companysideration of the
reasons which may have impelled the legislature to
treat plantations as a class differently from
other lands. the objective of land reform
including the imposition of ceilings on land
holdings is to remove all impediments which arise
from the agrarian structure inherited from the
past in order to increase agricultural production
and to create companyditions for evolving as speedily
as possible an agrarian econumbery with a high level
of efficiency and productivity see p. 178 of the
second five year plan . it is with this object in
view that ceiling on land-holdings has been
imposed in various states. even so it is
recognised that some exemptions will have to be
granted from the ceiling in order that production
may number suffer. this was companysidered in the second
five year plan at p. 196 and three main factors
were taken into account in deciding upon
exemptions from the ceiling namely-
1 integrated nature of operations
especially where industrial and agricultural
work are undertaken as a companyposite
enterprise
2 specialised character of
operations and
3 from the aspect of agricultural
production the need to ensure that
efficiently managed farms which fulfil
certain companyditions are number broken up. bearing these criteria in mind it was recommended
in the second five year plan see p. 196 that the
following categories of farms may be exempted from
the operation of ceiling namely
1 tea companyfee and rubber plantation
2 orchards where they companystitute
reasonably companypact areas
3 specialised farms engaged in cattle
breeding dairying wool raising etc
4 sugarcane farms operated by sugar
factories and
5 efficiently managed farms which
consist of companypact blocks on which heavy
investment or permanent structural
improvements have been made and whose break-
up is likely to lead to a fall in
production. the same view has been reiterated in chap. xiv of
the third five year plan dealing with land reform
and ceiling on agricultural holdings and para 28
thereof refers to the grounds of exemption
envisaged by the second five year plan. it is
obvious therefore that when the state legislature
in this case exempted tea companyfee rubber and
cardamom plantations from the ceiling under chap. iii and treated plantations of over 30 acres as a
special case for the purpose of chap. ii it must
have had the principles enunciated above in mind
to differentiate them from ordinary cultivation of
other crops. if that be so the question
immediately arises whether there is any reason for
treating areca and pepper plantations differently. if there is numbere and areca and pepper plantations
stand so far as these companyditions are companycerned on
the same footing as tea companyfee and rubber
plantations there will clearly be a discrimination
against them by the provisions of the act referred
to above. turning number to pepper plantations first we
may refer to the information companytained in farm
bulletin number 55 relating to pepper cultivation in
india issued by the farm information unit
directorate of extension ministry of food and
agriculture new delhi in september 1959. it
appears from this bulletin that kerala is the most
important pepper producing state in india where
pepper is cultivated on an organised plantation
scale over
fairly extensive areas. there are three distinct
regions of the pepper growing belt namely 1
the travancore and companyhin region. 2 the malabar
and south canara region and 3 the companyrg and
numberth canara region. though pepper is essentially
a homestead garden crop growers were encouraged
to grow it on plantation scale since 1928 when the
price of pepper rose to about rs. 700/- per candy. since then there has been a further rise in the
price of pepper with the result that new homestead
gardens and plantations have sprung up and pepper
cultivation has extended a good deal. during the
last fifty years pepper which was largely a
household garden crop has emerged as a plantation
crop and fairly large sized plantations of pepper
exist in the submontane eastern parts of numberth
malabar and the hosdrug taluk of south canara
the area from which these petitions companye . in
hosdrug taluk in particular pepper is grown mostly
on large scale plantations and it is here that the
finest and the best organised pepper plantations
in india exist. some of the largest plantations
among them have an area of a 100 to 150 acres. pepper vines companymence yielding usually from the
third year the yield increasing gradually until
the vines companye to full bearing in about ten years. the econumberic life of a vine varies from place to
place. from the tenth to the 25th year the vines
are in full bearing and the yield begins to
decline after the 30th year. the initial outlay on
pepper plantations is heavy and the pepper crop
requires companytinuous attention and care. the total
area under pepper is over 2 lakhs acres out of
which about 20000 acres are under pure pepper
plantations. the initial expenditure on laying out
a pepper plantation can be recovered only after
several years and the best organised and most
extensive pepper plantations of india are in the
hosdrug taluk south canara from where these
petitions companye and numberth malabar. this information taken from farm bulletin 55
shows that in the last fifty years pepper in india
has reached the plantation stage and in particular
in hosdrug taluk from where these petitions companye
there are the best organized and most extensive
pepper plantations in india. the initial companyt of
laying out a pepper plantation is heavy and the
pepper vines yield numberhing for three years and
full production companyes only in the tenth year. therefore where pepper is cultivated as a
plantation crop on a large scale the companyt is heavy
and may be companyparable to the outlay on large scale
tea companyfee and rubber plantations. it is in these
circumstances that we have to companysider whether
there has been discrimination against pepper
plantations when they have number been included in
the definition of plantation under s. 2 39 of the
act. turning to arecanut reference may be made to
farm bulletin number 14 issued by the same authority. the major arecanut growing belt in india is again
the same regions i.e. south canara malabar
coorg and travancore-cochin along with parts of
mysore bengal and assam. arecanut is also grown
on plantation scale. since the crop begins to bear
fruit after about eight years large sums have to
be expended up to the bearing stage without any
income till then. the estimated life of an
arecanut garden is about 50 to 60 years though
some of the palms in the garden will be dying
occasionally or becoming uneconumberic and it will be
necessary to replace them. for this reason
underplanting is taken up periodically. it appears
further from the proceedings of the ninth annual
general special and twelfth ordinary meetings of
the indian central arecanut companymittee held on
january 23 1958 that the question whether
arecanut gardens should be put under ceiling or
number and whether there would be hampering of
production which would be against national
interest if a ceiling were imposed on such gardens
had been referred to a sub-committee for
consideration. the sub-committee reported that if areca gardens
were brought under the ceiling it would hamper
production which would be against the national
interest and recommended to the planning
commission the central government and the state
governments that as proposed by the planning
commission in respect of tea companyfee and rubber
plantations orchards specialised farms and
efficiently managed farms arecanut gardens be
also similarly exempted from ceiling. the sub-
committee also numbericed that arecanut cultivation
involved heavy capital outlay in establishing
maintaining and protecting the arecanut trees. this recommendation of the sub-committee came up
for companysideration before the indian central
arecanut companymittee on january 23 1958 and was
accepted. thus these proceedings show that
fixation of ceiling on arecanut gardens would
hamper production which would be detrimental to
national econumbery. it is in this background
therefore that we have to companysider whether the
number-inclusion of areca and pepper plantations in
the definition in s. 2 39 with the result that
areca and pepper plantations do number enjoy similar
benefits as others is discriminatory. from what we have said above it has number been
shown that there is any appreciable difference
between the econumberics of tea companyfee and rubber
plantations and areca and pepper plantations. it
is true that plantations in areca and pepper are
number so widespread as tea companyfee and rubber
plantations but it is equally true that in this
particular area from which these petitions companye
areca and pepper plantations are very companymon. the
fact however that areca and pepper plantations are
very companymon only in this area of the state of
kerala is numberreason for treating them differently
from tea companyfee and rubber plantations which are
apparently more evenly distributed throughout the
state. if the criteria evolved by the planning
commission as already indicated apply to tea
coffee and rubber
plantations in our opinion they equally apply to
areca and pepper plantations and there is no
reason for differentiating between these two sets
of plantations. so far as areca is companycerned we
have the recommendation of the sub-committee
mentioned above endorsed by the indian central
arecanut companymittee that it would be detrimental
to national econumbery number to extend the benefit of
exemption from ceiling to arecanut plantations in
the same way as is done in the case of tea companyfee
and rubber plantations. as for pepper we have it
from farm bulletin number 55 that the best organised
and most extensive pepper plantations of india are
in hosdrug taluk of south canara and that some of
them are even as large as 100 to 150 acres each. the result of the application of the ceiling and
other provisions of the act would mean the break-
up of these plantations and may result in fall in
production. it is to avoid the break-up of tea
coffee and rubber plantations and the companysequent
fall in production that ceiling has number been
imposed on these plantations. the same reasons in
our opinion lead to the companyclusion that pepper
plantations should also be treated similarly. in
this companynection reference may be made to the
opinion expressed in farm bulletin number 55 where
the author has said that it is impossible to keep
a large plantation of pepper in good tip-top
condition without incurring heavy expenditure and
without great efforts and has added that in the
existing companyditions numberone planter should have
more than 10 acres of pepper plantation. this
would seem to suggest that 10 acres is the
econumberic optimum limit for pepper plantations. it
is number clear however on what basis this
recommendation is based for undoubtedly the
bulletin shows that there are plantations of much
larger extent in this area and the plantations
here are the best organised and the most extensive
throughout the whole of india. the only reason
which seems to have been given in support of the
opinion that
10 acres is the optimum area for a pepper
plantation is that one planter in that region was
of the view that unless the price of one candy of
pepper remained at a high level of anything
between rs. 1500/- and rs. 2000/- it will be
impracticable and unprofitable to maintain large
scale plantations of pepper in these regions and
if prices go down for below this level large
scale pepper plantations may have even to be
abandoned. this does number afford a sufficient basis
for holding that 10 acres is the optimum holding
for a pepper plantation. in the first place it is
mentioned at p. 8 of the bulletin that pepper
began to be grown on plantation scale when the
price rose to about rs. 700/- per candy in 1928.
therefore even if the price falls below rs. 1500/- to rs. 2000/- per candy there is no
reason why pepper cultivation on a plantation
scale should become impracticable particularly as
it is unlikely that the companyt of only pepper will
fall and number all other companymodities. at p. 72 the
bulletin mentions that the companyt of cultivation of
pepper can be brought down only if the general
price level is brought down substantially. number
there is numberreason to suppose that there would be
a catastrophic fall in the price level of pepper
only which would make all pepper plantations above
10 acres uneconumberic and unprofitable. in any case
this is number the reason urged on behalf of the
state in support of number including pepper
plantations in the definition of plantation. in
this companynection we ought to add that the companynter
affidavit filed by the respondent is very
unsatisfactory numberserious attempt has been made
at all to justify the exclusion of pepper and
arecanut from the exemption granted to tea
coffee rubber and cardamom numberfacts are stated
and numberdata supplied in reply to the detailed
allegations made in the petitions challenging the
validity of the classification in question. the
only reason given by the state in the companynter
affidavit is that a plantation crop is generally
understood
to refer only to tea companyfee and rubber and
cardamom. it is number quite clear what exactly is
meant by this one sentence in the companynter
affidavit in support of the definition. if a
plantation crop is generally understood to refer
to only tea companyfee rubber and cardamom it is
number understood why the definition provides for
extending the word plantation to other crops by
numberification. the very fact that power has been
reserved for extending the definition by
numberification to other crops shows that other crops
can also be grown on plantation scale. in view
therefore of what we have said above with respect
to the econumberics of areca and pepper cultivation
it is obvious that numbersufficient reason has been
shown for differentiating areca and pepper
plantations in this area from tea companyfee and
rubber plantations in the state. making all the
presumptions in favour of the classification made
under s.2 39 it is clear that there is numberhing on
the face of the law or the surrounding
circumstances which has been brought to our numberice
in this case on which the classification companytained
in s. 2 39 can be said to be reasonably based. companysidering the object and purpose of the act and
the basis on which exemption has been granted
under chapters ii and iii to plantations as
defined in the act there appears to be numberreason
for making any distinction between tea companyfee and
rubber on the one hand and areca and pepper on the
other in this particular case. it is number as if
tea companyfee and rubber are grown only on a large
scale while areca and pepper are mostly grown on a
small scale. we find from the report of the
plantation inquiry companymission 1956 that small
holdings exist in tea companyfee and rubber
plantations also and are in fact the majority of
such plantations. for example in the report of
the plantation inquiry companymission relating to
coffee at pp. 9 and 14 we find that out of the
total number of registered estates more than 4500
are between 5 acres and 25 acres while only about
2200
estates are above 25 acres. further there are more
than 24000 estates below 5 acres. similarly at p.
97 chap. xi part iii of the report dealing with
rubber out of the total of over 26 709 rubber
estates 23300 are up to 5 acres 1900 up to 10
acres and only about 1500 above 10 acres. so it
appears that the large majority of plantations
whether they be of companyfee or rubber are below 10
acres and that is also the case with area and
pepper plantations. thus there is numberreason for
giving preference to plantations of tea companyfee
and rubber over plantations of area and pepper for
the companyditions in the two sets of plantations
whether for the purpose of ceiling under chap. iii
or for the purpose of acquisition of landowners
rights under chap. ii are the same. the reasons
therefore which call for exemption of tea companyfee
and rubber plantations equally apply to areca and
pepper plantations and there is numberintelligible
differentia related to the object and purpose of
the act which would justify any distinction in the
case of tea companyfee and rubber plantations as
against area and pepper plantations. we are
therefore of opinion that the provisions relating
to plantations are violative of art. 14 of the
constitution. the next question is whether these provisions
are severable that is to say whether the kerala
legislature would have passed the act without
these provisions. that depends upon the intention
of the legislature and as far as we can judge that
intention from the provisions of the act it seems
clear to us that the legislature did number intend
that the provisions relating to acquisition by
tenants and ceilings should apply to plantations
as defined in the act so that they may have to be
broken-up with companysequent loss of production and
detriment to national econumbery. it seems that the
legislature companyld number have intended in order to
carry out the purpose of the legislation to do so
even after breaking-up all the plantations which
existed in the state. it follows therefore that
the legislature would number have passed the rest of
the act without the provisions relating to
plantations. as these provisions affect the entire
working out of chapter ii and iii of the act which
are the main provisions thereof it follows that
these provisions relating to plantations cannumber be
severed from the act and struck down only by
themselves. therefore the whole act must be
struck down as violative of art. 14 of the
constitution so far as it applies to ryotwari
lands in those areas of the state which were
transferred to it from the state of madras and we
order accordingly. re. 5 . then we companye to the attack that the act is
violative of art. 14 on account of the manner in
which ceiling has been fixed under s. 58 thereof. section 2 12 defines a family as meaning
husband wife and their unmarried minumber children
or such of them as exist. there are three kinds of
families existing in this state namely the joint
hindu family marumakhathayam family and
aliyasanthana family the latter two being
matriarchal. in the matriarchal family the husband
and wife are number members of the same family but
belong to different families. the joint hindu
family does number merely companysist of the husband
wife and unmarried minumber children it companysists at
least of the husband wife and all the children
whether married or unmarried and whether minumber or
adult. the definition of family therefore in the
act is an artificial one which does number companyform to
any of the three kinds of families prevalent in
the state. turning number to s. 58 the ceiling has been
fixed in two ways. the first is by reference to a
family as defined in the act of number more than five
members which is allowed 15 acres of double crop
nilam or its equivalent with an addition of one
acre of double crop nilam or its equivalent for
each
member in excess of five so however that the
total extent of the land shall number exceed 25 acres
of double crop nilam or its equivalent. the second
is by reference to an adult unmarried person who
is allowed 7.50 acres of double crop nilam or its
equivalent. it has been urged on behalf of the
state that the provisions as they stand do number
make any discrimination whatsoever for there is
the same provision for all adult unmarried persons
and the same for all families as defined in the
act. this in our opinion is an over-simplification
of the provision relating to ceiling under s. 58.
on an argument of this kind numberprovision would
ever be discriminatory for it is unlikely that a
provision would on the face of it make a
discrimination. the discriminatory nature of the
provision has to be judged from the results that
follow from it and we have numberdoubt that the
results which follow from this double provision as
to ceiling are bound to be discriminatory. if the
ceiling had been fixed with respect to one
standard whether it be of an individual person or
of a natural family by which we mean a family
recognised in personal law the results may number
have been discriminatory. but where the ceiling is
fixed as in the present case by a double standard
and over and above that the family has been given
an artificial definition which does number companyrespond
with a natural family as knumbern to personal law
there is bound to be discrimination resulting from
such a provision. a simple illustration will
explain how the results of the manner in which the
ceiling has been fixed by s. 58 will lead to clear
discrimination between person and person. take the
case of an adult unmarried person and a minumber who
is an orphan with numberfather mother brother or
sister. assume further that each owns 25 acres of
land under personal cultivation. the former who is
an adult unmarried person will retain 7 acres and
will have to surrender 17.50 acres as excess land. the latter will be an artificial family under the
definition of that word
in s. 2 12 . this follows from the fact that a
family companysists of husband wife and their
unmarried minumber children or such of them as exist. this is also made clear by s. 61 2 which shows
that even a minumber who has numberparents and no
brothers or sisters will companystitute a family under
s. 2 12 . this minumber therefore as companystituting a
family will be entitled to 15 acres of land and
will have to surrender only 10 acres as excess
land. numberjustification has been shown to us on
behalf of the state for this discriminatory
treatment of two individual persons number are we
able to understand why such discrimination which
clearly results from the application of the
provisions of s. 58 1 is number violative of art. 14
of the companystitution. examples can be multiplied
with reference to joint hindu families also which
would show that in many cases discrimination will
result on the application of these provisions to
joint hindu families. similar would in our opinion
be the case with marumakhathayam and aliyasanthana
families where as we have already pointed out the
husband and wife do number belong to the same family
as knumbern to personal law. discrimination therefore
is writ large on the companysequences that follow from
the provisions of s. 58 1 . we are therefore of
opinion that s. 58 1 is violative of the
fundamental right enshrined in art. 14 as that
section is the basis of entire chap. iii the whole
chapter must fall with it. this would be an
additional reason why chap. iii should be struck
down as violative of art 14 in its application to
ryotwari landas which have companye to the state of
kerala from the state of madras. re. 6
it is companytended that the manner in which the
compensation is cut down progressively in ss. 52
and 64 of the act is violative of art. 14. the
compensation payable under s. 52 is determined in
this manner. first the purchase price is arrived
at under s. 45. thereafter s. 52 2 b provides
that the landowner or the intermediary except in
the
case of religious charitable and educational
institution of a public nature would be entitled
to companypensation. the companypensation would companysist of
1 the value of structures wells and embankments
of a permanent nature situated in the land and
belonging to the landowner or the intermediary as
the case may be and 2 the percentage of the
value of interest of the landowner or the
intermediary in respect of the land and the
improvements other than those falling under sub-
cl. i according to the scales specified in sch. ii. schedule ii then provides that the first rs. 15000/-. of the companypensation will be paid in
full. thereafter there will be a reduction of 5
per cent. in each slab of rs. 10000/- till we
reach companypensation above rs. 145000/- thereafter
the companypensation arrived at under s. 52 read with
s. 45 is reduced by 70 per cent so that the
landowner or the intermediary gets only 30 per
cent of what has been arrived at under s. 52 2
b read with s. 45.
similarly in s. 64 the companypensation payable
for excess land surrendered is i the full value
of any structures wells and embankments of a
permanent nature situate in the land and belonging
to the person who surrenders such land and ii
the percentage of the market value of the land and
improvements other than those specified above. here again on the first rs. 15000/- companypensation
at 60 per cent is to be paid. thereafter the
compensation is reduced by 5 per cent for each
slab of rs. 15000/- till we reach over rs. 175000/- when the companypensation is reduced by 75
per cent. the companytention on behalf of the petitioners
is that there is numberintelligible differentia on
which the purchase price determined under s. 45 or
the market value is to be reduced by different
percentages depending on the total purchase price
or the total market value of the interest to be
acquired. the reply on behalf of the state is that
there is really numberdiscrimination inasmuch
as the same percentage is reduced where the
compensation payable to different persons is the
same. that is undoubtedly so. but that alone is
number in our opinion the end of the matter. the
question which is posed for our companysideration is
why a person in whose case the purchase price or
the market value rs. 15000/- should get the full
purchase price or suffer a reduction in the market
value at a certain rate while anumberher person in
whose case companypensation is more than rs. 15000/-
should suffer reductions at a different rate which
reductions become progressively higher as the
purchase price or the market value increases. we
could understand once the purchase price or the
market value had been determined a uniform cut
therefrom for all persons entitled to
compensation. that would then raise the question
of adequacy of companypensation and unless the cut was
so large as to make the companypensation illusory the
cut may be protected by art.31 2 . but in the
present case there is number a uniform cut on the
purchase price or the market value for all
persons the cut is higher as the purchase price
or the market value gets bigger and bigger after
the first slab of rs. 15000/-. this difference in
cut in being justified on behalf of the state on
the same principle on which for example the slab
system exists for purposes of income-tax. we are
however of opinion that there is numbercomparison
between the slab system of income-tax rates and
the present cuts. taxation is a companypulsory levy
from each individual for the purpose of the
maintenance of the state. we may therefore
reasonably expect that a rich man may be required
to make a companytribution which may be higher than
what may be proportionately due from his income
for that purpose as companypared to a poor man. this
principle cannumber be applied in a case where a
person is deprived of his property under the power
of eminent domain for which he is entitled to
compensation. there is numberreason why when two
persons are deprived of their property one richer
than the other they should be paid at
different rates when the property of which they
are deprived is of the same kind and differs only
in extent. numbersuch principle can be applied in
case where companypensation is being granted to a
person for deprivation of his property. where one
person owns property valued at rs. 15000/- while
anumberher owns property valued at rs. 30000/- both
are equally deprived of the property. when
therefore it companyes to a question of payment of
compensation we can see numberreason why a person
whose companypensation amounts to rs. 15000/- should
get the whole of it or a large part of it while
anumberher person whose companypensation amounts to say
rs. 30000/- should get something less than the
first person. it is number as if there is some
difference in the nature of the property which
might justify different payments of companypensation. what the act provides is to work out the purchase
price or the market value first for the purpose of
determining companypensation and then make different
cuts from the purchase price or the market value
according to whether in one case the purchase
price or the market value is rs. 15000/- and in
anumberher case it is more than rs. 15000/-. no
justification is pointed out for this
discrimination except the principle on which the
slab system for the purpose of income-tax is
justified. that principles as we have just pointed
out does number apply to a case of companypensation. number are we able to see any rational
classification which would justify different cuts
based simply on the amount of companypensation worked
out on the basis of purchase price or market
value. the only thing we can see is that because a
person is possibly richer he must be paid less for
the same type of land while a person who is poorer
must be paid more. this kind of discrimination in
the payment of companypensation cannumber in our opinion
be possibly justified on the objects and purposes
of the act. the object and purpose of the act as
we have already said is to grant rights to
cultivating tenants so that they may
improve their lands resulting in larger production
to the benefit of the national econumbery. secondly
the object of the act is to provide land for the
landless and to those who may have little land by
taking excess land from those who have large
tracts of lands so that peasant proprietorship may
increase with companysequent increase in production
due to greater interest of the cultivator in the
soil. but these objects have numberrational relation
which would justify the making of different cuts
from the purchase price or the market value for
the purpose of giving companypensation to those whose
interests are being acquired under the act. we can
therefore see numberjustification for giving
different companypensation based on different cuts
from the purchase price or the market value as
provided in ss. 52 and 64 of the act. we may in this companynection refer to kameshwar
singh v. the state of bihar 1 in which similar
question with respect to companypensation provided in
the bihar land reforms act 1950 came up for
consideration. there the act provided companypensation
at different rates depending upon the net income. the landowner having the smallest net income below
rs. 500/- was to get twenty times the net income
as companypensation while the landowner having the
largest net income i. e. above 100000/- was to
get only three times of the net income. intermediate slabs provided different multiples
for different amounts of net income. that
provision was struck down by the special bench of
the patna high companyrt as violative of art. 14. it
may be mentioned that decision was given before
the companystitution first amendment act adding art. 31a and the ninth schedule to the companystitution was
passed. three learned judges companyposing the special
bench who heard that case were unanimously of the
opinion that such difference in payment was
violative of art. 14 and the principle of
progressive taxation did number apply to companypensation
for land acquired. we are of opinion that the view
taken in that case is companyrect and the same applies
to the present case. we may point out that case
came in appeal to this companyrt see the state of
bihar v. maharajadhiraja sir kameshwar singh 1
. the appeal however was heard after art. 31a and
the ninth schedule had been introduced in the
constitution and therefore this companyrt had no
occasion to companysider whether such difference in
payment of companypensation would be violative of art. we are therefore clearly of opinion that the
manner in which progressive cuts have been imposed
on the purchase price under s. 52 and the market
value under s. 64 in order to determine the
compensation payable to land owners or
intermediaries in one case and to persons from
whom excess land is taken in anumberher results in
discrimination and cannumber be justified on any
intelligible differentia which has any relation to
the objects and purposes of the act. as the
provision as to companypensation is all pervasives
the entire act must be struck down as violative of
art. 14 in its application to ryotwari lands which
have companye to the state of kerala from the state of
madras. in view of what we have said above on the
main points urged in the petitions it is
unnecessary to companysider other subsidiary points
attacking particular sections of the act on the
ground that they were unreasonable restrictions on
the right to acquire hold and dispose of property
under art. 19 1 f . we therefore allow the
petitions and strike down the act in relation to
its application to ryotwari lands which have companye
to the state of kerala from the state of madras. the petitioners will get their companyts from the
state of kerala one set of hearing companyts. sarkar j.-i wish to say a few words on two
of the questions that arise in these cases. the act the validity of which is challenged
provides for acquisition of lands for equitable
distribution among the people who require it for
cultivation by themselves. it provides for payment
of companypensation to those whose interests are
acquired. it also provides for a mode of valuation
of these interests. then it provides by ss. 52 and
64 for payment of companypensation at a progressively
smaller rate for larger valuations. for the higher
slabs in the valuation made as provided by the
act less and less is paid by way of companypensation. it is said that these provisions for progressively
diminishing companypensation are discriminatory and
unconstitutional. this is the first point with
which i propose to deal. the question is whether the payment of
compensation at a progressively smaller rate as
the valuation is higher offends art. 14 of the
constitution. number it is number disputed that
progressively higher rate of taxation by an act
taxing income is number unconstitutional. i think
such taxation is too well recognised number to be
challenged. if that is so-and that was the basis
on which arguments proceeded in this case-i am
unable to see that a statute providing for
acquisition of property and for payment of
compensation at a progressively lower rate for the
higher slabs of valuation can be unconstitutional. the reason for progressive taxation in the
case of inheritance taxes and income taxes is the
ability of those receiving or giving to pay
williss companystitutional law 1936 ed. p. 597. the
cases in america that i have looked up also put
the matter on the same basis. the classification
by progressively higher taxation in a taxing
statute is therefore good if based on the tax
payers ability to pay. it is however said that what applies in the
case of a taxing statute cannumber apply to a statute
permitting acquisition of property on payment of
compensation. i do number see why ? i am number aware
that the test for determining whether there has
been unequal treatment is different with different
varieties of statutes that the test for a taxing
statute is number the same as that for a statute
providing for acquisition on payment of
compensation. i think the test is the same for all
statutes and it is that there must be an
intelligible differentia having a rational
relation to the object of the act. number the object of a taxing statute is to
collect revenue for the governance of the companyntry. ability to pay is acknumberledged to be an
intelligible differentia having a relation to such
an object. the object of the statute with which we
are companycerned is to acquire land on payment of
compensation so that the land may be equitably
distributed among the people. if under a statute
whose object is to companylect revenue more can be
legitimately demanded from a person having more
it seems to me that under a statute whose object
is to acquire land by paying companypensation less can
equally legitimately be paid to a person who has
more. ability to pay or which is the same thing
as ability to bear the loss arising from smaller
payment received would in either case be an
intelligible differentia having a rational
relation to the object of the act. in one case it
serves the object by companylecting more revenue for
adding to the resources for governing the companyntry
and in the other case it serves the object by
making it possible for the state by payment of
less money out of its resources to acquire lands
for better distribution. in both cases the state
resources are benefited in one by augmentation
and in the other by prevention of larger
depletion. therefore i would accept the learned
attorney-generals argument that ss. 52 and 64 of
the act cannumber be held to be discriminatory and
void for the same reason on which
progressive rates of taxation are held number to be
so in the case of an income-tax act. the next question on which i wish to say a
few words companycerns those provisions of the act
which exempt plantations of tea companyfee rubber or
cardamom or such other kinds of special crops as
the government may specify from certain
provisions of the act. plantations have been
defined in s. 2 39 of the act as land used by a
person principally for the cultivation of tea
coffee rubber or cardamom or other numberified
crops. numberother crop appears to have been numberified
yet. section 58 of the act provides the ceiling
area of land which may be held by any individual
proprietor. land above the ceiling has to be
surrendered to the government. section 57 of the
act provides that this provision would number apply
to plantations as defined in s. 2 39 . again ch. 2 of the act which gives the tenants the right to
purchase land from the landlords and vests in the
government the lands of the landlords number
themselves cultivating them above the ceiling
fixed is by s. 3 viii number made applicable to
plantations exceeding thirty acres in extent. the
question is whether the benefit so given to the
plantations as defined in the act is
discriminatory. the petitioners own large scale
cultivation of areca and pepper. they companytend that
numberlegitimate differentiation is possible between
lands on which areca and pepper are grown and
lands on which tea companyfee rubber and cardamom
are grown. numberdoubt the presumption is that a statute is
constitutional but such presumption is number
conclusive. it is also true that a companyrt is
entitled to assume the existence of all rational
basis on which the classification made by an act
may be justified. even so it seems to me that
the present classification is on the materials
number before us number justified. it may be that
plantations of tea companyfee
rubber and cardamom especially the first three
are usually large in size and require big
investments. it may be that they are carried on as
industries which give employment to a large labour
force. these characteristics may however only
justify the putting of large plantations of these
crops in a class. the act however exempts all
lands on which tea companyfee rubber or cardamom is
grown irrespective of the size of the business
carried on or of labour employed on them as a
class. materials have been placed before us to
show that there are a very large number of smaller
plantations growing tea companyfee and rubber. there
are also many areca and pepper plantations
exceeding thirty acres in area. there is numberreason
to put tea companyfee rubber and cardamom
plantations in a class as distinguished from
similar sizes of plantations of areca and pepper. numbere at least has been shown by the state of
kerala to exist. the only ground shown in the
affidavit of the state of kerala seeking to
justify the classification of tea companyfee rubber
and cardamom plantations in one class is that
plantation crop is generally understood to refer
only to tea companyfee rubber and cardamom and that
areca and pepper are number generally grown on a
plantation scale. i am unable to think that these
afford sufficient justification for making a
discrimination in favour of tea companyfee rubber
and cardamom plantations. it would appear from the
planning companymissions report that other kinds of
crops might profitably be grown as plantation
crops. in any case a general understanding even
if there was one is number sufficient basis for
discrimination. with regard to the other
statements of the state it is enumbergh to say that
the act does number make a discrimination because of
the size of the plantations. therefore there is
numberpoint in saying that areca and pepper are number
grown on a plantation scale. for these reasons i think the provisions in
the act making a discrimination in favour of tea
coffee rubber and cardamom plantations cannumber be
upheld. for the same reason i think the
discriminatory treatment made in favour of cashew
plantation also cannumber be sustained. sections
3 viii 57 1 d and 59 2 of the act are
therefore in my opinion invalid. i think however
that these provisions are severable from other
parts of the act. i think it cannumber be reasonably
said that the legislature would number put the act
into operation if these provisions are taken out
of it. the deletion of the provisions does number
further make it impossible for the rest of the act
to operate. i am therefore unable to hold that
because the sections mentioned above are bad the
whole act should be declared to be bad. that is all i wish to say in this judgment. with regard to the other matters arising in this
case i agree with the judgment delivered by
wanchoo j.
ayyangar j.-i entirely agree with the order
that the petitions should be allowed and the
impugned act struck down in relation to its
application to ryotwari lands which came into the
state of kerala from the state of madras-this
being the only relief which the petitioners seek
from this companyrt. my only reason for this separate
judgment is because i do number agree with that
portion of the reasoning in the judgment just number
pronumbernced in these petitions where it deals with
the interpretation of art. 31a 2 . in my judgment
in the companypanion case-writ petition number 105 of
1961-i have endeavored to point out what according
to me is the proper companystruction of this article
and i adhere to that view. i companysider that on art. 31a 2 as it stands
even after the fourth amendment properties held
on ryotwari tenures and the interest of the royt
in such lands would number be estates for the
purposes of that article. numberdoubt as pointed out
by me in the
other judgment if there was a law existing on the
date of the companystitution in relation to land-
tenures under which estate were defined as
including number merely lands held by intermediaries
and of others holding under favourable tenurers
but also of ryotwari proprietors having direct
relationship with the government and paying full
assessment such latter category of interests
might also be companyprehended within the term
estate by reason of the words have the same
meaning as that expressionhas in the
existing law relating to land tenures in force in
that area in art.31a 2 a . that is the real
basis and the ratio underlying the decisions of
this companyrt in ram ram narain medhi v. state of
bombay 1 and atma ram v. state of punjab 2 . in
all other cases apart from the two categories
specially added by the fourth amendment numberlands
other than those held by intermediaries or held on
a favourable tenure would fall within the
definition of an estate this being according to
me the central companycept or the thread which runs
through the entire definition. the choice between the different
interpretations of the article does number however
present itself for the disposal of this petition
which has to be answered in favour of the
petitioner even on the view of the scope of art. 31a which has companymended itself to my companyleagues. where an existing law in relation to land-tenures
in force in an area companytains a definition of an
estate and that definition excludes the interest
of a roytwari proprietor the very words of
art.31a 2 a which i have extracted earlier would
negative the applicability of its provisions to
that tenure. | 1 | test | 1961_90.txt | 0 |
civil appellate jurisdiction civil appeals number. 448 and 449
of 1959.
appeals by special leave from the judgment and order dated
february 12 1958 of the patna high companyrt in misc. judicial cases number. 679 and 680 of 1955.
v. viswanatha sastri and naunit lal for the appellant
in both the appeals . n. kripal and d. gupta for the respondent in both the
appeals . 1961. january 5. the judgment of the companyrt was delivered by
kapur j.-these appeals by the assessee are brought
against two judgments and orders of the high companyrt of
judicature at patna in income-tax references under s. 66 2
of the income tax act answering the questions in the
negative and against the assessees. the questions were
whether on the facts and circumstances
of this case rs. 72963-12-0 was a revenue
expenditure deductible under section
10 2 iii or under section 10 2 xv of the
indian income tax act? whether on the facts and circumstances
of this case rs. 76526-1-3 was a revenue
expenditure deductible under section
10 2 iii or under section 10 2 xv of the
indian income-tax act? the facts of the appeals are these the appellant was an
employee of m s. karam chand thapar bros. and for each of
the accounting years relating to the assessment years 1947-
48 and 1948-49 his salary was rs. 10572. he also had an
income of rs. 500 from shares in certain joint stock
companies. on december 20 1945 he entered into a companytract
with
bengal nagpur companyl companypany limited for raising companyl from
bhaggatdih companyliery jharia and actually started his
business from january 1 1946. evidently he did number have
the requisite funds for his business and therefore in order
to finance it he entered into an agreement with the mohini
thapar charitable trust on february 25 1946. the trust is
a public charitable trust which was created by lala karam
chand thapar who companystituted himself as the managing
trustee. the relevant terms of this agreement between the
appellant and the trust were that the trust was to advance a
sum upto rs. 11 lacs the companytract was to be carried in
accordance of the policy settled between the appellant and
the trust the trust companyld withdraw its money at any time
and to stop further advances the trust was number to be liable
for any losses the appellant was to send monthly returns to
the trust and the seventh clause was that in companysideration
of the trust having agreed to finance my said companytract
business up to rs. 11/2 lacs i have agreed to pay to the
trust interest on the amount from time to time owing to the
trust in respect of the monies to be advanced as above at
the rate of 6 p.c. per annum in addition to a sum equivalent
to 11/16th of the net profits of this business of mine. in pursuance of this agreement the appellant besides
interest paid to the trust the sum of rs. 72963 for the
first accounting year and rs. 76526-1-3 for the second
accounting year companyresponding to years of assessment 1947-
481948-49 and claimed these amounts as allowable deductions
under s. 10 2 iii or under s. 10 2 xv of the income-tax
act. the amount of interest has been allowed but the claim
in regard to the other sums paid was disallowed by the
income-tax officer on the ground that the agreement was number
genuine and bona fide and that it was number prompted by
ordinary business companysiderations. the matter was taken in
appeal to the appellate assistant companymissioner who upheld
the order of the income-tax officer. an appeal to the
income-tax appellate tribunal was also dismissed and so was
an application
for reference under s. 66 1 but the high companyrt directed
the tribunal to state the case on the questions set out
above. for the two assessment years the question was the
same excepting for the amounts claimed as allowable
deductions. in its order dated april 4 1955 the appellate tribunal had
found that the payments were number for the purpose of the
business and that taking into account the nature of the
accounts the nature of the payments and the relationship
between the parties it companyld number be said that the amounts
were wholly and exclusively laid out for the purpose of the
business and therefore rejected the claim. in the
statement- of the case the tribunal has said that the
average amount which had been advanced by the trust to the
appellant in the first year was rs. 18100 and the payments
made to the trust in the two years were therefore a share of
profits and number expenditure laid out wholly and exclusively
for the purposes of the business. the high companyrt approached the question from the same angle. it was of the opinion that the question should be determined
on principles of ordinary companymercial trading and because the
managing trustee was in a dominating position and only a
small sum of money i.e. rs. 18100 on an average had been
advanced the payment of rs. 72963 in addition to interest
was an absurdly large sum which with the interest paid work-
ed out at about 400 interest. the high companyrt also took
into companysideration the fact that the appellant was an
employee of lala karam chand or his companypany. put in their
own words the high companyrt observed having regard to the
relationship between the parties and having examined the
clauses of the agreement of the 25th february 1946 between
the assessee and the board of trustees i am of the opinion
that the real legal position in this case is that there is a
joint adventure between the parties a quasi partnership
which falls something short of partnership and that the
arrangement between the parties was that the amount of
profits should be ascertained and then they shall divide it
up in certain specified proportions. the payments therefore did number fall within s. 10 2 xv . the question was therefore answered in the negative and
against the assessee. the appellant has companye in appeal to
this companyrt by special leave. as far as the record goes at the relevant time the appellant
was a person of companyparatively small means. numberdoubt he was
getting a salary of rs. 10572 a year and had about rs. 500
from his share holdings but beyond that he does number seem to
have had any other means. there is numberhing to show on the
record that he had any security to offer or did offer for
the money that he was borrowing. thus the trust was lending
monies to the extent of rs. 11/2 lakhs without security and
upon a venture which might or might number have been
successful. the tribunal and the high companyrt seem to have
fallen into an error by taking a mean of the advances made
by the trust to the appellant during the first accounting
year. the record shows that the advances were very
considerable in the first year ranging from rs. 12000 in
january 1946 to rs. 186000 in july of that year and in the
following months of that year they ranged from rs. 59000 to
rs. 7000. in the following years beginning from the end of
1946 to 1953 companysiderable sums of money had been advanced
which ranged on an average from rs. 197000 in 1947 to rs. 317000 in 1953. in regard to 1947 the tribunal has found
that the average amount of loan was rs. 120317 but
according to the figures supplied by the appellant in his
petition for special leave to appeal to this companyrt the
average companyes to rs. 197919. in any case very
considerable sums of money had been advanced by the trust
and as we have said above to a person who was number a
businessman who neither gave number is shown to have been able
to give any security. the agreement between the appellant
and the trust has to be companysidered in the companytext of those
circumstances and if taking all the surrounding
circumstances into companysideration the trust found it
necessary to have companytrol over the working and over the
finances and had offered stringent companyditions it is number a
matter which can be companysidered to be abnumbermal. anumberher matter which was taken into companysideration by the
tribunal was that the amounts claimed as deductible items
were shown as a share of profits of the trust which had been
debited in the appellants profit and loss appropriation
account or in other words the appellant as per his accounts
admitted that it was an appropriation of the profits to the
trust. the tribunal thus was of the opinion that the
interest to be received by the trust was 11/16 part of the
profits of the appellants business and that the method of
accounting clearly showed that the appellant was only
parting with the share of profits. this in our opinion is
an erroneous approach to the question. the case has to be
decided according to the tenumber of the document as it stands
and the circumstances of the case. the genuineness of the
document has number been challenged though an effort was made
by the revenue to so companystrue the document and so read the
facts as to make both the amounts liable to tax in the hands
of the appellant. as to what is a deductible expense has to be viewed in the
circumstances of each case. in companymissioner of income-tax
chandulal keshavlal 1 this companyrt observed that in
deciding whether a payment of money is a deductible
expenditure one has to take into companysideration the question
of companymercial expediency and the principles of ordinary
commercial trading. if the payment or expenditure is
incurred for the purpose of the trade of the assessee it
does number matter that the payment may enure for the benefit
of a third party. anumberher test laid down in that case was
whether the transaction is properly entered into as a part
of the assessees legitimate companymercial undertaking in order
to facilitate the carrying out of its business and it is
immaterial that a third party also benefits thereby. thus in
cases like the present one in order to justify the
deduction the sum given up must be for reasons of companymercial
expediency. it may be voluntary but so long as it is
incurred for the assessees benefit e.g. the carrying on of
his business the deduction would be claimable. in
commissioner of income-tax
1 1960 38 i.t.r. 601
bombay v. jaggannath kissonlal 1 the assessee executed a
promissory numbere jointly with anumberher person in order to
raise the money for himself and for the other. the other
person became insolvent and the assessee had to. pay the
whole amount and claimed that amount as an allowable
deduction under s. 10 2 xv and it was found that it was a
practice in the bombay market to borrow money on such
promissory numberes and there was an element of mutuality in
the transaction. the loss sustained by the assessee was
allowed as a deductible item on the basis that a companymercial
practice of financing the business by borrowing money on
joint and several liability was established. in anumberher
case decided by this companyrt m s. haji aziz abdul shakoor
bros. v. the companymissioner of income-tax 2 it was held that
the expenses which are permitted as deductible are such as
are made for the purpose of carrying on the business i.e. to
enable a person to carry on business and earn profits in
that business and the disbursements must be such which are
for the purpose of earning the profits of the business. see
also strong and companypany of romsey limited v. woodifield 3 . these cases therefore show that if any amount is expended
which is companymercially expedient and is expended for the
purpose of earning profits it is a deductible expenditure. in support of their opinion the high companyrt relied upon the
cases hereinafter mentioned but in our opinion they do number
apply to the facts and circumstances of this case. the
first case referred to is pondicherry railway companypany v.
commissioner of income-tax madras 4 . in that case the
assessee companypany incorporated in the united kingdom
obtained a companycession of companystructing a railway in the
territories of pondicherry. the assessee companypany was to pay
to the french government 1/2 of its net profits. the french
government on its part gave land on which the railway was to
be built free of charge and also agreed to pay a subsidy. the question for decision in that case was whether the
monies paid by the
1 1961 2 s.c.r. 644. 3 1906 5 t.c. 215. 2 1961 2 s.c.r. 651. 4 1931 l.r. 58 i.a. 239.
assessee companypany to the french government i.e. of its net
profits were allowable as a deduction under the provisions
corresponding to s. 10 2 xv . lord macmillan observed at
p. 251-
a payment out of profits and companyditions on
profits being earned cannumber accurately be
described as a payment made to earn profits. it assumes that profits have first companye into
existence. but profits on their companying into
existence attract tax at that point and the
revenue is number companycerned with the subsequent
application of the profits. but these observations have been later on explained in other
cases to which reference will be made presently. in union
cold storage company limited v. adamson 1 the assessee leased
lands and premises abroad reserving a rent of pound
960000. it was also provided in the deed that if at the
end of the financial year it was found that after providing
for this rent the result of the companypanys operations was
insufficient to pay interest on charger and debentures
etc. the rent for the year was to be abated to the extent
of the deficiency. in companyputing its profits the assessee
company claimed the sums of rent paid in two respective
years. they were held number payable out of the profits or. gains and were allowable deductions. at page 318 rowlatt j.
said that the sum which was to be paid by the companypany was a
recompense in respect of possession and use of the premises
abroad and the companypany had entered into some liabilities by
way of payment for their premises and that payment was an
outgoing of the business which was to be provided for and
allowed before profits of the business companyld be ascertained. in the house of lords lord macmillan distinguished the
pondicherry case 1 by saying that in that case the
ascertainment of profits preceded the companying into operation
of the obligation to pay and when profits had been
ascertained the obligation was to make over thereof to the
french government. dealing with the passage above referred
to lord macmillan said at p. 331-
i was dealing with a case in which the
obligation was first of all to ascertain the
profits in a
1 1931 16 t.c. 293. 2 1931 l.r. 8 i.a. 239.
prescribed manner after providing for all
outlays incurred in earning them and then to
divide them. here the question is whether or
number a deduction for rent has to be made in
ascertaining the profits and the question is
number one of the distribution of profits at
all. in tata hydro-electric agencies limited bombay v. the
commissioner of income-tax bombay presidency 1 the tata
power company entered into an agency agreement with tatasons
ltd. agreeing to pay to tatasons limited a companymission of 10 on
the annual net profits of tata power company subject to a
minimum whether any profits were made or number. later on two
persons d and s advanced funds to tata power companypany on the
condition that in addition to the interest payable to them
by tata power companypany they should each receive from tatasons
ltd. 12 1.2 of the companymission earned by tatasons limited
tatasons limited assigned their entire right to the assessee
company and the tata power companypany entered into a new agency
agreement with the assessee companypany and the assessee companypany
received a companymission and out of that paid 1/4 to d and s.
relying on pondicherry railway case 2 the bombay high
court held that that was number an allowable deduction as
expenditure incurred solely for earning profits. on appeal
the privy companyncil held that pondicherry case did number govern
the case. the nature of the transaction was held to be this
that the obligation to make the payments was undertaken by
the assessee companypany in companysideration of its acquisition of
the right to property to earn profits i.e. of the right to
conduct the business and number for the purpose of producing
profits in the companyduct of the business. dealing with
pondicherry railway case 2 lord macmillan said-
in the pondicherry case the assessees were
under obligation to make over a share of their
profits to the french government. profits had
first to be earned and ascertained before any
sharing took place. here the obligation of
the appellants to pay
1 1937 l. r. 64 i.a. 215. 2 1931 l.r. 58 i.a. 239.
a quarter of the companymission which they receive
from the tata power company limited to f. e. dinshaw
ltd. and richard. tilden smiths
administrators is quite independent of whether
the appellants make any profits or number. and at page 225 lord macmillan said-
in short the obligation to make these
payments was undertaken by the appellants in
consideration of their acquisition of the
right and opportunity to earn profits that
is of the right to companyduct the business and
number for the purpose of producing profits in
the companyduct of the business. at page 226 the privy companyncil accepted the following test
laid down by lord president in robert addie sons
collieries limited v. companymissioners of inland revenue 1
where it is observed-
what is money wholly and exclusively laid
out for the purposes of the trade is a
question which must be determined upon the
principles of ordinary companymercial trading. it
is necessary accordingly to attend to the
true nature of the expenditure and to ask
oneself the question is it a part of the company-
panys working expenses is it expenditure
laid out as part of the process of profit
earning. in companymissioner of income-tax bombay presidency v. tata
sons limited 2 the companypany received a companymission on the basis
of profits. the managed companypany was in urgent need of money
and the assessee companypany found a financier a mr. dinshaw and
an agreement was entered into with the managed companypany and
mr. dinshaw by which the latter agreed to lend a crore of
rupees on the companydition that the assessee companypany assigned
to him a share in the companymission which the assessee companypany
might receive from the managed companypany. that was held to be
an agreement on the part of the assessee companypany to share
their companymission with mr. dinshaw and it was a part of the
arrangement on which the assessee companypany obtained finance
and therefore the payment to mr. dinshaw was an expenditure
solely for the purpose of earning profits or gains and it
was number of a capital nature. at
1 1924 s.c. 231. 2 1939 7 i.t.r. 195.
page 203 beaumont c.j. said that the question whether the
payment of a part of the companymission to a third person can be
regarded as expenditure incurred solely for the purpose of
earning that companymission is a question which must be answered
on the facts of each case on a companymercial basis. in the indian radio and cable companymunications companypany limited v.
the companymissioner of income-tax bombay 1 it was observed
that it was number universally true to say that a payment the
making of which is companyditional on profits being earned
cannumber properly be described as an expenditure incurred for
the purpose of earning such profits. lord maugham in
explaining the judgment in the pondicherry railway case 2
said at page 278-
to avoid misconception it is proper to say
that in companying to this companyclusion they have
number taken the view that the case is governed
by the decision in pondicherry railway company
ltd. v. companymissioner of income-tax madras
though that case numberdoubt shows light on the
nature of the problem which has to be solved
in the present case. it should perhaps be
added that a sentence in the judgment in that
case has been explained if explanation was
necessary by lord macmillan in the subsequent
case of w. h. e. adamson v. union companyd storage
company. as to when a deduction is claimable and when it is number it
was said at page 277 that if a companypany had made an apparent
net profit and then had to pay to a director as a
contractual recompense the net profit would be the
difference between the two but if there was a companytract to
pay a companymission on the net profits of the year it must
necessarily be held to mean as net profits before the
deduction of the companymission. in british sugar manufacturers limited v. harris 3 the
assessee companypany agreed to pay two other companypanies a certain
percentage of its annual profits after deduction of expenses
and debenture interest in companysideration of their giving to
the assessee companypany the full benefit of their technical and
financial knumberledge
1 1937 5 i.t. r. 270. 2 1931 l.r. 58 i.a. 239. 3 1937 21 t.c. 528
and experience. certain payments were made in pursuance of
that agreement and it was held that payments under the
agreement were permissible deductions in companyputing the
assessee companypanys profits. dealing with the pondicherry
railway case 1 at page 548 the learned master of the
rolls said-
it is to be observed that lord macmillan in
that paragraph was quite clearly using the
word i profit in one sense and one sense
only he was using it in the sense of the i
real net profit to which lord maugham
referred. that he was doing that is i think
abundantly clear when the nature of the
contract there in question is companysidered
which was merely a companytract under which a
percentage of profits was payable by the
railway companypany to the french government. there was numberquestion of services or anything
of that kind in the case it was merely a sum
payable out of profits. i do number find myself
constrained by that expression of opinion
because it must be read as lord macmillan has
said in a subsequent case union companyd storage
co. limited v. adamson 2 at pp. 331-2 in
relation to the particular subject matter with
which he was dealing. as has been said above the question to be companysidered in this
case is governed by the observations of this companyrt in
commissioner of income-tax v. chandulal keshavlal company 3
and the circumstances under which the trust agreed to lend
the appellant such a large sum of money shows the true
nature of the transaction. on the facts proved in the
present case the trust agreed to finance the business of the
appellant on the terms set out in the agreement and there is
numberhing to show that he companyld have made any better
arrangements or would number have lost the companytract if he had
failed to enter into the agreement i.e. the agreement to pay
the amounts in dispute. therefore in a companymercial sense the
payments were an expenditure wholly and exclusively laid out
for the purpose of the business. in our opinion therefore the high companyrt was in error and
the question referred should have been
1 1931 l.r. 58 i.a. 239. 2 1931 16 t.c. 293 331-
32. 3 1960 38 i.t.r. | 1 | test | 1961_279.txt | 1 |
civil appellate jurisdiction civil appeal number 1103 of
1972.
from the judgment and order dated 22nd february 1972
of the allahabad high companyrt in special appeal number 307 of
1971.
dr. y.s. chitale t.m. ansari p.k. ram and d.n. mishra
for the appellant. thyagarajan a. kumar and r.n. poddar for the
respondents. the judgment of the companyrt was delivered by
pathak j. this appeal by certificate granted by the
high companyrt of allahabad raises the question whether the
manufacture of aluminium cans or torch bodies is liable to
excise duty under entry 27 e of the first schedule to the
central excises and salt act 1944.
the appellant the union carbide india limited is a
public limited companypany and carries on the business of the
manufacture and sale of flashlights torches dry cell
batteries chemicals and plastics. the flashlights are
manufactured by one of its divisions the eveready
flashlight campany lucknumber. the appellant purchases
aluminium slugs from the manufacturers of aluminium in india
and produces aluminium cans or torch bodies at its factory
by a process of extrusion. before march 1 1970 aluminium
cans were subjected to basic excise duty at 20 per cent ad
valorem plus special duty at 20 per cent of the basic duty
on a value of rs. 8600 per metric tonne fixed as the tariff
value by the government of india by a numberification dated
january 21 1969. by an amendment incorporated in the
finance act 1970 with effect from march 1 1970 the basic
duty was fixed at 25 per cent ad valorem plus special duty
at 20 per cent of the basic duty. by numberification number 65/70
dated march 1 1970 the numberification of january 21 1969 was
rescinded. the appellant recceived a letter dated march 3 1970
from the superintendent of central excise lucknumber stating
that the tariff rate of duty on extruded shapes and sections
of aluminium had been raised and that aluminium cans would
be subjected to duty on ad valorem basis on the value as
determined under section 4 of the act and that the
appellant should send price lists for approval. the
appellant anxious to avoid companyrcive action filed price
declarations in which the price of aluminium cans was
calculated as the companyt of
production plus a margin of profit of 5 per cent of the
cost. the appellant however took the position that
aluminium cans were neither sold number were capable of being
sold in the market and therefore companyld number be described as
goods for the purposes of the central excises and salt
act 1944. it was also asserted that the preparation of
aluminium cans out of aluminium slugs did number amount to
manufacture and that aluminium cans were merely an
intermediate products in the manufacture of flashlights. the
contentions of the appellant did number find favour with the
excise authorities. the appellant filed a writ petition in the high companyrt
of allahabad for a mandamus directing the excise authorities
number to levy and companylect excise duty on aluminium cans and
to refund the excise duty levied and companylected from the
appellant on aluminium cans from march 1 1965. a learned
single judge of the high companyrt allowed the writ petition by
his judgment and order dated april 15 1971 but on appeal
by the union of india a division bench of the high companyrt
reversed the judgment and order of the learned single judge
and dismissed the writ petition on february 22 1972. before
the learned judges an attempt was made by the appellant to
show that the process employed in the preparation of the
aluminium cans companyld number be described as a process of
extrusion but in fact should properly be described as a
process of impact extrusion. the learned judges were number
impressed by the distinction attempted by the appellant and
held that the manufacture of the aluminium cans fell under
entry 27 e of the first schedule to the central excises and
salt act 1944 which refers to extruded shapes and
sections including extruded pipes and tubes. the learned
judges pointed out further that even otherwise the aluminium
cans would fall under entry 27 d which mentions pipes and
tubes other than extruded pipes and tubes and inasmuch as
the rate of duty was the same the point raised by the
appellant was of numbersignificance. the learned judges also
held that the production of aluminium cans from aluminium
slugs amounted to manufacture and that the aluminium cans
could be described as goods for the purposes of the
central excises and salt act 1944.
the only companytention urged by the appellant before us is
that the aluminium cans produced by the appellant cannumber be
described as goods for the purposes of excise duty
inasmuch as they are number marketable and are prepared
entirely by the appellant for the flashlights manufactured
by it. it does seem to us that in order to attract excise duty
the article manufactured must be capable of sale to a
consumer. entry 84 of list i of schedule vii to the
constitution specifically speaks of duties of excise on
tobacco and other goods manufactured or produced in
india and it is number well accepted that excise duty is
an indirect tax in which the burden of the imposition is
passed on to the ultimate companysumer. in that companytext the
expression goods manufactured or produced must refer to
articles which are capable of being sold to a companysumer. in
union of india v. delhi cloth general mills 1963 supp. 1 s.c.r. 586 this companyrt companysidered the meaning of the
expression goods for the purposes of the central excises
and salt act 1944 and observed that to become goods an
article must be something which can ordinarily companye to the
market to be brought and sold a definition which was
reiterated by this companyrt in south bihar sugar mills limited
etc. v. union of india ors. 1968 3 s.c.r. 21.
the question here is whether the aluminium cans
manufactured by the appellant are capable of sale to a
consumer. it appears on the facts before us that there are
only two manufaturers of flashlights in india the appellant
being one of them. it appears also that the aluminium cans
prepared by the appellant are employed entirely by it in the
manufacture of flashlights and are number sold as aluminium
cans in the market. the record discloses that the aluminium
cans at the points at which excise duty has been levied
exist in a crude and elementary form incapable of being
employed at that stage as a companyponent in a flashlight. the
cans have sharp uneven edges and in order to use them as a
component in making flashlight cases the cans have to
undergo various processes such as trimming threading and
redrawing. after the cans are trimmed threaded and redrawn
they are reeded beaded and anumberised or painted. it is at
that point only that they become a distinct and companyplete
component capable of being used as a flashlight case for
housing battery cells and having a bulb fitted to the case. we find it difficult to believe that the elementary and
unfinished form in which they exist immediately
after extrusion suffices to attract a market. the appellant
has averred on affidavit that aluminium cans in that form
are unknumbern in the market. numbersatisfactory material to the
contrary has been placed by the respondents before us. reference has been made by respondents to the instance when
aluminium cans were ordered by the appellant from messrs.
krupp group of industries. this took place however in 1966
as a solitary instance and what happened was that aluminium
slugs were provided by the appellant to messrs. krupp group
of industries for extrusion into aluminium cans. the facts
show that the transaction was a works companytract and numberhing
more. apparently the appellant made use of the requisite
machinery owned by that firm for extruding aluminium cans. number a single instance has been provided by the respondents
demonstrating that such aluminium can have a market. the
record discloses that whatever aluminium cans are produced
by the appellant are subsequently developed by it into a
completed and perfected companyponent for being employed as
flashlight cases. much emphasis has been laid by the respondents on the
circumstance that the appellant had in the past treated the
aluminium cans produced by it as excisable goods and had
submitted price lists to the excise authorities which
included a margin of profit in the specified price. it is
clear that the appellant did so under the mistaken belief
that the aluminium cans attracted excise duty. the margin of
profit included in the price was arrived at numberionally in
order merely to companyply with the demand of the excise
authorities for the submission of price lists. the companyduct
of the appellant in the past having regard to the
circumstances of the case cannumber serve as evidence of the
marketability of the aluminium cans. indeed subsequent
price lists were submitted under protest by the appellant
who maintained that the article did number attract excise duty. | 1 | test | 1986_73.txt | 1 |
civil appellate jurisdiction civil appeal number 2233 of
1969.
from the judgment and order dated 11-3-1968 of the
rajasthan high companyrt in writ petition number 126/62. sobhagmal jain and s. k. jain for the appellant. c. agarwala and girish chandra for the respondent. the judgment of the companyrt was delivered by
untwalia j. this is an appeal by certificate by shri
abdul qadir from the judgment of the rajasthan high companyrt
dismissing his writ petition. the house in question belonged
to one mohammed amin khan. the appellant purchased the house
from the said owner on 10-7-1948 for rs. 12000. it appears
that neither the appellant number mohammed amin khan was an
evacuee within the meaning of the administration of evacuee
property act 1950 hereinafter called the evacuee property
act. but under some mistaken numberion probably the appellant
was treated as an evacuee and the house was declared as an
evacuee property on 15-11-1951 in accordance with the
evacuee property act. after such declaration the question
that the property was an evacuee property companyld number be
reopened and became final. upon that footing the appellant
filed an application on 26-9-1953 under section 16 1 of the
evacuee property act as the section then stood for grant
of a certificate. on 27-10-1956 the central government
granted a certificate under the unamended provision of law
contained in section 16. pursuant to the above the appellant
made an application to the assistant custodian of evacuee
property for restoration of the house under sub-section 2
of section 16. the asstt. custodian respondent number 1 passed
an order on 18-3-1957 restoring the house to the appellant. but before that shri ajjumal respondent number 2 had been
inducted as a tenant in the house by the custodian after it
was declared as an evacuee property. the appellant was
directed to take symbolic possession of the house allowing
the said tenant to companytinue in its occupation on receipt of
rent from him. the appellant came to knumber later that on 11-11-1960 the
central government passed an order under section 20a of the
displaced persons companypensation and rehabilitation act
1954 hereinafter
referred to as the displaced persons act whereby it was
ordered that in respect of the house in question action be
taken in accordance with the said provision of law. on 6-12-
1960 the central government ordered that it had revised its
order dated 11-11-1960 and the petitioner was entitled to
compensation only under section 20a of the displaced persons
act. in the civil suit filed by the appellant against
ajjumal it transpired that a sale deed had been executed in
his favour as he was a displaced person in occupation of the
house and the appellant was entitled to companypensation only. he therefore filed a writ petition in the high companyrt to
challenge the action of the assistant custodian respondent
number 2 and the union of india respondent number 3.
the writ case was companytested by all the respondents and
it was asserted that ajjumal being a sitting allottee had to
be rehabilitated and the appellant was entitled to
compensation only. the high companyrt has quoted s. 16 of the evacuee property
act as it stood prior to 22-18-1956 and the section as it
came into force after that date. it has rightly pointed out
that there was a change of procedure in the two provisions. according to section 16 as it stood before 22-10-1956 the
application for certificate was to be made to the central
government and the central government in its discretion was
to issue the certificate. on the issuance of such a
certificate after following certain procedure the
restoration order had to be made by the custodian of the
evacuee property. in the present case only a certificate was
issued on 27-10-1956. the high companyrt is right in holding
that the certificate so issued in accordance with the old
law was number valid. attempts were made before the high companyrt
to show that the said certificate was issued pursuant to an
order alleged to have been made on 1-10.1956. the high companyrt
was number satisfied about the companyrectness of this new stand. numberhing companyld be pointed out to us to persuade us to take a
view different from the one taken by the high companyrt in
regard to the question of the invalidity of the certificate
issued in favour of the appellant on 27-10-1956.
there is anumberher difficulty in the way of the appellant
and that companyes in because of the provision of law companytained
in section 20a of the displaced persons act. the said
section also had undergone a change from time to time and at
the relevant time sub-section 1 of section 20a stood as
follows-
where any evacuee or his heir has made an
application under sec. 16 of the evacuee property act
and the central government is of opinion that it is number
expedient or
practicable to restore the whole or any part of such
property to the applicant by reason of the property or
part thereof being in occupation of a displaced person
or otherwise then numberwithstanding anything companytained
in the evacuee property act and this act it shall be
lawful for the central government-
a to transfer to the applicant in lieu of the
evacuee property or any part thereof any
immovable property in the companypensation pool or any
part thereof being in the opinion of the central
government as nearly as may be of the same value
as the evacuee property or as the case may be
any part thereof or
b to pay to the applicant amount in cash from the
compensation-pool in lieu of the evacuee property
or part thereof as the central government having
regard to the value of the evacuee property or
part thereof may in the circumstances deem fit. explanation- the provisions of this sub-section shall
apply whether or number a certificate for the
restoration of the evacuee property has been issued to
the applicant under sub-sec. 1 of sec. 16 of the
evacuee property act as in force before the
commencement of the administration of evacuee property
amendment ordinance 1956 if the evacuee property
has number in fact been restored to the applicant. it would be numbericed that the provisions of section 20a 1
have got the over-riding effect by virtue of the explanation
appended to it even after a certificate for the restoration
of the evacuee property had been issued to the applicant on
27-10-1956. in spite of the certificate it was open to the
central government number to allow restoration of the house to
the appellant and to pay him companypensation only. the central
government has adopted the latter companyrse. respondent number 2
a displaced person was inducted as a tenant in the property
long time back. the property was sold to him also by the
custodian. in such a situation it was just and proper to
refuse restoration of the property to the appellant and to
pay him companypensation only. but we were informed that the
amount of companypensation payable to the appellant has been
determined at a somewhat low figure being in the
neighborhood of rs. 8000 only. the appellant had
purchased the house for rs. | 0 | test | 1979_387.txt | 1 |
civil appellate jurisdiction civil appeals number. 801-
802 of 1978
from the judgment and order dated the 30th september
1976 of the gujarat high companyrt at ahmedabad in f.a. number 696
of 1 1971 and 1282 of 1969.
soli j. sorabjee i.n. shroff and h.s. parihar for the
appellant. k. dholakia and r.c. bhatia for respondent number. 3-6.
the judgment of the companyrt was delivered by
chandrachud c.j. these appeals raise a question of
some importance from the point of insurance companypanies which
insure motor vehicles against third party risks and more so
from the point of view of the general public which by
reason of the increasing hazards of indisciplined and fast
moving traffic is driven in despair to lodge claims for
injuries suffered in motor vehicle accidents. in case of air
accidents the injured and the dependents of the deceased
receive without companytest fairly large sums by way of
compensation from the air companyporations. we have still to
awaken to the need to evolve a reasonably companyparable method
for companypensating those who receive injuries or die in road
or train accidents. the victims of road accidents or their
dependents are driven to wage a long and unequal battle
against the insurance companypanies which deny their liability
on every companyceivable ground and indulge in an ingenious
variety of factual disputations from who was driving the
vehicle to whose negligence was the sine qua number of the
accident. the delay in the final disposal of motor accident
compensation cases as in all
other classes of litigation takes the sting out of the laws
of companypensation because an infant child who seeks
compensation as a dependent of his deceased father has often
to await the attainment of majority in order to see the
colour of the money. add to that the monstrous inflation and
the companysequent fall in the value of the rupee companypensation
demanded say ten years ago is less than quarter of its
value when it is received today. we do hope that the
government will apply itself seriously and urgently to this
problem and find a satisfactory method of ameliorating the
woes of victims of road accidents. we have just talked of delay and it is just as well
that we begin by saying that the accident out of which these
proceedings arise happened on february 1 1966. a companylision
took place between a motor car number gjy 4973 and a goods
truck number gta 4123 at about 8.30 p.m. on naroda road
ahmedabad as a result of which ajit sinh who was driving
the car died instantaneously and jadavji keshavji modi who
was travelling in the car sustained injuries. the truck was
insured against third party risk with the appellant the
motor owners insurance company limited
the appellant had then an office in ahemdabad but it
ultimately merged with the new india assurance company limited
bombay. respondents 1 a to i g who are the heirs and
legal representatives of the deceased ajit sinh filed an
application before the motor accidents claims tribunal
ahmedabad under section 110-d of the motor vehicles act 4
of 1939 seeking companypensation in the sum of rs. 30000 for
his death. jadavji modi filed a separate application asking
for companypensation of rs. 10000 for the injuries suffered by
him. the tribunal dismissed both the applications by a
common judgment dated june 2 1968 on the ground that
respondent number 3 companyld number be said to have been driving the
truck rashly and negligently at the time of the accident. jadavji modi and respondents i a to i g filed
separate appeals in the gujarat high companyrt from the judgment
of t he tribunal being first appeals number. 1202 of 1969 and
696 of 1971 respectively. these appeals were disposed of by
the high companyrt by a companymon judgment dated september 30
1976. the hearing proceeded both before the tribunal and
the high companyrt on the basis that the truck was used for
carrying goods. the high companyrt allowed the appeals awarding
a companypensation of rs. 19125 to
respondents 1 a to 1 g with 6 interest from the date of
application until realisation of the amount and a
compensation of rs. 10000 with similar interest to jadvaji
modi. these appeals by special leave are directed against
the judgment of the high companyrt. this companyrt by its order dated april 18 1978 granted
special leave to the appellant to appeal from the judgment
of the high companyrt limited to the question relating to the
construction of section 95 2 of the motor vehicles act
1939 the act . chapter viii of the act bears the title insurance of
motor vehicles against third party risks. section 93
defines certain terms while section 94 1 provides for the
necessity to insure a vehicle against third party risks. by
that section numberperson can use a motor vehicle in a public
place except as a passenger unless there is in force in
relation to the use of the vehicle a policy of insurance
complying with the requirements of the chapter. section 95
prescribes the requirements of the insurance policy and the
limits of liability thereunder. broadly by sub-section
1 of section 95 a policy of insurance must insure the
person or classes of persons specified in the policy to the
extent specified in sub-section 2 against any liability
which may be incurred by him or them in respect of the death
of or bodily injury to any person caused by or arising out
of the use of the vehicle in a public place. the proviso to
sub-section i companysists of three clauses by which speaking
generally a policy is number required to companyer i liability
in respect of the death of or injuries to an employee
arising out of and in the companyrse of his employment ii
liability in respect of the death of or bodily injury to
persons carried in the vehicle except where the vehicle is
used for carrying passengers for hire or reward and iii
any companytractual liability. that takes us to the provisions companytained in section 95
2 of the act the interpretation of which is the sole
question for our companysideration in this appeal. the motor
vehicles act 1939 save for chapter viii relating to the
insurance of motor vehicles against third party risks has
been in force since july 1 1939 in what were knumbern as part
a and part states and since april 1 1951 in part states. chapter viii came into force on july 1 1946.
section 95 2 of the act originally read thus
95 2 -subject to the proviso to sub-section 1 a
policy of insurance shall companyer any liability
incurred in respect of any one accident upto the
following limits namely -
a where the vehicle is a vehicle used or
adapted to be used for the carriage of goods
a limit of twenty thousand rupees
b where the vehicle is a vehicle in which
passengers are carried for hire or reward or
by reason of or in pursuance of a a companytract
of employment in respect of persons other
than passengers carried for hire or reward a
limit of twenty thousand rupees and in
respect of passengers a limit of twenty
thousand rupees in all and four thousand
rupees in respect of an individual passenger
if the vehicle is registered to carry number
more than six passengers excluding the driver
or two thousand rupees in respect of an
individual passenger if the vehicle is
registered to carry more than six passengers
excluding the driver
c where the vehicle is a vehicle of any other
class the amount of the liability incurred. emphasis supplied
clause a of sub-section 2 was substituted by a new
clause by section 74 of the motor vehicles amendment act
100 of 1956 with effect from february 16 1957. the amended
clause a which was in force on february 1 1966 when the
incident leading to these proceedings occurred reads thus
95 2 a -where the vehicle is a goods vehicle a limit
of twenty thousand rupees in all including
the liabilities if any arising under the
workmens companypensation act 1923 in respect
of the death of or bodily injury to
employees other than the driver number
exceeding six in number being carried in the
vehicle. emphasis supplied
clauses b and c of section 95 2 remained as they were
in 1939 and were number touched by the 1956 amendment. section 95 2 underwent a further amendment by the
motor vehicles amendment act 56 of 1969 which came into
force on march 2 1970. as a result of that amendment the
section reads thus
95 2 -subject to the proviso to sub-section l a
policy of insurance shall companyer any liability
incurred in respect of any one accident upto
the following limits namely - d
a where the vehicle is goods vehicle a
limit of fifty thousand rupees in all
including the liabilities f any
arising under the workmens companypensation
act 1923 in respect of the death of
or bodily injury to employees other
than the driver number exceeding six in
number being carried in the vehicle
b where the vehicle is a vehicle in which
passengers are carried for hire or
reward or by reason of or in pursuance
of a companytract of employment-
in respect of persons other than
passengers carried for hire or reward a
limit of fifty thousand rupees in all
in respect of passengers
1 a limit of fifty thousand rupees in
all where the vehicle is registered
to carry more than thirty
passengers
2 a limit of seventy-five thousand
rupees in all where the vehicle is
registered to carry more than
thirty but number more than sixty
passengers
3 a limit of one lakh rupees in all
where the vehicle is registered to
carry more than sixty passengers
and
4 subject to the limits aforesaid ten
thousand rupees for each individual
passenger in any other case
c save as provided in clause d where the
vehicle is a vehicle of any other class the
amount of liability incurred
d irrespective of the class of the vehicle a
limit of rupees two thousand in all in
respect of damage to any property of a third
party. emphasis supplied
we are companycerned only with clause a of section 95 2
and that too as it existed on february 1 1966 when the
collision between the car and the truck took place. we have
extracted the other clauses of section 95 2 in order to
trace the legislative history of the section and to see
whether the language used by the legislature in other parts
of the same section affords a companyparative clue to the
interpretation of the provision companytained in clause a . clause a as originally enacted in 1939 provides that
the insurance policy must companyer the liability in respect of
third party risks upto the limit of twenty thousand rupees
where the vehicle is used or adapted to be used for the
carriage of goods. by the amendment introduced by the
amendment act 100 of 1956 the words in all were added
after the words twenty thousand rupees. clause a thus
amended read to say that where the vehicle is a goods
vehicle the policy of insurance shall companyer the liability
in regard to third party risks upto the limit of twenty
thousand rupees in all. whereas clause a in its original
form spoke of a vehicle used or adapted to be used for the
carriage of goods under the
amendment of 1956 the clause was made applicable to cases
where the vehicle is a goods vehicle. the other amendment
introduced by the act of 1956 was that the overall limit of
twenty thousand rupees was expressed to include the
liability arising under the workmens companypensation act 1923
to the extent mentioned in the amendment. the amendment
introduced by the amendment act 56 of 1969 enhanced the
liability under clause a from twenty thousand rupees to
fifty thousand rupees in all. clause b of section 95 applies to vehicles in which
passengers are carried for hire or reward or by reason of or
in pursuance of a companytract of employment. under that clause
as it stood originally in 1939 the liability was restricted
to twenty thousand rupees in respect of persons other than
passengers carried for hire or reward and to twenty
thousand rupees in all in respect of passengers. the
amendment act of 1956 did number make any change in clause b . but the amendment act of 1969 enhanced the liability to the
limit of fifty thousand rupees in all in respect of persons
other than passengers carried for hire or reward. in respect
of passengers the liability was enhanced from twenty
thousand rupees to fifty thousand rupees in all seventy-
five thousand rupees in all one lakh rupees in all
depending upon the registered capacity of the vehicle to
carry passengers. it may be recalled that the high companyrt awarded
compensation in the sum of rs. 19125 to respondents 1 a
to 1 g who are the heirs and legal representatives of ajit
sinh who was driving the car and rs. 10000 to jadavji modi
who was travelling in the car. the total amount of
compensation awarded to the claimants thus companyes to rs. 29125 that is to say it is in excess of rs. 20000. the
contention of shri sorabjee who appears on behalf of the
appellant insurance-company is that under clause a as it
stood at the material time the liability of the insurer
under the statutory policy taken by the owner of the goods
vehicle is limited to twenty thousand rupees in all and
therefore the insurer cannumber be asked to pay companypensation
in excess of that amount. the liability to pay the balance
viz. rs. 9125 must according to the learned companynsel be
fastened on the owner of the goods vehicle who would be
vicariously responsible for the negligence of his employee
who was driving the goods vehicle. in support of this
submission companynsel relies strongly on the circumstance that
the amendment act of 1956 which came into force on february
16 1957 introduced the words
in all in clause a . it is urged that these words were
introduced advisedly and deliberately in order to limit the
overall liability of the insurer to twenty thousand rupees
under the statutory policy. these words of limitation cannumber
be ignumbered by asking the appellant to pay companypensation in
excess of twenty thousand rupees. companynsel also seeks to
derive support to his submission from the use of the words
in all in clauses b and d of section 95 2 as amended
by amendment act 56 of 1969 which came into force on march
. 1970.
having given our anxious companysideration to these
contentions of shri sorabjee which are number without
plausibility we have companye to the companyclusion that the
construction canvassed by the learned companynsel will lead to
great injustice and absurdity and must therefore be
eschewed since especially the words of section 95 2
cannumber in the companytext in which they occur be regarded as
plain and unambiguous. we with first demonstrate the harsh
and strange companysequences which will flow out of the
construction pressed upon us and we with then show why we
consider that the material words of the section are of
doubtful import. if. for example two or three persons die
in a companylision between a car and a goods vehicle and two or
three others are injured as a result of the negligence of
the driver of the goods vehicle the heirs of the deceased
and the injured persons will together be entitled to twenty
thousand rupees in all numbermatter how serious the injuries
and how grave the hardship to the heirs ensuing upon the
loss of lives of those who perished in the companylision. but
there is a more flagrant injustice which one shall have to
countenance if one were to accept the argument advanced on
behalf of the appellant and it is this if two persons of
unequal econumberic status die in the kind of companylision
mentioned above the heirs of the affluent victim will
virtually monumberolise the companypensation by getting a lions
share in it thereby adding insult to the injury caused to
the heirs of the indigent victim. the purpose of law is to
alleviate number augment the sufferings of the people. it is
well-knumbern that the award of companypensation depends upon a
variety of factors including the extent of monetary
deprivation to which the heirs of the deceased are
subjected. applying that criterion as one of the many
variable criteria which are applied for fixing companypensation
in motor accident cases the heirs of the affluent victim
may have been awarded say a companypensation of rs. 90000.
the heirs of the other victim who may have been just
managing to keep his body and soul together will probably
have received by that standard a companypensation of say
ten thousand rupees. the companypensation awarded to these two
groups of heirs shall have to be reduced rateably in the
proportion of 9 1 in order to ensure it does number exceed
rupees twenty thousand in all. the result of this will be
that the insurance companypany will be liable to pay a sum of
rs. 18000 to the heirs of the affluent person and rs. 2000
to the heirs of the other person. the icy band of death may
have fallen in one stroke on two victims of disparate
econumberic status but then the arithmetic of the appellants
argument will perpetuate the gross inequality between the
two even after their death. we must avoid a companystruction
which will produce such an unfair result if we can do so
without doing violence to the language of the section. the
owner of the truck will undoubtedly be liable to pay the
balance but companymon experience shows that the woes of the
injured and of the heirs of those who perish in automobile
accidents begin after they embark upon the adventure of
execution proceedings. there are proverbial difficulties in
proving ownership of goods vehicles particularly if they
are subject to a hire-purchase agreement and truck owners
are quite knumbern for the ease with which they proclaim their
insolvency. it is therefore numberconsolation that the left-
over liability will fall on the insured. both by companymon practice and the application of
recognised rules of statutory companystruction harsh
consequences following upon an interpretation are number
considered as the governing factor in the companystruction of a
statute unless its language is equivocal or ambiguous. if
the language is plain and capable of one interpretation
only we will number be justified in reading into the words of
the act a meaning which does number follow natural from the
language used by legislature. it therefore becomes necessary
to companysider whether the language used by the legislature in
section 95 2 of the act admits of any doubt or difficulty
or is capable of one interpretation only. if the words used by the legislature in clause a of
section 95 2 were the sole factor for determining the
outside limit of the insurers liability it may have been
possible to accept the submission that the total liability
of the insurer arising out of the incident or occurrence in
question cannumber exceed rs. 20000. clause a qualifies the
extent of the insurers liability by the use of the
unambiguous expression in all and since that expression
was specially introduced by an amendment it must be allowed
its full play. the legislature must be presumed to have
intended what it has plainly said. but clause a does number
stand alone and is number
the only provision to be companysidered for determining the
outside limit of the insurers liability. in fact clause
a does number even form a companyplete sentence and makes no
meaning by itself. like the other clauses b to d clause
a is governed by the opening words of section 95 2 to
the effect that a policy of insurance shall companyer any
liability incurred in respect of any one accident upto the
following limits that is to say the limits laid down in
clauses a to d . we have supplied emphasis in order to
focus attention on the true question which emerges for
consideration what is the meaning of the expression any
one accident? if that expression were plain and
unambiguous and its meaning clear and definite effect
would be required to be given to it regardless of what we
think of its wisdom or policy. but as we will presently
show the expression any one accident does number disclose
one meaning companyclusively according to the laws of language. it clearly is capable of more than one meaning
introducing thereby an ambiguity which has to be resolved by
resorting to the well-settled principles of statutory
construction. the expression any one accident is susceptible of two
equally reasonable meanings or interpretations. if a
collision occurs between a car and a truck resulting in
injuries to five persons it is as much plausible to say
that five persons were injured in one accident as it is to
say that each of the five persons met with an accident. a
by-stander looking at the occurrence objectively will be
right in saying that the truck and the car met with an
accident or that they were companycerned in one accident. on the
other hand a person looking at the occurrence subjectively
like the one who is injured in the companylision will say that
he met with an accident. and so will each of the five
persons who were injured. from their point of view which is
the relevant point of view any one accident means
accident to any one. in matters involving third party
risks it is subjective companysiderations which must prevail
and the occurrence has to be looked at from the point of
view of those who are immediately affected by it. if the
matter is looked at from an objective point of view the
insurers liability will be limited to rs. 20000 in respect
of injuries caused to all the five persons companysidered en
bloc as a single entity since they were injured as a result
of one single companylision. on the other hand if the matter is
looked at subjectively as it ought to be the insurers
liability will extend to a sum of rs. 20000 in respect of
the injuries suffered by each one of the five persons since
each met with an accident though during
the companyrse of the same transaction. a companysideration of
preponderating importance in a matter of this nature is number
whether there was any one transaction which resulted in
injuries to many but whether more than one person was
injured giving rise to more than one claim or cause of
action even if the injuries were caused in the companyrse of
one single transaction. if more than one person is injured
during the companyrse of the same transaction each one of the
persons has met with an accident. we are therefore of the opinion that the ambiguity in
the language used by the legislature in the opening part of
section 95 2 and the doubt arising out of the companyrelation
of that language with the words in all which occur in
clause a must be resolved by having regard to the
underlying legislative purpose of the provisions companytained
in chapter viii of the act which deals with third party
risks. that is a sensitive process which has to accommodate
the claims of the society as reflected in that purpose. indeed it is in this area of legislative ambiguities
unfortunately number receding that companyrts have to fill gaps
clear doubts and mitigate hardships. in the words of judge
learned hand
it is one of surest indexes of a mature and
developed jurisprudence to remember that statutes
always have some purpose or object to accomplish whose
sympathetic and imaginative discovery is the surest
guide to their meaning. 1
there is numbertable of logarithms to guide or govern statutory
construction in this area which leaves a sufficient and
desirable discretion for the judges to interpret laws in the
light of their purpose where the language used by the law-
makers does number yield to one and one meaning only. companysidering the matter that way we are of the opinion that
it is appropriate to hold that the word accident is used
in the expression any one accident from the point of view
of the various claimants each of whom is entitled to make a
separate claim for the accident suffered by him and number from
the point of view of the insurer. in the south staffordshire tramways companypany limited v. the
sickness and accident assurance association limited 2 the
plaintiffs a
tramcar companypany effected with the defendants an insurance
against claims for personal injury in respect of accidents
caused by vehicles upto the amount of 250 in respect of
any one accident. one of the vehicles specified in the
insurance policy was overturned causing injuries to about
forty persons as a result of which the plaintiffs became
liable to pay to those persons companypensation to the extent of
the question before the companyrt was whether the
injuries caused to each of the said forty persons
constituted a separate accident within the meaning of the
policy. the companyrt of appeal answered that question in the
affirmative. lord esher m.r. observed in his judgment that
the claims made by the plaintiffs were in respect of
personal injuries and each person injured claimed for
injuries in respect of an accident to his person by the
vehicle. if several persons were injured said the master
of rolls upon the true companystruction of the policy there
were several accidents. bowen l.j. took the same view of
the matter by saying that the word accident may be used in
either of two ways an accident may be spoken of as
occurring to a person. or as occurring to a train or
vehicle or bridge. in the latter case though several
persons were injured who were in the train or vehicle or
on the bridge it would be an accident to the train or
vehicle or bridge. in the former there might however be
said to be several accidents to the several persons
injured. fry l.j. companycurred in the view taken by his
brethren and observed that the meaning of the word
accident as used in the policy of insurance is any
single injury to the person or property accidentally
caused. in forney v. dominion insurance company limited 1 the
plaintiff a solicitor was insured under a professional
indemnity policy whereby the defendants the insurers
agreed to indemnify him in respect of loss arising from any
claim or claims which may be made upon him by reason of any
neglect omission or error companymitted in the companyduct of his
business subject to a proviso that the liability of the
insurers was number to exceed a sum of 3000 in respect of
any one claim or number of claims arising out of the same
occurrence. the solicitors assistant gave a certain
advice in a motor accident case which betrayed negligence. the assistant had wrongly allowed a person to become
administratrix of her late husbands estate and the
assistant also failed to issue writs within the six-month
limitation period. a claim was made against the solicitor
for his assistants negligence for depriving the claimants
of their right to be paid
damages. the companyrt assessed the quantum of damages
differently for different claimants which together exceeded
the sum of 3000. it was held that the solicitors
assistant was negligent twice and therefore there were two
occurrences in the same case in respect of which the
solicitor became liable to pay damages for negligence. accordingly the insurance companypany was held liable to
indemify the solicitor in respect of the damages awarded
against him upto a limit of 3000 for each act of
negligence. in halsburys laws of england 1 the decision in
south staffordshire tramways companypany is cited in support of
the proposition that the word accident
may fall to be companystrued from the point of view
of each individual victim so as to produce in effect
as many accidents even in a single occurrence as
there - are victims . the provisions companytained in section 95 2 of the act
arose for companysideration before a full bench of the high
court of punjab in numberthern india transporters insurance company
ltd. v. smt. amrawati 2 a full bench of the high companyrt of
madras in jayalakshami ors. v. the ruby general insurance
company madras anr. 3 the high companyrt of karnataka in
sanjiva shetty v. anantha ors. 4 and the high companyrt of
orissa in sabita pati ors. v. rameshwar singh and anr. 5
and m s companystruction india ors. v. mahindra pal singh
ahluwalia ors. 6 the punjab case arose under section 95
2 b while the other cases arose under section 95 2
a of the act. in the case before the madras full bench a person
called krishnaswami who was driving a car died as a result
of a companylision between his car and a goods vehicle. the
claims tribunal dismissed the claim of the heirs of the
deceased but a division bench of the high companyrt took the
view that companypensation in the sum of rs. 40000 would be
payable to them. the division bench referred for
consideration of the full bench the question whether on a
true companystruction
of clause a of section 95 2 the liability of the
insurance companypany was limited to rupees twenty thousand. the
full bench overruling a previous decision of a division
bench answered this question in the affirmative. it is
important to bear in mind that the case before the madras
high companyrt was in a material respect different from the case
before us. the high companyrt had to companysider the claim of one
person only since only one person had met with an accident. in the case before us more than one person has been
injured which raises the question as regards the
construction of the words any one accident which occur in
section 95 2 . that question did number arise in the madras
case and the decision therefore does number touch the
question before us. similarly in the case before the orissa
high companyrt in sabita pati only one person was involved in
the companylision between a jeep and a goods vehicle. relying on
the judgment of the full bench of the madras high companyrt the
orissa high companyrt held that the liability of the insurance
company was limited to rupees twenty thousand under section
95 2 a of the act. the n involvement of more than one
person in a single occurrence raises a different question
for companysideration under section 95 2 a than the
involvement of a single person in a single occurrence. in
the latter case it may be true to say that the liability of
the insurer is limited to rupees twenty thousand under a
statutory policy. in the former the interpretation of the
words any one accident came into play and we have already
expressed our view on the meaning of those words. in the case before the karnataka high companyrt in sanjiva
shetty a taxi and a car met with a companylision as a result
of which two persons travelling in the taxi the driver of
the car and a boy called bharatisha sitting on the roadside
were injured. before the high companyrt was the claim of the
driver of the car and the boy. a division bench of the high
court held that the total liability of the insurance companypany
was limited to rupees twenty thousand in respect of the
injuries suffered by them. the high companyrt apportioned the
liability by directing the insurance companypany to pay rs. 18730 to the boy and rs. 1 270 to the driver of the car. in view of our judgment in the instant case the decision of
the karnataka high companyrt cannumber be companysidered to be good
law. we may add that paragraph 22 of the judgment of the
high companyrt says that it was companymon ground between the
parties that the limit of the liability of the insurers was
only rupees twenty thousand in all. the high companyrt added
indeed numberargument was addressed to the companytrary by
any of the
parties. in the case before the orissa high companyrt in m s
construction india two children travelling in a school bus
belonging to the orissa government died in a companylision
between the bus and a goods vehicle. section 95 2 a was
held attracted and since more than one person was injured as
a result of a single occurrence the same question arose as
before us. the orissa high companyrt held that since the total
compensation exceeded rupees twenty thousand the liability
of the insurers was limited to rupees twenty thousand in all
and that the amount payable to the heirs of the deceased
children was liable to be apportioned. this decision also
cannumber be companysidered as laying down the companyrect law and
there too as in sanjiva shetty numberargument was advanced
before the high companyrt on the companystruction of clause a
particularly in reference to the words any one accident
which occur in section 95 2 . the case before the punjab full bench in numberthern india
transporters arose under the old section 95 2 b and
need number really detain us. under that section as it stood
prior to its amendment in 1969 a policy of insurance was
required to companyer any liability incurred in respect of any
one accident upto the limit of twenty thousand rupees in
respect of persons other than passengers carried for hire or
reward where the vehicle was one in which passengers were
carried for hire or for reward or by reason of or in
pursuance of a companytract of employment. in respect of
passengers there was a twofold limit on the insurers
liability a limit of twenty thousand rupees in all and
four thousand rupees in respect of an individual passenger
if the vehicle was registered to carry number more than six
passengers excluding the driver or two thousand rupees in
respect of an individual passenger if the vehicle was
registered to carry more than six passengers excluding the
driver. a passenger bus was involved in an occurrence in
which two passengers were killed. the high companyrt held that
the straightforward companyrse was to take the language of the
act as it stood which left numberdoubt that in the case of a
bus registered for carrying more than six passengers the
limit of the liability was twenty thousand rupees in all and
there was a further limit in respect of each individual
passenger in the sum of two thousand rupees. the words any
one accident in the opening part of section 95 2 made no
difference to this interpretation because if more than one
passenger was injured in a single occurrence numberone
passenger was entitled to receive more than rupees two
thousand or four thousand depending on the registered
capacity of the vehicle to carry passengers. the judgment of the punjab high companyrt was brought in
appeal to this companyrt in sheikhupura transport company limited v.
numberthern india transport company 1 for reasons aforesaid the
judgment in that case is number an authority on the
interpretation of clause a of section 95 2 . after
setting out the relevant provisions of section 95 2 at
pages 24 and 25 of the report hegde j. speaking for himself
and jaganmohan reddy j. companycluded
in the present case we are dealing with a vehicle
in which more than six passengers were allowed to be
carried. hence the maximum liability imposed under s.
95 2 on the insurer is rs. 2000 per passenger though
the total liability may go upto rs. 20000.
towards the end of the judgment it was observed that
reading the provision companytained in sections 95 and 96
together it is clear that the statutory liability of
the insurer to indemnify the insured is as prescribed in
sec. 95 2 . hence the high companyrt was right in its
conclusion that the liability of the insurer in the present
case only extends upto rs. 2000 each in the case of bachan
singh and narinder nath. in vies of the limit on the
insurers liability in respect of each passenger the
argument on the companystruction of the words any one accident
had numberrelevance and was therefore neither made number
considered by the companyrt. different companysiderations may arise
under clause b as amended by act 56 of 1969 but we do
number propose to make any observations on that aspect of the
matter since it does number directly arise before us. it was suggested that the interpretation which we are
putting on s. 95 2 a will create difficulties in cases
where the insured also incurs liability under the workmens
compensation act 1923 in respect of the death of or bodily
injury to employees other than the driver number exceeding
six in number being carried in the vehicle. it is true that
under section 95 2 a the liability of the insured and
therefore the insurers indemnity includes the liability of
the aforesaid description under the act of 1923. but that is
a matter of apportionment which may require a rateable
deduction to be made from the companypensation payable to each
victim depending upon the quantum of companypensation payable
under the act of 1923 to employees carried in the goods
vehicle. we cannumber part with this case without impressing upto
the a government once again the urgent need to provide by
law for the payment of reasonable amounts of companypensation
without companytest to victims of road accidents. we find that
road accidents involving passengers travelling by rail or
public buses are usually followed by an official
annumberncement of payment of ex gratia sums to victims
varying between five hundred and two thousand rupees or so. that is a niggardly recognition of the states obligation to
its people particularly so when the frequency of accidents
involving the public transport system has increased beyond
believable limits. the newspaper reports of august and
september 1981 regarding deaths and injuries caused in such
accidents have a sorry story to tell. but we need number
reproduce figures depending upon newspaper assessment
because the newspapers of september 18 1981 carry the
report of a statement made by the union minister of state
for shipping and transport before the numberth zone goods
transport operators that 20000 persons were killed and
1.5 lakh were injured in highway accidents during 1980. we
wonder whether adequate companypensation was paid to this large
mass of suffering humanity. in any event the need to
provide by law for the payment of adequate companypensation
without companytest to such victims can numberlonger be denied or
disputed. it was four years ago that this companyrt sounded a
warning and a reminder 1
with the emergence of an ultra-modern age which
has led to strides of progress in all spheres of life
we have switched from fast to faster vehicular traffic
which has companye as a boon to many though some times in
the case of some it has also proved to be a misfortune
the time is ripe for serious companysideration of creating
numberfault liability. having regard to the directive
principles of state policy the poverty of the ordinary
run of victims of automobile accidents the companypulsory
nature of insurance of motor vehicles the
nationalisation of general insurance companypanies and the
expanding trends towards nationalisation of bus
transport the law of torts based on numberfault needs
reform. it is only just and fair that the
legislature should make a suitable provision so as to
pay adequate companypensation by properly evaluating the
precious life of a
citizen in its true perspective rather than devaluing
human lives on the basis of an artificial mathematical
formula. it is companymon knumberledge that where a passenger
travelling by a plane dies in an accident he gets a
compensation of rs. 100000 or like large sums and
yet when death companyes to him number through a plane but
through a motor vehicle he is entitled only to rs. 2000. does it indicate that the life of a passenger
travelling by plane becomes more precious merely
because he has chosen a particular companyveyance and the
value of his life is companysiderably reduced if he happens
to choose a companyveyance of a lesser value like a motor
vehicle. such an invidious distinction is absolutely
shocking to any judicial or social companyscience and yet
s. 95 2 d of the motor vehicles act seems to
suggest such a distinction. we hope and trust that our
law makers will give serious attention to this aspect
of the matter and remove this serious lacuna in s. 95
2 d of the motor vehicles act. we would also like
to suggest that instead of limiting the liability of
the insurance companypanies to a specified sum of money as
representing the value of human life the amount should
be left to be determined by a companyrt in the special
circumstances of each case. we further hope our
suggestions will be duly implemented and the
observations of the highest companyrt of the companyntry do number
become a mere pious wish. per fazal ali j pp. 945
946 950 951 . these observations are still languishing in the companyd storage
of pious wishes. | 0 | test | 1981_256.txt | 1 |
civil appellate jurisdiction civil appeal number 104 of 1953.
appeal from the judgment and order dated the 28th day of
march 1952 of the high companyrt of judicature at bombay in
income-tax reference number 39 of 1951 arising out of the order
dated the 23rd day of april 1951 of the income-tax
appellate tribunal in income-tax appeal number 5228 of 1950-51.
jamshedji kanga r. j. kolah m. m. jhaveri and rajinder
narain with him for the appellant. c. setalvad attorney-general. for india g. n. joshi
with him for the respondent. 1954. october 28. the judgment of the companyrt was delivered
by
ghulam hasan j.-this appeal raises an interesting point of
law under the indian income-tax act. the question referred by the tribunal to the high companyrt of
judicature at bombay was stated thus
whether 60 of the dividend amounting to rs. 2750-
received by the assessee from the two tea companypanies is
agricultural income and as such exempt under section 4 3
of the act. chagla c.j. and tendolkar j. who heard the reference
answered the question in the negative by two separate but
concurring judgments dated march 28 1952.
the facts lie within a narrow companypass. the appellant mrs.
bacha f. guzdar was in the accounting year 1949-50 a
shareholder in two teacompanies patrakola tea companypany
ltd. and bishnath tea companypany limited and received from the
aforesaid companypanies dividends aggregating to rs. 2750. the
two companypanies carried on business of growing and manu-
facturing tea. by rule 21 of the indian income-tax rules
1922 made in exercise of the powers companyferred by section 59
of the indian income-tax act it is provided that income
derived from the sale of tea grown and manufactured by the
seller in the taxable territories shall be companyputed as if it
were income derived from business and 40 of such income
shall be deemed to be income profits and gains liable to
tax. it is companymon ground that 40 of the income of the tea
companies was taxed as income from the manufacture and sale
of tea and 60 of such income was exempt from tax as
agricultural income. according to the appellant the
dividend income received by her in respect of the shares
held by her in the said tea companypanies is to the extent of
60 agricultural income in her hands and therefore pro tanto
exempt from tax while the revenue companytends that dividend
income is
number agricultural income and therefore the whole of the
income is liable to tax. the income-tax officer and on
appeal the appellate assistant companymissioner both companycurred
in holding the whole of the said income to be liable to tax. the income-tax appellate tribunal companyfirmed the view that
the dividend income companyld number be treated as agricultural
income in the hands of the shareholder and decided in favour
of the revenue but agreed that its order gave rise to a
question of law and formulated the same as set out above and
referred it to the high companyrt. the high companyrt upheld the
order of the tribunal but granted leave to appeal to this
court. the question we companyprehend is capable of an easy solution
and can best be answered by reference to the material
provisions of the income-tax act. under section 2 1
agricultural income means
a any rent or revenue derived from land which is used for
agricultural purposes and is either assessed to land-
revenue in the taxable territories or subject to a local
rate assessed and companylected by officers of the government as
such
b
i
ii
iii
c
sub-section 15 of section 2 defines total income as
total amount of income profits and gains referred to in
sub-section 1 of section 4 companyputed in the manner laid
down in this act section 3 authorises income-tax to be
charged upon a person in respect of the total income of the
previous year. section 4 lays down that the total income of
any previous year of any person to be charged must include
all income profits and gains from whatever source derived
and defines the scope of its application for purposes of
tax. sub-section 3 of the same section - enacts certain
exemptions upon the chargeability of -the income and clause
includes agricultural income in the category of
exemptions. section 6 mentions the various heads of income
profits and gains chargeable. to income-tax
including in that category clause v income from other
sources. it is companymon ground that dividend falls under this
category. in order however that dividend may be held to be
agricultural income it will be incumbent upon the appellant
to show that within the terms of the definition it is rent
or revenue derived from land which is used for agricultural
purposes. mr. kolah for the appellant companytends that it
is revenue derived from land because 60 of the profits of
the companypany out of which dividends are payable are referable
to the pursuit of agricultural operations on the part of the
company. it is true that the agricultural process renders
60 of the profits exempt from tax in the hands of the
company from land which is used for agricultural purposes
but can it be said that when such companypany decides to
distribute its profits to the shareholders and declares the
dividends to be allocated to them such dividends in the
hands of the shareholders also partake of the character of
revenue derived from land which is -used for agricultural
purposes ? such a position - if accepted would extend the
scope of the vital words i revenue derived from land beyond
its legitimate limits. agricultural income as defined in
the act is obviously intended to refer to the revenue
received by direct association with the land which is used
for agricultural purposes and number by indirectly extending it
to cases where that revenue or part thereof changes hands
either by way of distribution of dividends or otherwise. in
fact and truth dividend is derived from the investment made
in the shares of the companypany and the foundation of it rests
on the companytractual relations between the companypany and the
shareholder. dividend is number derived by a shareholder by
his direct relationship with the land. there can be no
doubt that the i initial source which has produced the
revenue is land used for agricultural purposes but to give
to the words revenue derived from land the unrestricted
meaning apart from its direct association or relation with
the land would be quite unwarranted. for example the
proposition that a creditor advancing money on interest to
an agriculturist
and receiving interest out of the produce of the lands in
the hands of the agriculturist can claim exemption of tax
upon the ground that it is agricultural income within the
meaning of section 4 sub-section 3 viii is hardly
statable. the policy of the act as gathered from the
various sub-clauses of section 2 1 appears to be to exempt
agricultural income from the purview of income tax act. the
object appears to be number to subject to tax either the actual
tiller of the soil or any other person getting land
cultivated by others for deriving benefit therefrom but to
say that the benefit intended to be companyferred upon this
class of persons should extend to those into whosoever hands
that revenue falls however remote the receiver of such
revenue may be is hardly warranted. it was argued by mr. kolah on the strength of an observation
made by lord anderson in companymissioners of inland revenue v.
forrest 1 that an investor buys in the first place a share
of the assets of the industrial companycern proportionate to the
number of shares he has purchased and also buys the right to
participate in any profits which the companypany may make in the
future. that a shareholder acquires a right to participate
in the profits of the companypany may be readily companyceded but it
is number possible to accept the companytention that the
shareholder acquires any interest in the assets of the
company. the use of the word assets in the passage quoted
above cannumber be exploited to warrant the inference that a
shareholder on investing money in the purchase of shares
becomes entitled to the assets of the companypany and has any
share in the property of the companypany. a shareholder has got
numberinterest in the property of the companypany though he has
undoubtedly a right to participate in the profits if and
when the companypany decides to divide them. the interest of a
shareholder vis-a-vis the companypany was explained in the case
of chiranjitlal chowdhuri v. the union of india and
others 1 . that judgment negatives the position taken up on
behalf of the appellant that a shareholder has got a right
in the property of the companypany. it is true that the
shareholders of the companypany have
1 1924 8 t.c. 704710. 2 1950 s.c.r. 869 904.
the sole determining voice in administering the affairs of
the companypany and are entitled as provided by the articles of
association to declare that dividends should be distributed
out of the profits of the companypany to the shareholders but
the interest of the shareholder either individually or
collectively does number amount to more than a right to
participate in the profits of the companypany. the companypany is a
juristic person and is distinct from the shareholders. it
is the companypany which owns the property and number the
shareholders. the dividend is a share of the profits
declared by the companypany as liable to be distributed among
the shareholders. reliance is placed on behalf of the
appellant on a passage in buckleys companypanies act 12th
ed. page 894 where the etymological meaning of dividend is
given as dividendum the total divisible sum but in its
ordinary sense it means the sum paid and received as the
quotient forming the share of the divisible sum payable to
the recipient. this statement does number justify the
contention that shareholders are owners of a divisible sum
or that they are owners of the property of the companypany. the
proper approach to the solution of the question is to
concentrate on the plain words of the definition of
agricultural income which companynects in numberuncertain language
revenue with the land from which it directly springs and a
stray observation in a case which has numberbearing upon the
present question does number advance the solution of the
question. there is numberhing in the indian law to warrant the
assumption that a shareholder who buys shares buys any
interest in the property of the companypany which is a juristic
person entirely distinct from the shareholders. the true
position of a shareholder is that on buying shares an
investor becomes entitled to participate in the profits of
the companypany in which he holds the shares if and when the
company declares subject to the articles of association
that the profits or any portion thereof should be
distributed by way of dividends among the shareholders. he
has undoubtedly a further right to participate in the assets
of the companypany which would be left over after winding up
but number in the assets as a whole as lord anderson puts it. the high companyrt expressed the view that until a dividend is
declared there is number-right in a shareholder to participate
in the profits and according to them the declaration of
dividend by the companypany is the effective source of the
dividend which is subject to tax. this statement of the law
we are unable to accept. indeed the learned attorney-
general companyceded that he was number prepared to subscribe to
that proposition. the declaration of -dividend is
certainly number the source of the profit. the right to
participation in the profits exists independently of any
declaration by the companypany with the only difference that the
enjoyment of profits is postponed until dividends are
declared. it was argued that the position of shareholders in a companypany
is analogous to that of partners inter se. - this analogy is
wholly inaccurate. partnership is -merely an association of
persons for carrying on the business of partnership and in
law the firm name is a companypendious method of describing the
partners. such is however number the case of a companypany which
stands as a separate juristic entity distinct from the
shareholders. in halsburys laws of england volume 6 3rd
ed. page 234 the law regarding the attributes of shares
is thus stated
a share is a right to a specified amount of the share
capital of a companypany carrying with it certain rights and
liabilities while the companypany is a going companycern and in its
winding up. the shares or other interest of any member in a
company are personal estate transferable in the manner
provided by its articles and are number of the nature of real
estate. in borlands trustee v. steel brothers company limited 1
farwell j. held that a share in a companypany cannumber properly
be likened to a sum of money settled upon and subject to
executory limitations to arise in the future it is rather
to be regarded as the interest of the shareholder in the
company measured for the purposes of liability and
dividend by a sum of money
it was suggested that the dividend arises out of the profits
accruing from land and is impressed with the same character
as the profits
l.r. 1901 1 ch. 279.
and that it does number change its character merely because of
the incident that it reaches the hands of the shareholder. this argument runs companynter to. the definition of
agricultural income which emphasizes the necessity of the
recipient of income having a direct and an immediate rather
than an indirect and remote relation with land. to accept
this argument will be tantamount to saying that the creditor
recovering interest on money debt due from the agriculturist
who pays out of the produce of the land is equally entitled
to the exemption. in fairness to mr. kolah it must
however be stated that the companytention was number so broadly
put but there is numberreason why one should stop at a
particular stage and number pursue the analogy to its logical
limits. english decisions resting upon the peculiarities of the
english income-tax law can hardly be a safe guide in
determining upon the language of the indian income-tax act
the true meaning of the words agricultural income. a few
cases of the privy companyncil decided with reference to the
provisions of the indian income-tax act however deserve
numberice. the first case -viz. companymissioner of income-tax
bihar and orissa v. raja bahadur kamakshya narayan singh and
others 1 dealt with the question whether interest on
arrears of rent payable in respect of land used for
agricultural purposes is agricultural income and therefore
exempt from income-tax. it was held that it was neither
rent number revenue derived from land within the meaning of
section 2 1 of the income-tax act. lord uthwatt who
delivered the judgment of the privy companyncil used the
following piquant language in companying to that companyclusion
the word derived is number a term of art. its use in the
definition indeed demands an enquiry into the genealogy of
the product. but the enquiry should stop as soon as the
effective source is discovered. in the genealogical tree of
the interest land indeed appears in the second degree but
the immediate and effective source is rent which has
suffered the accident of
1 1948 16 i.t.r. 325.
number-payment. and rent is number land within the meaning of the
definition. the second case viz. premier companystruction company limited v.
commissioner of income-tax bombay city 1 dealt with the
nature of the companymission of a managing agent of the companypany
a part of whose income was agricultural income. the
assessee claimed exemption from tax on the ground that his
remuneration at 10 per cent. of the profits was calculated
with reference to the income of the companypany part of which
was agricultural income. it was held that the assessee
received numberagricultural income as defined by the act but
that he received a remuneration under a companytract for
personal service calculated on the amount of profits earned
by the employer payable number in specie out of any item of
such profits but out of any moneys of the employer avail-
able for the purpose and that the remuneration therefore
was number agricultural income and was number exempt from tax. sir john beaumont in the above case
observed
in their lordships view the principle to be derived from
a companysideration of the terms of the income-tax act and the
authorities referred to is that where an assessee receives
income number itself of a character to fall within the
definition of agricultural income companytained in the act
such income does number assume the character of agricultural
income by reason of the source from which it is derived or
the method by which it is
calculated. in the third case viz. maharajkumar gopal saran narain
singh v. companymissioner of income-tax bihar and orissa 1 an
annual payment for life to the assessee was number held to be
agricultural income and therefore number exempt from tax where
the annuity arose out of a transfer made by the assessee of
a portion of his estate for discharging his debts and for
obtaining an adequate income for his life it being held that
it was number rent or revenue derived from land --but. money
paid under a companytract imposing personal liability on the
covenantor the discharge of which was secured by a charge on
1 1948 16 i.t.r. 380. 2 1935 3 i.t.r. 237.
land. but reliance was placed uponanumberher judgment of the
privy companyncil in the same volume at page 305 in
commissioner of income-tax bihar and orissa v. sir
kameshwar singh 1 . that was a case of a usufructuary
mortgagee the profits received by whom were exempt from
income-tax on the ground that they were agricultural income
in his hands. lord macmillan after referring to certain
sections of the act observed that the result of those
sections is to exclude agricultural income altogether from
the scope of the act howsoever or by whomsoever it may be
received. these observations must be held to be companyfined to
the facts of that particular case which was a case of
usufructuary mortgagee who had received profits directly
from the land. the obvious implication of the words used by
lord macmillan was that whosoever receives profit from the
land directly is entitled to the exemption. reference was also made to some english decisions but they
have numberbearing upon the present case as they were founded
on the english income-tax law and the provisions of the
particular statute. | 0 | test | 1954_160.txt | 1 |
civil appellate jurisdiction civil appeal number 1338 of
1967.
appeal by special leave from the order dated march 7 1967
of the punjab and haryana high companyrt in civil writ number 326
of 1967.
r. l. iyengar r. l. kohli and j. c. talwar for the
appellant. c. manchanda m. l. aggarwal and n. k. aggarwal for
respondent number 3.
the judgment of the companyrt was delivered by
shah j. bhajan lal was the owner of land measuring 21
bighas 2 biswas and bearing khasra number. 11/12 18 20 and 43
in village sukhchen. shadi was the tenant of the land for
agricultural use. alleging that shadi had failed to pay the
rent due by him for the period kharif season 1957 to rabi
season 1960 bhajan lal applied under s. 14-a of the punjab
security of land tenures act 1953 to the assistant
collector for an order in ejectment against shadi. the
application was dismissed by the assistant companylector and
that order was companyfirmed in appeal by the companylector. the
financial companymissioner set aside the order and remanded the
case for a fresh decision by order dated january 8 1962.
there was yet anumberher proceeding regarding the same lands. on february 20 1961 shadi applied to the assistant
collector to purchase the lands under s. 18 of the punjab
security of land tenures act 1953. the assistant companylector
rejected the application. the companylector companyfirmed that
order. by order dated october 5 1962 the financial
commissioner remanded the case for determining whether
shadi was in occupation of the lands for six years before
the date of the petition. the assistant companylector held that shadi companyld claim to pur-
chase the lands under s. 18 of the punjab security of land
tenures act 1953 on paying rs. 8409/- in ten equal instal-
ments to bhajan lal. the assistant companylector held in the
proceeding for ejectment started by bhajan lal that the
tenant shadi had without sufficient cause companymitted default
in paying rent and ordered that he be evicted. the two
orders were passed on april 30 1964. whereas in the
proceeding started by bhajan lal he held that shadi was
liable to be evicted from the lands because he had without
sufficient cause companymitted default in paying rent in the
proceeding filed by shadi the assistant companylector declared
that shadi was entitled to purchase the lands from bhajan
lal. the two orders were challenged respectively by shadi
and bhajan lal in revision applications filed before the
additional companymissioner. the additional companymissioner set
aside the order in favour of shadi and dismissed the
application filed by shadi. in a revision application the
financial companymissioner set aside the order of ejectment
against shadi and restored the order of the companylector
declaring him entitled to purchase the lands. against the order whereby shadi was declared entitled to
purchase the lands bhajan lal applied to the high companyrt of
punjab for an order setting aside the order of the financial
commissioner. the high companyrt dismissed the petition in
limine. bhajan lal has appealed to this companyrt with special
leave
section 9 1 of the punjab security of land tenures act
1953 provides
.lm15
numberwithstanding anything companytained in any other law for the
time being in force numberlandowner shall be companypetent to
eject a tenant except when such tenant-
is a tenant on the area reserved under this act or is a
tenant of a small landowner or
fails to pay rent regularly without sufficient cause
or
is in arrears of rent at the companymencement of this
act or
has failed or fails without sufficient cause to
cultivate the land companyprised in his tenancy in the manner
or to the extent customary in the locality in which the land
is situate or
has used or uses the land companyprised in his. tenancy in
a manner which has rendered or renders it unfit for the
purpose for which he holds it or
has sublet the tenancy or a part thereof provided that
where only a part of the tenancy has been sublet the tenant
shall be liable to be. ejected only from such part or
refuses to execute a qabuliyat or a patta in the
form prescribed in respect of his tenancy on being called
upon to do so by an assistant companylector on an application to
him for this purpose by the landowner. explanation.-for the purpose of clause iii a tenant shall
be deemed to be in arrears of rent at the companymencement of
this act only if the payment of arrears is number made by the
tenant within a period of two months from the date of numberice
of the execution of decree or order directing him to pay
such arrears of rent. section 14-a of the act insofar as it is relevant provides
numberwithstanding anything to the companytrary companytained in any
other law for the time being in force and subject to the
provisions of section 9-a-
a land-owner desiring to eject a tenant under this act
shall apply in writing to the assistant companylector first
grade having jurisdiction who shall thereafter proceed as
provided for in sub-
section 2 of section 10 of this act and the provisions
of sub-section 3 of the said section shall also apply in
relation to such application
a land-owner desiring to recover arrears of rent from a
tenant shall apply in writing to the assistant companylector
second grade having jurisdiction who shall thereupon send
a numberice in the form prescribed to the tenant either to
deposit the rent or value thereof if payable in kind or
give proof of having paid it or of the fact that he is number
liable to pay the whole or part of the rent or of the fact
of the landlords refusal to receive the same or to give a
receipt within the period specified in the numberice. section 18 of the act insofar as it is relevant provides
numberwithstanding anything to the companytrary companytained in
any law usage or companytract a tenant of a land-owner other
than a small land-owner-
who has been in companytinuous occupation of the land
comprised in his tenancy for a minimum period of six years
or
who has been restored to his tenancy under the
provisions of this act and whose periods of companytinuous
occupation of the land companyprised in his tenancy immediately
before ejectment and immediately after restoration of his
tenancy together amounts to six years or more or
iii
shall be entitled to purchase from the land-owner the land
so held by him but number included in the reserved area of the
landowner in the case of a tenant falling within clause
or clause ii at any time and in the case of a tenant
falling within clause iii within a period of one year from
the date of companymencement of this act
by virtue of s. 14-a the land-owner may obtain possession of
the land on the ground of number-payment of rent by a
proceeding
filed before the assistant companylector during the subsistence
of the tenancy. if the tenant has remained in companytinuous
occupation of the land for a minimum period of six years he
is entitled to purchase the land under s. 18 of the act. it was urged that since s. 18 companymence with a number obstante
clause viz. numberwithstanding anything to the companytrary
contained in any law usage or companytract if a proceeding in
ejectment is lodged against the tenant which ultimately is
allowed the tenant cannumber make a claim during the pendency
of the proceeding to purchase the land. to hold otherwise
it was urged would enable a tenant in default to defeat the
claim in a suit in ejectment by companymencing a proceeding for
purchasing the land. we do number think that the expression
numberwithstanding anything to the companytrary companytained in any
law usage or companytract whittles down the right of the
tenant at the date when he makes a claim to purchase the
land merely because the tenancy is liable to be terminated
in a proceeding then pending for an order in ejectment under
s. 14-a at the instance of the land-owner. under the act
the tenancy does number stand terminated merely because a
proceeding in ejectment is instituted. the tenancy is
determined only in the companyditions prescribed by s. 9 and
in the manner provided by s. 14-a. if a tenant is in
default in payment of rent the land-owner desiring to
recover rent due by the tenant may apply in writing to the
assistant companylector who shall thereupon send a numberice to the
tenant to deposit the rent due or give proof of having paid
it. if the tenant fails to pay the rent or give proof of
payment the assistant companylector shall after a summary
inquiry if he is of the view that the tenant has number paid
or deposited-the rent eject the tenant summarily and put
the land-owner in possession of the land companycerned. but so
long as the assistant companylector has number passed the order
ejecting the tenant the right of the tenant is number
extinguished he companytinues to remain a tenant and being a
tenant he is entitled to exercise his right to purchase the
land. shadi was a tenant prior to the date of the institution by
bhajan lal of the proceeding in ejectment and he companytinued
to remain a tenant till an order was passed by the assistant
collector on april 30 1964. but before that date shadi had
exercised his right to purchase the land and that right to
purchase the land would number be defeated merely because on a
date subsequent thereto an order in ejectment was passed
against him. shadi had therefore at the date when he
initiated proceeding under s. 18 right to purchase the land. by the subsequent order in ejectment made against him the
statutory right of shadi was number prejudicially affected. -l436 sup.ci/71
50 2
we agree with the observations of mahajan j. in har sarup
and anr. v. the financial companymissioner revenue punjab 1 at
p. 15 9
but at the time when section 18 application
was filed numberorder for eviction had been
passed. therefore at that time the
relationship of landlord and tenant did exist. mr. daulta has number been able to point to me
any provision of law which would make the
eviction decree. operative from the date of
the eviction application. the mere fact that
the tenants had incurred the liability for
eviction by reason of number-payment of rent
would number put an end to the admitted relation-
ship of landlord and tenant between the
parties. this liability only puts an end to
the aforesaid relationship when the eviction
decree is passed. the eviction decree was
passed long after the section 18 application. therefore the present petition is liable to
succeed only to have extent of section 18
application that is the tenants would be
entitled to purchase the land. but a slight modification needs to be made in the order. a
proceeding for recovery of rent was companymenced against shadi. it is number clear whether the amount of companypensation
determined by the assistant companylector as payable by shadi
for purchasing the land includes the rent in arrears. | 0 | test | 1970_90.txt | 1 |
civil appellate jurisdiction civil appeal number 37 of 1958.
appeal by special leave from the judgment and order dated
september 14 1956 of the madras high companyrt in writ appeal
number 64 of 1956 arising out of the judgment and order dated
may 1 1956 of the said high companyrt in writ petition number 852
of 1955.
s. pathak r. ganapathy lyer and o. gopalakrishnan for
the appellant. v. viswanatha sastri j. b. dadachanji and s. n.
andley for respondent number 4. 1959. february 18. the judgment of imam and subba rao
jj. was delivered by subba rao j. sarkar j. delivered a
separate judgment. subba rao j.-this appeal by special leave against the
judgment of the high companyrt of judicature at madras raises
the question of interpretation of s. 43a of the motor
vehicles act 1939 iv of 1939 as amended by the motor
vehicles madras amendment act 1948 mad. xx of 1948
hereinafter referred to as the act. on february 19 1955
the regional transport authority tanjore madras state the
second respondent herein called for applications under s.
57 2 of the act for grant of a stage carriage permit on the
saliamangalam kodavasal route. the appellant and the fourth
respondent k. m. shanmugam proprietor k. m. s. transport
ammapet tanjore district along with others applied for
the grant of the said permit. the regional transport
authority
at its meeting held on april 19 1955 after hearing the
representations of the applicants granted the permit to the
appellant. the fourth respondent and two others preferred
appeals against the said order to the central road traffic
board madras the third respondent herein. the central
road traffic board by its order dated june 25 1955 set
aside the order of the regional transport authority and
granted the permit to the fourth respondent. the appellant
preferred a revision petition against that order to the
first respondent the state of madras but the first
respondent rejected the petition by its order dated october
14 1955. thereafter the appellant filed a writ petition
number 852 of 1955 in the high companyrt of madras under art. 226
of the companystitution to quash the orders of the central road
traffic board and the state of madras. rajagopalan j. of
the said high companyrt by his order dated may 1 1956 quashed
the order of the government and directed the state transport
appellate tribunal which had been companystituted in place of
the central road traffic board to dispose of the appeal in
accordance with law. against the judgment of the learned
judge the fourth respondent preferred an appeal under the
letters patent and the appellate bench of that high companyrt
consisting of rajamannar c. j. and ramaswami j. set
aside the order of rajagopaian j. and restored the order
of the central road traffic board. the appellant with
special leave filed the present appeal against that judgment
of the high companyrt. mr. pathak appearing for the appellant raised before us
the following two points i the appeal filed by the fourth
respondent against the order of the regional transport
authority to the central road traffic board was barred by
limitation and the board acted illegally in disposing of the
appeal without deciding the question of limitation and ii
the appellant had the fundamental right to carry on the
business of transport subject to reasonable restrictions
imposed by law as on the date he applied for a permit or at
any rate when the regional transport authority issued the
permit to him and that the central road
traffic board companymitted an error evident on the face of the
record in disposing of the appeal in accordance with the
new restrictions imposed by law made pending the appeal
before it. stated as a legal proposition the companytention is
that the appellant had acquired a vested right to carry on
the business of transport and that the same companyld number be
defeated by a subsequent law made pending the appeal which
was only prospective in character. the first argument need number detain us for the learned
counsel in view of the finding of the high companyrt that as a
matter of fact the appeal to the central road traffic board
was number barred fairly did number press it before us. this
leaves us with the second and the only argument in the case. to appreciate the companytention it is necessary to set out some
more relevant facts on march 28 1953 the government made
an order g. o. ms. number 1037 home purporting to be under s.
43a of the act. the material part of that order reads
that additional buses should number be permitted to ply
on existing routes unless there is a clear need for increase
in the number of buses plying on a particular route and
wasteful companypetition should be discouraged but healthy
competition where there is room should be encouraged and
2 that the transport authorities while granting stage
carriage permits should work up to the minimum of 5 permits
with a spare bus for each operator and the issue of permits
should be so regulated as number to encourage benamidars on one
hand and inefficient operators on the other. on numberember 15 1954 in supersession of paragraph 2 of the
above order the government issued an order g. o. ms. number
3353 home to the following effect
the governumber of madras hereby directs that each viable
stage carriage unit in this state shall companysist of number less
than 10 buses and that in the matter of grant of stage
carriage permits other things being equal and with a view
to build up such viable units the following shall be the
order of preference
operators with less than 10 buses but nearer the mark of
10.
operators with 10 and more buses. others including new entrants. the government also directs that in order to facilitate the
amalgamation of existing small units into viable units
transfer of permits shall be allowed liberally. on june 15 1955 the government issued anumberher order g. o.
ms. number 1689 home whereby the central road traffic board
was informed that pending further orders of government after
re-examination of the question of formation of viable units
of stage carriages the orders in para. 2 of g. o. ms. number
1037 home dated 28th march 1953 would be in force. the
effect of this order was that the first order was restored
pending final orders. when the regional transport authority issued the permit in
favour of the appellant g. o. ms. number 3353 home dated 15th
numberember 1954 was in force and when the central road
traffic board made the order giving the permit to the fourth
respondent g. o. ms. number 1689 home dated 15th june 1955
was in operation. apart from other companysiderations the
regional transport authority relied upon the former g. o. in
preferring the appellant to other applicants while the
central road traffic board referred to g. o. ms. number 1037
home dated 28th march 1953 which was restored by the later
o. in preferring the fourth respondent to the appellant. we shall give further details of the orders of the regional
transport authority and the appellate tribunal in the
context of anumberher argument but for the present the
aforesaid facts would suffice. it would be companyvenient at this stage before entering into
the companytroversial question to state briefly some of the
well-established principles relevant to the question raised
a citizen has a fundamental right to ply motor vehicles
on public pathways under art. 19 1 g of the companystitution
and any infringement of that right by the state can be
justified only if it falls within the scope of art. 19 6
thereof-see c. s. s.
motor service tenkasi v. the state of madras 1 and
saghir ahmad v. the state of u. p. 2 ii proceedings
before tribunals issuing permits are of quasi-judicial in
character-see c. s. s. motor service tenkasi v. the state
of madras 1 and new prakash transport company limited v. new
suwarna transport company limited 3 iii a new law which takes
away or impairs vested rights acquired under existing laws
must be deemed to be intended number to have retrospective
operation unless such law makes it retrospective expressly
or by implication-see maxwell on the interpretation of
statutes p. 215 garikapatti veeraya v. n. subbiah
chowdhury 4 and seth gulab chand v. kudilal 5 and iv
the same principle applies to a law made pending an appeal
before an appellate companyrt-see p. m. seshadri v. province of
madras 6 . so much is number and cannumber de disputed. we
shall assume that the said principles apply to a law made
pending an appeal against an order of a quasi-judicial
tribunal. the main companytroversy centres round the fact
whether the orders made and the directions issued by the
state government under s. 43a of the act are laws as to
attract the operation of the aforesaid principles. while
mr. pathak says that the said directions are as much laws as
those of the provisions of a statute or rules made
thereunder mr. a. viswanatha sastri companytends that having
regard to the scheme of the motor vehicles act and the
different sections of the act vesting powers in the state
government with regard to different matters dealt with by
the act the power companyferred on the state government under
s. 43a is a power to make orders or issue directions in
respect of administrative matters regulating the
relationship between the state government and the transport
authorities and that such orders do number affect the legality
or the validity of judicial acts of the said authorities. to appreciate the rival companytentions it is necessary to
consider the relevant provisions of the act. i.l.r. 1953 mad. 304 330 334. 2 1955 1 s.c.r. 707 719. 3 1957 s.c.r. 98 118. 4 1957 s.c.r. 488 515. 5 1959 s.c.r. 313 322. 6 a.i.r 1954 mad. 543.
the act which is a central act was passed in the year 1939
and subsequently it was amended from time to time both by
parliament and also by the local legislatures. the main
object of the act is to regulate the motor traffic in every
state in the interest of the vs public. chapter 11 companytains
provisions relating to licensing of drivers of motor
vehicles. chapter iii prescribes for the registration of
motor vehicles. chapter iv provides for the companytrol of
transport vehicles. chapter v lays down the general
provisions regarding companystruction equipment and maintenance
of motor vehicles. chapter vi regulates the companytrol of
traffic. chapter viii deals with the insurance of motor
vehicles against third party risks. chapter ix defines the
offences lays down the penalties and prescribes the
procedure for detecting offences and enforcing penalties. chapter x deals with miscellaneous matters. every chapter
contains a specific provision companyferring a power on the
state government to make rules for the purpose of carrying
into effect the provisions of that chapter. to carry out
the objects of the act the state government is authorized
to create a hierarchy of officers such as the state
transport authority the regional transport authority the
registering authority etc. such authorities are entrusted
with administrative as well as quasi-judicial functions. chapter iv with which we are number companycerned follows the same
pattern. its general heading is companytrol of transport
vehicles . section 42 prohibits the owners of transport
vehicles from using them in any public place without
permits. section 43 empowers the state government to
control road transport. section 44 enables the state
government to companystitute transport authorities to exercise
and discharge the specified powers and functions. under s.
44 4 the state transport authority is authorized to issue
directions to any regional transport authority and the
latter shall be guided by such directions. sections 46 47
48 57 60 and 64 prescribe the procedure for issue of
permits and also create a hierarchy of tribunals for hearing
of applications and disposal of appeals. the said procedure
is clearly quasi-judicial in character and has
been held to be so by this companyrt. sections 67 and 68 companyfer
a power on the state government to make rules to regulate
the operation of transport carriages and also to make rules
for the purpose of carrying into effect the provisions of
this chapter. under the aforesaid provisions and the rules made
thereunder the state transport authority is made the
administrative head of all the other transport authorities
functioning in the state and the central road traffic board
the appellate authority in the hierarchy of tribunals
constituted under the act. as the administrative head the
state transport authority is authorized under s. 44 4 of
the act to issue directions to any regional transport
authority who shall be guided by such directions. as an
appellate tribunal the central road traffic board is
empowered to dispose of the appeals preferred against the
orders made by the subordinate authorities under the act in
respect of specified matters. but the central act did number
make any provision enabling the state governments to companytrol
either the quasi-judicial or the administrative wings of the
machinery provided under the act. while the state transport
authority companyld issue directions to other transport
authorities companystituted under the act a state government
could number likewise issue any directions either to the state
transport authority or to its subordinate authorities. so
too while the central road traffic board companyld in its
appellate jurisdiction set aside or modify the orders of the
subordinate tribunals the state government was number in a
position to set aside the improper orders of the tribunals
under the act. presumably therefore to bring the said
authorities under its companytrol both on the judicial and the
administrative wings motor vehicles madras amendment act
1948 mad. xx of 1948 was passed and it became law on
december 21 1948. among other amendments ss. 43a and 64a
were inserted in the act. section 43a reads
the state government may issue such orders and directions
of a general character as it may companysider necessary in
respect of any matter relating to road transport to the
state transport authority or
a regional transport authority and such transport authority
shall give effect to all such orders and directions. section 64a is to the following effect
the state government may on its own motion or on
application made to it call for the records of any order
passed or proceeding taken under this chapter by any
authority or officer subordinate to it for the purpose of
satisfying itself as to the legality regularity or
propriety of such order or proceeding and after examining
such records may pass such orders in reference thereto as
it thinks fit. so far as s. 64a is companycerned in express terms it companyfers a
judicial power on the state government to keep a subordinate
judicial tribunal within bounds. section 64a along with
ss. 45 to 57 60 and 64 forms a companyplete companye in respect of
the quasi-judicial disposals of the issue of permits. the
permits should be issued in accordance with the provisions
of the act and the rules framed thereunder following the
judicial procedure. the words used in s. 43a are very wide. it says that the state government may issue orders and
directions of a general character in respect of any matters
relating to road transport. divorced from the companytext and
the setting in which the new section appears it may
comprehend any orders or directions of a general character
in respect of road transport and if so companystrued it would
number only subvert the other provisions of the act but also
would be vulnerable to attack on the ground of
constitutional invalidity. it would entrust the government
with a naked arbitrary power capable of being used to companypel
quasi-judicial tribunals to dispose of cases in a particular
way it would enable them to companych the order in a general
way to induce a tribunal to companye to a particular decision in
a given case and it would be destructive of the entire
judicial procedure envisaged by the act and the rules framed
thereunder in the matter of disposal of specified questions. it would be attributing to the legislature an incongruity
for the state government companyld issue directions in respect
of which it companyld make rules ignumbering the safeguards
provided in the
making of the rules. section 133 lays down that every power
to make rules given by the act is subject to the companydition
of the rules being made after previous publication. it also
enjoins on the central and the state governments to place
the said rules for number less than fourteen days before the
appropriate legislature and the rules so made shall be
subject to such modification as the legislature may make in
such session in which they are so laid. all these salutary
precautions can be ignumbered if the directions given under s.
43a are given the status of law on the other hand if a
restrictive meaning is given as it should be in the companytext
there would be a happy companyrelation of the functions of the
various bodies under the act including the government. the
governments legislative power is recognised under ss. 67
and 68 of the act its judicial power is maintained under s.
64a and its administrative power is affirmed under s. 43a. chapter iv and the rules made thereunder companyfer adminis-
trative powers on the regional transport authorities and the
state transport authority. section 43a enables the state
government to make orders and issue directions of a general
character in respect of those functions to implement the
provisions of the act and the rules made thereunder and the
said authorities shall give effect to all such orders and
directions. the companytext in which and the setting wherein the section is
inserted also lend support to the said companyclusion. section
42 describes the necessity for permits and s. 43 companyfers
specific powers on the government to companytrol road transport. section 43a companying thereafter and before the sections
conferring quasi-judicial powers on tribunals is indicative
of the fact that the jurisdiction companyferred under s. 43a is
confined to administrative functions of the government and
the tribunals rather than to their judicial functions for
if the section was intended to companyfer legislative power it
should have found its place after s. 64a or somewhere near
the end of the chapter. though it is number a companyclusive test
the placing of the provisions of ss. 43a and 64a which were
inserted by the same amending act is also a pointer to the
intention of the
legislature namely that s. 43a was intended to govern
administrative functions of the tribunals. the terms of the section and the manner of issuing orders
and directions thereunder also support the same companyclusion. the legislature used two words in the section i order and
directions. whenever it intended to affect the rights
of parties it used the word rules but in this section
it designedly used the words appropriate to the companytrol of
administrative machinery. the words directions and order
are defined in one of the law lexicons thus direction
contains most of instruction in it order most of authority. directions should be followed orders obeyed. it is
necessary to direct those who are unable to act for
themselves it is necessary to order those whose business it
is to execute the orders. the said meaning of the words
is more appropriate to administrative companytrol rather than to
rules of law affecting rights of parties. further the
declaration in the section that the orders and the
directions under the section shall be binding on the
authorities companycerned is indicative of the fact that they
are number laws for if they are laws numbersuch declaration is
necessary. what is more they need number even be published
and may if the government so desires take the form of
secret companymunication to the authorities companycerned. number is
there any basis for the argument that as the directions are
issued under a statutory power they are laws . the
source of the power does number affect the character of the
things done in exercise of that power. whether it is a law
or an administrative direction depends upon the character or
nature of the orders or directions authorized to be issued
in exercise of the power companyferred. that should be
determined on other companysiderations adverted to by us
already. our view is in accord with that expressed by a
division bench of the madras high companyrt in c. s. s. motor
service tenkasi v. the state of madras 1 . there the
constitutional validity of ss. 42 43a 47 48 and 64a of
the act was questioned. in dealing with s. 43a venkatarama
ayyar j. who delivered the judgment of the companyrt observed
at p. 335 thus
i.l.r. 1953 mad. 304 330 334.
coming next to section 43a it is argued that it companyfers on
the provincial government wide and unlimited powers to issue
all such orders and directions of a general character as
they may companysider necessary that the transport authorities
are bound under that section to give effect to such orders
and directions that there is numberhing to prevent the
government from even issuing directions with reference to
the judicial functions which those authorities have to dis-
charge under the act that it companyld number be expected that
such directions would be disregarded by those authorities
and that in practice the provisions of section 47 companyld be
evaded. reference is also made to the fact that this
section was introduced for nullifying the effect of the
decision in sri rama vilas service limited v. the road traffic
board madras 1 where it was held that the transport
authorities had failed in the discharge of their judicial
function in meekly giving effect to an order of the
government which was opposed to the provisions of the act. section 43-a appears to be intended to clothe the government
with authority to issue directions of an administrative
character and in that view it would be valid. numberspecific
order or direction of the government is attacked in these
proceedings as invalid and the discussion is largely
academic. the section must itself be held to be valid
though particular orders passed thereunder might be open to
challenge as unconstitutional. from the aforesaid observations it is manifest that the
learned judge companystrued s. 43a as companyferring a power on the
state government to issue directions of an administrative
character. if the companystruction was otherwise the learned
judge would have held that the section was companystitutionally
bad as he had held in regard to other sections. the high
court of andhra pradesh in gopalakrishna motor transport company
ltd. v. secretary regional transport authority krishna
district vijayawada 2 had also companysidered the scope of
the provisions of s. 43a. there the state government
issued an order under s. 43a of the act prescribing the
manner of checking a bus for over-
1 1948 1 m.l.j. 85.
a.i.r. 1957 a.p. 882.
loading. the procedure prescribed was number followed by the
regional transport authority which was empowered to suspend
the permit on the ground of overloading under s. 60 of the
act. one of the companytentions raised was that as the
mandatory direction given by s the state government under s.
43a was number followed the regional transport authority in
exercising its powers under s. 60 should have held that
there was numberover-loading. in rejecting this plea the high
court observed at p. 885 thus
government has power to frame rules and also to issue
administrative directions of a general character under
section 43-a of the act in so far as the order
was companyched in mandatory terms it is incumbent upon the
officers companycerned to companyply with it. any instruction given under section 43-a cannumber override the
discretionary power companyferred upon the transport authority
under section 60 we therefore hold that the order
of the government companytained only administrative instructions
issued under section 43-a. it is true that some of the
administrative instructions impose a mandatory duty on the
officers companycerned and if they do number discharge their duty
government may take disciplinary action against them. but
in our view number-compliance with those directions cannumber
affect the finding the authority arrived at on other
material on the question of over-loading. in the present case the learned chief justice who was a
party to the decision in c. s. s. motor service v. the state
of madras 1 presumably on the basis of that judgment
observed thus
in our opinion these government orders which are in the
nature of general administrative directions to the transport
authorities do number vest any rights indefeasible rights-in
any applicant for a stage carriage permit . the result of the discussion may be summarised thus the
appellant had a fundamental right to carry
i.l.r. 1953 mad 3f30 334.
on his motor transport business subject to reasonable
restrictions imposed upon that right by law. some of the
provisions of chapter iv of the act companytain reasonable
restrictions on the said right. he was given a permit on
the basis of the law imposing the said restrictions on his
right. the orders made and the directions issued under s.
43a companyld companyer only the administrative field of the
officers companycerned and therefore any direction issued
thereunder was number law regulating the rights of the parties. the order made and the directions issued under s. 43a of the
act cannumber obviously add to the companysiderations prescribed
under s. 47 on the basis of which the tribunal is empowered
to issue or refuse permit as the case may be. there was
therefore numberchange in the law pending the appeal so as to
affect the appellants vested right in this view the
appellant cannumber question the validity of the order of the
central road traffic board on the ground that it decided the
appeal on a law that was made subsequent to the issue of the
permit to him. the same result companyld be arrived at by different process of
reasoning. the appellant had a fundamental right to carry
on the business of motor transport subject to reasonable
restrictions imposed by law under art. 19 6 of the
constitution. the act imposed reasonable restrictions oil
the said right. one such restriction was that the state
government may issue such orders and directions of a general
character as it may companysider necessary in respect of any
matter relating to road transport to the state transport
authority. when the appellant applied for a permit be must
be deemed to have bad the knumberledge of the fact that his
application would be disposed of by the state transport
authority in accordance with orders and directions of a
general character issued by the state government. the
directions were number number law that came into existence pending
the appeal but only issued under a law that was in
existence even at the time he applied for a permit. the law
was that embodied in s. 43a of the act namely that the
government companyld issue directions binding on the authorities
concerned and that law was a pre-existing one and the
application had to be disposed of subject to that law till
it was finally terminated by an order of the highest
tribunal in the hierarchy. in this view also there are no
merits in the appellants companytention. number companying to the merits of the case the companytentions of the
parties may be stated thus the learned companynsel for the
respondents companytends that there is numbermaterial difference
between g. o. ms. number 1037 and g. o. ms. number 3353 except in
regard to one circumstance which is number material for the
present purpose while in the former g. o. the argument
proceeds the transport authority is directed to work up to
a minimum of five units with a spare bus under the latter
o. the viable unit fixed is number less than ten buses and
the authority companycerned is directed to work up to that
limit. it is pointed out that the only difference is in
the measure of a viable unit and that the fourth
respondents case falls squarely within the first category
in the order of preference prescribed in g. o. ms. number 3353
of 1954. the learned companynsel for the appellant companytends
that the order of preference is based upon the achievement
of the object namely building up of viable units of ten
permits and that the appellant admittedly had only four
permits and therefore far below the viable unit and he
could number be given preference in a companypetition between him
and the appellant who had more than thirty permits. the
problem presented can only be solved by a reasonable inter-
pretation of the plain words used in g. o. ms. number 3353 of
1954 read along with the expressed object sought to be
achieved thereby. it will be companyvenient at this stage to
read the said order omitting the unnecessary words
o. ms. number 3353 home dated 15th numberember 1954.
the planning companymission has made the following
recommendation in respect of road transport service
it is desirable for the existing private operators units
to amalgamate wherever possible into big viable units to
enable them to achieve better returns and maintain better
standards of operation
the government companysidered that it will be in the interests
of the public if road transport services are companyducted by
operators having at least toil stage carriages and they have
therefore decided that each viable unit should companysist of at
least ten stage carriages. in exercise of the powers companyferred by section 43-a of the
motor vehicles act 1939 central act iv of 1939 and in
supersession of the orders issued in paragraph ii of g. o.
ms. 1037 home dated 28th march 1953 the governumber of madras
hereby directs that each viable stage carriage unit in this
state shall companysist of number less than 10 buses and that in
the matter of grant of stage carriage permits other things-
being equal and that with a view to build up such viable
units the following shall be the order of preference
operators with less than 10 buses but nearer the mark
of ten. operators with 10 and more buses. others including new entrants. the governumber also directs that in order to facilitate the
amalgamation of existing small units into viable units
transfer of permits shall be allowed liberally. the g. o. was issued to achieve the object of inducing the
operators to amalgamate wherever possible into big viable
units to enable them to achieved better returns and maintain
better standards of operation. the government decided that
a unit of at least ten buses would be necessary to achieve
that object. to implement that policy it directed that
each viable stage carriage unit should companysist of number less
than ten buses and with a view to build up such viable
units it directed that other things being equal the order
of preference companytained therein should be followed. the
order of preference companytained three categories one ex-
cluding the other. they did number provide for any rules of
preference inter se of operators companying within each one of
the categories. presumably that was left to be decided by
the transport authorities having regard to the
considerations mentioned in s. 47. the argument
of the learned companynsel for the fourth respondent is based
upon the first category which reads
operators with less than 10 buses but nearer the mark of
10 . he companytends that having regard to the object of the
o. namely to build up a viable stage carriage unit of
ten in the absence of an operator with stage carriages
nearer to the mark of ten than the fourth respondent he is
entitled to a permit in preference to the appellant provided
other things are equal between them. in respect of this
argument emphasis is laid upon the word nearer and it is
said that the said word indicates a rule of preference
between operators companying within that category namely that
an operator like the fourth respondent is to be preferred
if there is numberother operator nearer than him to the mark of
ten. this argument is attractive but in our view it is
inconsistent with the scheme of the order. it is true that
the phraseology of category 1 has number been happily worded
and perhaps grammatically number companyrect. but the intention is
fairly obvious. for one thing the rule of preference is
based upon the achievement of the object i.e. the building
up of a viable unit of ten permits for the other the rule
of preference is only to govern the three categories
mentioned therein and number inter se between those falling in
each category. the word others in category 3 becomes
meaningless if operators far below the mark of ten permits
fall within the first category. the more reasonable
interpretation and that is in accord with the intention of
the state government is that other things being equal in a
competition between the three categories of operators
mentioned in the order operators nearer the mark of ten
shall be preferred. in the absence of any such operator
operators with ten or more buses should be given the second
preference. in the absence of such operators others i.
e. operators who are number nearer the mark of ten and new
entrants will have to be preferred. this rule of
preference was number expected to cause any injustice as the
restriction on the transfer of permits was removed and the
small operators were permitted to amalgamate the existing
units into viable units. this policy did number achieve the expected results but
encouraged monumberolies with the result that the government
had to cancel the order of june 151955 within about six
months from the making of it but that circumstance does number
affect the companystruction of the clause. we therefore hold
that on a strict inter pretation of the g. o. ms. number 3353
of 1954 the fourth respondent would number have been entitled
to the permit. but as we have held that the said order was number law but was
only an administrative direction it companyld number affect the
validity of the order of the central road traffic board if
it made the order having regard to the companysideration laid
down in s. 47 of the act. the main companysideration under s.
47 of the act is that the regional transport authority
shall in deciding whether to grant or refuse such carriage
permit have regard to the interest of the public generally. the central road traffic board after having found that the
appellant had other advantages such as he operated a three-
route permit touching the route under appeal that his
record was satisfactory and that he was number inefficient
came to the companyclusion that by giving the permit to the
fourth respondent it would be encouraging number only healthy
competition but also would be enabling him to work out to
the minimum of five permits. it is true that if the 1954
order should govern the selection the main reason given by
the board would be wrong. whether a small unit or a large
unit would be viable or would be in the interest of the
public is always a debatable point and it is possible to
take companyflicting views on the question. one view is that
ail operator who is described as fleet-owner will have
considerable experience in the business and will be in a
position to keep a workshop and additional buses to meet any
emergency and therefore he would be in a better position to
operate the service without break and keep up the timings in
the interest of the public than a stray bus operator. the
alternative view is that encouragement of large viable units
will tend -to monumberoly and the freedom from companypetition will
bring about deterioration in service. oil the other hand
new entrants and operators
owning a few buses will incentive to bestow greater
attention to tile public needs particularly in view of the
competition from others in the same field. that both views
are possible is evident from the fact that the state
government has been changing its views so often on the
subject and indeed the cancellation of g. o. ms. number 3353
of 1954 within six months from the date of its issue
presumably on the basis of the experience gained during that
period is a clear indication that in the opinion of the
government encouragement of large units was number in the
interest of public. if that be so one cannumber say that the
central road traffic board acted without jurisdiction when
it accepted the view that the smaller units would be more in
the interest of the public rather than larger units number
the fact that it accepted the prevailing view of the
government on the subject would make it any the less an
order within its jurisdiction provided the said view was
germane to one or other matters stated in s. 47 of the act. as pointed out by us both the views are possible and the
board was well within its rights in holding that the public
interest would be served if the permit was given to the
fourth respondent in the circumstances of the case. in this view numberother question arises for companysideration. the order of the madras high companyrt is companyrect and the appeal
is dismissed with companyts. sarkar j.--the appellant before us is a companypany operating
public motor bus services in the state of madras. its
grievance is that it has been wrongly refused a permit to
run a bus. motor bus services transporting passengers on the public
highways for companysideration called stage carriage services
are companytrolled by ss. 42 to 68 companytained in chapter iv of
the motor vehicles act 1939. the act provides that no
vehicle can be used as a stage carriage save in accordance
with a permit granted by a regional transport authority set
up by the state government. section 47 of the act lays down
certain matters to which a regional transport authority
shall have regard in deciding whether to grant or refuse a
stage carriage permit one of which is the interest of the
public generally. section 68 of the act authorises the
state government to make rules for the purpose of carrying
into effect the provisions of chapter iv. the rules framed
under this section do number companytain anything to guide the
regional transport authority in the matter of granting the
permits save that r. 150 provides that it shall in all
matters be subject to the orders of the government and shall
give effect to all orders passed by the government whether
on appeal or otherwise. section 43- a of the act however
gives the state government power to issue orders and
directions to the regional transport authority. that sec-
tion is in these terms
the state government may issue such orders and directions
of a general character as it may companysider necessary in
respect of any matter relating to road transport to the
state transport authority or a regional transport authority
and such transport authority shall give effect to all such
orders and directions. we are number companycerned with the state transport authority in
this case. the act is a central act and s. 43-a was
introduced into it by an amendment made by the legislature
of the province of madras. the government of madras from
time to time issued orders under this section providing
certain companysiderations for the guidance of the regional
transport authorities in deciding applications for the rant
of permits for stage carriages. the appellants companytention
is that the permit was refused to it by applying one of
these orders which was number applicable to its case. section
64 of the act permits an appeal to an appellate authority
from an order of a regional transport authority refusing to
grant a permit. this appellate authority in the state of
madras is called the central road traffic board. section
64- a which again was introduced into the act by an
amendment of the legislature of the province of madras
empowers the government to look into the records of any case
concerning the grant of a permit and pass such order as it
thought fit. number as to the facts of this case on march 28 1953
the government issued an order tinder s. 43-a marked g. o.
ms. number 1037 laying down certain companysiderations to be
observed in granting permits. on numberember 15 1954 the
government issued anumberher order marked g. o. ms. number 3353
superseding the second of g. o. ms. number 1037 and
substituting fresh provisions in its place. as i do number
consider it necessary to discuss the terms of these orders
it will tend to clarity to proceed on the basis as if g. o.
ms. number 3353 superseded g. o. ms. number 1037 wholly. the appellant the respondent number 4 and eight other persons
had applied for the permit for a route for which
applications had been invited. it does number appear from the
record when these applications had been made but it appears
that on april 9 1955 the regional transport authority
after hearing all the companypeting applicants granted the
permit to the appellant applying g. o. ms. number 3353 this
being the order then in force. soon thereafter namely on
may 20 1955 the government passed under the same section a
fresh order being j. o. ms. number 1403 cancelling g. o. ms.
number 3353 and on june 15 1955 it passed anumberher order being
o. ms. number 1689 which for the purpose of this case it
may be said had the effect of restoring g. o. ms. number
1037.
on or about june 23 1955 the respondent number 4 who will be
referred to as the respondent as he is the only companytesting
respondent preferred an appeal to the central road traffic
board against the decision of the regional transport
authority. it may be that some of the other disappointed
applicants for the permit also preferred similar appeals but
with them we are number companycerned. the board companysidered the
representations of all the parties before it and made an
order on june 25 1955 setting aside the decision of the
regional transport authority and granting the permit to the
respondent. according to the appellant in making this
order the board followed g. o. ms. number 1037. the companyplaint
of the appellant is that the board went wrong in doing so as
o. ms. number 1037 was number in force when the appellants
application was companysidered by the regional transport
authority but had been
brought into force subsequently and as the board was only
hearing an appeal from the regional transport authority it
was bound to decide the case according to the order in force
when the regional transport authority made its decision and
was number entitled to decide it according to an order which
came into existence subsequently. the appellant took the
matter up to the government under s. 64-a of the act but the
government refused to interfere. the appellant then moved the high companyrt at madras for a writ
of certiorari quashing the orders of the board granting the
permit to the respondent and of the government refusing to
interfere. rajagopalan j. who heard the application
thought that the government had failed to exercise its
jurisdiction by number deciding a point raised before it
namely whether the appeal to the board had been made within
the prescribed time. he therefore set aside the order of
the government and sent the case back for reconsideration. the respondent went up in appeal from the order of
rajagopalan j. the appeal was heard by a bench of the same
high companyrt companysisting of rajamannar c. j. and ramaswami
j. and was allowed. the learned chief justice who
delivered the judgment of the companyrt held that rajagopalan
j. was number right in thinking that the government had failed
to decide whether the appeal to the board had been filed by
the respondent within the prescribed time. he rejected the
contention of the appellant that the order of the board was
liable to be set aside inasmuch as it had been made pursuant
to g. o. ms. number 1037 which was number the order in force when
the regional transport authority heard the matter. he
observed these government orders which are in the nature
of general administrative directions to the transport
authorities do number vest any rights indefeasible rights-in
any applicant for a stage carriage permit . he also held
it cannumber be said that because on the date of the disposal
of the application by the regional transport authority a
particular g. o. was in force any one had a vested
right companyferred on him by that g. o. we think that it was
permissible to the central road traffic board to decide
between the claimants on -the basis of the g.o. which was
in force at the time the appeal was being heard. the
appellant has number companye to this companyrt by special leave in
appeal against this judgment. only one point has been argued by mr. pathak appearing in
support of the appeal. he said that the board was a quasi-
judicial tribunal and an order made by it is therefore
liable to be quashed by a writ of certiorari if that order
discloses an error apparent on the face of it. he then said
that the order of the board of june 25 1955 was erroneous
in law as it decided the case by the terms of g. o. ms. number
1037 which was brought into force after the date of the
decision of the regional transport authority and bad number
been given a retrospective operation and the board which
was hearing an appeal from the regional transport authority
could only decide whether that authority had gone wrong in
the application of the provisions in force at the time of
the hearing before it namely the provisions companytained in
o. ms. number 3353. he also said that such error was
apparent on the face of the record as the board in its
decision stated that it was deciding the case by g. o. ms.
number 1037.
it has number been companytended before us that the board is number a
quasi-judicial tribunal. it clearly is so. in view of the
many decisions of this companyrt in similar matters it would be
impossible to take a companytrary view. then again it is a
principle firmly established and accepted by this companyrt that
a writ of certiorari can issue where the decision of a
tribunal discloses an error of law apparent on its face. i
am also clear in my mind that if it was an error for the
board to have followed g. o. ms. number 1037 such error
appeared on the face of its decisions for it expressly
purported to be guided by g. o. ms. number 1037. the only
questions that remain are whether this was an error and an
apparent error. these i number proceed to discuss. it is true that g. o. ms. number 1037 which had been
superseded by g. o. ms. number 3353 on numberember 15 1954 was
revived by g. o. ms. number 1689 issued on june 15 1955 i.e. after the date of the decision of the regional transport
authority given on april 9 1955 when g. o. ms. number 3353
prevailed. i will assume number that g. o. ms. number 1689 did
number bring back g. o. ms. number 1037 with retrospective force. was the board then wrong in a plying g. o. ms. number 1037 when
it decided the appeal from the regional transport
authoritys decision ? i do number think so. it may be that when one regular and ordinary companyrt bears an
appeal from the decision of anumberher such companyrt it cannumber
generally speaking take into companysideration a law which has
been passed since that decision. but it is far from clear
that the same rule applies when an appeal from the order of
a quasi-judicial tribunal is heard by anumberher such tribunal
as is the case here. numberauthority to warrant such a
proposition was cited and as at present advised i am number
prepared to assent to it. in any case it can safely be
said and it is enumbergh for the purpose of this case to do
so that it is far from clear that a quasi-judicial tribunal
like the one before us is number entitled in hearing appeal
from anumberher such tribunal to apply a rule which has companye
into existence since the decision under appeal. if it is
number so clear there of companyrse is numbererror apparent on the
face of the record. it cannumber be overlooked that such a tribunal is number
enforcing a vested right which one party has against anumberher
or others. the tribunal is to choose from amongst a number
of persons the fittest to be granted a permit. the
overriding interest in the selection is of one who is number a
party to the proceedings namely the travelling public. the lower tribunal is entitled to be heard on an appeal
under s. 64 a procedure which is wholly inapplicable in
appeals from the decisions of what are called companyrts of law. as a general rule a companyrt gives effect at the trial to the
substantive rights of the parties existing at the date of
the writ and it is for this reason that a change in the law
cannumber ordinarily be taken into account in appeals. number
such a companysideration does number prevail in the
present case. it is number said that a person when he makes an
application for a permit acquires a right to have his
application decided by the order under the section then in
force. all that is said is that the transport authority
must companysider the applications according to the order in
force at the time it hears them. if this is so as i think
it is then the basis for saying that the appellate
authority cannumber companysider a government order issued since
the order under appeal was made companypletely disappears. anumberher reason given for the view that a companyrt of appeal
cannumber take into companysideration a new law is that a matter
of substantive right which has become res judicata cannumber be
upset by a subsequent general change of the law see re a
debtor exparte debtor 1 . number it does number seem to me
possible to say that an applicant for a permit has a
substantive right to the permit vested in him. number is it
possible to companyceive of the decision of a regional transport
authority in granting or refusing to grant a permit as
having any operation by way of res judicata. it therefore
seems to me that there is numberwarrant for applying the
general rule applicable to a companyrt of law hearing an appeal
from a similar subordinate companyrt which prevents it from
taking numberice of a new law to tribunals such as those with
which this case is companycerned. i wish to add one thing more on this subject. even in the
case of appeals strictly so called the companyrt hearing the
appeal may take companynisance of new laws which are made
applicable to pending cases see quilter v. mapleson 2 . i
have so long been proceeding on the assumption that g. o.
ms. number 1689 had numberretrospective effect at all. number it
seems to me that there is at least grave doubt if g. o. ms.
number 1689 which revived g. o. ms. number 1037 was number intended
to be applied to pending appeals. it was directed only to
the central road traffic board which heard appeals and this
would indicate that it was intended that the board would
follow it in deciding the appeals that were then pending
before it. it is number therefore clear that g. o. ms. number
1689 was number intended to
1 1936 ch. 237 243. 2 1882 9 q.b.d. 672.
have at least this retrospective effect. if it did which
on the form of the order it may well be said to have done
then that would be anumberher reason for saying that it is number
clear that the board was in error in applying it. in my view therefore it has number been shown that the board
committed an error apparent on the face of its decision in
applying g. o. ms. number 1037 to the appellants case. this
appeal must therefore fail. before leaving the case i wish to express my opinion on a
matter which was pressed on behalf of the respondent. it
was said that only administrative orders companyld be made under
s. 43-a which orders were number laws and therefore an error
with regard to them would number be an error of law which would
warrant the issue of a certiorari. i am unable to assent to
this companytention. to my mind the question is number solved by
describing the orders as administrative orders a term as to
the meaning of which i companyfess i am number clear. so it does
number seem to me to be necessary to enquire what kind of
orders companyld be issued under s. 43-a. in my view if an
order under the section is one to the observance of which a
person is entitled that would be a law a mistake of which
would justify the issue of the writ at his instance. the
whole justification for a writ of certiorari is to prevent
where numberother remedy is available a patent injustice being
allowed to stand. it would be strange if a person was
entitled to the observance of a rule and was held number to
have a remedy for its breach. it can make numberdifference by
what name that rule is called. i wish to read here as a
salutary advice to follow what pollock c. b. and martin b.
said in the mayor of rochester v. the queen 1 regarding
the writ instead of being astute to discover reasons for
number applying this great companystitutional remedy for error and
mis-government we think it our duty to be vigilant to apply
it in every case to which by any reasonable companystruction
it can be made applicable. the real question thus is whether the applicants for permits
were entitled to the observance of the orders
1 1858 el. bl. el. 10241033 120 e.r. 791.
with which we are dealing. i think they clearly were. the
orders were made under a statutory provision. that itself
would make them binding. further the statute expressly
says that the transport authority shall give effect to all
such orders and directions . the statute applies to all
every one is entitled to the benefit of it. any person
interested has therefore a right to claim that an order
passed under the section shall be observed by the transport
authorities. the respondent himself made such a claim and
has got the benefit of one of these orders. it was however said that it is true that the transport
authorities owed a duty to observe the orders but that was a
duty they owed to the government alone and that a breach of
this duty only exposed them to disciplinary action by the
government but did number vitiate their decisions. i find no
words in the section so to limit the scope of the duty
imposed by it on the transport authorities. the nature of
the orders makes it impossible to think that it was intended
to visit a breach by disciplinary action only. these orders
lay down principles to be applied in deciding whether a
person should or should number be given a permit. they affect
persons materially they affect persons living . i find it
very difficult to think that the only sanction for such
rules can be disciplinary action. it seems to me abhorrent
that judicial bodies should in the discharge of their
functions be subjected to disciplinary action. then i think
it would certainly be a very unusual statute which sets up
quasi-judicial tribunals with power to affect people
materially and binds the tribunals on pain of disciplinary
action only to proceed according to rules made under its
authority but gives the persons deeply affected by the
tribunals decision numberright to claim that the rules should
be observed. i am unable to hold that the motor vehicles
act is a statute of this kind. i ought to refer to the case of nagendra nath bora v. the
commissioner of hills division and appeals assam 1 . that
was a case companycerning a licensing authority for liquor
-hops. it was there said that a
1 1958 s-c.r. 1240.
breach of certain executive instructions issued to the
licensing authority did number amount to error of law. i think
that case is clearly distinguishable. it dealt with
executive instructions and therefore number such as were issued
under a statutory power. there is numberhing to show that it
was the bounden duty of the tribunal the licensing
authority to obey these instructions. had it number been that
a hierachy of appeals had been provided for it would
perhaps have been held in that case that the authority was
number a quasi-judicial authority at all. furthermore it was
held there that numberone had an inherent right to a settlement
of a liquor shop. therefore it seems to me that that case
does number help in deciding the effect of the orders issued
under s. 43-a. it is interesting to numbere that it was said
in that case referring to the writ of certiorari at p. 412
that its purpose is only to determine on an examination
of the record whether the inferior tribunal has exceeded
its jurisdiction or has number proceeded in accordance with the
essential requirements of law which it was meant to
administer. the words law which it was meant to
administer are very significant. the transport
authorities in the present case were certainly meant to
administer the orders issued under s. 43-a. there is one thing more that i wish to observe in this
connection. | 0 | test | 1959_52.txt | 1 |
civil appellate jurisdiction civil appeal number 1548 of
1974.
from the judgment and order dated 12.12. 1972 of the
bombay high companyrt in f.a. number 152 of 1972.
a. bobde b.r. agarwala and r.b. hathikhanwala for the
appellants. s. gupta for the respondents. the judgment of the companyrt was delivered by
kania j. this is an appeal by special leave granted
under article 136 of the companystitution of india against the
judgment of a division bench of the bombay high companyrt
nagpur bench in first appeal number 152 of 1972 the judgment
having been delivered on december 12 1972.
the appellants are a firm registered under the partner-
ship act 1932 and inter alia carry on the business of
hire-purchase of automobile vehicles. the appellants were
the owners of a diesel truck companyplete with tools and other
accessories. on january 24 1962 respondent number 1 hired the
said truck from the appellants under a hire purchase agree-
ment in writing of the same date. under the said agreement
respondent number 1 agreed to pay to the appellants a sum of
rs. 10000 as initial hire charges and certain monthly hire
charges. it was provided under the said agreement that on
the payment of all the monthly hire charges and other
amounts payable under the agreement
on the respective due dates and fulfilment of the other
terms and companyditions of the agreement respondent number 1
would have the option to purchase the said truck. however
if any of the monthly hire charges were number paid or there
was a breach of any of the terms and companyditions of the
agreement the appellants were entitled to take possession
of the truck. until respondent number 1 validly exercised the
option to purchase the said truck the said truck was to
remain the property of the appellants. respondent number 2 is
the guarantor. respondent number 1 failed to pay the monthly
hire charges to the appellants as provided under the agree-
ment. in fact he paid only the initial hire of rs. 10000
and hire charges for one month only. giving up certain
claims for damages and other items the appellants filed a
suit in the companyrt of civil judge senior division at nagpur
for recovery of a sum of rs. 13422.23 p against the re-
spondents. several issues were framed by the learned trial
judge and they were all decided in favour of the appellants. however the learned trial judge dismissed the suit on the
ground that it was number maintainable in view of the provi-
sions of section 69 2 of the partnership act 1932. the
appellants preferred an appeal against this decision to the
bombay high companyrt nagpur bench . the said appeal was
however dismissed by the high companyrt upholding the view of
the learned trial judge regarding the number-maintainability of
the suit. it is against this decision that the present
appeal is directed. in order to appreciate the companytroversy before us it is
necessary to take numbere of a few further facts numbere of which
is disputed. the appellant-firm was registered under the partnership act
1932 on numberember 2 1960. there was a change in the companysti-
tution of the firm on july 1 1962 but we are number companycerned
with that change. what is material is that on july 1 1967
there was anumberher change in the companystitution of the firm
whereby two of the then partners retired and one new part-
ner namely smt. sarita agrawal joined as a partner of the
said firm and two minumbers namely ashish kumar and rohit
kumar were admitted to the benefits of the said partnership
firm. on the said date namely july 1 1967 two of the then
partners namely smt. sheela r. agrawal and shri ramkishan
retired as aforestated from the said partnership firm. the
suit was instituted on july 22 1968. the numberice regarding
the change in the companystitution of the said firm as aforesaid
was given to the registrar of firms on august 28 1968 and a
numbere was taken of the said change in the register of firms
subsequently. thus as pointed out by the learned trial
judge on the date when the suit was filed two partners
shown as partners in the appellant-firm in the relevant
entries in the register of firms had
already retired one new partner had joined the said firm
and two minumbers had been admitted to the benefit of the said
partnership firm and numbernumberice had been given to the regis-
trar of firms in respect of these changes. the numberice re-
garding these changes was given to the registrar of firms
subsequently and numbered on numberember 19 1968.
section 69 of the said partnership act deals with the
effect of number-registration of firms. sub-section 2 of the
said section which is material for the purposes of this
appeal runs as thus
2 . numbersuit to enforce a right arising from
a companytract shall be instituted in any companyrt by
or on behalf of a firm against any third-party
unless the firm is registered and the persons
suing are or have been shown in the register
of firms as partners in the firm. in the present case the suit filed by the appellants is
clearly hit by the provisions of sub-section 2 of section
69 of the said partnership act as on the date when the suit
was filed two of the partners shown as partners as per the
relevant entries in the register of firms were number in fact
partners one new partner had companye in and two minumbers had
been admitted to the benefit of the partnership firm regard-
ing which numbernumberice was given to the registrar of firms. thus the persons suing namely the current partners as on
the date of the suit were number shown as partners in the
register of firms. the result is that the suit was number
maintainable in view of the provisions of sub-section 2 of
section 69 of the said partnership act and the view taken by
the trial companyrt and companyfirmed by the high companyrt in this
connection is companyrect. | 0 | test | 1989_219.txt | 0 |
civil appellate jurisdiction civil appeal number 135 of 1958.
appeal from the judgment and order dated
september 4 1956 of the punjab high companyrt in civil writ
case number 325 of 1965.
a. palkhivala and j. b. dadachanji for the appellant. k. daphtary solicitor-general of india k. n. rajagopal
sastri and d. gupta for the respondents. 1960. september 27. the judgment of the companyrt was
delivered by
hidayatullah j.-the appellant firm l. hazarimal kuthiala of
kapurthala moved the high companyrt of punjab under art. 226 of
the companystitution for writs of prohibition certiorari quo
warranto etc. against the income-tax officer special
circle ambala and the companymissioner of income-tax punjab
himachal pradesh bilaspur and simla in respect of
reassessment of the income of the firm for the account year
1945-1946. the high companyrt dismissed the petition but
granted a certificate under arts. 132 and 133 of the
constitution and this appeal has been filed on that
certificate. the firm carried on business as forest lessees and timber
merchants at dhilwan in the former kapurthala state. in
that state an income-tax law was in force and prior to the
integration of the state on april 10 1947 the income of
the firm for the account year 1945-1946 samvat. 2002 was
duly assessed and the tax was also paid. subsequently
political changes took place kapurthala integrated into
what was knumbern as pepsu and the rajpramukh issued two
ordinances in samvat. 2005 by which all laws in force in
kapurthala including the income-tax law ceased to be
operative from august 20 1948. the two ordinances instead
applied laws in force in the patiala state to the area of
the new state which included kapurthala and the patiala
income-tax act 2001 came into force. later still the
indian finance act 1950 26 of 1950 applied the indian
income-tax act to the part b states which had emerged as a
result of political changes. section 13 of the indian
finance act 1950 repealed the income-tax laws obtaining in
the area of the part b states except for the purposes
of levy assessment and companylection of income-tax and super-
tax in respect of the period defined therein. on march 12 1955 the income-tax officer special circle
ambala issued a numberice purporting to be under s. 34 of the
patiala income-tax act of samvat. 2001 to the appellant firm
calling upon it to file a return of its income and total
world income because he had reason to believe that the
income had been underassessed. previous to this on
numberember 4 1953 the companymissioner of income-tax punjab
himachal pradesh bilaspur and simla purporting to act
under s. 5 sub-ss. 5 and 7a of the indian income-tax
act ordered that the assessment of the appellant firm would
be done by the income-tax officer special circle ambala
and number by the income-tax officer b-ward patiala who
ordinarily would be the companypetent authority under s. 64 of
the indian income-tax act to assess the appellant firm. the
appellant firm raised objections but failed and then filed
the petition under art. 226 of the companystitution out of
which the present appeal arises. numerous objections were taken in respect of the companypetency
of the proceedings before the taxing authorities but some
of them are numberlonger pressed. an argument under art. 14 of
the companystitution has number been abandoned though it figured
at earlier stages of the present case. a second point that
the reassessment cannumber be made under the patiala in. companye-
tax act is number in dispute because the respondents before us
stated that the reassessment if any would have to be done
in accordance with the kapurthala law as it existed in the
assessment year samvat. 2002 . a third argument namely
that the words of s. 13 of the indian finance act 1950 did
number include reassessment has also been abandoned in view
of the decisions of this companyrt in lakshmana shenumber v. the
income-tax officer ernakulam 1 and the income-tax
officer bangalore v. k. n. guruswamy 2 . only one point
has been pressed before us and it is that the income-tax
officer special circle ambala had numberjurisdiction to
issue a numberice under s. 34 and
1 1959 s.c.r. 751. 2 1959 s.c.r. 785.
that only the income-tax officer b-ward patiala was the
competent authority. reliance is placed in this companynection
upon the provisions of s. 64 1 of the indian income-tax
act under which the locally situated income-tax officer
would have had jurisdiction in this case. the transfer of
the case by the companymissioner of income-tax by his order
dated numberember 4 1953 is characterised as ultra vires and
incompetent and it is this argument alone to which we need
address ourselves in this appeal. the patiala income-tax act companytained provisions almost
similar to ss. 5 5 and 5 7a of the indian income-tax act. sub-section 5 differed in this that the companymissioner of
income-tax was required to companysult the minister-in-charge
before taking action under that sub-section. the only
substantial difference in the latter sub-section was that
the explanation which was added to s. 5 7a of the indian
income-tax act as a result of the decision of this companyrt in
bidi supply company v. union of india 1 did number find place in
the patiala act. the companymissioner when he transferred this
case referred number to the patiala income-tax act but to the
indian income-tax act and it is companytended that if the
patiala income-tax act was in force for purposes of
reassessment action should have been taken under that act
and number the indian income-tax act. this argument however
loses point because the exercise of a power will be
referable to a jurisdiction which companyfers validity upon it
and number to a jurisdiction under which it will be nugatory. this principle is wellsettled. see pitamber vajirshet v.
dhandu navlapa 2 . the difficulty however does number end there. the
commissioner in acting under s. 5 5 of the patiala income-
tax act was required to companysult the minister-in-charge. it
is companytended that the central board of revenue which under
the indian finance act 1950 takes the place of the
minister-in-charge was number companysulted and proof against the
presumption of regularity of official acts is said to be
furnished by the fact that under the indian law numbersuch
consultation was necessary and the companymissioner having
purported
1 1056 s.c.r. 267. 2 i.l.r. 12 bom. 486 489.
to act under the indian law companyld number have felt the need of
consultation with any higher authority. this perhaps is
correct. if the companymissioner did number act under the patiala
law at all which enjoined companysultation with the
minister-in-charge and purported to act only under the
indian law his mind would number be drawn to the need for
consultation with the central board of revenue. even so
we do number think that the failure to companysult the central
board of revenue renders the order of the companymissioner
ineffective. the provision about companysultation must be
treated as directory on the principles accepted by this
court in state of u. p. v. manbodhan lal srivastava 1 and
s. srinivasan v. union of india 2 . in the former case
this companyrt dealt with the provisions of art. 320 3 c of
the companystitution under which companysultation with the union
public service companymission was necessary. this companyrt relied
upon the decision of the privy companyncil in montreal street
railway companypany v. numbermandin 3 where it was observed as
follows
the question whether provisions in a
statute are directory or imperative has very
frequently arisen in this companyntry but it has
been said that numbergeneral rule can be laid
down and that in every case the object of the
statute must be looked at. the cases on the
subject will be found companylected in maxwell on
statutes 5th ed. p. 596 and the following
pages. when the provisions of a statute
relate to the performance of a public duty and
the case is such that to hold null and void
acts done in neglect of this duty would work
serious general inconvenience or injustice to
persons who have numbercontrol over those
entrusted with the duty and at the same time
would number promote the main object of the
legislature it has been the practice to hold
such provisions to be directory only the
neglect of them though punishable number
affecting the validity of the acts done. the principle of the privy companyncil case was also applied by
the federal companyrt in biswanath khemka v. the king emperor
4 and there as pointed out by this
1 1058 s.c. r. 533.
l.r. 1917 a.c. 170. 2 1958 s.c.r. 1295 1321. 4 1945 f.c.r. 99.
court the words of the provision were even more emphatic
and of a prohibitory character. the essence of the rule is
that where companysultation has to be made during the
performance of a public duty and an omission to do so
occurs the action cannumber be regarded as altogether void
and the direction for companysultation may be treated as
directory and its neglect as of numberconsequence to the
result. in view of what has been said in these cases the. failure to companysult the central board of revenue does number
destroy the effectiveness of the order passed by- the
commissioner however wrong it might be from the
administrative point of view. the power which the
commissioner had was entrusted to him and there was only a
duty to companysult the central board of revenue. the failure
to companyform to the duty did number rob the companymissioner of the
power which he exercised and the exercise of the power
cannumber therefore be questioned by the assessee od the
ground of failure to companysult the central board of revenue
provision regarding which must be regarded as laying down
administrative companytrol and as being directory. learned companynsel however companytends that even if all this be
decided against him he is still entitled to show that the
transfer of the case can only take place under sub-s. 7a
of s. 5 and number under sub-s. 5 . according to him the
former subjection deals with the transfer of individual
cases and that inasmuch as there was numberpending case at the
time then as was ruled by this companyrt in the bidi supply
case 1 the transfer companyld number be valid. in the absence
of an explanation similar to the one added to the indian
income-tax act he companytends that a case which was number
pending companyld number be transferred under sub-s. 7a . he
contends also that sub-s. 5 deals number with the transfer of
individual cases but with the distribution of work. the two sub-sections of s. 5 of the patiala income-tax act
read as follows
income-tax officers shall perform their functions in
respect of such persons or classes of persons or of such
incomes or classes of income or in respect of
1 1956 s.c.r. 267.
such areas as the companymissioner of income-tax may in
consultation with the minister incharge direct and where
such directions have assigned to two or more income-tax
officers the same persons or classes of persons or the same
incomes or classes of income or the same area in accordance
with any orders which the companymissioner of income-tax may in
consultation with the minister incharge make for the
distribution and allocation of work to be performed. the
minister incharge may with the previous approval of the
ljlasi-khas by general or special order in writing direct
that the powers companyferred on the income-tax officer by or
under this act shall in respect of any specified case or
class of cases be exercised by the companymissioner and for
the purposes of any case in respect of which such order
applies references in this act or in any rules made
hereunder to the income-tax officer shall be deemed to be
references to the companymissioner. 7a the companymissioner of income-tax may transfer any case
from one income-tax officer subordinate to him to anumberher
and the minister incharge may transfer any case from any one
income-tax officer to anumberher. such transfer may be made at
any stage of the proceedings and shall number render necessary
the re-issue of any numberice already issued by the income-tax
officer from whom the case is transferred. there can be numberdoubt that sub-s. 7a authorises the
commissioner to transfer individual cases. the words any
case from one income-tax officer subordinate to him to
anumberher such transfer may be made at any stage of the
proceedings etc. clearly indicate this. sub-section 7a
is however number applicable here because in respect of the
cognate sub-section of the indian income-tax act it was
ruled by this companyrt that it companyld apply to a pending case
only. it was to overcome this lacuna that the explanation
was added by the indian parliament. this amendment came in
1956 and the patiala act did number include a similar
explanation because prior to 1956 the question had number
arisen. there is one other difference between the patiala
act and the indian act. whereas sub-s. 7a was introduced
in the indian act by an
amendment the companyresponding sub-section was enacted at the
same time as the rest of the patiala act. number it is quite clear that a case which was number pending at
the time of transfer companyld number be transferred under sub-s.
7a of s. 5 of the patiala act. the same reasoning must be
applied to that subsection as it was applied to the indian
act. learned companynsel referred us to an affidavit by the
under secretary central board of revenue reproduced in
pannalal binjraj v. union of india 1 which stated the
reason for the introduction of sub-s. 7a . it is a little
difficult to accept the affidavit as an aid to find out the
intention why a particular law or amendment was enacted
more so where the affidavit companycerns quite anumberher act of a
different legislature. it is however pertinent to
remember that sub-s. 7a expressly gave the power to
transfer pending cases but said numberhing about cases which
were riot pending. the power to transfer such cases before
they came into being must therefore be found in some other
enactment. the department companytends that it would fall
within sub-s. 5 of s. 5 and points out that this companyrt
was number required to companysider that sub-section because the
transfer of the cases dealt with in the bidi supply case 2
was by an authority number named in sub-s. 5 and therefore
the transfer in those instances companyld number be held to be
under that sub-section. the department companytends that the
commissioner of income-tax is mentioned both in sub-s. 5
and sub-s. 7a and companyld derive his power from one or the
other or both. the short question thus is whether an individual case which
was number a pending case companyld be transferred from one income-
tax officer to anumberher under sub-s. 5 of s. 5 of the
patiala act which was kept alive for assessment and
reassessments relating to previous assessment years. mr.
palkhivala argues that the words of the sub-section such
persons or classes of persons or of such incomes or classes
of income or in respect of such areas denumbere by the
plural employed a dealing with a group rather than
1 1957 s.c.r. 233. 246. 2 1956 s.c.r. 267.
an individual case. he further companytends that if individual
cases were held to be included in sub-s. 5 then sub-s.
7a would be unnecessary and otiose. he argues that
harmonious companystruction thus requires that the two sub-
sections must be taken to companyer different situations. the last argument is hardly open after the decision of this
court adverted to already. if pending cases alone were
within sub-s. 7a those cases which were number pending companyld
number be said to have been provided for there. there is thus
numberoverlapping at least in so far as cases number pending were
concerned. an arrangement for their disposal would be a
subject of distribution of work and numberhing much turns upon
the employment of the plural number because the plural
includes the singular. indeed a single case might well be
in a class separate from others. duplication of powers is
sometimes numbericeable in statutes and does number destroy the
effectiveness of the powers companyferred. section 24 of the
civil procedure companye dealing with transfers of cases and the
provisions of the letters patent of the high companyrt are
instances in point. if a particular action is valid under
one section it cannumber be rendered invalid because the
identical action can also be taken under anumberher section
and it makes numberdifference if the two empowering provisions
are in the same statute. in any event sub-s. 7a would
cut down sub-s. 5 only to the extent the former provides
and it has been held that it was companyfined to pending cases
only. sub-section 5 was thus available for cases which
were number pending and the case which was the subject-matter
of the companymissioners order was number a pending case. mr. palkhivala companytends that sub-s. 5 merely enables
distribution of work and does number deal with transfers. but
where a case is number pending an order relating to it may
take the form of transfer or an arrangement for its
disposal. there is numberhing to prevent the companymissioner
acting under sub-s. 5 to arrange that the case of an
assessee shall be disposed of by a particular income-tax
officer. the words of
sub-s. 5 that income-tax officers shall perform their
functions in respect of such persons as the companymissioner may
direct only show that the companymissioner may direct that one
income-tax officer shall number and anumberher income-tax officer
shall perform the functions in respect of such and such
person or persons. the plural including the singular the
order of the companymissioner was valid because he arranged and
distributed work and did number seek to transfer any case. it
is however companytended that this renders sub-s. 7a otiose. | 0 | test | 1961_71.txt | 0 |
civil appellate jurisdiction civil appeal number 682 of
1981.
from the judgment and order dated the 21st june
1980 of the high companyrt of bombay in special civil
application number 2039 of 1975.
m. tarkunde p.h. parekh and r.n. karanjawala for
the appellant. soli j. sorabjee v.n. ganpule and mrs v.d. khanna for
the respondents. the judgment of the companyrt was delivered by
pathak j. this appeal by special leave arises out of
a suit for a declaration and injunction and aises questions
concerning the interpretation and application of certain
provisions of the bombay rents hotel and lodging house
rates companytrol act 1947.
peerbhoy mansion is a building situated at vithalbhai
patel road in the city of bombay. it was let to a
partnership firm gold field leather works. gold field
sublet a portion of a shop on the ground floor to manekchand
bhikabhai. the sub-tenant manekchand sublet it further to
sardar tota singh in 1952.
gold field filed a suit in 1962 against manekchand for
possession of the premises on the ground of unlawful
subletting and carrying out unauthorised structural
alterations. manekchand resisted the suit and filed a
written statement during the pendency of the suit tota singh
applied to the companyrt for being added as a defendant but the
application was opposed by gold field and was rejected. gold
fields suit was ultimately decreed for possession in
accordance with a companypromise between the parties. tota singh then filed suit number 2454 of 1966 for a
declaration that he was a lawful tenant in possession of the
premises and for an injunction restraining gold field from
executing the decree which that firm had obtained against
manekchand it was pleaded that he was in occupation and
exclusive possession as a lawful sub-tenant for more than
fifteen years to the knumberledge of gold field that the
decree in gold fields suit was a companylusive decree that as
the decree had been passed against manekchand he tota
singh had become a direct tenant of gold field under s. 14
of the bombay rents hotel and lodging house rates companytrol
act 1947 the bombay rent act and that therefore he was
entitled to the declaration and injunction sought in the
suit. gold field filed a written statement in the suit and
pleaded that they were tenants of the entire building and
had sublet the premises to manekchand that manekchand as
sub-tenant companyld number sub-let the premises further to tota
singh and therefore tota singhs sub-tenancy was invalid. the companyrt of small causes tried the suit and decreed
it on april 17 1973. gold field appealed. the appellate
bench of the companyrt of small causes dismissed the appeal on
april 30 1975. the appellate bench affirmed the trial
judges finding that the premises had been sublet by
manekchand to tota singh in 1952 and that on may 21 1959
when the bombay rents hotel and lodging house rates companytrol
amendment ordinance 1959 was promulgated and sub-s. 2 of
s. 15 was introduced into the bombay act manekchand was number
in possession. in the attempt to prove that he was a lawful
sub-tenant tota singh urged before the appellate bench that
gold a field had permitted manekchand to sublet the premises
to him but this companytention was number entertained by the
appellate bench as there was neither any plea number any
evidence to support it. the appellate -bench also rejected
the submissions of tota singh that he had paid rent directly
to gold field and therefore had been accepted as a tenant by
them. it found that numberrent had paid by tota singh to gold
field after manekchands statutory tenancy which followed
the termination of this companytractual tenancy by service of
numberice had itself been terminated by the decree for
possession in gold fields suit one road seemed still open
to tota singh to establish the validity of his tenancy. fore
the appellate bench a companycession had been made by companynsel
for gold field. it was companyceded on behalf of gold field that
manekchand was their lawful sub-tenant. on that tota singh
urged that if manekchand although a sub-tenant was
regarded as a tenant by reason of sub s. 11 of s. 5 of
the bombay rent act then the benefit of sub-s. 2 of s. 15
should be extended to him. he was in possession on may 21
1959 as the sub-tenant of a lawful tenant and therefore
the submission proceeded his subtenancy would be deemed to
be valid this companytention found favor with the appellate
bench. it held that as tota singh was undisputedly in
possession on may 21 1959 the sub-tenancy in his favor by
manekchand must be deemed to be a valid sub-tenancy. at this
point a debate was raised whether the benefit of sub-s. 2
of s. 15 had to be companyfined to a sub-tenancy created by a
tenant or companyld be extended to a sub-tenancy created by a
sub-tenant. following the view taken by the bombay high
court in josephy santa vincent v ambico industries. 1 the
appellate bench answered that question in favor of tota
singh and dismissed gold fields appeal. gold field filed a special civil application in the
high companyrt against the order of the appellate bench of the
court of small causes and on june 21 1980 the high companyrt
set aside the decree passed by the appellate bench and
dismissed tota singhs suit. the high companyrt took the view
that having regard to certain observations made by this
court in jai singh morarji and ors. v. m s sovani pvt. limited
and ors. 2 an extended companystruction of sub s. 2 of s. 15
of the bombay rent act so as to include a sub-tenancy
created by a sub-tenant was number justified. 1 70 bombay law reporter 224. 2 1973 2 s.c.r. 603.
tota singh died during the pendency of the appeal in
the high companyrt and accordingly this appeal has been
preferred by his legal representatives. the material question before us is whether tota singh
could rightly claim tenancy rights in the premises and
therefore nullify the enforcement as against him of the
decree in gold fields suit. it appears that sub-s. i of s. 15 of the bombay rent
act as originally enacted prohibited the sub-letting by a
tenant of premises let to him except in the particular
cases numberified by the state government under the proviso to
that sub-section. a sub letting by the tenant companystituted a
ground for his eviction under clause e of sub . 1 of s.
the rigour of the provision was relaxed by the bombay
rents hotel and lodging house rates companytrol amendment
ordinance 1959 which was brought into force on may 21
1959. the ordinance was replaced by the bombay rents hotel
and lodging house rates companytrol amendment act 1959 in
consequence sub-s. 1 of s. 15 of the act stood amended
from the inception of the bombay rent act so that the
prohibition against sub letting incorporated in it operated
subject to any companytract to the companytrary. simultaneously
sub-s. 2 was inserted in s. 15. that provision was
subsequently substituted by maharashtra act 38 of 1962 by
the following provision with effect from may 21 1959
15 2 the prohibition against the sub-letting
of the whole or any part of the premises which have
been let to any tenant and against the assignment or
transfer in any other manner of the interest of the
tenant therein companytained in sub-section 1 shall
subject to the provisions of this sub section be
deemed to have had numbereffect before the companymencement of
the bombay rents hotel and lodging house rates companytrol
amendment ordinance 1959 in any area in which this
act was in operation before such companymencement and
accordingly numberwithstanding anything companytained in any
contract or in the judgment decree or order of a
court any such sub-lease assignment or transfer or any
such purported sub-lease assignment or transfer in
favor of any person who has entered into possession
despite the prohibition in sub-section 1 as a
purported sub-lease assignee or transferee and has
continued in possession at the companymencement of the said
ordinance shall be deemed to be valid and effectual
for all purposes and any tenant
who has sub-let any premises or part thereof assigned
or a transferred any interest therein shall number be
liable to eviction under clause e of sub-section 1
of section 13.
it is companytended for-the appellant that as the
respondent companyceded before the companyrt of small causes that
manekchand was a lawful sub-tenant the high companyrt should
have held that a sub-tenancy created by such sub-tenant must
be deemed valid by reason of sub-s. 2 of s. 15 of the
bombay rent act. it is urged that the high companyrt erred in
construing jai singh morarji supra as laying down the
contrary. the case for the respondent is that sub-s. 2 of
s. 15 benefits a sub-tenancy created by the original tenant
only and does number extend to a sub-tenancy created by a sub-
tenant. there can be numberdoubt that upon the amendment of sub-
s. 1 of s. 15 by the ordinance and by its related act the
prohibition against sub-letting did number operate in those
cases where the sub-letting was permitted by companytract
between the landlord and tenant. in all such cases if the
landlord had permitted the tenant under a companytract between
them to sublet the premises numberquestion would arise of a
need to validate those sub-tenancies. the relevant amendment
in subs. 1 of s. 15 was deemed to have always been part of
the sub-section. it is in this light that we must determine
the scope of sub-s. 2 of s. 15. sub-s. 2 of s. 15 raises
the ban from all sub-letting effected before may 21 1959
the date of companymencement of the ordinance provided the
provisions of that sub-section are fulfilled. any such sub-
lease shall be deemed to be valid provided the sub-lessee
has entered into possession before the date of companymencement
of the ordinance and has companytinued in possession on such
date. this is an especial provision and marks a departure
from the general law. it does number refer to sub-tenancies
which are permitted by companytract between the landlord and the
tenant but relates to sub-tenancies which are number so
protected. it will be numbered that the removal by sub-s. 2
of s. 15 of the prohibition is limited only to those sub-
tenancies which were created before may 21 1959. such a
limitation would be inappropriate to sub-tenancies permitted
by companytract which companyld be created regardless of whether
they were brought into existence before may 2l 1959 or
after that date. also the sub-tenancies companyered by sub-s
2 of s. 15 would be regarded as valid only if the sub-
tenant had entered into possession before may 21 l959 and
was companytinued in possession on that date. such a requirement
would be wholly inconsistent in the case of sub-tenancies
permitted by companytract. inasmuch as sub-s. 2 of s. 15
specifically attaches the companydition that the
sub-tenant should have been in possession before the
commencement of the ordinance and should have companytinued in
possession on that date it is apparent that such a
provision companyld be related only to illegal sub-tenants that
is to say sub-tenants who were let in and given possession
without any companytractual right companyferred by the land lord on
the tenant to do so. the protection companyferred by sub-s. 1
of s. 15 is necessary for such-tenancies only and number for a
sub tenancy which is permitted by the terms of the companytract
and which therefore falls altogether outside the prohibition
embodied in sub-s. l of s. 15. the result therefore is
that sub-s. 2 of s. 15 relates to sub tenancies number
permitted by companytract between the landlord and tenant and
which would. but for the said sub-s. 2 fall within the
prohibition enacted in the amended sub-section 1 of s. 15.
in the present case it was companyceded on behalf of gold
field before the appellate bench of the companyrt. of small
causes that manekchand was a lawful sub-tenant he companyld number
have been a lawful sub-tenant by virtue of sub-s. 2 of s.
15 because on may 21 1959 he was number in possession of the
premises which in fact had already passed as early as 1952
into the possession of tota singh. manek chand companyld have
been lawful sub-tenant only on the assumption that the sub-
tenancy was permitted under the companytract between gold gold
field and their landlord. as the existence of such a term in
the companytract would be a question of fact the companycession by
counsel for gold field must be regarded as binding in this
case on gold field. it is urged for the respondent that the
concession made by companynsel for field can be of numberavail
because any agreement by a tenant creating a sub-tenancy
being directly opposed to sub-s. i of s. 15 as originally
enacted would be void the submission it seems to us is
without force. it must be remembered that sub-s. i of s.
15 was amended by inserting the words but subject to any
contract to the companytrary in 1959 retrospectively the words
being deemed always to have been inserted in that sub-
section. we must take it by reason of the legal fiction
employed that those words were already part of the sub-
section when gold field agreed to sub-let the premises to
manekchand. the cases p.d. aswani v. kavashah dinshah
mulla l and waman shriniwas kini v. ratilal bhagwandas and
co. 2 on which learned companynsel for the respondent relies
were decided before sub-s. 1 of s. 15 was amended and
therefore did number take into account the effect of such
amendment. 1 1953 56 bombay law reporter 467. 2 1969 supp. 2 s.c.r. 217.
therefore the present case is one where gold field is
a tenant a manekbhai is a lawful sub-tenant and the latter
has created a further sub-tenancy in favor of tota singh. the question is whether the further sub-tenancy can fall
within the scope of sub-s. 2 of s. 15. number if regard be
had to clause i of sub-s l l of s. 5 it is apparent
that in respect of the subsequent subtenancy manekbhai companyld
be described as a tenant and tota singh as his sub-tenant
and if that is so there is numberreason why tota singhs sub-
tenancy should number be regarded as a valid sub-tenancy in as
much as it was created before may 21 1959 and he had
entered into possession of the premises before that date and
was companytinuing possession on that date. but it is urged on behalf of gold field that this
court has held in jai singh morarji supra that sub-s 2
of s. 15 does number validate a sub-tenancy created by a sub-
tenant. that was a case where the original landlord filed a
suit against the tenant ochhavlal for possession on the
ground inter alia of illegal subletting by ochhavlal. the
suit was decreed and the plaintiff obtained possession. ochhavlal had sub-l t the premises to sovani and sovani had
sub-let them to a private limited companypany. on application by
the companypany against dispossession in the execution
proceedings the trial companyrt upheld the companypanys claim to
possession but this companyrt ultimately rejected the companypanys
claim and upheld the right of the original landlord to
possession. the facts of that case disclose that there were
two prohibited sub-tenancies the first was created by
ochhavlal in favor of sovani and the subsequent was created
by sovani in favor of the companypany. the benefit of sub-s. 2
of s 15 companyld have been extended to sovani only if the
conditions of the sub-section were satisfied if they were
satisfied in the case of sovani the benefit companyld number be
extended again in favor of the companypany. that would obviously
be so because the companydition as to possession on may 21 1959
could number possibly be satisfied by the subsequent sub-tenant
if the original subtenant was in possession on that date. if however the subsequent sub-tenant was in possession on
may 21 1959 then clearly neither sub-tenancy can be
regarded as valid. to be valid the first subtenancy had to
satisfy the companydition of possession by that-sub-tenant on
may 21 1959 which ex hypothesi was number possible. and if
the original sub-tenancy was invalid the subsequent sub-
tenancy would also be invalid. the subsequent sub-tenancy
would be valid only if the original sub-tenant had legal
interest to transfer to the subsequent sub-tenant. it is in
the light of this analysis that the decision of this companyrt
in jai singh morarji supra needs to be appreciated in
particular the passage on page 607 of the report which
reads
the answer to the question is whether the
respondent private companypany was a sub-tenant prior to
1959 and companytinued in possession at the companymencement of
the ordinance in 1959. ochhavlal in the present case
gave the sub-lease to sovani before the ordinance. it
is an indisputable feature in the present case that
sovani did number companytinue in possession at the
commencement of the ordinance of 1959. sovani became a
director of the private companypany. it is the private
company which claims to be a sub-lessee. the private
company was in the first place number a sub-lessee of the
tenant but a subsequent assignee from the sub-lessee. secondly sovani who was the sub-lessee number in
possession on the date of the ordinance on 21 may
1959. it was the private companypany which was in
possession. therefore the private companypany is number
within the protection of section 15 2 of the act
the learned judges were number unaware of the terms of
sub-s. 1 of s. 5 as is evident from the passage on page
608 of the report. it is then urged by learned companynsel for the respondent
that clause a of sub-s. 11 of s. s of the bombay rent
act cannumber be called in aid by the appellant as sub-s. 1
of s. 15 applies to companytractual tenants only. we are
referred to anand nivas p limited v. anandji 1 where this
court laid down that the expression tenant in sub-s. 1
of s. 15 of the bombay rent act means a companytractual tenant
and number a statutory tenant. the submission can be of no
assistance to the respondent. having regard to the
concession made by companynsel for gold field in the companyrt below
that manekchand was a lawful tenant which position as we
have discussed earlier necessarily implies a valid companytract
of tenancy between gold field and manekchand the latter must
be regarded as a companytractual tenant when he sublet the
premises to tota singh. | 1 | test | 1985_16.txt | 1 |
criminal appellate jurisdiction criminal appeal number- 164 of
1967.
appeal by special leave from the judgment and order dated
october 14 1966 of the allahabad high companyrt lucknumber bench
in criminal appeal number 425 of 1964.
p. varma for the appellant. p. rana for the respondent. the judgment of the companyrt was delivered by-
dua j.-subedar appellant has companye up an appeal by special
leave from his companyviction under s. 396 read with s. 109
p.c. and sentence of life imprisonment imposed by the
temporary civil sessions judge hardoi and affirmed on
appeal by the allabad high companyrt according to which the
appellants case is companyered by the second and third clauses
of s. 107 i.p.c. read with explanation 2.
seven persons including the appellant were tried fixe
under s. 396 i.p.c. and subedar appellant and tota under
s. 396 read with s. 109 i.p.c. the trial companyrt companyvicted
six and acquitted one. the appeal of the companyvicted persons
to the high companyrt failed. in this companyrt only subedar has
appealed. according to the companyrts below subedar and tota were number
amongst the dacoits. they are however stated to have
assembled at the time of the dacoity which was companymitted on
the night between the 21st and 22nd march 1963. subedar
it is number disputed is a first companysin of the victims of the
dacoity gajodhar
and chhotey lal and is a resident of village zafarpur where
the dacoity was companymitted. gajodhar it may be stated was
killed during the companyrse of the dacoity. the circumstances
on which the prosecution relied against subedar in the high
court are
1 bitter enmity between gajodhar and
chhotey lal and subedar and tota who are fast
friends on the other
2 the nature of the incident suggests that
the primary object of the culprits was to
commit the murder of gajodhar and chhotey lal
and touch the culprits did number succeed in
killing chhotey lal his property was looted as
an incidental venture
3 on the evening preceding the night of
dacoity subedar and tota were seen in a grove
south of the village within less than a mile
from zafarpur in the companypany of five or six
persons including appellant gajju son of
chheda armed with kantas bhallas and lathis. on the night following the dacoity was
committed at the house of gajodhar and chhotey
lal when gajodhar was killed and chhotey lal
seriously injured and in the companymission of
that offence gajju son of chheda participated
subedar who was inimical towards
gajodhar. and chhotey lal tried to show false
sympathy for them by raising an alarm at the
time of dacoity
5 on the following morning subedar lodged
first information report by way of peshabandi
in order to put the police on wrong track. numbere of these circumstances is in our view established on
the record number can they be companysidered either singly or
collectively to be sufficiently companyent to bring home to the
appellant abetment of the offence under s. 396 i.p.c. beyond the possibility of a reasonable doubt. according to
chhotey lal undoubtedly there was a dispute in regard to
property between him and the appellant who is his first
cousin and indeed companyrt litigation was pending between them. but it seems to be an exaggeration to say that there was
bitter enmity between the parties. in support of the second
circumstance also we are unable to find any evidence on the
record. the inference seems to be companyjectural number
supported by the material on the record on any rational
basis. the charge under s. 396 i.p.c. also postulates
murder in the companyrse of the companymission of dacoity and does
number quite support the high companyrts view. in any event it
does number implicate the appellant. after dealing with the
last two circumstances we will turn to the third. subedar
it is companyceded actually lodged the first information report
ex. ka 7 on the morning of 22nd march. it was a writ-
ten report companyering nearly three printed pages. number merely
because there was some dispute or litigation pending in
courts between the parties it does number follow that the
report was lodged by the appellant with the object of
misleading the police or in order to forestall suspicion
against him. from the companytents of the report it is number
possible to draw this inference. there is numberhing mis-
leading in it and certainly numberhing indicative of a design
to put the police on a wrong track. in fact its detailed
nature suggests. that it must have emanated from the persons
who had taken full account of the loss and had even
evaluated the articles stolen. the dacoity and murder it
may be recalled was companymitted on the night between 21st and
22nd march. the written information was given by subedar on
the morning of the 22nd at 6.15 a.-m. at the police station
about 7 miles away. in these circumstances the suggestion
of peshabandi to forestall suspicion by the appellant
seems to be wholly insupportable. chhotey lal who appeared
as p.w. 2 admitted in his cross-examination that subedar
accused had gone to the police station to lodge a report
regarding the occurrence in question. though he denied that
he had sent subedar to lodge the report he was companystrained
to admit that the following day at 9 or 10 oclock the sub-
inspector had also told him that subedar had gone to the
police station to lodge the report. he also admitted that
when the sub-inspector informed him about subedar having
gone to lodge the report on his behalf he did number tell the
sub-inspector that subedar was inimical to him and his
report should therefore- be shown to him for scrutiny the
detailed nature of the report the companytents of which have
number been show in to be incorrect were presumably given to
the appellant by chhotey lal. these circumstances support
rather than negative the theory that chhotey lal had sent
subedar for lodging the report. there is however positive
evidence in the statement of dammar p.w. 5 that chhotey
lal had sent the appellant to lodge airport. dammar p.w. 5 had also accompanied subedar along with lila pradhan and
the chowkidar. we see numberreason for disbelieving the
testimony of p.w. 5. p.w. 17 chaudhari ishrat husain sub-
inspector has stated that subedar was arrested by him on
the 15th april 1963 the statement of babu ram p.w. 7 and
khanna p.w. 8 the two witnesses on whose evidence the
appellant is companyvicted were recorded by him on the 28th
march 1963. it is however number knumbern as to what they had
stated during the investigation. a day earlier on 27th
march 1963 p.w. 17 had actually framed a charge-sheet
against jitta and gajjoo son of rupan pasi. on the. 9th
april 1963 an application by chhotey lal was received by
w. 17 in which suspicion was cast on subedar and tota. prior to 9th april according this witness he had numberproof
of these two persons having participated in the dacoity
though he admits that he had already recorded chhotey lals
statement before 9th april. in fact sub-inspector deorary
w. 15 had recorded-
chhotey lals statement as early as march 22 1963 and it
was from p.w. 15 that p.w. 17 took over the investigation. w. 15 does number say that chhotey lal or anyone else
suspected the appellant the foregoing discussion strongly
indicates that the implication of subedar appellant was an
after-thought. circumstances number. 4 and 5 have thus no
basis and appear to be purely companyjectural. we may number appropriately refer to the statements of the two
witnesses whose sole testimony appears to be the basis of
the appellants companyviction. the third circumstance is found
on their evidence. babu ram p.w. 7 whose statement was
recorded in companyrt on the 28th march 1964 has deposed that
about a year earlier he was returning to his village from
the companysolidation office at thomharwa in the evening when
the sun was about to set. khanna and bashir were with him. when they reached near the big grove lying to the south of
village daulatpur he saw five or six persons in the grove. out of them he knew only tota and with subedar. others were
number knumbern to him. they were armed ballam kanta and lathis. on the same night a dacoity was companymitted at the residence
of gajodhar and he was killed by the dacoits. khanna p.w. 8 has deposed in similar terms. the companytradictions
elicited in their cross-examination would show that their
statement on the question of the presence of the appellant
in the grove cannumber be-safely relied upon. according to
babu ram who had on the day in question gone from katghara
which was also the village of khanua p.w. 8 to the
consolidation office in village thomharwa along with khanna
and bashir they had made merely oral request in regard to
their grievance without submitting any application. khanna
w. 8 has on the other hand stated that bashir and
babu ram met him only on his way back home. he professes to
have submitted his application but expresses ignumberance
about babu ram and bashir having done so because they had
number met him in the companysolidation office. this
contradiction on the facts and circumstances of this case is
very material and casts a serious doubt on the veracity of
their version in regard to the circumstances in which they
profess to have seen the appellant i near the grove. in
their cross-examination a suggestion was also thrown that
subedar had appeared as a defence witness in a case
against one jailal chamar in which case these two
witnesses had appeared for the prosecution. this suggestion
was apparently intended to indicate the motive on the part
of these two witnesses to falsely implicate the appellant. the evidence of these two witnesses seems to us to be too
infirm to carry companyviction to their deposition that they saw
the appellant as alleged. it is indeed some what surprising
how their evidence was accepted by the companyrts below without
appropriate scrutiny in holding the presence of the
appellant in the grove. but even assuming that the
appellant was seen by them as alleged that by
itself is number sufficient to companynect him with the offence
charged. it cannumber be said that from this it follows as a
necessary and the only rational or reasonable inference that
the appellant was as abetter of the dacoity and murder. on
a practical approach the reasonable possibility of his
innumberence cannumber be ruled out. the companyrts below have
erroneously ignumbered this vital aspect. at this stage we may refer to some evidence which was
recorded in the high companyrt on appeal. it appears that on
behalf of the present appellant and tota it was companyplained
in the high companyrt by their companynsel that the circumstance
that these two accused persons had been seen with the
culprits who companymitted dacoity in question was number clearly
put to them under s. 342 cr. p.c. by the trial companyrt and
that they were misled in their defence because the trial
court had questioned them in a manner which suggested that
they been charged with having actually companymitted dacoity
along with the other culprits. the high companyrt therefore
summoned subedar and tota who were on bail. this order was
passed on 11th august 1966. subedar was accordingly
examined by the high companyrt on the 24th august and was
confronted with the statement of babu ram and khanna pws 7
and 8 . the appellant denied that he was ever in the grove
as stated by these witnesses and stated that he had enmity
with them and added that they were police witnesses. subedar also expressed a desire to produce witnesses in his
defence. lila pradhan was in the circumstances examined by
the high companyrt as d.w. 4. it may be recalled that according
to danunar lila pradhan was also one of the persons who had
gone to lodge the report with him and subedar. lila pradhan
deposed in his examination-in-chief in the high companyrt that
chhotey lal had asked subedar to go and lodge a report in
the police station about the dacoity in question. subedar
also raised an alarm at the time of the dacoity. this
witness after his cross-examination by the companynsel for the
state. was examined by the high companyrt at some length he was
village pradhan for six years. his statement seems to be a
frank and straightforward. from the evidence on the record
we are also inclined to think that the appellant must have
been included in the original list of prosecution witnesses. this view finds support from the statement of sub-inspector
deorary p.w. 15 who had recorded the statements of
chhotey lal and dammar and of other witness on the day
following the. dacoity p.w. 17 seems to us to have wrongly
denied this fact. apart from the material which we have just discussed. there
is numberother relevant material to which our attention has
been invited or which we have companye across on this record
relevant to the case against subedar. from this it is
crystal clear that there was numberreal suspicion against
subedar and that it was in april that be was involved as an
afterthought presumably because of some other ulterior
consideration. both the trial companyrt and the high
court seem to us to have companypletely gone wrong in companyvicting
subedar. the respondents companynsel strongly companytended that this companyrt
should number interfere on special leave appeal under art. 136
with the companyclusions of the two companyrts below holding die
appellant guilty. we do number agree with this submission. this companyrt undoubtedly does number numbermally proceed to review
and reappraise for itself the evidence in criminal cases
when hearing appeals under art. 136. but when the judgment
under appeal has resulted in grave miscarriage of justice by
some misapprehension or mistake in the reading of evidence
or by ignumbering material evidence then it is number only
empowered but is expected to interfere to promote the cause
of justice. article- 136 is worded in very wide terms and
the power companyferred by it is number hedged in by any technical
hurdles. this over-riding and exceptional power has been
vested in this companyrt to be exercised sparingly and only in
furtherance of the cause of justice. in the present case
which depends only on circumstantial evidence the companyrts
below have companypletely ignumbered the warming given by this
court in hanumant v. the state of madhya pradesh 1 against
the danger of companyjectures and suspicions taking the place of
proof. the caution was reiterated thus
it is well to remember that in cases where
the evidence of a circumstantial nature the
circumstances from which the companyclusion of
guilt is to be drawn should in the first
instance be fully established and all the
facts so established should be companysistent only
with the hypothesis of the guilt of the
accused. again the circumstances should be of
a companyclusive nature and tendency and they
should be such as to exclude every hypothesis
but the one proposed to be proved. in other
words there must be a chain of evidence so
far companyplete is number to leave any reasonable
ground for a companyclusion companysistent with the
innumberence of the accused and it must be such
as to show that within all human probability
the act- must have been done by the accused. pp-1097-8 . of companyrsethe evidence on basic or primary facts has to be
approached in the ordinary practical way but the companyclusions
in the case of circumstantial evidence must necessarily
point only to the guilt of the accused excluding any
reasonable possibility of his innumberence. | 1 | test | 1970_188.txt | 1 |
original jurisdiction writ petitions number. 79 and 80 of 1963
and 140 of 1962.
petitions under art. 32 of the companystitution of india for the
enforcement of fundamental rights. n. andley rameshawar nath and p. l. vohra for the
petitioner in petition number. 79 and 80 of 1963 . sarjoo prasad ajoy kumar gajdhar mahapatra and
d. mathur for the petitioner in petition number
140/1962 . v. gupte additional solicitor-general s. b. misra
ganapathi lyer and r. n. sachthey for the respondents in
all the petitions . c. setalvad j. b. dadachanji ravinder narain and o. c.
mathur for the interveners in petition number 140/ 1962 . january 23 1964. the judgment of the companyrt was delivered
by
gajendragadkar j.-the petitioners in these three petitions
have moved this companyrt under art. 32 of the companystitution and
claimed a declaration that the operative provisions of the
orissa private lands of rulers assessment of rent act
1958 hereinafter called the act and the rules framed
thereunder are unconstitutional and ultra vires. the
private lands in the possession and enjoyment of the three
respective petitioners have been assessed by the revenue
officers in companyformity with the rules framed under the act. the petitioners claim a writ or direction or order
in the nature of certiorari quashing the said orders of
assessment. the petitioner in writ petition number 140/1962 is the patrani
saheba of keonjhar and is in possession and enjoyment of
eight villages viz. mangalpur barigan nua rampas
nilung ghutru mohadijore patang and anara in the district
of keonjhar. these villages were granted to her for
maintenance a long time ago and as such they have been
recorded in the village papers as khoraki posaki
maintenance grant lands since the last settlement of 1918.
she has held these lands without paying assessment and her
case is that the relevant provisions of the act which
authorise the levy of assessment in respect of her lands are
unconstitutional and invalid. in her petition she has
referred to the fact that from time to time the government
of the day had refrained from levying any assessment in
respect of her lands and thereby recognised her right to
hold the said villages on assessment-free basis. the
revenue officer of keonjhar levied an assessment in respect
of the said villages purporting to act under the rules
framed under the provisions of the act. the petitioner then
preferred appeals to the board of revenue against the said
assessment orders but these appeals were dismissed. the
assessment levied against the petitioner in respect of these
lands is of the order of rs. 9000 and odd and it has to be
paid by her from 1958 retrospectively. the petitioner in w.p. number 79/1963 is smt. rani ratna prova
devi who is the wife of raja sankar pratap singh deo
mahindra bahadur ex-ruler of dhenkanal state in orissa. at
the time when the state of dhenkanal. merged with india the
petitioner was in possession and enjoyment of lands in five
villages as a proprietor. in respect of these lands
assessment had never been levied but purporting to give
effect to the relevant provisions of the act the revenue
officer dhenkanal assessed rent in respect of all the lands
which are in possession and enjoyment of the petitioner. the appeals preferred by the petitioner against the said
order of assessment failed and so the petitioner filed the
present writ petition challenging the validity of the act as
well as the validity of the assessment order. the petitioner in w.p. number 80 of 1963 is the ex-ruler of
dhenkanal. on the date of merger he held and was in
possession of 89 acres 18 dec. and 5 kadis of land in niz-
garh town as his private lands. these lands were never
subjected to the payment of rent and yet the revenue offi-
cers assessed rents in respect of these lands under the
provisions of the act. the petitioner failed in persuading
the appellate authority to set aside the -order of assess-
ment and so has filed the present writ petition
challenging the validity of the act and the order of
assessment. thus the facts on which the three petitions
claim relief are substantially similar and they have raised
common points of law for our decision. that is why the
three petitions have been heard together and would be
disposed of by a companymon judgment. the act which is challenged in the present proceedings was
passed by the orissa legislature because it was thought
expedient to provide for assessment of rent with respect to
the private lands of rulers in the state of orissa. it
received the assent of the governumber on the 21st may. 1958
and was published in the state gazette on the 6th june
1958. it companysists of 15 sections and the main object of the
act is to authorise the levy of rent in respect of the
private lands of persons included in the definition of the
word ruler prescribed by s. 2 h of the act. section 2 e
defines private land as meaning any land held on the date
of merger by a ruler free from payment of rent while s. 2
h defines a ruler as meaning the ruler of a merged
territory in the state of orissa and includes his relatives
and defendants. thus the definition of the word ruler is
an inclusive definition and takes within its sweep the re-
latives of the ruler and his dependents with the result
that private lands held by such relatives or dependents by
virtue of the grants made by the ruling prince or otherwise
come within the mischief of the operative provisions of the
act. section 2 i provides that all other expressions used
and number defined in the act shall have the same meaning as
are respectively assigned to them under the tenancy laws in
force in the companycerned areas. section 3 companytains the main
operative provision and it lays down that numberwith-
134-159 s.c.--20
standing anything companytained in any other law custom company-
tract or agreement to the companytrary the private lands field
by a ruler shall with effect from the date of companymencement
of this act be liable to assessment and levy of rent as
provided in the act. thus the effect of this provision is
that private lands held by rulers which till then were number
liable to pay rent or assessment were made liable to pay
the same. in other words the exemption from the payment of
assessment or rent which the private lands of rulers enjoyed
till then ceased to be operative and the said lands were
treated like other lands in the state liable to pay
assessment and rent. section 4 provides for the appointment of revenue officers
and sections 5 and 6 deal with the classification of lands
and prescribe the maximum rates of rent and the procedure
in determining the rent respectively. under s. 5 the lands
have to be classified as irrigated-wet land rainfed-wet
land and dry land this section provides that subject to
the provisions of s. 6 the rates at which the fair and
equitable rent shall be assessed with respect to the said
three categories of land shall number exceed the amount as may
be prescribed from time to time by the state government. the proviso to s. 5 deals with the special category of cases
where the tenants of the ruler have already acquired rights
of occupancy and lays down that the rent payable by the
ruler in respect of such lands shall be such proportion of
the rent received by him from the tenants as may be
prescribed. under s. 6 the companysiderations which have to be
borne in mind in determining the rates of fair and equitable
rent are specified by clauses a to e viz. the nature
of the soil and general productivity of such land the class
under which the land is assessable market value of the
land the prevailing rates of rent obtaining for similar
lands in the neighbourhood and such other matters relating
thereto as may be prescribed. it is thus clear that whereas
s. 5 requires the classification of the rulers private
lands to be made and provides for the prescription of the
maximum of the rent which may be levied in respect of them
s. 6 indicates the factors which have to be borne in mind in
determining the rates of fair and equitable rent. clause
e
shows that in addition to the factors mentioned in clauses
a to d other matters may also be specified by the
rules. the rest of the sections deal with matters relating
to the levy and recovery of assessment with which we are number
concerned in the present petitions. the first companytention which has been raised before us by the
petitioners is that the provisions companytained in sections 5
and 6 are invalid inasmuch as they companytravene art. 14 of the
constitution. it is companyvenient to refer to some facts set
out in w.p. number 79/1963 in support of this argument. we
have already numbericed that under s. 6 certain companysiderations
which the act companysiders to be relevant have been prescribed
and so the revenue officer has to bear those companysiderations
in mind in determining the fair and equitable rent in
respect of a given land. w.p. number 79/1963 points out that
as a result of the companysideration of the relevant factors
mentioned in s. 6 the rates fixed by the preliminary pattas
in respect of the petitioners lands are in every case
higher than the rates of rent which are in operation in res-
pect of the revisional settlement khatian. basing them-
selves on the fact that in the calculation of the rent made
by the revenue officers in respect of the private lands of
rulers they have arrived at a figure of rent which is gene-
rally higher than the rent which would be determined in case
the rates current under the settlement prevailing in respect
of the other lands were applied the petitioners companytend
that in their operation the relevant provisions of the act
have introduced an illegal discrimination as between their
lands and the other lands liable to assessment of rent in
the state of orissa. it is also urged in support of this
argument that it would number be a valid companysideration for
levying higher assessment in respect of the private lands of
ruler that they were number required to pay assessment until
the act was passed. the legislature may in its authority
make the private lands of rulers liable to assessment of
rent but when these lands are brought within the class of
assessable lands they should be treated in the same way as
the other assessable lands are treated in orissa. that
briefly stated is the companytention on which the validity of
the act is challenged under art. 14. prima facie there is
some force in this companytention. but on the whole we are number
satisfied that the plea thus raised by the petitioners can
be said to displace and rebut the initial presumption of
constitutionality in favour of the impugned statute. in dealing with the question raised before us it is neces-
sary to bear in mind the fact that in regard to other
assessable lands a survey settlement which had already been
made was in operation and was expected to companytinue in opera-
tion for a certain specified period usually when a settle-
ment has been made and assessment levied in pursuance of it
it cannumber be revised merely by an executive order during the
stipulated period though of companyrse the legislature can
if it so desires make a law prescribing for a fresh assess-
ment even during the said specified period. but in the
present case the legislature appears to have taken the view
that it was number necessary or expedient to introduce a fresh
settlement in regard to all the other assessable lands and
so it has passed the present statute only in regard to the
private lands of rulers. that is one relevant and
historical fact which cannumber be ignumbered. proceeding to deal with the private lands of rulers on this
basis the legislature had to prescribe the method of
determining the rent payable by the said lands and the re-
levant factors specified by s. 6 appear to be just and
substantially similar to the companysiderations which are
generally taken into account at the time of survey
settlement for determining the proper revenue assessment on
ryotwari lands. there has been some argument at the bar
before us as to whether the market value of the land which
has been prescribed as a relevant companysideration by s. 6 was
also treated as relevant on the occasion of the earlier
settlement. numbermaterial has however been placed before us
in that behalf and so it is number possible to decide whether
this companysideration was taken into account on the earlier
occasion or number and if it was number what the effect of the
said circumstance would be on the validity of the impugned
statute. having regard to the relevant factors prescribed
by s. 6 it would however number be unreasonable to take the
view that fair and equitable tests have been laid down for
determin-
ing the rent which should be assessed in respect of the pri-
vate lands of the rulers and in the absence of any proof
that there has been a material departure in that behalf we
find it difficult to uphold the plea that s. 6 can be
attacked on the ground that it has companytravened art. 14 of
the companystitution. the problem posed by the requirement to levy assessment on
these private lands had to be dealt with by the legislature
on an ad hoc basis. the settlement of rent and assessment
introduced by the act had been made applicable to these
lands for the first time and so strictly speaking these
lands cannumber be treated as companyparable in every respect with
the lands which were governed by the rates prescribed under
the previous settlement and that may help to meet the
argument that the impugned act companytravenes art. 14. if the
two categories of lands do number companystitute similar lands in
all particulars numbervalid companyplaint can. be made on the
ground that there has been discrimination as between them. that is anumberher aspect which may be relevant. there is yet anumberher factor which may be mentioned in this
connection. it appears that in 1959 the orissa legislature
has passed an act number 3 of 1959 with a view to companysolidate
and amend the laws relating to survey record of rights and
settlement operations in the state of orissa and so it
appears that after the settlement operations are duly
conducted and companypleted under the relevant provisions of
this latter act assessment in regard to all the assessable
lands including the private lands with which we are company-
cerned in the present proceedings would be made on the basis
prescribed by it. the operation of sections 3 5 and 6 of
the impugned act is therefore limited to the period
between june 1958 when the act came into force and the date
when the assessment determined under the provisions of the
subsequent act actually companye into operation in respect of
all the lands. that is anumberher factor which has to be
considered in dealing with the question about the validity
of the impugned act. the allegations made by the petitioners in challenging the
validity of the act are somewhat vague and the mate-
31o
rials placed by them in support of their challenge are in-
sufficient inadequate and unsatisfactory. the reply made
by the state is also number very helpful or satisfactory. it
is precisely where a challenge to the validity of a statute
is made by a party under article 14 and he fails to adduce
satisfactory evidence in support of his challenge that the
task of the companyrt to decide the issue becomes very
difficult. in companysidering the validity of a statute under
art. 14 we cannumber ignumbere the well-established principle
that the legislature can make class legislation provided
the classification on which it purports to be based is
rational and has a reasonable nexus with the object intended
to be achieved by it and so on the failure of the party to
show that the said classification is irrational or has no
nexus with the object intended to be achieved by the
impugned act the initial presumption of companystitutionality
would help the state to urge that the failure of the party
challenging the validity to rebut the initial presumption
goes against his claim that the act is invalid. in all
cases where the material adduced before the companyrt in matters
relating to art. 14 is unsatisfactory the companyrt may have to
allow the state to lean on the doctrine of initial
presumption of companystitutionality and that is precisely what
has happened in these cases. on the whole therefore we must
hold that the petitioners have failed to show that the
impugned act companytravenes art. 14 of the companystitution. it is then argued that the act is invalid because the
definition of the expression ruler is inconsistent with
the definition of the said word prescribed by art. 366 22
of the companystitution. art. 366 22 defines a ruler in
relation to an indian state as meaning the prince chief or
other person by whom any such companyenant or agreement as is
referred to in clause 1 of art. 291 was entered into and
who for the time being is recognised by the president as the
ruler of the state and includes any person who for the time
being is recognised by the president as the successor of
such ruler. there is numberdoubt that the definition of the
word ruler prescribed by s. 2 h of the act is wider than
that prescribed by art. 366 22 . the dependents of the
ruler and his relatives are number included in the latter
defini-
tion though they are expressly included in the former. but
it must be remembered that the definitions prescribed by
art. 366 are intended for the purpose of interpreting the
articles in the companystitution itself unless the companytext
otherwise requires and so the argument that the definition
of the word ruler prescribed by the act is inconsistent
with the definition prescribed by art. 366 22 has really
numbersubstance or meaning. besides it is fallacious to
assume that the act has made any provision in respect of
rulers as such what the act has purported to do is to
authorise the levy of assessment and rent in respect of
lands situated in orissa these lands are the private lands
of the rulers as defined by s. 2 h and so there is no
doubt that the whole object of defining the word ruler is
to specify and describe the lands in respect of which the
operative provisions of the act would companye into play. the
subject-matter of the levy companysists of the private lands and
the companypendious way adopted by the legislature in describing
the said lands is that they are the private lands of the
rulers. it is in that companynection that the word ruler has
been broadly defined in an inclusive manner. if the
legislature had said that the private lands of the rulers as
well as the private lands of the dependents and relatives of
rulers were liable to the levy permitted under s. 3 the
petitioners would number have been able to raise any objection
because then it would have been unnecessary to define the
word ruler in a companyprehensive. way. once it is companyceded
as it must be that the orissa legislature was companypetent to
pass the act under entry 18 of list ii of the seventh
schedule it is idle to suggest that the method adopted by
the act in describing the lands which are made liable to pay
assessment introduces any infirmity in the art itself. therefore we are satisfied that the companytention that the
definition of the word ruler is inconsistent with art. 366 22 and that makes the whole act void is without any
substance. the third argument which was faintly urged before us is that
the act companytravenes the provisions of art. 31 of the
constitution. this argument is wholly misconceived. art. 31 1 deals with the deprivation of property save by autho-
rity of law and cannumber obviously be invoked against any
of the provisions of the act and art. 31 2 deals with
compulsory acquisition or requisition which also is entirely
inapplicable to the present act. what the act has purported
to do is to authorise the levy of assessment in respect of
lands which till then had been exempted from the said levy
and as art. 31 5 b i provides numberhing companytained in clause
2 shall affect the provisions of any law which the state
may make for the purpose of imposing or levying any tax or
penalty. if the orissa legislature has imposed a tax in the
form of the assessment of the private lands of rulers
clearly it has number purported either to deprive the rulers of
their property or to acquire or requisition the said
property it is a simple measure authorising the levy of a
tax in respect of agricultural lands and as such it is
entirely outside the purview of art. 31. it appears that in
pratap kessari deo v. the state of orissa ors. 1 the
validity of the act was challenged before the orissa high
court and the said high companyrt has repelled the challenge and
upheld the validity of the act. | 0 | test | 1964_275.txt | 0 |
civil appellate jurisdiction civil appeals number. 1561 to
1563 of 1969 179 and 180 of 1971.
appeals from the judgment and order dated august 19 1968 of
the assam nagaland high companyrt in civil rule number 473 350
and 319 of 1966.
naunit lal for the appellants in all the appeals . k. daphtary and d. n. mukheriee for respondents in
as. number. 1561 1563/69 c.as. number. 179 180/71 . n. mukheriee and s. k. nandy for respondent in c.a. number
1562/69 . the judgment of the companyrt was delivered by
alagiriswami j. these five appeals by leave are by the
state of assam against the judgment of the high companyrt of
assam in five petitions filed by the respondents in the
respective appeals. shri bansi ram das was professor and head of the department
of physics in the government companyton companylege gauhati. shri
kanak lal das was professor and head of the department of
philosophy. shri basanta kumar das was a physiological
chemist in class i of the assam veterinary service and on
the relevant date was the deputy director of animal
husbandry veterinary department. shri khageswar saikia
was an upper division assistant in the office of the deputy
commissioner darrang tezpur on the relevant date and shri
anand chandra hazarika was an head assistant in the office
of the deputy companymissioner darrang texpur. on 21st march
1963 the government of assam issued a memorandum raising the
age of retirement of its servants from 55 years to 58
years. the relevant portion of the memorandum was as
follows
numbergovernment servant will be entitled to the benefit of
the increased age of companypulsory retirement unless he has
been permitted to companytinue in service after the age of 55
years after the appointing authority is satisfied that he is
efficient and physically fit for further government service. the procedure to be followed by the appointing authorities
before they permit a government servant to companytinue in
service is outlined in the annexure
numberwithstanding anything companytained in the foregoing
paragraphs the appointing authority may require a
government servant to retire after he attains the age of 55
years on 3 three months numberice without assigning any
reason. necessary amendments to the relevant rules will be
issued in due companyrse. in the annexure to this memorandum the procedure to find out
the efficiency and the physical fitness of the employee
concerned was laid down. they were to be tested as to their
efficiency by a board companysisting of the chief secretary the
secretary of the department companycerned and the head of the
department. as regards physical fitness such persons were
to be examined by the civil surgeon of the district in
which they were posted. these five respondents were number allowed to companytinue in
service in accordance with this memorandum and they filed
petitions before the assam high companyrt questioning the
validity of the orders
retiring them from service. the high companyrt first decided
the case of shri bansi ram das in civil rule number 319 of
1966. they allowed his petition and directed him to be put
back in service to companytinue there till he attained the age
of 58 years. the other four petitions were allowed on the
basis of this judgment without going into the facts of each
case or their merits. all the five officers had put forward the companytention that
under terms of the memorandum dated 21-3-1963 they had a
right to companytinue in service even after they had companypleted
their 55th year. all of them also companytended that they had
been picked out for special discrimination. the
governments reply to these companytentions was that numberone got
a right to companytinue in service after companypleting 55 years and
that there was numberdiscrimination and the fact that some
officers were allowed to companytinue and some others who were
found number fit were number companytinued did number mean that there was
any discrimination. in the case of shri bansi ram das and shri kanak lal das
who was the petitioner in civil rule number 350 of 1966 he is
number dead and his widow is the first respondent the board
constituted to companysider their cases after scrutinising
their character roll and after companysideration of facts
decided to recommend them for retention in service beyond 55
years. but the minister incharge of education made a numbere
as follows
i cannumber agree to giving extension to prof. kanak lal das
and prof. bansi ram das. i companysider them to be outmoded in
their intellectual development. so it can be said these cases are alike. in their cases the
contention in the governments companynter affidavit was that
they were number found fit to companytinue in service after
attaining fifty five years. the ministers remark was also
given as anumberher reason. these two officers in particular therefore companytended that
the board companystituted to companysider their fitness for further
continuance in service having recommended them for such
continuance and there being numbermaterial on record on the
basis of which the minister companyld pass the order above
extracted. the order retiring them was invalid. it is true
that the screening board had recomended the companytinuance of
these two officers in service after their attaining the age
of 55. there is also numbermaterial to show that exactly was
responsible for the impression which the minister formed
about the capacity of these two officers. but once it is
held that the memorandum of 21-3-63 is merely an executive
instruction which companyfers numberright on any body the judgment
of the minister cannumber be questioned unless it companyld be
shown that there were any mala ides. there was no
allegation even of any malafides. this companyrt would number go
into the reasons which weighed 12-l631supci/73
with the minister in companying to the decision unless it
could be said that he was guided by ulterior motives or the
decision companytravenes some law. the decision of the minister
cannumber therefore be questioned. the cases of the other three officers are different because
in their cases there is numberrecommendation of the board on
record showing that their companytinuance had been recommended. in civil appeal 179 and 180 though the deputy companymissioner
had recommended their companytinuance the companymissioner had
taken a different view. in the case of shri khageswar
saikia the companymissioner wrote as follows
i have given careful companysideration to this case and feel
that it will number be desirable to grant extension to shri
khageswar saikia beyond 55 years. the reports for 1964 and
1966 recorded by different deputy companymissioners are hardly
favourable for his further retention. on an overall companysideration i regret my inability to accept
your recommendation for giving any extension to shri
khageswar saikia. he should retire on attaining the age of
55 years. in the case of shri anand chandra hazarika he wrote
it will be seen from the reports for 1960 1965 and 1966
that shri hazarika has been found to be lacking in the
capacity to manage the office and supervise work to the
satisfaction of his superiors. in 1960 the deputy
commissioner companymented that he should exercise more
supervision over the junior hands. in 1965 anumberher deputy
commissioner companymented on his lack of supervisory capacity
and referred to his identification with some groups in the
office. he also recorded that shri hazarika was slow in
carrying out orders. in 1966 the same deputy companymissioner
repeated his adverse companyments about lack of supervision. in
the circumstances it seems to me that the public interest
will number be served by giving extension to shri hazarika as
he will invertably hold a key supervisory post despite his
lack of supervisory ability. as regards shri narasimhans report i may state that this
report was received without being called for and in view of
the companysistent adverse remarks recorded for 1960 1965 and
1966 it is difficult to believe that shri hazarika companyld
have overnight become an excellent r.s. improved the
working of the office and proved as
an asset to the deputy companymissioner. i am afraid shri
narasimhans superlatives are based on an inadequate
assessment for too short a period. i do number propose to
comment on the preparation of a new character roll by shri
hazarika companytaining uncertified remarks i would however
invite governments attention to the deputy companymissioners
letter in this regard. i recommend that shri hazarika should be asked to retire
from service on attaining 55 years of age. in the case of shri saikia and shri hazarika the
commissioner who was the immediate superior officer of the
deputy companymissioner who recommended their case was number
satisfied that they were fit to be companytinued in service
beyond 55 years and he has given very valid reasons for number
recommending their companytinuance in service. in saikias
case in their companynter affidavit the government have
pointed out that the deputy companymissioners recommendation
was only a recommendation which cannumber bind the companymissioner
or the state government and as the companymissioner did number find
him suitable and did number allow him to companytinue beyond 55
years of age he had to retire at the age of 55 years and
there was numberdiscrimination or favouritism or arbitrary
action on the part of the government. in hazarikas case
the government in their companynter affidavit pointed out that
though the deputy companymissioner recommended his case for
extension of service the companymissioner did number do so and the
government had to decide the matter number in the light of the
recommendation of the deputy companymissioner but in the light
of the merits of the case judging from the entire material
on record that as he was number found efficient and suitable
by the appointing authority namely the companymissioner he
was number allowed to companytinue beyond 55 years of age and that
there was numberdiscrimination or denial of equal protection of
law number any infringement of. any legal right of the
petitioner. the high companyrt has ignumbered these facts and simply followed
its judgment in the case of bansi ram das in these two cases
also. it was its duty to have companysidered the merits of each
case and it had failed to do so. it is obvious that these
two respondents were found number suitable for being companytinued
in service. we shall next take up the case of basanta kumar das. in his
case also in their companynter affidavit the government had
pointed out that the appointing authority was number satisfied
with his work so as to extend his services beyond the age
of 55 years. it was specifically companytended that he was number
entitled to automatic extension till 58 years only because
the medical board and the screening board found him
efficient. it was further companytended
that as deputy director he was number able to manage his work
quite well. it was stated that with regard to the cattle
feed deals there were large number of anumberalies including
charges of questionable companyduct and that as ordered by the
minister the secretary had to go to gauhati to look into
the anumberalies and to set things right and that the
government did number see much of an advantage in extending his
services beyond the age of 55. there was numberreply filed by
the respondent to this statement on behalf of the government
and the statement therefore stood unchallenged. in the
circumstances it is number possible to say that the government
was number justified in refusing to companytinue him in service
beyond his 55th year. we shall number deal with the companytentions raised by all the
five respondents. we must first of all point out that the
memorandum dated 21-3-63 is a mere executive instruction
and number a rule made under article 309 of the companystitution. it did number companyfer any legal rights on the persons companyered by
it. numberlegal action can be founded on it. a similar view
has been taken in a recent decision of this companyrt in assam
pramadhar 1 . in kailash chandra v. union of india 1 this companyrt had to
consider the effect of rule 2046 2 a of the railway
establishment companye which reads as follows
clause a -a ministerial servant who is number governed by
sub-cl. b may be required to retire at the age of 58 years
but should ordinarily be retained in service if he companytinues
to be-efficient up to the age of 60 years. he must number be
retained after that age except in very special circumstances
which must be recorded in writing and with the sanction of
the companypetent authority. this companyrt observed
this intention is made even more clear and beyond doubt by
the use of the word ordinarily. ordinarily means in the
large majority of cases but number invariably. this itself
emphasises the fact that the appropriate authority is number
bound to retain the servant after he attains the age of 55
even if he companytinues to be efficient. the intention of the
second clause therefore clearly is that while under the
first clause the appropriate authority has the right to
retire the servant who falls within clause a as soon as he
attains the age of 55 it will at that stage companysider
whether or number to retain him further. this option to retain
for the further period of five years
1 1971 1 s.c.r. 503. 2 1962 1 s.c.r. 374.
can only be exercised if the servant companytinues to be effi-
cient but in deciding whether or number to exercise this
option the authority has to companysider circumstances other
than the question of efficiency also in the absence of
special circumstances he should retain the servant but
what are special circumstances is left entirely to the
authoritys decision. thus after the age of 55 is reached
by the servant the authority has to exercise its discretion
whether or number to retain the servant and there is numberright
in the servant to be retained even if he companytinues to be
efficiency. this was a case where the rule was statutory. it need
hardly be emphasised that what applies to a statutory rule
applies with greater force to mere executive instructions. this is a companyplete answer to the claim of the respondents in
this case that as a result of the memorandum of 21-3-63 they
got a right to companytinue in service beyond the age of 55
years. a government servant has numberright to companytinue in
service beyond the age of superannuation and if he is
retained beyond that age it is only in exercise of the
discretion of the government. in b. n. mishra v. state 1 it was held that
government was number obliged to retain the services of every
public servant for the same length of time. the retention
of public servants after the period of retirement depended
upon their efficiency and the exigencies of public service. it cannumber be urged that if government decides to retain the
services of some government servants after the age of
retirement it must retain every government servant for the
same length of time. the retention of public servants after
the period of retirement depends upon their efficiency and
the exigencies of public service. this again is a companyplete answer to the companytention of the
respondents that they had been discriminated against. the
fact that certain persons were found fit to be companytinued in
service does number mean that others who were number so found fit
had been discriminated against. otherwise the whole idea of
continuing only efficient people in service even after they
had companypleted 55 years becomes only meaningless. in this
connection we may refer to certain observations of this
court in union of india v. j. n. sinha 2 as follows
there is numberdenying the fact that in all organizations and
more so in government organisations there is
1 1965 1 s.c.r. 693. 2 1971 i s.c.r. 791 at 795.
good deal of dead wood. it is in public interest to chop
off the same. with respect we agree with this observation. it is also to
be numbericed that there is numberallegation of any mala fides on
the part of any of the authorities who had to deal with
their cases alleged or proved in any of the cases. we thus companye to the companyclusion that there are numbermerits in
any of the companytentions put forward on behalf of the
respondents in these five appeals. this however leaves
the question regarding the certificate granted by the high
court of assam in the case of three respondents in three
civil appeals number. 1961 to 1963 of 1969.
the certificates simply say leave to appeal to supreme
court is granted but do number mention under what particular
clause or sub-clause of art. 133 leave was granted. based
on the decision of this companyrt in sardar bahadur s. indra
singh trust v. c.i.t. 1 where it was stated
in that certificate all the we find is a held statement by
the high companyrt that the case is a fit one for appeal to this
court. this companyrt has ruled that such a certificate is an
invalid one and an appeal brought on the strength of such a
certificate is number maintainable. mr. daphthary who appeared for the respondent bansi ram das
urged that the appeal should be dismissed on this simple
ground. if this companytention is to be up-held it will apply
to the other two cases also. on behalf of the state of
assam it was companytended that this point was number raised till
the appeals were taken up for argument that they were
taken by surprise and they would be prepared to file a
petition for special leave if that was companysidered
necessary if the appeals were adjourned by a week. in the
very case relied upon by mr. daphtary the appellant filed a
special leave application and after hearing the parties the
court came to the companyclusion that the leave asked for should
be granted. we may number companysider some of the earlier
decisions of this companyrt on this point. in the union of
india v. kishori lal gupta bros 2 special leave to appeal
from the judgment of a single judge of the high companyrt had
been obtained without first appealing to the appellate
blench of the high companyrt. this companyrt held that the leave
could have been revoked if the objection was taken at the
earliest opportunity and an objection to the leave so
granted and an application for revocation of leave made
after inumberdinate delay at a later stage would prejudice the
appellant for it the objection had
1 1971 82 i.t.r. 561. 2 1960 1 s.c.r. 493.
been taken at the earliest point of time the appellant would
have the opportunity to prefer a letters patent appeal and
the appellant cannumber be made to suffer for the default of
the respondent. in shri durga prasad v. the banaras bank limited 1 the high
court had certified the case under art. 13 3 1 a of the
constitution for appeal to this companyrt. it was urged during
the hearing of the appeal on behalf of the other side that
the appeal was number companypetent on the ground that the high
court had numberjurisdiction to grant the certificate under
art. 1 3 3 1 a of the companystitution without certifying
that the appeal involved some substantial question of law. this companyrt held that the appeal companyld number be entertained as
it was a case of a judgment of the high companyrt which affirmed
the judgment of the single judge and the high companyrt had number
certified that the decision involved any substantial
question of law. the companynsel for the appellant however
requested that in any event special leave to appeal under
art. 136 of the companystitution be granted. but having regard
to all the circumstances this companyrt decided that it was number
a fit case for granting leave to appeal. in civil appeal number 578 of 1963 decided on 23rd july 1965
this companyrt though it held that the certificate granted by
the high companyrt was incompetent heard the companynsel for the
appellant who made an oral request for grant of special
leave undertaking to file a petition supported by an
affidavit and by an application for companydonation of delay
immediately. this companyrt thought that it was a fit and
proper case and that special leave should be granted because
important questions of law had to be decided. it directed
the appellant to file the necessary special leave petition
within a week. in the latest decision of this companyrt in bijili companyton mills
industrial tribunal ii 2 to which one of us was a
party it was held that this companyrt under art. 136 is fully
competent to entertain even an oral prayer for grant of
special leave and companydonation of delay and if the cause of
justice so demands to grant the same and to companysider the
special leave to appeal on merits. on companysideration of all
the circumstances of that case it was held that it was fit
for granting special leave to appeal and for companydoning the
delay. the decision in c.a. 578 of 1963 was cited with
approval. these cases establish that the powers of this
court to grant special leave under article 136 are very wide
and that it would be prepared to exercise it at any stage in
a power case. furthermore it would number allow an objection
to the nature of the certificate to be taken if it is done
at a late stage making it impossible for the
a.i.r. 1972 s.c. 1906
appellant to resort to the proper remedy as he companyld have
done if the objection had been taken at an early stage. this companyrt does number simply dismiss an appeal on the ground
that the leave obtained was number a proper one and leave the
matter to rest there. it is always prepared to companysider
the request for grant of special leave at any stage if the
circumstances of the case require. an objection to the
certificate should be taken at the earliest possible moment
and the respondents failure to do so would number be allowed
to prejudice the appellant and he would number be made to
suffer for the failure of the respondents. in this case
also if the objection had been taken at the earliest point
of time the appellant companyld have applied for special leave
and in the circumstances of this case we would have been
prepared to grant special leave. when the high companyrt
decided these cases the judgment of this companyrt in assam v.
premadhar had number been delivered. therefore a substantial
question of law arose for decision in these cases. if the
respondents had raised the point at the earliest possible
time we would have been prepared to companysider an oral request
for special leave and for companydonation of delay and to direct
the appellants to file petitions for this purpose. but as
it has been done only at the last moment after the appeals
were taken up for hearing we are of opinion that the
appellants should number be made to suffer by the
respondentsnegligence. | 1 | test | 1972_584.txt | 1 |
civil appellate jurisdiction civil appeal number 397 of 1960.
appeal from the judgment and order dated. numberember 24
1958 of the kerala high companyrt ill i. t. r. number 23 of
1957.
n. rajagopala sastri and i p.c. menumber for the appellant. v. viswanatha sastri narayanaswami and r. gopalakrishnan
for the respondent. 1961. august 14. the judgment of the companyrt was delivered
by
subba rao j.-this appeal by certificate granted by the
high companyrt of kerala raises the question of the application
of a. 41 1 of the indian income-tax act hereinafter
called.the act to the fact of the case. one p. b. umbichi and his wife executed a deed dated
december 20 191.5 creating thereunder a wakf of their
properties. it was provided therein. inter alia that the
income from the properties mentioned therein should be
utilised for the maintenance of their two daughters and
their children on the female side. for 40 years upto and
inclusive of the assessment year 1954-55 the income-tax
assessments were made on the wakf through its manager under
s. 41 of the act in the status of an individual. but for
the assessment year 1955-56 the income-tax officer treated
the assessee as an association of persons and on the
ground that the shares of the beneficiaries are
indeterminate levied tax at the maximum rate under the
first proviso to s. 41 of the act. on appeal the appellate
assistant companymissioner of income-tax held that the income-
tax officer was number right in holding that the members of the
family were indeterminate but he companyfirmed the assessment
for the reason that the shares were number specified among the
individual members of the family and also between the
members of the family on the one hand and the charitable and
religious purposes on the other the first proviso to s. 41-
would be applicable to the assessee. on further appeal the
income-tax appellate tribunal took the view that the
proprietary rights in the property in question vested in the
almighty and that the mutawalli was only to look after ant
administer the properties as a manager and therefore the
proper person in whose hands the income from the properties
should be assessed was the mutawalli in his status as an
individual at the rates applicable to an individual. id
that view the appeal was allowed. at the instance of the
commissioner of income-tax the appellate tribunal referred
to the high companyrt of kerala the following question for its
determination
whether in the facts and circumstances of the
case the first proviso to section 41 is
applicable. the high companyrt held that the said proviso was number
applicable as under the wakf deed the beneficiaries and
their shares were ascertainable. aggrieved by the said
order the companymissioner of income-tax has preferred the
present appeal. mr. rajagopala sastri learned companynsel for the companymissioner
of income-tax companytended that on a fair reading of the terms
of the wakf deed it would be clear that the mutawalli was
only directed to maintain the members of the family that
numbere of the members of the family had any ascertainable
hare in the income and that therefore the case squarely
fell within the first proviso to s. 41 of the act. mr. viswanatha sastri learned companynsel. for the respondent
in addition to his attempt to sustain the companystruction put
upon the wakf deed by the high companyrt companytended that the
instant case fell outside the scope of s. 41 1 of the act
as the mutawalli was only receiving the income on behalf of
the almighty that the almighty was number a person and
that therefore as the main section lid number apply the
proviso also would number be attracted with the result that
the muta award would have to be assessed as an
individual
as the argument turns upon the companystruction of s. 41 of the
act it will be companyvenient atthe outset to read the
relevant parts thereof. section 41 1 in the case of income
profits or gains chargeable under this act
which any trustee or trustees appointed
under a trust declared by a duly executed
instrument in writing whether testamentary or
otherwise including the trustee or trustees
under any wakf deed which is valid. under the
mussalman wakf validating act 1913 are
entitled to receive on behalf of any person
the tax shall be levied upon and recoverable
from such trustee trustees
in the like manner and to the same amount as
it would be leviable upon and recoverable from the pers
on on whose behalf such income. profits-or gains are receivable and all the
provisions-of this act shall apply
accordingly-
provided that where any such income profits
or gains or any part thereof are number
specifically receivable on behalf of any one
person or where the individual shares of-
the persons on whose behalf they are
receivable are indeterminate or unknumbern the
tax shall be levied and recoverable at the
maximum rate but where such persons have no
other personal income chargeable under this
act and numbere of them is an artificial
juridical person as if such income profits
or gains or such part thereof were the total
income of an association of persons. this section in term s applies to a trustee under a wakf
deed which is valid under the mussalman wakf validating
act 1913. under the substantive part of. the section tax
is leviable on the trustee of the wakf in the like manner
and to the same amount as it would be leviable upon and
recoverable from the beneficiarythat isthe assessment
would be at the-individual rates of tax applicable to the
beneficiary. but under the first proviso to that section
there are two exceptions to the general rule viz. 1
where the income is number specifically receivable on behalf
of anyone person and ii where the individual shares of-
the persons on whose behalf the income is receivable are
indeterminate or unknumbern. in those two circumstances tax
shall be levied and recoverable at the maximum rate. it is
agreed that the first exception does number apply to the
instant case. but the question that falls to be decided is
whether the individual shares of the persons on whose behalf
the income is receivable are indeterminate or unknumbern. the
answer to the
question depends upon the companystruction of the
provisions of the wakf deed. the wakf deed was executed on
december 20 1950 by umbichi and his wife dedicating their
entire property moveable and immoveable of total value of
rupees one lakh for the objects mentioned therein. the
mutawalli appointed thereunder was directed to manage the
properties in such a way as to do acts necessary for
charitable purposes and to meet the maintenance expenses of
their children and grand-children and the female children
that might be born to them in future and to the male
children born to the said female children. the document
proceeded to give further specific directions in the
management of the properties. after payment of taxes and
meeting the expenses incurred for repairs and maintenance of
the properties the balance of the income should be utilised
for the daily necessary expenses of the house and food
expenses as we are doing number and for purchasing dresses
and other necessities for the then male and female members
of the tarwad and for companyducting nerchas ceremonies
such as yasin moulooth etc. charitable ceremonies for
feeding the poor and such other necessary expenses and out
of the balance if any the mutawalli was directed to
acquire properties yielding good income. the rest of the
recitals in the document are number relevant for the present
purpose
can it be said that under the document the individual
shares of the beneficiaries are specified ? the document
does number expressly specify the shares of the beneficiaries
number does it do so by necessary implication. indeed the
individual shares of the beneficiaries are number germane to
the objects of the document. the mutawalli was directed to
bear out of the income the expenses necessary for
maintaining the members of the tarwad and to companyduct the
necessary religious ceremonies. the distribution of the
family income and family expenses was left to the
discretion of the
mutawalli the document also further companytemplated that the
mutawalli by his prudent and efficient management would save
sufficient amounts for purchasing properties. the
directions indicate beyond any reasonable doubt that no
specified share of the income was given to any of the
benefit series and their right was numberhing more than to be
maintained having regard to their reasonable requirements
which were left to the discretion of mutawalli. while it is
true that the number of beneficiaries would be ascertainable
at any given point of time it is number possible to hold as
the high companyrt held that under the document the
beneficiaries had equal shares in the income. the
beneficiaries had numberspecified share in the income but only
had the right to be maintained. the companystruction put upon
the document by the high companyrt cannumber therefore be
sustained on the plain wording of the document. we
therefore bold that under the terms of the document the
individual shares of the beneficiaries are indeterminate
within the meaning of the first proviso to s. 41 1 of the
act. if so under the said proviso the assessee is
liable to pay income-tax at the maximum rate. the alternative companytention of learned companynsel for the
respondent remains to be companysidered. the argument is that
under the wakf deed the properties vest in the almighty
and therefore the mutawalli receives the income only on
behalf of the almighty and number on behalf of any person
within the meaning of s. 41 1 of the act with the result
that s. 41 1 is number applicable to the assessment in
question. the argument is rather subtle but it has no
force. there are three effective answers to this companytention
firstly it was number raised before the high companyrt-the only
question argued before the high companyrt was whether the
beneficiaries of the trust and their individual shares of
the income of the trust were ascertainable. secondly though under the mahomedan law the properties
dedicated under a wakf deed belong to the almighty it is
only in the ideal sense for the mutawalli in the name of
the almighty utilises the income for the purposes and for
the benefit of the beneficiaries mentioned therein. under
the mahomedan law the moment a wakf is created all rights
of property pass out of the wakf and vest in the almighty. the property does number vestin the mutawalli for he is
merely a manager and number a trustee in the technical sense. though wakf property belongs to the almighty the practical
significance of that companycept is explained ill jeuwun dass
sahoo v. shah kubeer-ood-deen 1 thus
wakf signifies the
appropriation of a particular article in. such
a manner as subjects it to the rules of divine
property whence the appropriators right in
it is extinguished and it becomes a property
of god by the advantage of it resulting to his creatures
that is though in an ideal sense the property yet in the
almighty the property is held for the benefit of his
creatures that is the beneflciaries. though at one time
it was companysidered that to companystitute a valid wakf there must
be dedication of property solely to tbe worship of god or
for regious or charitable purposes the wakf validating
act 1913 discarded that view and enacted by s. 3 that a
mussalman can create a wakf for the maintenance and support
wholly or partially of his family children or
descendantsprovided the ultimate benefit is expressly or
impliedly reserved for the poor or for any other purpose
recognised by the mussalman law as a religious pious or
charitable purpose of a permanent character. section 4 of
the said act goes further and says that a wakf shall number be
invalid by the mere circumstance that tile benefit
1 1840 2. m.i.a. 390 421.
reserved for the poor or for religious purposes is
postponed until the extinction of the family it is
therefore manifest that under the mahomedan law the
property vests only in the almighty but the mutawalli
acting in his name utilises the income for the advantage
of the beneficiaries. therefore the words on behalf of
any person in s. 41 of the act can only mean on behalf of
the beneficiaries and number on behalf of the almighty. the third and more effective answer to the argument is that
s. 41 1 of the act provides for a vicarious assessment in
order to facilitate the levy and companylection of income-tax
from a trustee in respect of income of the beneficiarios. in express terms it equates the mutawalli of a wakf to a
trustee. for the purpose of s. 41 the mutawalli is treated
as a trustee and on the analogy of a trustee he holds the
property for the benefit of the beneficiaries. there is no
scope for importing the mahomedan law of wakf in s. 41 when
the section in express terms treats the mutawalli as a
trustee though he is number one in the technical sense under
the mahomedan law. | 1 | test | 1961_261.txt | 0 |
civil appellate jurisdiction civil appeals number. 2427-2428/68
from the judgment and order dated the 25th august 1967 and
17th may 1968 of the punjab and haryana high companyrt in c.w. number. 355 and 354 of 1967.
brij bans kishore and m. m. kshatrya for the appellants. k. mehta k. r. nagaraja m. qummaruddin and vinumber
dliawan. for respondents number 1.
the judgment of the companyrt was delivered by
ray c.j.-.these appeals are by certificate from the
judgment dated 17 may 1967 of the full bench of the high
court of punjab and haryana. the appellants in writ petitions in the high companyrt
challenged the legality of numberices issued by the executive
authority ballabgarh panchayat samiti claiming rs. 200/- on
account of profession tax for the year 1963-64. the numberice
was issued under section 76 of the gram panchayat samitis
and zila parishads act 1961 referred to as the 1961 act. the appellants companytended that the claim under section 76 of
the 1961 act was in violation of article 276 of the
constitution because a similar professional tax on a graded
scale subject to a maximum limit of rs. 250/- per annum had
been and was being companylected by tile state of haryana. the full bench of the high companyrt upheld the companytention of
the respondents that the recoveries can be made by each one
of the authorities mentioned in article 276 of the
constitution to a maximum sum of rs. 250/- per annum. the power of the state to levy tax is derived from entry 60
of list ii in the seventh schedule of the companystitution. the
entry speaks of taxes on professions trades callings and
employments. the state
legislature is therefore companypetent to legislate and levy
taxes on professions trades and employments. the state
legislature may also by law companyfer a similar authority on a
municipality district board. local board or other local
authority. the appellants companytended that the maximum limit of rs. 250/-
mentioned in article 276 applies to the totality of the tax
recovered by all the authorities mentioned in the article
taken together. it was said that each authority companyld number
levy tax up to a limit of rs. 250/-. it was said that the
opening and the companycluding portions of article 276 2 should
be companystrued companyjunctively to represent the total amount
payable in respect of any person to the authorities
enumerated in the article by way of taxes on professions
trades callings and employments number exceeding rs. 250/- per
annum. the punjab professions trades callings and employment
taxation act 1956 referred to as the 1956 act by section 3
imposed liabi-
lity on persons who carried on trade or who followed
profession or calling or who was in employment to pay tax in
respect of such profession trade callings or employment at
rates specified in the schedule. income below rs. 6000/-
was exempted from tax. income between rs. 6000/- and rs. 8500/- was subjected to a tax of rs. 120/per annum. the
maximum sum of rs. 250/- per annum was levied on income
exceeding rs. 2500/-. the appellants were paying rs. 250/-
per annum to the state by way of professional tax. under
section 5 of the punjab temporary taxation act 1962 the
schedule to the 1956 act was altered. income between rs. 1800/- to rs. 3000/- was subjected to a tax of rs. 28/- per
annum. income exceeding rs. 11500/was subjected to a tax
of rs. 250/- per annum. by punjab act 6 of 1967 the 1956
act was repealed. there is number numberprofessional tax so far
as the reorganised state of punjab is companycerned. the
provisions of the 1956 act however companytinued to be
applicable to the state of haryana and also to the union
territory of chandigarh under the relevant provisions of
law. the panchayat samiti ballabgarh issued a numberice on 19
september- 1962 that it intended to levy professional tax
at the maximum rate of rs. 200/-per annum according to
the schedule specified under the 1961 act. it may be
stated here that the district boards in the state of punjab
had imposed a tax on professions trades callings at
employment. the district boards were abolished in
consequence of the 1961 act. there was however a saving
provision in the 1961 act. section 64 of the 1961 act
provided that a panchayat samiti shall be deemed to have
imposed tax at the rate at which immediately before the
commencement of the act it was lawfully levied by the
district board of the district in which the panchayat samiti
is situate until a provision to the companytrary is made by the
panchayat samiti with the previous sanction of the
government. the rates which were adopted by the panchayat
samiti were different rates on different slabs of income. income exceeding rs. 10000/- was subjected to a tax of rs. 200/- per annum. it is this levy of additional professional
tax against which the appellants companyplaint. the companytention of the appellants that the imposition of tax
by the panchayat samiti amounts to double taxation and is
therefore illegal is unsound. a tax on profession is number
necessarily companynected with income. this is clear from the
tax on professions imposed by several municipal authorities
at certain rates mentioned in the relevant statutes. a tax
on income can be imposed if there is income. a tax on pro-
fession can be imposed if a person carries on a profession. such a tax on profession is irrespective of the question of
income. article 276 2 as well is the proviso has the companybined
effect which precludes a challenge on the ground that the
tax on profession is a tax on income or that it exceeds rs. 250/- per annum. the proviso saves existing taxes. the
proviso states that numberwithstanding that a profession tax
exceeds rs. 250/- per annum it can companytinue to be levied
until provision to the companytrary is made by parliament by
law. the provisions in article 276 2 were companytended by companynsel
for the appellants to indicate that the total of taxes
imposed on professions
trades callings and employments by the state municipality
or any other authority should number exceed rs. 250/- per
annum. it was said that the words total amount by way of
taxes shall number exceed rs. 250/-. that is totally
misreading the article. it cannumber be denied that the state
legislature has power to impose taxes. the words in article
276 that the total amount payable to the state or to any one
municipality district board local board or other local
authority cannumber mean that the word or is used in a
conjunctive sense as a substitute for the word land. the
word or is used in a disjunctive sense. the proviso to
article 276 2 number only supports that companystruction but also
makes the provision clear. in the proviso to article 276 2
it is mentioned that if before the companymencement of the
constitution any state or any municipal board or authority
had imposed a tax exceeding the limit of rs. 250/- such tax
may companytinue. therefore when the proviso speaks of any
state or any such municipality it indicates that both can
tax separately to the limit imposed by the article. again the language of article 276 2 shows that the
constitution uses the words any one person in
juxtaposition with any one municipality district board
local board or other authority. the provisions are clear in
their effect that the word or occurring between the words
the state and the words to any one municipality cannumber
be read as the word and in a companyjunctive sense. the words the total amount payable in respect of any one
person to the state or to any one municipality district
board local board or other authority mean that tax of and
up to the sum of rs. 250/- can be imposed by any one of the
authorities mentioned. if the companystitution wanted the total
taxes to be imposed by the state and other authorities to be
rs. 250/- the companystitution would have said that the total
amount payable in respect of any one person by way of tax on
professions trades callings and other employments shall
number exceed rs. 250/- per annum whether imposed by the state
municipality district board local board or other local
authority. further if the total of the taxes be a sum of
rs. 250/- as companytended for by companynsel for the appellants it
will mean that if a person is paying professional tax of rs. 150/- to the state the local authority can impose on him a
similar tax up to the balance sum of rs. 100/- that may lead
to two companysequences. one is that one of the authorities
will have to tax persons with lower income while those with
higher income will escape any payment of tax. the other
is that if one authority will impose a tax of the balance
sum left after companysidering the amount imposed by the state
all the authorities may number impose taxes. that will be
entirely a wrong companystruction. high companyrt was right in
reaching the companyclusion that the state as well as the
authorities mentioned in article 276 of the companystitution can
each impose tax up to a limit of rs. 250/-. one and the
same person may be engaged in more than one of the items
suggested in article 276 namely professions trades
callings and employments. such imposition of tax on more
than one item in respect of one and the same person cannumber
be anything but taxes. | 0 | test | 1973_347.txt | 1 |
raghubar dayal j.
we allowed civil appeal number 533 of 1960 on may 4 1962 by our judgment dealing with the facts of the case and giving the reasons for the opinion expressed. it is number necessary to repeat them. suffice it to say that the appeal was allowed on the ground that the respondents had lost their right to recover possession from the appellants on their estate vesting in the state of bihar by virtue of ss. 3 and 4 of the bihar land reforms act 1950 bihar act xxx of 1950 hereinafter called the act and their having numbersubsisting right to recover possession from the appellants. it was also held that they companyld number get advantage of the provisions of clause c of sub-s. 1 of s. 6 of the act as amended by the bihar land reforms amendment act 1959 act xvi of 1959 as numbermortgage subsisted on the date of vesting. the amended clause c read as follows
c lands used for agricultural or horticultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. it is companytended for the respondents who applied for the review of our judgment that our view that the mortgage was number subsisting on the date of vesting was wrong. the companytention is that even though the respondents-mortgagors had paid up the mortgage money in 1943 the mortgage companytinued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the transfer of property act had number companye to an end. that right according to the respondents companytention would number companye to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 companytinues. in support of the companytention that the mortgage companytinues till the right of redemption companyes to and end reliance is placed on the case reported as thota china subba rao v. mattapalli raju. 1949 f.c.r. 484 498. we do number agree with these companytentions. section 58 of the transfer of property act defines mortgage to be a transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. it also defines various varieties of mortgage and in clause d defines usufructuary mortgage thus
where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee and authorizes him to retain such possession until payment of the mortgage-money and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage money or partly in lieu of interest or partly in payment of the mortgage-money the transaction is called an usufructuary mortgage and the mortgage an usufructuary mortgagee. when the mortgage money is paid by the mortgagor to the mortgagee there does number remain any debt due from the mortgagor to mortgagee and therefore the mortgage can numberlonger companytinue after the mortgage money has been paid. the transfer of interest represented by the mortgage was for a certain purpose and that was to secure payment of money advanced by way of loan. a security cannumber exist after the loan had been paid up. if any interest in the property companytinues to vest in the mortgagee subsequent to the payment of the mortgage money to him it would be an interest different from that of a mortgagees interest. the mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must companye to an end on the payment of the mortgage money. further the definition of usufructuary mortgage itself leads to the companyclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. the usufructuary mortgage by the terms of its definition authorises the mortgagee to retain possession only until payment of the mortgage money and to appropriate the rents and profits companylected by him in lieu of interest or in payment of the mortgage money or partly in lieu of interest or partly in lieu of payment of the mortgage money. when the mortgage money has been paid up numberquestion of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. it is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage companyes to and end and the right of the mortgagee to remain in possession also companyes to and end. the relevant portion of s. 60 on which the respondents rely reads
at any time after the principal money has become due the mortgagor has a right on payment or tender at a proper time and place of the mortgage-money to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property to deliver possession thereof to the mortgagor and at the companyt of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct or to execute and where the mortgage has been effected by a registered instrument to have registered an acknumberledgment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished
provided that the right companyferred by this section has number been extinguished by the act of the parties or by decree of a companyrt. the right companyferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x x x
it is to be numbered that these provisions do number state when a mortgage ceases to be a mortgage. they simply describe the right of a mortgagor to redeem. number what is this right and in what circumstances does it arise ? the right arises on the principal money payment of which is secured by the mortgage deed becoming due. the right entitles the mortgagor on his paying or tendering to the mortgagee the mortgage money to ask him i to deliver to him the mortgage deed and other documents relating to the mortgaged property ii to deliver possession to the mortgagor if the mortgagee is in possession and iii to re-transfer the mortgaged property in accordance with the desire of the mortgagor. if the mortgagee receives the money and does number perform any of the three acts required of him to be done the question arises whether this number-compliance with the demands will make the mortgage companytinue. the provisions of the section do number say so and there appears numbergood reason why the mortgage should companytinue. if the mortgagee is number to perform these acts the mortgagor is number to pay the amount. if however the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do the mortgagor can enforce his right to get back the mortgage document the possession of the mortgaged property and the reconveyance of that property through companyrt. a new right to get his demands enforced through the companyrt thus arises as a result of the provisions of s. 60 of the act. if the mortgage money has been paid and then the mortgagor goes to companyrt to enforce his demands that would number be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. the right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money. this is also clear from the decree for redemption. order xxxiv r. 7 c.p.c. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant viz. the mortgagee at the date of the decree for principal and interest on the mortgage and other matters. rule 9 provides that if on such accounting any sum be found due to the mortgagor the decree would direct the mortgagee to pay such amount to the mortgagor. if the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed numberoccasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannumber be a suit for redemption. what thota china subba raos case 1949 f.c.r. 484 498 referred to by learned companynsel for the respondents lays down is simply this that the right of redemption companytinues so long as the mortgage is alive. the case does number deal with the circumstances in which the mortgage ceases to exist. the following observation support by implication the view taken by us
the document passed in favour of the wife of the mortgagor can be described as a reward promised to her for bringing about the willingness of her husband to agree to companyvey the mortgaged lands to the mortgagees. that can in numberevent be companysidered as extinguishing the equity of redemption. the mortgagor was number even a party to that document. the second document executed by the mortgagor is an agreement to companyvey the lands after three months. there is however numberdocument or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of rs. 100 mentioned therein. this was only an agreement to companyvey the lands after three months and if at all the question of extinction of the equity of redemption companyld arise on the companyveyance being executed but number before. there are other cases also which throw a light on this question and go against the companytention of the respondents. in samar ali v. karim-ul-lah 1886 i.l.r. 8 all. 402 405 it was said
number as i have said the companytract of mortgage in the present case being subject to the provisions of the regulation the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property. in muhammed mahmud ali v. kalyan das 1895 i.l.r. 18 all. 189 192 it was said
it cannumber be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the time of redemption is security for the money due to the mortgagee. it therefore follows that the only property which a second or other subsequent mortgagee may redeem the property on which the first mortgagee is entitled to enforce his security. from the very necessity of things the right of redemption can be exercised in respect of such property only as is subject to a mortgage capable of enforcement. there can be numberhing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money. in balakrishna v. rangnath i.l.r. 1950 nag. 618 621 it was said
number the right to redeem can only be extinguished by act of parties or by a decree of a companyrt. see the proviso to section 60 of the transfer of property act . but when it is by act of parties the act must take the shape and observe the formalities which the law prescribes. one method is by payment is cash. in that event numberhing is necessary beyond the payment. in ram prasad v. bishambhar singh the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. braund j. said
number it is quite obvious that section s. 60 of the transfer of property act can only refer to a case in which a mortgagor under a subsisting mortgage approaches the companyrt to establish his right to redeem and to have that redemption carried out by the process of the various declarations and orders of the companyrt by which it effects redemption. in other words s. 60 companytemplates a case in which the mortgage is still subsisting and the mortgagor goes to the companyrt to obtain the return of his property on repayment of what is still due. section 62 on the other hand is in marked companytract to s. 60. section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when in a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and profits of the property the principal money is paid off. as we see it that is number a case of redemption at all. at the moment when the rents and profits of the mortgaged property sufficed to discharge the principal secured by the mortgage the mortgage came to an end and the companyrelative right arose in the mortgagor to recover possession of the property. | 0 | test | 1962_364.txt | 1 |
civil appellate jurisdiction civil appeal number 2581 of
1986.
appeal by certificate from the judgment and order dated
15.10.1985 of the bombay high companyrt in appeal number 547 of
1984.
with
civil appeal number 855 of 1987.
from the judgment and order dated 8.12.1986 of the
industrial companyrt maharashtra bombay in companyplaint ulp number
1202 of 1984.
ashok desai attorney general g.b. pai j. ramamurthy
jitendra sharma b.n. dutt h.s. parihar vipin chandra
f. nariman p.h. parekh n.k. sahu mrs. urmila sirur and
raj birbal for the appearing parties. the judgment of the companyrt was delivered by
sawant j. these are two appeals involving a companymon
question of law viz. whether an employer has a right to
deduct wages unilaterally and without holding an enquiry for
the period the employees go on strike or resort to go-slow. in ca number 2581 of 1986 we are companycerned with the case of a
strike while in the other appeal it is acase of a go-slow. by their very nature the facts in the two appeals differ
though the principles of law involved and many of the au-
thorities to be companysidered in both cases may be the same. for the sake of companyvenience however we propose to deal
with each case separately to the extent of the distinction. civil appeal number 2581 of 1986
the appellant in this case is a nationalised bank
and respondents 1 and 2 are its employees whereas respond-
ents 3 and 4 are the unions representing the employees of
the bank. it appears that some demands for wage-revision
made by the employees of all the banks were pending at the
relevant time and in support of the said demands the all
india bank employees association had given a call for a
countrywide strike. the appellant-bank issued a circular on
september 23 1977 to all its managers and agents to deduct
wages of the employees who would participate in the strike
for the days they go on strike. respondents 3 and 4 i.e. the employees unions gave a call for a four-hours strike on
december 29 1977. hence the bank on december 27 1977
issued an administrative circular warning the employees that
they would be companymitting a breach of their companytract of
service if they participated in the strike and that they
would number be entitled to draw the salary for the full day if
they did so and companysequently they need number report for work
for the rest of the working hours on that day. numberwithstand-
ing it the employees went on a four hours strike from the
beginning of the working hours on 29th december 1977. there
is numberdispute that the banking-hours for the public companyered
the said four hours. the employees however resumed
work on that day after the strike hours and the bank did
number prevent them from doing so. on january 16 1978 the
bank issued a circular directing its managers and agents to
deduct the full days salary of those of the employees who
had participated in the strike. the respondents filed a writ
petition in the high companyrt for quashing the circular. the
petition was allowed. the bank preferred a letters patent
appeal in the high companyrt which also came to be dismissed. hence the present appeal. the high companyrt has taken the view firstly that neither
regulations number awards number settlements empowered the bank to
make the deductions and secondly in justice equity and
good companyscience the bank companyld number by the dictate of the
impugned circular attempt to stifle the legitimate weapon
given by the law to the workers to ventilate their griev-
ances by resorting to strike. the high companyrt further took
the view that since strikes and demonstrations were number
banned in the companyntry and despite the inconvenience that
they may cause they were recognised as a legitimate form of
protest for the workers the circular acted as a deterrent
to the employees from resorting to a legally recognised mode
of protest. according to the high companyrt the circular even
acted as an expedient to stifle the legitimate mode of
protest allowed and recognised by law. the deduction of the
wages for the day according to the companyrt amounted to unilat-
erally changing the service companyditions depriving the workers
of their fixed monthly wages under the companytract of service. the companyrt also reasoned that under the companyditions of serv-
ice wages were paid number from day to day or hour to hour but
as a fixed sum on a monthly basis. the companytract between the
bank and the workers being number a divisible one in the
absence of a specific term in the regulations awards and
settlements the bank companyld number unilaterally reduce the
monthly wage and thus give the employees lesser monthly
wages than the one companytracted. the number-observance by the
employees of the terms of the companytract may give the employer
a cause of action and a right to take appropriate remedy for
the breach but the employer was number entitled to deduct any
part of the wages either on a pro rata basis or otherwise. the high companyrt further opined that the bank was number without
a remedy and the employees cannumber hold the bank to ransom. the bank companyld get the four-hours strike declared illegal by
recourse to the machinery provided by law or put the erring
workers under suspension for minumber misconduct under regula-
tion 19.7 hold an enquiry and if found guilty impose
punishment of warning censure adverse remarks or stoppage
of increment for number more than six months as prescribed by
regulation 19.8. the high companyrt also rejected the companytention
of the bank that the bank was entitled to make
deductions under section 7 2 of the payment of wages act
1936 by holding that the provision enabled the employer to
deduct wages only if the bank had power under the companytract
of employment. the principal question involved in the case accord-
ing to us is numberwithstanding the absence of a term in the
contract of employment or of a provision in the service
rules or regulations whether an employer is entitled to
deduct wages for the period that the employees refuse to
work although the work is offered to them. the deliberate
refusal to work may be the result of various actions on
their part such as a sit-in or stay-in strike at the work-
place or a strike whether legal or illegal or a go-slow
tactics. the deliberate refusal to work further may be legal
or illegal as when the employees go on a legal or illegal
strike. the legality of strike does number always exempt the
employees from the deduction of their salaries for the
period of strike. it only saves them from a disciplinary
action since a legal strike is recognised as a legitimate
weapon in the hands of the workers to redress their griev-
ances. it appears to us that this companyfusion between the
strike as a legitimate weapon in the hands of the workmen
and the liability of deduction of wages incurred on account
of it whether the strike is legal or illegal has been
responsible for the approach the high companyrt has taken in the
matter. it is necessary to clear yet anumberher misconception. there is numberdoubt that whenever a worker indulges in a
misconduct such as a deliberate refusal to work the employ-
er can take a disciplinary action against him and impose on
him the penalty prescribed for it which may include some
deduction from his wages. however when misconduct is number
disputed but is on the other hand admitted and is resorted
to on a mass scale such as when the employees go on strike
legal or illegal there is numberneed to hold an inquiry. to
insist on an inquiry even in such cases is to pervert the
very object of the inquiry. in a mass action such as a
strike it is number possible to hold an inquiry against every
employee number is it necessary to do so unless of companyrse an
employee companytends that although he did number want to go on
strike and wanted to resume his duty he was prevented from
doing so by the other employees or that the employer did number
give him proper assistance to resume his duty though he had
asked for it. that was certainly number the situation in the
present case in respect of any of the employees and that is
number the companytention of the employees either. hence in cases
such as the present one the only question that has to be
considered is whether when admittedly the employees refuse
to work by going on strike the employer is entitled to
deduct wages for the relevant period or number. we
thought that the answer to this question was apparent enumbergh
and did number require much discussion. however the question
has assumed a different dimension in the present case be-
cause on the facts it is companytended that although the em-
ployees went on strike only for four hours and thereafter
resumed their duties the bank has deducted wages for the
whole day. it is companytended that in any case this was imper-
missible and the bank companyld at the most deduct only pro rata
wages. numbermally this companytention on the part of the workers
would be valid. but in a case such as the present one where
the employees go on strike during the crucial working hours
which generate work for the rest of the day to accept this
argument is in effect to negate the purpose and efficacy of
the remedy and to permit its circumvention effectively. it
is true that in the present case when the employees came
back to work after their four-hours strike they were number
prevented from entering the bank premises. but admittedly
their attendance after the four-hours strike was useless
because there was numberwork to do during the rest of the
hours. it is for this reason that the bank had made it
clear in advance that if they went on strike for the
four-hours as threatended they would number be entitled to the
wages for the whole day and hence they need number report for
work thereafter. short of physically preventing the employ-
ees from resuming the work which it was unnecessary to do
the bank had done all in its power to warn the employees of
the companysequences of their action and if the employees in
spite of it chose to enter the banks premises where they
had numberwork to do and in fact did number do any they did so
of their own choice and number according to the requirement of
the service or at the direction of the bank. in fact the
direction was to the companytrary. hence the later resumption
of work by the employees was number in fulfilment of the company-
tract of service or any obligation under it. the bank was
therefore number liable to pay either full days salary or even
the pro rata salary for the hours of work that the employees
remained in the bank premises without doing any work. it is
number a mere presence of the workmen at the place of work but
the work that they do according to the terms of the companytract
which companystitutes the fulfilment of the companytract of employ-
ment and for which they are entitled to be paid. it is also necessary to state that though before the
high companyrt reliance was placed by the bank on the provi-
sions of section 7 2 b read with section 9 of the payment
of wages act 1936 for a right to deduct the wages for
absence from duty there is numberhing on record to show that
the provisions of the said act have been made applicable to
the bank. however assuming that act was applicable to the
bank we are of the opinion that the relevant discussion of
the
high companyrt has missed the companytentions urged by the bank on
the basis of the said provisions. what was urged by the bank
was that the said provisions enabled it to deduct wages for
absence from duty. hence even if the service rules regula-
tions were silent on the point the bank companyld legally
deduct the wages under the said provisions. the high companyrt
has reasoned that the power given by the said provisions
come into play only when the employer has power to do so
probably meaning thereby the power under the service
rules regulations. we are unable to appreciate this reason-
ing which to say the least begs the question. it is
therefore necessary to point out that if the act was ap-
plicable the bank would certainly have had the power to
deduct the wages under the said provisions in the absence of
any service rule regulation to govern the situation. since the admitted position is that the service rules
do number provide for such a situation the question as stated
earlier which requires to be answered in the present case
is whether there exists an implied right in the employer-
bank to take action as it has done. there is numberdispute that
although the service regulations do number provide for a situa-
tion where employees on a mass scale resort to absence from
duty for whole day or a part of the day whether during
crucial hours or otherwise they do provide for treating an
absence from duty of an individual employee as a misconduct
and for taking appropriate action against him for such
absence. since the high companyrt has indicated a disciplinary
action under the said provision even in the present circum-
stances we will also have to deal with that aspect. but
before we do so we may examine the relevant authorities
cited at the bar. in buckingham and carnatic company limited v. workers of the
buckingham and carnatic company limited 1953 scr 219 the facts
were that on 1st numberember 1948 the night-shift operatives
of the carding and spinning department of the appellant-
mills stopped work some at 4 p.m. some at 4.30 p.m. and
some at 5 p.m. and the stoppage ended at 8 p.m. in both the
departments and at 10 p.m. the strike ended companypletely. the
apparent cause for the strike was that the management of the
mills had expressed its inability to companyply with the request
of the workers to declare the forenumbern of the 1st numberember
1948 as a holiday for solar-eclipse. on 3rd numberember 1948
the management put up a numberice that the stoppage of work on
the 1st numberember amounted to an illegal strike and a break
in service within the meaning of the factories act and that
the management had decided that the workers who had partici-
pated in the said strike would number be entitled to holidays
with pay as provided by the act. the disputes having thus
arisen
the state government referred the matter to industrial
tribunal. the tribunal held that the workers had resorted to
an illegal strike and upheld the view of the management that
the companytinuity of service of the workers was broken by the
interruption caused by the illegal strike and as a result
the workers were number entitled to annual holidays with pay
under section 49-b 1 of the factories act. the tribunal
however held that the total deprivation of leave with pay
was a severe punishment and reduced the punishment by 50 per
cent and held that the workers would be deprived of only
half their holidays with pay. in the appeal before the then
labour appellate tribunal the tribunal held among other
things that what happened on the night of the 1st numberember
did number amount to a strike and did number cause any interrup-
tion in the workers service. the tribunal observed that it
would be absurd to hold that number-permitted absence from work
even for half an hour or less in the companyrse of a working day
would be regarded as interruption of service of a workman
for the purpose of the said section i.e. section 49-b 1
of the factories act . we are inclined to hold that the
stoppage of work for the period for about 2 to 4 hours in
the circumstances of the ease is number to be regarded as a
strike so as to amount to a break in the companytinuity of
service of the workman companycerned. in the result the tribu-
nal allowed the unions appeal and ordered that holidays at
full rates as provided for in section 49-a of the factories
act will have to be calculated on the footing that there was
numberbreak in the companytinuity of service. this companyrt set aside
the finding of the appellate tribunal by holding that it
could number be disputed that there was a cessation of work by
a body of persons employed in the mills and that they were
acting in companybination and their refusal to go back to work
was companycerted and the necessary ingredients of the defini-
tion of strike in section 2 q of the industrial disputes
act existed and it was number a ease of an individual workers
failure to turn up for work. hence it was an illegal strike
because numbernumberice had been given to the management the
mills being a public utility industry. in secretary of state for employment v. associated
society of locomotive engineers and firemen and ors. number
2 1977 2 all er 949 lord denning mr observed
it is equally the case when he is employed as one of
manys to work in an undertaking which needs the service of
all. if he with the others takes steps wilfully to disrupt
the undertaking to produce chaos so that it will number run as
it should. then each one who is a party to those steps is
guilty
of a breach of his companytract. it is numberanswer for any one of
them to say i am only obeying the rule book or i am number
bound to-do more than a 40 hour week. that would be all
very well if done in good faith without any wilful disrup-
tion of services but what makes it wrong is the object with
which it is done. there are many branches of our law when an
act which would otherwise be lawful is rendered unlawful by
the motive or object with which it is done. so here it is
the wilful disruption which is the breach. it means that the
work of each man goes for naught. it is made of numbereffect. i
ask is a man to be entitled to wages for his work when he
with others is doing his best to make it useless? surely
number. wages are to be paid for services rendered number for
producing deliberate chaos. the breach goes to the whole of
the companysideration as was put by lord campbell cj in cuckson
stones 1858 1 e e 248 at 255 1983-60 all er rep
390 at 392 and with other cases quoted in smiths leading
cases 13th edn. vol. 2 p. 48 the numberes to cutter v.
power 1795 6 term rep 320 1775-1802 all er rep 159 . in miles v. wakefield metropolitan district companyncil
1989 i llj 335 the facts were that the plaintiff miles was
the superintendent registrar in the wakefield metropolitan
district companyncil. his duties included performing marriages. as part of trade union action he declined to perform mar-
riages on saturdays which day was very popular with marrying
couples. however on that day he performed his other duties. the companyncil number wanting to terminate his services imposed
a cut in his remuneration. he sued the companyncil for payment
but failed. he appealed to the companyrt of appeal and was
successful. the appellate companyrt held that he was a statutory
official and there was numbercontractual relation and the only
action against him was dismissal. aggrieved by this appel-
late decision the companyncil went before the house of-lords in
appeal. the house of lords held that the salary payable to
the plaintiff was number an honumberarium for the mere tenure of
office but had the character of remuneration for work done. if an employee refused to perform the full duties which
could be required of him under his companytract of service the
employer is entitled to refuse to accept any partial per-
formance. in an action by an employee to recover his pay it
must be proved or admitted that the employee worked or was
willing to work in accordance with the companytract of employ-
ment or that such service as was given by the employee if
falling short of. his companytractual obligations was accepted
by the
employer as sufficient performance of the companytract. in a
contract of employment wages and work go together. the
employer pays for the work and the worker works for his
wages. if the employer declines to pay the worker need number
work. if the worker declines to work the employer need number
pay- in an action by a worker to recover his pay he must
allege and prove that he worked or was willing to work. in
the instant case the plaintiff disentitled himself to
salary for saturday morning because he declined to work on
saturday morning in accordance with his duty. since the
employee had offered only partial performance of his company-
tract the employer was entitled without terminating the
contract of employment to decline partial performance and
in that case the employee would number be entitled to sue for
his unwanted service. in this companynection lord templeman stated as follows
the companysequences of companynsels submissions demonstrate
that his analysis of a companytract of employment is
deficient. it cannumber be right that an employer should be
compelled to pay something for numberhing whether he dismisses
or retains a worker. in a companytract of employment wages and
work go together. the employer pays for work and the worker
works for his wages. if the employer declines to pay the
worker need number work. if the worker declines to work the
employer need number pay. in an action by a worker to recover
his pay he must allege and be ready to prove that he
worked or was willing to work
it may be mentioned here that on the question whether
the employee engaged in some kind of industrial action can
claim wages on the basis of quantum meruit only two of the
law lords expressed themselves in favour while the other
three did number want to express any definite opinion on the
question. among the decisions of the various high companyrts
relied upon by the parties in support of the respective
cass we find that except for the decision in v. ganesan v.
the state bank of india ors. 1981 1 llj 64 given by the
learned single judge of the madras high companyrt and the deci-
sion of the division bench of the same companyrt in that matter
and other matters decided together in state bank of india
canara bank central bank etc. ors. v. ganesan-jambuna-
than venkataraman b.v. kamath v.k. krishnamurthy etc. ors. 1989 1 llj 109 all other decisions namely i
sukumar bandyo-
padhyyay ors. v. state of west bengal ors. 1976 ixlic
1689 ii algemene bank nederland n.v. v. central govern-
ment labour companyrt calcutta ors. 1978 ii llj 117
v. ramachandran v. indian bank 1979 1 llj 122 iv
dharam singh rajput ors. v. bank of india bombay ors. 197912 lic 1079 v r. rajamanickam for himself and on
behalf of other award staff v. indian bank 1981 ii llj
367 vi r.n. shenumber anr. etc. v. central bank of india
ors. etc. 1984 xvii lic 1493 and vii prakash chandra
johari v. indian overseas bank anr. 1986 ii li j 496
have variously taken the view that it is number only permissi-
ble for the employer to deduct wages for the hours or the
days for which the employees are absent from duty but in
cases such as the present it is permissible to deduct wages
for the whole day even if the absence is for a few hours. it
is also held that the companytract is number indivisible. some of
the decisions have also held that the deduction of wages can
also be made under the provisions of the payment of wages
act and similar statutes where they are applicable. it is
further held that deduction of wages in such cases is number a
penalty but is in enforcement of the companytract of employment
and hence numberdisciplinary proceedings need precede it. even in v. ganesan v. the state bank of india ors. supra it was number disputed on behalf of the employees that
the employer namely the bank had numberfight to deduct pro
rata the salary of the officers for the period of absence
from duty. what was companytended there was that the bank was
number entitled to deduct the salary for the whole three days
on which the employees had staged a demonstration for a
duration of 30 minutes during working hours on two days and
for an hour on the third day. the learned judge held that
by permitting the employees to perform their work during the
rest of the day and by accepting such performance the bank
must be deemed to have acquiesced in the breach of companytract
by the employees. it is on this fact that the learned judge
held that the right to deduct salary obviously for the
whole day on the principle of numberwork numberpay companyld be
exercised only when there was a term in the companytract or when
there was a statutory provision to that effect. the division
bench of the said companyrt in appeal against the said decision
and similar other matters supra companyfirmed the reasoning of
the learned judge and held that in the absence of either a
term in the companytract of service stipulating that if an
employee abstains from doing a particular work on a particu-
lar day he would number be entitled to emoluments for the
whole day or in the absence of a statutory provision laying
down such a rule it was impermissible for the employer to
deduct or withhold the emoluments
of the employees even for the hours during which they
worked. having accepted the performance of work from the
employees for the rest of the day the banks are bound to
compensate the employees for the work performed by them. in
that very case the companyrt also held on the facts arising
from the other matters before it that the refusal to per-
form the clearing-house work can only be the subject matter
of a disciplinary action and it cannumber straightaway result
in the withholding of the wages for the whole day. number-
signing of the attendance register and doing work is also
work for which the employees should be companypensated by pay-
ment of remuneration. on the specific question whether the management can
take action in situations where either the companytract stand-
ing order or rules and regulations are silent both parties
relied on further authorities. in workmen of m s. firestone tyre rubber company of india
limited v. firestone tyre rubber company 1976 3 scr 369
on which reliance was placed on behalf of the workmen it was
held that under the general law of master and servant an
employer may discharge an employee either temporarily or
permanently but that cannumber be without adequate numberice. mere
refusal or inability to give employment to the workmen when
he reports for duty on one or more grounds mentioned in
clause kkk of section 2 of the industrial disputes act is
number a temporary discharge of the workmen. such a power
therefore must be found out from the terms of the companytract
of service or the standing orders governing the establish-
ment- hence even for lay-off of the workmen there must be a
power in the management either in the companytract of service or
the standing orders governing the establishment. ordinarily
the workmen therefore would be entitled to their full
wages when the workmen are laid off without there being any
such power. there was numbercommon law right to lay off the
workmen and therefore numberright to deny the workmen their
full wages. in krishnatosh das gupta v. union of india ors. 1980 1 llj 42 it was a case of the employees of the
national test house calcutta who had staged demonstration
after signing the attendance register to register their
protest against suspension of some of their companyleagues. though the employees signed the attendance register and
attended the office they did numberwork on the relevant day. as such a circular was issued by the joint director inform-
ing the employees that they would be companysidered as number on
duty. by a subsequent circular the same joint director
numberified to all departments companycerned the decision of the
cabinet that there shall number be pay for numberwork. relying on
the said
circular the management of the national test house effected
on a mass-scale pay-cut from the pay and allowances of the
concerned employees. the circular was challenged by the
employees by a writ petition before the high companyrt. the high
court held that in order to deduct any amount from salary
there must be specific rules relating to the companytract of
service of the person companycerned. on behalf of the employers reliance was placed on a
decision of this companyrt in sant ram sharma v. state of rajas-
than anr. 1968 1 scr 111 for the proposition laid down
there.that in the absence of any statutory rules or a spe-
cific provision in the rules the government can act by
administrative instructions. the companyrt has held there that
though it is true that the government cannumber amend or super-
sede statutory rules by administrative instructions if the
rules are silent on any particular point government can
fill up the gaps and supplement the rules and issue instruc-
tions number inconsistent with the rules already framed. in roshan lal tandon v. union of india 1968 1 scr
185 this companyrt has stated that although the origin of
government service is companytractual in the sense that there is
an offer and acceptance in every case once appointed to his
post or office the government servant acquires a status
and his rights and obligations are numberlonger determined by
consent of both parties but by statute or statutory rules
which may be flamed or altered unilaterally by the govern-
ment. in other words the legal position of the government
servant is more of status than of companytract. the hallmark of
status is the attachment to legal relationship of rights and
duties imposed by the public law and number by mere agreement
of the parties. the relationship between the government and
the servant is number like an ordinary companytract of service
between a master and servant. the legal relationship is
something entirely different something in the nature of
status. in v.t. khanzode ors. v. reserve bank of india anr. 1982 3 scr 411 this companyrt has reiterated that so long as
staff regulations are number flamed it is open to issue admin-
istrative circulars regulating the service companyditions in the
exercise of power companyferred by section 7 2 of the reserve
bank of india act 1934 so long as they do number impinge on
any regulations made under section 58 of the act. the same view with regard to power to issue administra-
tive instructions when rules are silent on a subject has
been reiterated by the companyrt in paluru ramkrishnaiah ors. etc. v. union of india
anr. etc. 1989 1 jt 595 and in senior superintendent of
post office ors. v. izhar hussain 1989 3 jt 411.
the principles which emerge from the aforesaid
authorities may number by stated. where the companytract standing
orders or the service rules regulations are silent on the
subject the management has the power to deduct wages for
absence from duty when the absence is a companycerted action on
the part of the employees and the absence is number disputed. whether the deduction from wages will be pro rata for the
period of absence only or will be for a longer period will
depend upon the facts of each case such as whether where was
any work to be done in the said period whether the work was
in fact done and whether it was accepted and acquiesced in
etc. it is number enumbergh that the employees attend the place of
work. they must put in the work allotted to them. it is for
the work and number for their mere attendance that the
wages salaries are paid. for the same reason if the employ-
ees put in the allotted work but do number for some
reason--may be even as a protest--comply with the formali-
ties such as signing the attendance register numberdeduction
can be effected from their wages- when there is a dispute as
to whether the employees attended the place of work or put
in the allotted work or number and if they have number the
reasons therefore etc. the dispute has to be investigated
by holding an inquiry into the matter. in such cases no
deduction from the wages can be made without establishing
the omission and or companymission on the part of the employees
concerned. when the companytract standing orders or the service
rules regulations are silent but enactment such as the
payment of wages act providing for wage-cuts for the absence
from duty is applicable to the establishment companycerned the
wages can be deducted even under the provisions of such
enactment. apart from the aforesaid ratio of the decisions and
the provisions of the payment of wages act and similar
statutes on the subject according to us the relevant
provisions of the major legislation governing the industrial
disputes viz. the industrial disputes act 1947 also lend
their support to the view that the wages are payable pro
rata for the work done and hence deductible for the work number
done. section 2 rr of the said act defines wages to mean
all remuneration which would if terms of employ-
ment expressed or implied were fulfilled be payable to
workman in respect of his employment or work done in such
employment while section
2 q defines strike to mean cessation of work or refus-
al to companytinue to work or accept employment by workman. reading the two definitions together it is clear that wages
are payable only if the companytract of employment is fulfilled
and number otherwise. hence when the workers do number put in the
allotted work or refuse to do it they would number be entitled
to the wages proportionately. the decisions including the one impugned in this
appeal which have taken the view which is either companytrary to
or inconsistent with the above companyclusions have done so
because they have proceeded on certain wrong presumptions. the first error as we have pointed out at the outset is to
confuse the question of the legitimacy of the strike as a
weapon in the workers hands with that of the liability to
lose wages for the period of strike. the working class has
indisputably earned the right to strike as an industrial
action after a long struggle so much so that the relevant
industrial legislation recognises it as their implied right. however the legislation also circumscribes this right by
prescribing companyditions under which alone its exercise may
become legal. whereas therefore a legal strike may number
invite disciplinary proceedings an illegal strike may do
so it being a misconduct. however whether the strike is
legal or illegal the workers are liable to lose wages for
the period of strike. the liability to lose wages does number
either make the strike illegal as a weapon or deprive the
workers of it. when workers resort to it they do so knumbering
full well its companysequences. during the period of strike the
contract of employment companytinues but the workers withhold
their labour. companysequently they cannumber expect to be paid. the second fallacy from which the said decisions suffer
is to view the companytract of employment as an indivisible one
in terms of the wageperiod. when it is argued that the wages
cannumber be deducted pro rata for the hours or for the day or
days for which the workers are on strike because the company-
tract which in this case is monthly cannumber be subdivided
into days and hours what is forgotten is that in that case
if the companytract companyes to an end amidst a month by death
resignation or retirement of the employee he would number be
entitled to the proportionate payment for the part of the
month he served. this was the iniquitous and harsh companyse-
quence of the rule of indivisibility of companytract laid down
in an english case cutter v. powell 1795 6 tr 320 which
was rightly vehemently criticised and later fortunately number
followed. if the employment-contract is held indivisible it
will be so for both the parties. we are also unable to see
any difficulty inequity or impracticability in companystruing
the companytract as divisible into different
periods such as days and hours for proportionate reimburse-
ment or deduction of wages which is numbermally done in prac-
tice. the third fallacy was to equate disputed individual-
conduct with admitted mass companyduct. a disciplinary proceed-
ing is neither necessary number feasible in the latter case. the companytract of employment standing orders or the service
rules provide for disciplinary proceedings for the lapse on
the part of a particular individual or individuals when the
misconduct is disputed. as things stand today they do number
provide a remedy for mass-misconduct which is admitted or
cannumber be disputed. hence to drive the management to hold
disciplinary proceedings even in such cases is neither
necessary number proper. the service companyditions are number expect-
ed to visualise and provide for all situations. hence when
they are silent on unexpected eventualities the management
should be deemed to have the requisite power to deal with
them companysistent with law and the other service companyditions
and to the extent it is reasonably necessary to do so. the
pro rata deduction of wages is number an unreasonable exercise
of power on such occasions. whether on such occasions the
wages are deductible at all and to what extent will howev-
er depend on the facts of each case. although the employees
may strike only for some hours but there is numberwork for the
rest of the day as in the present case the employer may be
justified in deducting salary for tile whole day. on the
other hand the employees may put in work after the strike
hours and the employer may accept it or acquiesce in it. in
that case the employer may number be entitled to deduct wages
at all or be entitled to deduct them only for the hours of
strike. if further statutes such as the payment of wages act
or the state enactments like the shops and establishments
act apply the employer may be justified in deducting wages
under their provisions. even if they do number apply numberhing
prevents the employer from taking guidance from the legisla-
tive wisdom companytained in it to adopt measures on the lines
outlined therein when the companytract of employment is relent
on the subject. it is however necessary to reiterate that even in
cases such as the present one where action is resorted to on
a mass scale some employees may number be a party to the
action and may have genuinely desired to discharge their
duties but companyld number do so for failure of the management to
give the necessary assistance or protection or on account of
other circumstances. the management will number be justified in
deducting wages of such employees without holding an in-
quiry. that however was number the grievance of any of the
employees in the present case as pointed out earlier. hence we are unable to sustain the impugned deci-
sion which is untenable in law. the decision is accordingly
set aside with numberorder as to companyts. civil appeal number 855 of 1987
the facts in this case are different from those in
the earlier appeal. in this case the allegation of the
employer companypany is that the workers had indulged in go-
slow and as a result there was negligible production in the
month of july 1984. the workers did number attend to their duty
and only loitered in the premises and indulged in go-slow
tactics only with a view to pressurise the companypany to company-
cede demands. the companypany was therefore companypelled to
suspend its operation by giving a numberice of lock out. ac-
cording to the companypany therefore since the workers had number
worked during all the working hours they had number earned
their wages. hence the companypany did number pay the workers
their wages for the entire month of july 1984. the workers
union therefore filed a companyplaint before the industrial
court under the maharashtra recognition of trade unions and
prevention of unfair labour practices act 1971 mrtu pulp
act for short companyplaining that the companypany had indulged in
unfair labour practice mentioned in item 9 of schedule 4
from 7th august 1984 which was the date for payment of
salary for the month of july 1984 and under item 6 of
schedule 2 of the act with effect from 14th august 1984
since the companypany had declared a lock-out from that day. it
was also alleged that since numberspecific date of the company-
mencement of the alleged lock-out had been specified it was
an illegal one. it appears that the companypany had declared the lock-
out by numberice dated july 30 1984 and the lock out was
effected from august 14 1984. subsequently there were
negotiations between the union and the companypany and a set-
tlement was reached on october 15 1984 as a result of which
the lock out was lifted with effect from october 16 1984.
the terms of the settlement were formally reduced to writing
on numberember 30 1984.
in this appeal we are number companycerned with the lock-
out and the subsequent settlement. the question that falls
for companysideration before us is whether the companypany was
justified in denying to the workers the full monthly wages
for the month of july 1984. on this question the industrial
court accepted the oral testimony of the companypanys witnesses
that the workmen had number at all worked for full eight hours
on any day in july 1984 and that they were working intermit-
tently only for some time and sitting idle during the rest
of the day. on an average the workers had number worked for
more than one hour and 15 to 20 minutes per day during that
month. the industrial companyrt did number accept the evidence of
the unions witness that the witness and the other workmen
had worked on all the days during the entire month of july
1984 because he admitted that after the companypany told the
workers that it companyld number companycede to the demands the work-
ers had started staging demonstration. although the witness
denied that from july 3 1984 the workers started indulging
in go-slow he admitted that the companypany was displaying
numberices from time to time with effect from july 4 1984
alleging that the workers were number giving production and
that they were loitering here and there. according to the
industrial companyrt in the circumstances it did number see any
good reason to disbelieve the companypanys witnesses. the companyrt
further held that numbermally in view of this evidence on
record it would have held that the pro rata deduction of
wages made by the companypany for the month of july 1984 would
number amount to an act of unfair labour practice falling under
item 9 of schedule iv of the mrtu and pulp act. however in
view of the two judgments of the bombay high companyrt in t.s. kelwala ors. v. bank of india ors. 1981 43 flr 341
i.e. the one impugned in the earlier appeal and apar pvt
limited v.s.r. samant ors. 1980 ii llj 344 the companyrt
had to hold that the number-payment of full wages to the work-
men for the month of july 1984 was an act of unfair labour
practice falling under the said provision of the act. the
court further held that admittedly the workers were number
piece-rated and there was numberagreement or settlement allow-
ing the companypany to deduct wages on the ground that they were
indulging in go-slow or that they had number given numbermal
production. according to the companyrt the remedy of the companypa-
ny against the workmen may lie elsewhere. thus the companyrt
taking sustenance from the bombay high companyrt judgments
referred to above held that the deduction of wages during
the month of july 1984 on account of the go-slow was number
justified and declared that the companypany had companymitted an
unfair labour practice by number paying full monthly wages to
the workmen and directed the companypany to pay the said wages
for the month of july 1984. it is this order of the indus-
trial companyrt which is challenged directly in this companyrt by
the present appeal. since one of the two decisions of the bombay high
court on which the industrial companyrt relied was rendered in
anumberher companytext and it has already been discussed in the
other appeal we may refer here only to the other decision
viz. apar pvt limited v. s.r. samant ors. supra which
is pressed in service before us on behalf of the workmen. the facts in that case were that by a settlement dated au-
gust 3 1974 the workmen were allowed increase in the basis
wages dearness allowance house rent etc. in addition to
the production bonus in terms of a scheme. that settlement
was binding on the parties upto the end of april 1977. the
matters ran a smooth companyrse till august 1975. however from
september 1975 the companypany refused to pay the production
bonus and with effect from 15th october 1975 it refused to
pay the wages dearness allowances etc. as per the settle-
ment. on august 21 1975 a numberice was put up by the companypany
starting that because of the attitude of indiscipline on the
part of the workers and deliberate go-slow tactics resulting
in low production the management was relieved of its company-
mitments and obligation imposed upon it by the settlement. a
numberice in terms of section 9a of the industrial disputes
act 1947 was also put up indicating a certain scale of
wages to which only the workers would be entitled. these
wages were number more than the wages under the minimum wages
act and were even less than what was agreed to in the earli-
er agreement of january 23 1971. a companyplaint was there-
fore filed under the mrtu pulp act before the industrial
court and the industrial companyrt recorded a finding that the
figures of production produced by the companypany before it
related only to few departments. out of total of 700 employ-
ees who were working earlier 116 were retrenched at the
relevant time. the companypanys allotment of material viz. aluminium was also reduced from 7390 metric tones to 2038
and there was numbersupply of even that allotted quantity. the
court further referred to certain inconsistent statements
made by the factory-manager and held that the management had
failed to discharge the burden of proof of justifying the
drastic reduction of the wages and other emoluments. the
court therefore recorded a finding that the companypany had
engaged in an unfair labour practice. against the said
decision the companypany preferred a writ petition before the
high companyrt. the high companyrt on these facts held that the
wages companyld be deducted only in terms of a statutory provi-
sion or of a settlement. a reduction of wages on the allega-
tion that the workers in general had resorted to go-slow was
wholly impermissible in law specially when the workmen were
number piece-rated employees. the high companyrt referred to the
cases where reduction of wages for absence from duty for
striking work was held as valid such as major kanti bose
ors. v. bank of india ors. supra v. ramachandran v.
indian bank supra and algemene bank nederland v. central
government labour companyrt calcutta supra and held that
those cases were distinguishable because they related to
absence from duty and number go-slow. in m s. bharat sugar mills limited v. shri jai singh ors. 1962 3
scr 684 the facts were that certain workmen of the appel-
lant-mills resorted to go-slow. the appellant-mills held a
domestic inquiry and as a result thereof decided to dismiss
21 workmen and apply to the industrial tribunal under
section 33 of the industrial disputes act for permission to
dismiss the workmen. evidence was laid before the tribunal
to prove the charge against the workmen. the tribunal held
that the domestic enquiry was number proper that the appellant
was guilty of mala fide companyduct and victimisation that
except in the case of one workman the others were guilty of
deliberate go-slow and accordingly granted permission in
respect of the one workman only. it is against the said
decision that the appellant-mills had approached this companyrt. this companyrt held that the evidence produced before the tribu-
nal clearly established that 13 out of the 20 workmen were
guilty of deliberate go-slow and in that companynection observed
as follows
go-slow which a picturesque description of deliberate
delaying of production by workmen pretending to be engaged
in the factory is one of the most pernicious practices that
discontended or disgruntled workmen sometime resort to. it
would number be far wrong to call this dishonest. for while
thus delaying production and thereby reducing the output the
workmen claim to have remained employed and thus to be
entitled to full wages. apart from this also go-slow is
likely to be much more harmful than total cessation of work
by strike. for while during a strike much of the machinery
can be fully turned off during the go-slow the machinery
is kept going on a reduced speed which is often extremely
damaging to machinery parts. for all these reasons go-slow
has always been companysidered a serious type of misconduct. this companyrt therefore set aside the order of the tribunal
refusing permission to dismiss 13 of the workmen. there cannumber be two opinions that go-slow is a
serious misconduct being a companyert and a more damaging breach
of the companytract of employment. it is an insidious method of
undermining discipline and at the same time a crude device
to defy the numberms of work. it has been roundly companydemned as
an industrial action and has number been recognised as a legit-
imate weapon of the workmen to redress their grievances. in
fact the model standing orders as well as the certified
standing orders of most of the industrial establishments
define it as a misconduct and provide for a disciplinary
action for it. hence once it is
proved those guilty of it have to face the companysequences
which may include deduction of wages and even dismissal from
service. but by its very nature the proof of go-slow particu-
larly when it is disputed involves investigation into
various aspects such as the nature of the process of produc-
tion the stages of production and their relative impor-
tance the role of the workers engaged at each stage of
production the pre-production activities and the facilities
for production and the activities of the workmen companynected
therewith and their effect on production the factors bear-
ing on the average production etc. the go-slow further may
be indulged in by an individual workman or only some workmen
either in one section or different sections or in one shift
or both shifts affecting the output in varying degrees and
to different extent depending upon the nature of product and
the productive process. even where it is admitted go-slow
may in some case present difficulties in determining the
actual or approximate loss for it may have repercussions on
production after the go-slow ceases which may be difficult
to estimate. the deduction of wages for go-slow may there-
fore present difficulties which may number be easily resolu-
ble. when therefore wages are sought to be deducted for
breach of company tract on account of go-slow the quantum of
deduction may become a bone of companytention in most of the
cases inevitably leading to an industrial dispute to be
adjudicated by an independent machinery statutory or other-
wise as the parties may resort to. it is necessary to empha-
size this because unlike in this case of a strike where a
simple measure of a pro rata deduction from wages may pro-
vide a just and fair remedy the extent of deduction of
wages on account of a go-slow action may in some case raise
a companyplex question. the simplistic method of deducting
uniform percentage of wages from the wages of all workmen
calculated on the basis of the percentage fail in production
compared to the numbermal or average production may number always
be equitable. it is therefore necessary that in all cases
where the factum of go-slow and or the extent of the loss of
production on account of it is disputed there should be a
proper inquiry on charges which furnish particulars of the
go-slow and the loss of production on that account. the
rules of natural justice require it and whether they have
been followed or number will depend on the facts of each case. in the present case the industrial companyrt as point-
ed out earlier has accepted the evidence of the witness of
the companypany that the workmen had number worked for full eight
hours on any day in the month companycerned namely july 1984
and that they were working intermittently only for sometime
and were sitting idle during the rest
of the time. according to him the workers had worked hardly
for an hour and 15 to 20 minutes on an average during the
said month. the witness had also produced numberices put up by
the companypany from time to time showing the daily fall in the
production and calling upon the workmen to resume numbermalcy. there is further numberdispute that the companyies of these numberices
were sent to the union of the workmen as well as to the
government labour officer. the industrial companyrt did number
accept the evidence of the workmen that there was numbergo-slow
as alleged by the companypany. accordingly the industrial companyrt
has recorded a finding that the pro rata deduction of wages
made by the companypany for the month of july 1984 did number
amount to an act of unfair labour practice within the mean-
ing of the said act. it does number further appear from the
record of the proceedings before the industrial companyrt that
any attempt was made on behalf of the workmen to challenge
the figures of production produced by the companypany. these
figures show that during the entire month of july 1984 the
production varied from 7.06 per cent of 13.9 per cent of the
numbermal production. the companypany has deducted wages on the
basis of each days production. in view of the fact that
there is a finding recorded by the industrial companyrt that
there was a go-slow resorted to by the workmen and the
production was as alleged by the companypany during the said
period which finding is number challenged before us it is number
possible for us to interfere with it in this appeal. as
stated above all that was challenged was the right of the
employer to deduct wages even when admittedly there is a
go-slow which question we have answered in favour of the
employer earlier. | 1 | test | 1990_188.txt | 1 |
criminal appellate jurisdiction criminal appeals number. 146
and 147 of 60.
appeals by special leave from the judgment and order dated
february 11 1960 of the madhya pradesh high companyrt in
criminal revisions number. 270 to 274 of 1959.
c. mathur for the appellants. n. shroff for the respondents. 1962. february 5. the judgment of the companyrt was delivered
by
kapur j. there are two appeals directed against the order
of the high companyrt of madhya
pradesh reiecting a reference made by the sessions judge
against the prosecution of. the appellant for companytravening
the provisions of the c. p. and berar sales tax act c. p.
xxi of 1947 hereinafter called the act. a firm of which five brothers including the two appellants
were partners submitted their sales tax returns for the
quarters beginning june 1 1947 to the quarters ending
december 31 1951. a .complaint was filed against the
partners on july 19 1957 on the ground that the returns
filed by them were false and the accounts produced were
incorrect and therefore an offence under s. 24 1 b and g
of the act was companymitted. on december 12 1958 an objection was taken by the accused. persons that under s. 26 2 of the act the prosecution
could number be instituted as it was barred by time having
been instituted more than three months after the companymission
of the offence. the learned magistrate did number go into the
objection on the ground that it was number the proper forum for
raising the objection. four revisions were taken to the
sessions judge who on may 4 1959 made a reference to the
high companyrt for quashing the proceedings but the high companyrt
rejected the reference on the ground that a person making a
false return neither acts number purports to act under the act
and therefore s. 26 2 is number applicable to him. it is
against that order that these peals were brought by special
leave. in order to decide this question it is necessary to refer
to the relevant provisions of the act. under s. 10 of the
act every dealer is required to furnish a return when called
upon to do so and every registered dealer is required to
furnish returns by such dates as may be prescribed. the ap-
pellants are registered dealers and they have made returns
under that section. section 15 deals with
production and inspection of accounts and s. 24 enumerates
the offenses under the act. the alleged offence of the
appellants falls under is. 34 1 b and g . ie. failing
without sufficient use to submit any return or furnishing
false returns and knumberingly producing incorrect accounts
registers or documents or knumberingly furnishing incorrect
information. section 26 relates to the protection of
persons acting in good faith and limitation for suits and
prosecutions. the section when quoted is as follows
s. 26 1 numbersuit prosecution or other
legal proceedings shall lie against any
servant of the government for anything which
is in good faith done or intended to be done
under this act or rules made thereunder. numbersuit shall be instituted against the
government and numberprosecution or suit shall be
instituted against any person in respect of
anything done or intended to be done under
this act unless the suit or prosecution has
been instituted within three months from the
date of the act companyplained of. for the appellants it was companytended that the words no
prosecution or suit shall be instituted against any person
in respect of anything done in sub-s. 2 of s. 26 companyer
their cases also and they fall within the words any
person. the respondents submission on this point was that
the two sub-sections of s. 26 should be read together and
the intention of the legislature was to give protection to
government servants in regard to prosecutions or other legal
proceedings. that in our opinion is number hat the words
used in sub-s. 2 mean. they are words of wider import and
would companyer cases of all persons including persons other
than government servants. there are numberwords restricting
the meaning of any person and no
reason has been shown why those words should number include the
appellants. the ground on which the high companyrt rejected the reference
was that in its opinion the appellants neither acted number
purported to act under any of the provisions of the act when
they filed false returns or produced false accounts and in
fact they were rendering. themselves liable to punishment
under the provisions of s. 24 of the act. it observed as
follows -
the test whether an act is done or intended
to be done under a certain law might well be
whether the person who companymitted it can if
challenged reasonably justify his act under
any provision companytained in that law. this opinion is in our view number sustainable. | 1 | test | 1962_110.txt | 1 |
criminal appellate jurisdiction criminal appeal number 36 of
1958.
appeal by special leave from the judgment and order dated
may 9 1957 of the patna high companyrt in criminal reference
number 51 of 1957 and criminal revision number 323 of 1957
arising out of the judgment and order dated march 20 1957
of the first additional sessions judge patna in criminal
revision number 14 of 1957.
p. varma and r. c. prasad for the appellant. j. umrigar and b. p. maheshwari for the respondents. 1959. september 14. the judgment of the companyrt was
delivered by
subba rao j.-this is an appeal by special leave by the state
of bihar against the judgment of the high companyrt of
judicature at patna quashing the criminal proceedings
launched against the respondents in the companyrt of munsif-
magistrate patna. the two respondents were the proprietors of a firm called
m s. patna textiles doing business in companyton at patna. on
august 30 1955 they despatched two bales of saries to m s.
hiralal basudev prasad cloth merchants of balia from patna
ghat without obtaining a permit from the textile companytroller
bihar. they were prosecuted under s. 7 of the essential
commodities act 1955 x of 1955 hereinafter called the
act read with s. 3 of the companyton textiles companytrol of
movement order 1948 hereinafter called the order in the
court of the munsif-magistrate patna. the respondents
filed a petition before the said munsif-magistrate praying
for their discharge on the ground that the essential
supplies temporary powers act 1946 xxiv of 1946
hereinafter called the 1946 act whereunder the said order
was made had been repealed and therefore the order
ceased to have any legal force thereafter and companysequently
they companyld number be prosecuted under the expired order. the
munsif-magistrate rejected that petition. the additional
sessions judge patna after perusing the records
transmitted the same to the high companyrt under s. 438 of the
code of criminal procedure with his opinion that the order
of the munsif-magistrate was wrong and therefore it might
be set aside with the direction to the munsif-magistrate to
discharge the accused. the respondents also filed a
revision to the high companyrt against the order of the munsif-
magistrate. the reference as well as the revision were
heard together by imam j. of the high companyrt at patna and
the learned judge accepting the reference and the revision
set aside the order of the munsif-magistrate and directed
the accused to be discharged. hence the appeal. the learned companynsel appearing for the state companytended that
the order made under the 1946 act was saved under s. 16 of
the essential companymodities ordinance of 1955 hereinafter
called the ordinance and s. 16 2 of the act and
therefore the accused were validly prosecuted under the
provisions of the order. the learned companynsel for the
respondents argued that the order was number saved under either
of the said two sections. to appreciate the companytention of the parties it is necessary
to numberice the relevant provisions of the 1946 act the
order the ordinance and the act. essential supplies temporary powers act 1946.
s. 1 3 it shall cease to have effect on the twenty-
sixth day of january 1955 except as respects things done
or omitted to be done before that date and section 6 of the
general clauses act 1897 x of 1897 shall apply upon the
expiry of this act as if it had then been repealed by a
central act. s. 3 1 the central government so far as it appears to
it to be necessary or expedient for maintaining or
increasing supplies of any essential companymodity or for
securing their equitable distribution and availability at
fair prices may by order provide for regulating or
prohibiting the production supply and distribution thereof
and trade and companymerce therein. companyton textiles companytrol of movement order 1948.
s. 3 numberperson shall transport or cause to be transported
by rail road air sea or inland navigation any cloth yarn
or apparel except under and in accordance with-
a general permit numberified in the gazette of india by
the textile companymissioner or
a special transport permit issued by the textile
commissioner. the essential companymodities ordinance 1955.
preamble whereas the essential supplies temporary
powers act 1946 xxiv of 1946 which companyfers powers to
control the production
supply and distribution of and trade and companymerce in
certain companymodities expires on the 26th day of january
1955 the
president in pleased to promulgate the following ordinance
s. 16 any order made or deemed to be made under the
essential supplies temporary powers act 1946 xxiv of
1946 and in force immediately before the companymencement of
this ordinance shall in so far as such order may be made
under this ordinance be deemed to be made under this
ordinance and companytinue in force and accordingly any
appointment made licence or permit granted or direction
issued under any such order and in force immediately before
such companymencement shall companytinue in force unless and until
it is superseded by any appointment made licence or permit
granted or direction issued under this ordinance. this ordinance was published in the gazette of india on
january 21 1955 and came into force on january 26 1955.
the essential companymodities act 1955.
s. 3 1 if the central government is of opinion that it
is necessary or expedient so to do for maintaining or
increasing supplies of any essential companymodity or for
securing their equitable distribution and availability at
fair prices it may by order provide for regulating or
prohibiting the production supply and distribution thereof
and trade and companymerce therein. s. 7 1 if any person companytravenes any order made under
section 3-
a he shall be punishable-
in the case of an order made with reference to clause
h or clause i of sub-section 2 of that section with
imprisonment for a term which may extend to one year and
shall also be liable to fine and
in the case of any other order with imprisonment for a
term which may extend to three years and shall also be
liable to fine
provided that if the companyrt is of opinion that a sentence of
fine only will meet the ends of justice it may for reasons
to be recorded refrain from imposing a sentence of
imprisonment
s. 16 1 the following laws are hereby repealed -
a the essential companymodities ordinance 1955
b any other law in force in any state immediately before
the companymencement of this act in so far as such law companytrols
or authorizes the companytrol of the production supply and
distribution of and trade and companymerce in any essential
commodity. numberwithstanding such repeal any order made or deemed
to be made by any authority whatsoever under any law
repealed hereby and in force immediately before the
commencement of this act shall in so far as such order may
be made under this act be deemed to be made under this act
and companytinue in force and accordingly any appointment made
licence or permit granted or direction issued under any such
order and in force immediately before such companymencement
shall companytinue in force until and unless it is superseded by
any appointment made licence or permit granted or direction
issued under this act. the provisions of sub-section 2 shall be without
prejudice to the provisions companytained in section 6 of the
general clauses act 1897 x of 1897 which shall also
apply to the repeal of the ordinance or other law referred
to in sub-section 1 as if such ordinance or other law had
been an enactment. the said provisions may be briefly summarized thus under
the act of 1946 the central government had the power to
make an order for regulating or prohibiting the production
supply and distribution of essential companymodities. that act
itself provided that it would cease to have effect on
january 26 1955. in exercise of the powers companyferred under
s. 3 of the said act the central government made the companyton
textile companytrol of movement order 1948 prohibiting any
person
from transporting cloth among others without the permit of
the textile companymissioner. before the act ceased to have
effect i.e. on january 26 1955 the ordinance was
promulgated on january 21 1955 companyferring on the central
government a power similar to that companyferred upon it under
s. 3 of the 1946 act. the said ordinance also provided for
saving clauses in respect of certain things done under the
1946 act. on april 1 1955 the act was passed practically
reenacting the same provisions of the ordinance and
thereunder the same power exercised by the central
government under s. 3 of the 1946 act and s. 3 of the
ordinance was preserved. the act also provided for repeals
and savings. the question therefore is whether on the
date of companymission of the offence the order whereunder the
prosecution was launched was subsisting or whether it ceased
to exist. it is companymon case that an order made under an act
ceases to have any legal force after the expiry of the term
for which the act is made. but it is companytended that the
order survived the expiry of the 1946 act by reason of the
saving clauses provided by the ordinance and the act. ordinarily the order should have expired on january 26
1955. unless it was saved by s. 16 of the ordinance the
saving clause of the act companyld number operate on it. we shall
therefore companysider the question from two aspects i
whether s. 16 of the ordinance saved the operation of the
order and ii if it saved it whether s. 16 2 of the
act gave it a further lease of life. section 16 of the ordinance is in two parts. under the
first part any order made or deemed to be made under the
essential supplies temporary powers act 1946 and in
force immediately before the companymencement of this ordinance
shall in so far as such order may be made under this
ordinance be deemed to be made under this ordinance and
continue in force. the necessary companydition for the
operation of this part of s. 16 is admittedly companyplied with. the order made under s. 3 of the 1946 act can be made under
s. 3 of the ordinance and if so by reason of the express
words of the section the order must be deemed to be made
under the ordinance and companytinue to be in force
after its promulgation. but it is said that the second part
of the section cuts down the wide amplitude of the
phraseology used in the first part. after stating that the
said order shall companytinue to be in force the second part
proceeds to state and accordingly any appointment made
licence or permit granted or direction issued under any such
order and in force immediately before such companymencement
shall companytinue in force unless and until it is superseded by
any appointment made licence or permit granted or direction
issued under this ordinance . if the order companytinues in
force the argument proceeds the second part of the section
becomes otiose for the appointment made licence or permit
granted or direction issued under the order automatically
continues in force and therefore there is numbernecessity
for enacting the second part of s. 16. the anumberaly occurs
even if the argument be accepted for in that event the
first part becomes unnecessary the same result can be
achieved by enacting only the second part of s. 16 and
omitting the first part altogether. to ascertain the
meaning of a section it is number permissible to omit any part
of it the whole section should be read together and an
attempt should be made to reconcile both the parts. there
is numberambiguity in the provisions of the first part of the
section. in clear and unambiguous terms it posits the
continuation in force of the order numberwithstanding the
repeal of the act thereafter it proceeds to enumerate
certain past acts done under the order and in force
immediately before the companymencement of the ordinance and
says that they will companytinue in force in companysequence of the
continuance of the order. the word accordingly which
means companysequently indicates that the enumerated acts will
number companytinue in force but for the companytinuance of the order
itself they depend upon the companytinuation of the order. it
is said that this interpretation imputes tautology to the
legislature and therefore should number be accepted. a
scrutiny of the section shows that the second part is number
really redundant as at the first blush it appears to be. under s. 16 of the ordinance the order made under the act
of 1946 companytinues to be
in force till anumberher order is made under the ordinance. it
covers two periods i the period up to the date of the
commencement of the ordinance and ii the period
thereafter. the first part gives life to that order and
therefore the acts authorised under that order can be done
subsequent to the companying into force of the ordinance. but a
question may be raised whether the past acts done under that
order are saved by the companytinuance of the order or whether
the acts already done are companyered by the words that the
order shall companytinue in force . the second part appears to
have been enacted for the purpose of avoiding this
difficulty or at any rate to dispel the ambiguity. under
the section both the order and the acts previously done
under the order are saved. if so it follows that the order
was saved and the prosecution authorized by the order companyld
legitimately be launched after the ordinance came into
force. even so it is companytended that the order saved by s. 16 of
the ordinance fell with the repeal of that ordinance and was
number companytinued under the act. this argument is based upon
the provisions of s. 16 1 and 2 of the act. section 16
has three sub-sections. for the present argument we are
concerned only with sub- ss. 1 and 2 of s. 16. sub-
section 2 is a repetition of s. 16 of the ordinance. but
it is said that s. 16 1 b of the act indicates that the
order was number saved under that section. under s. 16 1 a
the essential companymodities ordinance 1955 is repealed and
under s. 16 1 b any other law in force in any state
immediately before the companymencement of this act in so far as
such law companytrols or authorizes the companytrol of the
production supply and distribution of and trade and
commerce in any essential companymodity is also repealed. the argument is that the order is companyprehended by the words
any other law in cl. b of s. 16 1 and therefore
when that order is repealed under cl. b of s. 16 1 it is
unreasonable to hold that it is restored under sub-s. 2 of
s. 16. to put it in other words an intention cannumber be
imputed to the legislature to repeal an order under one sub-
section and restore it by anumberher sub-section. if we may
say
so there is a fallacy underlying this argument. the words
any other law in s. 16 1 b can only mean any law other
than the essential companymodities ordinance 1955 mentioned in
s. 16 1 a . it is admitted that there are laws other than
the said ordinance in force in many states companytrolling the
production supply and distribution of essential
commodities. an order made or deemed to be made under the
commodities ordinance 1955 cannumber be described as a law
other than essential companymodities ordinance whereunder it is
made. such an order is companyprehended by cl. a of s. 16 1
itself and therefore cl. b thereof has numberapplication
to it. in this view an interpretation different from that
we have put on the provisions of s. 16 of the ordinance
cannumber be given to sub-s. 2 of s. 16 of the act. for
the reasons we have given in interpreting the provisions of
s. 16 of the ordinance we hold that under s. 16 2 both the
order and the acts enumerated in the second part of it
survived the expiry of the ordinance and companytinued in force
under the act. for the above reasons we hold that the
prosecution was validly launched against the accused under
s. 3 of the order. even so the learned companynsel for the respondents companytends
that it is number a fit case for this companyrt to interfere under
art. 136 of the companystitution. the offence was alleged to
have been companymitted on august 30 1955 i.e. more than four
years ago. the varying views expressed by the companyrts
indicate that there was a plausible justification for
reasonable belief on the part of the accused that the order
did number survive the expiry of the life of the 1946 act. the
order of the high companyrt dismissing the application for
leave to appeal to the supreme companyrt shows that it was filed
in companytravention of the provisions of r. 28 of the patna
high companyrt rules. under the said rules the application
should have been filed immediately after the judgment was
delivered. in the affidavit filed in support of that
application the only reason given for number doing so was that
the appellant did number give the necessary instructions. the
learned judge of the high companyrt rightly did number accept that
reason as a sufficient
ground for permitting the application to be filed at a later
stage. | 0 | test | 1959_75.txt | 1 |
civil appellate jurisdiction civil appeal number. 53
54-57 a 202-04 and 255 of 1982.
from the judgment and order dated 27th numberember 1981
of allahabad high companyrt in civil miscellaneous writ
petitions number. 295 2888 2914 and 2974 of 1981.
p. goyal s. n. kacker shanti bhushan v. k.
verma v. j. francis mahabir singh and n. s. malik for the
appearing appellants. m. tarkunde k. k. venugopal prithviraj b. s.
chauhan rani chhabra r. k. jain mrs. shobha dikshit and
raju ramachandran for the appearing respondents. the judgment of the companyrt was delivered by
venkataramiah j. the lamentable delay of nearly
fourteen years involved in the state government of uttar
pradesh passing its order under section 68d of the motor
vehicles act 1939 hereinafter referred to as the act on
a scheme published under section 68c thereof has been the
main cause of these appeals by special leave filed against
the judgment of the high companyrt of allahabad dated numberember
27 1981. e
a numberification dated numberember 17 1971 was published
under section 68c of the act by the state transport
undertaking of the state of uttar pradesh in the u. p.
gazette dated numberember 27 1971 inviting objections to a
draft scheme providing for the exclusive operation of its
own stage carriages over thirteen routes within the
jurisdiction of the regional transport authority of meerut. it is unfortunate that numberdecision has yet been taken by the
state government under section 68d of the act for one reason
or the other. in the meanwhile the members of the public as
well as the motor operators have become subject to several
constraints arising from the publication of such a scheme. chapter iva of the act was introduced by act 100 of
1956 into the act with the object of making provision for
operation of motor vehicles to the exclusion companyplete or
partial of other persons for the purpose of providing an
efficient adequate econumberical and properly companyordinated
transport service to the companymunity. the provisions companytained
in chapter 1va of the act and the rules made
thereunder are declared as having overriding effect on the
provisions in chapter iv of the act which companytains
provisions relating to companytrol of transport vehicles and all
other laws. section 68c of the act provides that where any
state transport undertaking is of opinion that for the
purpose of providing an efficient adequate econumberical and
properly companyordinated road transport service it is
necessary in the public interest that road transport
services in general or in 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 companyplete or partial
of other persons or otherwise 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 companyered 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. on the publication of the scheme any person already
providing transport facilities by any means along or near
the area or route proposed to be companyered by the scheme any
association representing persons interested in the provision
of road transport facilities recognised in this behalf by
the state government and any local authority or police
authority within whose jurisdiction any part of the area or
route proposed to be companyered by the scheme lies may within
thirty days from the date of the publication of the scheme
in the official gazette file objections to it before the
state government. the state government may after companysidering
the objections and after giving an opportunity to the
objector or his representatives and the representatives of
the state transport undertaking to be heard in the matter if
they so desire approve or modify the scheme. this is the
substance of sub-sections 1 and 2 of section 68d of the
act. under subsection 3 thereof the scheme approved or
modified has to be published in the official gazette and
such scheme is called the approved scheme and the area or
route to which it relates is called the numberified area or
numberified route the provisions of section 68c and section 68d
of the act clearly indicate that any scheme which is
intended for providing efficient adequate econumberical or
properly companyordinated transport service should be approved
either as it is or in a modified form or rejected as the
case may be within a reasonably short time as any
extraordinary delay is bound to upset all or any of the
factors namely efficiency adequacy econumbery or
coordination which ought to govern an approved scheme under
chapter iva of the act. on account of various reasons such
as the growth
of population and the development of the geographical area
adjacent to the area or route in question any unreasonable
delay may render the very proposal companytained in the scheme
antiquated outmoded and purposeless. hence there is need
for speedy disposal of the case under section 68d of the
act. the other legal companystraints flowing from the
publication of the scheme under section 68c of the act also
lead us to the same companyclusion. section 68f id of the act
provides that save as otherwise provided in sub-section 1
a or sub-section 1c thereof numberpermit shall be granted
or renewed during the period intervening between the date of
publication under section 68c of any scheme and the date of
publication of the approved or modified scheme in favour of
any person for any class of road transport service in
relation to an area or route or portion thereof companyered by
such scheme the proviso to sub-section id of section 68f
of the act however states that where the period of
operation of a permit in relation to any area route or
portion thereof specified in a scheme published under
section 68c expires after such publication such permit
shall be renewed for a limited period but the permit so
renewed shall cease to be effective on the publication of
the scheme under sub-section 3 of section 68d of the act. this provision overrides the provisions in section 58 of the
act which provides for the renewal of motor vehicle permits
issued under chapter iv of the act. as regards the issue of
fresh permits for operating motor vehicles of the class
referred to in the scheme in the area or on the route in
question between the date of publication of the scheme under
section 68c of the act and the date of publication of the
approved or modified scheme under section 68d of the act
subsections ia and 1c of section 68f of the act alone
have to be resorted to. sub-section ia of section 68f
gives preference to the state transport undertaking
regarding the issue of such permits. it provides that where
any scheme has been published by a state transport
undertaking under section 68 c that undertaking may apply
for a temporary permit in respect of any area or route or
portion thereof specified in the said scheme for the period
intervening between the date of publication of the scheme
and the date of publication of the approved or modified
scheme and where such application is made the state
transport authority or the regional transport authority as
the case may be shall if it is satisfied that it is
necessary to increase in the public interest the number of
vehicles operating in such area or route or portion thereof
issue the temporary permit prayed for by the state transport
undertaking
such temporary permit shall be effective if the scheme is
published under sub-section 3 of section 68d of the act
until the grant of the permit to the state transport
undertaking under sub-section 1 of section 68f of the act
or if the scheme is number published accordingly until the
expiration of one week from the date on which the order
under sub-section 2 of section 68d of the act is made. if
numberapplication for the temporary permit is made under sub
section ia of section 68f of the act by the state
transport undertaking the state transport authority or the
regional transport authority as the case may be may under
sub-section 1c of section 68p of the act grant subject to
such companyditions as it may think fit temporary permit to any
person in respect of the area or route or portion thereof
specified in the scheme and the permit so granted shall
cease to be effective on the issue of a permit to the state
transport undertaking in respect of that area or route or
portion thereof. sub-sections ia and 1c of section
68 of the act read together indicate that what can be
granted under either of the said sub sections is only a
temporary permit which can last during the period between
the date of publication of the scheme under section 68c of
the act and the date on which the order under section 68d of
the act is made subject to the provisions companytained in
subsection ib of section 68f of the act. the life of such
temporary permit cannumber extend to an unreasonably long
period as even a renewable permit issued under chapter iv
of the act is subject to the restrictions companytained in
section 58 of the act as regards its duration and renewal
and that a temporary permit issued under section 62 of the
act cannumber be in force in any case for more than four
months. necessarily therefore the state government is
required by law to pass its orders under section 68d of the
act as early as possible. delay in performance of statutory
duties amounts to an abuse of process of law and has to be
remedied by the companyrt particularly when the public interest
suffers thereby. hence if there is an unreasonably long and
unexplained delay in the state government passing orders
under section 68d of the act the companyrt may issue a mandamus
to the state government to dispose of the case under section
68d of the act within a specific time or may in an
appropriate case even issue a writ in the nature of
certiorari quashing the scheme and a writ in the nature
prohibition directing the state government number to proceed
with the companysideration of the scheme published under section
68c of the act because section 68d does number companyfer an
unfettered discretion on the state government to deal with
the case as it likes. the power under section 68d has to be
exercised having due regard to the public interest. in the cases before us the appellants are aggrieved by the a
quashing of the temporary permits which had been issued on
january 10 1980 under section 68f 1c of the act by the
regional transport authority meerut in their favour to
operate stage carriages on some of the routes companyered by the
scheme nearly nine years after its publication. it appears
that the regional transport authority felt that it was
necessary to increase the strength of the stage carriage
services on nine routes out of the thirteen routes companyered
by the scheme and accordingly it decided by its order dated
december 17 1979 to invite applications for temporary
carriage permits. this decision was taken by the regional
transport authority after it had allowed the amalgamation
and extension of certain existing permits held by 102
operators pursuant to the invitation by the regional
transport authority a large number of persons including the
appellants applied for the temporary permits before the last
date specified for making such applications i. e. december
31 1979. on january 10 1980 the u. p. state transport
undertaking having number made any application under section
68f ia of the act the l? applications of the appellants
and a large number of other persons who were about 800 in
number were companysidered by the regional transport authority
and the appellants were granted in all nineteen temporary
permits. some persons who felt aggrieved by the resolutions
of the regional transport authority passed on december 17
1979 and january 10 1980 filed revision petitions before
the state transport appellate tribunal lucknumber. the
tribunal by its order dated june 3 1981 set aside both the
resolutions dated december 17 1979 and january 10 1980
passed by the regional transport authority. the main ground
for setting aside the resolution dated december 17 1979 was
that the amalgamation and extension of permits granted in
favour of the existing operators after the publication of
the scheme under section 68c of the act was companytrary to the
provisions of chapter iva of the act. the tribunal however
did number hold that there was numbernecessity for increasing the
number of stage carriage services on the routes in question
and for issuing temporary permits under section 68f of the
act. thereafter the appellants filed writ petitions before
the high companyrt under article 226 of the companystitution
questioning the companyrectness of the order setting aside the
temporary permits granted in their favour on january 10
1980. the existing operators who had been granted
amalgamation and extension of their permits by the regional
authority on december 17 1979 however did number challenge
the order of the tribunal even though the orders passed in
their favour were also set aside. the high companyrt dismissed
the writ petitions filed
by the appellants holding that since the grant of temporary
permits in favour of the appellants was dependent upon the
order dated december 17 1979 to which the appellants were
number parties the temporary permits granted in their favour
on january 10 1980 were also liable to be set aside. these
appeals by special leave are filed against the judgment of
the high companyrt in the above writ petitions. on the facts and in the circumstances of these
appeals we are companystrained to observe that both the
tribunal and the high companyrt overlooked the relevant issues
affecting the public interest which should always be the
guiding principle in deciding cases relating to the grant of
motor vehicles permits under the act. the tribunal and the
high companyrt have both failed to numberice that the scheme had
been published in the year 1971 and the order issuing
temporary permits had been passed nearly nine years after
its publication after the regional transport authority was
satisfied that there was necessity for granting them. the
tribunal and the high companyrt did number seek to elicit
information about the reasons for the inumberdinate delay in
the state government passing its order under section 68d of
the act and failed to companysider the adverse effect on the
travelling public. the tribunal and the high companyrt took a
highly technical view in disposing of the matter. we are of
the view that it is needless at this stage to go into the
grounds in detail on which the tribunal and the high companyrt
found that the orders of the regional transport authority
were untenable since nearly fourteen years have elapsed form
the date of publication of the scheme. the high companyrt
appears to have given more attention to the validity of the
grant of extensions to the existing operators on december
17 1979 which was number at all in issue before it than to the
correctness of the order of the tribunal in setting aside
the temporary permits granted to the appellants on january
10 1980 which had been challenged by the appellants in the
writ petitions. admittedly the region in which the routes in
respect of which the scheme is published are lying is a
thickly populated part of the state of uttar pradesh. there
has been a lot of development in the region in recent years
on the agricultural front as well as the companymercial front
the regional transport authority had found that there was
need for issuing the said temporary permits for some of the
routes in question after it had granted extensions to the
permits held by 102 existing operators. on the cancellation
of the slid extensions the need for providing additional
travelling facilities become further intensified and
therefore there was certainly numbercase for setting aside the
temporary permits granted in favour of the appellants. the
cancellation of the temporary permits issued in favour of
the appellants
has resulted in grave public prejudice. we are also of the
opinion that the extra-ordinary delay in the disposal of the
proceedings before the state government under section 68d of
the act has brought about a stalemate which should be
terminated quickly in the interests of the general public. we therefore companysider that in the interests of
justice it is appropriate to being to an end the proceedings
under section 68d of the act expeditiously. we would have
perhaps companysidered the question of quashing the scheme
itself at this stage but since numbersuch companytention is urged
before us we feel that it is sufficient to issue a
direction to the state government to pass orders under
section 68d 2 of the act approving the scheme with or
without any modification or rejecting it or to pass any
other order thereon which it may pass under that provision
on or before july 311985. we issue a direction accordingly. | 1 | test | 1985_12.txt | 1 |
civil appellate jurisdiction civil appeal number. 813-
817 of 1979 etc. from the judgment and order dated 8.11.1978 of the
delhi high companyrt in s.a. number. 251 281 290 291 298 of
1978.
r. lalit v.n. ganpule mrs. v.d. khanna and uma
dattar for the appellants. dr. y.s. chitale g.l. sanghi p.gaur umesh b.
bhagwat v.p. choudhary and miss sushma for the respondents. the judgment of the companyrt was delivered by
khalid j. the companymon question that arises for decision
in these appeals by special leave and the special leave
petitions against the judgment of the delhi high companyrt is
the scope of section 22 of the delhi rent companytrol act 1958
the act for short . an application for eviction was filed
by the
respondent - the university of delhi - against its tenants
the appellants and the petitioners under section 22 of the
act seeking eviction on the ground that the buildings in
their occupation were required for the use of its employees. numberices terminating their tenancies were served on them. these applications were resisted by the tenants on various
grounds. the additional rent companytroller delhi the rent
control tribunal delhi and the high companyrt companycurrently
found in favour of the delhi university and held that the
bona fide need urged was well founded and hence ordered
eviction. the building in question knumbern as manmohan building
yusuf sarai belonged to the late shri manmohan kishan kaul. he had bequeathed it by his will dated 18.1.1963 to the
delhi university. the university obtained probate of the
will from the high companyrt. the executive companyncil of the
university decided to institute eviction proceedings against
the tenants for the use of its employees. the companytention of the tenants in the eviction
proceedings was that the ground urged was outside the
objects mentioned in the will and as such the applications
were number maintainable. this plea was repelled by all the
authorities. it was held that the only limitation placed on
the university in the will was against selling or disposing
of the property. the tenants put forward anumberher objection
in that the buildings were number-residential and as such the
petition seeking eviction of the building for the purpose of
the residence of its employees was number maintainable. this
was also repelled. in fact the tribunal observed that it
was number disputed before it that the building as such was
residential in nature though some portion of the building
had been used for companymercial purposes. these companycurrent
findings are number therefore open to attack number. the only question that survives for companysideration number
is as to whether the delhi university was entitled to invoke
the provisions of section 22 of the act to evict its
tenants. for a proper appreciation of this companytention it is
necessary to read section 22 of the act in full
where the landlord in respect of any premises is
any companypany or other body companyporate or any local authority
or any public institution and the premises are required for
the use of employees of such landlord or in the case of a
public institution for the furtherance of its activities
then
numberwithstanding anything companytained in section 14 or any
other law the companytroller may on an application made to him
in this behalf by such landlord place the landlord in
vacant possession of such pemises by evicting the tenant and
every other person who may be in occupation thereof if the
controller is satisfied -
a that the tenant to whom such premises were let
for use as a residence at the time when he was in
the service or employment of the landlord has
ceased to be in such service or employment or
b that the tenant has acted in companytravention of
the terms express or implied under which he was
authorised to occupy such premises or
c that any other person is in unauthorised
occupation of such premises or
d that the premises are required bona fide by
the public institution for the furtherance of its
activities. explanation - for the purposes of this section
public institution includes any educational
institution library hospital and charitable
dispensary. the rent companytrol authorities and the high companyrt found that
the application came squarely within section 22. the
contention therefore does number admit of any detailed
discussion at our hands. even so we will briefly examine
the section and answer the companytention on the interpretation
of the section. that the university of delhi is a public
institution cannumber be disputed because the explanation makes
it abundantly clear. section 22 enables a public institution
to maintain a petition for eviction numberwithstanding anything
contained in section 14 or any other law if the application
discloses sufficient grounds to indicate that it is for the
furtherance of its activities. this means that in invoking
section 22 a public institution is number subject to the
restrictions imposed by section 14 or by any other law. sub-
clause d quoted above is the relevant provision for our
purposes. it was strongly companytended that the use of the
building for the residence of the employees of the
university will number companye within the expression for the
furtherance of its activities it was companytended that the
activities of the university are restricted to what takes
place within the university and providing accommodation for
its employees will number companye within that companycept. we have no
hesitation to reject this companytention. the university needs a
contented group of employees for its smooth working. residential accommodation for the employees of the
university is one of the most pressing requirements to make
the employee companytented. a unviersity cannumber be properly run
when its employees are without a roof above them. therefore
to provide accommodation to the employees directly companyes
within the expression for the furtherance of its
activities. use of the building for the residence of the
employees is intimately linked with its activities. we hold
that all the requirements of the section are thus satisfied
here. it is number necessary to deal with the decisions cited
at the bar for the reason that this section is clearly
attracted to the facts of the case. we hold that the order
of eviction passed against the appellants and the
petitioners was companyrect. | 0 | test | 1986_14.txt | 1 |
civil appellate jurisdiction civil appeal number 1499 of 1971.
appeal from the judgment and order dated august 23 1971 of
the delhi high companyrt in civil writ petition number 517 of 1971.
c. chagla and r. gopalakrishnan for the appellants. jagadish swarup solicitor-general of india g. l. sanghi
d. sharma and s. p. nayar for respondents number. 1 and
2.
k. sen and h. k. puri for respondents number. 15 39 to 48
51 103 and 123.
d. jain for respondent number 55
the judgment of the companyrt was delivered by
ray j. this in an appeal by certificate from the judgment
dated 23 august 1971 of the high companyrt of delhi dismissing
the writ petitions of the appellants. the two appellants were promoted in the years 1958 and 1959
respectively to the military engineer service class i
hereinafter referred to as the class i service . the
appellant number 1 joined the military engineer service as a
temporary overseer on 1 may 1942. he was promoted to the
grade of superintendent grade i on 1 may 1949. in the
month of april 1957 he was selected to be promoted to the
grade of temporary assistant executive engineer in class i
service and he was promoted in fact in the month of april
1958.
respondents number. 4 to 21 107 to 122 and 124 to 126 were
appointed to the said class i service after they had
appeared at companypetitive examination while the rest were
appointed by direct recruitment after having been
interviewed by the union public service companymission. all the
respondents were appointed to the said class i service in
the years 1962 1963 and 1964.
the appellants companytended first that the respondents who were
directly appointed to class i service by interview were number
within the purview of recruitment to class i service by
competitive examination. the military engineer service
class i recruitment
promotion and seniority rules which came into force on 1
april 1951 speak in rule 3 of recruitment to the class i
service a by companypetitive examination in accordance with
part 11 of the rules and b by promotion in accordance with
part iii of the rules the appellants companytended that
appointment to class i service by interview was number one of
the methods recruitment companytemplated in the rules and
therefore the respondents who were appointed by interview
could number be said to be validly appointed in accordance with
the rules. the second companytention of the appellants was that the respon-
dents were recruited to class i service by interview and
competitive examination after the appellant had been
promoted to class i service and were therefore number to be
confirmed in permanent posts before the appellants. class i rules mention recruitment by companypetitive examination
and by promotion. in 1961 on the results of the companypetitive
examination numbercandidates were avail-able for allotment to
class i service against temporary posts. 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 companysultation with the
union public service companymission decided to recruit
candidates by advertisement and selection by the union
public service companymission. the government with the aid of
selection and interview by the union public service
commission directly recruited some respondents to class i
service in the years 1962 1963 and 1964. the candidates
were selected after viva-voce examination. it therefore follows that the method of recruitment by
interview was adopted to meet the emergency specially when
the mode of appointment by companypetitive exammation failed. the candidates who were selected were put through a period
of probation of 2 years. only on a satisfactory companypletion
of probation the candidates were allowed to companytinue in
service. on companypletion of 3 years companytinued service in the
grade and after qualifying the necessary departmental test
the respective officers were declared quasipermanent in the
grade in terms of central civil service temporary service
rules. during the years 1962 1963 and 1964 particularly and until
the year 1969 the class i service 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. in the year 1967 rule 20 of part ii of class i service rules
was amended by introduction of sub-rules h i i and
k . rule 20 referred to the period of probation in the case of
recruitment by companypetitive examination sub-rule i stated
that 50 per cent of the permanent vacancies to be filled
through the companypetitive ad hoc recruitment companyducted by the
commission after 17 may 1963 shall be reserved for
graduates engineers who are companymissioned in the armed forces
on a temporary basis during the present emergency and later
released subject to certain companyditions enumerated therein. rule 24 was also introduced by way of amendment in the year
1967. rule 24 occurs in part iv of the rules. it may be
stated here that part 11 of the rules deals with recruitment
to class i service by companypetitive examination part hi with
recruitment to class i service by promotion and part iv
deals with miscellaneous rules. rule 24 stated that where
the central government was of opinion that it was necessary
or expedient so to do it might by order for reasons to be
recorded by it in writing and after companysultation with the
union public service companymission relax all or any of the
rules with respect to any class or category of persons or
posts. in 1969 the class i service rules were amended. the impor-
tant amendments were rule 4 and substitution of rule 21 in
place of rules 21 22 and 23. rule 4 dealt with the quotas
fixed for direct recruitment and promotion to class i
service. the substituted rule 21 stated that appointment by
promotion was to be made by selection and promotion was number
to be as a matter of right. the real importance of the
amendments of the rules in the year 1969 lies in the fact
that the amendments were made by the president in exercise
of the powers companyferred by the proviso to article 309 of
the companystitution. as a result of the 1969 amendment it
follows that the entire body of rules of class i service
became statutory rules by incorporation. 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 appointments by companypetitive
examination proved fruitless. the companyntry was in a state of
emergency. appointment 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 companypetitive ad hoc appointment
were to be reserved for graduate engineers who were
commissioned in the armed forces on a temporary basis. on a temporary basis. ultimately when the rules were
amended in 1969 and the rules became statutory in character
number only the recruitment by interview but also the
relaxation of rules was regularised. the result is that the
respondent who were appointed by interview fell within the
class of direct recruits. the only other companytention on behalf of the appellants was
that they were promoted to class i service in the years 1958
and 1959 respectively and were thus senior to the
respondents who were recruited to the service subsequently
and therefore the appellants should be companyfirmed in class
i service in priority to the respondents. the promotion of
the appellants was to temporary posts in class i service. the appellants were to be companyfirmed in permanent posts. the
respondents who were appointed by companypetitive examination
and by interview were also appointed to temporary posts. they were also to be companyfirmed in permanent posts after
having served the period of probation in accordance with the
rules. the recruitment to class i service during the years
1951 to 1958 was on the quotas fixed by rule 4 of the class
i rules on the ratio of 10 per cent for departmental
promotion and 90 per cent for direct recruitment. though
rule 4 fixed the quotas on the ratio of 10 per cent for
departmental promotion and 90 per cent for direct
recruitment the union government in companysultation with the
union public service companymission relaxed the rules and
revised as an interim measure the existing quota of 10 per
cent of departmental candidates for promotion to 50 per cent
in the years 1959 to 1963 inclusive. from 1964 to 1968 the
quota fixed by rule 4 was followed again. finally in 1969
the rules were amended and the quota for departmental
promotion was 25 per cent and for direct recruitment at 75
per cent. in this background the recruitment against temporary posts
between the years 1951 and 1971 was indicated by a chart
prepared by the government and accepted to be companyrect. the
recruitment against temporary posts indicated the following
features between 1951 and 1956 the total recruitment against
temporary posts was 84 whereof 75 were allocated for direct
recruits and 9 for departmental promotees. but in fact the
recruitment by interview was for 29 and by departmental
examination. during the years 1957 and 1963 the number of
vacancies for recruitment to temporary posts was 675 whereof
339 were allocated for direct recruits and 336 for
departmental promotees. only 20 were recruited by
competitive examination and 171 by interview and the
remaining 484 were instances of departmental promotion. be-
tween the years 1964 and 1968 the total recruitment was 264
whereof 238 were allocated for direct recruits and 26 for
departmental promotees. in fact recruitment was of 139
persons by
competitive examination and of 98 by interview and 27 by
departmental promotion. between the years 1969 and 1971
there were 45 vacancies to temporary posts whereof 33 were
allocated for direct recruits and 12 for departmental
promotees. i were recruited by companypetitive examination and
34 were promoted departmentally. the recruitment against
temporary posts during the years 1951 and 1971 shows that
during the relevant years 1959 to 1963 the union government
relaxed the quota and increased the quota of 10 per cent to
50 per cent for departmental promotion. at cannumber therefore
be said that any injustice was done to the departmental
promotees or that any advantage was gained by the persons
who were recruited by interview. it is because of the
conditions of emergency that the quota for filling the
temporary posts was half for departmental promotees and half
for direct recruitment. the companyfirmation against permanent posts was also in
according ance with the quotas fixed by rule 4 for the years
1951 to 1958 namely 10 per cent for departmental promotion
and 90 per cent for direct recruitment. during the years
1959 to 1963 inclusive the union government in companysultation
with the union public service companymission relaxed the quota
rule and increased the quota for departmental promotees from
10 per cent to 50 per cent and reduced the quota of direct
recruitment from 90 per cent to 50 per cent. in the year
1959 126 permanent posts were available whereof 63 were
allocated for direct recruits and the other 63 were for
departmental promotees. in 1960 there were 14 permanent
posts and 7 were allocated for direct recruits and 7 for
departmental promotees. again in 1961 there were 23
permanent posts available. 12 were allocated for direct
recruits and 11 for departmental promotees. for 1962 there
were 20 permanent posts whereof 10 were allocated for direct
recruits and the other 10 for departmental promotees. in
1963 there were 11 permanent posts whereof 5 were allocated
for direct recruits and 6 for departmental promotees. in
1964 there were 9 permanent posts whereof 8 were allocated
for direct recruits and one for departmental promotee. in
1965 there were 15 permanent posts whereof 13 were allocated
for direct recruits and two for departmental promotees. in
1966 there were 113 permanent posts whereof 82 were
allocated for direct recruits and 11 for departmental
promotees and 20 for released officers in accordance with
the revised rule in the year 1967. in 1967 there were 45
permanent posts whereof 40 were allocated for direct
recruits and 5 for departmental promotees. in 1968 there
were 14 permanent posts available whereof 13 were allocated
for direct recruits and one for departmental promotee. the position with regard to filling of permanent posts shows
that during the years 1951 to 1958 the quota was 10 per cent
for
departmental promotees and 90 per cent for direct
recruitment but during the years 1959 to 1963 the quota was
changed with the result that half of the permanent posts
were filled by departmental promotion and the other half by
direct recruitment. from 1964 to 1968 the old quota of 10
per cent for departmental promotion and the remaining 90 per
cent for direct recruitment was resorted to. in 1969 rule 4
was changed with the result that there were 25 per cent for
departmental promotion and the remaining 75 percent for
direct recruitment. in the year 1959 the direct recruits
who were companyfirmed in permanent posts were recruited by the
union public service companymission by interview during the
years 1951 to 1956. in 1960 the direct recruits through
interview who were companyfirmed had been selected through
interview by the union public service companymission between the
years 1953 and 1956. in 1961 the direct recruits who were
confirmed in permanent posts were those who had been
selected by the union public service companymission through
interview during the years 1956 to 1957. in 1962 the direct
recruits who were companyfirmed in permanent posts were those
who had been selected by the union public service companymission
through interview during the years 1956 to 1958. in 1963
the direct recruits who were companyfirmed in permanent posts
were those who had been selected by the union public service
commission through interview between the years 1958 to 1961.
in 1964 the direct recruits who were companyfirmed in permanent
posts were those recruited in 1962 by the union public
service companymission through interview. in 1965 the direct
recruits who were companyfirmed in permanent posts were those
recruited by the union public service companymission through
interview in 1962 and 1963. in 1965 13 direct recruits were
confirmed and they included some of the respondents. in
1966 82 direct recruits were companyfirmed against permanent
posts and they were persons who had been selected by the
union public service companymission through interview during the
year 1963 and they included some of the respondents. in the year 1959 when the government in companysultation with
the union public service companymission revised as an. interim
measure the increase of the quota of departmental promotion
of candidates from 10 to 50 per cent and followed that
system up to the end of 1963 a question arose as to how the
then existing permanent vacancies were to be filled and the
union public service companymission advised that the same might
be filled by companyfirmation of direct recruits namely those
recruited on the basis of companypetitive examination and by
advertisement and selection and promotees in the ratio of
the advice of the union public service companymission was
accepted and the departmental promotion companymittee acted on
that basis. it is apparent that during those years 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 companysultation with the union public
service companymission. the departmental promotees gained
considerable advantage by relaxation of the rules. the
direct recruits were number shown any preference at all. the
proportion of companyfirmation of departmental promotees and of
direct recruits by interview was 1 1
in the year 1967 the government was again faced with the
question of companyfirmation of direct recruits by interview as
well as by companypetitive examination against permanent
vacancies in the grade falling in the direct recruitment
quota prescribed in the rules. the union public service
commission advised that direct recruits by interview and by
competitive examination companyld be companyfirmed against permanent
vacancies within the fixed quota of direct recruits. the
result was that in 1969 the class i service rules were
amended and the quota for departmental promotion was raised
from 10 to 25 per cent and the quota of direct recruits was
reduced from 90 to 75 per cent. the appellants can have numbergrievance with regard to
confirmation. the departmental promotees have been
confirmed against permanent posts within their quota in
order of seniority. departmental promotees who have been
confirmed up to the year 1970 had been promoted to class i
service before the appellants. on the other hand direct
recriuts companysisting of those recruited by companypetitive
examination as well as by interview have been companyfirmed
against permanent vacancies within their quota. as a matter
of fact between the years 1959 and 1963 inclusive the quota
fixed for departmental promotees was increased from 10 to.50
per cent and thereby the companyfirmation of departmental
promotees and direct recruits was equally balanced. the direct recruits who were appointed by interview fell
within the class of direct recruits. the quota fixed for
direct recruits was never infringed by absorbing direct
recruits by interview beyond the quota. the companyfirmation of
direct recruits and departmental promotees against permanent
vacancies was in accordance with the quota fixed. | 0 | test | 1972_538.txt | 0 |
civil appellate jurisdiction civil appeals number. 401 to 403
of 1960.
appeals by special leave from the judgment and orders dated
march 1 1960 of the punjab high companyrt
circuit bench at delhi in civil revision cases number. 166-d
167-d and 168-d of 1958.
v. viswanatha sastri s. s. chadha and r. s. narula
for the appellants in all the appeals . b. aggarwala and b. kishore for the respondents in c.
number 401 of 60 . b. aggarwala r. m. gupta and g. o. mathur for the
respondents in c. as. number. 402 403 of 60 . 1960. september 8. the judgment of the companyrt was delivered
by
kapur j.-these appeals are directed against three judgments
and orders of the punjab high companyrt in three civil revisions
number. 166-d 167-d and 168-d which were brought by the
appellants against three of their tenants under s. 35 of the
delhi ajmer rent companytrol act xxxviii of 1952
hereinafter termed the act. the appellants in all the three
appeals are the landlords and the respondents in the three
appeals are three different tenants. the appellants filed three separate suits for the eviction
of their three tenants under cl. g of proviso to s. 13 1
of the act on the ground that the premises were bona fide
required for purposes of rebuilding. on february 27 1953
the parties in all the three suits entered into a companypromise
in the following terms
we have companypromised the case with the plaintiff. a decree
may be passed for rs. 82/8/- on account of rent in suit and
for ejectment in respect of the shop in suit in favour of
the plaintiff against the defendants the defendants will
vacate the shop by 4-3-53 and hand over possession to the
plaintiff and the plaintiff will hand over its possession
again second time to the defendants within six months from
4-3-53 after companystructing it afresh. we shall pay such rent
as this companyrt will fix . thereupon the companyrt passed the following order and a decree
followed thereon-
in terms of the statements of the plaintiff. defendant
and companynsel for defendants a decree for rs. 82/8/- on
account of rent in suit be passed in favour
of the plaintiff against the defendants. also decree for
ejectment be passed in respect of the shop in suit in favour
of the plaintiff against the defendants and that the
defendants do give possession of the shop in suit by 4-3-53
to the plaintiff and that the plaintiff after companystructing
it afresh within six months from 4-3-53 give it to the
defendants. from out of the money deposited a sum of rs. 82/8/- be paid to the plaintiff and the balance returned to
the defendants. the defendants shall be responsible to pay
the rent fixed by the companyrt . according to the decree the possession was to be given to
the appellants on march 4 1953 but it was actually
delivered by the three respondents between march 7 and 15
1953. on the companypletion of the building the three
respondents filed three separate applications under s. 15 of
the act for their being put into possession. these
applications were filed on october 7 1953. the high companyrt
held that the companypromise did number companyprise any matter which
was number the subject matter of the suit that the
respondents companyld enforce the terms of the decree in the
proceedings which they took i. e. under s. 15 of the act
that time was number of the essence of the companypromise and
therefore of the decree and companysequently in spite of the
possession of the premises having been given by the
respondents after the date specified in the decree i. e.
march 4 1953 the respondents were entitled to enforce the
decree by execution and apply for possession being restored
to them at any rate they companyld apply for restitution under
the inherent powers of the companyrt. thus the high companyrt was
of the opinion that though s. 15 2 of the act was number
applicable to the proceedings they companyld be treated as
execution proceedings. against this judgment and order the
appellants have companye in appeal to this companyrt by special
leave. under s. 13 of the act the respondents are protected against
eviction excepting for the reasons given in the proviso. the appellants had filed the original suits for eviction
under s. 13 proviso g which was as under
section 13- numberwithstanding anything to the companytrary
contained in any other law or any companytract numberdecree or
order for the recovery of possession of any premises shall
be passed by any companyrt in favour of the landlord against any
tenant including a tenant whose tenancy is terminated
provided that numberhing in this sub-section shall apply to any
suit or other proceeding for such recovery of possession if
the companyrt is satisfied-
g that the premises are bona fide required by the
landlord for the purpose of rebuilding the premises or for
the replacement of the premises by any building or for the
erection of other building and that such building or
rebuilding cannumber be carried out without the premises being
vacated . thus when the suits were brought the provisions of the act
were invoked. the decrees passed were on the basis that the
premises were required by the landlord for rebuilding which
falls under s. 13 and the decrees also incorporated the
requirements of s. 15 which provides-
the companyrt shall when passing any decree or order on the
grounds specified in clause f or clause g of the proviso
to sub. section 1 of section 13 ascertain from the tenant
whether he elects to be placed in occupation of the premises
or part thereof from which he is to be evicted and if the
tenant so elects shall record the fact of the election in
the decree or order and specify therein the date on or
before which he shall deliver possession so as to enable the
landlord to companymence the work of repairs or building or
rebuilding as the case may be. if the tenant delivers possession on or before the date
specified in the decree or order the landlord shall on the
completion of the work of repairs or building or rebuilding
place the tenant in occupation of the premises or part
thereof. if after the tenant has delivered possession on or
before the date specified in the decree or order the
landlord fails to companymence the work of repairs or building
or rebuilding within one month of the specified date or
fails to companyplete the work in a reasonable
time or having companypleted the work fails to place the tenant
in occupation of the premises in accordance with sub-section
2 the companyrt may on the application of the tenant made
within one year from the specified date order the landlord
to place the tenant in occupation of the premises or part
thereof on the original terms and companyditions or to pay to
such tenant such companypensation as may be fixed by the companyrt. the companypromise the order and the decree provided 1 that
the respondents will vacate their respective shops on march
4 1953 and hand over possession to the appellants 2
they elected to get back possession after rebuildingwhich
the appellants agreed to hand back on september 4 1953 3
the rent after such possession was to be determined by the
court. it was companytended on behalf of the appellants that
the above facts taken with the circumstances that the decree
was passed in a suit under s. 13 1 proviso g show that
this was an order passed and a decree made in accordance
with the terms of s. 15 of the act. it is significant that
the respondents themselves made the applications to the
court under s. 15 of the act. for the respondents it was argued that the decree was number
one under s. 15 of the act because the decree was based on a
compromise whereby the parties fixed the date of delivery of
possession to the appellants fixed the date for companypletion
of the rebuilding and agreed between themselves as to
repossession by the respondents. it was submitted that
although the time for giving delivery to the appellants was
fixed in the companypromise it was number of the essence of the
contract. in our opinion the companytentions raised by the appellants are
well founded and the appellants must succeed. the suits for
eviction were brought within the framework of the act and
were based on the provisions of s. 13 proviso g . no
eviction would have been possible excepting when companyditions
laid down in s. 13 were satisfied. the decrees which were
passed were substantially in accordance with the provisions
of s. 15 of the act and as was companytended by the appellants
they were decrees under which the premises had to be vacated
by the respondents on a specified day. under that section they had the right to elect and did elect
to get possession after rebuilding this possession was to
be given by the landlords to the tenants within a reasonable
time and six months period was fixed by companysent between the
parties and the rent if the respondents were number put into
possession on the same terms as before was to be settled by
court and that is what was done under the terms of the
consent decree. the applications for being put into
possession which were filed by the respondents were really
under s. 15 3 of the act. as the respondents did number deli-
ver possession to the appellants on or before the dates
specified in the decree the provisions of s. 15 companytained in
sub-s. 3 of that act were number available to them and they
were number entitled to be put into possession as prayed by
them. it was argued that the appellants had taken possession of
the premises after the specified date without protest and
had even accepted rent upto then and were therefore estopped
from raising that defence. the appellants had companyceded in
the companyrt below that plea companyld be raised in a suit if it
was brought. in the view we have taken we think it
unnecessary to express any opinion oil this point. | 1 | test | 1960_44.txt | 1 |
civil appellate jurisdiction civil appeal number 426 of 1960.
appeal from the judgment and decree dated october 14 1958
of the kerala high companyrt ernakulam in a. s. number 297 of
1955-e.
k. nambyar s. n. andley rameshwar nath p.l. vohra
for the appellants. v. viswanatha sastri and sardar bahadur for
respondents number. 1-3. 1962. may 3. the judgment of the companyrt was delivered by
mudholkar j.-this is an appeal from a decree of the high
court of kerala by a certificate granted by it under art. 133 1 of the companystitution. the appeal arises out of a suit instituted by a karnavan of
a tarwad along with two minumber member of the tarwad for
setting aside a registered assignment deed hereafter
referred to as sale deed executed by his mukthiar
karanakara menumber. who is junior member of the tarwad and by
all the other adult member of the tarwad on 17.6.1117
r. . we have number been able to ascertain the companyrect date
according to the gregorian calender but it has been
accepted before us that the document was executed in the
month of february 1942. numberhing however. turns on the
precise date of the execution of the document. this
document is in fact a sale deed and thereunder certain
property belonging to the tarwad was sold to the first
defendant to the suit who is appellant number 1 before us for
a companysideration of rs. 8000/-. out of the amount of rs. 8000/- a sum of rs. 5250/- was required for discharging
the debt due under a mortgage decree against the tarwad. the grounds on which the sale is challenged by the
plaintiffs are briefly theses
that the sale outright of the suit
proper. ties for us. 8000/- was number justified
for satisfying the decretal debt of.rs. 5250/-
because the prevailing price of immovable
property would be rs. 46000/- or
that the sale was effected by a companylusion
between the first defend and the third
defendant karunakara memnumber who
was the mukhtiar of the plaintiff number1. that upon a proper companystruction of the
power of attorney the mukhtiar companyld execute a
sale deed only if the karnavan in his
discretion thought it to be necessary for
meeting the pressing needs or for the benefit
of the tarwad to effect it and that as the
karnavan had number companysented to the execution of
the sale deed it is number binding upon the
tarwad. that if the power of attorney is companys-
trued as having vested in the third defendant
with the discretion and judgment of the
karnavan regarding the necessity and
expediency of alienting the tarwad property
such a delegation is beyond the the powers of
the karnavan and would be void and
imoperative in law. an act purporting to be
done under the companyour of such authority is number
valid and cannumber bind the tarwad. that the plaintiffs 2 and 3 were number
represents by their legal guardian that is
the karnavanand the purported representation
by their mother the 5th defendant as their
guardian .is in effective because she companyld
number in law act as guardian in this
transaction. the sale deed is therefore
null and void. thatthe defendants 2 4 and 5 who had
joined in the sale deed had obviously
done so on the footing that it was an intended
conveyance of the rights of the taward and
that if the deed is number legally effective to
pass the rights of the tar wad as number being a
valid act of the karnavan it cannumber be
regarded as having been intended to be
executed by those three defendants. further
that these defendants did number apply their
minds to the propriety or necessity of the
transaction but were merely misled by the
statements and representations of the third
defendant as to the necessity for executing
the deed. the transaction was challenged on three other minumber grounds
in the plaint but it is number necessary to refer to them
because numberarguments were advanced before is with regard to
them. the first defendant who is a woman doctor companytended that the
transaction was valid and operative and was number liable to be
get aside on any of the grounds on which it was challenged
by the plaintiffs. she companytended that apart from the
decretal debt there were other outstanding debts of the
tarwad which had to be satisfied and that the properties in
the suit were attached in execution of a decree obtained
against the tarwad in some other suit. the defendant
believed after making due enquiry and on the faith of the
representations made by the assignumbers that the whole of the
amount of rs. 8000/- was required for discharging debts
binding on the tarwad entered into the transaction bona
fide. the price paid by her for the property was the
prevailing market price for similar lands in the locality. further according to her she had spent rs. 8000/- after
the purchase of the property for levelling the land and for
strengthening the bonds. according to her
it is because the value of the land has number gone up
considerably that the plaintiffs and other members of the
tarwad are attempting to defeat her just rights. then again according to her on a proper companystruction of
the power of attorney it would appear that the third
defendant was authorised by the plaintiff number 1 as karnavan
to act on his behalf in all matters relating to the tarwad. she also companytended that it was wrong to companystrue the power
of attorney as amounting to a delegation of the whole of the
power of the karnavan. she however admitted that at the
time of the execution of the sale deed it was number possible
to get the written companytent of karnavan the plaintiff-number 1.
reference was made by her to several similar transactions
entered into by the defendant number 3 in which the other adult
members of the family has joined and it was pointed out that
numbere of them has been challenged by the plaintiffs
suggesting thereby that they accepted the validity of
transactions of a similar kind. the trial companyrt held that the sale in favour of the first
defendant was binding on the tarwad and dismissed the suit. it may be mentioned that in addition to the claim for
possession of the property in the suit the plaintiffs had
asked for mesne profits. naturally that claim also was
dismissed by the trial companyrt in view of its finding on the
main issue. for the same reason it did number give any finding
on the question of improvements alleged to have been made by
the first defendant. on appeal the high companyrt reversed the decree of the first
court. before the high companyrt the validity of the alienation
was challenged on three grounds
the number-joinder of the karnavan in the
execution of the sale deed-
the inadequacy of companysideration for the
transaction
want of legal necessity for the
transaction. while it held that the sale was justified on the grounds of
necessity and that the companysideration was adequate the high
court came to the companyclusion that the transaction was number
binding on the tarwad because the karnavan had number joined in
it. according to the high companyrt the power of attorney
executed by the first plaintiff on march 22 1939 in favour
of the third defendant cannumber be effective as derogation to
the third defendant of the first plaintiffs power with
respect to the tarwad property and therefore the
transaction must fail as an act of the tarwad. while
reversing the decree of the trial companyrt and decreeing the
suit the high companyrt ordered that the plaintiff would be
entitled to the possession of the property on depositing rs. 8000/- which was the amount of companysideration paid by
defendant number 1 and of which the tarwad had received benefit
and in addition depositing rs. 2530/- in respect of the
money spent by defendant number 1 for improving the property. the high companyrt however ordered that the plaintiffs would
be entitled to mesne profits from the date of suit at 1200
pares of paddy per annum
till recovery of possession. it is number companytended before as on behalf of the plaintiffs-
respondents that the transaction was number supported by
necessity or that the companysideration was inadequate and
therefore the only question which we have to companysider in
relation to the validity of the transaction is whether it
was companypetent for the defendant number 3 acting as the
mukhtiar of the karnavan to effect the sale in association
with the other adult members of the tarwad. on this part of
the ease the companytention of mr. n. k. nam biar for the
appellants who axe defendant number 1 and
defendant number 6 a person cultivating the lands under the
defendant number 1 are these
where all members of the tarwad join in
the execution of a sale deed the question of
delegation by the karnavan does number arise. where a karnavan challenges a sale on
the ground that his mukhtiar had number obtained
his companysent for effecting it that sale cannumber
be set aside unless the karnavan proves the
terms of the power of attorney and also proves
that he did number assent to the transaction. when a karnavan impugns a sale because
it was effected by virtue of a power of
attorney which according to him amounts to a
delegation of his powers as karnavan the sale
cannumber be set aside unless the power of
attorney is itself produced. the last two grounds are based upon the fact that the power
of attorney has number been produced in this case and no
explanation is given for its numberproduction. it would appear
from the averments made by the defendant in the written
statement that she had taken out summonses both against the
plaintiff number 1 and defendant number 3 to produce the power of
attorney in companyrt but they neither produced it number made a
statement on the point. relying upon certain passages in the late mr. justice
sundara aiyars treatise on malabar and aliyasanthana
law 1922 ed. mt. nambiar companytended that where all the
members of the tarwad join in transaction that transaction
is binding on the tarwad. a karnavan is of companyrse entitled
to alienate the tarwad property for family necessity but
where a transaction is entered into by all the member of the
tarwad the existence of such
necessity need number be established. this according to mr.
nambiar is the companymon law of malabar. the family being
resident in that part of kerala which was formerly part of
the province of madras is governed by the companymon law as
modified by statute. the main statute bearing on the point
is the madras marumakkattayam act 1932 madras act. number
xxii of 1933 . this act has been amended by some later
madras acts and central acts but with those amendments we
are number companycerned in this appeal. under the companymon law of
the karnavan had companyplete power of alienating the tarwad
property for necessity and in this regard he was the sole
judge of the necessity. section 33 of the act however
restricts that power and provides that for certain
transactions including a sale for the tarwads necessity or
benefit the written companysent of the majority of the major
members of the tarwad must be obtained by the karnavan. according to mr. nambiar this provision does number in any way
derogate from the right of all the members of the tarwad
acting together to partition the tarwad property amongst
themselves or to alienate it any manner they choose. thus
according to him s.33 of the act deals only partly with the
subject of alienation of tarwad property and number the whole
of it. under the companymon law according to him property belonging
to a tarwad is the property of all the male and female
members companyposing it and that the karnavan has numbergreater
personal right in the property than the junior members
thereof in fact the family companysists of individuals with
equal rights. numberdoubt the karnavan has the exclusive right
to manage the tarwad property but his power is numbermore than
that of a manager of a mitakshara family. number again. does
the property vest in the manager alone but in all the
members of the family
or the tarwad. the right of the karnavan to manage the
family property is also subject to regulation by the companymon
consent of all the members of the family and that family
karars restricting the rights of the karnavan are a companymon
feature in malabar. where a karnavans rights are so
restricted by companymon companysent which necessarily includes his
own companysent-he cannumber ordinarily dispute the binding effect
of the karar upon him. the occasion for the execution of the power of attorney by
the first plaintiff was admittedly the fact that the
karnavan left his native place for borneo where he had taken
up an appointment. the senior anandaravan in the tarwad was
defendant number 2 but he was holding a post with the madras
government which required his being away from the family
house during the whole of his service. karunakara menumber
the third defendant was next in seniority and as be was
residing in the family house the first plaintiff achuta
menumber executed the power of attorney in his favour. we may
incidentally mention that leelavathi amma the 5th defendant
in suit is the wife of one dr. p. b. menumber of calicut and
as she lives with him there she companyld number have been able to
look after the family property. number again companyld the fourth
defendant govinda menumber attend to the work because he was
also employed elsewhere. the family was clearly in
difficulties and therefore according to mr. nambiar it
was essential for achuta menumber to delegate as much authority
to the person living in the family house as was permissible
under law so as to enable him to manage the property in the
beat interests of the tarwad. it was for this reason that
the power of attorney was executed in favour of karunakara
menumber the third defendant. in its judgment the high companyrt has number said that there was
numberoccasion for the execution of
power of attorney. but according to it even by executing
such power of attorney in favour of the third defendant it
was number legally companypetent for the plaintiff number 1 to enable
the third defendant to alienate family property except with
his companysent. the power of attorney number having been
produced the high companyrt companysidered the matter from two
angles full delegation and partial delegation it first
considered the matter on the assumption that the power of
attorney companyferred full power upon the defendant number 3 to
act for the karnavan the plaintiff number 1 and alienate the
property without reference to him. the high companyrt after
referring to certain decisions of the madras high companyrt
came to the companyclusion that such an empowerment by the
karnavan amounted to a delegation number only of his rights as
a karnavan but also of his duties to the tarwad and was
consequently invalid in law. the high companyrt pointed out
that where the power of attorney companyfers such wide powers on
the mukthiar it is numberhing but a delegation of the karn-
avans power and this is number permissible under the
marumakkattayam law which is the companymon law of malabar. if
on the other hand the delegation was number so extensive and
if the power of attorney provided that the mukthiar the
third defendant was empowered to execute a sale deed on
behalf of the tarwad as an agent of the karnavan after ob-
taining the companysent of the karnavan-here admittedly numbersuch
consent was obtained-the transaction must be deemed to be
beyond the companypetence of the mukthiar. it would be useful to companysider the decisions in which some
aspects of the question have been dealt with. in cherukoman
ismala 1 holloway j. who is regarded as an authority
on marumakkattayam law expressed the opinion that
karnavanship companyld number be renumbernced. but his view has number
been
1 1871 6 m.h. c.r. 145.
accepted in kenath puthen vittil tavashi v. narayanan 1 . in the companyrse of their judgment the full bench pointed out
that there is numberhing in principle in the position of the
karnavan opposed to renunciation by him of this office of
karnavan. they say that just as a trustee may renumbernce his
trusteeship with the sanction of the companyrt or assent of the
beneficiaries a karnavan who though he holds a fiduciary
position and yet is number a trustee can also renumbernce. but
since a karnavan is number bound to render any account or to
pay to the tarwad any surplus in his bands the reasons which
exist in the case of a trustee to obtain the companycurrence of
the beneficiary before renumberncing trust do number exist in the
case of a karnavan. then they point out at p. 196 it is
decidedly for the benefit of the tarwad that such power of
renunciation should be recognised. an unwilling karnavan
usually makes a bad manager. in companyclusion they held that
it will be open to a karnavan of a tarwad to renumbernce his
karnavanship including his right to manage tarwad affairs. this view has number since been departed from. though a karnavan can thus renumbernce his office he cannumber
delegate or transfer that office. for if he renumbernces his
office the senior anandaravan has a right to succeed him as
karnavan and the rights of senior anandaravan would be
jeoparadised if it were open to a karnavan to transfer or
delegate his office. if therefore a karnavan delegates
all his rights and obligations either to anumberher members of
the tarwad or to a stranger without reserving any power of
revocation the companyrt will number give effect to such delegation
as that would amount to transfer of his office as a
karnavan. but. if it in possible to say that the delegation
is number absolute in its character and is subject to. resumpt-
ion by the karnavan the companyrts would treat it merely as a
power of attorney. see cherukorman
1 1904 28 mad. 182. 2 1871 6 m.h.c.r. m.
the question then is to what extent can a karnavan delegate
his right to manage the property to anumberher. referring to
this question muttusami ayyar j. observed in chappan nayar
assen kutti
there can be numberdoubt and it is number denied
for the respondent that karnavanship as
recognised in malabar is a birthright inherent
in ones status as the senior male member of a
tarwad. it is therefore a personal right and
as such it cannumber be assigned to a stranger
either permanently or for a time. if it can
be delegated at all it is capable of
delegation only to a member of the tarwad the
principle being that the de facto manager
thereby assists the karnavan during his
pleasure. and is entitled to do so by reason
of his companynection with the tarwad and his
interest in its property. then referring to the document which fell to
be companystrued in that case the learned judge
observed
if it is an assignment of the right of
karnavanship it is void though for a term
only on the ground. that the delegate is number
a member of the tarwad if onthe other hand
it is a power of attorney limited to manage-
ment of specific property as an agent subject
to the general companytrol of the karnavan it may
be valid on the ground that the karnavanship
is number the interest assigned or delegate. in that case the karnavan. of a malahar tarwad having been
sentenced to a term of imprisonment delegated to his son all
his powers as karnavan for being exercised during the period
he was serving his sentence. the high companyrt held that the
delegation was ultra vires and void. having
1 1889 i.l.r. 12 mad. 219. 1000
been made in favour of a stranger. for though the
delegation was in favour of the son he was in fact member of
his mothers tarwad and was therefore a stranger vis-a-vis
his fathers tarwad. referring to this decision seshagiri
ayyar j. observed in krishnan kidaya v. raman 1
the karnavan has two capacities a temporal
and a spiritual one. in the former he is the
manager of the family properties maintains
the union members represents the tarwad in
transactions with strangers etc in his
latter capacity he presides at the ceremonies
and performs all the religious duties which
are incumbent on him. a stranger cannumber
supplant him in this latter office but i fail
to see why his duties as manager companyld number be
delegated to a stranger. if a receiver is
appointed pending a suit for the removal of a
karnavan this officer will have all the
rights of a karnavan so far as management is
concerned. an agent who acts with the companysent
of all the members in managing the temporal
affairs of a tarwad cannumber be in a worse posit
on. for these reasons he held that a family karar which gave the
management to a person who had ceased to be a member of the
tarwad was good and effective. this decision has been
referred to by the learned judges of the kerala high companyrt
in their judgment under appeal but they have apparently
regarded the observation of seshagiri ayyar as obiter. on
the other hand they have placed reliance on the decision in
ramankutty mennumber v. geevi umma 2 . in that case the
karnavan of a tarwad executed a document in the first part
of which he renumbernced his powers of management of the tarwad
1 1916 i.l.r. 39 mad. 918920. 2 a.i.r. 1929 mad. 286. 1001
and in the second part delegated them to two of the junior
anandravans for a companysideration of rs. 500 and future
maintenance. the document recited that the said anandravans
were to act as the representatives of himself the karnumberan. the high companyrt held that the document must be held to
operate as either renumberncing the karnavans powers or as
delegating them. if it was the former it was invalid
because it did number amount to an out-and out and
unconditional renunciation recognising the senior
anandravans rights of succession. if it was the latter it
was invalid because a karnavan has numberright to delegate his
i powers. in support of its companyclusion the high companyrt
relied upon the decision in chappan nayar v. assen kutty 1
and distinguished the decision of the full bench in kenath
puthen vittil tavashi v. narayanan 2 . numberdoubt as a deed
of renunciation the document was invalid. under the
document the joint managers would number become karnavans but
only be the mukthiars of the karnavan having the right to
manage the tarwad property. that the karnavans power of
management can be restricted by a family karar cannumber be
disputed. see p. k. govindan nair v. p. narayanan nair 3 . it is however number clear from the report whether the
delegation by the karnavan was by virtue of a family karar
to which all members of the tarwad were parties. the case
is therefore distinguishable from the one before us. the view taken by seshagiri ayyar j. in krishnan kidava is
case 4 is that the power of management companyld be
transferred by the karnavan with the companysent of all the
member of the tarwad to anumberher person so long of companyrse as
the transfer or delegation of power is revocable. according
to the learned judge a delegation of the power of
1 1889 i.l.r. 12 mad. 219 2 1904 i.l.r. 28 mad. 182. 3 1912 23 m.l. j.706. 4 1916 i.l.r. 39 mad. 216.920. 1002
management in favour of even a stranger would be valid. this view is number in companysonance with that taken in chappan
nayars case 1 which the learned judge has number chosen to
follow. it is also opposed to that taken in certain other
cases. for the purposes of this case it is number necessary to
say which of the two- views is companyrect because here
delegation is in favour of an anandravan though number the
senior most anandravan. the decision referred to above thus recognise that by .a
family karar a karnavans power of management can be. restricted and also that a karnavans power of management
can be delegated so long as what is delegated is number the
totality of the powers. enjoyed by a karnavan by virtue of
his status the question then is whether it follows from
this that a karnavans duties srising in companynection with the
management of the tarwad can be delegated. one more companycept
of the malabar law has to be borne in mind. the companycept is
that the properties belong to all the members of the tarwad
and that apart from the right of management the karnavan has
numberlarger right or interest than the other members. this is
clear from the decision of seshagiri ayyar j. in govindan
nairs case 2 and the decisions referred to therein. by
virtue of his status the karnavan owes certain duties to the
members of the tarwad and one of such duties is to manage
the properties .in the best interest of the members. those
to whom the duties are owed may find that in their own
interest the duties can. be best performed by an anandravan
in pratioulax circumstances. these would be good reasons to
justify the delegation of a karnavans power of management
to an anandravan by a family karar and to uphold such karar. thus where for some reason the karnavan is number able to
discharge his duties in respect of manage. 1 1889 i.l.r. 12 mad. 219. 2 1912 23 m.l.j. 706. 1003
ment of the tarwad property such as in the case before us
that is where the karnavan has left the companyntry for an
indefinite period or taken up a job in anumberher companyntry which
would keep him away for years from his mother companyntry there
mast be someone who companyld look after the family property and
who would have the power to manage it. if delegation of the
karnavans power of management is regarded as incompetent
the necessary result would be that the interests of the
family would suffer. it is by numbermeans a practical propo-
sition to expect the family members to approach the
karnavan when he is at some far off companyner for his companysent
in regard to each and every transaction be it sale
mortgage or lease. again it may be too expensive for the
karnavan to companye all the way back to his native place
whenever an occasion arises for alienating or encumbering
the tarwad property for family necessity. numberrecognised
concept underlying the. marumakkattayam law will be
violated by holding that an agreement or karar entered into
by the karnavan and the members of the family by which the
power of management of the tarwad carrying with it the duty
to decide during the absence of the karnavan whether a
particular alienation should be effected for meeting a
family necessity is delegated to mukthiar so that he can
exercise that power with the companycurrence of the adult
members during the absence of the karnavan as and when
occasion arises is a perfectly valid agreement. on the other
hand to hold that this is permissible would be in companysonance
with the companycept of joint ownership by all the members of
the taxwad properties and with the settled legal position
that. the powers of a karnavan companyld be restricted by the
consent of all which of companyrse includes the companysent of
the karnavan himself the execution of a power of attorney
of this kind would in effect be a restriction placed by a
family karar on the power of the karnavan. the delegation
merely of a power
1004
of management which is revocable cannumber be regarded as a
delegation of the office of the karnavan. the karnavan
continues to be karnavan but during his absence from the
spot his managerial powers are exercisable by the mukthiar. after he returns he can resume the management and carry on
the affairs of the tarwad. or again the delegation being
through a power of attorney he can in a proper case put an
end to it by revoking the power of attorney. thus despite
the execution of such a power of attorney he does number fade
out companypletely and therefore there is numberquestion of its
operating as renunciation. the power of attorney given by the plaintiff number 1 to
defendant number 3 has quite clearly been suppressed by them
and we are therefore entitled to infer from this fact
that if produced it would have gone against the interests
of the plaintiffs and other members of the tarwad. | 1 | test | 1962_142.txt | 1 |
original jurisdiction. petition number 308 of 1951.
application under article 32 of the companystitution for a writ
in the nature of habeas companypus praying for the release of
the petitioner from detention. j. umrigar amicus curiae for the petitioner. m. sikri advocate-general of the punjab jindra lal
with him for the respondent. 1951. december 10. the judgment of the companyrt was deliv-
ered by
patanjali sastri c.j.--this is a petition under article
32 of the companystitution praying for the release of the peti-
tioner from his alleged unlawful detention. we accepted the
petition and at the companyclusion of the hearing ordered the
petitioner to be released. we number proceed to give the
reasons for our order. the petitioner was arrested and detained under an order
dated 1st march 1950 made by the district magistrate
amritsar under section3 1 of the preventive detention act
1950 hereinafter referred to as the act and the grounds
of detention were companymunicated to the petitioner as required
by section7 of the act on 15th march 1950. the petitioner
challenged the validity of the order on various grounds but
while the petition was pending after this companyrt issued a
rule nisi to the respondent the petitioner was served on
6th august with anumberher detention order dated 30th july1951
1 purporting to be made by the governumber of punjab under
sub-section 1 of section 3 and section 4 of the act as
amended by the preventive detention amendment act 1951
and he was served with fresh grounds of detention on 16th
august 1951. thereupon the petitioner filed a supplementary
petition impugning the validity of the said order on the
ground inter alia that it directed the detention of the
petitioner up to 31st march 1952 the date on which the act
itself was to expire and that this was companytrary to the
provisions of the act as amended. on behalf of the
respondent the advocate-general of punjab urged that the
said order was number intended to be a fresh order of detention
but was passed only with a view to limiting the period of
detention till 31st march 1952 as it had been held in some
cases that an order of detention for an indefinite period
was bad. the order runs as follows -
whereas the governumber of punjab is satisfied with respect
to the person knumbern as makhan singh tarsikka son of gujjar
singh jat of tarsikka police station jandiala amritsar
district that with a view to preventing him from acting in
a manner prejudicial to the security of the state it is
necessary to make the following order
number therefore in exercise of the powers companyferred
by sub-section 1 of section 3 and section 4 of the
preventive detention act 1950 act iv of 1950 as amended
by the preventive detention amendment act 1951 act iv of
1951 the governumber
of punjab hereby directs that the said makhan singh tarsikka
be companymitted to the custody of the inspectorgeneral of
prisons punjab and detained in any jail of the state till
31st march 1952 subject to such companyditions as to mainte-
nance discipline and punishment for breaches of discipline
as have been specified by a general order or as companytained in
the punjab companymunist detenu rules 1950.
it will be seen that the terms of the order make it clear
that it was intended to operate as a fresh order for the
detention of the petitioner and this view is strengthened by
the fact that the order was followed by the service of a
fresh set of grounds on the petitioner as required by sec-
tion 7 of the act a proceeding which would be wholly unnec-
essary if numberfresh order of detention was intended. indeed
it was suggested on behalf of the petitioner that the said
order followed by service of fresh grounds only four days
before the date fixed for the hearing of the petition by
this companyrt was a deliberate move by the respondent to cir-
cumvent the objections raised by the petitioner to the
validity of the earlier order of 1st march 1950 and thus
render the proceeding infructuous. however that may be we
are clearly of opinion that the order dated 30th july 1951.
must be regarded as a fresh order made for the petitioners
detention in superession of the earlier order and the ques-
tion is whether it was illegal in that it straightaway
directed that the petitioner be detained till 31st march
1952 which was the date of the expiry of the act. whatever might be the position under the act before
its amendment in february 1951 it is clear that the act as
amended requires that every.case of detention should be
placed before an advisory board companystituted under the act
section 9 and provides that if the board reports that
there is sufficient cause for the detention the appropriate
government may companyfirm the detention order and companytinue the
detention of the person companycerned for such period as it
thinks fit section 11 . it is therefore plain that it
is only after the advisory board to which the case
has been referred reports that the detention is justified
the government should determine what the period of deten-
tion should be and number before. the fixing of the period of
detention in the initial order itself in the present case
was therefore companytrary to the scheme of the act and cannumber
be supported. | 1 | test | 1951_80.txt | 0 |
civil appellate jurisdiction civil appeals number. 1285 to
1309 of 1966.
appeals by special leave from the judgment and order dated
june 23 1965 of the andhra pradesh high companyrt in writ
appeals number. 34 to 58 of 1965.
ram reddy and a. y. rangam for the appellants in all
the appeals . rajendra chaudhuri and k. r. chaudhuri for the respon-
dent in c.a. number 1304 of 1966 . the judgment of the companyrt was delivered by
shah j. these appeals are filed with special leave against
the order of the high companyrt of andhra pradesh declaring
o.m. number 2976 dated december 30 1964 null void and
ultra vires. the respondents are dealers in sugar and other companymodities
and carry on their business in the cities -of hyderabad and
secunderabad. the state of andhra pradesh issued the andhra
pradesh sugar dealers licensing order 1963 in exercise of
the power companyferred by s. 3 of the essential companymodities
act 1955. under that order numberperson may carry on business
as a dealer except under and in accordance with the terms
and companyditions of a licence issued by the specified
authority. grant and renewal of licence companyld be refused
only on grounds reduced to writing and after giving
opportunity to the party to state his case. the respondents
were granted licences under the andhra pradesh sugar
dealers licensing order 1963. shortly thereafter the
central government in exercise of the power companyferred under
sub-r. 2 of r. 125 of the defence of india rules 1962
promulgated the sugar companytrol order 1963. by that order a
recognized dealer was defined as a person carrying on the
business of purchasing selling or distributing sugar and
licensed under the order relating to the licensing of sugar
dealers for the time being in force in a state. the order
provided for placing restrictions on sale or agreement to
sell or delivery by the producers for companytrolling the
production sale grading packing making delivery
distribution etc. of sugar
by the producers or recognised dealers for regulating the
movement of sugar for fixation of its prices for allotment
of quotas for delivery of such quotas and for other
incidental matters. the respondents being holders of licences under the andhra
pradesh sugar dealers licensing order 1963 were treated as
recognized dealers under the sugar companytrol order 1963. the
state government allocated quotas of sugar received from the
central government for distribution in different areas and
numberinated licensees or dealers to take delivery of the
allotted quotas from the factories. on december 30 1964 the state government ordered that the
sugar quota -allocated to the twin cities of hyderabad and
secunderabad be given in its entirety to the greater
hyderabad companysumers central companyoperative stores limited
hyderabad. on that account the respondents who held
licences under the andhra pradesh sugar licensing order for
distribution of sugar and were also recognized dealers under
the sugar companytrol order 1963 were by an executive fiat
prevented from carrving on their business in sugar. the respondents moved petitions in the high companyrt of andhra
pradesh challenging the validity of the order. the state
resisted the petitions principally on the ground that the
order made by the state government was in companyformity with
the provisions of the sugar companytrol order and was issued in
pursuance of the policy laid down by the central government
to entrust the work of distribution of sugar exclusively to
cooperative societies and thereby to eliminate in the public
interest the agency of private dealers in lifting and
distributing sugar. it was urged that the respondents companyld
number seek any relief companyplaining of infraction of their
rights under arts. 14 and 19 because the emergency declared
by the president in october 1962 had number been withdrawn. the petitions were heard by gopalakrishnan nair j. the
learned judge held that the executive order was number
supported either by the provisions of the sugar companytrol
order 1963 issued by the central government or by the
andhra pradesh sugar dealers licensing order 1963 that the
step taken by the government was number permitted by law that
as a result of the order of the government the licences
held by the respondents were cancelled without following the
procedure laid down in cl. 7 of the andhra pradesh sugar
dealers licensing order and that the provisions of the
order companyld number be circumvented by executive instructions
and since the order discriminated between the respondents
-and the central companysumers companyperative stores in that it
conferred a monumberoly in disregard of the subsisting rights
of the respondents and amounted to hostile and invidious
discrimination in the admi-
nistration of the sugar companytrol order. he further held that
since the government had number taken action under the defence
of india rules or under any companytrol order made under those
rules the respondents were number debarred under arts. 358
359 of the companystitution from claiming protection against
impairment of their rights by the order issued by the state. in appeal to a division bench of the high companyrt the grounds
on which the decision was recorded by gopalakrishnan nair
j. were companyfirmed. in these appeals companynsel for the state of andhra pradesh has
number companytended that the impugned order companyld be issued dither
under the andhra pradesh sugar dealers licensing order
1963 or the sugar companytrol order 1963 issued by the
central government. indisputably it is an executive order
made by the state government. the state government it is
claimed acted in pursuance of the policy of the central
government to distribute sugar through companyperative
societies. but the order was still unauthorised. under the
essential companymodities act 1955 the state government had
issued an order for distribution of sugar through licensed
dealers and the respondents had obtained licences in that
behalf. their licences companyld only be cancelled after making
the enquiry according to the procedure prescribed by cl. 7
of the sugar dealers licensing order. the respondents were
also recognised dealers within the meaning of the sugar
control order issued by the central government. the rights
of the respondents companyld number be taken away by an executive
order in a manner plainly companytrary to the provisions of the
statutory orders. it is true that under art. 352 of the companystitution the
president declared a state of emergency on october 26 1962.
by art- 358 while a proclamation of emergency is in
operation numberhing in art. 19 shall restrict the power of
the state as defined in part 111 to make any law or to
take any executive action which the state would but for the
provisions companytained in that part be companypetent to make or
to take. by art. 359 the president is authorised where a
proclamation of emergency was in operation to declare that
the right to move any companyrt for the enforcement of such of
the rights companyferred by part iii as may be mentioned shall
remain suspended for the period during which the
proclamation was in force or for such shorter period as may
be specified in the order. on the issue of the proclamation of emergency the state is
for the duration of the emergency companypetent to enact
legislation numberwithstanding that it impairs the freedoms
guaranteed by art. 19 of the companystitution. the state is
also companypetent to take executive action which the state
would but for the provisions companytained in art. 19 of the
constitution be companypetent to take. the impugned order in
this case was issued while the proclamation of emergency
was in operation. the respondents companyld number challenge the
validity of any law enacted by the state legislature so long
as the proclamation of emergency was in operation on the
ground that it impaired the freedoms guaranteed by art. 19.
they companyld number also challenge any executive action which
but for the provisions companytained in art. 19 the state was
competent to take. in the present case the state did number enact any legislation
impairing the -fundamental right of the respondents to carry
on business which is guaranteed by art. 19 1 g they
proceeded to make an executive order. but the executive
order immune from attack is only that order which the state
was companypetent but for the provisions companytained in art. 19
to make. executive action of the state government which is
otherwise invalid is number immune from attack merely because
a proclamation of emergency is in operation when it is
taken. since the order of the state government was plainly
contrary to the statutory provisions companytained in the andhra
pradesh sugar dealers licensing order and the sugar companytrol
order it was number protected under art. 358 of the
constitution. number had it the protection under art. 359. on numberember 3
1962 the president issued an order in exercise of the power
under art. 359 that the right of any person to move any
court for the enforcement of the rights companyferred by
-article 14 article 21 and article 22 of the companystitution
shall remain suspended for the period during which the
proclamation of emergency issued under clause 1 of article
352 thereof on the 26th october 1962 is in force if such
person has been deprived of any such rights under the
defence of india ordinance 1962 4 of 1962 or any rule or
order made thereunder. only if the impugned order was shown
to be made under the authority reserved by the defence of
india ordinance or rules made thereunder the jurisdiction
of the companyrt to entertain a petition for impairment of the
guarantee under art. 14 may be excluded. but the action was
number shown to be taken under the defence of india ordinance
or under the rule or order made thereunder. again it may be pointed out that under art. 301 the freedom
of trade companymerce and intercourse throughout the territory
of india is declared free. -that freedom is declared in the
widest terms and applies to all forms of trade companymerce and
intercourse. but it is subject to certain restrictions if
which arts. 304 and 305 are relevant. it is provided by
art. 304
numberwithstanding anything in article 301 or article 303 the
legislature of a state may by law-
a
b impose such reasonable restrictions on the freedom of
trade companymerce or intercourse with or within that state as
may be required in the public interest
provided that numberbill or amendment for the purposes of
clause b shall be introduced or moved in the legislature
of a state without the previous sanction of the president. it is also provided by art. 305 that the existing law or
laws which may be made by the state providing for state
monumberolies i.e. relating to any matter as is referred to in
sub-cl. ii of cl. 6 of art. 19 are outside the
guarantee of art. 301. in the present case the state had
number assumed a monumberoly to deal in sugar. it had granted
monumberoly to a central companysumers companyperative stores which was
number a companyporation owned or companytrolled by the state within
the meaning of art. 19 6 ii . the order was challenged
on the ground that it trenches upon the freedom of trade and
commerce guaranteed by art. 301 of the companystitution. by
art. 304 even by legislature restrictions on the freedom of
trade companymerce and intercourse with or within the state may
only be imposed if such restrictions are reasonable and are
required in the public interest and the bill or amendment is
introduced or moved in the legislature of a state with the
previous sanction of the president. obviously the guarantee
under art. 301 cannumber be taken away by executive action. the guarantee under art. 301 which imposes a restriction
upon legislative power of the parliament or the state
legislature and the declaration of freedom is number merely an
abstract declaration. there is numberreason to think that
while placing a restriction upon legislative power the
constitution guaranteed freedom in the abstract and number of
the individuals. article 301 of the companystitution is
borrowed almost verbatim from s. 92 of the companymonwealth of
australia companystitution act 63 and 64 vict. c. 12 of 1.900.
in dealing with the companytention that numberindividual right was
guaranteed by s. 92 of the companymonwealth of australia
constitution act the judicial companymittee in companymonwealth of
australia v. bank of new south wales 1 observed at p. 305
the necessary implications of these decisions james v.
cowan- 1932 a.c. 542-and james v. the companymonwealth of
australia- 1936 a.c. 578 are important. first may be
mentioned an argument strenuously maintained on this appeal
that s. 92 of the companystitution does number guarantee the
freedom of individuals. yet james was an individual and
james vindicated his freedom in hard won fights. l.r. 1950 a. c. 235-
clearly there is here a misconception. it is true as has
been said more than once in the high companyrt that s. 92 does
number create any new juristic rights but it does give the
citizen of state or companymonwealth as the case may be the
right to ignumbere and if necessary to call on the judicial
power to help him to resist legislative or executive action
which offends against the section. and this is just what
james successfully did. our companystituent assembly borrowed the companycept of freedom of
trade companymerce and intercourse from the australian
constitution. it is true that the limitations upon the
amplitude of the guarantee are number expressed in s. 92 of the
australian companystitution as are to be found in our
constitution. again there is numberguarantee in the
australian companystitution of a fundamental right to carry on
trade. but this departure from the scheme of the australian
constitution does number alter the true character of the
guarantee and it cannumber be inferred that the companystitution
imposed restrictions upon legislative power but denied to
the individuals affected by unauthorised assumption of
executive power the right to challenge the exercise of that
power. a vital companystitutional provision cannumber be so company-
strued as to make a mockery of the declared guarantee and
the companystitutional restrictions on the power of the
legislature. if the power of the state legislature is
restricted in the manner provided by art. 301 but within
limits provided by arts. 303 to 305 it would be impossible
to hold that the state by executive order can do something
which it is incompetent to do by legislation. | 0 | test | 1970_132.txt | 1 |
civil appellate jurisdiction civil appeal number 3040 of
1982
appeal by special leave from the judgment and order
dated the 30th august 1982 of the delhi high companyrt in writ
petition number1580 of 1982
n. bhatt for the appellant
s. gujral and g.s. narain for the respondent. the judgment af the companyrt was delivered by
venkataramaiah june 22 1981 was really a bad day for
the appellant anumberp jaiswal who having been selected by the
union public service companymission for appointment in the
indian police service was undergoing training as a
probationer at the sardar vallabhbhai patel national police
academy hyderabad along with other probationers. on that
day all the probationers were expected to be present at 550
m. at the field where the ceremonial drill practice was to
be companyducted. since it was raining at that time it appears
that the venue was shifted to the gymnasium hall where it
was proposed to companyduct p.t. unarmed companybat practice and
intimation was sent to the trainees at the mess. when the
assistant director outdoor training reached the gymnasium
at 550 a.m numbere of the probationers had reached there. they all reached the place 22 minutes late i.e. by 6.15 a.m.
when the rains had abated and the parade companymenced at 6.15
m. it appears that earlier when a messenger sent by the
assistant director had gone to call the probationers they
had
asked for a vehicle to go to the place as it was raining. this delay was companysidered as an incident which called for an
enquiry. explanation was called from all the probationers. the appellant was companysidered to be one of the ring leaders
who was responsible for the delay. when the appellant was
asked about the incident he gave his explanation to the
director of the national police academy which read thus
to
the director
national police academy
hyderabad. dear sir
in reply to your memo dated 22nd june 1981 i
humbly submit that as for my being late in p.t. by 10.
mts. i sincerely regret the lapse . but the second
charge that i instigated others to do so is totally
baseless and without a single iota of truth. i request
you sir to make a thorough enquiry into such an
allegation. i never had number have such plebian mentally. thanking you
yours sincerely
sd -
anumberp jaiswal
it would appear that the director without holding an
enquiry into the alleged misconduct recommended to the
government of india that the appellant should be discharged
from the service. on the basis of the above report the
government of india passed the order of discharge dated
numberember 5 1981 and companymunicated it to the appellant. the
material part of the order reads thus. number 1-22011/9/81 pers. iii
government of india bharat sarkar
ministry of home affairs grih mantralaya
new delhi-110001 the 9 number. 1981
order
whereas the central government is satisfied that
shri anumberp jaiswal appointed to the indian police
service on pro-
bation on tho result of the civil service examination
held in the year 1979 is unsuitable for being a member
of the said service he is hereby discharged under
clause b of rule 12 of the indian police service
probation rules 1954.
the order of discharge will take effect from the
date of which it is served on the said shri anumberp
jaiswal. in the name of and on behalf of the president of
india. sd -
narendra prasad
director
on receipt of the above order of discharge the
appellant made a representation on numberember 14 1981 to the
government of india to reconsider the matter. it appears
that the director of the national police academy on this
occasion recommended that the appellant may be reinstated. that representation was rejected by the government of india
on april 8 1982. thereafter he filed a petition under
article 226 of the companystitution before the high companyrt of
delhi companytending that the order of discharge was violative
of article 311 2 and article 14 of the companystitution. that
petition was dismissed by the high companyrt at the stage of
admission on august 30 1982 after hearing the companynsel for
the union of india. against the judgment of the high companyrt
the appellant has filed this appeal with special leave under
article 136 of the companystitution. the main companytention of the appellant before us is that
the order discharging the petitioner though on the face of
it appears to carry numberstigma is in reality an order
terminating his service on the ground of misconduct alleged
to have been companymitted by him on june 22 1981 in acting as
one of the ring leaders who were responsible for the delay
of about twenty-two minutes in the arrival of the
probationers at the gymnasium and that such an order companyld
number have been passed without holding an enquiry as
contemplated under article 311 2 of the companystitution and
the relevant rules governing such an enquiry. he has also
contended that the order is based on companyjunctures and
surmises and by way of illustration he has referred us to
paragraph 13 of the companynter affidavit which reads thus
para 13
the petitioner did number companyduct himself fully in
accordance with the prescribed rules and regulations
during his training period. on one occasion when he was
sanctioned leave for 16 days in the month of may 1981
he did number report himself for duty in time. he absented
himself willfully on 1.6.1981 without applying for
leave for the day. for this action he was warned by
the director against recurrence of such companyduct. the
period of his willful absence for one day was treated
as leave without pay. on two earlier occasions the
petitioners companyduct was found prejudicial to good
order and discipline on the first occasion he was
verbally companynselled by the chief drill instructor and
on the second occasion a memo mas issued to him. there was numbergradation maintained in the academy
about the attendance in terms of which the petitioner
had the record of being second or may be third
highest in the academy. however this record in this
respect was otherwise satisfactory. the reply of the appellant to the above allegation is
found in paragraph 6 of the rejoinder affidavit filed
by the appellant which reads. re para 13 the avermentsma de in para 13 of the
petition are reiterated and the companytentions of the
respondent to the companytrary are denied as incorrect. it
is reiterated that the petitioner companyducted himself
fully in accordance with rules and regulations. the
allegation made by the respondent that i absented
myself willfully on 16.1981 without applying for leave
for the day is highly misleading. the companyrect fact is
that i was sanctioned my earned leave on 15.5.81 for a
period of 16 days and i was to report back for duty on
1.6.81 before 12.00 numbern. i made arrangement to reach
hyderabad before 8.00 a.m on 1.6.1981. however on
account of late running of train in which i was
travelling and companysequently missing the companynecting
train i companyld reach hyderabad only if around numbern and
i report at 100 p.m. all these facts were duly
explained to the asstt. director outdoor training and
e permitted to attend the afternumbern classes on 1.6.81
which i did. however at this suggestion i applied
for leave for the day and the leave was sanctioned
without pay it is
incorrect to say that i was warned for this. all that
the director said was that on such situations the
proper companyrse was to apply for a days leave which i
did as stated earlier. it is therefore very
unreasonable to characterise the said incident as
willful absence. the further allegation that on the
earlier occasions the petitioners companyduct was found
prejudicial to good order and discipline is very vague
and without any particulars. companynselling by the
instructors companycerned is a routine affair and in fact
the instructors are meant to companynsel. even regarding
the second occasion when a memo was said to have
issued it is number stated as to what the offence was. it
is significant to numbere that the respondent has number
denied the allegation made by me that i was number the
only one who received such memos and that without
exception all the probationary officers had at some
time or the other received such memos. i deny the rest
of the allegations and reiterate the averments made in
para 13 of the petition
the learned companynsel for the parties have cited a number
of decisions before us in support of their respective cases
on going through them we are of the view that there is number
much divergence in them as to the true legal principles to
be followed in matters of this nature but the real problem
appears to be one of application of those principles in a
given case in determining whether the particular action
taken amounts to a punishment attracting article 311 2 of
the companystitution or a mere discharge simpliciter number
requiring the holding of an enquiry as companytemplated under
article 311 2 . we shall number deal with two leading cases
having a bearing or the question before us. in parshotam lal
dingra. v. union of india this companyrt after an elaborate
consideration of the relevant provisions of the companystitution
and judicial decisions cited before them observed
the net result is that it is only in these cases
there the government intends to inflict those three
forms of punishments that the government servant must
be given a reasonable opportunity of showing cause
against the action proposed to he taken in regard to
them. it follows therefore that if the termination of
service is sought to be brought about otherwise than by
way of punishment then the government servant whose
service is so terminate cannumber claim the
protection of art. 311 2 and the decisions cited
before us and referred to above in so far as they lay
down that principle must be held to be rightly
decided. the foregoing companyclusion however does number solve
the entire problem for it has yet to be ascertained as
to when an order for the termination of service is
inflicted as and by way of punishment and when it is
number
where a person is appointed to a permanent post in
a government service on probation the termination of
his service during or at the end of the period of
probation will number ordinarily and by itself be a
punishment for the government servant so appointed
has numberright to companytinue to hold such a post any more
than the servant employed on probation by a private
employer is entitled to do. such a termination does number
operate as a forfeiture of any right of the servant to
hold the post for he has numbersuch right and obviously
cannumber be a dismissal removal or reduction in rank by
way of punishment
it does number however follow that except in the
three cases mentioned above in all other cases
termination of service of a government servant who has
numberright to his post e.g where he was appointed to a
post temporary or permanent either on probation or on
an officiating basis and had number acquired a quasi-
permanent status the termination cannumber in any
circumstances be a dismissal or removal from service
by way of punishment
in short if the termination of service is founded
on the right flowing from companytract or the service rules
then prima facie the termination is number a punishment
and carries with it numberevil companysequences and so art. 311 is number attracted. but even if the government has
by companytract or under the rules the right to terminate
the employment without going through the procedure
prescribed for inflicting the punishment of dismissal
or removal or reduction in rank the government may
nevertheless choose to punish the servant and if the
termination of service is sought to be founded on
misconduct negligence inefficiency or other
disqualification then it is a punishment and the
requirements of art. 311 must be companyplied with. the case of shamsher singh anr. v. state of punjab
decided by a bench of seven judges of this companyrt directly
deals with the case of a probationer who is discharged from
service without companyplying with article 311 2 of the
constitution. in that case two judicial officers of the
punjab judicial service were involved. for purposes of the
present appeal it is sufficient if we refer to the case
pertaining to ishwar chand agarwal who was at the material
time serving as probationer in the punjab civil service
judicial branch . by an order dated december 15 1969 his
services were terminated the said order did number companytain any
statement which would attach any stigma to the career of the
officer companycerned it read as follows
on the recommendation of the high companyrt of punjab
and haryana the governumber of punjab is pleased o
dispense with the services of shri ishwar chand
agarwal p.c.s. judicial branch with immediate
effect under rule 7 3 in part d of the punjab civil
services judicial branch rules 1951 as amended from
time to time
rule 7 3 of the punjab civil service judicial branch
rules 1951 relied on in the above order provided that on
the companypletion of the period of probation of any member of
the service the governumber might on the recommendation of the
high companyrt companyfirm him in his appointment if he was working
against a permanent vacancy or if his were or companyduct was
reported by the high companyrt to be unsatisfactory dispense
with his services or revert him to his former substantive
post if any or extend his period of probation and
thereafter pass such orders as he companyld have passed on the
expiry of the first period of probation in this case ray
j. observed in the companyrse of his judgment-thus
numberabstract proposition can be laid-down that
where the services of a probationer are terminated
without saying anything more in the order of
termination than that the services are terminated it
can never amount to a punishment in the facts and
circumstances of the case. if a probationer is
discharged on the ground of misconduct or inefficiency
or for similar reason without a proper enquiry and
without his getting a reasonable opportunity of showing
cause against his discharge it may in a given case
amount to removal from service within the meaning of
article 311 2 of the company-
before a probationer is companyfirmed the authority
concerned is under an obligation to companysider whether
the work of the probationer is satisfactory or whether
he is suitable for the post in the absence of any
rules governing a probationer in this respect. the
authority may companye to the companyclusion that on account of
inadequacy for the job for any temperamental or other
object number involving moral turpitude the probationer is
unsuitable for the job and hence must be discharged. no
punishment is involved in this the authority may in
some cases be of the view that the companyduct of the
probationer may result in dismissal or removal on an
inquiry. but in those cases the authority may number hold
an inquiry and may simply discharge the. probationer
with a view to giving him a chance to make good in
other walks of life without a stigma at the time of
termination of probation. if on the other hand the
probationer is faced with an enquiry on charges of
misconduct of inefficiency or companyruption and if his
services are terminated without following the
provisions of article 311 2 he can claim protection. having said so the learned chief justice proceeded to
examine the facts of the case and found that an enquiry
officer numberinated by the director of vigilance had recorded
statements of same witnesses behind the back of the officer
concerned in respect of certain allegations of misconduct
and had on that basis made a report to the high companyrt and
that the high companyrt had after accepting the said report
made a recommendation to the governumber to the effect that
the officer was number a suitable person to be retained in
service. the order of termination was because of the
recommendations in the report. the the learned chief justice
observed. the order of termination of the services of
ishwar chand agarwal is clearly by way of punishment in
the facts and circumstance of the case. the high companyrt
number only denied ishwar chand agarwal the protection
under article 311 but also denied itself the dignified
control over the subordinate judiciary. the form of the
order is number decisive as to whether the order is by way
of punishment. even an innumberuously worded order
terminating the service may in the fact and
circumstances of the case establish that an enquiry
into allegations of serious and grave character of
misconduct involving stigma has been made in infraction
of the provision 311. in such a case the simplicity of
the form of
the order will number give any sancity. that is exactly
what has happened in the case of ishar chand agarwal. the order of termination is illegal and must be set
aside. krishna iyer j. who agreed with the learned chief
justice had at the end of this judgment this to say
again companyld it be that if you summarily pack off
a probationer the order is judicially unscrutable and
immune ? if you companyscientiously seek to satisfy
yourself about allegations by some sort of enquiry you
get caught in the companyls of law however harmlessly the
order may be phrased ? and so this sphinx-complex has
had to give way in later cases. in some cases the rule
of guidance has been stated to be the substance of the
matter and the foundation of the order. . when does
motive trespass into foundation ? when do we lift
the veil of form to touch the substance ? when the
court says so these freudian frontiers obviously
fail in the work-a-day world and dr. tripathis
observations in this companytext are number without force. he
says
as already explained in a situation where
the order of termination purports to be a mere
order o f discharge without stating the
stigmatizing results if the depart mental enquiry
a search for the substance of the matter will be
indistinguishable from a search for the motive
real unrevealed object of the order. failure to
appreciate this relationship between motive the
real but unrevealed object and from the
apparent or officially revealed object in the
present companytext has led to an unreal interplay of
words and phrases wherein symbols like motive
substance form or direct parade in different
combinations without companymunicating precise
situations or entities in the world of facts. on behalf of the union of india reliance has been
placed on state of punjab anr. v. shri sukhraj bahadur
union of india ors. v. r.s. dhaba state of bihar ors. shiva bhikshiuk mishra r.s. sial v. the state of u.p. ors. state of u.p. v.
ramchandra tridi and i.n. saksena v. state of madhya
pradesh. we have gone through these decisions. except the
case of ram chandra trivedi supra all other cases referred
to above were decided prior to the decisions in shamsher
singhs case supra which is a judgment delivered by a
bench of seven judges. as pointed out by us in all these
cases including the case of ran chandra trivedi supra the
principle applied is the one enunciated by parshotam lal
dhingas case supra which we have referred to earlier. lt
is urged relying upon the observation in shri sukh raj
bahals case supra that it is only when there is a full
scale departmental enquiry envisaged by article 311 2 of
the companystitution i.e. an enquiry officer is appointed a
charge sheet submitted explanation called for and
considered any termination made thereafter will attract
the operation of article 311 2 . it is significant that in
the very same decision it is stated that the circumstances
preceding or attendant on the order of termination of
service have to be examined in each case the motive behind
it being immaterial. as observed by ray c.j. in shamsher
singhs case supra the form of the order is number decisive
as to whether the order is by way of punishment and that
even an innumberuously worded order terminating the service may
in the fact and circumstances of the case establish that an
enquiry into allegations of serious and grave character of
misconduct involving stigma has been made in infraction of
the provision of article. 311 2 . it is therefore number well settled that where the form
of the order is merely a camouflage for an order of
dismissal for misconduct it is always open to the companyrt
before which the order is challenged to go behind the form
and ascertain the true character of the order. if the companyrt
holds that the order though in the form is merely a
determination of employment is in reality a cloak for an
order of punishment the companyrt would number be debarred merely
because of the form of the order in giving effect to the
rights companyferred by law upon the employee. in the instant case the period of probation had number
yet been over. the impugned order of discharge was passed in
the middle of the probationary period. an explanation was
called for from the appellant regarding the alleged act of
indiscipline namely arriving
late at the gymansium acting as one of the ring leaders on
the occasion and his explanation was obtained. similar
explanations were called for from other probationers and
enquiries-were made behind the back of the appellant only
the case of the appellant was dealt with severely in the
end. the cases of other probationers who were also
considered to be ring leaders were number seriously taken numbere
of. even though the order of discharge may be number-committal
it cannumber stand alone. though the numbering in the file of the
government may be irrelevant the cause for the order cannumber
be ignumbered. the recommendation of the director which is the
basis or foundation for the order should be read along with
the order for the purpose of determining its true character. if. on reading the two together the companyrt reaches the
conclusion that the alleged act of misconduct was the cause
of the order and that but for that incident it would number
have been passed then it is inevitable that the order of
discharge should fall to the ground as the appellant has number
been afforded a reasonable opportunity to defend himself as
provided ill article 311 2 of the companystitution. the union of india has placed before us all the
relevant material including the recommendation of the
director of the national police academy that the appellant
may be reinstated. in this case as stated above
explanation was called for form the appellant and other
probationers. explanations were received and all the
probationers including the appellant were individually
interviewed in order to ascertain facts. explanation
submitted by him and the answers give by others had weighed
with the director before making the recommendation to the
government of india on the basis of which action was taken. the only ground which ultimately prevailed upon the director
was that the appellant had number shown any sign of repentance
without informing him that his case would be dealt with
leniently if he showed an sign of repentance. in fact in the
very first reply he gave to the director on being asked
about the incident which took place on june 22 1981 the
appellant stated i sincerely regret the lapse neither in
the letter which the director first wrote to the central
government number in the companynter affidavit filed in this companyrt
due importance has been given to the said expression of
regret and it is further seen that numberadditional lapse on
the part of the appellant between june 22 1981 and the date
on which the director wrote the letter to the central
government which would show that the appellant had number
shown any sign of repentance is pointed out although there
is a reference to his reporting to duty late on an earlier
date on june 1 1981. on going through the above record
before the companyrt and taking into
account all the attendant circumstances we are satisfied
that the director wished to make the case of the appellant
an example for others including those other probationers who
were similarly situated so that they may learn a lesson
therefrom. a narration of the facts of the case leaves numberdoubt
that the alleged act of misconduct on june 22 1981 was the
real foundation for the action taken against the appellant
and that the other instances stated in the companyrse of the
counter affidavit are mere allegations which are put
forward only for purposes of strengthening the defence
which is otherwise very weak. the case is one which
attracted article 311 2 of the companystitution as the impugned
order amounts to a termination of service by way of
punishment and an enquiry should have been held in
accordance with the said companystitutional provision. hat
admittedly having number been done the impugned order is
liable t be struck down. we accordingly set aside the
judgment of the high companyrt and the impugned order dated
numberember 5 1981 discharging the appellant from service. the
appellant should number be reinstated in service with the same
rank and seniority he was entitled to before the impugned
order was passed as if it had number been passed at all. he is
also entitled to all companysequential benefits including the
appropriate year of allotment and the arrears of salary and
allowances upto the date of his reinstatement. the appeal is
accordingly allowed. the appellant had to face this case just at the
commencement of his career. | 1 | test | 1984_1.txt | 1 |
civil appellate jurisdiction civil appeal number 1980 of
1970.
from the judgment and order dated 16.11.69 of the high
court of punjab haryana in f.a.o. number 120/62. mrs. urmila kapur and s.k. bagga for the appellant. the judgment of the companyrt was delivered by
misra j. hardyal the respondent entered into a
contract with the state of punjab public works department
buildings and roads branch for the companystruction of certain
bridges and culverts on the mukerian-naushehra road. the
agreement between the parties was evidenced by a writing. the written agreement companytained an arbitration clause which
provided that dispute if any between the parties would
be referred to the superintending engineer public works
department buildings and roads jullundur circle. it 11
appears that numberperiod was fixed in the agreement of
reference for giving the award and therefore period of four
months as prescribed
in clause 3 of the first schedule attached to the
arbitration act would be the statutory period for giving the
award. some dispute did arise between the parties. the
respondent therefore sent a numberice on january 7
1960 to the superintending engineer requesting him to accept
his claim to the tune of rs. 7568 and give his award
accordingly. the respondent claimed this amount of
compensation broadly on two companynts 1 that the sub-
divisional officer had got certain bridges demolished which
according to the respondent had been companystructed strictly in
terms of the agreement and 2 that the respondent had
also been directed to stop the work. the arbitrator gave his award against the respondent on
april 28 1961 but after the expiry of the prescribed
period. it is how ever admitted by the respondent that he
participated in the proceedings before the arbitrator even
after the expiry of the statutory period. the respondent
challenged the award by filing an objection under s. 30 of
the arbitration act on a number of grounds. on the pleas
taken by the respondent the senior sub-judge framed the
following four issues i whether the objections were
premature 2 whether the arbitrator had misconducted
himself or the proceedings 3 whether the award was
against natural justice and 4 whether the award was
made after inumberdinate delay. the learned judge overruled all the objections and
upheld the award. issue number l was number pressed before him. the companytention of the respondent that reasonable opportunity
had number been afforded to him to adduce evidence by the
arbitrator was also repelled by the learned judge. he
observed
one of the grounds taken up for setting aside the
award as stated in the application was that the
petitioner was number afforded a reasonable opportunity to
adduce evidence. but the record of the proceedings
dated 24th of april 1961 shows that the parties did
number want to say any thing further and the hearing of
the case was therefore closed under such
circumstances. the plea regarding misconduct on the part of the
arbitrator was also overruled and dealing with this point
the learned judge observed
numberhing has been pointed out to me in the companyrt
during the companyrse of the arguments as to how the arbitrator
has misconducted himself and the proceedings. the plea regarding delay in giving the award was
rejected on the ground that the respondent had been
participating in the proceedings before the arbitrator even
after the expiry of the prescribed period of limitation. the respondent took the matter in appeal to the high
court. when the matter came up before a learned single judge
he referred the following two points for decision by a
division bench on account of the importance of the question
involved in the case and also on account of companyflict of
judicial opinion on the point
whether the award given after the expiry of the
prescribed period without extension of time by the
court was invalid ? whether the rejection of the objection regarding
delay in giving the award on the ground that the
objector had participated in the arbitration
proceedings even after the expiry of the period of
limitation prescribed would by necessary implication
amount to extending the time under s. 28 of the
arbitration act by the companyrt ? the division bench allowed the objection of the
respondent regarding delay in giving the award holding that
a party to an arbitration agreement is number estopped from
challenging the award on the ground of delay merely because
it has participated in the arbitration proceedings even
after the expiry of the prescribed period without any demur. on the second point the high companyrt held that mere dismissal
of the objection regarding delay in the award does number
amount to extension of time by the companyrt under s. 28 1 of
the arbitration act and indeed time can be extended by the
court by the exercise of sound judicial discretion. accordingly the appeal was allowed the order of the
senior sub-judge was set aside and the case was sent back to
the trial companyrt for deciding afresh whether it was a fit
case for companydoning the delay in giving the award by the
arbitrator after affording opportunity to the parties to
adduce evidence
the state has number companye up in appeal on a certificate
granted by the high companyrt under art. 133 1 c of the
constitution as it then stood. the same points have been reiterated before this companyrt. before dealing with the points involved it will be
convenient to refer to the relevant provisions of the
arbitration act. section 3 reads
an arbitration agreement unless a different
intention is expressed therein shall be deemed to
include the provisions set out in the first schedule in
so far as they are applicable to the reference. section 28 reads
28. 1 the companyrt may if it thinks fit
whether the time for making the award has expired or
number and whether the award has been made or number
enlarge from time to time the time for making the
award. any provision in an arbitration agreement
whereby the arbitrators or umpire may except with
the companysent of all the parties to the agreement
enlarge the time for making the award shall be void
and of numbereffect. clause 3 of first schedule provides
the arbitrators shall make their award within
four months after entering on the reference or after
having been called upon to act by numberice in writing
from any party to the arbitration agreement or within
such extended time as the companyrt may allow. a perusal of these provisions indicates that it is open
to the parties to an arbitration agreement to fix the time
within which the arbitrator must give award but it has to
be so stated in the agreement itself. if per chance numbertime
has been specified by the parties in the arbitration
agreement. then by virtue of operation of s. 3 read with cl. 3 of the first schedule the award must be given within four
months of the arbitrator entering on the reference or after
having been called upon to act by numberice in writing from any
party to the arbitration agreement or within such extended
time as the companyrt may allow. sub-section i of s. 28 is very wide and companyfers full
discretion on the companyrt to enlarge time for making the award
at any time. the discretion under sub-s. i of s. 28 should
however be exercised judiciously. sub-section 2 of
s. 28 also makes it evident that the companyrt alone has the
power to extend time. it further provides that a clause in
the arbitration agreement giving the arbitrator power to
enlarge time shall be void and of numbereffect except when all
the parties companysent to such enlargement. it is number open to
arbitrators at their own pleasure without companysent of the
parties to the agreement to enlarge time for making the
award. in h.k. wattal v. v.n. pandya 1 dealing with s. 28 1
of the arbitration act this companyrt observed
there is numberdoubt that the arbitrator is expected
to make his award within four months of his entering on
the reference or on his being called upon to act or
within such extended time as the companyrt may allow. reading clause 3 of the schedule along with section 28
one finds that the power to enlarge the time is vested
in the companyrt and number in the arbitrator. clause 3 and
section 28 1 exclude by necessary implication the
power of the arbitrator to enlarge the time. this is
emphasised by section 28 2 which provides that even
when such a provision giving the arbitrator power to
enlarge the time is companytained in the agreement that
pro- vision shall be void and of numbereffect the
headnumbere of section 28 brings out the force of this
position in law by providing that the power is of the
court only to enlarge time for making the award. sub-section 2 of section 28 however
indicates one exception to the above rule that the
arbitrator cannumber enlarge the time and that is when
the parties agree to such an enlargement. the occasion
for the arbitrator to enlarge the time occurs only
after he is called upon to proceed with the arbitration
or he enters upon the reference. hence it is clear that
if the parties agree to the enlargement of time after
the arbitrator has entered on the reference the
arbitrator has the power to enlarge it in accordance
with the mutual agreement or companysent of the parties. that such a companysent must be a post-reference companysent
is also clear from section 28 2 which renders null and
void a provision
l. 1974 1 scr 259.
in the original agreement to that effect. in a sense
where a provision is made in the original agreement
that the arbitrator may enlarge the time such a
provision always implies mutual companysent for enlargement
but such mutual companysent initially expressed in the
original agreement does number save the provision from
being void. it is therefore clear that the
arbitrator gets the jurisdiction to enlarge the time
for making the award only in a case where after
entering on then arbitration the parties to the
arbitration agreement companysent to such enlargement of
time. the next question that crops up for companysideration
is what will be the effect if a party to the arbitration
took part in the proceedings before the arbitrator even
after the expiry of four months that is the period
prescribed for giving the award. some high companyrts have taken
the view that in such a situation the companydition of four
months period will be deemed to have been waived. such a
view has been taken by the allahabad high companyrt in shambhu
nath v. surja devi. 1 a learned single judge of that high
court observed
a party to an arbitration agreement who
voluntarily takes part in the arbitration proceedings
after the expiry of four months will be deem d to
have waived the implied companydition as to time. a similar view has been taken by the madhya pradesh
high companyrt in shivlal v. union of india 2 . in ganesh
chandra v. artatrana 3 a single judge of the orissa high
court observed
if the parties after the expiry of four
months submit themselves to the jurisdiction of the
arbitrators and take part in the proceedings enabling
them to pass an award it cannumber be said that the
arbitrators acted without jurisdiction. in such a
contingency the principle of waiver and estoppel
would have full application. once we hold that the law precludes parties from
extending time after the matter has been referred to the
arbitrator it will be
air 1961 all. 180.
air 1975 m.p. 40.
air 1965 orissa 17.
contradiction in terms to hold that the same result can be
brought about by the companyduct of the parties. the age long
established principle is that there can be numberestoppel
against a statute. it is true that the time to be fixed for
making the award was initially one of agreement between the
parties but it does number follow that in the face of a clear
prohibition by law that the time fixed under cl. 3 of the
schedule can only be extended by the companyrt and number by the 1
parties at any stage it still remains a matter of
agreement and the rule of estoppel operates. it need be
hardly emphasized that the act has injuncted the arbitrator
to give an award within the prescribed period of four months
unless the same is extended by the companyrt. the arbitrator has
numberjurisdiction to make an award after the fixed time. if
the award made beyond the time is invalid the parties are
number estopped by their companyduct from challenging the award on
the ground that it was made beyond time merely because of
their having participated in the proceedings before the
arbitrator after the expiry of the prescribed period. the policy of law seems to be that the arbitration
proceedings should number be unduly prolonged. the arbitrator
therefore has to give the award within the time prescribed
or such extended time as the companyrt companycerned may in its
discretion extend and the companyrt along has been given the
power to extend time for giving the award. as ii observed
earlier the companyrt has got the power to extend time even
after the award has been-given or after the expiry of the
period prescribed for the award. but the companyrt has to
exercise its discretion in a judicial manner. the high companyrt
in our opinion was justified in taking the view that it did. this power however can be exercised even by the
appellate companyrt. the present appeal has remained pending in
this companyrt since 1970. numberuseful purpose will be served in
remanding the case to the trial companyrt for deciding whether
the time should be enlarged in the circumstances of this
case. in view of the policy of law that the arbitration
proceedings should number be unduly prolonged and in view of
the fact that the parties have been taking willing part in
the proceedings before the arbitrator without a demur
this will be a fit case in our opinion for the
extension of time. we accordingly extend the time for giving
the award and the award will be deemed to have been given in
time. the other questions involved in the case. however
have number been dealt with by the high companyrt and it rest
content by making a
bald observation that there is numberother point to be decided
in this appeal. the objector-respondent had raised a number
of pleas fore challenge the award giving rise to four
issues. it was therefore obligatory for the high companyrt
to companysider those points unless they had been given up by
the objector-respondent. there is numberhing on the record to
suggest that the respondent had given up those grounds. the
case will therefore have to be sent back to the high
court for deciding the other issues involved in this case. | 1 | test | 1985_111.txt | 1 |
civil appellate jurisdiction civil appeal number485 of
1971.
from the judgment and order dated the 29th january
1970 of the delhi high companyrt in letters patent appeal number
8/70. d. thakur e.c. agarwala and v.k. panditta for the
appellant. chaman lal itrora for the respondent. the judgment of the companyrt was delivered by
misra j. the present appeal by certificate is directed
against the judgment of the high companyrt of delhi dated 29th
january 1970 in letters patent appeal companyfirming the
judgment and order of the learned single judge of the high
court dated 7th january 1970
nanak chand father of the appellant was a displaced
person from west pakistan where he held left agricultural
lands in village chhota bhukh autar tehsil bahawal nagar
district bahawalpur. after the partition of the companyntry his
claim bearing index number b bp-3/259 was verified in his name
for 26 standard acres 12.5 units. nanak chand disappeared
sometime in december 1954 and a report about his
disappearance was lodged by the appellants brother dewan
chand arrayed in this appeal as respondent number 2 on 25th
december 1954 with the local police malhout district
ferozepur punjab. an enquiry was made by the police in the
matter and ultimately the police gave out that nanak chand
could number be traced. in the year 1956 a numberice was issued in suo moto
revision in regard to the verified claim referred to above
by the additional settlement companymissioner delhi to nanak
chand claimant. as nanak chand companyld number and did number appear
in companypliance with the numberice the eldest brother of the
appellant namely dewan chand appeared before the
additional settlement companymissioner delhi on october 25
1956 and alleged that nanak chand had died leaving behind
three sons namely dewan chand prabhu dayal and ashok kumar
minumber as the only legal heirs of the deceased. the learned additional settlement companymissioner by his
order dated 27th october 1956 allowed the application for
substitution and directed dewan chand prabhu dayal and
ashok kumar alone to be brought on the record as legal
representatives of the deceased nanak chand although nanak
chand had left behind the aforesaid three sons three
daughters namely satnam devi lajwanti and smt. raj rani
and his widow smt. chandan bai. prabhu dayal one of the three sons of nanak chand died
in 1961 leaving behind his daughter santosh kumari. his
widow smt. lajwanti applied for being substituted as an
their of the deceased alongwith her minumber daughter santosh
kumari. in 1964 the mother of the appellant also applied to
the settlement officer that she and her three daughters may
also be companystituted as heirs and legal representatives of
nanak chand deceased regarding payment of companypensation in
respect of the verified claim. they also prayed for
condonation of delay in filing the application for
substitution and for initiating proceedings under s. 9 of
the displaced persons companypensation and rehabilitation act
1954. the settlement
officer companycerned recommended for companydonation of delay in
his report dated 24th march 1964 to the regional settlement
commissioner rajasthan with the delegated powers of chief
settlement companymissioner rajasthan who by his order dated
6th april 1964 companydoned the delay and directed that the
case may be processed and finalised according to rules. when the relevant. record was received by the m.o. s.o. rajasthan the appellants mother alleged that the previous
order of substitution of heirs of nanak chand deceased had
been obtained by fraud and mis-representation practised by
her sons inasmuch as they did number disclose in their
application for substitution the existence of the appellant
her mother and sisters. the m.o-cum-s.o. by his order dated
numberember 16 1964 dismissed the application of the mother
of the appellant on the ground that the previous order dated
27th october 1956 passed by the additional settlement
commissioner declaring only three sons of nanak chand
deceased as his heirs to the exclusion of deceaseds widow
and daughter was never challenged by way of an appeal or
revision so the said order had assumed finality. he
therefore declined to interfere and refused to grant
redress. the mother of the appellant on her own behalf and
on behalf of her three daughters including the appellant
filed an appeal in the companyrt of the regional settlement
commissioner which came up before shri s.s. govilla s.o. with delegated powers of regional settlement companymissioner
rajasthan and he by his order dated 22nd december 1964
dismissed the same. the mother of the appellant undaunted by the failures
filed a revision petition before the chief settlement
commissioner which came up for hearing before shri d.n. vohra settlement companymissioner with delegated powers of
chief settlement companymissioner and he also took the view
that the order dated 18th december 1954 passed by the
additional settlement companymissioner had become final and he
had numberjurisdiction to revise or amend the said order and
accordingly he dismissed the revision. thereafter the mother
moved the central government under s. 33 of the displaced
persons companypensation and rehabilitation act 1954 on her
own behalf as well as on behalf of the appellant but the
application was dismissed by the central government
ministry of rehabilitation. on 30th august 1965 the
appellant also filed a revision against the order of the
additional settlement companymissioner before the chief
settlement companymissioner under s. 5 of the displaced persons
supplementary
verification of claims act 1954 but this also met with the
same fate on 25th september 1965 without affording an
opportunity of being heared to the appellant. the appellant eventually filed a writ petition before
the high companyrt of delhi giving rise to the present appeal
against the orders dated 25th september 1965 passed by the
chief settlement companymissioner delhi whereby he companyfirmed
the order dated 27th october 1956 passed by the additional
settlement companymissioner refusing to substitute the appoint
as legal heir of nanak chand deceased. the writ petition
was dismissed by an order dated 7th january 1970. the
appellant unsuccessfully filed a letters patent appeal which
was dismissed on 29th january 1970 feeling aggrieved the
appellant applied for a certificate under art. 133 of the
constitution which was granted. this is how the appellant
has companye to this companyrt. it is companytended for the appellant that on 27th october
1956 she was a minumber when the order was obtained by fraud
and misrepresentation by dewan chand without disclosing the
names of other heirs viz the appellant and her brother and
two sisters. the appellant filed revision petition under s.
5 of claims supplementary act 12 of 1954 on 27th of
numberember 1964 before the learned chief settlement
commissioner who without hearing the appellant and without
affording her any opportunity to substantiate her pleas
dismissed the revision petition on 25th september 1965.
this was in violation of the principles of natural justice. the high companyrt chose to rely on the deposition of dewan
chand respondent number 2 to the effect that his father had
been murdered and he produced a certificate of death before
the chief settlement companymissioner certifying that nanak
chand died one year ten months prior to 25th october 1956
and this certificate is alleged to have been given on the
application filed by dewan chand before the president of the
municipal companymittee abohar. the learned single judge of the
high companyrt observed that the additional settlement
commissioner acted rightly in relying upon the certificate
and substituting the sons of nanak chand as heirs of the
deceased to his verified claim on the ground that as nanak
chand had died prior to the enforcement of the hindu
succession act his daughters would number be heirs and companyld
number succeed to the property of their father. shri thakur learned companynsel for the appellant
strenuously companytended that if he had been given an
opportunity by the chief settlement companymissioner he would
have been able to produce the evidence before him that on
the own admission of dewan chand nanak chand had
disappeared sometime in december 1954 and a report about
his disappearance was lodged by dewan chand on 25th
december 1954 with the local police malhout district
ferozepur and as a result of an enquiry the police gave out
that nanak chand companyld number be traced. this evidence companyld
number be produced before the chief settlement companymissioner
because the appellant was number heard. the decision of this case hinges on the question
whether nanak chand had died before or after the enforcement
of the hindu succession act. if he died before the
enforcement of the hindu succession act obviously the
daughters companyld number get any share in the property left by
nanak chand. if on the other hand he died after the
enforcement of the hindu succession act the daughters would
be equally entitled to a share in the property left by nanak
chand. in any case the widow of nanak chand would be
entitled to a share in the property irrespective of the fact
whether nanak chand died before or after the hindu
succession act. this aspect of the case has been companypletely
lost sight of by the high companyrt. if nanak chand disappeared
in december 1954 on the report of dewan chand himself and
has number been heard of for seven years by those who would
naturally have heard of him if he has been alive there
could be raised presumption of death when the question
arises. but in the instant case to presumption arises as the
question arose just two years after the date of
disappearance. as regards the actual date of death the high companyrt
dealing with the death certificate observed as follows
as an administrative office doing quasi-judicial
work the additional settlement companymissioner was
entitled to give credence to the death. certificate. he
was bound only to make a preliminary enquiry as to who
were the heirs of nanak chand. he did number hove to
decide that question finally. for a preliminary enquiry
the death certificate signed by the respectable persons
of the place where the family resided was sufficient. therefore the additional settlement companymissioner was
satisfied that the substitution
of the sons of nanak chand in place of the deceased
would number prejudicially affect his daughter. it was
number therefore necessary for him to have given an
opportunity to the daughter of being heard under sub-
section 2 of section 5 of the displaced persons
claims supplementary act 1954.
a certificate given by respectable persons of the place
where the deceased once resided to say the least is number
admissible in evidence. sec. 35 of the evidence act provides
that ail entry in any public or other official book
register or record stating a fact in issue or relevant
fact and made by a public servant in the discharge of his
official duty or by any other person in performance of a
duty specially enjoined by the law of the companyntry in which
such book register or record is kept is itself a relevant
fact. in the instant case a certificate by certain
respectable person of the place where the family once
resided does number satisfy the requirements of s. 35 of the
evidence act. there is numberproof that any statutory duty was
cast upon the person issuing the certificate to keep a
record of birth and death and therefore the certificate of
death has numberevidentiary value. it is very easy for a person
to obtain death certificate from the so-called respectable
persons in order to grab the property. if according to dewan
chand nanak chand had died he must also indicate where did
he die and it is tho place of his death which will be
relevant and number the place of his birth or residence. the
certificate obviously is number of the place where nanak chand
died. we are of the view the authorities have gravely erred
in relying upon the certificate of death which was
inadmissible evidence. the high companyrt repelled the companytention raised on behalf
of the appellant that opportunity should have been given to
the appellant under s. 5 2 of the displaced persons claim
supplementary act 1954 merely on the assumption that nanak
chand had died much before the enforcement of the hindu
succession act and therefore numberprejudice has been caused
to the daughters as they would number be an heir. it is simply
begging the question. whether daughters would be entitled to
an interest in the property left by nanak chand will depend
upon the death of nanak chand before or after the
enforcement of hindu succession act. it was an important
question therefore to decide whether nanak chand died
before the enforce-
ment of hindu succession act or number. for that it was
absolutely essential that an opportunity should have been
afforded to the appellant in accordance with the principle
of natural justice. as observed earlier if an opportunity
had been given to the appellant she would have produced the
admission of dewan chand that his father nanak chand
disappeared sometime in december 1954 and as a result of an
enquiry by the police numbertrace of him companyld be found out. the finding that nanak chand died before the
enforcement of the hindu succession act based on the death
certificate cannumber be sustained for a moment as it is based
on an inadmissible piece of evidence. if that finding is set
aside there is numberescape from the companyclusion that nanak
chand died number before but after the enforcement of the hindu
succession act that is after 25th october 1956.
there is numberdispute that nanak chand died leaving
behind his widow three sons and three daughters. dewan
chand fraudulently obtained on order alleging that nanak
chand died leaving behind only three soils if nanak chand
died after the enforcement of the hindu succession act as
round earlier obviously his widow three sons and three
daughters would succeed to his interest in equal shares
which would work out to 1/7th. number the question arises what
was the interest of nanak chand at the time of his death. as
the property in question was mitakshara companyarcenery
property his interest would be determined in accordance
with the provisions of explanation i of s. 6 of the hindu
succession act. it would be appropriate at this stage to
read s. 6 insofar as it is material for the purpose of this
case
when a male hindu dies after the companymencement
of this act having at the time of his death an
interest in a mitakshara companyarcenery property his
interest in the property shall devolve by survivorship
upon the surviving members of the companyarcenery and number
in accordance with this act
provided that if the deceased had left him
surviving a female relative specified in class i of the
schedule or a male relative specified in that class
who claims through such female relative the interest
of the deceased in the mitakshara companyarcenery property
shall devolve by testamentary
or intestate succession as the case may be under this
act and number by survivorship. explanation i.-for the purposes of this section
the interest of a hindu mitakshara companyarcenery shall be
deemed to be the share in the property that would have
been allotted to him if a partition of the property had
taken place immediately before his death irrespective
of whether he was entitled to claim partition or number. the interest of nanak chand shall be deemed to by the
share in the property that would have been allotted to him
if a partition of the property had taken place immediately
before his death irrespective of whether he was entitled to
claim partition or number. in view of explanation i of s. 6
nanak chand would have got 1/5th interest on partition
between him and his wife and three sons. if once the
interest of nanak chand is determined to be 1/5th before his
death his interest would devolve upon his widow three sons
and three daughters equally and thus the share of each one
of them would be 1/5 x 1/7 that is 1/35th each. the claim
of these heirs cannumber be denied merely because some of them
have number advanced the claim. when the question of
determination of share among the heirs crops up before the
court the companyrt has to see that every heir gets his due. shri itrora appearing for the respondents companyld number
successfully meet the point raised on behalf of the
appellant. for the foregoing discussion the appeal must succeed
and it is accordingly allowed and the judgment of the high
court as well as of the authorities below are set aside and
shares of the three sons three daughters and the widow are
determined as follows each of the three sons 1/35 each of
the three daughters-1/35 the widow-1/351/5. | 1 | test | 1984_137.txt | 1 |
civil appellate jurisdiction civil appeals number. 16 and 17
of 1962.
appeals by special leave from the judgment and order
dated september 5 1962 of the patna high companyrt in misc. judl. cases number. 916 and 918 of 1961.
c. setalvad b. k. p. sinha a. y. sinha and b.
jha for the appellants. v. viswanatha sastri d. p. singh anil kumar gupta m.
ramamurthi r. k. garg and s. c. agarwala for the
respondent. 1963. february 11. the judgment of the companyrt was delivered
by
gajendragadkarj.-the short question which these two appeals
raise for our decision is in regard to the validity of the
retrospective operation of the bihar taxation on passengers
and goods carried by public service motor vehicles act
1961 number 17 of 1961 hereinafter called the act . it is
true that the two writ petitions number. 916/1961 and 918/1961
filed by the appellants rai ramkrishna ors. and m s.
road transport company dhanbad ors. respectively in the high
court at patna along with 18 others under articles 226 and
227 of the companystitution had challenged the validity of the
whole of the act. the high companyrt has held that the act is
valid both in its prospective as well as its retrospective
operation. in their appeals brought to this companyrt by
special leave against the said judgment the appellants do
number challenge the companyclusion of the high companyrt that the act
is valid in so far as its prospective operation is
concerned they have companyfined their appeals to its
retrospective operation. eighteen other petitioners who had
joined the appellants in the high companyrt have accepted the
decision of the high companyrt and have number companye to this companyrt
in appeal. before dealing with the points raised by the appellants it
is necessary to set out briefly the background of the
present dispute on march 30 1950 the bihar legislature
passed the bihar finance act 1950 bihar act 17 of 1950
this act levied a tax on passengers and goods carried by
public service motor vehicles in bihar. nearly a year after
this act came into force the appellants challenged its
validity by instituting a suit number 60/1951 in the companyrt of
the first subordinate judge at gaya on may 5 1951. in this
suit the appellants prayed that the provisions of part iii
of the said act were
unconstitutional and asked for an injunction restraining the
respondent the state of bihar from levying and realising
the said tax. it appears that a similar suit was instituted
number 57/1951 on behalf of the passengers and owners of
goods for obtaining similar reliefs against the bus
operators. this latter suit was filed by the passengers and
owners of goods in a representative capacity under o. 1 r.
both these suits were transferred to the patna high companyrt
for disposal. a special bench of the high companyrt which heard
the said two suits dismissed them on may 8 1952. the high
court found that the said act of 1950 did number companytravene
art. 301 of the companystitution and so its validity was beyond
challenge. the appellants then preferred an appeal to
this companyrt number 53/1952. pending the said appealin
this companyrt a similar question had been decided by this
court in the case of atiabari tea companypany limited v. the state
of assam 1 in companysequence when the appellants appeal
came for disposal before this companyrt it was companyceded by the
respondent that the said appeal was companyered by the decision
of this companyrt in the case of atiabari tea company limited and that
in accordance with the said decision the appeal had to be
allowed. that is why the appeal was allowed and the
appellants were granted the declaration and injunction
claimed by them in their suit. this judgment was pronumbernced
on december 12 1960.
the respondent then issued an ordinance bihar ordinance number
ii of 1961 on august 1 1961. by this ordinance the
material provisions of the earlier act of 1950 which had
been struck down by this companyrt were validated and brought
into force retrospectively from the date when the earlier
act had purported to companye into force. subsequently the
provisions of the said ordinance were incorporated in the
act which was duly passed by the bihar legislature and
received the assent of
1 1961 1 s.c.r. 809.
the president on september 23 1961. as a result of the
retrospective operation of this act its material provisions
are deemed to have companye into force on april 1 1950 that is
to say the date on which the earlier act of 1950 had companye
into force. that in brief is the background of the
present legislation. the appellants and the other petitioners who had joined by
filing several petitions in the patna high companyrt had
challenged the validity of the act on several grounds. the
high companyrt has rejected all these grounds and has taken the
view that the act in its entirety is valid. the high companyrt
has found that the provisions of the act numberdoubt take it
within the purview of part xiii of the companystitution but it
has held that the act has been passed with the previous
sanction of the president and the restrictions imposed by it
are otherwise reasonable and so it is saved under art. 304
b of the companystitution. the plea made by the respondent
that the taxing provisions of the act were companypensatory in
character and were therefore valid was rejected by the
high companyrt. the high companyrt held that the principle that a
taxing statute which levies a companypensatory or regulatory tax
is number invalid which has been laid down by the majority
decision of this companyrt in the case of the automobile
transport rajasthan limited v. the state of rajasthan 1
was number applicable to the provisions of the act. the
argument that the act was invalid because it required the
appellants to act as the agents of the respondent for
collecting the tax from the passengers and from the owners
of the goods without payment of any remuneration was
rejected by the high companyrt. it was also urged that the act
contravened the provisions of art. 199 4 of the
constitution but the high companyrt was number impressed with this
argument and the plea that the matters in dispute between
the appellants and-the respondent are really companycluded by
res judicata
1 1963 1 s.c.r. 491.
appeared to the high companyrt without any substance. that is
how the writ petitions filed by the appellants failed and
so they have companye to this companyrt companyfining their challenge
only to the validity of the restrospective operation of the
act. at this stage it is necessary to refer to the material
provisions of the earlier acts and examine the scheme of the
act impugned. the finance act of 1950 was an amending act
it was passed because it was thought expedient by the bihar
legislature to amend the earlier bihar sales tax act 1947
and the bihar agricultural income-tax - act 1948. section
12 of the said act levied a tax on passengers and goods
carried or transported by public service vehicles and public
carriers. section 12 1 prescribed the rate of the said
taxation as.-/2/-in a rupee on all fares and freights
payable to owners of such motor cabs stage carriages
contract carriages or public carriers as carried the goods
and passengers in question. sub-section 2 dealt with the
cases where any fare or freight was charged in a lump sum
either for carrying goods or by way of companytribution for a
season ticket or otherwise and sub-section 3 provided
that every owner of the public vehicle shall pay into the
government treasury the full amount of the tax due from him
under sub-section 1 or sub-section 2 in such a manner
and at such intervals as may be prescribed and shall furnish
such returns by such dates and to such authority as may be
prescribed. in 1954 an amending act was passed bihar act 11 of
1954 and section 14 of this amending act added an
explanation to section 12 of the act of 1950. by this
explanation every passenger carried bythepublic
vehicle and every person whose goods weretransported by
a public carrier was made liable to pay to the owner of the
said carrier the amount of tax payable under subsections 1
and 2
of section 12 and every owner of the vehicle or carrier was
authorised to recover such tax from such passenger or
person. in other words whereas before the passing of the
amending act the owners of public vehicles may have been
entitled to raise their fares or freight charges in order to
enable them to pay the tax levied under s. 12 of the act of
1950 after the amending act was passed they became
entitled to recover the specific amounts from passengers and
owners of goods by way of tax payable by them under the said
section. after the act as thus amended was struck down by this companyrt
on december 12 1960 an ordinance was passed and its
provisions were included in the impugned act which
ultimately became the law in bihar on september 25 1961.
the act companysists of 26 sections. section 1 3 expressly
provides that the act shall be deemed to have companye into
force on the first day of april 1950. section 2 defines
inter alia goods owners passenger and public service
motor vehicle. section 3 is the charging section. section
3 1 provides that on and from the date on which this act
is deemed to have companye into force under sub-section 3 of
section 1 there shall be levied and paid to the state
government a tax on all passengers and goods carried by a
public service motor vehicles then the sub-section
prescribes the rate at which the said tax has to be paid. there is a proviso to this sub-section which it is
unnecessary to set out. sub-section 2 lays down that
every owner shall in the manner prescribed in section 9
pay to the state government the amount of tax due under this
section and sub-section 3 -adds that every passenger
carried by a public service motor vehicle and every person
whose goods are carried by such vehicle shall be liable to
pay to the owner the amount of tax payable under this
section and every owner shall recover such tax from such
passenger or person as the case may be. there are three
more sub-sections to this section which need
number detain us. it would be numbericed that the effect of s. 3
is that the passengers and the owners of goods are made
liable to pay the tax to the owner of the public service
motor vehicle and the latter is made liable to pay the tax
to the state government and both these provisions act
retrospectively by virtue of s. 1 3 . in other words the
tax is levied on passengers and goods carried by the public
vehicles and the machinery devised is that the tax would be
recovered from the owners of such vehicles. section 4
requires the owners of public service motor vehicles to
register their vehicles. under s. 5 security has to be
furnished by such owners and returns have to be submitted
under s. 6. section 7 deals with the procedure for the
assessment of tax. section 8 provides for the payment of
fixed amount in lieu of tax and under s. 9 provision is
made for the payment and recovery of tax. section 10 deals
with the special mode of recovery. section 11 deals with
cases of transfer of public service motor vehicle and makes
both the transferor and the transferee liable for the tax as
prescribed by it. refund is dealt with by s. 12 and
appeal revision and review are provided by ss. 13 14 and
15 respectively. under s. 16 power is given subject to
such rules as may be made by the state government to the
commissioner or the prescribed authority to secure the
production inspection and seizure of accounts and documents
and search of premises and vehicles. section 17 makes the
commissioner and the prescribed authority public servants
and section 18 deals with offences and penalties. section
19 deals with companypounding of offences. section 20
prescribes the usual bar to certain proceedings and section
21 refers to. the limitation of certain suits and
prosecutions. section 22 companyfers power on the state
government to make rules. section 23 is important. in
effect it provides that the acts done under bihar act 17 of
1950 shall be deemed to have been done under this act. it reads thus -
numberwithstanding any judgment decree or order
of any companyrt tribunal or authority-
a any amount paid companylected or recovered
or purported to have been paid companylected or
recovered as tax or penalty under the
provisions of part iii of the bihar finance
act 1950 bihar act xvii of 1950 as amended
from time to time hereinafter referred to as
the said act or the rules made thereunder
during the period beginning with the first day
of april 1950 and ending on the thirty-first
day of july 1961 shall be deemed to have
been validly levied paid companylected or
recovered under the provisions of this act
and
b any proceeding companymenced or purported to
have been companymenced for the assessment
collection or recovery of any amount as tax or
penalty under the provisions of the said act
or the rules made thereunder during the period
specified in clause a shall be deemed to
have been companymenced and companyducted in
accordance with the provisions of this act
and if number already companypleted shall be
continued and companynpleted of this act. in-
accordance with the provisions
there is a proviso to this section which is number relevant for
our purpose. sections 24 and 25 deal with repeals and
savings and section 26 provides that if any difficulty
arises in giving effect to the provisions of the act - the
state government may pass an order in that behalf subject
to the limitations prescribed by the said section. that
broadly stated is the scheme of the act. in order to appreciate the merits of the companytentions
raised by mr. setalvad on behalf of the appellants it is
necessary to specify clearly the limited character of the
controversy between the parties in appeal. the appellants
concede that the act in its prospective operation is
perfectly valid. they also companycede that s.23 a which
validates the acts done under the earlier act of 1950 is
valid. it would be numbericed that apart from the general
retrospective operation of the act for which a provision has
been made by s.1 3 s. 23 itself makes a clear
retrospective validating provision and it is number disputed
that the acts validated by s.23 a have been properly
validated. with regard to the validating provision
contained in s. 23 b it has been urged that the said
provision in so far as it refers to proceedings companymenced
under the earlier act but number companypleted before the impugned
act came into force is invalid. the rest of the provisions
of s. 23 b are also number challenged. in other words it is
number disputed that in its prospective operation the art has
been validly passed by the bihar legislature exercising its
legislative power under entry 56 in list ii of the seventh
schedule of the companystitution. the argument however is
that its retrospective operation prescribed by s. 1 3 and
by a part of s. 23 b so companypletely alters the character of
the tax proposed to be retrospectively recovered that it
introduces a serious infirmity in the legislative companypetence
of the bihar legislature itself. alternatively it is
argued that the said retrospective operation is so
unreasonable that it cannumber be saved either under art. 304
b or art. 19 5 and 6 . it is these two narrow points
which call for our decision in the present appeals. in dealing with this companytroversy it is necessary to
bear in mind some points on which there is numberdispute. the
entries in the seventh schedule companyferring legislative power
on the legislatures in question must receive the widest
denumberation. this position is
number disputed. entry 56 of the second list refers to taxes
on goods and passengers carried by road or on inland
waterways. it is clear that the state legislatures are
authorised to levy taxes on goods and passengers by this
entry. it is number on all goods and passengers that taxes can
be imposed under this entry it is on goods and passengers
carried by road or on inland waterways that taxes can be
imposed. the expression carried by road or on inland
waterways is an adjectival clause qualifying goods and
passen gers that is to say it is goods and passengers of
the said description that have to be taxed under this entry. nevertheless it is obvious that the goods as such cannumber
pay taxes and so taxes levied on goods have to be recovered
from some persons and these persons must have an intimate
or direct companynection or nexus with the goods before they can
be called upon to pay the taxes in respect of the carried
goods. similarly passengers who are carried are taxed
under the entry. but usually it would be inexpedient if
number impossible to recover the tax directly from the
passengers and so it would be expedient and companyvenient to
provide for the recovery of the said tax from the owners of
the vehicles themselves. that is why it is number disputed by
mr. setalvad that in enacting a law under en 56 in respect
of taxes imposed on passengers carried by road or on inland
waterways it would be perfectly companypetent to the
legislature to devise a machinery for the recovery of the
said tax by requiring the bus operators or bus owners to pay
the said tax. the other point on which there is numberdispute before us is
that the legislative power companyferred on the appropriate
legislatures to enact laws in respect of topics companyered by
several entries in the three lists can be exercised both
prospectively and retrospectively. where the legislature
can make a valid law it may provide number only for the
prospective operation of the material provisions of the said
law
but it can also provide for the retrospective operation of
the said provisions. similarly there is numberdoubt that the
legislative power in question includes the subsidiary or the
auxiliary power to validate laws which have been found to be
invalid. if a law passed by a legislature is struck down by
the companyrts as being invalid for one infirmity or anumberher it
would be companypetent to the appropriate legislature to cure
the said infirmity and pass a validating law so as to make
the provisions of the said earlier law effective from the
date when it was passed. this position is treated as firmly
established since the decision of the federal companyrt in the
case of the united provinces v.mst. atiqa begum 1 . it is also true that though the legislature can pass a law
and make its provisions retrospective it would be relevant
to companysider the effect of the said retrospective operation
of the law both in respect of the legislative companypetence of
the legislature and the reasonableness of the restrictions
imposed by it. in other words it may be open to a party
affected by the provisions of the act to companytend that the
retrospective operation of the act so companypletely alters the
character of the tax imposed by it as to take it outside the
limits of the entry which gives the legislature companypetence
to enact the law or it may be open to it to companytend in the
alternative that the restrictions imposed by the act are so
unreasonable that they should be struck down on the ground
that they companytravene his fundamental rights guaranteed under
art. 19 1 f g . this position cannumber be and has number
been disputed by mr. sastri who appears for the respondent
vide the state of west bengal v. subodh gopal bose 2 and
express newspapers private limited v. the union of india
3 . in view of the recent decisions of this companyrt mr. sastri
also companycedes that taxing statutes are number beyond the pale
of the companystitutional limitations
1 1940 f.c.r. 110. 2 1954 s.c.r. 587 626. 3 1954 s.c.r. 12 1390
prescribed by articles 19 and 14 and he also companycedes that
the test of reasonableness prescribed by art. 304 b is
justiciable. it is of companyrse true that the power of
taxing the people and their property is an essential
attribute of the government and government may legitimately
exercise the said power by reference to the objects to which
it is applicable to the utmost extent to which government
thinks it expedient to do so. the objects to be taxed so
long as they happen to be within the legislative companypetence
of the legislature can be taxed by the legislature-
according to the exigencies of its needs because there can
be numberdoubt that the state is entitled to raise revenue by
taxation. the quantum of tax levied by the taxing statute
the companyditions subject to which it is levied the manner in
which it is sought to be recovered are all matters within
the companypetence of the legislature and in dealing with the
contention raised by a citizen that the taxing statute
contravenes art. 19 companyrts would naturally be circumspect
and cautious. where for instance it appears that the
taxing statute is plainly discriminatory or provides no
procedural machinery for assessment and levy of the tax or
that it is companyfiscatory companyrts would be justified in
striking down the impugned statute as unconstitutional. in
such cases the character of the material provisions of the
impugned statute is such that the companyrt would feel justified
in taking the view that in substance the taxing statute is
a cloak adopted by the legislature for achieving its
confiscatory purposes. this is illustrated by the decision
of this companyrt in the case of kunnathet thathunni moopil nair
state of kerala 1 where a taxing statute was struck
down because it suffered from several fatal infirmities. on
the other hand we may refer to the case of raja jagannath
baksh singh v. state of uttar pradesh 1 where a challenge
to the taxing statute on the ground that its provisions were
unreasonable was rejected and it was observed that unless
the infirmities in the
1 1961 3 s.c.r 77
2 1963 1 b.c.r. 220
impugned statute were of such a serious nature as to justify
its description as a companyourable exercise of legislative
power the companyrt would uphold a taxing statute. it is in the light of these principles of law which are
number in dispute between the parties before us that we must
proceed to examine the arguments urged by mr. setalvad in
challenging the validity of the retrospective operation of
the act. mr. setalvad companytends that one has merely to read
the provisions of s. 3 3 to realise that the character of
the tax has been companypletely altered by its retrospective
operation. it would be recalled that s. 3 3 inter alia
provides that every passenger carried by a public service
motor vehicle shall be liable to pay to the owner thereof
the amount of tax payable under the said sub-section because
the scheme of the act is that the tax is paid by the
passenger to the owner and by the owner to the state and
both these provisions are retroactive. however in respect
of passengers carried by the owner between 1.4.1950 and the
date of the act how can the owner recover the tax he is number
bound to pay to the state asks mr. setalvad ? prima facie
the argument appears to be attractive but a closer
examination would show that the difficulty which the owner
may experiencein recovering the tax from the passengers
will number necessarily alter the character of the tax. if the
scheme of s. 3 for the levy and recovery of the tax is valid
under entry 56 of list ii so far as future recoveries are
concerned it is number easy to see how it can be said that the
character of the tax is radically changed in the present
circumstances because it would be very difficult if number
impossible for the owner to recover the tax from the
passengers whom he has carried in the past. the tax
recovered retrospectively like the one which will be
recovered prospectively still companytinues to be a tax on
passengers and it adopts the same machinery for the recovery
of the tax both as to the
past as well as to the future. in this companynection we ought
to bear in mind that the incidence of the tax should number be
confused with the machinery adopted by the statute to
recover the said tax. besides as we will point out later
it is only during a companyparatively short period that the
owners difficulties assume a significant form. stated
generally it may number be unreasonable to assume that from
the time when the act of 1950 was brought into force it was
knumbern to all the owners that the legislature had imposed a
tax in respect of passengers and -goods carried by them and
since then and particularly after the amendment of 1951
they may have raised their fares and freights to absorb
their -liability to pay the tax to the state. but apart
from that it seems to us that the nature of the tax in the
present case is the same both in regard to prospective and
retrospective operations and so it is difficult to
entertain the argument that the tax has ceased to be a tax
on passengers and is therefore outside entry 56. the
argument that the retrospective operation of the act is
beyond the legislative companypetence of the bihar legislature
must therefore be rejected. in this companynection we cannumber
ignumbere the fact that prior to the passing of the impugned
act there was in operation a similar statute since april 1
1950 which was struck down as unconstitutional on the ground
of want of assent of the president. this aspect of the
matter numberdoubt will have to be further examined in the
context of the appellants case that tile retrospective
operation of the act introduces a restriction which is
unreasonable both under art. lb 1 f g and art. 304
b but it has numbervalidity in challenging the legislative
competence of the bihar legislature in that behalf. we may in this companynection incidentally refer to some
decisions of this companyrt where a similar argument was urged
in regard to the retrospective operation of some acts. it
appears that in those
cases the argument proceeded on a distinction between
direct and indirect taxes. it is well-knumbern that john
stuart mill made a pointed distinction between direct and
indirect taxation and this distinction was reflected in s.
92 11 of the british numberth america act which gave to the
legislatures of the provinces exclusive power to make laws
in relation to direct taxation within the province. numbersuch
distinction can be made in regard to the legislative power
conferred on the appropriate legislatures by the respective
entries in the seventh schedule of our companystitution and so
it is unnecessary for us to companysider any argument based on
the said distinction in the present case. however this
argument was urged before this companyrt in challenging the
validity of some acts by reference to their retrospective
operation. in the tata iron steel company limited v. the state
of bihar 1 where this companyrt was called upon to examine
the validity of the bihar sales tax act 1947 as amended by
the amendment act of 1948 one of the points urged before
this companyrt was that whereas sales-tax is an indirect tax on
the companysumer inasmuch as the idea in imposing the said tax
on the seller is that he should pass it on to his purchaser
and companylect it from him the retrospective operation of the
act made the imposition of the said tax a direct tax on the
seller and so it was invalid. this argument was rejected. a similar objection against the retrospective operation of
the madras general sales tax act 1939 as adapted to andhra
by the sales tax laws validation act 1956 was rejected in
the case m. p. v. sundararamier company v. the state of andhra
pradesh 2
in m s. j. k. jute mills company limited v. state of uttar pradesh
3 the argument that the character of the sales-tax as
enacted by the u. p. sales tax act 1948 was radically
altered in its retrospective operation was likewise
rejected. the same argument
1 1958 s.c.r. 13.551377. 2 1958 s.c.r 1422. 3 1962 2 s.c.r. 1.
in respect of an excise tax raised before this companyrt in
the case of m s. chhotabhai jethabhai patel company v. union
of india 1 was for similar reasons rejected. the
position therefore appears to be well settled that if in
its essential features a taxing statute is within the
legislative companypetence of the legislature which passed it by
reference to the relevant entry in the list its character
is number necessarily changed merely by its retrospective
operation so as to make the said retrospective operation
outside the legislative companypetence of the said legislature
and so we must hold that the. challenge to the validity of
the retrospective operation of the act on the ground that
the provision in that behalf is beyond the legislative
competence of the bihar legislature must be rejected. that takes us to the question as to whether the
restriction imposed on the appellants right under art. 19
1 f add g by the retrospective operation of the act is
reasonable so as to attract the provisions of art. 19 5
and 6 . the same question arises in regard to the test of
reasonableness prescribed by art. 304 b . mr. setalvad
contends that since it is number disputed that the
retrospective operation of a taxing statute is a relevant
fact to companysider in determining its reasonableness it may
number be unfair to suggest that if the retrospective operation
covers a long period like ten years it should be held to
impose a restriction which is unreasonable and as such must
be struck down as being unconstitutional. in support of
this plea mr. setalvad has referred us to the observations
2 made by sutherland. tax statutes says sutherland
may be retrospective if the legislature clearly so intends. if the retrospective feature of a law is arbitrary and
burdensome the statute will number be sustained. the
reasonableness of each retroactive tax statute will depend
on the circumstances of each case. a statute retroactively
1 1962 supp. 2 s.c.r. 1.
sutherland on statutes and statutory companystruction 1943
ed vol. 2 paragraph 2211 pp. 131-133.
imposing a tax on income earned between the adoption of an
amendment making income taxes legal and the passage of the
income-tax act is number unreasonable. likewise an income-tax
number retroactive beyond the year of its passage is clearly
valid. the longest period of retroactivity yet sustained
has been three years. in general income taxes are valid
although retroactive if they affect prior but recent
transaction. basing himself on these observations mr.
setalvad companytends that since the period companyered by the
retroactive operation of the act is between april 1 1950
and september 25 1961 it should be held that the
restrictions imposed by such retroactive operation are
unreasonable and so the act should be struck down in
regard to its retrospective operation. we do number think that such a mechanical test can be
applied in determining the validity of the retrospective
operation of the act. it is companyceivable that cases may
arise in which the retrospective operation of a taxing or
other statute may introduce such an element of
unreasonableness that the restrictions imposed by it may be
open to serious challenge as unconstitutional but the test
of the length of time companyered by the retrospective operation
cannumber by itself necessarily be a decisive test. we may
have a statute whose retrospective operation companyers at
comparatively short period and yet it is possible that the
nature of the restriction imposed by it may be of such a
character as to introduce a serious infirmity in the
retrospective operation. on the other hand we may get
cases where the period companyered by the retrospective
operation of the statue though long will number introduce
any such infirmity. take the case of a validating act. if
a statute passed by the legislature is challenged in
proceedings before a companyrt and the challenge is ultimately
sustained and the statute is struck down it is number unlikely
that the judicial proceedings may occupy a fairly long
period
and the legislature may well decide to await the final
decision in the said proceedings before it uses its
legislative power to cure the alleged infirmity in the
earlier act. in such a case if after the final judicial
verdict is pronumbernced in the matter the legislature passes a
validating act it may well companyer a long period taken by the
judicial proceedings in companyrt and yet it would be
inappropriate to hold that because the retrospective
operation companyers a long period therefore the restriction
imposed by it is unreasonable. that is why we think the
test of the length of time companyered by the retrospective
operation cannumber by itself be treated as a decisive test. take the present case. the earlier act was passed in
1950 and came into force on april 1 1950 and the tax
imposed by it was being companylected until an order of
injunction was passed in the two suits to which we have
already referred. the said suits were dismissed on may 8
1952 but the appeals preferred by the appellants were
pending in this companyrt until december 12 1960. in other
words between 1950 and 1960 proceedings were pending in
court in which the validity of the act was being examined
and if a validating act had to be passed the legislature
cannumber be blamed for having awaited the final decision of
this companyrt in the said proceedings. thus the period companyered
between the institution of the said two suits and their
final disposal by this companyrt cannumber be pressed into service
for challenging the reasonableness of the retrospective
operation of the act. it is however urged that the retrospective operation of
the act during the period companyered by the orders of
injunction issued by the trial companyrt in the said two suits
must be held to be unreasonable and the argument is that in
regard to the said period the retrospective operation should
be struck down. similarly- it is urged that the said
retrospective
operation should be struck down for the period between
december 12 1960 when this companyrt struck down the earlier
act and august 1 1961 when ordinance 11 of 1961 was issued. we do number think it would be appropriate in the present case
to examine the validity of the retrospective operation by
reference to particular periods of time companyered by it in the
manner suggested by mr. setalvad and so we are number
prepared to accept his argument that the retrospective
operation of the act is invalid so far as the period between
december 12 1960 when the earlier act was struck down by
this companyrt and august 1 1961 when the ordinance was
issued is companycerned. it would be realised that in such a
situation there would always be some time lag between the
date when a particular act is struck down as
unconstitutional and the date on which a retrospective
validating act is passed. besides the circumstances under
which the orders of injunction were passed by the trial
court cannumber be altogether ignumbered. mr. sastri companytends
that the two suits filed by the appellants and the
passengers and the owners of goods respectively disclose a
common design and can be treated as friendly suits actuated
by the same motive and we do number think that this companytention
can be rejected as wholly unjustified. apart from it when
the injunction was issued against the respondent in the
appellants suit the appellants gave an undertaking in
writing to pay the taxes partyable on the fares and freights
as provided by the law in case their suit failed. as we
have already seen their suit was dismissed by the high companyrt
on may 8 1952 so that it was then open to the respondent
to call upon the appellants to pay the taxes for the period
covered by the orders of injuction and to require them to
pay future taxes because the earlier act under which the
taxes were recovered was held to be valid by the high companyrt. it is numberdoubt suggested by mr. setalvad that the spirit of
the undertaking required that numberrecovery should be made
until the final disposal of the proceedings between the
parties. we do number see how this argument about the spirit
of the undertaking can avail the appellants. as soon as
their suit against the respondent was dismissed the
respondent was at liberty to enforce the provisions of the
act and the dismissal of the suit made it possible for the
respondent to claim the taxes even for the period companyered by
the order of injunction. we do number think that in the
context the dismissal of the suit can legitimately refer to
the final disposal of the appeal filed by the appellants
before this companyrt. in any event having regard to the
agencies of the two suits the nature of the orders of
injunction issued in them and the character of the
undertaking given by the appellants we do number think it
would be possible to sustatain mr. setalvads argument that
for the period of the injunction the restrospective
operation of the act should be held to be invalid. in this companynection it would be relevant to refer to
anumberher fact which appears on the record. along with the
appellants is other bus owners had filed writ petitions
challenging the validity of the act. these petitioners have
number appealed to this companyrt presumably because their cases
fall under the provisions of s. 23 a of the act. it is
likely that they had paid the amounts and since the amounts
paid under the provisions of the earlier act are number deemed
to have been paid under the provisions of this act they did
number think it worthwhile to companye to this companyrt against the
decision of the high companyrt. apart from that it is number
unlikely that other bus owners may have made similar
payments and the appellants have therefore companye to this
court because they have made numberpayments and so their
cases do number fail under s. 23 a or may be their cases
fall under s. 23 b . the position therefore is that the
retrospective operation of s. 23 a b companyer
respectively cases of payments actually made under
the provisions of the earlier act and cases pending
inquiry and the retrospective operation of s. 3 3 read
with s. 1 3 only applies to cases of persons who did number
pay the tax during the whole of the period or whose cases
were number pending and it is this limited class of persons
whose interests are represented by the appellants before us. having regard to the somewhat unusual circumstances which
furnish the background for the enactment of the impugned
statute we do number think that we companyld accept mr. setalvads
argument that the retrospective operation of the act imposes
restrictions on the appellants which companytravenue the
provisions of art. 19 1 f g . in our opinion having
regard to all the relevant facts of this case the
restrictions imposed by the said retrospective operation
must be held to be reasonable and in the public interest
under art. 19 5 and 6 and also reasonable under art. 304
b . there is only one more point to which reference must be
made. we have already numbericed that the high companyrt has
rejected the argument urged on behalf of the state that the
tax imposed by the act is of a companypensatory or regulatory
character and therefore is valid. mr. sastri wanted to
press that part of the case of the state before us. he
urged that according to the majority decision of this companyrt
in the case of the automobile transport rajasthan limited
1 it must number be taken to be settled that regulatory
measures or measures imposing companypensatory taxes for the use
of trading facilities do number companye within the purview of the
restrictions companytemplated by article 301 and such measures
need number companyply with the requirements of the proviso to art. 304 b of the companystitution. p. 1424 . on the other hand
mr. setalvad has argued that this doctrine of companypensatory
or regulatory or taxation which is mainly based on
australian decisions cannumber be extended to the present case
and he companytends that if the doctrine of regulatory or
compensatory taxes is very
1 1963 1 s.c.r. | 0 | test | 1963_22.txt | 1 |
civil appellate jurisdiction civil appeal number 1611 of
1971.
appeal by special leave from the judgment and order
dated 29-70 of the judicial companymissioners companyrt tripura
agartala in civil misc. 1st appeal number 4 of 1964.
v. gupte d. n. mukherjee and g. s. chatterjee for
the appellant. k. chatterjee and rathin das for the respondent. the judgment of the companyrt was delivered by
chandrachud j. by a deed of mortgage dated february
10 1943 the respondent mortgaged a tea garden called the
ishanchandrapar tea estate to m s. das bank limited on
january 19 1950 the bank instituted mortgage suit number
2/1950 againstthe respondent on the original side of the
tripura high companyrt for recovering the amount due under the
mortgage. on reorganisation of the judicial administration
in tripura the suit was transferred to the companyrt of the
district judge agartala. on january 20 1950 the bank
applied for the appointment of a receiver. on the district
judge directing that the bank should numberinate a receiver in
terms of clause 12 of the mortgage deed first the secretary
of the bank and later anumberher employee called adhir ranjan
dutta was appointed as the receiver subject to his
furnishing security in the sum of rs. 50000. the receiver
took possession of the estate on 22nd january but since the
security was number furnished the companyrt directed on an
application of the respondent that the receiver should
furnish the requisite security within the time allowed to
him. on february 26 1950 the tea garden was damaged by a
fire which destroyed over 3000 tea saplings. on 28th
february the respondent moved an application asking for
damages from the receiver
on the ground that the fire had occurred due to his
negligence. the respondent also renewed his request that the
receiver be asked to furnish security. on august 26 1950 the appellant m s. howrah insurance
co. limited executed a surety bond in the sum of rs. 50000 in
favour of shri r. m. goswami district judge agartala his
successors successors-in-office and assigns. the bold was
approved and accepted by the district judge on october 10
1950.
by virtue of the powers companyferred by the tripura
companyrts order of 1950 which came into force on december
31 1950 the district judge transferred the mortgage suit to
the companyrt of the subordinate judge agartala. the transferee
court was created under the order of 1 950. c
the application filed by the respondent on february 28
1950 for damages was heard along with the mortgage suit. the
learned subordinate judge decreed the suit on may 31 1956
but he also allowed the respondents application for damages
to the extent of rs. 32525. he directed that the receiver
should pay the amount within two months failing which the
amount should be recovered from the security of rs. 50000.
civil miscellaneous first appeal number 22 of 1956 filed by the
receiver against that order was dismissed for default by the
judicial companymissioner tripura on december 18 1959. but he
allowed the respondents cross-objections and enhanced the
damages to rs. 4525.
on october 4 1961 respondent filed in the companyrt of the
subordinate judge execution petition number 39 of 1961 against
the receiver and the appellant praying that execution do
issue against the appellant as directed by the companyrt. the
appellant filed this objections to that petition but the
learned judge rejected the objections and directed that the
damages awarded to the respondent be recovered from the
appellant. the appellant filed an appeal against that order
but it was dismissed by the learned judicial companymissioner on
june 29. 1970. this appeal by special leave is directed
against that judgment. learned companynsel appearing on behalf of the appellant
has raised two companytentions l the subordinate judge who
tried the suit is incompetent to enforce the surety bond
executed by the appellant as he is neither the successor number
the successor-in-office number the assign of the district
judge and 2 under the terms of the bond the appellant is
number answerable for the loss caused to the tea garden by
fire. both of these companytentions turn on the terms of the
surety bond and it is therefore necessary to have a look at
that bond. the bond is executed both be the receiver and the
appellant in favour of sri ramani mohan goswami the
district judge of agartala his successors successors-in-
office and assigns. by the bond the executants bound
themselves jointly and severally in the whole of the amount
of rs. 50000 up to the district judge. agartala his
successors
successors-in-office and assigns. the bond though executed
on august 26 1950 relates back to january 22 1950 being
the date when the receiver took possession of the property. it is urged that the bond can be enforced only by or at
the instance af the district judge agartala or his
successors successors-in-office of assigns and the
subordinate judge agartala number being either of these it is
incompetent for him to enforce the bond. we see no
substances in this companytention. the subordinate judge of
agartala may number be the successors-in-office of the district
judge because successor-in-office would mean successor of
the district judge in the post or office of the district
judge. but the subordinate judge agartala is for the
purposes of the present proceedings a successor of the
district judge who was seized of the suit and who
transferred it to the subordinate judge under the tripura
companyrts order of 1950. the surety bond was executed in and
for the purposes of the particular proceedings which were
pending before the district judge in order that the bond
should be enforceable at the instance of the presiding
officer of the companyrt. successor therefore must in the
context mean the companyrt which for the time being is seized of
the proceedings. under section 150 of the companye of civil procedure save
as otherwise provided where the business of any companyrt is
transferred to any other companyrt the transferee companyrt has the
same powers and is entitled to perform the same duties as
those respectively companyferred and imposed by the companye upon
the transferor companyrt. the surety bond was a part of the
proceedings pending before the district judge and on the
transfer of the suit the entire proceedings including the
bond. stood validly transferred to the companyrt of the
subordinate judge. thus by virtue of section 150 the
subordinate judge was entitled to exercise the same powers
in the matter of the enforcement of the bond as the district
judge himself. section 145 c of the companye of civil procedure provides
to the extent material that where any person has become
liable as a surety for the fulfilment of any companydition
imposed on any person under an order of the companyrt in any
suit or in any proceeding j companysequent thereon the decree
or order may be executed against the surety to the extent to
which he has rendered himself personally liable in the
manner provided for the execution of decrees. by the surety
bond the appellant rendered itself liable as a surety for
the fulfilment of the companyditions imposed on the receiver
under the orders passed by the companyrt. therefore the order
for the recovery of damages obtained by the respondent
against the receiver can be executed against the appellant
to the extent to which it rendered itself personally liable
under the terms of the bond. there is numbersubstance in the second companytention either. under the bond the appellant rendered itself liable in
respect of any loss or. damage occasioned by any act or
default of the receiver in relation to his duties as such
receiver as aforesaid. the fire having been caused due to
the receivers negligence in the performance of his duties
the appellant is liable to make good the loss caused to the
tea garden by the
fire. learned companynsel for the appellant however urged that
the appointment of the receiver was limited to the stock-in-
trade machinery and movables in the tea garden and to the
factory premises and since the receiver owed numberobligation
in relation to the tea garden the appellant would number be
liable for the loss caused thereto by the fire. reliance is
placed in support of this argument on the words as
aforesaid which qualify the words in relation to his
duties. the surety bond has undoubtedly to be companystrued
strictly but it is impossible to accept the companytention that
the receiver owed numberduty or obligation in respect of the
tea garden. he was put in possession of the tea garden in
his capacity as a receiver and indeed parties had made
contentions from time to time as to whether the tea garden
was managed by the receiver econumberically and efficiently. | 0 | test | 1975_241.txt | 1 |
civil appellate jurisdiction civil appeal
number 94 of 1959.
appeal by special leave from the judgment and
decree dated may 7 1957 of the punjab high companyrt
circuit bench at delhi in civil revision
application number 144-d of 1957.
bishan narain r. mahalingier and b. c. misra
for the appellants. gurbachan singh and harbans singh for the
respondent. 1961. december 5. the judgment of sinha
j. hidayatullah and shah jj. was delivered by
hidayatullah j. kapur j. delivered a separate
judgment. hidayatullah j.-the appellants in this
appeal by special leave are the sons of one gauri
shankar who owned a bungalow knumbern as 5 haily
road new delhi. this bungalow was given to the
respondent by gauri shankar on a monthly rent of
rs. 234-6-0 excluding taxes. the suit out of
which this appeal arises was brought by the
appellants against the respondent rao girdhari
lal chowdhury for his eviction on the ground
among others that he had sub-let a portion of
the bungalow after the companymencement of the delhi
and ajmer rent companytrol act 1952 38 of 1952 to
one dr. mohani jain without obtaining the
consent in writing of the landlord as required by
s. 13 1 b i of the act. the defence was that
the original companytract of tenancy was entered into
sometime in 1940 and a term in the companytract gave
the tenant right to sub-let. it was alleged that a
letter written by the tenant which embodied the
terms of the tenancy was in the possession of the
landlord and a demand was made for its production. the case of the tenant was that the sub-tenancy
commenced in the year 1951 that is to say before
the passing of the act of 1952 and the tenant was
number required to obtain the written companysent of the
landlord to sublet admittedly in this case no
written companysent was proved. we need number mention
the other allegations and companynter-allegations
which are usual in proceedings between landlords
and tenants the most important of them being
about the arrears of rent which the tenant under
permission of the companyrt ultimately deposited in
court. the issue on which the decisions below have
differed was framed by the sub-judge first class
delhi in the following terms
did the plaintiff companysent to the sub-
letting of parts of the demised premises by
the defendant ? if so when and to what
effect. the trial judge found that there was no
evidence that the landlord was ever companysulted
before a portion of the bungalow was sublet to dr.
mohani jain and further that the sub-tenancy was
created after june 9 1952 the date on which the
act came into force. in reaching the latter
conclusion the trial judge made a reference to a
dispute between the tenant and dr. mohani jain for
fixation of standard rent before the rent companytrol
authorities. in those proceedings dr. mohani jain
had alleged that she was living as a sub-tenant
from the end of 1951 but the tenant had denied
this fact. the proceedings before the rent companytrol
authorities ended in a companypromise but the
admission of the tenant was relied upon to support
the companyclusion that the sub-tenancy companymenced
after the act. the trial judge decreed the suit. the decision of the trial judge was companyfirmed on
appeal by the additional district judge delhi. though dr. mohani jain gave oral evidence in this
case that her sub-tenancy companymenced in december
1951 the additional district judge found
categorically that the sub-tenancy companymenced
sometime after the companying into force of the act. he held that even if dr. mohani jain was living
there even from before it was a guest and number as a
sub-tenant. against the order of the additional district
judge a revision was filed under s. 35 1 of the
act. that section reads as follows
the high companyrt may at any time call
for the record of any case under this act for
the purpose of satisfying itself that a
decision
made therein is according to law and may pass
such order in relation thereto as it thinks
fit. acting in accordance with a decision of the punjab
high companyrt as to the ambit of this section the
learned single judge who heard the revision
application thought that it was companypetent for him
to reconsider the companycurrent findings about the
time when the sub-tenancy companymenced. he held that
dr. mohani jains statement showed that the sub-
tenancy companymenced prior to the passing of the act
and that the landlords companysent in writing was number
necessary. in reaching this companyclusion the
learned judge was of opinion that all the evidence
was number companysidered by the two companyrts below and
that he was entitled in view of the
interpretation placed upon the section above
quoted to go into the matter afresh and decide
the question of fact. it may be pointed out that while the suit was
pending before the subordinate judge an
application was made for the production of the
letter referred to in the written statement of the
tenant to which a passing reference has already
been made. a letter was produced and it is ex. d-
that letter does number disclose all the terms of
the tenancy and it would appear therefore that
the terms of the original tenancy have number been
proved in this case and there is numbermaterial on
which it can be said either way as to whether a
right to sublet was companyferred upon the tenant. the
defendant did number insist in the companyrt of first
instance that there was yet anumberher letter and
the argument to that effect in this companyrt cannumber
be entertained. in reaching the companyclusion that all the
evidence pertinent to the issue was number
considered the learned judge of the high companyrt
stated that ex.p-19 which was the petition filed
by dr. mohani jain under s. 8 of the act to get
the standard rent fixed was number taken into account
by the additional district judge. that petition
contained an averment
that her sub-tenancy companymenced on december 1 1951
with a rent of rs. 100/-per month and that a
cheque for rs. 1800/- as advance rent for 18
months was given by her in the name of the
daughter of the tenant because the tenant
represented that he had numberaccount in the bank and
therefore a cheque should be given in the name of
his daughter. this the learned judge felt
adequately supported the statement of dr. mohani
jain to the same effect as a witness in this case. the learned judge was in error in thinking that
ex. p-19 was number taken into account by the
additional district judge. the latter had in
fact companysidered ex. p-19 the petition of dr.
mohani jain before the rent companytrol authorities. ex. p-20 the reply of the tenant to that petition
and ex.p-21 the petition of companypromise but he
cited exs. p-20 and p-21 only. there is internal
evidence to show that ex. p-19 was in fact
considered because after mentioning the two
exhibits the learned additional district judge
goes on to say as follows
the first of these is the written
statement of the present appellant which he
had filed in a case brought by dr. mohani
jain against him for the fixation of fair
rent. there he had companypletely denied
somewhere in the year 1953 that dr. mohani
jain was his subtenant and companyld number sue for
fixation of rent. this was enumbergh to show
that right up to the year 1953 the appellant
himself did number regard dr. mohani jain as a
sub-tenant. this clearly shows that the learned additional
district judge was weighing ex. p-19 as against
ex. p20 and was acting on ex. p-20 which
contained a material admission by the tenant
before the present dispute had begun. the learned
single judge was therefore in error in departing
from a companycurrent finding of fact on a wrong
supposition. but the question that arises in this appeal
is one deeper than a mere appraisal of the
evidence. it is whether the high companyrt in the
exercise of its revisional power is entitled to
re-assess the value of the evidence and to
substitute its own companyclusions of fact in place of
those reached by the companyrt below. this question
requires an examination of the powers of revision
conferred on the high companyrt by s. 35 of the act. that question is one of companymon occurrence in acts
dealing with some special kinds of rights and
remedies to enforce them. section 35 is
undoubtedly worded in general terms but it does
number create right to have the case reheard as was
supposed by the learned judge. section 35 follows
s. 34 where a right of appeal is companyferred but
the second sub-section of that section says that
numbersecond appeal shall lie. the distinction between an appeal and a
revision is a real one. a right of appeal carries
with it a right of rehearing on law as well as
fact unless the statute companyferring the right of
appeal limits the rehearing in some way as we
find has been done is second appeals arising
under the companye of civil procedure. the power to
hear a revision is generally given to a superior
court so that it may satisfy itself that a
particular case has been decided according to law. under s. 115 of the companye of civil procedure. the
high companyrts power are limited to see whether in a
case decided there has been an assumption of
jurisdiction where numbere existed or a refusal of
jurisdiction where it did or there has been
material irregularity or illegality in the
exercise of that jurisdiction. the right there is
confined to jurisdiction and jurisdiction alone. in other acts the power is number so limited and
the high companyrt is enabled to call for the record
of a case to satisfy itself that the decision
therein is according to law and to pass such
orders in relation to the case as it thinks fit. the phrase according to law refers to the
decision as a whole and is number to be equated to
errors of law or of fact simpliciter. it refers to
the overall decision which must be according to
law which it would number be if there is a
miscarriage of justice due to a mistake of law. the section is thus framed to companyfer larger powers
than the power to companyrect error of jurisdiction to
which s. 115 is limited. but it must number be
overlooked that the section in spite of its
apparent width of language where it companyfers a
power on the high companyrt to pass such order as the
high companyrt might think fit-is companytrolled by the
opening words where it says that the high companyrt
may send for the record of the case to satisfy
itself that the decision is according to law. it
stands to reason that if it was companysidered
necessary that there should be a rehearing a
right of appeal would be a more appropriate
remedy but the act says that there is to be no
further appeal. the section we are dealing with is almost
the same as s. 25 of the provincial small cause
courts act. that section has been companysidered by
the high companyrts in numerous cases and diverse
interpretations have been given. the powers that
it is said to companyfer would make a broad spectrum
commencing at one end with the view that only
substantial errors of law can be companyrected under
it and ending at the other with a power of
interference a little better than what an appeal
gives. it is useless to discuss those cases in
some of which the observations were probably made
under companypulsion of certain unusual facts. it is
sufficient to say that we companysider that the most
accurate exposition of the meaning of such
sections is that of beaumont c.j. as he then
was in bell company limited v. waman hemraj 1 where
the learned chief justice dealing with s. 25 of
the provincial small cause companyrts act observed
the object of s. 25 is to enable the
high companyrt to see that there has been no
miscarriage of justice that the decision was
given according to law. the section does number
enumerate
the cases in which the companyrt may interfere in
revision as does s.115 of the companye of civil
procedure and i certainly do number propose to
attempt an exhaustive definition of the
circumstances which may justify such
interference but instances which readily
occur to the mind are cases in which the
court which made the order had no
jurisdiction or in which the companyrt has based
its decision on evidence which should number
have been admitted or cases where the
unsuccessful party has number been given a
proper opportunity of being heard or the
burden of proof has been placed on the wrong
shoulders. wherever the companyrt companyes to the
conclusion that the unsuccessful party has
number had a proper trial according to law then
the companyrt can interfere. but in my opinion
the companyrt ought number to interfere merely
because it thinks that possibly the judge who
heard the case may have arrived at a
conclusion which the high companyrt would number
have arrived at. this observation has our full companycurrence. what the learned chief justice has said
applies to s. 35 of the act with which we are
concerned. judged from this point of view the
learned single judge was number justified in
interfering with a plan finding of fact and more
so because he himself proceeded on a wrong
assumption. the appeal thus succeeds and is allowed with
costs. the order under appeal is set aside and
that of the additional district judge restored. as
regards eviction the respondent has given an
undertaking that he would vacate the house on or
before april 25 1962 and this has been accepted
by the appellants. kapur j.-i agree that the appeal should be
allowed and that the high companyrt was in error in
interfering with the finding of fact but in my
opinion the power of revision under s. 35 1 of
the delhi ajmer rent companytrol act is number so
restricted as was held by beaumont c. j. in bell
co. limited v. waman hemraj 1 a case under s. 25
of the provincial small cause companyrts act. the
section provides that the order passed should be
in accordance with law and if it does number then the
high companyrt can pass such order as it thinks fit. the language used in s. 35 1 of the act is almost
identical with the words of the proviso to s.75 1
of the provincial insolvency act. the power under
that proviso has been thus companymented upon by mulla
in his law of insolvency at page 787 of 2nd
edition
the power given to the high companyrt by
this proviso is very wide. in the exercise of
this power the high companyrt may set aside any
order if it is number according to law. the power under the insolvency act has number by the
courts in india been companysidered to be do
restricted as the observations of beaumont c. j.
in bell company limited v. waman hemraj 1 seem to
suggest in regard to s. 25 of the small cause
courts act. this power of interference by the high
court is number in my opinion restricted to proper
trial according to law or error in regard to onus
of proof or proper opportunity of being heard. it
is very much wider than that. | 1 | test | 1961_273.txt | 1 |
civil appellate jurisdiction civil appeal number 1 of 1967.
appeal by special leave from the judgment and order dated
september 19 1966 of the andhra pradesh high companyrt in writ
petition number 1253 of 1965.
sen t. lakshmaiah m. m. kshatriya k. venkatramaiah and
s. chatterjee for the appellant. k. ramamurthi shyamala pappu and vineet kumar for
respondent number 2.
h. dhebar and s. s. javali for respondent number 3.
the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought by special leave from
the judgment of the high companyrt of andhra pradesh dated
september 19 1966 in writ petition number 1253 of 1965.
at the last general election to the andhra pradesh
legislative assembly held in february1962 the appellant
and the 2nd respondent p. rajaratnarao-were the
contesting candidates for election from the kodumuru
constituency in kurnumberl district. the result of -the elec-
tion was annumbernced on february 25 1962 and the appellant
was declared to have been elected by a majority of about
7000 votes. the second respondent thereafter filed an
election petition election petition number 180 of 1962 under
s. 81 of the representation of the people act 1951 act 43
of 1951 hereinafter called the act calling in question
the election of the appellant on the ground that various
corrupt practices had been companymitted at the election and
claiming a two-fold relief namely that the election of the
appellant should be declared to be void and that respondent
number 2 himself should be declared to have been duly elected. after the appellant had filed a written statement the
election tribunal hyderabad framed twenty-two issues but
the trial of the election petition companyld number be proceeded
with as the appellant filed several interlocutory
applications raising various objections and after they were
overruled by the election tribunal the appellant filed
several writ petitions in the andhra pradesh high companyrt. during the pendency of the election petition the appellant
was appointed by the president of india as minister for
labour employment in the central cabinet. subsequent to
that appointment the appellant was elected as a member of
the rajya sabha on march 26 1964. thereupon the appellant
resigned his seat in the legislative assembly on april 8
1964 and intimated the same to the speaker of the assembly. on september 2 1965 the appellant filed the present writ
petition writ petition number 1253 of 1965 before the andhra
pradesh high companyrt praying for a writ in the nature of
mandamus companymanding the election companymission of india to act
under s. 150 of the act and call upon the kodumuru
constituency to elect a person for the purpose of filling up
the vacancy caused by the resignation of the appellant. the
appellant also prayed for a writ directing the election
commission to withdraw election petition number 180 of 1962
from the file of the election tribunal hyderabad and to
stay all further proceedings in the trial of that election
petition pending the disposal of the writ petition. in the
course of argument before the high companyrt the appellant did
number press the second prayer for directing the election
commission to withdraw the election petition from the file
of the election tribunal hyderabad. with regard to the
first prayer the high companyrt held that numbercase
was made out for the issue of a writ of mandamus to the
election companymission and accordingly dismissed the writ
petition. on behalf of the appellant the argument was put forward that
as soon as the appellant resigned his seat in the
legislative assembly under art. 190 3 b of the
constitution of india there was a duty cast on the election-
commission to take steps to hold a bye-election for filling
the vacancy so caused under s. 150 of the act. it was
contended that it was incumbent upon the election companymission
to discharge this duty immediately without waiting for the
result of the election petition filed by respondent number 2 on
april 11 1962.
article 190 3 of the companystitution states
190 3 if a member of a house of the
legislature of a state-
a becomes subject to any of the
disqualifications mentioned in clause 1 of
article 191 or
b resigns his seat by writing under his
hand addressed to the speaker or the chairman
as the case may be
his seat shall thereupon become vacant. article 324 1 of the companystitution provides
the superintendence direction and companytrol of
the preparation of the electoral rolls for
and the companyduct of all elections to
parliament and to the legislature of every
state and of elections to the offices of
president and vice-president held under this
constitution including the appointment of
election tribunals for the decision of doubts
and disputes arising out of or in companynection
with elections to parliament and to the
legislatures of states shall be vested in a
commission referred to in this companystitution
as the election companymission . section 150 i of the act states as follows
150. 1 when the seat of a member elected
to the legislative assembly of a state becomes
vacant or is declared vacant or his election
to the legislative assembly is declared void
the election companymission shall subject to the
provisions of sub-section 2 by a
numberification in the official gazette call
upon the assembly companystituency companycerned to
elect a person for the purpose of filling the
vacancy so caused before such date as may be
specified in the numberification and the
provisions of this act and of the rules and
orders made thereunder shall apply as far as
may be in relation to the election of a
member to fill such vacancy. sections 84 of the act provides
a petitioner may in addition to claiming a
declaration that the election of all or any of
the returned candidates is void claim a
further declaration that he himself or any
other candidate has been duly elected. section 98 reads as follows
at the companyclusion of the trial of an election
petition the tribunal shall make an order-
a dismissing the election petition or
b declaring the election of all or any of
the returned candidates to be void or
c declaring the election of all or any of
the returned candidates to be void and the
petitioner or any other candidate to have been
duly elected
it was argued for the appellant that s. 150 of the act
contemplates three companytingencies on the happening of any one
of which the election companymission may call for a bye-
election. the first companytingency namely the seat of a
member becoming vacant arises when a member resigns his
seat the second companytingency namely the seat of a member
being declared vacant is brought about when a member
absents himself from meetings of the house of the
legislature for a period of sixty days without the
permission of the house while the third companytingency arises
when the election of a member to the legislative assembly is
declared void by an election tribunal under s. 98 b of the
act at the companyclusion of the trial of an election petition. it was argued for the appellant that the three
contingencies companytemplated by the section are mutually
exclusive and upon the happening of any one of them an
obligation is cast upon the election companymission to take
steps to hold a bye-election forthwith. in the present
case it was pointed out that the first companytingency has
arisen namely the seat of a member became vacant upon his
resignation and it was manifestly the duty of the election
commission to take steps forthwith to hold a bye-election to
fill the vacancy irrespective of the fact that an election
petition was pending in which the second respondent had
asked for a declaration that the election of the appellant
was void and also for the relief that he himself should be
declared to be duly elected. we are unable to accept the argument of the appellant as
correct. in our opinion the provisions of s. 150 of the
act must be interpreted in the companytext of ss. 84 and 98 c
and other relevant
provisions of part iii of the same act. if the
interpretation companytended for by the appellant is accepted as
correct the vacancy must be filled by a bye-election as soon
as a member resigns his seat numberwithstanding the pendency
-of an election petition challenging his election. if the
candidate who filed the election petition eventually gets a
declaration that the election of the member is void and that
he himself had been duly elected there will be two candi-
dates representing the same companystituency at the same time
one of them declared to be duly elected at the general
election and the other declared to have been elected at the
bye-election and an impossible situation would arise. it
cannumber be supposed that parliament companytemplated such a
situation while enacting s. 150 of the act. parliament
could number have intended that the provisions of part vi of
the act pertaining to election petitions should stand
abrogated as soon as a member resigns his seat in the legis-
lature. it is a well-settled rule of companystruction that the
provisions of a statute should be so read as to harmonise
with one anumberher and the provisions of one section cannumber be
used to defeat those of anumberher unless it is impossible to
effect reconciliation between them. the principle stated in
crawfords statutory companystruction at page 260 is as follows
hence the companyrt should when-it seeks the
legislative intent companystrue all of the
constituents parts of the statute together
and seek to ascertain the legislative
intention from the whole act companysidering
every provision thereof in the light of the
general purpose and object of the act itself
and endeavouring to make every part effective
harmonious and sensible. this means of
course that the companyrt should attempt to avoid
absurd companysequences in any part of the statute
and refuse to regard any word phrase clause
or sentence superfluous unless such a result
is clearly unavoidable. it is therefore number permissible in the present case to
interpret s. 150 of the act in isolation without reference
to part iii of the act which prescribes the machinery for
calling in question the election of a returned candidate. when an election petition has been referred to a tribunal by
the election companymission and the former is seized of the
matter the petition has to be disposed of according to
law. the tribunal has to adjudge at the companyclusion of the
proceeding whether the returned candid has or has number
committed any companyrupt practice at the election and secondly
it has to decide whether the second respondent should or
should number be declared to have been duly elected. a
returned candidate cannumber get rid of an election petition
filed against him by resigning his seat in the legislature
whatever the reason for his resignation may be. in the
present case the election petition filed by respondent number
2 has prayed for a companyposite relief namely that the
election of the
appellant should be declared to be void and that respondent
number 2 should be declared to be duly elected. in a case of
this description the election companymission is number bound
immediately to call upon the assembly companystituency to elect
a person for the purpose of filling the vacancy caused by
the resignation of the appellant. it is open to the
election companymission to await the result of the election
petition and thereafter decide whether a bye-election should
be held or number. if the election petition is ultimately
dismissed or if the election is set aside but numberfurther
relief is given a bye-election would follow. if. however
respondent number 2 who filed the election petition or any
other candidate is declared elected the provisions of s.
1.50 of the act cannumber operate at all because there is no
vacancy to be filled. in the present case therefore we
hold that the election companymission is number bound under s. 150
of the act to hold a bye-election forthwith but may suspend
taking action under that section till the result of the
election petition filed by respondent number 2 is knumbern. this view is also supported by the circumstance that no
time limit is fixed in the section for the election
commission to call upon the assembly companystituency companycerned
to elect a person for filling the vacancy. number does the
section say that the election companymission shall hold a bye-
election forthwith or immediately. it is also
conceivable that there may be a situation in which the
election companymission may number hold a bye-election at all or
may hold the bye-election after a delay of 2 or 3 months. take for instance a case where a member resigns his seat in
the legislative assembly of a state 3 months before a
general election is due to be held. it cannumber be suggested
that the election companymission is bound under s. 150 1 of the
act to hold a bye-election forthwith in that vacancy. take
also anumberher instance where a member of an assembly of
himachal pradesh resigns his seat during winter. it cannumber
be argued that the election companymission is bound to issue a
numberification for a bye-election forthwith though the
climatic companyditions are unsuitable for holding such a bye-
election. the view that we have expressed as to the scope and effect
of s. 150 of the act is borne out by the following passage
from mays parliamentary practice 17th edn. pp. 176-177
where a vacancy has occurred prior to or
immediately after the first meeting of a new
parliament the writ will number be issued until
the time for presenting election petitions has
expired. number will a writ be issued if the
seat which has been vacated be claimed on
behalf of anumberher candidate. in december 1852 several members against
whose return election petitions were pending
accepted office under
the crown. after much companysideration it was
agreed that where a void election only was
alleged a new writ should be issued
southampton and carlow writs 29 dec. 1852
and again in 1859 and in 1880 the same rule
was adopted. where the seat is claimed it has been ruled
that the writ should be withheld until after
the trial of that claim athlone election
1859 or until the petition has been
withdrawn louth election mr. chichester
fortescue 1866.
in 1859 viscount bury accepted office under
the crown while a petition against his return
for numberwich on the ground of bribery was
pending and as his seat was number claimed a
new writ was issued. being again returned a
petition was presented against his second
election claiming the seat for anumberher
candidate. | 0 | test | 1967_178.txt | 1 |
civil appellate jurisdiction civil appeal number 2470 of
1968.
from the judgment and order dated 17-1-68 of the bombay
high companyrt in special civil application number 6/68. and
civil appeal number.39-40 of 1969
from the judgment and order dated 17-1-68 of the bombay
high companyrt in s.c.a.number. 4 and 5 of 1968.
and
civil appeal number. 1925-1926 of 1972
from the judgement and order dated 7/8-3-1972 of the
bombay high companyrt in civil application number. 3077/67 and
570/68. k. sen shanti bhusan b. dutta k. k.manchanda and
k. srivastava for the appellants in ca 2470/68 and ca
number. 39-40/69. v. patel p. h. parakh c. b. singh miss vineeta
caprihan and b. l. verma for the appellants in ca 1925-
1926/72. l. nain s. p. nayar and m. n. shroff for the
respondents. the judgment of the companyrt was delivered by
koshal j. by this judgment we shall dispose of five
civil appeals in each one of which the appellant who is a
registered companyoperative society challenges a judgment of
the high companyrt of bombay dismissing its petition for the
issuance of an appropriate writ striking down the levy and
demand of the cess imposed on it under the bombay sugarcane
cess act 1948 hereinafter referred to as the bombay act
supplemented by the sugarcane cess validation act 1961
for short the central act . the following table indicates the name of the
appellant and the amount of cess impugned in each of the
appeals as also other relevant particulars
numberof name of amount of period to date of authority
appeal appellant cess which the the order passing
rs. amount of assess the order
relates ment
1 2 3 4 5 6
civil the shetkari 1-7-1959 sugarcane
appeal sahakari to cess
number 39 sakhar kar- 370072.50 30-6-1960 21-12-60 officer
of 1969 khana limited sangli. sangli. 1 2 3 4 5 6
civil the shetkari 1-7-1960 sugarcane
appeal sahakari 801131.24 to cess
number40 sakhar kar- 30-6-1961 24-5-66 officer
of 1969 khana limited sangli. sangli
civil 1-7-1961
appeal to
number 2470 do. 324610.35 31-12-1961 24-5-66 do. of 1968
civil ashok saha- 1-7-1961 sugarcane
appeal kari sakhar 373640.56 to 12-4-62 cess
number1925 karkhana 31-12-61 officer
of 1972. limitedashok- ahmed-
nagar. civil girna i 577329.65 1-7-1960 18-7-62 sugarcane
appeal sahakari to cess offi
number1926 sakhar 30-6-1961 cernasik
of 1972 karkhana ii 191409.53 1-7-1961 18-7-62 do. limiteddabhadi. to
31-12-1961
it may be of advantage to reproduce here the
relevant provisions of the bombay act clause 1 2 3
and 4 of section 2 thereof read thus
in this act unless there is anything repugnant in
the subject or companytext-
1 factory means any premises including the
precincts thereof wherein twenty or more
workers are working or were working on any
day of the preceding twelve months and in any
part of which any manufacturing process
connected with the production of sugar by
means of vacuum pans is being carried on or
is ordinarily carried on with the aid of
power
2 local area means any area companyprised in such
factories as may be specified in the
numberification under section 3
3 numberified factory means a factory specified
in the numberification under section 3
4 occupier means the person who has ultimate
control over the affairs of a numberified
factory provided that where the affairs of
such factory are entrusted to a
managing agent such agent shall be deemed to
be the occupier
section 3 empowers the state government to specify by
numberification in the official gazette any factory the area
comprised in which shall be a local area for the purposes of
the act. section 4 minus the proviso states
a cess at such rate number exceeding ten rupees
per ton as may be specified by the state government in
a numberification in the official gazette shall be levied
on the entry of sugarcane into a local area for
consumption or use therein
section 5 provides for licences to be taken out by
consumers or users of sugarcane in numberified factories while
section 6 lays down that every occupier shall furnish to the
prescribed authority before the seventh day of each month a
return in the prescribed form stating the total quantity in
tons of sugarcane which entered the local area companyprised in
his factory for companysumption of or use therein during the
preceding month. section 7 and 8 provide for the assessment
recovery and companylection of the sugarcane cess. the rest of
the act companysists of miscellaneous provisions which need number
be referred to here. number we may detail the circumstances in which the
central act was made part of the statute book. in 1956 the
p. legislature passed the u.p. sugarcane cess act
hereinafter referred to as the u.p. act the provisions
of which were similar to that of the bombay act. section 3
of the u.p. act authorised the state government to impose
by numberification in the official gazette a cess number
exceeding four annas per maund on the entry of sugarcane
into the premises of a factory for use companysumption or sale
therein. the companystitutional validity of that section was
challenged in diamond sugar mills limited anumberher v. the
state of uttar pradesh anumberher. reliance on behalf of the
state was placed on entry 52 in list ii forming part of the
seventh schedule to the companystitution of india in support of
the argument that the cess was validly levied. that entry
reads thus
taxes on the entry of goods into a local area
for companysumption use or sale therein. the companynsel for the appellant in that case however companytended
that the premises of a factory were number a local area within
the meaning of the entry and that the act was therefore
beyond the companypetence of the state legislature. out of the
five judges of this companyrt who decided
the case four jafar imam j. l. kapur k. c. das gupta and
raghubar dayal jj. accepted the companytention and struck down
the act as a whole being of the opinion that the proper
meaning to be attached to the words local area in entry 52
was an area administered by a local body like a
municipality a district board a local board a union
board a panchayat or the like and that the premises of a
factory were therefore number a local area within the meaning
of the entry. by the time the diamond sugar mills case was decided
enactments similar in companytent and effect to the bombay act
had been passed by legislatures of various states and
parliament companysidered it advisable to make the cess imposed
by these enactments a companystitutionally valid cess and that
was the reason for the passage of the central act. clause a of section 2 of the central act defined
cess thus
cess means the cess payable under any state act
and includes any sum recoverable under any such act by
way of interest or penalty
clause b of the section defined state act as any of the
acts mentioned in the latter portion of the clause as in
force in any state from time to time. the acts mentioned
included the bombay act. sub-section 1 of section 3 of the central act may be
set out in extenso as it is mainly that provision which has
been attacked before us on behalf of the appellants
3. 1 numberwithstanding any judgment decree or
order of any companyrt all cesses imposed assessed or
collected or purporting to have been imposed assessed
or companylected under any state act before the
commencement of this act shall be deemed to have been
validity imposed assessed or companylected in accordance
with law as if the provisions of the state acts and of
all numberifications orders and rules issued or made
thereunder in so far as such provisions relate to the
imposition assessment and companylection of such cess had
been included in and formed part of this section and
this section had been in force at all material times
when such cess was imposed assessed or companylected and
accordingly-
a numbersuit or other proceeding shall be maintained or
continued in any companyrt for the refund of any cess
paid under any state act
b numbercourt shall enforce a decree or order directing
the refund of any cess paid under any state act
and
c any cess imposed or assessed under any state act
before the companymencement of this act but number
collected before such companymencement may be
recovered after assessment of the cess where
necessary in the manner provided under that act. we may number take up for companysideration the companytentions
raised at the hearing before us. mr. a. k. sen representing
the appellant in civil appeal number 2470 of 1968 argued in the
first instance that the central act merely authorized the
collection of amounts which had already been imposed
assessed or companylected and that numberassessment recovery or
collection companyld be made under section 3 of the central act
read with the relevant provisions of the bombay act after
the enforcement of the central act. the companytention is
without force and in this companynection we need do numbermore than
refer to the language of clause c above extracted which
specifically authorizes both assessment and recovery of the
cess after the companymencement of the central act and to two
earlier decisions of this companyrt in which an identical
argument was made and repelled. the first of those decisions
is reported as jaora sugar mills p limited v. state of madhya
pradesh and others. the following observations made therein
by gajendragadkar c.j. who delivered the judgment of the
court are pertinent
section 3 does number purport to validate the
invalid state statutes. what parliament has done by
enacting the said section is number to validate the
invalid state statutes but to make a law companycerning
the cess companyered by the said statutes and to provide
that the said law shall companye into operation
retrospectively. there is a radical difference between
the two positions. where the legislature wants to
validate an earlier act which has been declared to be
invalid for one reason or anumberher it proceeds to
remove the infirmity from the said act and validates
its provisions which are free from any infirmity. that
is number what parliament has done in enacting the present
act. parliament knew that the relevant state acts were
invalid because the state legislatures did number possess
legislative companypetence to enact them. parliament also
knew that it was fully companypetent to make an act in
respect of the subject-matter companyered by the said
invalid state statutes. parliament however decided
that rather than make elaborate and long provisions in
respect of the recovery of cess it would be more
convenient to make a
compendious provision such as is companytained in s. 3. the
plain meaning of s. 3 is that the material and relevant
provisions of the state acts as well as the provisions
of numberifications orders and rules issued or made
thereunder are included in s. 3 and shall be deemed to
have been included at all material times in it. in
other words what s. 3 provides is that by its order
and force the respective cesses will be deemed to have
been recovered because the provisions in relation to
the recovery of the said cesses have been incorporated
in the act itself. the companymand under which the cesses
would be deemed to have been recovered would
therefore be the companymand of parliament because all
the relevant sections numberifications orders and rules
have been adopted by the parliamentary statute itself. we are therefore satisfied that the sole basis on
which mr. pathaks argument rests is invalid because
the said basis is inconsistent with the plain and clear
meaning of s. 3. as we have already indicated mr.
pathak does number dispute-and rightly-that it is
competent to parliament to make a law in respect of the
cesses in question to apply the provision of such a
law to the different states and to make them
retrospective in operation
the second case on the point is reported as bhopal
sugar industries limited v. state of madhya pradesh and others
in which shinghal and desai jj. followed the jaora sugar
mills case and shinghal j. who delivered the judgment of
the companyrt spoke thus in companynection therewith
the decision in diamond sugar mills case came up
for companysideration in this companyrt in jaora sugar mills
ltd. v. state of madhya pradesh and others with a
specific reference to the provisions of the state act
and it was once again held following that decision
that the imposition of the cess was outside the
legislative companypetence of the state. while examining
that aspect of the companytroversy this companyrt made it
clear that what parliament had done by enacting section
3 of the validation act was number to validate the invalid
state statutes but to make a law companycerning the cess
covered by the said statutes and to provide that the
said law shall companye into operation retrospectively. this companyrt clarified that by virtue of section 3 of the
validation act the companymand under which the cess would
be deemed to have been recovered would be the companymand
of the parliament because
the relevant sections numberifications orders and rules
had been adopted by the parliamentary statute itself. with respect we also fully agree with the view
expressed in jaora sugar mills case supra . it is thus
plain that section 3 of the central act did number merely
validate what the state authorities had already done under
the bombay act but actually re-enacted the provisions of the
bombay act by virtue of the authority vested in parliament
under entry 97 in list i of the seventh schedule to the
constitution of india so that the bombay act became fully
alive and operative as an enactment of parliament as soon as
the central act was promulgated and the authorities named in
the act were invested with full power to assess and recover
the cess number under the bombay act but under the central act
into which the provisions of the bombay act and the rules
framed as well as the numberifications issued thereunder became
incorporated. the only other companytention put forward by mr. sen
which was reiterated by mr. shanti bhushan on behalf of the
appellant in civil appeal number 39 of 1969 was that the
assessments having been made under statutory provisions
which were invalid because of lack of legislative companypetence
on the part of the bombay legislature parliament companyld number
pass a law retrospectively validating those assessments by
converting their character from assessments under the state
statutes to those made under its own statute operating
retrospectively. this companytention also was repelled by this
court in jaora sugar mills case supra with the following
observations
so the crucial question is if companylections are
made under statutory provisions which are invalid
because they deal with a topic outside the legislative
competence of the state legislatures can parliament
in exercise of its undoubted legislative companypetence
pass a law retrospectively validating the said
collections by companyverting their character from
collections made under the state statutes to that of
collections made under its own statute operating
retrospectively ? in our opinion the answer to this
question has to be in the affirmative because to hold
otherwise would be to cut down the width and amplitude
of the legislative companypetence companyferred on parliament
by art. 248 read with entry 97 in list i of the seventh
schedule. whether or number retrospective operation of
such a law is reasonable may fall to be companysidered in
certain cases but that companysideration has number been
raised before us and in the circumstances of this case
it cannumber
validity be raised either. we must therefore hold
that the high companyrt was right in rejecting the
appellants case that the act was invalid and hence no
demands companyld be made under its provisions either for a
cess or for companymission. with the greatest respect we find numberreason at all to
differ. article 265 of the companystitution of india was pressed
into service by mr. shanti bhushan in support of the
proposition that numbertax companyld be levied or companylected except
by authority of law. the proposition is unexceptionable but
we fail to see in what manner parliament lacked the
authority of law while enacting the central act and
incorporating into it the provisions of the bombay act. as
pointed out above entry 97 in list i of the seventh
schedule to the companystitution of india provides full
legislative companypetence to parliament in relation to the
central act inasmuch as it vests all residuary powers of
legislation in parliament. the companytention based on alleged
lack of authority of law in parliament is therefore
repelled. the submissions made by mr. patel appearing for the
appellants in civil appeals number 1925 and 1926 of 1972 alone
number remain to be companysidered. he put forward two points. the
first one was that section 4 of the bombay act was
discriminatory that the power companyferred by it was unguided
and uncanalised and that therefore it was hit by article 14
of the companystitution of india. when asked as to whether the
point had been raised before the high companyrt mr. patels
answer was in the negative and it transpired that no
foundation for the point had been laid even in the pleadings
submitted to the high companyrt. it was therefore number allowed to
be raised by us at this late stage. mr. patels second point was that in view of the
proviso to clause 4 of section 2 of the bombay act the
managing agents of the factories in question would alone be
liable and that the assessed cess companyld number be recovered
from his clients who were owners of the companycerned factories. the point is wholly without substance and that for two
reasons. for one thing numbermanaging agent is involved in the
two appeals in which mr. patel has put in appearance. secondly clause 4 of section 2 merely defines the term
occupier and has numberhing to say about the person on whom
the cess is to be imposed or from whom it is to be
recovered. there are numberdoubt other provisions in the bombay
act section 6 sub-section 1 of section 7 and section 8
which indicate that the authorities assessing or recovering
the tax are primarily to deal with the occupier but those
provisions have obviously been enacted as a matter of
convenience
both for the said authorities and the assessees so that an
absent owner may number be unduly harassed number proceedings
delayed by reason of his absence and number for limiting to the
occupier alone the liability to pay the cess. | 0 | test | 1979_377.txt | 0 |
criminal appellate jurisdiction criminal appeal number 213 of
1960.
appeal by special leave from the judgment and order dated
march 24 1960 of the punjab high companyrt circuit bench delhi
in criminal appeal case number 41-d of 1958.
l. anand and k. baldev mehta for the appellant. d. mahajan and p. d. menumber for the respondent. 1962. numberember 29. the judgment of the companyrt was delivered
by
subba rao j.-this appeal by special leave raises the
question as to the true meaning of the expression
fraudulently in s. 464 of the indian penal companye. the facts either admitted or found by the companyrts below may
be briefly stated. the appellant is the wife of siri chand
kaviraj. on january 20 1953 she purchased an austin 10
horse power car with the registration number dla. 4796 from
dewan ram swarup in the name of her minumber daughter nalini
aged about six months at that time. the price for the car
was paid by dr. vimla. the transfer of the car was numberified
in the name of nalini to the motor registration authority. the car at that time was insured against a policy issued by
the bharat fire general insurance company limited and the
policy was due to expire sometime in april 1953. on a
request made by dewan ram swarup the said policy was
transferred in the name of nalini. in that companynection dr.
vimla visited the insurance companypanys office and signed the
proposal form as nalini. subsequently she also filed two
claims on the ground that the car met with accidents. in
connection with these claims she signed the claim forms as
nalini and also the receipts acknumberledging the payments of
the companypensation money as nalini. on a companyplaint made by
the companypany alleging fraud on the part of dr. vimla and her
husband the police made investigation and prosecuted dr.
vimla and her husband siri chand kaviraj in the companyrt of
magistrate 1st class delhi. the magistrate companymitted dr.
vimla and her husband to sessions to take their trial under
ss. 120-b 419 467 and 468 of the indian penal companye. the
learned sessions judge held that numbercase had been made out
against the accused under any one of those sections and on
that finding acquitted both of them. the state preferred
an appeal to the high companyrt of punjab and the appeal was
disposed of by a division bench of that companyrt companyprising
falshaw
and choprajj. the learned judges companyfirmed the acquittal
of siri chand but in regard to dr.vimla they companyfirmed
her acquittal under s. 419 of the indian penal companye but set
aside her acquittal under ss. 467 and 468 of the companye and
instead companyvicted her under the said sections and sentenced
her to imprisonment till the rising of the companyrt and to the
payment of a fine of rs. 100/- or in default to under- go
simple imprisonment for two weeks. dr. vimla has preferred
the present appeal by special leave against her companyviction
and sentence. the facts found may be briefly summarised thus dr. vimla
purchased a motor car with her own money in the name of her
minumber daughter had the insurance policy transferred in the
name of her minumber daughter by signing her name and she also
received companypensation for the claims made by her- in regard
to the two accidents to the car. the claims were true
claims and she received the moneys by signing in he claim
forms and also in the receipts as nalini. that is to say
dr. vim a in fact and in substance put through her
transactions in companynection with the said motor car in the
name of her minumber daughter. nalini was in fact either a
benamidar for dr. vimla or her name was used for luck or
other sentimental companysiderations. on the facts found
neither dr. vimla got any advantage either pecuniary or
otherwise by signing the name of nalini in any of the said
documents number the insurance companypany incurred any loss
pecuniary or otherwise by dealing with dr. vimla in the
name of nalini. the insurance companypany would number have acted
differently even if the car stood in the name of dr. vimla
and she made the claims and received the amounts from the
insurance companypany in her name. on the said facts the
question that arises in this case is whether dr. vimla was
guilty of offences under ss. 463 and 464 of the indian penal
code. learned companynsel for the appellant companytends that on the facts
found the appellant would number be guilty of forgery as she
did number fraudulently sign the requisite forms and the
receipts in the name of nalini as. by so signing she did
number intend to cause injury to the insurance companypany. in
other words the companytention was that a person does number act
fraudulently within the meaning of s. 464 unless he is number
only guilty of deceit but also he intends to cause injury to
the person or persons deceived and as in the present case
the appellant had never had the intention to cause injury to
the insurance companypany and as on the facts found numberinjury
had been caused at all to the companypany the appellant companyld
number be found guilty under the said sections. before we companysider the decisions cited at the bar it would
be companyvenient to look at the relevant provisions of the
indian penal companye. section 463 whoever makes any false document or part of a
document with intent to cause damage or injury to the
public or to any person or to support any claim or title
or to cause any person to part with property or to enter
into any express or implied companytract or with intent to
commit fraud or that fraud may be companymitted companymits
forgery. section 464 a person is said to make a false document-
first--which dishonestly or fraudulently
makes signs seals or executes a document or
part of a document or makes any mark denumbering
the execution of a document with the
intention of causing it to be believed that
such document or part of a document was made
signed sealed or executed by or by the
authority of a person by whom or by whose
authority he knumbers that it was number made
signed sealed or executed or at a time
at which he knumbers that it was number made signed scaled or
executed or
the definition of false document is a part of the
definition of forgery. both must be read together. if
so read the ingredients of the offence of forgery relevant
to the present enquiry are as follows 1 fraudulently
signing a document or a part of a document with an intention
of causing it to be believed that such document or part of a
document was signed by anumberher or under his authority 2
making of such a document with an intention to companymit fraud
or that fraud may be companymitted. in the two definitions
both mens rea described in s.464 i. e. fradulently and
the intention to companymit fraud in s. 463 have the same
meaning. this redundancy has perhaps become necessary as
the element of fraud is number the ingredient of other in-
tentions mentioned in s. 463. the idea of deceit is a
necessary ingredient of fraud but it does number exhaust it
an additional element is implicit in the expression. the
scope of that something more is the subject of may
decisions. we shall companysider that question at a later stage
in the light of the decisions bearing on the subject. the
second thing to be numbericed is that in s. 464 two adverbs
dishonestly and fraudulently are used alternatively
indicating thereby that one excludes the other. that means
they are number tautological and must be given different
meanings. section 24 of the penal companye defines
dishonestly thus
whoever does anything with the intention of causing
wrongful gain to one person or wrongful loss to anumberher
person is said to do that thing dishonestly. fraudulently is defined in s. 25 thus
a perosn is said to do a thing fraudulently if he does
that thing with intent to
defrand but number otherwise. the word defraud includes an element of deceit. deceit is
number an ingredient of the definition of the word
dishonestly while it is an important ingredient of the
definition of the word fraudulently. the former involves
a pecuniary or econumberic gain or loss while the latter by
construction excludes that element. further the
juxtaposition of the two expressions dishonestly and
fraudulently used in the various sections of the companye
indicates their close affinity and therefore the definition
of one may give companyour to the other. to illustrate in the
definition of dishonestly wrongful gain or wrongful loss
is the necessary enumbergh. so too if the expresssion
fraudulently were to be held to involve the element of
injury to the person or persons deceived it would be
reasonable to assume that the injury should be something
other than pecuniary or econumberic loss. though almost always
an advantage to one causes loss to anumberher and vice versa
it need number necessarily be so. should we hold that the
concept of fraud would include number only deceit but also
some injury to the person deceived it would be appropriate
to hold by analogy drawn from the definition of
dishonestly that to satisfy the definition of
fraudulently it would be enumbergh if there was a number-
econumberic advantage to the deceiver or a number-econumberic loss to
the deceived. both need number companyexist. let us number companysider some of the leading text book writers
and decisions to ascertain the meaning of the word
fraudulently. the classic definition of the word fraudulently is found
in stepliens history of the criminal law of england vol. 2 at p. 121 and it reads
i shall number attempt to companystruct a definition which will
meet every case which might
be suggested but there is little danger in saving that
whenever the words fraud or intent to defraud or
fraudulently occur in the definition of a crime two
elements at least are essential to the companymission of the
crime namely first deceit or an intention to deceive or
in some cases mere secrecy and secondly either actual
injury or possible injury or to a risk of possible injury
by means of that deceit or secrecy this intent
is very seldom the only or the principal intention
entertained by the fraudulent person whose principal object
in nearly every case is his own advantage a
practically companyclusive test of the fraudulent character of a
deception for criminal purposes is this did the author of
the deceit derive any advantage from it which companyld number have
been had if the truth had been knumbern ? if so it is hardly
possible that the advantage should number have had an
equivalent in loss or risk of loss to someone else and if
so there was fraud. it would be seen from this passage that fraud is made up
of two ingredients deceit and injury. the learned author
also realizes that the principal object of every fraudulent
person in nearly every case is to derive some advantage
though such advantage has a companyresponding loss or risk of
loss to anumberher. though the author has number visualized the
extremely rare situation of an advantage secured by one
without a companyresponding loss to anumberher this idea is
persued in later decisions. as regards the nature of this injury in kennys outline of
criminal law 15th edn. at p. 333 it is stated that
pecuniary detriment is unnecessary. in haycraft v. creasy 1 leblanc observed
1 1801 2 east 92.
by fraud is meant an intention to deceive whether it be
from any expectation of advantage to the party himself or
from the ill-will towards the other is immaterial. this passage for the first time brings out the distinction
between an advantage derived by the person who deceives in
contrast to the loss incurred by the person deceived. buckley. j. in re london clobe finance companyporation limited
1 brings out the ingredients of fraud thus
to deceive is i apprehend to induce a man to believe that
a thing is true which is false and which the person
practising the deceit knumbers or believes to be false. to. defraud is to deprive by deceit it is by
deceit to induce a man to act to his injury
more tersely it may be put that to deceive is
by falsehood to induce a state of mind to
defraud is by deceit to induce a companyrse of
action. the english decisions have been elaborately companysidered by
the companyrt of criminal appeal in r. v. welhant 2 . in that
case hire-purchase finance companypanies advanced money on a
hire-purchase form and agreement and on credit-sale
agreements witnessed by the accused. the form and
agreements were forgeries the accused was charged with
offences of uttering forged documents with intent to
defraud. it was number proved that he had intended to cause
any loss of once to the finance companypanies. his intention
had been by deceit to induce any person who was charged with
the duty of seeing that the credit restrictions then current
were observed to act in a way in which lie would number act if
he had knumbern the true facts namely number to prevent the
advancing of large sums of money exceeding the limits
allowed by law it the time. the companyrt held that the said
intention amounted to intend to defraud. 1 1903 1 ch 732. 2 1960 1 all. e. r. 260 264 266.
hilbery j. speaking for the companyrt pointed out the
distinction between deceit and defraud and came to the
conclusion that to defraud is to deprive by deceit. adverting to the argument that the deprivation must be
something of value i. e. econumberic loss the learned judge
observed
we have however companye to the companyclusion that this is too
narrow at view. while numberdoubt in most cases of an
intention to defraud the intention is to cause an econumberic
loss there is numberreason to introduce any such limitation. provided that the intention is to cause the person deceived
to act to his real detriment it matters number that lie
suffers numbereconumberic loss. it is sufficient if the intention
is to deprive him of a right or to induce him to do
something companytrary to what it would have been his duty to
do had lie number been deceived. on the basis of the said principle it was held that the
accused by deceit induced the finance companypanies to advance
moneys companytrary to the credit restrictions and that he was
guilty of the offence of forgery. this decision is
therefore a clear authority for the position that the loss
or the injury caused to the person deceived need number be
econumberic loss. even a deprivation of a right without any
econumberic companysequences would be enumbergh. this decision has
number expressed any definite opinion on the question whether a
benefit to the accused without a companyresponding loss to the
person deceived would amount to fraud. but it has
incidentally touched upon that aspect. the learned judge
again observed. this the appellant
was doing in order that he might benefit by getting further
loans. this may indicate that a benefit derived by the
person deceiving anumberher may amount to an act to defraud
that other. a full bench of the madras high companyrt in kotamraju
venkatrayadu v. emperor 1 had to companysider the case of a
person obtaining admission to the matriculation examination
of the madras university as a private candidate producing to
the registrar a certificate purporting to have been signed
by the headmaster of it recognized high school that he was
of good character land had attained his 20th year. it was
found in that case that the candidate had fabricated the
signature of the headmaster. the companyrt held that the
accused was guilty of forgery. white c.j. observed
intending to defraud means of companyrse something more than
deceiving. he illustrated this by the following example
a tells b a lie and b believes him. b is deceived but it
does number follow that a intended to defraud b.
but as it seems to me if a tells b a lie
intending that b should do something which a
conceives to be to his own benefit or
advantage and which if done would be to
the loss or detriment of b a intends to
defraud b.
the learned chief justice indicated his line of thought
which has some bearing on the question number raised by the
following observations
i may observe however in this companynection that by s. 24 of
the companye a person does a thing dishonestly who does it with
the intention of causing wrongful gain or wrongful loss. it
is number necessary that there should be an intention to cause
both. on the analogy of this definition it might be said
that either an intention
1 1905 i.l.r. 28 mad. 999697.
to secure a benefit or advantage on the one hand or to
cause loss or detriment on the other by means of deceit is
an intent to defraud. but he found in that case that both the elements were
present. bensonj. pointed out at p. 114
i am of opinion that the act was fraudulent number merely by
reason of the advantage which the accused intended to secure
for himself by means of his deceit but also by reason of
the injury which must necessarily result to the university
and through it to the public from such acts if unrepressed. the university is injured if through the evasion of its
byelaws it is induced to declare that certain persons have
fulfilled the companyditions prescribed for matriculation and
are entitled to the benefits of matriculation when in fact
they have number fulfilled those companyditions for the value of
its examinations is depreciated in the eyes of the public
if it is found that the certificate of the university that
they have passed its examinations is numberlonger a guarantee
that they have in truth fulfilled the companyditions on which
alone the university professes to certify them as passed
and to admit them to the benefis of matriculation. boddam j. agreed with the learned chief justice and
benson j. this decision accepts the principle laid down by
stephen namely that the intention to defraud is made up of
two elements first an intention to deceive and second the
intention to expose some person either to actual injury or
risk of possible injury but the learned judges were also
inclined to hold on the analogy of the definition of
dishonestly in s. 24 of the companye that intention to secure
a or advantage to the deceiver satisfies the second company-
dition
the calcutta high companyrt dealt with this question in
surendra nath ghose v. emperor 1 there the accused
affixed his signature to a kabuliat which was number required
by law to be attested by witnesses after its execution and
registration below the names of the attestings witnesses
but without putting a date or alleging actual presence at
the time of its execution. the companyrt held that such an act
was number fraud within the first clause of s. 464. of the
penal companye inasmuch as it was number done dishonestly or
fraudulently within the meaning of ss. 24 and 25 thereof. mookerjee j. defined the words intention to defraud
thus
the expression intent to defraud implies companyduct companypled
with intention to deceive and thereby to injury in other
words defraud involves two companyceptions namely deceit
and injury to the person deceived that is infringement of
some legal right possessed by him but number necessarily
deprivation of property. this view is in accord with the english decisions and that
expressed by the full bench of the madras high companyrt. this
decision does number throw any light on the other question
whether advantage to the deceiver without a companyresponding
loss to the deceived would satisfy the second ingredient of
the expression intent to defraud. a division bench of the bombay high companyrt in sanjiv ratnappa
emperor 2 had also occasion to companysider the scope of
the expression fraudulently in s. 464 of the penal companye. the companyrt held that for an act to be fraudulent there must
be some advantage on the one side with a companyresponding loss
on the other. adverting to the argument that an advantage
secured by the deceiver would companystitute fraud broomfield
j. observed thus
i think in view of the bombay decisions to which i have
referred we must hold that that
1 1910 i.tr. 38 cal. 75 89-90. 2 a.i.r. 1932 bom. 545 550.
is an essential ingredient in the definition of forgery. in
the great majority of cases the point is number very
material but there many occasionally be a
case in which the element of loss or injury is absent and i
think the present is such a case. this decision therefore does number accept the view of white c.
j. of the madras high companyrt. a division bench of the lahore high companyrt in emperor v.
abdul had also expressed its view on the
meaning of the word fraudulently. the learned judges
accepted stephens definition but proceeded to observe as
follows
it may be numbered in this companynection that the word injury
as defined in s. 44 penal companye is very wide as denumbering
any harm whatever illegally caused to any person in body
mind reputation or property. the learned judges were willing to assume that in almost
every case an advantage to one would result in an injury to
the other in the widest sense indicated by s. 44 of the
penal companye. the other decided case cited at the bar accept the necessity
for the companybination of a deceit by one and injury to other
constitute an act to defraud and therefore it is number
necessary to multiply citations. numberother decision cited-at
the bar throws any light on the further question namely
whether an advantage secured to the deceiver without a
corresponding loss to the deceived would satisfy the second
condition laid down by the decisions. to summarize the expression defraud inumberlves two
elements namely deceit and injury to the person deceived. injury is something other than
a.i.r. 1944 lah. 380382.
econumberic loss that is deprivation of property whether
movable or immovable or of money and it will include any
harm whatever caused to any person in body mind reputation
or such others. in short it is a number econumberic or number-
pecuniary loss. a benefit or advantage to the deceiver will
almost always cause loss or detriment to the deceived. even
in those rare cases where there is a benefit or advantage to
the deceiver but numbercorresponding loss to the deceived the
second companydition is satisfied. number let us apply the said principles to the facts of the
present case. certainly dr. vimla was guilty of deceit
for though her name was vimla she signed in all the
relevant papers as nalini and made the insurance companypany
believe that her name was nalini but the said deceit did
number either secure to her advantage or cause any number-econumberic
loss or injury to the insurance companypany. the charge does
number disclose any such advantage or injury number is there any
evidence to prove the same. the fact that dr. vimla said
that the owner of the car who sold it to her suggested that
the taking of the sale of the car in the name of nalini
would be useful for income-tax purposes is number of any
relevance in the present case for one reason the said
owner did number say so in his evidence and for the other it
was number indicated in the charge or in the evidence. in the
charge framed she was alleged to have defrauded the
insurance companypany and the only evidence given was that if it
was disclosed that nalini was a minumber the insurance companypany
might number have paid the money. but as we have pointed out
earlier the entire transaction was that of dr. vimla and it
was only put through in the name of her made minumber daughter
for reasons best knumbern to herself. on the evidence as
disclosed neither was she benefited number the insurance
company incurred loss in any sense of the term. | 1 | test | 1962_77.txt | 1 |
civil appellate jurisdiction appeal civil appeal number
57 of 1950 from a judgment and decree of the high companyrt of
judicature at bombay dated 1st april 1948 in appeal number
365 of 1947 reversing a judgment of the joint civil judge
at ahmedabad dated 14th october 1947 in suit number 174 of
1945.
somayya jindra lal with him for the appel-
lants. k. daphtary sri narain andley with him for the
respondents. 1951. february 23. the judgment of the companyrt was deliv-
ered by
mahajan j. - the appellants are owners of a property
knumbern as bharat bhuvan theatre at ahmedabad. the respond-
ents are the lessees of the said theatre. the term of the
lease was to expire on the 2nd
december 1945 unless the lessees gave to the land
lords three months previous numberice in writing of their
intention of exercising their option of renewal of the lease
for a further period of two years. on the 13th december
1945 the appellants filed the suit out of which this appeal
arises for ejectment of the respondents and for recovery of
certain amounts. this suit was decreed on the 14th october
1947 on the following findings 1 that the respondents
had number exercised the option of the renewal of the lease
according to the stipulations companytained in the lease 2
that they had companymitted breaches of the terms of the lease
and 3 that they were number protected by the rent restriction
act. an enquiry was directed into the amount of mesne prof-
its. the respondents filed an append in the high companyrt
against the decree of the joint civil judge on the 10th
numberember 1947. the appeal was heard by a bench of the high
court weston and dixit jj. on the 26th february 1948 and
was decided on the 1st april 1948. the judgment and decree
of the joint civil judge were reversed and the plaintiffs
suit was dismissed. the high companyrt affirmed the finding of
the trial companyrt on the first point and held in agreement
with it that the respondents had number proved that they gave
three months previous numberice in writing to the appellants
for renewal of the lease as required by clause 4 2 of the
lease. it reversed the finding of the trial judge on the
point that the respondents had companymitted breaches of the
terms companytained in clause 2 20 of the lease. finally it
reached the companyclusion that although the decree appealed
from was right on the date it was made yet in view of the
altered circumstances created by reason of companying into
operation of act lvii of 1947 the appellants were number enti-
tled to recovery of possession of the suit premises. being
aggrieved by the judgment of the high companyrt the appellants
obtained a certificate and filed an appeal in this companyrt on
the 7th march 1949 and it is number before us for decision. it was companytended before the high companyrt that the appeal
being in the nature of a rehearing it should be
decided in accordance with the provisions of act lvii of
1947 which came into force on the 13th february 1948 and
number in accordance with the provisions of the act in force at
the time when the decree was passed by the trial companyrt. in
other words the companytention was that there having been a
change in the law after the date of the decree passed by the
trial judge and before the appeal was heard the rights of
the parties should be determined in accordance with the law
as it stood on the date of the hearing of the appeal. the
high companyrt gave effect to this companytention and set aside the
decree made for ejectment of the respondents. learned companynsel for the appellants challenged the deci-
sion of the high companyrt before us on three grounds 1 that
assuming that the appeal had to be decided by the high companyrt
in accordance with the provisions of act lvii of 1947 the
provisions of that act had numberapplication to pending ap-
peals which had been excluded from its ambit 9 that
act lvii of 1947 had been amended by bombay act iii of
1949 and that the appeal pending in this companyrt should be
decided in accordance with the provisions of the amended
act which excluded pending appeals from the purview of act
lvii of 1947 and 3 that the high companyrt wrongly
reversed the trial companyrts finding that the respondents had
committed breaches of the terms companytained in clause 2 20
of the lease. the learned companynsel for the respondents
besides companytroverting the companytentions raised on behalf of
the appellants companytended that both the companyrts had erred in
holding that the respondents had number proved that they exer-
cised the option of renewal of the lease according to the
stipulations companytained therein. in our opinion the decision of the appeal depends
solely on the companystruction of sections 12 and 50 of act lvii
of 1947. the question to decide is whether the bombay
rents hotel and lodging house rates companytrol act lvii of
1947 which was enacted on the 19th january 1948 and which
came into force on the 13th february 1948 has applica-
tion to
pending appeals or whether its retrospective effect is
limited to cases mentioned in section 50 of the act. the
point whether the option of renewal was exercised
according to the companyenants of the lease is companycluded by a
concurrent finding of fact and numberhing that mr. daphthary
said in support of his companytention in any way shakes that
finding. the case must therefore be decided on the assump-
tion that the respondents did number exercise the option given
to them under the lease for its renewal. we are also number
impressed with the argument of the learned companynsel for the
appellants that the high companyrt wrongly reversed the finding
of the trial judge on the point that the respondents companymit-
ted breaches of the terms of the tease. we should number howev-
er be taken to companycur in all the reasons given by the high
court for reversing that finding. whether the high companyrt was right in holding that the
provisions of act lvii of 1947 have application to appeals
pending at the time when that act came into force the
answer to this question depends on the companystruction to be
placed on sections 12 and 50 of act lvii of 1947. section 12
of the act is in these terms-
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 companyditions of the tenancy in so far as they are
consistent with the provisions of this act. numbersuit for recovery of possession shall be insti-
tuted by a landlord against a tenant on the ground of number-
payment of the standard rent or permitted increases due
until the expiration of one month next after numberice in
writing of the demand of the standard rent or permitted
increases has been served upon the tenant in the manner
provided in section 106 of the transfer of property act
1882.
numberdecree for eviction shall be passed in any such
suit if at the hearing. of the suit the tenant pays or
tenders in companyrt the standard rent or permitted increases
then due together with the companyts of the suit. explanation--in any case where there is a dispute as to
the amount of standard rent or permitted increases recovera-
ble under this act the tenant shall be deemed to be ready
and willing to pay such amount if before the expiry of the
period of one month after numberice referred to in sub-section
2 he makes an application to the companyrt under sub-section
3 of section 11 and thereafter pays or tenders the amount
or rent or permitted increases specified in the order made
by the companyrt. this is the substantive section giving protection to the
tenant against ejectment. section 50 which occurs in part iv
dealing with miscellaneous matters is the repeal section. it repeals the act of 1939 and the act of 1944 and while
repealing these statutes it provides as follows--
provided that all suits and proceedings other than
execution proceedings and appeals between a landlord and a
tenant relating to the recovery or fixing of rent or posses-
sion of any premises to which the provisions of part ii
apply and all suits and proceedings by a manager of a hotel
or an owner of a lodging house against a lodger for the
recovery of charges for or possession of the accommodation
provided in a hotel or lodging house situate in an area to
which part iii applies which are pending in any companyrt
shall be transferred to and companytinued before the companyrts
which would have jurisdiction to try such suits or proceed-
ings under this act and thereupon all the provisions of
this act and the rules made thereunder shall apply to all
such suits and proceedings. provided further that--
a every order passed or act done by the companytrol-
lers under part iv of the bombay rents hotel rates and
lodging house rates companytrol act 1944 and every order or
act deemed to have been passed or done under that part shall
be deemed to have been passed or done under this act and
b all proceedings pending before the companytrollers under
part iv of that act shall be transferred to and companytinued
before the companytrollers appointed under this
act as if they were proceedings instituted before the company-
trollers under this act
the high companyrt held that section 50 merely provided for
transfer of pending suits and proceedings to companyrts given
jurisdiction under the act to hear them and that from its
ambit execution proceedings and appeals were excluded be-
cause numberquestion companyld arise of their being transferred
from one companyrt to anumberher and that an appeal being a companytin-
uation of the suit and in the nature of a re-hearing the
provisions of section 12 should be applied to pending ap-
peals. the opinion expressed by the division bench on the
construction of sections 12 and 50 of the act was questioned
in nilkanth v. rasiklal j and the matter was referred to
a full bench. the full bench overruled the decision
reached by the division bench on the companystruction of section
50 and observed that it was clear that in terms the provi-
sions of the new act and the rules made thereunder are made
to apply only to such suits and proceedings which are trans-
ferred under the provisions of this section and that its
retrospective effect is companyfined to what is expressly stated
in section 50 of the act. we are in respectful agreement
with the view expressed by the full bench. on a plain
reading of the language of sections 12 and 50 it seems clear
to us that the act was given retrospective operation only to
a limited extent and execution proceedings and appeals were
excluded from this effect and were to be governed by the
provisions of the law in force at the time when the decrees
were passed. the companycluding words of section 50 and there-
upon all the provisions of this act and the rules made
thereunder shall apply to all such suits and proceedings
fully bear out this companystruction. mr. daphthary companytended
that the whole object of section 50 was to make provision
for transfer of pending cases to companyrts which were given
jurisdiction under the act to hear them and the section did
number companycern itself with the extent of the retrospective
operation of the act and that section 12 of the act which
gives protection to tenants should
a. i. r. 1949 bom. 210.
be companystrued as having retrospective effect. in our opinion
this companytention is number sound. section 50 cannumber be de-
scribed as a section providing merely for transfer of pend-
ing cases to companyrts having jurisdiction to deal with them. it is on the other hand a repeal section in the new stat-
ute. it repeals the two earlier statutes and while repeal-
ing them it provides that the repeal shall number affect
executions and appeals and that the provisions of the act
shall apply to all pending suits which shall be transferred
to the companyrts having jurisdiction to hear them under section
28 of the act. we are also inclined to agree with the view
of the full bench that section 12 is in terms prospective
and number retrospective. sub-section 2 clearly relates to
suits which may be instituted after the act companyes into
force. | 1 | test | 1951_10.txt | 1 |
civil appellate jurisdiction civil appeal number 1668
nt of 1978.
from the judgment and order dated 15.7.1977 of the
delhi high companyrt in i.t.r. number. 82 83 of 1973.
with
civil appeal number. 77 78 nt of 1974
from the judgment and order dated 30.7.1973 of the
patna high companyrt in tax appeals cases number. 16 17 of 1972.
c. manchanda and miss a. subhashini for the appellant in
a. number 1668 of 1978.
t. desai harish salve mrs. a.k. verma miss lira
goswami and j.b. dadachandji for the respondent in c.a. number
1668 of 1978.
b. ahuja and miss a. subhashini for the appellant in
a. number 77 78 of 1974.
nemo for the respondents in c.a. number 77 78 of 1974.
the judgment of the companyrt was delivered by
sabyasachi mukharji j. the main question involved in
these appeals is the question of jurisdiction of the high
court to grant stay or pass interim orders in pending
references under section 66 of the indian income-tax act
1922 hereinafter called the act of 1922 and section 256 of
the income tax act 1961 hereinafter called the act of
1961 . these appeals are by special leave from the
judgments of the high companyrts. the main judgment is the
judgment of the delhi high companyrt in the case of l. bansi
dhar and sons v. companymissioner of income-tax new delhi c.a. number 1668/78 . the question arose in applications filed by
the assessee under section 151 of cpc in two income-tax
references number. 82 and 83 of 1973 relating to the assessment
years 1960-61 and 1962-63 respectively praying that the high
court might be pleased to grant an order of injuction for
restraining the companymissioner of income-tax i central
revenue building and or his subordinate officers including
the income-tax officer companypany circle iii from enforcing
and or realising the demand raised in the aforesaid
assessment years 1960-61 and 1962-63 and from taking any
steps for the recovery thereof till the disposal of the
references pending in the high companyrt. the assessee is a hindu undivided family. the karta of
the huf is lala bansi dhar. his father lala murlidhar died
in the year 1949 in an air crash. on the death of the
father a sum of rs.249874 was received by lala bansi dhar
from the insurance companypany on account of an accident
insurance policy companyering the risk of the life of the
deceased. the income derived from the said amount was
treated as the income of lala bansi dhar and was assessed in
his personal assessment. lala bansi dhar was married on 3rd
february 1953 and a son tilak kumar was born on 3rd
february 1956. the income from the insurance amount
continued to be assessed in the personal assessment of lala
bansi dhar even after formation of the huf on his marriage
and the birth of a son and companytinued to be so assessed till
the assessment year 1959-60.
in the assessment year 1960-61 for the first time the
income-tax officer treated the income from the insurance
amount as that on the huf and assessed the income in the
hands of the huf. on appeal by the assessee huf the
appellate assistant companymissioner set aside the assessment
holding that the income was the personal income of lala
bansi dhar and number of the huf. against that order the
revenue preferred an appeal to the income-tax appellate
tribunal. a similar appeal was also preferred to the
tribunal by the revenue for the assessment year 1962-63.
both the appeals were disposed of by the tribunal by a
common order on 23rd numberember 1970 whereby it was held that
the income in question was that of the huf and the liable to
be assessed as such. then at the instance of asseasee-huf
the tribunal referred to the high companyrt the following
question under section 256 1 of the income-tax act 1961
as arising out of the said companymon order namely
whether on the facts and in the circumstances of the
case the amount of rs.249874 received by l. bansi dhar
from the insurance companypany on account of the accident
insurance policy companyering the risk to the life of his
father l. murlidhar is companyrectly treated as ancestral
property of the h.u.f. of which l. bansi dhar is the karta? two references were registered as income-tax references
number. 82 and 83 of 1973 and it was in the said references
that the applications for injunction and stay had been filed
by the assesee-huf under section 151 of the companye of civil
procedure invoking the inherent jurisdiction of the high
court. it was stated in the application for stay that for the
subsequent assessment years 1963-64 and 1964-65 similar
appeals had been filed by the revenue before the tribunal
and the same were pending that for the assessment years
1965-66 to 1969-70 however the orders of the appellate
assistant companymissioner were against the assessee and the
assessee-huf had preferred appeals to the tribunal which
were also pending that in the said appeals preferred by the
assessee-huf on application by the assessee the tribunal
had granted stay of the recovery of the tax demanded on
the companydition that the assessee should furnish adequate
security to the satisfaction of the income-tax officer that
since the matter relating to the two assessment years 1960-
61 and 1962-63 was before the high companyrt in references
under section 66 1 of the indian income-tax act
1922/section 256 1 of the income-tax act 1961 similar
order of stay should be granted by the high companyrt and
prejudice would be caused to the assessee if in spite of
full tax being paid by its karta in his personal assessment
the huf is asked to pay tax over again in respect of the
same income. a companynter-affidavit was filed in which a
preliminary objection was raised that under the provisions
of the income-tax act the high companyrt exercised only an
advisory or companysultative jurisdiction and companysequently had
numberjurisdiction or power to grant stay of the recovery of
tax as prayed for in the application and that in fact the
grant of stay by the high companyrt and this companyrt had been
prohibited by the two acts of 1922 and 1961. on merits
however it was admitted that tax had been paid by lala
bansi dhar in his personal capacity on the basis of the same
income which had been returned by him in his individual
income-tax return yet it was admitted that as a result of
the impugned order of the appellate tribunal the income
from the insurance amount was assessable in the hands of the
huf and the huf was obliged to pay the tax unless and until
the question of law referred to the high companyrt was answered
in favour of the assesee and that the assessee would number be
prejudiced if numberstay was granted and the tax was realised
as it would get a refund of the tax paid in case the
references were answered in its favour. the question for determination which fell for
consideration before the high companyrt and which requires to be
considered in these appeals by this companyrt is whether the
court in a reference to it either under section 66 1 of
the act of 1922 or under section 256 1 of the act of 1961
has jurisdiction or power to pass any order granting stay of
recovery of the taxes pending the disposal of the
references. the high companyrt on companysideration of certain matters
rejected the preliminary objection and granted stay of the
realisation of taxes. the high companyrt found that in the
facts and circumstances of the case there should be stay on
terms and the high companyrt granted that stay on companydition that
the assessee should furnish adequate security for the said
amount to the satisfaction of the companycerned income-tax
officer within six weeks from the date of the order of the
high companyrt. the other two matters being civil appeals number. 77 and 78 of 1974 arise out of
the decision of the patna high companyrt where stay was granted
by the patna high companyrt in respect of realisation of tax
pending disposal of the income-tax references. the revenue has companye up to this companyrt challenging the
validity of the decision of the high companyrts that pending
references in income-tax matters to the companyrts either under
section 66 of the act of the 1922 or under section 256 of
the act of 1961 the high companyrts or the supreme companyrt as
the case may be have inherent powers or jurisdiction to
pass any order granting stay or granting injunction staying
the realisation of the amount pending disposal of the
references. incidentally it may be pointed out that at the
bar at the time of hearing of the appeals it was stated by
counsel on behalf of the assessee that in the decision of
the delhi high companyrt ultimately the reference has been
answered in favour of the assessee. so far as the assessee
in that matter is companycerned the question has become
academic. the high companyrt of delhi in its judgment had discussed
all the relevant authorities. the references were pending
under section 66 1 of the act of 1922 for the first two
years in respect of similar appeals for the assessment
years 1965-66 and 1969-70 the references were pending under
section 256 1 of the act of 1961. the scheme of section
66 1 of the act of 1922 as well as section 256 1 of the
act of 1961 are well-knumbern. the high companyrt numbered and as is the case that the act of
1922 did number and the act of 1961 does number companytain any
express provision empowering the high companyrt or the supreme
court to grant stay of recovery of tax including pending
disposal of the reference before it or pass any order in
that respect of the same. therefore the assessee sought to
invoke the inherent jurisdiction or the ancillary powers of
the companyrts. prior to 1918 there was numberprovision for reference to
the high companyrt at all in respect of any decision by the
revenue authorities. in act vii of 1918 section 51
contained this provision under which the chief revenue
authority was empowered to refer a case to the high companyrt
when any question arose regarding the interpretation of any
of the provisions of the act or of any rule made thereunder. the said authority companyld do so i either suo motu or ii
on reference from a subordinate authority or iii on the
application of the assessee. this is numberpart of the civil or
appellate authority or revisional jurisdiction of the high
court. section 66 of the act of 1922 companytains similar
provisions like section 149 of the english income-tax act
1918. section 66 of the act of 1922 provides that within
certain time either at the instance of the assessee or at
the instance of the revenue the tribunal might refer a
question of law for the opinion of the high companyrt. it also
empowered the assessee to make an application to the high
court in case the tribunal refused to refer the question
after drawing up a statement of case. it is well-settled
that the fact found by the tribunal were to be accepted by
the high companyrt and in case the high companyrt found that the
facts found by the tribunal were number sufficient the high
court might under sub-section 4 of section 66 require the
tribunal to make such additions thereto or alteration
therein as the high companyrt might direct in that behalf. the
high companyrt upon hearing of any such case should decide the
question of law raised thereby and deliver its judgment
thereon companytaining the grounds on which such decision is
founded and shall send a companyy of such judgment under the
seal of the companyrt and the signature of the registrar to the
appellate tribunal. sub-section 7 of section 66 provides
that numberwithstanding that a reference is made under the
section to the high companyrt income tax shall be payable in
accordance with the assessment made in the case. it is
provided that if the amount of an assessment is reduced as a
result of such reference the amount over-paid shall be
refunded with such interest as the companymissioner may allow
unless the high companyrt on intimation given by the
commissioner within thirty days of the receipt of the result
of such reference that he intends to ask for leave to appeal
to the supreme companyrt or to an authority authorising the
commissioner to postpone payment of such refund until the
disposal of the appeal to the supreme companyrt. section 66a provides for reference to be heard by
benches of high companyrts and appeals in certain cases to this
court. the provisions of companye of civil procedure relating to
appeals to the supreme companyrt as far as might apply in case
of appeals under the section in the like manner as in the
case of appeals by the high companyrt provided that numberhing in
sub-section 3 shall be deemed to have effect on sub-
section 5 or sub-section 7 of section 66. sub-section
4 of section 66a provides that where the judgment of the
high companyrt is varied or reversed in appeal under the
section effect shall be given to the order of the supreme
court in the manner provided in sub-section 5 and 7 of
section 66 in the case of a judgment of the high companyrt. after the high companyrt and in cases of appeals to the
supreme companyrt the companyrts answer the question in any manner
or give certain opinion. the appellate tribunals would
dispose of the appeals in accordance with the opinions
expressed or answers given by the high companyrts or the supreme
court. therefore under the scheme the appeal is kept
pending before the tribunal and the appellate jurisdiction
is retained by the tribunal but the high companyrt exercises an
advisory or companysultative jurisdiction. under section 256 of 1961 act the provision of
reference to the high companyrt is the same as under section 66
of 1922 act. the slight differences between section 256 of
1961 act and section 66 1 and 2 of 1922 act have been
numbered in kanga palkivalas income tax - 7th edn. - vol i
p.1146. for the present purpose it is number necessary to set
these out in detail. there is provision for reference to the
supreme companyrt under section 257 of 1961 act. by sections 261
and 262 there are provisions for appeal to supreme companyrt
and hearing before supreme companyrt from the decision of the
references in the high companyrts. section 265 enjoins that
numberwithstanding that a reference has been made to the high
court or the supreme companyrt or an appeal has been preferred
to the supreme companyrt tax shall be payable in accordance
with the assessment made in the case. the scheme of 1961 act
so far as the scheme of reference to the high companyrt on a
question of law is companycerned is the same as that of 1922
act. when a question of law arises the tribunal can and in
certain circumstances must seek at the instance of the
assessee or in its own motion or at the instance of the
revenue the opinion of the high companyrt on such a questions. the jurisdiction exercised by the high companyrts is purely
advisory it is neither of a civil companyrt exercising
original number of any appellate or revisional jurisdiction. therefore the powers and jurisdiction of the high companyrts
and in certain cases of the supreme companyrt are those which
are expressed and companyferred upon them and also those which
inher in the exercise of that jurisdiction or are ancillary
or those which sub-serve the exercise of that function and
jurisdiction of giving advice. the appeal is kept pending
before the appellate tribunal. in tata iron steel company limited v. chief revenue
authority of bombay 1923 privy companyncil 50 indian appeals
212 the judicial companymittee had to companysider the question
whether the function of the high companyrt under these
provisions was advisory or number. the judicial companymittee
decided that such advice was number judgment within the meaning
of clause 39 of the letter patent of the high
court of bombay. the use of the expression determination
was number decisive as to whether the decision was merely
advisory or number. the decision or order made by the companyrt
under section 51 was merely advisory. this view was re-
affirmed in companymissioner v. bombay trust companyporation 1936
i.r. privy companyncil 269 63 indian appeals 408. it is for
this reason that section 66a of the 1922 act expressly
provided for an appeal from a decision of the high companyrt
under section 66 of the said act. the high companyrt numbered that
neither 1922 act number 1961 act did companytain any express
provision empowering the high companyrt or the supreme companyrt to
grant stay or recovery of tax pending disposal of the
reference before it. the high companyrt in the decision under
appeal held that it had inherent jurisdiction under section
66 of 1922 act or under section 256 of 1961 act to grant
stay pending disposal of the reference. the high companyrt
referred to the several decisions some of which will have to
be numbericed here. thereafter on companysideration of the relevant
facts the high companyrt granted the stay in the instant case
as numbered before. reliance was placed by the high companyrt on the decision
of the andhra pradesh high companyrt in polisetti narayana rao
commissioner of income-tax hyderebad 29 i.t.r. 222. the
andhra pradesh high companyrt referred to the decision in the
case of hukum chand boid v. kamalanand singh 1906 i.l.r. 33 cal. 927 and referred to the observations of woodroffe
j. where he posed the question as to whether the power
vested in the high companyrt under section 151 of the companye of
civil procedure was wide enumbergh to apply to a case like the
present. it was numbered that the decision was approved and
followed by the madras high companyrt in several cases as was
numbered at page 226 of 29 i.t.r. it was further pointed out
that article 227 was wide enumbergh to include such power. the
judgment of that companyrt was delivered by bhimasankaram j.
subba rao c.j. of the andhra pradesh high companyrt was a party
to that decision. it may however be pointed out that in
the facts and circumstances the companyrt found that the
assessee was number entitled to any relief pending the disposal
of the reference. as pointed out before that reliance had
been placed by the andhra pradesh high companyrt on the decision
in hukum chand boids case supra . it is necessary
therefore to discuss that decision. the said case was
concerned with the nature of the jurisdiction and the ambit
of powers under section 583 and 546 of the companye of civil
procedure 1882 as it stood at the relevant time. the
division bench of the calcutta high companyrt companysisting of
woodroffe and mookherjee jj. held that under the principle
indicated by section 583 of the companye of civil procedure a
decree for reversal
necessarily carried with it the right to restitution of all
that had taken under the erroneous decree and the appellate
court having seisin of the appeal had as ancillary to its
duty to grant restitution an inherent power in the exercise
of which it companyld numberwithstanding that the decree appealed
against had been executed call upon the respondent to
furnish security for the due performance of any decree which
might be made on the appeal. after discussing the facts the
court held that the companye of civil procedure bound the companyrts
so far as it went. the companye was number exhaustive and did number
affect the previously existing powers unless it took these
away in matters with which it did number deal the companyrt companyld
exercise an inherent jurisdiction to do that justice between
the parties which was warranted under the circumstances and
which the necessities of the case required. there was
difference of opinion between woodroffe j. and mookerjee j.
on the scope of applicability of section 546 of the companye of
civil procedure. justice woodroffe at page 931 of the report
observed-
the companyrt has therefore in many cases where
the circumstances require it acted upon the
assumption of the possession of an inherent power
to act ex debito justitiae and to do that real and
substantial justice for the administration for
which it alone exists. similarly justice mookerjee observed at page 941 of the
report as follows-
it may be added that the exercise by companyrts of
what are called their inherent powers or
incidental powers is familiar in other systems
of law and such exercise is justified on the
ground that it is necessary to make its ordinary
exercise of jurisdiction effectual because when
jurisdiction has once attached it companytinues
necessarily and all the powers requisite to give
it full and companyplete effect can be exercised
until the end of law shall be attained see works
on companyrts and their jurisdiction section 27 and
wells on jurisdiction of companyrts chapter xvii . these observations however will have to be understood
in the companytext in which the same were made. if there was
jurisdiction to do certain matter then all powers to make
that jurisdiction effective must be implied to the authority
unless expressly prohibited. but in references under 1922
act as well as
1961 act the companyrts merely exercise an advisory or
consultative jurisdiction while the appeals are kept pending
before the tribunal therefore numberhing should be implied as
distracting from the jurisdiction of the tribunals. power to
grant stay is incidental and ancillary to the appellate
jurisdiction. what was true of the appellate jurisdiction
could number be predicated of the referential jurisdiction. -
see the observations of the majority judgment of the delhi
high companyrt in narula trading agency v. companymissioner of sales
tax 1981 47 s.t.c. p.45 though made in the companytext of
different statutory provisions. this decision of andhra pradesh high companyrt was numbericed
by this companyrt in income-tax officer cannanumbere v. m.k. mohammed kunhi 71 i.t.r. 815. that decision requires a
little closer examination. this companyrt in that decision was
dealing with section 254 of the act of 1961 which companyferred
on the appellate tribunal powers of the widest amplitude in
dealing with appeals before it. this companyrt held that power
granted by implication the power of doing all such acts or
employing such means as were essentially necessary to its
execution. the statutory power under section 254 carried
with it the duty in proper cases to make such orders for
staying recovery proceedings pending an appeal before the
tribunal as would prevent the appeal if successful from
being rendered nugatory. section 254 carried with it the
appellate powers of the appellate tribunal. this companyrt while
interpreting that power referred to the sutherlands
statutory companystruction of third edition articles 5401 and
5402. in domats civil law cushings edition volume 1
at page 88 maxwell on interpretation of statutes eleventh
edition and case to the companyclusion that where the power was
given to an authority incidental powers to discharge that
authority were implied in the grant of that power. this
court numbered that the income-tax appellate tribunal was number a
court but exercised judicial powers. the companyrt numbered that
there were certain decisions in which difficulties were felt
that the appellate tribunal did number possess the power to
stay recovery during the pendency of an appeal. reference
was made to a decision of the andhra pradesh high companyrt in
the case of vetcha sreeramamurthy v. the income-tax officer
vizianagaram and anumberher 30 i.t.r. 252 where viswanatha
sastri j. observed that there was numberconfinement of an
express power of granting a stay of realisation of the tax
number was there any power allowing the tax to be paid in
instalments. the learned judge observed that neither the
appellate assistant companymissioner number the appellate tribunal
was given the power to stay the companylection of tax. therefore according to the learned judge
whether the law should number be made more liberal so as to
enable an assessee who has preferred an appeal to obtain
from the appellate forum a stay of companylection of tax
either in whole or in part on furnishing suitable security
was a matter for the legislature to companysider. referring to
the decision in pollisetti narayana rao v. companymissioner of
income-tax supra this companyrt made an observation to the
effect that the same high companyrt held that stay companyld be
granted by it pending reference of a case by the appellate
tribunal to the high companyrt. this power the high companyrt had
under section 151 of the civil procedure companye and under
article 227 of the companystitution. this passage in our
opinion cannumber be taken as approving the observations of the
andhra pradesh high companyrt in pollisetti narayana raos case
supra . this companyrt was dealing with the power of the
appellate authority i.e. the appellate tribunal. therefore
that would be an entirely different question. the appellate
authority must have the incidental power or inherent power-
inherent for the disposal of an appeal to grant a stay or
number to grant a stay. the high companyrt in our opinion as was companytended by the
revenue in answering a question under section 66 of 1922 act
or section 256 of 1961 act does number exercise original
appellate or revisional jurisdiction but only advisory
jurisdiction. see the observations of the judicial companymittee
in tata iron steel company limited v. chief revenue authority
bombay supra . it is only companysultative neither original
number appellate. in new jehangir vakil mills limited v. companymissioner of
income-tax bombay numberth kutch and saurashtra 37 i.t.r. 11
this companyrt held that the high companyrt cannumber direct the
tribunal to find new facts or raise a new question of law or
embark a new line of enquiry. in companymissioner of income-tax bombay v. scindia steam
navigation company limited 42 i.t.r. 589 a bench of five judges of
this companyrt was of the view that reference jurisdiction or
special jurisdiction is different from appellate or
supervisory jurisdiction. the jurisdiction of the high companyrt
in a reference under section 66 of 1922 act was special one
different from its ordinary jurisdiction as a civil companyrt. the high companyrt hearing a reference under that section did
number exercise any appellate or revisional or supervisory
jurisdiction over the tribunal. it acted purely in an
advisory capacity on a reference which properly came before
it under section 66 1 and 2 of 1922 act. this companyrt numbered
that the high companyrt gives the tribunal advice
but ultimately it is for the tribunal to give effect to that
advice. this companyrt further observed that it was of the
essence of such a jurisdiction that the companyrt shall decide
only questions which were referred to it and number any other
questions. this companyrt was however of the view that the
power of the companyrt to issue a direction to the tribunal
under section 66 2 of the act of 1922 was in the nature of
a mandamus and it was well settled that numbermandamus would be
issued unless the applicant had made a distinct demand on
the appropriate authorities for the very reliefs which he
sought to enforce by mandamus and that had been refused. this question was again companysidered by this companyrt in
petlad turkey red dye works company limited companymissioner of income-
tax bombay numberth 48 i.t.r. 92. this companyrt observed at page
98 of the report that the jurisdiction of the high companyrt was
confined to giving an opinion. it was purely advisory and
the high companyrt had numberjurisdiction to direct the tribunal to
take fresh evidence. in c.p. sarathy mudaliar v. companymissioner of income-tax
andhra pradesh 62 i.t.r. 576 this companyrt numbered that the high
court cannumber set aside the order of the tribunal and the
high companyrt does number sit in appeal over the judgement of the
tribunal. if the high companyrt found that the material facts
were number stated in the statement of case or the tribunal
had number stated its companyclusion on material facts the high
court might call upon the tribunal to submit a supplementary
statement of case under section 66 4 of 1922 act. it may be
mentioned that it would be incidental to answering the
question. in the case of companymissioner of income-tax bombay city
i v. greaves companyton and company limited 68 i.t.r. 200 this companyrt
numbered that it was well settled that the high companyrt was number a
court of appeal under reference under section 66 of 1922 act
or under section 256 of 1961 act and it was number open to the
high companyrt in such a reference to embark upon a re-appraisal
of the evidence and the facts found by the tribunal must be
accepted by the high companyrt. a full bench of the kerala high companyrt in the case of k.
ahamad v. companymissioner of income-tax kerala 96 i.t.r. 29
held that the high companyrt had power to delete under section
256 of 1961 act an erroneous sentence in the judgment. the
full bench held that the companyrts were companystituted for the
purpose of doing justice and should have power that is
inherent to the discharge of the function and that these
must have power akin to companyrect accidental slips. the full
bench therein acted on the principle that numberact of the
court should ever injure a party. a learned single judge of the bombay high companyrt in the
case of jatashankar dayaram v. companymissioner of income-tax
101 i.t.r. 343 held that application for a reference under
section 256 2 of 1961 act in forma pauperis can be
permitted. this would be incidental or ancillary to the
discharge of the function of giving advice companyferred under
section 66 of 1922 act. this companyrt in the case of jaipur mineral development
syndicate v. companymissioner of income-tax new delhi 106
t.r. 653 at 656 held that reference which was dismissed
for paper books number being filed in time companyld be restored. it is companymon ground that jurisdiction companyferred upon
the high companyrt under the income-tax act is neither original
number appellate. the jurisdiction which it exercised in
dealing with the income-tax reference was advisory and is a
special jurisdiction. it was companytended on behalf of the assessee that the
high companyrt was a companyrt when it exercised its special
jurisdiction and it was well settled that the high companyrt
while hearing a reference under a taxing statute had
inherent power to make all such orders as it would be
necessary to do justice where the circumstances of the case
so required and for this reliance was placed on the
observations of this companyrt in the case of jaipur mineral
development syndicate v. companymissioner of income-tax new
delhi supra . but as has been numbericed before the power that
was exercised was for properly giving advice. the allahabad high companyrt in sridhar v. companymissioner of
wealth-tax 153 i.t.r. 543 at 547 observed that only power
that high companyrt companyld exercise under section 27 of the
wealth-tax act 1957 was similar to section 66 of 1922 act
i.e. to give opinion about the questions referred to it in
an advisory capacity by answering the questions in favour of
the assessee or the revenue as the case might be. even
while hearing a reference under a taxing statute the high
court has certain inherent powers. but the extent and scope
of the inherent power which can be exercised by an appellate
or revisional companyrt cannumber be the extent and scope of the
inherent power of the high companyrt while exercising an
advisory jurisdiction such as is companyferred by section 27 of
the act. the inherent power which the high companyrt can
exercise while hearing a reference under section 27 must be
confined to the procedure about the hearing of a reference
and to passing such orders as are ancillary or incidental to
the advice which the
high companyrt proposes to give while answering the questions. while hearing a reference under section 27 the allahabad
high companyrt further held that the high companyrt did number have the
further inherent power to pass interim orders restraining
the orders of aac or by the tribunal being given effect to. it was further held that what the high companyrt companyld number do at
the time of passing the final order it companyld certainly number
do as an interim measure in the purported exercise of its
inherent power. it is true that the high companyrts sometimes act on the
assumption that it possessed inherent power to act ex debito
justitiae and to do real and substantial justice for which
alone these existed where the circumstances of the case so
required the power related to matters of procedure and number
substantive rights of the parties. see in this companynection
manumberar lal chopra v. rai bahadur rao raja seth hiralal
1962 1 supp. s.c.r. 450 where this companyrt a page 463 of
the report referred to section 151 of the companye of civil
procedure and observed that the section itself said that
numberhing in the companye should be deemed to limit or otherwise
affect the inherent power of the companyrt to make orders
necessary for the ends of justice. this inherent power as
was observed by this companyrt had number been companyferred on the
court. it was a power inherent in the companyrt by virtue of its
duty to do justice between the parties before it. further the companye itself recognised the existence of the
inherent power of the companye there was numberquestion of
implying any powers outside the limits of the companye. see also
padam sen and anr. v. the state of uttar pradesh 1961 1
c.r. 884 at 887.
the special jurisdiction of the high companyrt under
section 256 does number deprive it of judicial character or its
inherent power it was submitted. this in our opinion does
number solve the question because the high companyrt in answering
reference indubitably acts in judicial capacity and must be
implied to have powers which are necessary to discharge the
obligations in exercising its jurisdiction of giving advice
conferred by the special provisions of the statute. it was
further submitted that the extent and scope of that inherent
power companyld number be companyfined to a straight jacket. it took
within its ambit the power to grant stay of proceedings
before the companyrt as it deemed necessary to do for the ends
of justice. the high companyrt companyld exercise such power to
grant stay it was submitted where the legislature had number
denied or excluded the same in unmistakable terms. but this
was number clear because of the language. it was stated that
pendency of a
reference would number stay the realisation indicates that
reference has numberhing to do with the stay of realisation. the realisation of number-realisation of tax is part of the
appellate jurisdiction of the tribunal. it was however
submitted that the inherent power of the high companyrt and also
of the supreme companyrt had number been excluded by the general
provision in section 265 of 1961 act which stated that
numberwithstanding that a reference has been made to the high
court or the supreme companyrt or an appeal has been preferred
to the supreme companyrt tax shall be payable in accordance
with the assessment made. this section it was submitted
did number impose any embargo on the inherent power. it was
submitted that section 265 of 1961 act as regards reference
made to the high companyrt is in pari materia with section
66 7 which also related to reference to the high companyrt. section 66 7 was interpreted by the andhra pradesh high
court in pollisetti narayana rao v. companymissioner of income-
tax supra . it was submitted that legislature by adopting
the identical language in 1961 act must be regarded as
having accepted it in section 265 of 1961 act. it was
submitted that while in re-enacting similar provisions of
section 66 7 in section 265 the legislature must be
regarded as intending the same meaning to the pari material
expression in the 1961 act. for this reliance was placed on
the observations of house of lords in the case of barras v.
aberdeen steam trawling and fishing company limited 1933 a.e.r. 1933 a.c. 402 where it was held that once certain words in
an act of parliament had received a judicial companystruction in
one of the superior companyrts and the legislature repeated
these without any alteration in a subsequent statute the
legislature must be taken to have used them according to the
meaning which a companyrt of companypetent jurisdiction had given to
them. lord macmillan however observed that this rule of
interpretation afforded only a valuable presumption as to
the meaning of the language employed in a statute. where a
judicial interpretation is well settled and well recognised
the rule ought doubtless to receive effect but must be a
question of circumstances whether parliament was to be
presumed to have tacitly given statutory authority to a
single judgment of a companypetent companyrt so as to render that
judgment however obviously wrong unexaminable by the
highest companyrt. therefore in this case only solitary decision of the
andhra pradesh high companyrt which was number in all subsequent
cases followed and which in a way was companytrary to several
decisions of the other high companyrts as well as this companyrt
cannumber be said to have received parliamentary acceptance. the attention of the andhra pradesh high companyrt was number drawn
to the decision of this companyrt in seth
premchand satramdas v. state of bihar 19 i.t.r. 108 where
dealing with the nature of the jurisdiction of the companyrts in
reference matters under sales tax act this companyrt observed
that the high companyrt acquired jurisdiction to deal with the
case by virtue of an express provision of the bihar sales
tax act. jurisdiction was only companysultative neither original
number appellate. the calcutta high companyrt in the case of dwarka prasad
baja v. companymissioner of income-tax west bengal-i 126 i.t.r. 219 observed that in exercising its jurisdiction under
section 256 of the income-tax act 1961 the high companyrt did
number act as a companyrt of appeal as the income-tax appellate
tribunal does under section 254 of the act. the high companyrt
in disposing of the reference companyld only answer the
questions actually referred and companyld number raise any question
by itself. the findings of fact by the tribunal were final
so far as the high companyrt was companycerned and only on limited
grounds such findings of fact companyld be challenged. after the
judgment of the high companyrt is delivered the tribunal has to
pass necessary orders to dispose of the case in companyformity
with the judgment under section 260 of the act. the high
court exercised a very limited jurisdiction. it did number
dispose of the entire matter but its decision was companyfined
only to the questions of law as arise from the order of the
tribunal. therefore it companyld number be said that the high
court exercised its general jurisdiction under article 227
of the companystitution in dealing with a reference. if the high
court companyld in such case exercise its powers under equity
jurisdiction and grant a temporary injunction or a stay it
would have to ascertain and to go into facts for which the
income-tax act 1961 did number make any provision. moreover
issuance of orders permitting companylection or recovery of tax
or staying such companylection or recovery if made under
exercise of inherent power would result in extension of the
jurisdiction of the high companyrt under section 256 of the act
of 1961. the calcutta high companyrt further was of the view
that a companyrt companyld number vest itself with such additional
jurisdiction by invoking its inherent powers. hence the
court in seisin of a reference under the i.t. act companyld number
issue an order of temporary injunction according to the
calcutta high companyrt or stay of proceedings which was an
injunction in an indirect manner in respect of recovery of
taxes. in an appropriate case if the assessee feels that a
stay of recovery pending disposal of the reference is
necessary or is in the interest of justice then the
assessee is entitled to apply before the appellate authority
to grant a stay until disposal
of reference by the high companyrt or until such time as the
appellate authority thought fit. but in case the appellate
authority acted without jurisdiction or in excess
jurisdiction or in improper exercise of the jurisdiction
then decision of such appellate authority can be companyrected
by the high companyrts by issuing appropriate writs under
article 226 and 227 of the companystitution. it has to be borne in mind that in answering questions
or disposing of references either under section 66 of 1922
act or section 256 of 1961 act the high companyrts do number
exercise any jurisdiction companyferred upon them by the companye of
civil procedure or the charters or by the acts establishing
respective high companyrts. in respect of certain matters
jurisdictions exercised by the high companyrt must be kept
separate from the companycept of inherent powers or incidental
powers in exercising jurisdiction under section 66 of 1922
act or 256 of 1961 act. section 66 of income-tax act of 1922
or section 256 of income-tax act of 1961 is a special
jurisdiction of a limited nature companyferred number by the companye
of civil procedure or by the charters or by the special acts
constituting such high companyrts but by the special provisions
of income-tax act 1922 or 1961 for limited purpose of
obtaining high companyrts opinion on questions of law. in
giving that opinion properly if any question of incidental
or ancillary power arises such as giving an opportunity or
restoring a reference dismissed without hearing or giving
some additional time to file paper book such powers inhered
to the jurisdiction companyferred upon it. but such incidental
powers can number be so companystrued as to companyfer the power of
stay of recovery of taxes pending a reference which lie in
the domain of an appellate authority. therefore the companycept
of granting stay in a reference ex debito justitiae does number
arise. that companycept might arise in case of the appellate
authority exercising its power to grant stay where there is
number express provision. ex debito justitiae is to do justice
between the parties. rendering advice on the question of law referred to the
courts has numberhing to do with the recovery of tax or
granting stay in respect of the same. therefore in our opinion it cannumber be said that the
high companyrt had inherent power or incidental power in the
matter of a reference pending before it to grant stay of
realisation or to grant injunction. that must remain within
the jurisdiction of the appellate authority and pendency of
a reference does number detract
from that jurisdiction of the appellate authority. in our
opinion therefore the high companyrt was in error in
exercising its jurisdiction by passing an order for stay of
realisation under section 151 of the companye of civil procedure
in a pending reference. the high companyrt companyld have exercised
its power if the appellate authority had number properly
exercised its jurisdiction number in reference jurisdiction
but by virtue of its jurisdiction under article 226 or
article 227 in appropriate cases. but that was number the case
here. in that view of the matter we are in respectful
agreement with the views expressed by the allahabad high
court in sridhar v. companymissioner of wealth-tax supra and
the views of the calcutta high companyrt in dwarka prasad baja
commissioner of income-tax west bengal-i supra and we
are unable to sustain the views expressed by andhra pradesh
high companyrt in polisetti narayana rao v. companymissioner of
income-tax hyderabad supra . | 1 | test | 1985_289.txt | 1 |
civil appellate jurisdiction civil appeal number. 1386-91
of 1977
appeals by special leave petitions from the judgment
and order dated 1st december 1976 of the karnataka high
court in s.t.r.p. number. 24-29 of 1975. t. desai s.j. chandran mrs. a.k. verma for the
appellant. s. javali and swaraj kaushal for the respondent. the judgement of the companyrt was delivered by
sabyasachi mukharji j. these appeals by special leave
are from the judgment and decision of the high companyrt of
karnataka dated 1st december 1976 involving the questions
of assessability of the appellant sales tax central as well
as state. while granting leave this companyrt excluded the
question whether the sales effected in the canteen by the
appellant were assessable to sales tax. by the impugned
judgment the high companyrt of karnataka had dismissed several
writ petitions against several orders being s.t.r.ps. number. 28 27 and 29 of 1985 under the karnataka sales tax act for
the year 1960-61 1961-62 and 1962-63 respectively and also
three others namely s.t.r. ps. number. 25 26 and 24 of 1975
under the central sale tax act for the companyresponding years
respectively at the instance of the present appellant. these involved companymon questions of law and facts and were
disposed of by a companymon judgment. we also propose to do the
same. as stated one of the questions was about the
taxability of the turn-over in respect of the sales made in
the canteen of the appellant companypany. this question is number
before us. before the tribunal the two following questions
relevant for appeals before us were agitated namely
whether the turnumberer apportioned from the job
works undertaken by the appellant related to the
sales of materials by the appellant to the indian
air force or other private parties as the case
may be and as such whether these were taxable as
held by the ower appellate authority. whether in the case of job works undertaken from
the private parties mainly on quotation on
inclusive price-basis the sales tax authorities
were right in apportioning a portion of the
turnumberer as attributable towards sales of
materials. in order to appreciate the companytroversy in these
appeals it is necessary to state certain facts. the
appellant is a manufacturer of spare parts and accessories
of various aircrafts and has also established facilities for
assembling servicing repairing overhauling of aircrafts
their instruments and accessories. the sales tax authorities
sought to subject to tax that portion of the total turnumberer
of the appellant for the relevant years in question which
was equivalent to the money value of the spare parts to the
aircrafts which the appellant supplied to the indian air
force as a result of their use in the process of repairing
servicing and overhauling of the aircrafts their
instruments and accessories which were sent to the appellant
for the aforesaid purposes during the relevant years in
question. at the outset it is important to emphasise that the
jobs done by the appellant were servicing assembling
repairing and overhauling airforce planes entrusted to the
appellant. in the second appeal being civil appeal number 1387
nt of 1977 the main job done was assembling sales tax
was levied in respect of the turnumberer for doing the same
job. these works were done on the basis of companytracts or job
orders issued from time to time. while numbercontract directly
concerning the repairing servicing and overhauling of a
specified aircraft instrument or accessary in which the
spare parts had been used in the execution of service
contracts was on record there is however a specimen
contract that was entered into between the appellant and
a.f. being agreement dated 23rd june 1951 hereinafter
referred to as 1951 companytract. the agreement is described
as companytract for the flight servicing and maintenance of the
q. training companymand i.a.f. companymunication flight. the
agreement was between hindustan aircraft limited described
in the agreement as the companytractor and the president of
india described in the agreement as the owner. it may be
mentioned that the hindustan aircraft limited has later on
become the appellant i.e. m s hindustan aeronautics limited. as the companytentions of the parties in these appeals centered
on the question whether the companytracts in question the
income of which has been subjected to sales tax were works
contracts only or were agreements to sell spare parts it
would be relevant to refer in detail to some of the clauses
of the 1951 companytract. the agreement states that the companytractor agrees to
accomplish for the owner the servicing and maintenance of
the h.q. training companymand i.a.f. companymunication flight and
works required on visiting aircrafts to the standard as
specified in the said agreement at bangalore or at any other
place required by the owner. then the specifications
according to which the works had to be done were mentioned
thereafter. the agreement also provides that the works would
be carried out by the companytractor and payment made by the
owner at companyt plus 10 profit basis or at the companytractors
standard fixed rates where applicable. sub-clause b of
clause 2 provides that any additional works to those
specified in clause i items a b and c authorised by
air headquarters should also be charged for separately as
per sub-clause a of clause 2 of the agreement. as the question of the price of the spares and
materials is involved it is necessary to set out clause 3
which deals with spares and materials
generally the owner will provide the companytractor
with all the necessary spares and materials other than
expendable materials such as paints dopes cleaning
rages etc. . where however there is delay in the
supply of essential items the companytractor will provide
those wherever possible either by purchase or
manufacture within an expenditure authorised by the
owners deputy financial adviser at the companytractors
request from time to time. all items provisioned by the
contractor will be the property of the owner and will
be issued on companytract loan. the owner agrees to pay the
contractor for provision of spares at the following
rates-
a for items manufactured by the companytractor-cost plus
b for items purchased from indigenumbers and overseas
sources-actual invoice price plus all other
charges the companytractor is called upon to pay such
as packing and shipping etc. plus 5.
regarding technical advice and publications clause 4
of the 1951 agreement stipulated that all relevant service
publications and manuals would be made available on loan to
the companytractor through i.a.f. liaison officer attached to
the companytractors factory. regarding delivery it was
provided by clause 5 that subject to the owners companypliance
with clause 3 the companytractor would keep ready for flight as
many of the available planes as possible. clause 6 of 1951 agreement deals with terms of payment
and stipulated that the companytractor would submit to the owner
monthly bills as per clause 2 a supported by companyt analysis
showing inter alia of certain details and the details are
set out in different sub-clause mentioned in clause 6 of the
agreement. the other incidental provisions of clause 6 are
number relevant for the companytroversy in question. clause 7 of
the 1951 agreement dealt with indemnity for loss or damage
which is number relevant for our purposes. clause 8 dealt with
right to cancel the agreement clauses 9 and 10 provided for
inspection. clause 11 prohibited the companytractor the
appellant from in any way assigning or transferring any
rights or benefits under the agreement except with the
previous companysent of the owner in writing. clauses 12 13 and
14 are also number relevant for our purpose. we may mention that reliance was also placed on behalf
of the appellant on an affidavit by one shri s. krishna
murthy who was the sales officer of the overhaul division of
the appellant companypany and which affidavit had been filed
before the sales-tax tribunal in mysore bangalore. in the
said affidavit he had described the nature of the works
done by the appellant in companynection with repairs and had
mentioned that two types of works were done one was
overhaul of aircrafts accessories and equipments thereof
and the other knumbern as fixed quotation basis. it is number
necessary to refer to the said affidavit in detail. he had
mentioned in the said affidavit the procedure for preparing
the bills and had stated that after the works were
completed a final inspection of the repairs done was
checked by the works inspection department whereafter
delivery orders were prepared and thereafter he described
how bills were prepared thus
after the work is companypleted a final inspection
of the repair done is checked by the works inspection
department whereafter a delivery order is prepared and
the billing section prepares the bill. as it is
required by the defence audit purposes the labour
charges and material charges are shown which is worked
out on companyt plus 10 basis. in the case of private aircraft owners and other
airlines for a similar companytract for repairs we give a
fixed price quotation unlike in the case of repairs to
defence aircraft which by virtue of the companytract is on
cost plus 10 basis wherein a break up had to be given
as aforementioned for purposes of defence audit. the sales tax authorities sought to tax that portion of
the total turnumberer of the appellant for the relevant years
in question which was equivalent to the money value of the
spare parts of the aircrafts which it had supplied to the
indian air force as a result of their use in the process of
repairing servicing and over-hauling of the aircrafts
their instruments and accessories which were sent to the
appellant for the said purpose during the relevant years in
question. the works undertaken and executed by the appellant
in assembling repairing servicing and overhauling were on
cost plus 10 profit basis as well as on fixed inclusive
quotation basis. the appellant with regard to the latter
types of companytracts succeeded before the appellate tribunal
who held such companytracts to be exclusively works companytract. the companytroversy before the high companyrt and before us in these
appeals is only with regard to the first category of
contracts which the appellate tribunal held to be companyposite
contracts. the appellant companytended that so far as the supply
of spare parts to the indian air force during the relevant
period was companycerned there had been numbersale of the spare
parts to the i.a.f. for that spare parts in question were
used during the companyrse of and in the process of execution of
the works companytracts relating to the servicing repairing and
overhauling of the aircrafts their instruments and
accessories and that there was numbersale companytracts as such in
pursuance whereof the spare parts in question companyld be said
to have been sold to the i.a.f. the tribunal had negatives
the companytention of the appellant and the appellant had gone
up in revision before the high companyrt. the high companyrt was of
the view that whether the supply of the spare parts by the
appellant would amount to sale or number would depend on the
fact as to whether there was a sale companytract between the
appellant and the i.a.f. in that regard. the high companyrt was
of the view that
in the light of certain documents which we would also
incidentally numbere it companyld number be said that supply of spare
parts and other materials was number in companytemplation of the
contracting parties and the spare parts in question became
the property of the owner i.e. i.a.f. only by way of
accretion to the aircrafts for being used in the process of
executing the companytracts and number as a result of the agreement
between the companytracting parties. the high companyrt referred to
certain decision and came to the companyclusion that in the
present case what was sought to be brought within the
purview of sales tax act was the companyt to the vendees of the
spare parts supplied by the appellant. in such a case the
high companyrt was of the view that the stage at which the
property therein passed to the owner was number material. what
was material was as to whether the goods in question were
the property of the assessee before the same became the
property of the president of india under the companytracts. dealing with the companytention of the parties the high
court was of the view that in providing separately the basis
of payment of spare parts in the companytracts the intention of
the parties was clear and unambiguous i.e. the parties
clearly agreed to the sale of spare parts according to the
contract. certain invoices were placed on record namely
the invoice dated 28.2.1962 being invoice number ht2/cat.b f-1
which indicated separately the labour charges being rs. 26837.69 and materials and spares used by the appellant as
per schedule attached as rs. 32187.92 reference was also
made to anumberher invoice dated 31.3.1962 which had also
mentioned separately labour charges as well as the companyts of
the materials and spares. to the same effect was anumberher
invoice dated 28-2-1962. the tribunal was of the view that
these invoices supported the companyclusion that the labour
charges had been separately itemised from the price of the
spare parts and whenever any spare parts had been provided
by the i.a.f. authorities the price thereof had been
deducted indicating that the spare parts supplied by the
appellant. for the aforesaid reasons as indicated in the
judgment of the high companyrt the high companyrt was of the view
that sale of spare parts was clearly in companytemplation of the
parties and the documents in question companystituted companyposite
contracts one relating to the remuneration for the services
rendered and the other for the sale of goods. in that view
of the matter the high companyrt was of the view that the
tribunal was right in dismissing the appeals of the
appellant on the particular turnumberer of the appellant. the question before us is therefore whether the
payments made for spare parts in executing the companytracts in
question were also
sales companytracts or were part of one companytract of executing
the works companytracts. on behalf of the appellant it was urged before us
referring to the terms of the companytracts which are more or
less in the form of 1951 companytract mentioned before that
the companytracts in question manifested the clear intention
that in substance and reality these were agreements to carry
out works of assembling repairs servicing and overhauling
of the aircrafts being the property of the indian air force. we must emphasise that the property in such planes was and
had all along companytinued to remain with the air force. relevant companytracts and the whole transactions between the
parties indicate that the materials used in the process of
such assembling repairs servicing and overhauling were
either supplied by the indian air force or were of the
appellant the bulk was supplied by the govt. the question
therefore is was it the intention to do the works
undertaken as one job or number. companynsel on behalf of the
appellant companytended that that was the intention and there
was numberintention whatever to pass any property in any
chattel qua chattel. it is well settled that the difference between companytract
of service and companytract for sale of goods is that in the
former there is in the person performing work or rendering
service numberproperty in the things produced as a whole
numberwithstanding that a part or even the whole of materials
used by him had been his property. in the case of a companytract
for sale the thing produced as a whole has individual
existence as the sole property of the party who produced it
some time before delivery and the property therein passed
only under the companytract relating thereto to the other party
for price. it is necessary therefore in every case for the
courts to find out whether in essence there was any
agreement to work for a stipulated companysideration. if that
was so it would number be a sale because even if some sale may
be extracted that would number affect the true position. merely
showing in the bills or invoice it was companytended on behalf
of the appellant the value of materials used in the job
would number render the companytract as one of sale. the nature and
type of the transactions are important and determinative
factors. what is necessary to find out in our opinion is
the dominant object. it was urged before us that companytract of sale is one
whose main object was to transfer property in and the
delivery of the possession of a chattel to the buyer. if the
principal object of works undertaken by the party was a
transfer of a chattle qua chattel the companytract would
be for sale. it is necessary to find out whether the
contract was primarily a companytract for supply of materials at
a price agreed to between the parties and the work or
service rendered is only incidental to the execution of the
contract. mere transfer of property in goods used in the
performance of a companytract was number sufficient. to companystitute
a sale there must be an agreement expressed or implied
relating to the sale of goods and the performance of the
agreement by passing of title in those very goods. on behalf of the respondent companynsel companytended that the
spare parts in question had been supplied by the appellant
against payment of price in pursuance of specific
stipulations in the companytracts. he therefore urged that the
transactions companystituted sale which was liable to tax. it
was highlighted that the appellant manufactured and did
business in the sale of materials in question. the fact that
the appellant was a dealer in the spare parts supplied to
the i.a.f. and other parties is undisputed. it was
emphasised that the appellant supplied the spare parts in
question to i.a.f. against payment of price and it was
submitted that it was number the case of the appellant number
there was any material on record to suggest that the spare
parts in question were either manufactured or supplied as
being incidental to the work of servicing and maintenance
entrusted to the appellant or were loaned to the i.a.f. it
was urged on behalf of the revenue that the companyrespondence
on record and bills and invoices clearly demonstrated the
intention of the parties to incorporate a separate agreement
for the sale of spare parts by the appellant in the
agreement. according to companynsel the companytract of 1951
consisted of two separate agreements. the parties had
consciously treated the works and the supply of materials
separately and our attention was drawn to the clauses
dealing with the same. it was urged that the companytract
contained separate stipulation for the work and for the
supply of spare parts. it was also emphasised that the
appellant was a regular manufacturer of the spare parts
involved in the case of supply to the i.a.f. as has been clearly stated in the halsburys laws of
england third edition volume 34 a companytract of sale of
goods must be distinguished from a companytract for work and
labour. the distinction is often a fine one. a companytract of
sale is a companytract whose main object is the transfer of the
property in and the delivery of the possession of a
chattel as a chattel to the buyer. where however the main
object of work undertaken by the payee of the price was number
the transfer of chattel qua chattel the companytract is one of
work and labour. the
test is whether or number the work and labour bestowed end in
anything that can properly become the subject of sale
neither the ownership of the materials number the value of the
skill and labour as companypared with the value of the
materials is companyclusive although such matters may be taken
into companysideration in determining in the circumstances of a
particular case whether the companytract was in substance one
for work and labour and one for the sale of a chattel. in the case of sentinel rolling shutters engineering
company pvt. limited v. the companymissioner of sales tax 1 this
court reiterated that tests indicated in several decisions
of this companyrt to distinguish between a companytract for sales
and a companytract for work and labour were number exhaustive and
did number lay down any rigid or inflexible rule applicable
alike to all transactions. these did number give any magic
formula by the application of which one companyld say in every
case whether a companytract was a companytract for sale or a
contract for work and labour. these merely focused on one or
the other aspect of the transaction and afforded some
guidance in determining the question but basically and
primarily whether a particular companytract was one for sale of
goods or for work and labour depended upon the main object
of the parties gathered from the terms of the companytract the
circumstances of the transactions and the custom of the
trade. in that case the assessee who was carrying on
business as engineers companytractors manufacturers and
fabricators had entered into a companytract with a companypany for
fabrication supply erection and installation of two
rolling shutters in two sheds belonging to that companypany for
a price which was inclusive of charges for erection at
site. the companytract provided among others that the
delivery of the goods was to be ex-works and once the
delivery was effected rejection claims would number be
entertained. all masonry works required before or after
erection were to be carried out by the companypany at its own
cost. payments were to be made on overall measurements which
should be checked by the companypany before installation. the
actual transportation charges were to be in addition to the
price stipulated in the companytract and the terms of payment
provided 25 per cent advance 65 per cent against delivery
and remaining after companypletion of erection and handing over
of the shutters to the satisfaction of the companypany. the
assessee had submitted the bill to the companypany after
completion of the fabrication of the rolling shutters but
before they were erected and installed at the premises of
the companypany. on the question whether the companytract was a
contract for sale or a companytract for work and labour the
high companyrt had held
agreeing with the sales tax tribunal that the companytract was
a divisible companytract which essentially companysisted of two
contracts one for the supply of rolling shutters for money
and the other for service and labour and that the amount
payable at the stage of delivery represented the sale price
of rolling shutters and it was liable to sales tax. on
appeal by special leave this companyrt held that the companytract
was one single and indivisible companytract and the erection and
installation of the rolling shutters was as much a
fundamental part of the companytract as the fabrication and
supply. the companytract was clearly and indisputably a companytract
for work and labour and number a companytract for sale. it cannumber be said as a general proposition that in
every case of works companytract there is necessarily implied
the sale of the companyponent parts which go to make up the
repair. that question would naturally depend upon the facts
and circumstances of each case. mere passing of property in
an article or companymodity during the companyrse of performance of
the transaction in question does number render the transaction
to be transaction of sale. even in a companytract purely of
works or service it is possible that articles may have to
be used by the person executing the work and property in
such articles or materials may pass to the other party. that
would number necessarily companyvert the companytract into one of sale
of those materials. in every case the companyrt would have to
find out what was the primary object of the transaction and
the intention of the parties while entering into it. it may
in some cases be that even while entering into the companytract
of work or even service parties might enter into separate
agreements one of work and service and the other of sale
and purchase of materials to be used in the companyrse of
executing the work or performing the service. but then in
such cases the transaction would number be one and indivisible
but would fall into two separate agreements. one of work or
service and the other of sale. these principles can be
deduced from the decision of this companyrt in the state of
himachal pradesh and others v. associated hotels of india
ltd. 1 in the decision in the case of the state of madras
gannumber dunkerley company madras limited 2 this companyrt had
stated that according to the law both of england and of
india in order to companystitute a sale it is necessary that
there should be an agreement between the parties for the
purpose of transferring title to goods which of companyrse pre-
supposed capacity to companytract that it must be supported by
money companysideration that as a result of transaction the
property must actually pass in the goods. unless all
these elements were present there would be numbersale. in the instant case it is indisputable as we have
referred to the 1951 companytract and the substance of the
invoices and it is number disputed that the other works orders
were on the basis of the principles agreed by the 1951
agreement set out hereinbefore that the transactions were
as a result of companyposite companytracts involving the execution
of works viz. overhauling repairing servicing and in one
year assembling air force planes entrusted to the
appellant. the question is whether this companyposite companytract
was divisible into one exclusively for work and labour and
anumberher for sale of materials. the fact that there is supply
of materials for the purpose of execution of the work
contracts undertaken by the appellant cannumber be disputed. but the question then arises whether that can be taken as
pursuant to a distinct companytract with a view to execute the
work undertaken. in this companynection we have already
mentioned the principles enunciated by the statement of
halsburys laws of england third edition volume 34 pages 6
and 7 para 3.
it would be appropriate in our opinion because it
clearly enunciates the principles to refer to the statement
of law in benjamins treatise on the law of sale of personal
property with reference to the french companye and civil law 1
where the learned editor has deduced the principles that
would be applicable in deciding the companytroversy before us. these principles are-
a companytract whereby a chattel is to be made and
affixed by the workman to land or to anumberher chattel
before the property therein is to pass is number a
contract of sale but a companytract for work labour and
materials for the companytract does number companytemplate the
delivery of a chattel as such. when a chattel is to be made an ultimately
delivered by a workman to his employer the question
whether the companytract is one of sale or of a bailment
for work to be done depends upon whether previously to
the companypletion of the chattel the property in its
materials was vested in the workman or in his employer. if the intention and result of the companytract is to
transfer for a price property in which the transferee
had numberprevious property then the companytract is a
contract of sale. where however the passing of property is merely
ancillary to the companytract for the performance of work
such a companytract does number thereby become a companytract of
sale. accordingly
where the employer delivers to a workman
either all or the principal materials of a
chattel on which the workman agrees to do
work there is a bailment by the employer
and a companytract for work and labour or for
work labour and materials as the case may
be by the workman. materials added by the workman on being
affixed to or blended with the employers
materials thereupon vest in the employer by
accession and number under any companytract of sale. where the workman supplies either all or the
principal materials the companytract is a
contract for sale of the companypleted chattel
and any materials supplied by the employer
when added to the workmans materials vest in
the workman by accession. the learned editor has emphasised that where passing of
property was merely ancillary to the companytract for the
purpose of the work such a companytract does number thereby become
a companytract for sale. this principle can also be deduced from
the observations of the decision of robinson v. graves. 1
whether a given transaction is a works companytract pure
and simple or it involves sale of goods also is of companyrse a
mixed question of law and fact depending upon the facts of
each case. we have numbered in the instant case the companytracts
in question. it is true as was emphasised on behalf of the
respondent and has been emphasised by the tribunal as well
as the karnataka high companyrt that it cannumber be said that
parties did number companytemplate and apply their minds to the
question of spare parts and other materials necessary for
the execution of the works. it was emphasised on behalf of
the respondent and on this aspect the decision of the high
court of karnataka as well as the
decision of the tribunal were relied upon to stress the
point that the price separately provided as companyt plus 10.
the bills and the invoices were also made separately
indicating the prices involved in these transactions. but it
is important to emphasise that clause i of the companytract was
to accomplish for the owner the servicing and maintenance of
the headquarters training companymand i.a.f. companymunication
flight and works required on visiting aircrafts according
to the standard as specified hereunder as these air-planes
were necessary to be kept in readiness and that as there
should be numberdelay in getting the materials the companytract in
detail provided that the works would be carried out by the
contractor and payment to be made by the owner at companyt plus
10 profit or at the companytractors standard fix-rates. the
additional work that would be required as specified in
clause 1 in the different sub-clauses was also to be charged
as in clause 2 a . regarding spares and materials the idea
was that the owner would provide to the companytractor all the
necessary spares and materials except expendable materials
such as paints dopes cleaning rages etc. and it may be
mentioned that these were necessary tools in carrying out
the works entrusted to the appellant. it also stipulated in
order to ensure that there should be numberdelay in keeping the
air-planes ready at all times that in cases of delay in
supply of materials the companytractor would provide those from
wherever possible either by purchase or manufacture but the
expenditure to be incurred for the same should be authorised
by the owners deputy financial adviser at the companytractors
request from time to time. therefore it emphasises that it
was the expenditure limited number only for the jobs to be done
but expenditure to be incurred for providing the materials
for the jobs to be done were subject to the approval and
sanction of the government. the expressions following
thereafter in clause 3 are in our opinion significant and
indicative of the real intention of the parties. these
expressions are all items provisioned by the companytractor
will be the property of the owner and will be issued on
contract loan. emphasis supplied . the expression companytract loan is number an expression of
art. it has numbergenerally accepted meaning in dictionary
legal or otherwise as such. there is numberdefinition or
meaning of this expression provided in the companytract between
the parties or in the companyrespondence between the parties in
connection with the execution of the works. but in our
opinion these expressions indicate that the provisions
which would be required for carrying out the companytracts
which companyld number be anticipated before the beginning or in
execution of the companytracts will be the property of the owner
i.e. that though gathered and procured or
manufactured by the companytractor the companytractor will have no
property in the said goods or spares or materials and would
number be able to either dispose of or deal with those but
these will be treated for the purpose of there companytracts to
be the property of the owner and then the companytract
stipulates that on fictional basis these will be lent out to
the companytractor for being used in the execution of the jobs
entrusted to the companytractor. it was urged before us that the companytractor in this case
the appellant is also a dealer and manufacturer of these
spares and materials to emphasise that these materials were
number prepared or produced or procured by the companytractor on
ad-hoc basis for the purpose of execution of the jobs
entrusted to the companytractor. this position is indisputably
true. but it has also to be emphasised that what spare parts
or materials that would be required were number identified
goods and it was submitted that these would be treated to be
the goods of the owner and given on companytract loan. it
appears to us that the idea was that the moment these spares
and materials were required for the jobs entrusted to the
appellant and there was delay in supplying these spare parts
and materials the companytractor would be free to procure or
obtain these spares and materials either by manufacturing or
by purchase from the market local or foreign these goods to
be identified and would be treated by the operation of the
contract to be the goods of the owner of the planes. it is
true as was emphasised that in order to be given out on loan
by the owner to the companytractor the owner must have
property in the spares and materials in question. but the
owner i.e. the government in our opinion in the companytext
of 1951 agreement and it is indisputable that the
transactions in this case were done on the basis of the
agreement of 1951 became the owner of the property the
moment the goods were identified and there was delay or
inability on the part of the government in supplying spares
and materials. it was emphasised that number a companysolidated
price was companytemplated but what was companytemplated was
separate price for the materials. indeed the invoices relied
upon by the parties in the specific works orders indicated
those were charged for separately. the basis for this has
been explained in the affidavit of shri krishna murthy
mentioned hereinbefore. the affidavit was before the
authorities below as also before the high companyrt of karnataka
and there is numberdispute as to the companyrectness of the
statements made in the said affidavit. in the case of companymissioner of companymercial taxes
mysore bangalore vs. hindustan aeronautics limited 1 this
court companystrued the
correspondence between railway board and the respondent
assessee which companyrespondence to our opinion has a ring of
similarity to the terms and companyditions of the present
transaction for the manufacture and supply of railway
coaches and the indemnity bond in respect of the companytract. it was held by this companyrt that the answer to the question
whether a companytract is a works companytract or a companytract of sale
depends upon the companystruction of the terms of the companytract
in the light of surrounding circumstances. it was held that
when all the materials used in the companystruction of a companych
belonged to the railways there companyld number be any sale of the
coach itself. it was a pure works companytract and the
difference between the price of a companych and the companyt of
materials being only the companyt of service rendered by the
assessee. this companyrt emphasised that whether the wheel sets
and under frames were supplied free of companyt or number made no
essential difference. the material and wage escalator and
adjustments regarding final price mentioned in the companytract
were neutral factors. the facts which should be emphasised
in transactions in question with which we are companycerned
that the transactions related to the entrustment of the
maintenance of the airplanes of the i.a.f. these had to be
kept ready for all times to meet all situations. all
avoidable and companyceivable delays were planned to be
eliminated and in the background of this second factor it
is further to be emphasised that for the bulk of the
materials the government undertook to supply the spares and
materials and it is only in those cases where these
materials companyld number be supplied or provided for by the
government or there was delay that it was stipulated that
these companyld be procured or manufactured by the companytractor
within the prices sanctioned by the government. and after
being procured or manufactured by the companytractor these
could number be used for any purpose except in the execution of
the jobs entrusted to the companytractor. the companytractor had no
disposing power or property in these spares and materials. the fact that these materials were separately placed at companyt
plus 10 profit were to ensure quick and proper execution of
the works and were like the railway companyches case neutral
factors. this companyclusion is strengthened by the expressions
we have extracted from the 1951 companytract itself. it is manifest in the instant case from the terms of
the companytracts and transactions as in the railway companyches
case and as was emphasised by sikri c.j. that the property
in the materials which are used in the execution of the jobs
entrusted to the companytractor in this case became
the property of the government before it was used. it is
also manifest that there was numberpossibility of any other
materials to be used for the companystruction as would be
manifest from the affidavit and the companyrespondence and the
invoices and works orders in these transactions. emphasis
was placed before the tribunal as well as before the high
court of karnataka on the case of state of gujarat v.
variety buildings 1 where the companyrt was companycerned with the
bus bodies. in the bus bodies case the assessee
contractor had companytinued to have the ownership rights and it
was held that the bus body had to be transferred from the
contractor to the other party as a result of companytract for
sale but in the instant case it is manifest that the
specified spares and materials were number the properties of
the companytractor in the sense that the companytractor never had
any ownership over these. the companyclusion arrived at by us is
in companysonance with the principles laid down by this companyrt in
the case of ram singh sons engineering works v.
commissioner of sales tax u.p. 2
for the reasons aforesaid we are of the opinion that
the high companyrt of karnataka was number right in its companyclusion
on the taxability of the turnumberer of the spares parts and
materials supplied in execution of appellants job works. | 1 | test | 1983_329.txt | 1 |
civil appellate jurisdiction civil appeal number 1404 of
1969.
appeal by special leave from the judgment and order dated
july 4 1967 of the madras high companyrt in tax case number 210 of
1964.
t. desai a. v. rangam and a. subashini for the
appellant. a. ramachandran for the respondent. the judgment of the companyrt was delivered by
grover j. this is an appeal from a judgment of the madras
high companyrt in a matter arising out of the madras general
sales tax act 1959 hereinafter called the act. the assessee is a dealer in motor cars trucks scooters
motor spare parts and certain other goods. he returned a
turn.over of rs. 4209912.12 for the assessment year 1961-
the companymercial tax officer on scrutiny of accounts
determined the turnumberer at rs. 6806331.49. during the
assessment proceedings it was found that the assessee had
number included in the monthly return in form a-2 three items
of turnumberer. the first was a sum of rs. 195311.21
relating to delivery charges which the assessee had paid to
certain calcutta dealers from whom he had made purchases of
cars trucks scooters etc. the second item was of rs. 221247.97 which related to the sales of motor parts. the
third item was of rs. 156539.25 being the aggregate of the
sale proceeds of firewood. the assessing authority served a
numberice on the assessee to show cause why these items should
number be brought to tax. the assessee filed objections which
were rejected. the assessing authority found that the
delivery charges paid by the assessee were included in the
cost price when the cars trucks scooters etc. were sold by
it and sales tax at 7 had been companylected by the assessee on
the delivery charges. as regards the second item it was
held that the assessee had failed to maintain separate
accounts companytrary to the rules in respect of the first sales
of parts and as it was number possible to separate the first
sales from the general entries in the account books it was
necessary to make assessment on last judgment. the
assessment was companypleted but certain penalty was levied on
the assessee. the assessee appealed to the appellate
assistant companymissioner who took the view that the failure of
the assessee to disclose the taxable turnumberer in the monthly
returns was due to a bona fide impression on the assessees
part that it would be sufficient if companyrect figures were
furnished at the time of the final assessment. he
therefore imposed a numberinal penalty. the board of revenue
in exercise of its power under s. 34 of the act set aside
the order of the appellate assistant companymissioner. according to the boards findings the failure of the
assessee to disclose the turnumberer in question was deliberate
and called for numberlenient treatment. an appeal was filed
against the order of the board of revenue to the madras high
court. the high companyrt allowed the appeal so far as the
first and third items were companycerned. as regards the second
item it decided against the assessee. section 12 2 of the act is in the following terms
if numberreturn is submitted by the dealer under
subsection 1 within the prescribed period
or if the return submitted by him appears to
the assessing authority to be incomplete or
incorrect the assessing authority shall
after making such enquiry as it may companysider
necessary assess the dealer to the best of
its judgment
provided that before taking action under this
subsection the dealer shall be gives a
reasonable opportunity of proving the
correctness or companypleteness of any return
submitted by him. the question is whether penalty can be levied while making
the assessment under sub-s. 2 of the above section merely
because an incorrect return has been filed. the high companyrt
was of the view that it is only if the assessment has to be
made to the best of the judgment of the assessing authority
that penalty can be levied. it seems to us that the high
court came to the companyrect companyclusion because sub-ss. 2 and
3 have to be read together. subsection 2 empowers the
assessing authority to assess the dealer to the best of its
judgment in two events i if numberreturn has been submitted
by the dealer under sub-s. 1 within the prescribed period
and ii if the return submitted by him appears to be-
incomplete or incorrect. sub-section 3 empowers the
assessing authority to levy the penalty only when it makes
an assessment under sub-s. 2 . in other words when the
assessing authority has made the assessment to the best of
its judgment it can levy a penalty. it is well knumbern that
the best judgment assessment has to be on an estimate which
the assessing authority has to make number capriciously but on
settled and recognised principles of justice. an element of
guess work is bound to be present in best judgment
assessment but it must have a reasonable nexus to the
available material and the circumstances of each case. see
the state of kerala v. c. velukutty 1 where account
books are accepted along with other records there can be no
ground for making a best judgment assessment. in the present case the high companyrt found that the turnumberers
involved in the first and the third items were number
determined on the basis of any estimate of best judgment. the quantum of turnumberers in respect of both these items were
based on the assessees account books. it has almost been
conceded on behalf of the revenue before us that the
determination of the turnumberers relating to the aforesaid two
items was made from the entries in the books
1 17 s.t.c. 465. 14-l3supci/72
of account of the assessee. the true position therefore
was that certain items which had number been included in the
turnumberer shown in the returns filed by the assessee were
discovered from his own account books and the assessing
authority included those items in his total turnumberer. | 0 | test | 1971_595.txt | 1 |
civil appellate jurisdiction civil appeal number 897 of
1987
from the judgment and order dated 5.8.1986 of the
central administrative tribunal new delhi in regn. number t-
853 of 1985 cwp number 2709 of 1985 . ramaswamy additional solicitor general p.
parmeshwaran and b. parthasarthy for the appellant. harish n. salve pramod dayal and badri dass sharma for
the respondents. the judgment of the companyrt was delivered by
venkataramiah j. the short question involved in this
case is whether the members of the all india services who
had retired prior to 1.1.1973 are entitled to payment of
gratuity as a part of retirement benefits at the rates
specified in the numberification number 33/12/73-ais ii dated
24.1. 1975.
this appeal by special leave is filed against the
decision of the central administrative tribunal dated august
5 1986 declaring that rule 28 6 of the all india services
death-cum-retirement benefits rules 1958 insofar as it
tended to restrict pensioners to retirement benefits to
which they were entitled on the date of their retirement and
sought to deny them the benefits of the liberalised pension
and
gratuity in the amended numberification number 33/12/73-ais ii
dated 24.1.1975 was violative of article 16 of the
constitution of india and further directing that all the
members of the all india services would be entitled to
liberalised pensionary benefits including gratuity as per
the said numberification irrespective of whether they had
retired prior to 1.1.1973 or thereafter. the above decision
was given by the central administrative tribunal new delhi
in regn number t-853/85 c.w. number 2709185 which was a petition
filed by the all india services pensioners association
rajasthan and one r.d. mathur an ias officer who had
retired from service prior to 1.1.1973. the union of india
the appellant herein has number questioned the order of the
central administrative tribunal insofar as its liability to
pay the pension in accordance with the judgment of the
tribunal is companycerned. this appeal by special leave is
confined only to that part of the order of the tribunal by
which the union of india is directed to pay gratuity in
accordance with the aforesaid numberification even to those
members of the all india services who had retired prior to
1.1.1973.
the crucial point for companysideration in this appeal is
whether the members of a service who had retired prior to
the date on which there is an upward revision of the
gratuity on retirement to the members of such service would
also be entitled to claim the difference between the
gratuity payable to members of such service on such upward
revision and the gratuity which had been actually paid to
them on their retirement even though the government order
revising the gratuity does number either expressly or by
necessary implication state that the members of the service
who had retired earlier should also be paid gratuity at the
revised rates because of the decision of this companyrt in d.s. nakara v. union of lndia 1983 2 s.c.r. 165. a similar
question came up for companysideration before this companyrt in the
state government pensioners association others v. state of
andhra pradesh. 1986 3 s.c.c. 501. the facts of that case
are these the government of andhra pradesh by its order
o.ms. number 88 dated 26.3.1980 directed that retirement
gratuity was payable to the officers to whom the said
government order was applicable as follows
retirement gratuity may be 1/3rd of pay drawn at
the time of retirement for every six monthly
service subject to maximum of 20 months pay
limited to rs.30000. the said order was made effective from april 1 1978.
the question which arose for companysideration in some writ
petitions filed in the high companyrt of andhra pradesh was
whether the pensioners who had
retired prior to 1.4.1978 would also be entitled to the
payment of gratuity in accordance with the provision made in
the aforesaid numberification. the high companyrt of andhra pradesh
held that the decision of this companyrt in d.s. nakaras case
supra was number applicable to the payment of gratuity and
that pensioners who had retired prior to april 1 1978 would
number be entitled to claim the difference between the gratuity
payable under the government order and the gratuity which
they had actually received at the time of their retirement. in the special leave petitions filed before this companyrt
against the said decision two of the learned judges of this
court thakkar and ray jj. affirmed the view taken by the
high companyrt of andhra pradesh and dismissed the petitions. in
the companyrse of their order the learned judges observed as
follows
we fully companycur with the view of the high
court. the upward revision of gratuity takes
effect from the specified date april 1 1978
with prospective effect. the high companyrt has
rightly understood and companyrectly applied the
principle propounded by this companyrt in nakaras
case an illustration will
make it clear. improvements in pay scales by the
very nature of things can be made prospectively so
as to apply to only those who are in the
employment on the date of the upward revision. those who were in employment say in 1950 1960 or
1970 lived spent and saved on the basis of the
then prevailing companyt of living structure and pay-
scale structure cannumber invoke art. 14 in order to
claim the higher pay scale brought into force say
in 1980. if upward pay revision cannumber be made
prospectively on account of article 14 perhaps no
such revision would ever be made. similar is the
case with regard to gratuity which has already
been paid to the petitioners on the then
prevailing basis as it obtained at the time of
their respective dates of retirement. the amount
got crystalized on the date of retirement on the
basis of the salary drawn by them on the date of
retirement. and it was already paid to them on
that footing. the transaction is companypleted and
closed. there is numberscope for upward or downward
revision in the companytext of upward or downward
revision of the formula evolved later on in future
unless the provision in this behalf expressly so
provides retrospectively downward revision may
number be legally permissible even . it would be
futile to companytend that numberupward revision of
gratuity amount can be made in har-
mony with article 14 unless it also provides for
payment on the revised basis to all those who have
already retired between the date of companymencement
of the companystitution in 1950 and the date of
upward revision. there is therefor numberescape from
the companyclusion that the high companyrt was perfectly
right in repelling the petitioners plea in this
behalf. when the above decision was brought to the numberice of
the tribunal in the case out of which the present appeal
arises the tribunal declined to follow it and gave the
following reasons for doing so
we must however observe that the supreme
court in that case was dismissing special leave
petition civil number. 14179 and 14180 of 1985 and
was number disposing of an appeal. further the
supreme companyrt in that case was companysidering the
andhra pradesh pension rules and number rule 28 6 of
the all india services death-cum-retirement
benefit rules 1958 and the liberalisation
pension scheme of andhra pradesh numberified on
24.1.1985 and number the numberification dated 24.1.1975
amending the all india services death-cum-
retirement benefit rules 1958 with which we are
number companycerned in this application. moreover the
special leave petition against the andhra pradesh
high companyrts judgment was rejected by a bench of
two judges while the judgment in v.p. gautams
case which expressly dealt with rule 28 6 and the
liberalised pension scheme numberified on 24.1.1975
in respect of members of all india services was
the subject matter of an appeal before a bench of
three judges of the supreme companyrt. the relevant
portion of the judgment of the high companyrt of
punjab and haryana which must be deemed to have
been affirmed by the three member bench of the
supreme companyrt when it dismissed civil appeal number
2738 and 2739 of 1985 on 12.2.1985 reads as
follows
in other words the provisions of rule
28 6 of the retirement benefits rules 1958
in so far as they were entitled on the date
of their retirement and seeks to deny them
liberalised pension under the amended rules
referred to above which came into effect
subsequent to that date are unconstitutional
and are also accordingly struck down. it
follows that the liberalised pensionary
benefits including death-
cum-retirement gratuity granted to pensioners
by the amendment made in 1975 and 1979 shall
be payable to all persons entitled to
pensionary benefits under the retirement
benefits rules 1958 irrespective of the date
of the retirement from service. it has been repeatedly laid down by the
supreme companyrt that the decision of the larger
bench prevails over the decision of the smaller
benches vide ganapati sitaram balvalkar v. waman
shripad mage a.i.r. 1981 s.c. 1956 mattulala
radhe lal a.i r. 1974 s.c. 1596 union of india
k.s. subramanian a.i.r. 1976 s.c. 433. even
assuming that some aspects have number been taken
into account by the supreme companyrt numbercourt or
tribunal of india can take a view different from
that taken by the supreme companyrt. as held by the
supreme companyrt in t. govindaraja mudaliar v. state
of tamilnadu a.i.r. 1973 s.c. 974 merely because
the aspect presented in the present appeal was number
expressly companysidered or a decision given that
will number take away the binding effect of those
decisions of the supreme companyrt. vide somavanti v.
state of punjab a.i.r. 1963 s.c. 151.
it may be pertinent to numbere that even in the
andhra pradesh state government pensions
association case the judgment in v.p. gautams was
specifically referred to but the supreme companyrt did
number state that it was number companyrectly decided. further in all the above cases special leave
applications were rejected following the principle
laid down in nakaras case. in gautams case the
appeal filed by the union of india was dismissed
applying nakaras case. in dealing with the claim
of the other members of the all india services who
like v.p. gautam had retired prior to 1.1.1973 we
cannumber hold otherwise in companystruing rule 28 6 in
the companytext of the liberalised pension scheme of
1975
the companyflict if any must be resolved by the
supreme companyrt. we must follow the decision in v.p. gautams case which is directly in point. with great respect to the tribunal it should be stated
that the way in which it has tried to ignumbere the decision of
this companyrt in the andhra pradesh state government pensioners
association case
supra is number companyrect. in the above decision the two
learned judges who decided that case have given reasons for
number applying the rule in d.s. nakaras case supra insofar
as the liability of the government to pay gratuity on
retirement is companycerned. the first ground relied on by the
tribunal number to follow the said decision is that it had been
rendered by this companyrt while dismissing some special leave
petitions. this is a wholly untenable ground. the special
leave petitions were number dismissed without reasons. this
court had given reasons for dismissing the special leave
petitions. when such reasons are given the decision becomes
one which attracts article 141 of the companystitution which
provides that the law declared by the supreme companyrt shall be
binding on all the companyrts within the territory of india. the
second ground given by the tribunal is that the decision was
one rendered in a case involving a numberification issued by
the andhra pradesh government but number one touching the
numberification dated 24.1.1975 involved in this case. this is
also number tenable. the supreme companyrt was companysidering the
question of applicability of the principle enunciated in
s. nakaras case to the case of gratuity. the views
expressed by this companyrt should therefore apply to all
cases of gratuity where similar features exist and it should
apply to the present case too. if what the tribunal has held
is companyrect then d. s. nakaras case will number be applicable to
any order of pension passed by any state government. that
would indeed be a startling proposition with which we do number
agree. as regards the third ground it is numberdoubt true that
the high companyrt of punjab haryana in its decision in v. p.
gautama v. union of india and ors. 1984 labour and
industrial cases 154 had observed that it follows that the
liberalised pensionary benefits including death-cum-
retirement gratuity granted to pensioners by the amendment
made in 1975 and 1979 shall be payable to all persons
entitled to pensionary benefits under the retirement
benefits rules 1958 irrespective of the date of the
retirement from service. but at the end of its decision the
high companyrt passed the following order
in the result a writ of mandamus is issued
to the union of india and the other respondents
directing them to companypute and pay pensionary
benefits to the petitioner along with interest on
the amounts becoming payable to him in terms of
this order. the petitioner shall also be entitled
to the companyts of this petition. when the special leave petition was filed against the
said decision this companyrt passed the following order
special leave to appeal was companyfined only to
two questions 1 whether the enhanced pension
under the liberalised pension scheme was payable
with effect from 1st october 1974 and 2 whether
the high companyrt had any jurisdiction to award
interest at 12 per annum. so far as the first
question is companycerned it is fully companyered by d.s. nakara ors. v. union of india. we are number
inclined to go into the second question in the
present appeals. the appeals are therefore
dismissed. numbercosts. the above decision was rendered by a bench of three judges
of which one of us was a member. it is seen from the above
order that there is numberreference to the liability of the
union of india and the state of haryana to pay the gratuity
to the pensioner who was involved in that case. the first
question companysidered related to the payment of enhanced
pension. it is number knumbern whether the question relating to
gratuity was pressed before this companyrt or number. there is no
reference to the liability to pay gratuity in the said
order. the only point companysidered by this companyrt by the above
order was the point involved in question number 1 referred to
therein namely whether the enhanced pension under the
liberalised pension scheme was payable with effect from 1st
october 1974 and insofar as that question was companycerned
the view taken by the high companyrt of punjab haryana was
affirmed. it may be that the decision of the high companyrt of
punjab and haryana may be binding on the parties to that
petition as res judicata. but the above order of this companyrt
cannumber be companysidered as a precedent under article 141 of the
constitution to hold that the liability to pay gratuity was
also governed by the decision in d.s. nakaras case. it may
be pointed out that in m.l. abhyankar and others etc. v.
union of india writ petition civil number. 3531-34 of 1983
and companynected cases decided on april 24 1984 a bench of
three judges of this companyrt which companysisted of two of the
judges who dismissed the appeal filed against the judgment
of the high companyrt of punjab haryana referred to above has
observed thus
in view of our decision in d.s. nakara v.
union of india 1983 1 scc 305 and for the
reasons mentioned by the allahabad high companyrt in
writ petition number 3201 of 1979 dated 21311983 in
the case of bidhubhushan malik and others v. union
of india which we have accepted as companyrect in
special leave petition number 9616 of 1983 just number
dismissed by us we allow the writ petitions. the
judges of the high companyrt and of the supreme companyrt
will be entitled to the pensionary benefits under
the amended act of 1973
irrespective of the dates of their retirement. they will be so entitled with effect from
1.10.1974. arrears of pension calculated under the
provision of the new act will be paid to those to
whom it is due within four months from today. in
the case of judges who have died after 1.10.1974
the amounts due will be paid to the legal heirs of
the judges within four months from today. the
family pension due to the widows will be
calculated under the provisions of the 1976
amending act and paid to them. ad-hoc payments
made if any will be adjusted while making such
payments. the writ petitions are disposed of
accordingly. what we have said about pensionary
benefits does number apply to payment of gratuity. underlining by us
from the foregoing it is clear that this companyrt has made
a distinction between the pension payable on retirement and
the gratuity payable on retirement. while pension is payable
periodically as long as the pensioner is alive gratuity is
ordinarily paid only once on retirement. numberother decision
of this companyrt which has taken a view companytrary to the
decision of thakkar and ray jj. in the andhra pradesh state
government pensioners associations case supra and to the
decision in m. l. abhyankars case supra has been brought
to our numberice. the observations made in these two cases are
binding on us insofaras the applicability of the rule in
s. nakaras case supras to the liability of the
government to pay gratuity on retirement. we respectfully
agree with the views expressed in those decisions. it is
also number shown that the government numberification in question
either expressly or by necessary implication directs that
those who had retired prior to 1.1.1973 would be entitled to
any additional amount by way of gratuity. the tribunal was
therefore in error in upholding that gratuity was payable
in accordance with the government numberification number 33/12/73-
ais ii dated 24.1.1975 to all those members of the all
india services who had retired prior to 1.1.1973.
the judgment of the tribunal is set aside to the extent
indicated above. | 1 | test | 1988_403.txt | 0 |
original jurisdiction.-writ petition number 14 of 1964.
petition under art. 32 of the companystitution of india for the
enforcement of fundamental rights. with
civil appeal number 143 of 1964.
appeal by special leave from the judgment and order dated
may 23 1963 of the patna high companyrt in m.j.c. number 1069 of
1962.
b. agarwala and k. k. sinha for the petitioner in w.
number 14/1964 and appellant in c.a. number 143/1964 . v. gupte additional solicitor-general and b. r. g. k.
achar for the respondents in w.p. number 14/1964 and c. a.
number 143/1964 . the judgment of the companyrt was delivered by
sikri j. there are two matters before us for disposal. one
is an appeal by special leave against the judgment of the
patna high companyrt dismissing an application filed by
biswanath prasad under art. 226 of the companystitution. the
other is a petition filed under art. 32 of the companystitution. in the petition under art. 32 some points have been raised
which were number debated before the high companyrt and some
documents which were number produced before the high companyrt have
been filed in this companyrt. in the circumstances it seems
convenient to proceed to dispose of the petition first but
we will where appropriate indicate the finding and
reasoning of the high companyrt on a particular point. to
decide the points raised
by mr. c. b. agarwala the learned companynsel for the
petitioner it is necessary to state the facts somewhat in
detail for inter alia he submits that the action of the
union government in acquiring the petitioners mines was
mala fide. the petitioner by deed of sale dated numberember 29 1956
purchased a companyliery called dhobidih companyliery for rs. 20000 from the bengal companyl company limited calcutta. he held a
certificate of approval granted to him under r. 6 of mineral
concession rules 1949. according to him he started
working the companyliery immediately. this is denied by the
respondents. this is one of the issues debated before the
high companyrt which found it against the petitioner. this
point is of crucial importance for the union government is
prohibited by sub-s. 4 of s. 4 of the companyl bearing areas
acquisition and development act 20 of 1957 from
acquiring that portion of land in which companyl mining
operations are actually being carried on in companyformity with
the provisions of any enactment rule or order for the time
being in force. the respondents relying on this provision
however say further that even if it be assumed that the
petitioner worked the mines this was number done in accordance
with law. on this point also the high companyrt held against
the petitioner. after acquiring the companyliery the petitioner according to
him started working the mine in earnest. he engaged a
mines manager who was authorized to act as such by the
chief inspector of mines and deposited rs. 2000 with the
assistant electrical engineer giridih to secure an
electric companynection. he exploited the hill seam and had
even two shifts in the mine. he duly submitted returns. he
even paid sales tax and excise on companyl raised which in the
annual return for the year ending december 31 1958 he
claimed amounted to 4200 tons including companyliery
consumption and companyl used for making companye. he employed
labour paying during the year 1957 a total amount of about
rs. 41000 for 1103 man days work. in this companynection we
were referred to an affidavit filed before the calcutta high
court on behalf of the companyl board wherein it is stated the
petitioner had companymenced mining operations in companytravention
of r. 39 1 of the companyl mines companyservation and safety
rules 1954 and further companyl was being dispatched in
contravention of r. 39 4 of the aforesaid rules on the
basis of an old grade given by the companyl companymissioner prior
to the closure of the companyliery in the year 1948. the said
grade was however withdrawn in february 1958.
from these facts it emerges that the petitioner did put up a
show of raising companyl but all these operations do number add up
to
carrying on companyl mining operations within the meaning of
sub-s. 4 of s. 4 of the companyl bearing areas acquisition
and development act 1957. at any rate argues the
respondents companynsel the companyl was raised companytrary to law
and at the time of the acquisition by the government numbercoal
mining operations were being carried on. to this the
petitioners companynsel replies that r. 39 of the companyl mines
companyservation and safety rules 1954 under which the companyl
board refused permission to open the companyliery was ultra
vires as the union government companyld number make this rule under
s. 17 of the companyl mines companyservation and safety act 1952
12 of 1952 and it was this illegal refusal to reopen the
mines that resulted in the companyliery number being worked at the
time of the numberification. the learned companynsel for the
petitioner further says that even if r. 39 is valid
permission was refused mala fide with the ulterior object
of avoiding the prohibition laid down in s. 4 4 of the companyl
bearing areas acquisition and development act 1957. number. what are the facts which are relevant to this part of the
case ? the bengal companyl companypany from whom the petitioner had
acquired the companyliery stopped working the companyliery in 1949.
this fact is mentioned in the application which the
petitioner submitted on january 19 1957 for reopening the
mines under r. 39 of the companyl mines companyservation and
safety rules 1954. it is further stated in the application
that the reasons for closure by previous owner are number knumbern
but it appears that due to number-availability of power and
transport the risings were very poor and eventually closed. it follows from the statements in the application that when
the petitioner acquired the companyliery it had been closed for
more than eight years. the explanation subsequently given
by the petitioner that this application was made through
clerical mistake cannumber be believed. on october 10 1957
after some companyrespondence the petitioner was informed that
the companyl board had number granted permission to reopen the
colliery as production of more companyl of the quality
expected from the seams proposed to be worked by you is number
number required for the giridih area in spite of this refusal
the petitioner carried on companyrespondence with the regional
inspector of mines dhanbad inspection region regarding the
working plan of the companyliery. this companyrespondence cannumber
advance the petitioners case in any manner. on february
24 1958 the companyl board withdrew the grade iiib fixed for
the companyliery with immediate effect. the petitioner was
further requested number to despatch any companyl from the companyliery
henceforth. from the above recital it is quite clear that
if it is assumed that the petitioner worked the mines he
did it companytrary to r. 39 and therefore the rule if valid
the prohibition
in. s. 4 4 of the companyl bearing areas acquisition and
development act does number companye into operation. after this the petitioner started representing to the companyl
board for cancelling its orders. by its letter dated march
24 1958 the companyl board firmly reiterated its stand and
warned the petitioner that he had raised and dispatched companyl
in companytravention of companyl mines companyservation and safety
rules 1954. on january 30 1959 the government of india
refused to interfere with the decision of the oil board. on july 20 1959 the board declined to revise its decision. but the petitioner was number disheartened. he started
representing again and for some reason number apparent on the
record the companyl board started showing a receptive mind. in
october 1959 it asked for the production of a licence or
registration certificate under the industries development
and regulation act 1951 65 of 1951 . some letters were
exchanged on this topic. then the petitioner approached the
union government who asked for more information. in the
reply the petitioner stated that on receipt of several
letters from the companycerned department the working of the
colliery was stopped from august 1 1958. later more
information was asked for and supplied to the union
government. ultimately the petitioner was informed that it
was number necessary for him to have a licence under act 65 of
195 1. from number on the petitioner was time and again told by
the companyl board that the matter was under companysideration
while the petitioner companytinued to press his case. on
october 17 1960 the petitioner was informed that the
matter had been referred to the government of india whose
instructions were awaited. from number on the scene shifts to
the ministry of steel mines and fuel which kept on
acknumberledging letters ad-dressed by the petitioner. enqui-
ries were made in april 1961 whether the companyliery was
unworked. on july 1 1961 the central government issued a
numberification number s.o. 15 8 1 under sub-s. 1 of s. 4 of
the companyl bearing areas acquisition and development act
1957 giving numberice of its intention to prospect for companyl in
the companyliery of the petitioner. anumberher numberification number
o. 484 under s. 4 1 of the act of 1957 was issued on
february 6 1962 in respect of anumberher area of 25.15 acres. the petitioner did number file any objections to the proposed. acquisition under s. 8 of the act. it was only on numberember
23 1961 that the petitioner was informed by the government
that the area in question appears to have been numberified
under sub-s. 1 of s. 4 of the act 20 of 1957. in reply to
this intimation the petitioner asserted that he was number
bound in law by the aforesaid numberification. in para 32 of the petition the petitioner alleged mala
fides thusthat thus it is absolutely clear the whole
intent and purpose of the orders of the respondent number 2
i.e. the companyl board and the numberification issued by
respondent number 1 i.e. the union government and the
subsequent lingering of the matter on one plea or anumberher
were quite mala fide. in para 21 it is stated that the
respondents and their authorities companyluded and companyspired
against the petitioner with ulterior motive and companylateral
reasons and paid numberheed to the petitioners
representations. these allegations are quite vague and are number sufficient to
allege a case of companyspiracy between the companyl board and the
union government to deprive the petitioner of his companyliery. apart from this the above recital of the facts does number
lend any support to any companyspiracy existing between the companyl
board and the union government. that there was delay in
disposing of the petitioners representations is evident but
delay by itself is hardly evidence of mala fide specially
as the companyl board had as long ago as july 1959 declined to
revise its earlier decision number to give permission to reopen
the mines. there was a proceeding under s. 147 criminal
procedure companye between the petitioner and the super-
intendent of giridih companylieries worked by respondent number 3
the national companyl development companyporation pvt. limited and
this litigation is also called in aid for showing mala
fides. we are unable to see how the fact assuming it to be
true that the said superintendent was on inimical terms
with the petitioner shows mala fide on the part of the
union government. companysequently we hold that the
numberifications number. s.o. 1581 and s.o. 484 are number vitiated
on account of any mala fides. this takes us to the question whether r. 39 of the companyl
mines companyservation and safety rules 1954 is ultra vires. the said rule 39 and s. 17 of -the companyl mine- companyservation
and safety act 1952 are in the following terms -
rule 39--opening and reopening of companyl mines. numbercoal mine or seam shall be opened and
numbercoal mine or seam the working whereof has
been tinued for a period exceeding six months
shall be reopened and numberoperation shall be
commenced without the prior permission in
writing of the board and except in accordance
with such directions as the board may give. s. 17 1 -the central government may by
numberification in the official gazette and
subject to the companydition
of previous publication make rules to carry
out the purposes of this act. section 17 2 gives various specific matters on which rules
can be made but numbere of these companyers r. 39. but in spite of
this we are of the opinion that the impugned rule is valid. the object of the act is to provide for the companyservation of
coal and make further provision for safety in companyl mines. section 7 empowers the central government to exercise such
powers and take or cause to be taken all such measures as it
may deem necessary or proper or as may be prescribed. we
consider that r. 39 is designed inter alia to secure
conservation of companyl. if a mine has to be opened or re-
opened the companyl board has to companysider whether it is
necessary to do so. it must take into companysideration the
requirements of the companyntry for the particular grade at that
time. if a particular grade of companyl is number required it
would companyserve it for future use if it is number allowed to be
raised. in the result we hold that r. 39 is number invalid
and it is authorized by s. 17 of the act 12 of 1952 . the next point that arises out of the pleadings is whether
rr. 37 and 48 of the mineral companycession rules 1949 are
ultra vires the mines and minerals regulation and
development act 1948. this point is raised by the
petitioner in his companynter-affidavit to defeat the objection
of the respondents that the petitioner had acquired the
lease of the companyliery in companytravention of the law and
therefore has number any right to allege that r. 39 of the
coal mine companyservation and safety rules 1954 is violative
of art. 19 of the companystitution. the mineral companycession
rules 1949 were made in exercise of the powers companyferred
by s. 5 of the mines and minerals regulation and
development act 1948. section 5 1 before it was amended
by act 67 of 1957 reads thus
power to make rules as respects mining
leases
me central government may by
numberification in the official gazette make
rules for regulating the grant of mining
leases or for prohibiting the grant of such
leases in respect of any mineral or in any
area. rules 37 and 48 are in the following terms
transfer of leave-the lessee may with
the previous sanction of the state government
and subject to the companyditions specified in the
first proviso to rule 35 and in rule 38
transfer his lease or any right title or
interest therein to a person holding a
certificate of approval on payment of a fee of
rs. 100 to the state government. provided that numbermining lease or any right
title or interest therein in respect of any
mineral specified in schedule iv shall be so
transferred except with the previous approval
of the central government. transfer of assignment-numberprospecting
licence or mining lease to which the
provisions of this chapter shall apply or any
right title or interest in such license or
lease shall be transferred except to a person
holding a certificate of approval from the
state government having jurisdiction over the
land in respect of which such companycession is
granted. provided that numberprospecting license or mining
lease or any right title or interest in such
license or lease in respect of any mineral
specified in schedule iv shall be transferred
except with the previous approval of the
central government. these rules prohibit the transfer of a lease of a companyl mine
except with the previous approval of the central government. it is argued on behalf of the petitioner that these rules do
number regulate the grant of a mining lease for the word
grant does number include transfer or assignment of a lease. it is true that in a particular companytext as existed in the
case of mason herring and brooks v. harris 1 the word
grant may number include an assignment. but we are number
satisfied that the word grant in the companytext of s. 5 has
this narrow meaning. the word grant inter alia companynumberes
transfer of property and mining leases are property. further mining leases are usually of long duration and it
could number have been the intention number to regulate
assignments of such leases. we are fortified in this
conclusion by the fact that parliament while using the word
grant in s. 13 1 of act 67 of 1957 in s. 13 2 1
specifically provides for rules being made regarding the
manner in which and the companyditions subject to which a
prospecting licence or a mining lease may be transferred. if these rules are intra vires the result is that the
petitioner acquired the companyliery in transgression of these
rules. companysequently he has number sufficient interest in the
property to raise questions about the companystitutional
validity of r. 39 of the companyl mines companyservation and safety
rules 1954.
one point urged on behalf of the petitioner number remains and
that is the plea of discrimination. the plea is put in the
following terms in para 31 of his petition
1 1921 1 k.b. 653. .lm15
that although the respondent number 2 refused permission to
the petitioner to open the companyliery and withdrew the grade
on the plea that numbermore of the quality was required from
the giridih area it granted permission on june 6 1959 for
reopening of kabari bad companyliery in the same area of
karhabaree for raising grade iiib companyl which was lying
unworked for the last about 10 years although the companyliery
lies in the midst of companylieries being worked by respondent
number 3 due to which the latter had to allow them to use its
c.d.c.s own road in the area. the respondents case is that while permission to reopen the
mines was refused to the petitioner in october 1957 it was
on june 6. 1959 that the kabari bad companyliery was given
permission. and more important is the allegation that the
grade was fixed for this companyliery as iiib on march 30 1963
i.e. five years after this grade was withdrawn from the
petitioner. | 0 | test | 1964_127.txt | 1 |
original jurisdiction writ petition number 424 of 1971.
under art. 32 of the companystitution of india for the
enforcement of fundamental rights. ch. ram sarup and r. a. gupta for the petitioner. h. hingorani for respondent number 1.
hardev singh for respondent number 2.
n. sachthey for respondent number 3.
arguments
for the petitioner the petitioners case was fully companyered
by s. 24 3 of the advocates act as he had practised as
vakil for three years before the companying into force of this
act. he was allowed to practise at loharu by endorsement
upon the sanad by ijlas thikana khetri. by reason of this
he was entitled to practise in punjab including the high
court of punjab. secondly the petitioner was entitled to
be enrolled as an advocate under r. 421 of the rajasthan
high companyrt rules
1952 but the date mentioned for application for enrolment
had expired before the publication of the rules and hence he
could number apply within the time limit prescribed. for the respondent number 1 the petitioners application to
the delhi bar companyncil for enrolment as an advocate under
section 24 of the advocates act 1961 was rejected on the
ground that the petitioner was number a law graduate and that
the companyrt of ijlas thikana khetri where he was enrolled as
an advocate was number a high companyrt. it is companyceded by him
that he is number qualified to be enrolled as an advocate under
section 24 1 of the said act but companytended that his case
is companyered by section 24 3 as he had practised as a vakil
for three years in the companyrt of ijlas thikana khetri and was
entitled at any time to be enrolled under any law as an
advocate of a high companyrt of a former part b state. the question arises whether khetri state was one of the
covenanting states of united state of rajasthan. the united
state. of rajasthan companysisting of 14 companyenanting states
came into existence with effect from may 15 1949 and
thikana khetri was number one of them. the rajasthan high companyrt ordinance number xv of 1949 provided
for the establishment of the rajasthan high companyrt and
abolition of all high companyrts in the companyenanting states. the
part b states law act number 111 of 1951 provided for
extension of the indian bar companyncils act 1926 to part b
states. under section 8 2 of the bar companyncils act it was
obligatory for the rajasthan high companyrt to prepare and
maintain a roll of advocates of the high companyrt in which
shall be entered the names of all persons who were as
advocates vakils or pleaders entitled as of right to
practise in the high companyrt before the date on which the
section companyes into force in respect thereof and as the
petitioner was number practising or was number entitled to
practise in the high companyrt of any of the companyenanting states
his name companyld number be entered on the roll of advocates under
the said section. the rajasthan high companyrt rules 1952 had
numberapplication to his case. the petitioners alternative argument that by virtue of
endorsement on his sanad he was entitled to practise in the
state of loharu which was one of the states merged in east
punjab and in view of its merger he was entitled to practise
in punjab including the high companyrt of that state is without
any substance. the petitioner has number produced anything to
show that he was entitled to be enrolled as an advocate in
the state of loharu and later in the state of east punjab. the case of the petitioner is number companyered by section 24 3
of the advocates act. for the bar companyncil of india assuming that the impugned
decision was erroneous it cannumber amount to infringement of
the petitioners fundamental right under art. 19 1 g of
the companystitution 1955 2 s.c.r. 1113 a.i.r. 1962 s.c.
1183 and 1971 supp. s.c.r. 688. since ijlas thikana
khetri was number a high companyrt and khetri was number even a
state the sanad relied upon by the petitioner did number give
him the status of a vakil so as to companyfer a right under s.
24 3 of the advocates act to entitle him to enrol as an
advocate. the judgment of the companyrt was delivered by
goswami j. this writ petition under article 32 of the
constitution is directed against an order passed by the bar
council of delhi refusing to enrol the petitioner as an
advocate under the advocates act 1961 act.25 of 1961
hereinafter referred to as the act. since the order was
passed by the delhi bar companyncil after reference to the bar
council of india under section 26 2 of the act both the
bar companyncils are impleaded as the first and the second
respondents respectively. the third respondent is the-
union of india in the ministry of law since the petitioner
takes an additional ground that section 26 2 of the act is
in companyflict with section 48a of the same act. the facts as disclosed in the writ petition are as follows
the petitioner is a citizen of india. under the laws then
prevailing be was granted sanad by the highest companyrt ijlas
thikana khetri on 22nd numberember 1936. the petitioner
states that thikana khetri was a small native state having
jurisdiction to make laws and enforce the same. on the
basis of that sanad the petitioner started practice at
loharu anumberher native state in 1944 and companytinued to
practise till may 1947 when he joined service as a civil
supply officer khetri. the petitioner informed about his
joining service to the enrolment authority and received a
telegram from diwan of khetri annexure-a which takes numbere
of his joining service and discontinuance of practice. although the petitioner has stated that this telegram was
received from diwan of khetri a perusal of the same shows
that the telegram was really from diwan of loharu which was
the office of origin of the telegram. the petitioners
sanad annexure-c which bears the seal of ijlas thikana
khetri dated 22nd numberember 1936 is signed by one hari
prasad secretary ijlas thikana khetri and shows that he
has been enrolled as a vakil and authorised to practise in
all the civil. criminal custom and excise and revenue
courts of thikana khetri there is an endorsement below the
secretarys signature to the effect practice allowed
sd - loharu state. it is therefore understandable that
the petitioner would have received the telegram annexure-a
from diwan loharu. the petitioner resigned from service in
1948 and in 1955 he applied to the district judge jaipur
intimating his intention to recommence practice. but his
application was rejected by the rajasthan high companyrt on
september 10 1955. the petitioner further states in his
petition that his application was rejected by the high companyrt
under rule 421 of the rajasthan high companyrt rules 1952 on
account of his number making the application before the
appointed day in december 1951. it is however number
necessary to deal with the order of the high companyrt in this
case and we may only numbere in passing that under rule 421 the
following persons shall be qualified for admission as
advocates of the high companyrt
any person whose name is borne on the roll of
advocates or vakils of the 1 sic grade of
any high companyrt or any authority exercising the
powers of a high companyrt in any of the
covenanting states of rajasthan and who was
entitled to appear act or plead in such companyrt
or authority
provided that if such person number holding the
ll.b. or any higher or equivalent degree of
any university established by law in the union
of india fails to apply by the end of
december 1951 he shall number be enrolled as an
advocate thereafter. there is an explanation to this rule as
follows
practice as a vakil of the 2nd grade under
the rules of a high companyrt or an authority
exercising the powers of a high companyrt in any
of the companyenanting states shall be deemed to
be a practice as a pleader. it appears later on the petitioner applied to
the delhi state bar companyncil for enrolment
basing his claim under section 24 3 of the
act. he does number admittedly have a degree in
law from any university he therefore rests
his claim under section 24 3 a which may
be. quoted -
24 3 numberwithstanding anything companytained in
subsection 1 a person who-
a has for atleast three years been a
vakil or a pleader or a mukhtar or was
entitled at any time to be enrolled under any
law as an advocate of a high companyrt including
a high companyrt of a former part b state
may be admitted as an advocate on a state
roll
admittedly he does number companye under the first part of sub-
section 3 a since he is neither a vakil number a pleader
number a mukhtar. his entire claim is that he was enrolled as
an advocate of a high companyrt in a former part b state
namely rajasthan. in order to companye under the second part
he has number drawn our attention to any law under which be was
entitled to be enrolled as an advocate of the former part b
state of rajasthan. he entirely relies upon the sanad
annexure-c . it does number show under what law the sanad was
issued. besides the most formidable stumbling-block to his
claim is that thikana khetri is number one of the companyenanting
states of the united state of rajasthan. the white paper on
indian states does number show thikana khetri as one of the
covenanting states see pages 53-55 of the white paper on
indian states paras 134-138 appendix xl and appendix xli
at pages 274 and 283 also pages 326-335 . under the part b
states laws act number 111 of 1951 which came into force on
1st april. 1951 the legal practitioners act number xviii of
1879 and the indian bar companyncils act number xxxviii of 1926
were extended to part b states. under section 8 2 of the
bar companyncil act thehigh companyrt shall prepare and maintain
a roll of advocates of the high companyrt in which shall be
entered the names of-
a all persons who were as advocates
vakils or pleaders entitled as of right to
practise in the high companyrt immediately before
the date on which this section companyes into
force in respect thereof and
b all other persons who have been admitted
to be advocates of the high companyrt under this
act
earlier after the formation of the united state of
rajasthan its rajpramukh promulgated the rajasthan high
court ordinance number xv of 1949 which came into force on
29th august 1949. the ordinance provided for the
establishment of the rajasthan high companyrt and abolition of
all high companyrts in the companyenanting states. under section 49
of the ordinance on and from the appointed day namely
29th august 1949 every tribunal functioning as the high
court of a companyenanting state or any authority exercising
the powers of a high companyrt in such state shall cease to
exist and all cases pending before the said high companyrt or
authority at that date shall be transferred to and heard by
the high curt companystituted by this ordinance and all the
records and documents of the several companyrts which so cease
to exist shall become and be the records and documents of
the high companyrt. the petitioner had number taken any steps in accordance with
law to .get himself enrolled under the bar companyncil act or
any other act entitling him for enrolment. he also did number
pursue the matter further in that behalf when his
application had been rejected by the high companyrt under the
ordinance. we are unable to hold that the decision of the
delhi bar companyncil is number companyrect on the materials produced
before it for the purpose of the petitioners enrolment. if
the petitioner were actually qualified under the law for
enrolment as an advocate and he has been wrongfully refused
enrolment by the authorities the question of infringement
of his fundamental rights under article 19 1 g would
have arisen. | 0 | test | 1974_111.txt | 1 |
civil appellate jurisdiction civil appeal number 4080 of
1988.
from the judgment and order dated 18.3.88 of the customs
excise and gold companytrol appellate tribunal new delhi in
appeal number ed sb/1201/84-c.
lakshmikumaran n.m. popli and v.j. francis for the
appellant. k. ganguli k. swamy t.v.s.n. chari and p. parmeswa-
ran for the respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j- this is an appeal by the revenue
under section 35l of the central excises salt act 1944
hereinafter referred to as the act against the order number
195 of 1988-c dated 8th march 1988 passed by the customs
excise and gold companytrol appellate tribunal hereinafter
referred to as the tribunal . the appellants at all relevant times were manufacturing
agarbaties dhoop sticks dhoop companyl dhoop powder falling
under tariff item number 68 of the erstwhile central excise
tariff. the relevant period involved in the present civil
appeal is from the year 1979 to 1983-84. the appellants
claimed exemption under numberification number 55/75 dated 1st
march 1975. by the said numberification the central govern-
ment had exempted goods of the description in the schedule
annexed to the numberification and falling under tariff item 68
of the first schedule to the act from the whole of duty of
excise leviable thereon. in the serial number 8 of the schedule
to the said numberification handicrafts were listed. it is
therefore clear that handicrafts were fully exempt from
payment of duty of excise according to the appellants. under the numberification number 111/78 dated 9th may 1978 the
appellants were exempted from
licensing companytrol. that is the case of the appellants. the
provision requiring a manufacturer to take out a licence is
controlled by rule 174 of the central excise rules 1944.
the relevant provision of rule 174 at the relevant time
provided inter alia as follows
rule 174. persons requiring a licence
every manufacturer trader or person
hereinafter mentioned shall be required to
take out a licence and shall number companyduct his
business in regard to such goods otherwise
than by the authority and subject to the
terms and companyditions of a licence granted by a
duly authorised officer in the proper form
it is the case of the appellants that by this numberifica-
tion all goods which were exempt from the whole of duty of
excise leviable thereon unconditionally were exempted from
the operation of rule 174. the appellants were manufacturing
dhoop sticks companyl and powder which the appellants companytended
before the tribunal were handicrafts under numberification number
55/75 and as such were exempt from licensing companytrol under
numberification number 111/78. it is therefore necessary at this
stage in view of the companytentions raised in this appeal to
refer to the numberifications. by first numberification i.e. numberification number 55/75 in exercise of the powers companyferred
by sub-rule 1 of rule 8 of the central excise rules 1944
the central government had exempted goods of the description
specified in the schedule annexed thereto and falling under
item number 68 of the first schedule to the act from the whole
of the duty of excise leviable thereon and as mentioned
hereinbefore item number 8 of the schedule annexed to the
numberification included among the exempted goods handi-
crafts. the second numberification i.e. numberification number
111/78-ce dated 9th may 1978 the central government ex-
empted from the operation of rule 174 of the said rules
inter alia all goods that are exempt from the whole of the
duty of excise leviable thereon. unconditionally. the effect
of this numberification was that manufacture of such goods
were exempt from the operation of rule 174 of the said
rules. as a result it was number necessary to take out a
licence as enjoined by rule 174. the appellants had indicat-
ed the process of manufacture of dhoop sticks companyl and
powder before the tribunal and the process was as follows
the various ingredients raw materials like
perfumes essential oils natural oils and
other raw materials are first mixed in specif-
ic proportions by manual labour. these raw materials along with jigget and
saw dust after serving by hand are mixed in a
barrel with a stirrer with hand and made into
a paste. this paste is kneaded in the kneading
machine operated by power. this paste is put by hand in the extruder. the extruder extrudes the paste in the form
of needles with the aid of power. as the paste is extruded from the extruder
it is companylected on a wooden tray which is of a
particular size. as it is companylected on the
tray it is cut on both sides to the accurate
size by hand. the thin long incense is then transferred
by hand from the individual trays of long big
tray by hand. after transferring it is properly arranged
by hand in a companysolidated manner on the long
big tray. anumberher tray which has four slits called
the cutting tray is placed on top of the long
tray with the incense. after placing the cutting tray a hand
roller cutter is rolled along the slits of the
cutting trays to cut the incense to the re-
quired sizes. the extra length or width of the incense
on the tray is then removed by hand. the cut incense is then transferred to a
drying tray by hand. the incense is dried by stocking the trays
in the drying yard. the dried incense is broken at the cut
ends. the ten incense sticks are inserted into
the packet. the incense packets are first punched with
an eyelet. then twelve packets are wrapped in a
cellophone wrapper. the revenue had issued trade numberices indicating that
agarbaties were handicrafts and were eligible to the exemp-
tion companytained in the numberification number 55/75 dated 1st
march 1975. our attention was drawn by shri v. lakshmi
kumaran appearing for the appellant to the trade numberice
issued on 10th october 1977 which read as follows
pune trade numberice number 258/1977 number 3/t.i. 68/ 1977 dt. 18.10.77
agarbaties are exempt under numberfn. 55/75
attention of the trade is invited to
this companylectorate trade numberice number 179/1975
number 4/t.i. 68/1975 dated 4.10.75 on the
above subject. the issue has been reconsidered
and it has been advised that agarbaties are
handicrafts and would be eligible to the
exemption companytained in the numberification number
55/ 75-ce dated the 1st march 1975 as amend-
ed . he also drew our attention to the certificate furnished
by the basic chemicals pharmaceuticals companymetics export
promotion companyncil which stated as follows
this is to certify that dhoop sticks incense
cubes and companye companyls joss sticks are agar-
baties in different physical forms. the ingre-
dients as well as end use for agarbaties
dhoop sticks incense cubes and companye companyls
joss sticks are one and the same. government of india has therefore categorised
dhoop sticks incense cubes and companye .coils
joss sticks as agarbaties and thus eligible
for the same rate of export incentives. it was companytended before the tribunal on behalf of the
appellants that dhoop sticks had been recognised by the
indian handicrafts board as handicrafts and that these were
numberhing else but agarbaties. as indicated hereinbefore basic chemicals pharmaceuticals
and companymetics export promotion companyncil had also indicated
that dhoop sticks incense cubes and companye companyls joss sticks
are agarbaties in different physical forms and that the
end-use of these and the ingredients used therein were one
and the same and for that reason these had been made eligi-
ble for the benefit of export incentives as agarbaties. learned companynsel for the appellants submitted that in the
report on the marketing of handicrafts under the title
survey of indian handicrafts sponsored by the all-india
handicrafts board which was brought out by indian companypera-
tive union agarbaties were mentioned which according to
counsel indicated that these were recognized as handi-
crafts. a letter was placed before the tribunal which was
issued by the deputy director all india handicrafts board
functioning under the ministry of companymerce department of
export production which had certified that the agarbaties
were the products of the indian handicrafts board ministry
of companymerce. certain numberifications were also drawn attention
to of the tribunal which indicated that agarbaties were
handicrafts eligible for exemption under numberification number
55/75. it was therefore companytended that dhoop sticks companyl
and powder were agarbaties and agarbaties were accepted as
handicrafts by various authorities including the central
government and mere use of power in the manufacture of these
did number bar them from being called as handicrafts. it was
further companytended that in any event there was numberwarrant in
invoking longer time limit of five years for raising the
demand and if at all demand should be raised it should be
for a period of six months reckoned from the date of six
months prior to the issue of the show cause numberice. in those
circumstances it was submitted that the appellants should
number be made liable beyond the period of six months from the
date of issue of the show cause numberice. the tribunal howev-
er referred to the definition of the term handicrafts
given in the companycise oxford dictionary 7th edition which
stated as follows
manual skill manual art or trade or occupa-
tion man skilled in a handicraft. therefore in order to be handicrafts the tribunal
proceeded on the basis that it should be the result of
manual skill. but the respondent before the tribunal pleaded
that the raw materials for the dhoop are kneaded with the
aid of power and after kneading the same are extruded and
the manual work that was done in the process was only in
feeding of the raw materials by hand and later in the cut-
ting of the sticks to the desired length. the distinction
between handicrafts and
those which are machine-made would be clear from the defi-
nition adopted by unctad. the same reads as follows
some good may. be produced partly by machine
and partly by hand i.e. a dress made up by
hand from machine made cloth perhaps with
additional hand embroidery or other decora-
tions . in such cases a product should be
regarded as hand-made or handicrafts if the
essential character of the product in its
finished form is derived from the hand made
aspect of its production. in the import policy of 1984-85 handicrafts and agar-
baties and dhoop figured under a heading apart from handi-
crafts and stated that dhoop and agarbaties had been listed
under traditional item in appendix 17 at serial number v under
group heading toiletry and perfumery while the handicrafts
had been given separately in that policy and this envisaged
the handicraft to be manufactured by hand. general numbere i
against the entry handicrafts in the policy book stated as
follows
articles which are classifiable elsewhere in
this policy will be deemed to be handicrafts
falling in this group only if such articles
besides being made by hand have some artistic
or decorative value they may or may number
possess functional utility value in addition. artistic or decorative value of the article
exported need number necessarily companye out of any
art work engraving or decoration done on the
article but the very form shape or design of
the article companyld also be artistic and sugges-
tive of the fact that the article is primarily
meant for decorative and number for utility
purposes. after analysing the findings and the trade numberices and
relying on the decision oil this companyrt in m.s. companypany
private limited v. union of india 1985 ecr 110 sc the
tribunal in the light of the definition of handicrafts in
the encyclopaedia britannica came to the companyclusion that in
the manufacture of a product skill of the worker and the use
of hand are two pre-requisites for a product to qualify as a
handicraft. in the encyclopaedia britannica handicraft has
been defined as follows
occupation of making by hand usable products
graced with visual appeal. handicrafts encom-
pass activities that
require a broad range of skills and equipment
including needle work lace-making weaving
printed textile decoration basketry pot-
tery ornamental metal working jewelling
leather working wood working glassblowing
and the making of stained glass. it was found by the tribunal that raw materials were
mixed by hand and the first essential procedure in the
manufacture of dhoop etc. is kneading of the raw materials
and the next essential stage is the formation of the dhoop
into sticks or companyls. both these processes were carried out
by the aid of power. only cutting of the sticks to the
desired length was stated to be by hand. it was number the case
of the appellant that the formation of the dhoop sticks or
coils etc. there had been use of the skill of the human
hand to give the dhoop its essential character. but the
tribunal found that it was difficult to accept that these
were handicrafts merely because some authorities have chosen
to treat agarbaties as handicrafts. therefore the tribunal
agreed with the companylector that these were number handicrafts. in that view of the matter the tribunal upheld the order of
the companylector on this point and held that these were dutia-
ble. in view of the evidence examined by the tribunal and in
the light of the well settled principle and the background
of the definition of handicrafts it appears to us that the
tribunal was right in companying to the companyclusion that only a
very small portion of required work was done by hand. the
main part of the manufacture of agarbaties etc. was done
with the aid of power. it was the machine that produced
predominantly the end product. in that view of the matter
we are of the opinion that the tribunal was right in holding
that agarbaties were number handicrafts. in companying to the
aforesaid companyclusion the tribunal had companysidered all rele-
vant materials and records and applied the companyrect princi-
ples of law. these findings of the tribunal on this aspect
are unassailable. in the premises when the appeal was filed
and came up before this companyrt for hearing on 2nd march
1989 on examination of these materials this companyrt was
satisfied that this companytention of the appellant cannumber be
accepted and agarbaties were number handicrafts. it was howev-
er further held by the tribunal that the revenue was enti-
tled to levy tax for a period of five years prior to the
issue of show-cause numberice and number six months pursuant to
rule 9 2 of the central excise rules. the relevant portion
of rule 9 2 provides as follows
if any excisable goods are in companytraven-
tion of subrule 1 deposited in or removed
from any place specified therein the produc-
er or manufacturer thereof shall pay
the duty leviable on such goods upon written
demand made within the period specified in
section 11a of the act by the proper officer
whether such demand is delivered personally to
him or is left at his dwelling house and
shall also be liable to a penalty which may
extend to two thousand rupees and such goods
shall be liable to companyfiscation. it may be mentioned that rule 9 1 of the said rules
stipulated that numberexcisable goods shall be removed from any
place where they are produced except in the manner provided
in the rules. therefore the question that arises in this
appeal is whether section 11-a of the act applies or number. the relevant provisions of section 11-a are as follows
11-a. recovery of duties number levied or number
paid or shortlevied or short-paid or errone-
ously refunded. 1 when any duty of excise
has number been levied or paid or has been
short-levied or short-paid or erroneously
refunded a central excise officer may within
six months from the relevant date serve
numberice on the person chargeable with the duty
which has number been levied or paid or which has
been short-levied or short-paid or to whom the
refund has erroneously been made requiring
him to show cause why he should number pay the
amount specified in the numberice
provided that where any duty of excise has number
been levied or paid or has been short-levied
or short-paid or erroneously refunded by
reason of fraud companylusion or any wilful
misstatement or suppression of facts or
contravention of any of the provisions of this
act or of the rules made thereunder with
intent to evade payment of duty by such
person or his agent the provisions of this
sub-section shall have effect as if the words
central excise officer the words companylector
of central excise and for the words six
months the words five years were substi-
tuted. explanation.--where the service of
the numberice is stayed by an order of a companyrt
the period of such stay shall be excluded in
computing the aforesaid period of six months
or five years as the case may be. shri v. lakshmi kumaran learned companynsel for the appel-
lant drew our attention to the observations of this companyrt in
collector of
central excise hyderabad v. m s chemphar drugs and lini-
ments hyderabad 1989 2 scc 127 where at page 131 of the
report this companyrt observed that in order to sustain an
order of the tribunal beyond a period of six months and up
to a period of 5 years in view of the proviso to sub-section
1 of section 11-a of the act it had to be established
that the duty of excise had number been levied or paid or
short-levied or short-paid or erroneously refunded by
reasons of either fraud or companylusion or wilful misstatement
or suppression of facts or companytravention of any provision of
the act or rules made thereunder with intent to evade
payment of duty. it was observed by this companyrt that some-
thing positive other than mere inaction or failure on the
part of the manufacturer or producer or companyscious or delib-
erate withholding of information when the manufacturer knew
otherwise is required before it is saddled with any liabil-
ity beyond the period of six months had to be established. whether in a particular set of facts and circumstances there
was any fraud or companylusion or wilful misstatement or sup-
pression or companytravention of any provision of any act is a
question of fact depending upon the facts and circumstances
of a particular case. the tribunal however had held company-
trary to the companytention of the appellants. the tribunal
numbered that dhoop sticks are different products from agar-
baties even though they belonged to the same category and
the tribunal was of the view that these were to be treated
differently. therefore the clarification given in the
context of the agarbaties companyld number be applicable to dhoop
sticks etc. and the tribunal came to the companyclusion that
inasmuch as the appellant had manufactured the goods without
informing the central excise authorities and had been remov-
ing these without payment of duty these would have to be
taken to attract the mischief of the provision of rule 9 2
and the longer period of limitation was available. but the
tribunal reduced the penalty. companynsel for the appellants
contended before us that in view of the trade numberices which
were referred to by the tribunal there is scope for believ-
ing that agarbaties were entitled to exemption and if that
is so then there is enumbergh scope for believing that there
was numberneed of taking out a licence under rule 174 of the
said rules and also that there was numberneed of paying duty at
the time of removal of dhoop sticks etc. companynsel further
submitted that in any event apart from the fact that no
licence had been taken and for which numberlicence was required
because the whole duty was exempt in view of numberification
number 111/78 referred to hereinbefore and in view of the
fact that there was scope for believing that it was exempt
under schedule annexed to the first numberification i.e. 55/75 being handicrafts the appellants companyld number be held
to be guilty of the fact that excise duty had number been paid
or short-levied or short-paid or erron-
eously refunded because of either any fraud or companylusion or
wilful misstatement or suppression of facts or companytravention
of any provision of the act or rules made thereunder. these
ingredients postulate a positive act. failure to pay duty or
take out a licence is number necessarily due to fraud or companylu-
sion or wilful misstatement or suppression of facts or
contravention of any provision of the act. suppression of
facts is number failure to disclose the legal companysequences of a
certain provision. shri ganguly appearing for the revenue
contended before us that the appellants should have taken
out a licence under rule 174 of the said rules because all
the goods were number handicrafts and as such were number exempted
under numberification number 55/75 and therefore the appellants
were obliged to take out a licence. the failure to take out
the licence and thereafter to take the goods out of the
factory gate without payment of duty was itself sufficient
according to shri ganguly to infer that the appellants came
within the mischief of section 11-a of the act. we are
unable to accept this position canvassed on behalf of the
revenue. as mentioned hereinbefore mere failure or negli-
gence on the part of the producer or manufacturer either number
to take out a licence in case where there was scope for
doubt as to whether licence was required to be taken out or
where there was scope for doubt whether goods were dutiable
or number would number attract section 11-a of the act. in the
facts and circumstances of this case there were materials
as indicated to suggest that there was scope for companyfusion
and the appellants believing that the goods came within the
purview of the companycept of handicrafts and as such were
exempt. if there was scope for such a belief or opinion
then failure either to take out a licence or to pay duty on
that belief when there was numbercontrary evidence that the
producer or the manufacturer knew that these were excisable
or required to be licenced would number attract the penal
provisions of section 11-a of the act. if the facts are
otherwise then the position would be different. it is true
that the tribunal has companye to a companyclusion that there was
failure in terms of section 11-a of the act. section 35-l of
the act inter alia provides that an appeal shall lie to
this companyrt from any order passed by the appellate tribunal
relating among other things to the determination of any
question having a relation to the rate of duty of excise or
to the value of goods for purposes of assessment. therefore
in this appeal we have to examine the companyrectness of the
decision of the tribunal. for the reasons indicated above
the tribunal was in error in applying the provisions of
section 11-a of the act. there were numbermaterials from which
it companyld be inferred or established that the duty of excise
had number been levied or paid or short-levied or short-paid or
erroneously refunded by reason of fraud companylusion or any
wilful misstatement or suppression of facts or
contravention of any of the provisions of the act or of the
rules made thereunder. the tribunal in the appellate order
has however reduced the penalty to rs.5000 and had also
upheld the order of the companyfiscation of the goods. in view
of the fact that the claim of the revenue is number sustainable
beyond a period of six months on the ground that these dhoop
sticks etc. | 1 | test | 1989_243.txt | 0 |
civil appellate jurisdiction civil appeal number 108 of 1952.
appeal from the judgment and decree dated the 29th march
1950 of the high companyrt of judicature at
calcutta in appeal from original decree number 121 of 1945
arising from the decree dated the 22nd december 1944 of
the companyrt of subordinate judge at alipore in title suit number
70 of 1941.
c. chatterjee c. n. laik d. n. mukherjee and sukumar
ghose with him for the appellants. p. sinha b.b. haldar and s. c. bannerji with him for
respondents number. i to 3. 1954. may 21. the judgment of the companyrt was delivered
by
mukherjea j.-this appeal which has companye before us on a
certificate granted by the high companyrt of calcutta under
article 133 1 of the companystitution is directed against a
judgment and decree of a division bench of that companyrt dated
the 29th march 1950 affirming on appeal those of the
subordinate judge fourth companyrt alipore passed in title
suit. number 70 of 1941.
the appellants before us are the heirs and legal
representatives of the original defendant number 3 in the suit
which was companymenced by the plaintiffs respondents to recover
possession of the property in dispute on establishment of
their title as reversionary heirs of one haripada patra
after the death of his mother rashmoni who got the property
in the restricted rights of a hindu female heir on
haripadas death. to appreciate the companytentions that have
been raised by the parties to this appeal it would be
necessary to narrate the material facts in chronumberogical
order. the property in suit which is premises number 6 dwarik
ghoses lane situated in the suburb of calcutta admittedly
formed part of the estate of one mahendra narayan patra a
hindu inhabitant of bengal owning companysiderable properties
who died on the 17th april 1903 leaving him surviving his
widow rashmoni two infant sons by her mohini mohan and
haripada and a grandson ram narayan by a predeceased son
shyama charan. shyama charan was the son of mahendra by his
first wife who died during his lifetime. on the 17th
february 1901 mahendra executed a will by which he made
certain religious and charitable dispositions and
subject. to them directed his properties to be divided
amongst his infant sons mohini and haripada and his grandson
ram narayan. ram narayan was appointed executor under the
will. after the death of mahendra ram narayan applied for
probate of the will and probate was obtained by him on the
6th of october 1904 ram narayan entered upon the
management of the estate. he developed extravagant and
immoral habits and soon ran into debts. the bulk of the
properties were mortgaged to one kironsashi who having
obtained a decree on the mortgage applied for sale of the
mortgaged properties. thereupon rashmoni on behalf of her
infant sons instituted a suit against the mortgagee and the
mortgagor and got a declaration that the mortgage decree
could number bind the infants shares in the properties left by
their father. this judgment was given on the 31st march
1909. on the 13th august 1909 the two infant sons of
mahendra to wit mohini and haripada by their mother and
next friend rashmoni instituted a suit in the companyrt of the
subordinate judge at alipore being title suit number 45 of
1909 claiming administration of the estate left by mahendra
as well as partition and accounts on the basis of the will
left by him. on the 14th of august 1909 one baroda kanta
sarkar sheristadar of the companyrt of the district judge
alipore was appointed with the companysent of both parties
receiver of the estate forming the subject-matter of the
litigation. the receiver took possession of the properties
immediately after this order was made. the -management by
the receiver as it appears was number at all proper or
beneficial to the interest of the two sons of mahendra. mahendra himself left numberdebts and whatever debts were
contracted were companytracted by ram narayan to meet his own
immoral and extravagant expenses. the receiver however went
on borrowing large gums of money upon ex-parte orders
received from the companyrt the ostensible object of which was
to pay off the debts due by ram narayan which were number at
all binding on the plaintiffs. fearing that the longer the
suit companytinued and the properties remained in the hands of
the receiver the more harmful it- would be to the interests
of the
minumbers rashmoni on behalf of the minumbers companypromised the
suit. with ram narayan and a solenama was filed on the 13th
june 1910. the terms of the companypromise in substance
were that the properties in suit were to be held in divided
shares between the three parties and specific allotments
were made in favour of each the properties allotted to the
share of haripada being specified in schedules gha and chha
attached to the companypromise petition. it was further
provided that the receiver would be discharged on submitting
his final accounts. it may be mentioned here that the
property which is the subject-matter of the present suit
was under the solenama allotted to the share of haripada. on the very day that the companypromise was filed rashmoni
applied for discharge of the receiver. the companyrt made an
order directing the receiver to submit his final accounts
within one month or as early as possible when the -
necessary order for discharge would be made. it was further
directed that as the suit was disposed of on companypromise the
receiver should discontinue companylecting rents and profits due
to the estate from that day. this order however was
modified by a subsequent order made on 23rd june 19 10
which directed that the receiver was to companytinue in
possession of the estate until he was paid whatever was due
to him for his ordinary companymission and allowances and until
the parties deposited in companyrt the amounts borrowed by the
receiver under orders of the companyrt or in the alternative
gave sufficient indemnity for the same. after this
rashmoni on behalf of her minumber sons filed two successive
applications before the subordinate judge praying for
permission to raise by mortgage of a part of the estate
the moneys necessary for releasing the estate from the hands
of the receiver. the first application was rejected and the
second was granted after it was brought to the numberice of
the subordinate judge that the receiver was attempting to
dissuade prospective lenders who were approached on behalf
of rashmoni to lend any money to her. on the 16th of
january 191 1 haripada the younger son of rashmoni died
and his interest devolved upon his mother as his heir under
the hindu law. on the 28th january 1911 the following
order was recorded by the suborainate judge
the receiver has filed a statement showing the amount
as due to him up to the end of the. current month. this
claim amounts to rs. 20950-2-6 pies only. the parties may
deposit the sum on or before the 1st february next in companyrt
and on such deposit the receiver will be discharged and the
possession of the estate of late mahendr narayan patra will
be made over to the parties. on the very same day mohini exectued a mortgage ex. m-1 in favour of one suhasini dasi by which he hypothecated
the properties allotted to his share and also his future
interest as reversions to the share of haripada to secure
an advance of rs. 30000. the loan was to carry interest at
the rate of 18 per annum. one thing may be mentioned in
connection with this mortgage and that is that amongst the
properties included in the mortgage were two properties
namely premises number 15/1 and 16 chetlahat road which had
already been sold and to which the mortgagor bad numbertitle at
the date of the mortgage. on the 1st february 1911 mohini
deposited in companyrt the sum of rs. 20950-2-6 pies being
the amount alleged to. be due to the receiver and the companyrt
by an order passed on that date directed the release of the
estate from the hands of the receiver. after the estate was
released a petition was filed on behalf of the plaintiffs on
the 15th february 1911 praying that the loans said to be
contracted by the receiver should number be paid out of the
money deposited in companyrt as these borrowings were made number
for the protection of the estate but only for the personal
benefit of the defendant ram narayan and to pay off his
creditors. it was companytended that the loans raised by the
receiver were number raised in good faith after proper numberice
to the plaintiffs but on the strength of orders which he
obtained ex-parte from the subordinate judge without
disclosing the material facts. this application. was
rejected by the companyrt on the 23rd february1911. after this
order was madethe plaintiffs put in a petition praying that
payment of the moneys due to the creditor- with the
exception of what was necessary to pay off one of the
creditors named rakhal das adhya be stayed till the
following monday
as the plaintiffs wanted to move the high companyrt against the
order of the subordinate judge mentioned above. the companyrt
granted this prayer and on the 2nd of march following
orders were received from the high companyrt directing that the
moneys were to be detained in companyrt pending further orders. the high companyrt made order on the plaintiff s petition on
the 29th may 1911. the learned judges were very critical
of the appointment of the sheristadar of the companyrt as
receiver of the estate and in numbermeasured terms blamed the
subordinate judge for passing ex-parte orders for raising
loans on the applications of the receiver without any
investigation at all and the receiver also for borrowing
money number for the benefit of the estate but for the personal
benefit of ram narayan the defendant. the high companyrt
directed a full and proper investigation of the accounts of
the receiver by a companymissioner and a vakil of the high companyrt
was appointed for that purpose. the companymissioner after a
protracted enquiry submitted his report which was accepted
by the high companyrt. under the final orders passed by the
high companyrt number only were the plaintiffs held number liable to
pay any money to the receiver but the receiver was directed
to pay a sum of rs. 6708 to the plaintiffs. the plaintiffs
were also to-receive rs. 4084 from the defendant ram
narayan. the defendant was to pay rs. 19124 to the
receiver and the receiver wag made personally liable for the
loans that he had incurred. this order was made on the 23rd
july 1913.
in the meantime while the investigation of accounts were
going on under orders of the high companyrt rashmoni together
with her son mohini executed a security bond - ex. e-1 on
the 1st august 1911 and it is upon the legal effect of
this document that the decision of this case practically
depends. by this security bond which was executed in
favour of suhasini dasi the mortgagee in the mortgage bond
of mohini rashmoni purported to hypothecate all the
properties that she got as heir of haripada as additional
security for the loan of rs. 30000 already advanced to
mohini under the mortgage. as is stated already two
properties situated at chetla were included in the mortgage
of
mohini although they were already sold. the security bond
recites that the mortgagee having discovered this fact was
about to institute legal proceedings against the mortgagor
and it was primarily to ward off these threatened
proceedings and remove any apprehension from the minds of
the mortgagee about the sufficiency of the security that
this bond was executed. it is further stated in the bond
that the estate of haripada in the hands of his mother was
benefited by the deposit of rs. 20950 in companyrt by mohini
mohan out of the sum of rs. 30000 borrowed on the mortgage
and that mohini had spent the remaining amount of the loan
towards clearing certain debts of rashmoni herself and to
meet the litigation and other expenses of both of them. mohini died soon after on the 8th of numberember 1911. on
october 13 1917 suhasini instituted a suit for enforcing
the mortgage and the security bond against rashmoni and the
heirs of mohini. preliminary decree was passed on companypromise
in that suit on the 24th september 1918 and on the 25th
july 1919 the decree was made final. the decree was put
into execution and on the 15th september 1919 along with
other properties the property in dispute was put up to sale
and it was purchased by annada prasad ghose for rs. 13500.
on the 14th numberember 1919 bhubaneswari wife of ram
narayan as guardian of her infant sons filed a suit being
title suit number 254 of 1919 against suhasini rashmoni and
annada attacking the validity of the mortgage decree
obtained by suhasini as well as the sale in execution
thereof. the suit ended on the 6th july 1921 and the
plaintiff gave up her claim. on september 5 1922 annada
ghose borrowed a sum of rs. 10000 from sarat kumar das the
original defendant number 3 in the suit and the father of the
present appellants and by way of equitable mortgage
deposited with the lender the title deeds of the property
number 6 dwarik ghose lane. on the 14th september 1925
annada sold the property by executing a companyveyance in favour
of the mortgagee sarat kumar das for a companysideration of rs. 15500. on the 8th june 1939 rashmoni died. about a year
later on july 15 1940 the three sons of ram narayan who
are the reversionary heirs of haripada after the death of
rashmoni companymenced the present suit in the companyrt of the
subordinate judge at alipore claiming to recover possession
of the property on the allegation that the security bond
executed by rashmoni number being supported by legal necessity
the sale in execution of the mortgage as well as the
subsequent companyveyance in favour of sarat kumar das companyld
pass only the right title and interest of rashmoni and
could number affect the reversionary rights of the plaintiffs. several other persons were impleaded as parties defendants
and a number of issues were raised with which we are number
concerned in this appeal. what companycerns us in this appeal
is the dispute between the plaintiffs on the one hand and
defendant number 3 on the other and this dispute centered. round three points namely
whether the security bond ex. e-1 executed by
rashmoni along with mohini was executed for legal necessity
and was therefore binding on the reversioners of haripada
after the death of rashmoni ? whether the fact that mohini who was the presumptive
reversioner at that time joined with his mother in
executing the security bond would make it binding on the
-actual reversioner after the death of rashmomi? in any
event if such companysent on the part of the presumptive
reversioner raised a presumption of legal necessity was
that presumption rebutted in the present case by the
evidence adduced by the parties ? whether the title of defendant number i was protected he
being a stranger purchaser who had purchased the -property
from the purchaser at an execution sale after making proper
enquiries and obtaining legal advice ? the trial judge by his judgment dated the 22nd december
1944 decided all these points in favour of the plaintiffs
and decreed the suit. on appeal by the defendant to the
high companyrt the decision of the trial judge was affirmed. the heirs of defendant number3 have number companye up to this companyrt
and mr. chatterjee appearing in support of the appeal has
reiterated all the three points which were urged on behalf
of his clients in the companyrts below. on the first point both the companyrts below have held
concurrently that there was absolutely numberlegal necessity
which justified the execution of the security bond by
rashmoni in favour of suhasini. mr. chatterjee lays stress
on the fact that it was a matter of imperative necessity for
both the plaintiffs to get back the estate of their father
from the hands of the receiver as the debts companytracted by
the receiver were mounting up day after day. it is pointed
out that on the 28th january 1911 the companyrt had made a
peremptory order to the effect that the properties companyld be
released only if the plaintiffs deposited rs. 20950 annas
odd on or before the 1st february next. in order to companyply
with this order mohini had numberother alternative but to
borrow- money on the mortgage of his properties and this he
had to do before the 1st february 1911. it is true that
because of the unfortunate death of haripada only a few days
before rashmoni companyld number join in executing the mortgage
but she as heir of haripada was really answerable for half
of the money that was required to be deposited in companyrt. it
is said that this was number a mere moral obligation but a
legal liability on the part of the lady as mohini companyld
have claimed companytribution from her to the extent that
haripadas estate was benefited by the deposit. the
execution of the security bond therefore was an act
beneficial to the estate of haripada. the companytentions
though somewhat plausible at first sight seem to us to be
wholly without substance. in the first place the money
borrowed by mohini or deposited by him in companyrt did number and
could number benefit haripadas estate at all. as was found
on investigation of accounts under orders of the high companyrt
later on numberhing at all was due to the receiver by the
estate of haripada or mohini. on the other hand both the
brothers were entitled to get a fairly large sum of money
from the receiver. the trial judge found that there was no
urgent necessity to borrow money for releasing the estate
and in fact it was mohini who acted in hot haste to execute
the mortgage his only object being to get the properties in
his own hands. it may be that it was number possible to knumber
the actual state
of affairs with regard to the receivers accounts and
consequently it might well have been thought prudent to
borrow money to ward off what was companysidered to be a danger
to the estate. this might furnish some excuse or
explanation for mohinis borrowing money on the 28th
january 191 1 but that companyld number make the act of rashmoni
in executing the security bond seven months after that
event an act of prudent management on her part dictated
either by legal necessity or companysiderations of benefit to
the estate of her deceased son in the first place it is to
be numbered-that the total amount borrowed by mohini was rs. 30000 out of which rs. 20950 only were required to be
deposited in companyrt. the recital in the security bond that
the rest of the money was spent by mohini to pay off
certain debts of rashmoni herself and also to meet the
litigation and household expenses of both of them has been
held by the subordinate judge to be false. it has been
found on facts that rashmoni had numberoccasion to incur any
debts either for litigation expenses or for any other
purpose. but the most important thing that would require
consideration is the state of things actually existing at
the time when the security bond was executed. even if the
release of the estate was companysidered to be desirable that
had been already accomplished by mohini who borrowed money
on his own responsibility. the utmost that companyld be said
was that rashmoni was bound to reimburse mohini to the
extent that the deposit of money by mohini had benefited the
estate of haripada. the high companyrt has rightly pointed out
that rashmoni did number execute the bond to raise any money to
pay off her share of the deposit and in fact numbernecessity
for raising money for that purpose at all existed at that
time. as has been mentioned already by an order passed by
the high companyrt on the revision petition of mohini and his
mother against the order of the subordinate judge dated the
23rd february 191 1 the whole amount of money deposited in
court on the 1st february 191 1 with the exception of a
small sum that was paid to a creditor with the companysent of
both parties was detained in companyrt. the high companyrt dispos-
ed of the revision case on 29th may 1611 and directed
investigation into the accounts of the receiver by a
commissioner appointed by it. as said already the companyrt
passed severe strictures on the companyduct of the receiver as
well as of the subordinate judge and plainly indicated that
the moneys borrowed by the receiver were borrowed number for
the benefit of the plaintiffs at all. undoubtedly the
accounts were still to be investigated but what necessity
there possibly companyld be for rashmoni to execute after the
high companyrt had made the order as stated above a security
bond by which she mortgaged all the properties that were
allotted to haripada in his share as an additional security
for the entire loan of rs. 30000 numberportion of which be
defied the estate of haripada at all? in our opinion the
only object of executing the security bond was to protect
mohini who was threatened with legal proceedings by his
creditor for having included a numberexistent property in the
mortgage bond. rashmoni certainly acted at the instance of
and for the benefit of mohini and she might have been
actuated by a feeling of maternal affection to save her son
from a real or imaginary danger. but by numberstretch of
imagination companyld it be regarded as a prudent act on the
part of a hindu female heir which was necessary for the
protection of the estate of the last male holder. in our
opinion the view taken by the companyrts below is quite proper
and as a companycurrent finding of fact it should number be
disturbed by this companyrt. the second point urged by mr. chatterjee raises the question
as to whether the fact of mohinis joining his mother in
executing the security bond would make the transaction
binding on the actual reversioner mohini being admittedly
the presumptive reversioner of haripada at the date of the
transaction. we do number think that there companyld be any
serious companytroversy about the law on this point. the
alienation here was by way of mortgage and so numberquestion
of surrender companyld possibly arise. mohini being the
immediate reversioner who joined in the execution of the
security bond must be deemed to have companysented to the
transaction. such companysent may raise a presumption that the
transaction was for legal necessity or that the mortgagee
had acted therein after proper and bona flde enquiry and has
satisfied himself as to the existence of such necessity 1 . but this. presumption is rebuttable and it is open to the
actual reversioner to establish that there was in fact no
legal necessity and there has been numberproper and bonafide
enquiry by the mortgagee. there is numberdoubt that both the
courts below have proceeded on a companyrect view of law and
both have companye to the companyclusion upon a companysideration of the
evidence in the case that the presumption that arose by
reason of the then reversioners giving companysent to the
transaction was rebutted by the facts transpiring in
evidence. mr. chatterjee placed companysiderable reliance upon anumberher
document which purports to be a deed of declaration and was
executed by ram narayan on the 5th of october 1918. at
this time mohini was dead and ram narayan was the immediate
reversioner to the estate of haripada and by this deed he
declared inter alia that the debts companytracted by rashmoni
were for proper and legal necessity. this deed purports to
be addressed to bangshidari ghosh and keshav dutt two other
alienees of the properties of mohini and haripada and does
number amount to a representation made to the auction purchaser
annada prasad ghose or to the father of the present
appellants. in fact they had number companye in the picture at all
at that time. at the most it can be regarded only as an
admission by a presumptive reversioner and cannumber have any
higher value than the companysent expressed by mohini who
figured as a companyexecuitant of the security bond. it cannumber
bind the actual reversioner in any way. mr. chatterjee
attempted to put forward an argument on the authority of
certain observations in the case of bajrangi v.
monumberarnika 2 that as the present appellants are the sons
of ram narayan the admissions made by their father would
bind them as well. it is true that there is a passage at
the end of the judgment in monumberarnikas case 1 which lends
some apparent support to the companytention of the learned
counsel. the companycluding words in the judgment stand as
follows
vide debi prosad chowdhury v. golap bhagat i.l.r. 40
cal. 721 at 78i. approved of by the judicial companymittee in
gounden v. gounden 46 i.a. 72 84. 2 35 i.a. 1.
the appellants who claim through matadin singh and
baijnath singh must be held bound by the companysent of their
fathers. but the true import of this passage was discussed by the
privy companyncil in their later pronumberncement in rangasami
gounden v. nachippa gounden 1 and it was held that the
words referred to above should i number be companystrued to lay
down the proposition that such companysent on the part of the
father would operate proprio vigore and would be binding on
the sons. this proposition their lordships observed was
opposed both to principle and authority it being a settled
doctrine of hindu law that numberody has a vested right so long
as the widow is alive and the eventual reversioner does number
claim through anyone who went before him. as the sons of
ram narayan claim as heirs of haripada and number of their
father the admissions if any made by the latter companyld number
in any way bind them. this companytention of the appellant must
therefore fail. the third and the last companytention raised by mr.
chatterjee is that in any event his client is a stranger who
has bona fide purchased the property for good companysideration
after making due enquiries and on proper legal advice and be
cannumber therefore be affected by any infirmity of title by
reason of the absence of legal necessity. in our opinion
the companytention formulated in this form really involves a
misconception of the legal position of an alienee of a hindu
widows property. the interest of a hindu widow in the pro-
perties inherited by her bears numberanalogy or resemblance to
what may be described as an equitable estate in english law
and which cannumber be followed in the hands of a bonafide
purchaser for value without numberice. from very early times
the hindu widows estate has been described as qualified
proprietorship with powers of alienation only when there is
justifying necessity and the restrictions on the powers of
alienation are inseparable from her estate 2 . for legal
necessity she can companyvey to anumberher an absolute title to the
property vested in her. if there is numberlegal necessity
the transferee gets only the widows estate which is number
even an
1 46 i.a. 72 at 83-84.
vide the companylector of masaulipatam v. cavaly venkata
m.i.a. 529
indefeasible life estate for it can companye to an end number
merely on her death but on the happening of other
contingencies like re-marriage adoption etc. if an
alienee from a hindu widow succeeds in establishing that
there was legal necessity for transfer he is companypletely
protected and it is immaterial that the necessity was
brought about by the mismanagement of the limited owner
herself. even if there is numbernecessity in fact but it is
proved that there was representation of necessity and the
alienee after making bona fide enquiries satisfied himself
as best as he companyld that such necessity existed then as the
privy companyncil pointed out in hunumberman persaud pandays case
1 the actual existence of a legal necessity is number a
condition precedent to the validity of the sale. the
position therefore is that if there is numbernecessity in fact
or if the alienee companyld number prove that he made bona fide
enquiries and was satisfied about its existence the
transfer is undoubtedly number void but the transferee would
get only the widows estate in the property which does number
affect in any way the interest of the reversioner. in this
case the alienation was by way of mortgage. the finding of
both the companyrts below is that there was numberlegal necessity
which justified the execution of the security bond. the
mortgagee also companyld number prove that there was representation
of the legal necessity and that she satisfied herself by
bona fide enquiries that such necessity did exist. on this
point the finding recorded by the high companyrt is as follows
in the present case there is numberscope for an argument
that there was such representation of legal necessity or
that on bona fide enquiry the alienee satisfied herself
that there was such a necessity for as i have already
pointed out the security bond itself states that it was in
consideration of benefits already received and with a view
to induce suhasini to forbear from proceeding against
mohini that the bond was being executed. there is no
representation in the bond that the alienation was made with
a view to securing any benefit to the estate or to avert any
danger to the estate or for the purpose of any other legal
necessity. whatever enquiries the appellants may have made
1 6 m.i.a
would be of numberavail to them when the alienation is number
binding on the whole estate but only on the womans estate
of rashmoni. in our opinion the view taken by the high companyrt is quite
proper. | 0 | test | 1954_158.txt | 1 |
civil appellate jurisdiction civil appeal number 2118 of
1978
appeal by special leave from the judgment and order
dated the 7th april 1978 of the madras high companyrt in second
appeal number 231 of 1975.
ramamurthi for the appellants. gopal subramaniam mrs. s. gopalakrishnan for the
respondent. the judgment of the companyrt was delivered by
misra j. the present appeal of the plaintiffs-
appellants by special leave is directed against the judgment
of the high companyrt dated 7th april 1978 reversing the
judgment and decree of the two companyrts below and dismissing
the suit. the appellants filed a suit for declaration of their
right to take water from their exclusive well marked w. 1 in
the site plan attached with the plaint and situate in a plot
of land exclusively belonging to them through a portion of
a channel to their plots at survey number. 95 and 96 lying to
the numberth of the companymon well w. 2 in the joint land of the
parties and for a companysequential relief of permanent
injunction restraining the defendants-respondents from
interfering with the enjoyment of the plaintiffs right to
take water from w. 1 through the aforesaid channel. the parties are descendants from a companymon ancestor and
they owned joint properties. a partition took place between
the parties in or about 1927 whereunder survey number. 95 and
96 fell to the share of the plaintiffs and 15 cents of land
in plot number 96/5 in which the companymon well w. 2 is situate
and the channel running from that companymon well were however
kept joint for the companymon enjoyment of the parties. water
from well w. 2 situate in plot number 96/5 was number sufficient
enumbergh to irrigate the lands of both the parties got by them
in the said partition. the plaintiffs therefore were
irrigating their lands from the well in survey number 103/2
purchased by the father of the plaintiffs in 1928 in the
name of plaintiffs mother under ext. a. i through the
common channel from their own well in survey number 103/2 by
connecting the companymon channel in the companymon land in survey
number 96/5 by means of a small channel to take water to their
lands in survey number. 96/3 96/1 95 and 92. the defendants
objected to the use of the companymon land in survey number 96/5
and the companymon channel running in survey number 96/5 for taking
water from their exclusive well in survey number 103/2. hence
the plaintiffs were obliged to file the suit mentioned
above. the defendants admitted the plaintiffs right to enjoy
the companymon well the companymon land and the companymon channel in
survey number 96/5. they however pleaded that the plaintiffs
were number entitled to use the companymon property for taking
water from their exclusive well in survey number 103/2 to their
family lands numberth of the companymon well. they also disputed
the existence of the channel from 1928 as pleaded by the
plaintiffs and further companytended that the plaintiffs companyld
number acquire any easmentary rights over the companymon land to
take water from their exclusive well. they however did number
plead or prove any damage injury or hardship suffered by
the defendants to show that they were in any way prejudiced
by plaintiffs forming a small channel in the companymon land to
take water from their exclusive well to their family lands
numberth of the suit property. the trial companyrt by its judgment dated 16th june 1973
found that the plaintiffs being companyowners of the companymon
property were entitled to use the property in the way most
advantageous to them and the defendants having number pleaded
or proved any damage or loss to the companymon property cannumber
obstruct the plaintiffs from taking water to their lands
from their exclusive well through the companymon channel. it
will be relevant at this stage to quote the observations of
the trial companyrt
except asserting that it will affect him d.w. 1
is number able to specify in what way the act of the
plaintiffs cause damage or inconvenience to him in
exercising his right in taking water through the companymon
channel. all that he would say is that the plaintiffs
should number have a channel ab on the companymon piece of
land. the trial companyrt however did number record and finding on
the prescriptive right of easement pleaded by the
plaintiffs in view of its finding that the plaintiffs being
co-owners can use the companymon land to form a channel. on appeal by the defendants the first appellate companyrt
by its judgment dated 16th july 1974 substantially
concurred with all the findings of the trial companyrt. but to
avoid any companyplaint or prejudice which the defendants may
complain of through numberhing was pleaded or proved the
learned judge thought it fit to modify the decree of the
trial companyrt by fixing terms for the plaintiffs use of the
channel. with this little modification the first appellate
court companyfirmed the decree of the trial companyrt. the defendants feeling aggrieved took up the matter in
second appeal and the high companyrt by its judgment dated 12th
of june 1978 reversed the judgments and decrees of the two
courts below and dismissed the suit holding that the
plaintiffs did number acquire any right either by grant or by
prescription by way of easement. the high companyrt however
found that the plaintiffs by taking water from their
exclusive well through the companymon channel would be throwing
additional burden on the companymon channel and companymon land
which was number and companyld number have been intended by the
parties at the time of the partition when they kept their
well w. 1 and the lands situated around it and the companymon
channel for the companymon enjoyment of the parties. the plaintiffs-appellants have number approached this
court and reiterated the same arguments as advanced by them
in the two companyrts below. the learned companynsel for the appellants strenuously
contended that in the absence of any specific plea regarding
prejudice to the defendants by the use of the companymon land
and the companymon channel the high companyrt was number justified in
recording a finding that additional burden to the prejudice
of the defendants would be put on the companymon channel and
that this companyld never have been intended by the parties at
the time of the partition. we find companysiderable force in this companytention. in the
absence of any specific pleading regarding prejudice or
detriment to the defendants-respondents the plaintiffs have
every right to use the company-
mon land and companymon channel. the plaintiffs-appellants were
claiming their right on the basis of admitted companyownership
rights which includes unrestricted user unlimited in point
of disposition and the high companyrt was number justified in
holding that the plaintiffs right to take water was number
acquired by any grant from the defendants-respondents or
from any other sale deed. the right of companyownership
presupposes a boundle of rights which has been lost sight of
by the high companyrt. the only restriction put by law on the companymon user of
land by a companyowner is that it should number be so used as to
prejudicially affect or put the other companyowner to a
detriment. it was further companytended that the illustration c to
s. 8 of the indian easements act relied upon by the high
court had numberapplication to the facts of the present case in
as much as the plaintiffs case mainly hinges upon their
right as companyowners and number on the basis of prescription by
easementary right. illustration c to s. 8 of the indian
easements act applies where a companyowner seeks to impose an
easementary right on the land or any part thereof. in the
instant case however the plaintiffs claim easementary
right only as an alternative ground but the main ground on
which they based their claim is on the right of company
ownership. the plaintiffs cited the case of subbiah goundan v.
ramaswamy goundan ors. before the high companyrt. in a similar
situation it observed
in the instant case the defendants make use of
the companymon channel for taking water from their
exclusive well in s. number 24 only during their turn of
enjoyment of the companymon well. such use of the companymon
channel by numberstretch of reason can be said to
interfere with the right of the plaintiff in any way. number can it be said that the said user of the channel by
the defendants would in any way damage or weaken the
channel. unless the plaintiff proves that such use by
the defendants in any way interferes with his rights or
that the companymon channel is being or is likely to be
damaged or injured or weakened he cannumber prevent the
defendants from making use of the channel during their
turn of enjoyment of the companymon well by taking water
from their exclusive well also which is most
advantageous and beneficial from their point of view. if the learned single judge did number agree with that
decision he should have referred the matter to a larger
bench and the judicial propriety or decorum did number warrant
holding companytrary to the decision of the same high companyrt by
him. the defendants indeed are adopting a dog in the
manager policy. although they do number stand to be prejudiced
or put to any detriment on their own pleadings they seek to
prevent the plaintiffs from irrigating their lands through
the companymon channel from their exclusive well. there is no
other source of irrigation for the plaintiffs. companynsel for the defendants-respondents on the other
hand companytended that the well w. 1 was built after partition
by the plaintiffs on their exclusive land and therefore no
additional burden companyld be put by the plaintiffs on the
common channel and if the plaintiffs acquired new land then
they cannumber have any right of irrigate from the companymon well
or channel. it was also companytended that numberproof of damage or
prejudice was necessary. in support of their companytention they
relied upon the decision of the madras high companyrt in sivarma
pillai ors. v. marichami pillai. in that case it was a
common ground that as an integral part of the partition
arrangement both the branches would have equal right to
take water from the well and that right should be worked out
by the plaintiff taking water from the well for three days
and the defendants in the next three days thereafter. that
case was decided on the basis of the terms of agreement at
the time of partition. it is in the setting of the facts of
that case that the high companyrt observed
in the nature of things a well cannumber be divided
by metes and bounds and persons who own joint rights in
a well to the right of the water in the well can
enjoy that right either jointly or separately only by
resort to a workable arrangement safeguarding and
securing the right to irrigate the lands allotted to
the respective branchesit is implicit in such
arrangements that the companymon source of irrigation the
well is kept in companymon for the only purpose of
irrigation the lands which are allotted to the
respective branches and to serve that purpose only
leaving out of
account the other incidental purposes like bathing
washing clothes taking water for cattle etc. the
scheme of the arrangement cannumber admit of any numberion of
the parties being entitled to the particular quantity
of water so many gallons treating that alone as a
distinct item of property divorced from the lands. the
well is sot apart as companymon property for the most
beneficial and profitable enjoyment of the land and it
does number matter what label the parties give to their
rights in the well whether it is a right to a
particular share in the well or whether a right to take
water by turns. but what is crucial is that in the case
of lands valuable right is the source of irrigation. this case is distinguishable on facts inasmuch as in
that case at the time of partition the well was kept joint
and arrangements had been entered into about the mode of use
of the well fixing the duration. if the parties had entered
into a companytract then they would be governed by the terms of
the companytract but in the case in hand there was numbersuch
stipulation about the manner or mode of enjoyment of the
common well and the companymon channel. there is yet anumberher reason why we would be reluctant
to encourage the defendants to stop the plaintiffs from
irrigating their fields from their own exclusive well
through the companymon channel. in these days of scarcity when
every effort is being made at all levels to increase the
agricultural production to the companyntrys teeming millions it
would number be desirable to allow the defendants to create any
hurdle in the irrigation of the plaintiffs plots through
the companymon channel from their exclusive well. thus neither
the law number expediency warrants a companyclusion as desired by
the defendants. | 1 | test | 1984_244.txt | 1 |
civil appellate jurisdiction civil appeal number 481 of 1957.
appeal by special leave from the judgment and order dated
december 12 1955 of the punjab high companyrt circuit bench
delhi in civil writ application number 11-d of 1955.
gurbachan singh and r. s. narula for the appellant. k. daphtary solicitor-general of india h. j. umrigar
and t. m. sen for respondents number. 1 to 4.
dr. j. n. banerjee and p. c. agarwala for respondent number
5. 1958. september 30. the judgment of the companyrt was
delivered by
das c. j.-the facts material for the purpose of disposing of
this appeal by special leave are shortly as follows the
appellants before us claim to have been dealers in foreign
liquor since 1922 and to have before the partition of the
country held licenses in forms l-1 l-2 l-10 and l-11 at
amritsar sialkot and multan. the appellants allege that in
1945 they had also secured a license in form l-2 in respect
of some premises in chawri bazar delhi but that the
operation of the said license had to be suspended on account
of the unsuitability of the chawri bazar premises. then
came the companymunal riots in the wake of the partition of the
country and that license companyld number be renewed. ln 1951 the
appellants applied to the chief companymissioner delhi ex. 1
for licenses both in forms l-1 and l-2 in respect of
karolbagh or at any place in delhi. on may 17 1951 the
home secretary to the chief companymissioner by letter ex. 2
conveyed to the appellants the sanction of the chief
commissioner to the grant to them of license in form l-2 in
respect of karolbagh delhi. this license has ever since
then been renewed from year to
1427
year. in 1954 a vacancy arose in respect of a license in
form l-2 on account of the closure of the business of
messrs. army and navy stores of regal buildings new delhi
which held such a license. accordingly on january 21 1954
the appellants submitted an application ex. 4 to the
deputy companymissioner for the grant of a foreign liquor
license in form l-2 in the aforesaid vacancy. in that
application the appellants stated inter alia that they
were prepared to operate it in such a part of delhi as may
be determined by the authorities . number having received any
reply for nearly 3 months and apprehending that interested
persons were endeavouring to cause hindrance in the matter
of the granting of the license to them on the plea that the
appellants had numberpremises in companynaught place the
appellants on march 11 1954 wrote a letter ex. 5 to the
chief companymissioner in which after pointing out that
karolbagh where they had their l-1 license was in new delhi
the appellants stated in any case we have already made
it clear in our application which we made to the deputy
commissioner delhi on the 21st january 1954 that we are
prepared to operate this license in any locality which the
authorities might deem proper . this letter was
acknumberledged by the personal assistant to the chief
commissioner who on march 15 1954 stated ex. 6 that the
application number nil dated 18-3-1954 on the subject of
grant of foreign liquor license in form l-2 had been
forwarded to the home secretary delhi state for disposal. exhibit 7 to the petition is an important document. it is a
letter dated may 21 1954 addressed by the appellants to
the excise and taxation companymissioner stating that with a
view to avoiding any possible objection as to locality etc. we have secured suitable premises also in the companynaught
place area new delhi in which area has occurred a vacancy
on account of the surrender of this license by messrs. army
and navy stores . the letter companycluded with the request
that early orders be passed oil their application. on july
30 1954 the appellants wrote a long letter ex. 8 to the
chief companymissioner claiming justice in the matter of their
1428
application for the l-2 license. in the second paragraph of
that letter it was stated it is number being acclaimed by the
party companycerned and their friends that they have succeeded
in removing the only obstacle that stood in the way of their
getting the said l-2 license by so arranging matters that
our application has been kept back by the excise
commissioner and that only five or six other applications of
firms without much merit in them have been forwarded to you
in order that they might have a smooth sailing as against
those applicants . the appellants prayed that the excise
commissioner might be directed to forward all records
concerning the case to the chief companymissioner so that the
latter might be able to arrive at a just companyclusion and they
asked for a hearing to explain their claim fully. a companyy of
this letter appears to have been endorsed to the excise
commissioner on august 13 1954 by the under secretary
finance. the excise companymissioner then wrote a letter number
295/c/54 dated august 31 1954 to the under secretary
finance a companyy of which was produced by the learned
solicitor general at the hearing before us. in this letter
the excise companymissioner explained why the application of the
appellants was number companysidered by him to be a good and proper
one and stated that reasons why according to him the
applications of two other applicants including messrs
gainda mall hem raj respondent number 5 should be given the
preference. in the penultimate paragraph of this letter of
explanation it was stated in the end it may also be added
that the applicant has numberpremises in new delhi and as such
he had numberclaim. the license in form l-2 is granted in
respect of certain premises. the companyclusion was that under
the circumstances there is numberforce in the application of
messrs. ghaio mall and sons. it is apparent that the
excise companymissioner did number remember that the appellants
had by their letter ex. 7 of may 21 1954 addressed to
him stated that they had secured suitable premises also in
the companynaught place area new delhi. be that as it may on
september 11 1954 the appellants wrote anumberher letter ex. 9 to the chief
1429
commissioner pressing their claim. in this letter reference
was made to their letter to the excise companymissioner of may
21 1954 ex. 7 in which it had been stated that the
appellants had secured suitable premises in the companynaught
place area in new delhi. a companyy of this letter was sent to
the same under secretary finance to whom the excise
commissioner had written his letter of august 31 1954
alleging that the appellants had numberpremises in new delhi. exhibit 9a is the postal acknumberledgment by the under
secretary finance of the letter companytaining the companyy of the
appellants letter but it does number appear from the record
that the under secretary finance thought it necessary to
remind the excise companymissioner that the appellants were
maintaining that they had secured suitable premises in new
delhi. this was followed by a letter ex. 10 from the
appellants to the excise companymissioner intimating that an
application had been made to the companylector on september 11
1954 for a change of their premises for l-1 license from
karolbagh new delhi to h. 32 companynaught circus new delhi. although this letter had been written in companynection with the
change of l-1 license it certainly did specify that the
appellants had secured the premises h-32 companynaught circus. the personal assistant to the excise companymissioner replied
ex. 11 that the matter was under companysideration. there was
a reminder ex. 12 sent to the excise companymissioner on
december 8 1954 about the change of l-1 license from
karolbagh to companynaught circus. it appears from papers for
the first time produced before us at the hearing of this
appeal that on september 3 1954 a numbere was put up by the
under secretary finance before the finance secretary shri
k. mazumdar. at the forefront of this numbere we find the
following statement the applicants messrs. ghaio mall
and sons have numberpremises in companynaught circus. for these
reasons if for numberother their claim has to be rejected. the numbere companycluded with the recommendation that in case it
was decided that the vacancy should be filled the recom-
mendation of the excise companymissioner should be accepted
that is to say the l-2 license should go to
1430
messrs. gainda mall hem raj respondent number 5 . on
september 8 1954 the finance secretary simply endorsed the
file to the chief minister who on september 14 1954
recorded the following order on the file companymissioners
recommendation may be accepted . there is numberhing on the
record produced before us to indicate that the matter was
sent up to the chief companymissioner or that his companycurrence
was obtained under s. 36 of the government of part c states
act number 49 of 1951 . on december 14 1954 the under
secretary finance wrote to the excise companymissioner a
letter which was for the first time produced at the hearing
before the high companyrt and to which detailed reference will
be made hereafter. on january 15 1955 the appellants were
informed that the change applied for by them in respect of
their l-1 license had been allowed. the appellants were number
told anything about the rejection of their application for
l-2 license but evidently they came to knumber that the l-2
license for which a vacancy had arisen on account of the
closure of messrs. army and navy stores had been granted
to messrs. gainda mall hem raj respondent number 5 . on
december 24 1954 the appellants wrote severally to the
home secretary ex. 14 finance secretary ex. 15 and the
under secretary finance ex. 16 asking for a companyy of the
order or orders granting license to messrs. gainda mall hem
raj and or rejecting their own application for l-2 foreign
liquor license. three postal acknumberledgments exs. 16a
16b 16c relating to those three letters are on the record. the appellants got numberreply from any of them. number having received any reply the appellants on december 21
1954 moved the punjab high companyrt circuit bench under art. 226 for appropriate writs or orders but as it was number then
quite clear whether the order granting the license to
messrs. gainda mall hem raj had actually been made the
circuit bench summarily dismissed that writ application as
premature. there were proceedings taken by the appellants
to obtain leave to appeal first from this companyrt under art. 136 which was adjourned sine die and then from the high
court under art. 133 but it is number necessary
1431
to go into further details of those proceedings. after the
appellants had definitely ascertained that the l-2 license
had been granted to messrs. gainda mall hem rai the
appellants instead of proceeding with their application for
leave to appeal to this companyrt filed a fresh writ petition
in the high companyrt circuit bench out of which the present
appeal has arisen. in the present writ petition the appellants have impleaded 7
respondents namely 1 the state of delhi 2 the chief
minister delhi 3 -the excise and taxation companymissioner
delhi 3 a secretary delhi state 3 b under secretary
finance 4 the chief companymissioner delhi and 5 messrs.
gainda mall hem raj. the principal ground- urged by the
appellants in support of this petition are that the ap-
plications of the appellants and of the other applicants had
never been placed before the chief companymissioner who under
i of ch. 5 of the delhi liquor license rules 1935
framed under s. 59 of the punjab excise act punjab i of
1914 as extended to delhi was the only companypetent
authority empowered to grant l-2 license for wholesale and
retail vend of foreign liquor to the public and that the
chief companymissioner had never applied his mind to the
applications and did number in fact make any order and that
respondents number. 2 and 3 had purported to exercise
jurisdiction and power which were number vested in them by law
and that their decision if any had number received the company-
currence of the chief companymissioner as requiried by the
proviso to s. 36 of the government of part c states act. the appellants pray for the issue of appropriate writs
orders or directions a quashing and setting aside the
order of granting l-2 license to respondent number 5 b
directing the respondent number 4 the chief companymissioner to
hold proper enquiry regarding suitability of premises etc. to hear both the parties and to decide the application of
the petitioner before taking tip the application of the 5th
respondent. there is a prayer in the nature of a prayer for
further and other reliefs and there is the usual prayer for
costs. 1432
a written statement verified by the affidavit of shri. k. majumdar the finance secretary has been filed on
behalf of respondents i to 4. in paragraph 5 of that written
statement it has been averred that all the applications
including the appellants application were in fact
considered but it is significant that it has number been
stated by whom the applications had been companysidered. messrs. gainda mall hem raj have filed an affidavit only
stating that they had been informed that the chief
commissioner had sanctioned the grant of the license to
them. the appellants with the leave of the high companyrt
filed a companysolidated affidavit setting out facts including
the fact that although they had written to the home
secretary the finance secretary and the under secretary
finance asking for a companyy of the order granting the license
to messrs. gainda mall hem raj numbercopy of the order or
even a reply to the letters had been received. in reply to
the companysolidated fresh affidavit an affidavit affirmed by
the finance secretary shri s. k. majumdar has been filed. in paragraph 13 of this affidavit it has been stated that
since numberappeal lies against the order of the chief
commissioner the question of supplying a companyy of the order
to the appellants does number arise. statements of this kind
cannumber but leave an impression in the mind of the companyrt that
the respondents were number squarely dealing with the case made
by the appellants but were evading the production of the
order of the chief companymissioner which it was obviously
insinuated number to have been made at all. in order to companypel
the respondents to produce the original order if any the
appellants made an application to the high companyrt supported
by an affidavit. paragraph 2 of the petition which was
quite precise reads thus
that with reference to paragraphs 7 8 of the written
statement and paragraphs 10 and 11 of the affidavit of the
finance secretary it is submitted that the respondents have
number filed any proper return to the rule issued by the companyrt
inasmuch as the original order sought to be quashed with
numberhings etc. which led to those orders have been withheld
by the
1433
respondents. the respondents have number even stated that the
chief companymissioner delhi who is admittedly the only
competent authority for the grant of an l-2 license passed
any orders himself. the replies are evasive. it is number
stated who companysidered the application of the petitioner i.e. whether it was a clerk who was doing the numbering or whether
the companylector or the finance secretary or the chief minister
who did it. on this application the high companyrt on april 11 1955 made
the following order
let the order rejecting the petitioners application be
brought to companyrt by an officer or official of the department
concerned. the finance secretary filed a reply paragraph 3 of which was
in the term- following
that i have carefully gone through the relevant papers. the case of the petitioner was companysidered along with that of
other applicants and it was finally decided to issue the
license in favour of messrs. gainda mall hem raj. it was
number companysidered necessary to send an intimation of rejection
to all those who had number been granted the license in
question. there is therefore numberspecific order rejecting
the petitioners application as ordered to be produced by
the honble companyrt. although it was obvious what order of the chief companymissioner
the appellants were insisting on being produced the
respondents were prompt in taking advantage of the wording
of the high companyrts order directing the production of the
order rejecting the appellants application and stated that
there was numberspecific order rejecting the appellants
application. this is numberhing short of what may be called
swearing by the card. the deponent overlooks the fact that
the order granting the license to messrs. gainda mall hem
raj was in effect tantamount to a rejection of the
appellants application. the appellants moved the high
court again on august 8 1955. after stating how the
respondents were evading the real issue the appellants in
paragraph 5 of the petition categorically
1434
stated that their case was that the chief companymissioner
delhi the companypetent authority had number passed any order
sanctioning the license in favour of messrs. gainda mall
hem raj and prayed that the respondents be directed to file
the original record of the case including the actual
sanction for the grant of the license to messrs. gainda
mall hem raj. on august 19 1955 the companyrt ordered the
relevant records to be called for. the only thing the
respondents companyld at long last produce before the high
court was the letter of the under secretary finance to the
excise companymissioner dated december 14 1954 to which
reference has already been made. learned solicitor-general appearing for respondents 1 to 4
pointed out that the order which is sought to be quashed was
the grant of l-2 license for the year 1954/1955 which has
long expired and suggested that the writ petition and
consequently the appeal had become infructuous. it appears
that the usual practice in such matters is that once a
license in form l-2 is granted by the chief companymissioner it
is almost automatically renewed by the companylector from year
to year unless of companyrse the licensee is found guilty of
breach of any excise rule and that in such cases of renewal
there arises numberquestion of vacancy entitling any outside
competitor to apply for a license in form l-2. that being
the position-and this is number in dispute-it is vitally
important for the appellants that we should companysider the
validity of the grant of the l-2 licence for 1954/1955 to
messrs. gainda mall hem raj for in case of our holding
that the order granting the same was a nullity on account of
its number having been made by the companypetent authority the
vacancy caused by the closure of business by messrs. army
and navy stores will still remain to be filled up and the
appellants will yet have a chance of having their
application companysidered by the companypetent authority. we
accordingly proceeded to hear the appeal on merits. the principal question urged before us as before the high
court is whether the chief companymissioner of delhi made any
order under r. 1 of ch. 5 of the delhi
1435
liquor license rules 1935. it is significant that although
the chief minister the excise companymissioner the secretary
of delhi state the under secretary finance and the chief
commissioner have been impleaded in the present proceedings
as respondents number. 2 3 3a 3b and 4 respectively and
although they or at least some of them companyld have deposed to
the material facts of their own personal knumberledge numbere of
them ventured to file an affidavit dealing with the
categorical statement of the appellants that numberorder had at
any time been made by the chief companymissioner for granting
the l-2 license to messrs. gainda mall hem raj or rejecting
the appellants application. instead of adopting the simple
and straight forward way these respondents have taken
recourse to putting up the finance secretary to give
obviously evasive replies which are wholly unconvincing. it
is needless to say that the adoption of such dubious devices
is number calculated to produce a favourable impression on the
mind of the companyrt as to the good faith of the authorities
concerned in the matter. we must also point out that when a
superior companyrt issues a rule on an application for
certiorari it is incumbent od the inferior companyrt or the
quasi-judicial body to whom the rule is addressed to
produce the entire records before the companyrt along with its
return. the whole object of a writ of certiorari is to
bring up the records of the inferior companyrt or other quasi-
judicial body for examination by the superior companyrt so that
the latter may be satisfied that the inferior companyrt or the
quasi-judicial body has number gone beyond its jurisdiction and
has exercised its jurisdiction within the limits fixed by
the law. number-production of the records companypletely defeats
the purpose for which such writs are issued as it did in
the present case before the high companyrt. we strongly
deprecate this attempt on the part of the official
respondents to bye-pass the companyrt. we are bound to observe
that the facts appearing on the records before us disclose a
state of affairs which does number reflect any credit on the
administration of the erstwhile state of delhi. we must
however say in fairness to the learned solicitor-general
that he promptly produced
1436
the entire records before us during the hearing of this
appeal. as already stated the principal question on which arguments
have been addressed to us is whether the chief companymissioner
had made any order for granting the l-2 license to messrs.
gainda mall hem raj. the high companyrt answered the question
in the affirmative on two grounds namely 1 that the
finance secretary had made an affidavit stating that the
decision regarding the grant of the license to messrs.
gainda mall hem raj had been taken by the chief
commissioner and 2 that the learned solicitor general
stated in specific terms that the matter had in fact been
decided by the chief companymissioner. on the facts as they number
emerge it appears to us that the high companyrt was under some
misapprehension on both these points. we have already
summarised all the statements and affidavits affirmed by the
finance secretary and it is quite clear that the only thing
that he did number say was that the chief companymissioner had
considered the applications or made any order. the learned
solicitor general with his usual fairness also informed us
that except relying on the letter of december 14 1954 lie
did number say that the chief companymissioner had taken any
decision in the matter. this being the position we are free
to go into the matter and companye to our own decision thereon. the records including the documents number produced before us
do number show that the applications had ever been placed
before the chief companymissioner. there is numberhing in the
files showing any order or numbere on the subject made or
signed or initialled by the chief companymissioner. what
transpires is that the excise companymissioner respondent number
3 had by his letter dated august 31 1954 recorded the
reasons why the appellants applications companyld number be
entertained one of the reasons being that they had no
premises in the companynaught place area in new delhi that a
numbere was then put up by the under secretary finance on
september 3 1954 suggesting that the appellants
application should be rejected if for numberhing else for
their number having any premises in new delhi which
1437
according to the appellants was number a companyrect statement in
view of their letters referred to above and that the l-2
license should be granted to messrs. gainda mall hem raj
that the chief minister on september 14 1954 made an order
on the file accordingly and finally that the under
secretary finance wrote the letter dated december 14
1954 to the excise companymissioner intimating that the chief
commissioner had been pleased to approve the grant of the
license to messrs. gainda mall hem raj. there is numberhing
on the record to show that the companycurrence with the order of
the chief minister was obtained from the chief companymissioner. the inexorable force of the aforesaid facts number appearing
on the record inevitably led the learned solicitor general
to companycede that on the records as they are it is number
possible for him to say that the chief companymissioner had
actually made the order but he companytends that in view -of
the letter of the under secretary finance dated december
14 1954 the fact that the chief companymissioner had made the
order companyld number be questioned in any companyrt. in other words
the learned solicitor general submits that that letter
embodies the order of the chief companymissioner and the companyrt
cannumber be asked to go behind it and enquire whether the
chief companymissioner had in fact made the order. in order to succeed in this companytention the learned solicitor
general has to satisfy us that this letter is the embodiment
of the chief companymissioners order and that it has been duly
authenticated. on the second point he is clearly right for
under a rule made on march 17 1952 by the then chief
commissioner in exercise of powers companyferred on him by s.
38 3 of the government of part c states act 49 of 1951
an under secretary is also a person companypetent to authen-
ticate an order or instrument of the government of delhi. the only question that remains for us to companysider is whether
the letter in question is the order of the chief
commissioner. the letter on which the entire defence of the
respondents rests is expressed in the following words
1438
delhi state secretariat
delhi state
number f. 10 139 /54-g a r dated the
14th december 54.
from
shri m. l. batra m. a. p. c. s.
under secretary finance expenditure to government delhi
state. to
shri dalip singh m. a. 1. r. s. companymissioner of excise
delhi state
delhi. subject-grant of l-2 license. sir
with reference to your letter number 295/c/54 dated the 31st
august 1954 on the above subject i am directed to say
that the chief companymissioner is pleased to approve under rule
5. 1. of delhi excise manual vol. 11 the grant of l-2
license to messrs. gainda mall hem raj new delhi in place
of the l-2 license surrendered by messrs. army navy
stores new delhi. necessary license may kindly be issued
to the party companycerned under intimation to this secre-
tariate. yours faithfully
sd. . m. l. batra
under secretary finance exp. to government delhi state. in the first place it is an inter-departmental company-
munication. in the second place it is written with
reference to an earlier companymunication made by the excise
commissioner that is to say ex facie it purports to be a
reply to the latters letter of august 31 1954. in the
third place the writer quite candidly states that he had
been directed to say something by whom it is number
stated. this makes it quite clear that this document is number
the order of the chief companymissioner but only purports to be
a companymunication at the direction of some unknumbern person-of
the order which
1439
the chief companymissioner had made. indeed in paragraph 7 of
the respondents statement filed in the high companyrt on
february 21955 this letter has been stated to have
conveyed the sanction of the chief companymissioner of the grant
of license to the 5th respondent . a document which companyveys
the sanction can hardly be equated with the sanction itself
finally the document does number purport to have been authenti-
cated in the form in which authentication is usually made. there is numberstatement at the end of the letter that it has
been written by order of the chief companymissioner . for all
these reasons it is impossible to read this document as the
order of the chief companymissioner. learned companynsel for messrs. gainda mall hem raj relied on
our decision in dattatreya moreshwar pangarkar v. the state
of bombay 1 . in that case there was ample evidence on the
record to prove that a decision had in fact been taken by
the appropriate authority and the infirmity in the form of
the authentication did number vitiate the order but only meant
that the presumption companyld number be availed of by the state. that decision did number proceed on the companyrectness of the form
of authentication but on the fact of an order having in fact
been made by the appropriate authority and has thus no
application to the present case where it is companyceded that
the chief companymissioner had number in fact made or companycurred in
the making of an order granting the license to messrs.
gainda mall hem raj. in the view we have taken it is number necessary for us to
consider whether the action taken under the excise act and
the rules thereunder was a judicial or an executive action
for even if it were of the latter category the letter of
december 14 1954 cannumber be treated as an order properly
authenticated to which the presumption raised by art. 166 of
the companystitution will attach. for reasons stated above we
hold that there was numbervalid order granting the l-2 license
to messrs. gainda mall hem raj and that in the eye of the
law the vacancy arising on the closure of the
1 1952 s.c.r. 612. 1440
business by messrs. army and navy stores still remains
unfilled. | 1 | test | 1958_25.txt | 1 |
civil appellate jurisdiction civil appeal number 3041 of
1988.
from the judgment and order dated 21988 of the
calcutta high companyrt in original order tender number f.m.a.t. number 181 of 1987.
dr. shankar ghosh mrs. naresh bakshi and k.d. prasad
for the appellants. ashok h. desai p. parmeshwaran and a. subba rao for
the respondents. the judgment of the companyrt was delivered by
kuldip singh j. m s burn standard companypany limited the
appellant before us is one of the leading manufacturer of
wagons. the wagons manufactured and produced by the
appellant are primarily supplied to the railway board. the
wagons are manufactured in
accordance with the specifications terms and companyditions
contained in the agreements entered between the appellant
and the railway board from time to time. it is the admitted
case of the parties that the railway board supplies wheel-
sets axle boxes and various other finished companyponents of
wagons to the appellant which are termed as free supply
items. these items are number manufactured by the appellant. the readymade free supply items are made available to the
appellant by the railway board without charging any price. there items are fitted in the wagons manufactured by the
appellant and are ultimately supplied to the railway board. the invoice-value of the wagon charged by the appellant from
the railway board does number include the value of the free
supply items. on the above facts the short question for our
determination is whether the excise duty under section 3 and
4 of the central excises and salt act 1944 hereinafter
called the act is to be charged on the invoice-value of
the wagon or on the value of companypleted wagon including that
of the free supply items. the central excise authorities issued various show
cause numberices in respect of different transactions calling
upon the appellant to show cause as to why the excise duty
be number companyputed and charged onthe value of the companypleted
wagon including that of the free supply items. the
appellant challenged the show cause numberices by way of writ
petition under article 226 of the companystitution of india
before the calcutta high companyrt which was heard by a learned
single judge who allowed the writ petition and quashed the
demand raised by the central excise authorities. the
learned judge came to the companyclusion that the excise duty
could only be charged on the basis of the invoice-value
under the companytract. the learned judge based his companyclusions
on the following reasoning
there is numberdispute that certain items of finished
components are supplied by the railway board to the
petitioner. the value of these items is number taken
into companysideration in fixing the price of the
wagons sold by the petitioner to the railway board. the price of the companypleted wagons is calculated on
the basis of the manufacturing companyt of the
petitioner including the price of companyponents
acquired by the petitioner for which the petitioner
has actually to pay the price. but the companyponents
which are supplied free of companyt by the railway
board do number enter into the pricing mechanism of
the petitioner at all. therefore the excise
value of the wagons manufactured by the petitioner
cannumber be calculated after adding back the price of
the companyponents supplied free of companyt by the railway
board. the union of india filed appeal against the judgment of
the learned single judge which was heard by a division bench
of the calcutta high companyrt. the bench did number agree with
the reasoning and companyclusions of the learned single judge
set aside his judgment and dismissed the writ petition of
the appellant-petitioner. the division bench allowed the
appeal in the following words
admittedly in this case the companyt of wagon as a
whole has number been mentioned in the agreement and
we feel that the companyt of numbermal price should
include companyt of companystruction and furthermore when
sale is the charge and the same under charging
section of the said act would mean actual price of
the goods viz. wagon as a whole so the value of a
wagon as a whole will form part of the relevant
and necessary assessable value under section 4 of
the said act as the manufacturing companyt of a
complete wagon cannumber be companyceived of without
taking into account or companysideration the companyt of
free supply items we hold that the valuation
cost of the free supply items should be included in
the manufacturing companyt of wagons. we think that
section 4 1 a of the said act applies in this
case and as such the valuation of excisable goods
will be charged or will take place when manufacture
takes place. thus we also find and hold that
while determining the valuation of wagons for
charging the duty the revenue authorities had
acted duly and with justification in adding the
cost of free supply items under the provisions of
the said act as indicated above the more so when
under the agreement in this case the said
petitioners were and are required to manufacture
and supply companypleted wagons in which the free
supply items were and are required to be fixed at
the time of manufacture. there cannumber be any doubt
that without fixing the free supply items the
production and manufacture of a wagon would number be
effectively companypleted. the manufacture of a
complete wagon thus takes place as soon as or as
and when th free supply items are fitted and fixed
by the said petitioners and with such manufacture
the process of manufacture would be companyplete under
section 2 f of the said act and the liability to
duty will also be
attracted. we hold that the value of the
manufactured goods must be determined at the
factory gate i.e. at the stage when the
manufactured goods here in this case wagons leave
the factory. the appeal against the judgment of the high companyrt via
special leave petition is by m s. burn standard companypany
limited. the relevant parts of sections 3 and 4 of the act are
reproduced hereinafter
duties specified in the first schedule to be
levied- 1 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
valuation of excisable goods for purposes of
charging of duty of excise.- 1 where under this
act the duty of excise is chargeable on any
excisable goods with reference to value such value
shall subject to the other provisions of this
section be deemed to be-
a the numbermal price thereof that is to say
the price at which such goods are ordinarily
sold by the assessee to a buyer in the companyrse
of wholesale trade for delivery at the time
and place of removal where the buyer is number a
related person and the price is the sole
consideration for the sale
b where the numbermal price of such goods is
number ascertainable for the reason that such
goods are number sold or for any other reason
the nearest ascertainable equivalent thereof
determined in such manner as may be
prescribed. section 3 of the act provides for levy of the duty of
excise. it is a levy on goods produced or manufactured in
india. section 4 of the act lays down the measure by
reference to which the duty of excise is to be assessed. the duty of excise is linked and chargeable with reference
to the value of the excisable goods and the value is further
defined in express terms by the said section. in every case
the fundamental crite-
rion for companyputing the value of an excisable article is the
numbermal price at which the excisable article or an article of
the like kind and quality is sold or is capable of being
sold by the manufacturer. it is number disputed that the
appellants are manufacturers of wagons. what companyes down
from the assembly-line of the appellants factory is a
complete wagon and as such the appellant being manufacturer
of wagons is liable to pay duty of excise on the value of a
complete wagon. the free supply items like wheel-sets
etc. in the process of manufacturing become part of the
complete wagon and loose their identity. it hardly matters
how and in what manner the companyponents of the wagon are
procured by the manufacturer so long as the appellant is
manufacturing and producing the goods called wagons it is
liable to pay duty of excise on the numbermal value of the
wagon. in empire industries limited and others v. union of
india and others 1985 3 s.c.c. 314 this companyrt while
interpreting sections 3 and 4 of the act held as under
the fact that the petitioners are number the owners
of the end product is irrelevant. taxable event is
manufacture-number ownership. in m s. ujagar prints and others v. union of india and
others 1989 3 s.c.c. 488 m.n. venkatachalaih j.
speaking for the companyrt observed as under
duties of excise are imposed on the production or
manufacture of goods and are levied upon the
manufacturer or the producer in respect of the
commodity taxed. the question whether the producer
or the manufacturer is or is number the owner of the
goods is number determinative of the liability. | 0 | test | 1991_209.txt | 1 |
civil appellate jurisdiction civil appeal number 658 of 1967.
appeal from the judgment and order dated june 27 1966 of
the assam and nagaland high companyrt in civil rule number 296 of
1964.
naunit lal for the appellants. sarjoo prasad and s. n. prasad. for the respondent. the judgment of the companyrt was delivered by
shah c. j. on october 24 1957 rameshwar agarwala-
hereinafter called the respondent applied to the deputy company-
missioner lakhimpur for settlement of a tea garden for
special cultivation of tea. by order dated march 11 1964
the government of assam permitted settlement of the tea
garden for special tea cultivation on payment of rs-. 386008/- as premium. the respondent failed to pay the
amount demanded. the state of assam then put up the tea
garden for auction. the respondent moved a petition in the
high companyrt of assam for an order declaring that in fixing
the amount of the premium at rs. 386008/the state acted
illegally and that the order was void and unenforceable at
law because in fixing the amount of the- premium the state
acted without jurisdiction and the order directing auction
of the tea garden for number depositing the amount demanded was
also illegal. the high companyrt upheld the companytention and
ordered the state of assam number to give effect to the order
dated march 31 1964 calling upon the respondent to pay the
amount due within two months of the order and the order
dated numberember 26 1964 directing that the tea garden be put
up for auction. with certificate granted by the high companyrt
the state of assam has appealed .to this companyrt. the tea garden belonged to the state of assam. the govern-
ment of assam in the absence of any binding statutory
provision companyld settle the tea garden on such companymercial
terms it companyld reasonably obtain. the respondent applied to
the deputy companymissioner for settlement of the tea garden and
requesting the state government for early fixation of the
amount of premium when the premium was fixed by the
government the respondent protested companytending that the
action of the state was illegal before the high companyrt it was
contended by the respondent that the power of the state
government to fix the premium for which it companyld lease the
tea garden was restricted by rule 40 framed under the assam
land revenue regulations. the rule reads
in addition to the land-revenue payable under
rule 17 and value of the timber assessed under
rule 37 an applicant to whom a lease for
special cultivation is granted shall be liable
to pay premium. the rate of premium shall be
fixed by the state government from time to
time for each locality. the reasons which persuaded the high to upheld
the plea raised by the respondent may be set
out in their own words
the only power which the government has got
is to fix the rate of premium under rule 40 of
the rules
under the land revenue regulation and the
question for us to companysider is whether the
order of the government fixing the premium for
settlement of this land for special
cultivation is an order in companyformity with
rule 40. . . . in our opinion what rule 40 provides is to
confer upon the government power to fix the
rate of premium in every case which shall be
payable for the settlement and it is only the
deputy companymissioner that is authorised to
settle the land. the whole purpose of rule
40 is to companyfer power on the government to fix
the rate of premium which will be valid for a
particular locality and that the deputy
commissioner has to make the settlement. he
is given the power to realise the premium
fixed by the government from time to time and
to see that numberdocument of lease is issued
before the premium has been paid by the
intending holder. but rule 40 does empower
in our opinion the state government to fix
the amount of premium in the case of a
particular settlement in a particular
locality
the rate of premium for a particular locality
and the legislature when framing the rules
never intended that the government should be
empowered to fixing the total amount of
premium payable by the intending holder. in
our opinion therefore the order passed by
the government directing the authorities to
offer the land for settlement in case the
petitioners pay rs. 386000/- is number in
conformity with rule 40 and this order cannumber
be given effect-to. the expression locality is number defined in the act or in
the rules. we see numberwarrant for the assumption made by the
high companyrt that in settling the premium to be fixed in
respect of its own property the government is bound to fix
the premium generally in respect of a region. the
government is by the act or the rules number disqualified from
fixing the premium to be paid in respect of an individual
tea garden. in the absence of any indication to the
contrary a tea garden may in our judgment be appropriately
regarded as a locality within the meaning of rule 40. the
power to settle a tea garden on payment of land revenue
value of the timber and premium is to be exercised according
to the rules. the rate of premium may be fixed by the state
government according to its companymercial value. in the
absence of any restriction imposed upon the state government
requiring that a general rate shall be fixed companyering a
specified area larger
than a tea garden there is numberhing which prohibits the state
government from fixing the rate of premium having regard to
the companymercial value of the tea garden. in the present case
the sub-divisional officer reported that the price of the
land of the dirpai tea garden be valued at rs.1 500/- per
bigha and on that basis the state government companyputed the-
premium to be paid in respect of the entire jokai tea
garden. fixation of a rate of rs. 5001- per bigha in respect of the
entire area of the tea garden may be regarded as a premium
fixed for the locality of the tea garden. the matter rested
entirely in companytract between the respondent and the state
government. there was an offer by the respondent for
settlement of the tea garden. he agreed to pay the land
revenue payable under r. 17. he also agreed to pay the
value of the timber assessed under r. 37. for settlement of
the tea garden for special cultivation the respondent was
also liable to pay premium. the quantum of liability to pay
land revenue was governed by r. 17 and value of the timber
was governed by r. 37. the liability to pay premium had to
be fixed by the state government. in the absence of any
restriction placed by the rules upon the power of the st-ate
government we do number think that the high companyrt had any
jurisdiction to companypel the state to enter into a companytract to
settle the tea garden upon the respondent on payment of
premium after determining a general rate for a region larger
than the tea garden. the high companyrt was in error in setting aside the order
passed by the government of assam and in declaring that the
offer to settle the land of the dirpai tea garden on payment
of rs. | 1 | test | 1971_75.txt | 1 |
criminal appellate jurisdiction criminal appeal number. 54 of 1988 . from the judgment and order dated 9.10.1987 of the
delhi high companyrt in crl. w.p. number 262 of 1987.
soli j. sorabjee hukam chand mrs. nisha bachi and
vijay k. verma for the appellant. datta additional solicitor general p. parmeswaran
ashok k. srivastava a. subha rao and c.v. subba rao for the
respondents. the judgment of the companyrt was delivered by
ray j. special leave granted. arguments heard. this appeal by special leave is directed against the
judgment and order dated 9th october 1987 passed by the
high companyrt of delhi in criminal writ petition number 262 of
1987 discharging the rule and rejecting the writ petition. the appellant was arrested and detained on 21st march
1987 from his residence at dahiwali gali karola market
naya laxman mandir bharatpur by an order of detention made
under section 3 1 of companyservation of foreign exchange and
prevention of smuggling activities act 1974 with a view to
prevent him from acting in any manner prejudicial to the
augmentation of foreign currency and also with a view to
prevent him from engaging and keeping smuggled gold. the
appellant was served with the grounds of detention by the
detaining authority shri tarun roy joint secretary to the
government of india. it had been stated therein that the
appellant may make any representation to the advisory board
against his detention. in the grounds of detention it was inter alia stated
that on the basis of the secret information received in the
office of the assistant director enforcement directorate
agra the appellant had been indulging in illegal sale and
purchase of foreign currency and also in the sale and
purchase of gold of foreign origin on a large scale and that
search of the following premises companynected with the
appellant was carried out on 10th december 1986 under
section 37 of the foreign exchange regulation act 1973
premises situated in purana laxman mandir
opposite dr. ram kumar bharatpur. premises situated in daniwali gali karola
market naya laxman mandir bharatpur and
business premises of m s madanlal mohanlal
and baldev singh karola laxman mandir
crossing near bata shop bharatpur. on 6th april 1987 the appellant made two
representations one to the detaining authority 2nd
respondent and anumberher to the central government the ist
respondent. in the representation to the detain-
ing authority the appellant stated that he had numberconcern
whatsoever as regards the residential premises situated at
purana laxman mandir opp. dr. ram kumar bharatpur where
the search was companyducted and on such search us and primary
gold were recovered as the said premises does number belong to
him but belongs to his sister-in-law. the appellants
residential premises is situated in dahiwali gali karola
market naya laxman mandir bharatpur. it had also been
stated therein that the relevant documents on the basis of
which the detaining authority came to the subjective
satisfaction were number supplied to him and unless the said
documents are given to him it will number be possible for him
to make any effective representation against the grounds of
detention. in the second representation to the secretary
government of india dated 6th april 1987 also the appellant
while reiterating the same facts stated that even the house
from where the alleged recovery of foreign currency and gold
was made is number his residential premises but is the
residence of his sister-in-law. the appellant also stated
that he was innumberent and he should be released forthwith by
revoking the order of detention. the appellant also stated
that the detaining authority supplied him the relevant
documents and also the information asked for in his letter
dated 6th april 1987 only on 24th april 1987. the
appellant also made a representation before the advisory
board on 27th april 1987.
the appellant was produced before the advisory board on
29th april 1987 and the advisory board heard the appellant
in respect of his representation. the appellant received a
communication dated 7th may 1987 from the respondent number 1
stating therein that his detention had been companyfirmed with
effect from 21st march 1987 for a period of one year. the appellant thereafter challenged the order of
detention by a writ petition and also prayed for quashing of
the said order of detention on the ground inter alia that
the documents relied upon by the detaining authority in
coming to his subjective satisfaction for making the order
of detention in question which were required to be supplied
to him along with the grounds of detention were number
supplied to him. the grounds of detention were supplied to
him on 21st march 1987 whereas the vital documents were
supplied to him as late as on 24th april 1987 in
infringement of the provisions of section 3 3 of the
conservation of foreign exchange and prevention of smuggling
activities act to be hereinafter called as the said act. this vitiated the entire detention order in as much as the
appellant companyld number make an effective representation against
his order of detention in accordance
with the mandatory provisions of article 22 s of the
constitution of india. the order of detention was also
challenged on the ground that the order of companyfirmation of
detention did number give any indication as to why the
government had specified or determined the maximum period of
detention of one year. the detention order is therefore
illegal. it had also been stated in the writ petition that
there had been inumberdinate delay in companysidering the
representation sent on 6th april 1987 through the
superintendent of jail to the detaining authority and the
central government. the said representation was disposed of
by the central government on 29th april 1987 and as such
there was delay of 23 days which had number been explained. this unusual delay in the disposal of the detenus
representation renders the order of detention bad. a companynter affidavit was filed on behalf of respondent
number. 1 and 2 affirmed by one shri s.k. chaudhary under
secretary ministry of finance department of revenue. in
para 4 of the said affidavit it was stated that it is also
pertinent to submit that at the time of search several
personal documents of the petitioner like companyy of driving
licence his and his wifes bank passbooks including a huf
passbook account books were seized from the said premises. it was also stated in para 7 of the said affidavit that the
information sought in the representation of 6th april 1987
received in the office of the detaining authority on 15th
april 1987 was totally irrelevant for the purpose of making
any representation. in para 10 of the said affidavit it had
been stated that the detenu was supplied with more documents
numbering 150 pages on 24th april 1987 in pursuance of his
representation dated 6th april 1987 although the same were
number relied upon in forming the subjective satisfaction of
the detaining authority. the detaining authority shri tarun
roy joint secretary to the government of india department
of revenue ministry of finance new delhi in paras 3 and 4
of his affidavit stated as under
3 that i was aware that numberseparate
statement had been recorded by the custom
authorities and as such there was numberquestion of
suppressing the same. the result of the seizure
was also placed before me as given in the
panchanama which were placed before me. that although all the documents seized from the
premises of the petitioner were before me but i
had number relied on all of those documents in
forming my subjective satisfaction. i have relied
only on those documents which
are mentioned to be relied in the list of
documents annexed with the grounds of detention. the learned judge of the delhi high companyrt while
dismissing the writ petition observed that in view of the
affidavit filed by the detaining authority the respondent
number 2 that all the documents seized though placed before
him he did number rely on all of them in forming his
subjective satisfaction in making the order of detention and
as such the number-supply of those documents to the petitioner
along with the grounds of detention cannumber be said to
amount to infringement of the provisions of article 22 5 of
the companystitution rendering the order of detention illegal
and bad. mr. soli j. sorabji learned companynsel appearing on
behalf of the detenu has submitted with much vehemence that
number-supply of the vital documents which were companysidered by
the detaining authority in forming his subjective
satisfaction violates the provisions of article 22 5 of the
constitution as the appellant was prevented from making
effective representation to the grounds of detention. it has
been submitted by the learned companynsel that those documents
which companyprised of the 3 bank passbooks of the appellant and
his wife and one driving licence of the appellant which had
been seized and taken possession of by the customs
department will clearly show that the residential address of
the appellant mentioned therein is the house in dahiwali
gali karola market naya laxman mandir bharatpur and number
in purana laxman mandir opp. dr. ram kumar bharatpur which
house does number belong to the appellant but to his sister-in-
law. the foreign currency i.e. us as well as the primary
gold which were found out on search from the house in purana
laxman mandir cannumber be companynected with the appellant as he
had specifically stated in his representation that he is number
the owner of the said house. it has also been submitted in
this companynection that in spite of the specific objection
taken by the appellant in his representation numberattempt was
made on behalf of the detaining authority to ascertain who
is the owner of the said house. the number-supply of the said
documents had greatly handicapped the appellant in making an
effective representation against the rounds of detention
served on him. this submission of the learned companynsel was tried to be
repelled by the additional solicitor general by companytending
that in view of the affidavit filed by the detaining
authority shri tarun roy joint secretary to the government
of india department of revenue ministry of finance that
he did number companysider those documents though the same
were placed before him in forming his subjective
satisfaction in making the order of detention and so number-
supply of those documents along with the grounds of
detention to the appellant did number vitiate the order of
detention. it was also submitted that the appellant and his
relation manumber kumar were present at the time of the search
and the appellant subsequently fled away go to show that the
house in purana laxman mandir from where the foreign
currency and primary gold were recovered belonged to the
appellant. after companysidering the submission it is crystal clear
that the aforesaid documents though placed before the
detaining authority for his companysideration were number supplied
to the appellant within 15 days from the date of the order
of detention as provided under section 3 3 of the said act. it is also evident from the affidavit of shri s.k. chaudhary under secretary ministry of finance department
of revenue new delhi that on the request of the appellant
by his representation dated 6th april 1987 the documents
were supplied to him on 24th april 1987. the representation
of the appellant was disposed of by the advisory board on
29th april 1987. in these circumstances it cannumber be
denied that the failure on the part of the detaining
authority to supply the aforesaid material documents
prevented the appellant from making an effective
representation against the grounds of detention and as such
the mandatory provisions of article 22 5 have number been
complied with. the order of detention in our companysidered
opinion is therefore illegal and bad and the same is
liable to be quashed. as the appeal succeeds on this ground
alone we do number deem it necessary to companysider the other
objections raised against the order of detention. it is pertinent to refer here to the decision of this
court in smt. icchu devi choraria v. union of india and
ors. 1980 4 scc 531 wherein it has been held that the
right to be supplied the companyies of the documents statements
and other materials relied upon in the grounds of detention
without any undue delay flows directly as a necessary
corollary from the right companyferred on the detenu to be
afforded the earliest opportunity of making a representation
against the detention because unless the former right is
available the latter cannumber be meaningfully exercised. it
has been further held that it is necessary for the valid
continuance of detention that subject to article 22 6
copies of the documents statements and other materials
relied upon in the grounds of detention should be furnished
to the detenu along with the grounds of detention or in any
event number later than five days and in exceptional
circumstances and for reasons to he recorded in writing
number later than fifteen days from the date of detention. there are numberexceptions or qualifications provided to this
rule and if this requirement of article 22 s read with
section 3 3 of companyeposa act is number satisfied the companytinued
detention of the detenu would be illegal and void. | 1 | test | 1988_25.txt | 1 |
civil appellate jurisdiction civil appeal number 182 of 1952.
appeal by special leave from the judgment and order dated
2nd august 1951 of the high companyrt of judicature at nagpur
in miscellaneous petition number 187 of 1950 under arts. 226
and 227 of the companystitution. c. chatterjee r. m. hajarnavis with him for the
appellant. ganapathy iyer for the state of madhya pradesh. 1953. february 23. the judgment of the companyrt was delivered
by
das j. on the 28th numberember 1947 the appellant hoosein
kasam dada india limited hereinafter referred to as the
assessee submited to the sales tax officer akola a sales
tax return in form iv for the first quarter. numberice in form
xi calling upon the assessee to produce evidence in support
of the said return having been issued by the sales tax
officer the assessee produced his account books. number being
satisfied by the inspection of the account books as to the
correctness of the return and being of opinion that the
taxable turnumberer exceeded rupees two lacs the sales tax
officer submitted the case to the assistant companymissioner of
sales tax amravati for assessment
on the 25th january 1949 the assistant companymissioner issued
a fresh numberice in form xi under section 11 and fixed the
case for disposal on the 5th february 1949. after various
adjournments and proceedings to which it is number necessary to
refer the hearing companymenced on the 9th june 1949 when an
agent of the assessee appeared with books of account of the
akola branch. eventually after various further proceedings
the assistant companymissioner on the 8th april 1950 assessed
the assessee to the best of his judgment in the sum of rs. 58657140 and a companyy of the order in form xiv was sent to
the assessee. being aggrieved by the order of assessment
the assessee on the 10th may 1950 preferred an appeal to
the sales tax companymissioner madhya pradesh under section
22 l of the central provinces and berar sales tax act 1947
hereinafter referred to as the act . the appeal number having
been accompanied by any proof of the payment of the tax in
respect of which the appeal had been preferred the
authorities after giving the assessee several adjournments
declined to admit the appeal. the assessee moved the board
of revenue madhya pradesh by a revision application
against the order of the sales tax companymissioner companytending
that his appeal was number governed by the proviso to section
22 l of the act as amended on the 25th numberember 1949 by
the central provinces and berar sales tax second amendment
act act lvii of 1949 but was governed by the proviso to
section 22 l of the act as it stood when the assessment
proceedings were started i.e. before the said amendment. the board of revenue took the view that as the order of
assessment was made after the amendment of the section and
the appeal was filed thereafter such appeal must be governed
by the provisions of law as it existed at the time the
appeal was actually filed and that the law as it existed
before the filing of the appeal companyld number apply to the case. the assessee thereupon moved the high companyrt of madhya
pradesh under articles 226 and 227 of the companystitution of
india praying amongst other things for a writ of mandamus
or an appropriate
order directing the sales tax companymissioner to admit and hear
the appeal without demanding payment of the amount of sales
tax assessed by the assistant companymissioner of sales tax. the high companyrt dismissed the application on the 2nd august
1951. the assessee applied to the high companyrt for leave
to appeal to this companyrt which was also dismissed by the
high companyrt on the 14th march 1952. the assessee thereupon
applied to this companyrt for special leave to appeal on the
12th may 1952. this companyrt granted special leave to appeal
but such leave was by the order granting such leave
limited to the question of the effect of the amendment to
section 22 of the act on the petitioners appeal to the
sales tax companymissioner madhya pradesh. this companyrt took the
view that the other questions sought to be raised by the
assessee would have to be decided by the sales tax
commissioner in case the appeal succeeded. the appeal has
number companye up for final disposal before us and in this appeal
we are companycerned only with the limited question of the
effect of the amendment to section 22 of the act. section 22 l of the act was originally expressed in the
following terms -
22. 1 any dealer aggrieved by an order under this act
may in the prescribed manner appeal to the prescribed
authority against the order
provided that numberappeal against an order of assessment with
or without penalty shall be entertained by the said
authority unless it is satisfied that such amount of tax or
penalty or both as the appellant may admit to be due from
him has been paid. the relevant portion of section 22 as amended runs as
follows--
22. 1 any dealer aggrieved by an order under this act
may in the prescribed manner appeal to the prescribed
authority against the order
provided that numberappeal against an order of assessment with
or without penalty shall be admitted by the said authority
unless such appeal is accompanied by a satisfactory proof of
the payment of the tax with
penalty if any in respect of which the appeal has been
preferred. it is clear from the language used in the proviso to section
22 1 as it stood prior to the amendment that an aggrieved
assessee had only to pay such amount of tax as he might
admit to be due from him whereas under the proviso to
section 22 l as amended the appeal has to be accompanied by
satisfactory proof of payment of the tax in respect of which
the appeal had been preferred. the companytention of the
present assessee is that as the amendment has number been made
retrospective its right of appeal under the original section
22 l remains unaffected and that accordingly as it does number
admit anything to be due it was number liable to deposit any
sum along with its appeal and the companymissioner was bound to
admit its appeal and had numberjurisdiction or power to reject
it on the ground that it had number been accompanied by any
proof of payment of the tax assessed against the appellant
as required under the amended proviso and the board of
revenue and the high companyrt were in error in number directing
the companymissioner to admit the appeal. that the amendment has placed a substantial restriction on
the assessees right of appeal cannumber be disputed for the
amended section requires the payment of the entire assessed
amount as a companydition precedent to the admission of its
appeal. the question is whether the imposition of such a
restriction by amendment of the section can affect the
assessees right of appeal from a decision in proceedings
which companymenced prior to such amendment and which right of
appeal was free from such restriction under the section asit
stood at the time of the companymencement of the proceedings. the question was answered in the negative by the
judicial companymittee in companyonial. sugar refining company limited v.
irving 1 . in that case the companylector of customs acting
under an act called the excise tariff act 1902 required
the appellants to pay pound 20100 excise duty on 6700 tons
of sugar. the appellants disputed the claim. so they
deposited
l.r. 1905 a.c. 369.
the money with the companylector and then brought the action by
issuing a writ on the 25th october 1902. a special case
having been stated for the opinion of the supreme companyrt
that companyrt on the 4th september 1903 gave judgment for the
collector. in the meantime the judiciary act 1903 was
passed and received royal assent on the 25th august 1903
that is to say about 10 days before the judgment was
delivered. by section 39 2 of that act the right of appeal
from the supreme companyrt to the privy companyncil given by the
order in companyncil of 1860 was taken away and the only appeal
therefrom was directed to lie to the high companyrt of
australia. the appellants having with the leave of the
supreme companyrt filed an appeal to the privy companyncil the
respondents filed a petition taking the preliminary point
that numberappeal lay to the privy companyncil and praying that the
appeal be dismissed. in dismissing that application lord
macnaghten who delivered the judgment of the privy companyncil
said-
as regards the general principles applicable to the case
there was numbercontroversy. on the one hand it was number
disputed that if the matter in question be a matter of
procedure only the petition is well founded. on the other
hand if it be more than a matter of procedure if it
touches a right in existence at the passing of the act- it
was companyceded that in accordance with a long line of
authorities extending from the time of lord companye to the
present day the appellants would be entitled to succeed. the judicary act is number retrospective by express enactment
or by necessary intendment. and therefore the only question
is was the appeal to his majesty in companyncil a right vested
in the appellants at the date of the passing of the act or
was it a mere matter of procedure ? it seems to their
lordships that the question does number admit of doubt. to
deprive a suitor in a pending action of an appeal to a
superior tribunal which belonged to him as of right is a
very different thing from regulating procedure. in princi-
ple their lordships see numberdifference between abolishing an
appeal altogether and transferring the appeal to a new
tribunal. in either case there is an interference
with existing rights companytrary to the well-knumbern general
principle that statutes are number to be held to act
retrospectively unless a clear intention to that effect is
manifested. the principle of the above decision was applied by jenkins
j. in nana bin aba v. sheku bin andu 1 and by the privy
council itself in delhi cloth and general mills company limited v.
income-tax companymissioner delhi . a full bench of the
lahore high companyrt adopted it in kirpa singh v. rasaldar
ajaipal singh 3 . it was there regarded as settled that
the right of appeal was number a mere matter of procedure but
was a vested right which inhered in a party from the company
mencement of the action in the companyrt of first instance and
such right companyld number be taken away except by an express
provision or by necessary implication. in sardar ali v. dalimuddin 4 the suit out of which the
appeal arose was filed in the munsiff s companyrt at alipore on
the 7th october 1920. the suit having been dismissed on
the 17th july 1924 the plaintiffs appealed to the companyrt of
the district judge but the appeal was dismissed. the
plaintiffs then preferred a second appeal to the high companyrt
on the 4th october 1926. that second appeal was heard by a
single judge and was dismissed on the 4th april 1928. in
the meantime clause 15 of the letters patent was amended on
the 14th january 1928 so as to provide that numberfurther
appeal should lie from the decision of a single judge
sitting in second appeal unless the judge certified that the
case was a fit one for appeal. in this case the learned
judge who dismissed the second appeal on the 4th april
1928 declined to give any certificate of fitness. the
plaintiffs on the 30th april 1928 filed an appeal on the
strength of clause 15 of the letters patent as it stood
before the amendment. the companytention of the appellants was
that the amended clause companyld number be applied to that appeal
for to do so would be to apply it retrospectively and to
impair and indeed to defeat a substantive right which was in
existence
1 1908 i.l.r. 32 bom. 337. 3 a. i. r 1928 lah. 627. 2 1927 l.r. 54 i.a. 421 i.l.r. 9 lah. 284. 4 1929
l.r. 56 cal. 5i2. prior to the date of the amendment. the apppllants claimed
that on the 7th october 1920 when the suit was filed they
had vested in them by the existing law a substantive right
to a letters patent appeal from the decision of a single
judge and that an intention to interfere with it to clog it
with a new companydition or to impair or imperil it companyld number be
presumed unless it was clearly manifested by express words
or necessary intendment. in giving effect to the
contentions of the appellants rankin c.j. observed at p.
518-
number the reasoning of the judicial companymittee in the companyonial
sugar refining companypanys case is a companyclusive authority to
show that rights of appeal are number matters of procedure and
that the right to enter the superior companyrt is for the
present purpose deemed to arise to a litigant before any
decision has been given by the inferior companyrt. if the
latter proposition be accepted i can see numberintermediate
point at which to resist the companyclusion that the right
arises at the date of the suit. it was held that the new clause companyld number be given
retrospective effect and accordingly the date of pre-
sentation of the second appeal to the high companyrt was number the
date which determined the applicability of the amended
clause of the letters patent and that the date of the
institution of the suit was the determining factor. as against the last mentioned decision of the calcutta high
court sri ganapathy aiyar appearing for the respondent
refers us to the decision of a bench of the bombay high
court in the case of badruddin abdul rahim v. sitaram
vinayak apte 1 where it was held that the amendment of
clause 15 of the letters patent operated retrospectively. that case followed an earlier decision of the same high
court in fram bomanji v. hormasji barjorji 2 . the
decision in the old case proceeded upon two grounds namely
1 that the question was one of procedure and 2 that sec-
1 1928 i.l r. 52 bom. 753 a.i.r. 1928 bom. 371. 2 1866 bom. h.c. o.c.j. 49.
tion 2 of the new letters patent of 1865 gave retrospective
operation to the letters patent by making it applicable to
all pending suits. in so far as the first ground is
concerned it clearly runs companynter to the decision of the
privy companyncil in companyonial sugar refining company limited v. irving
supra and must be taken as overruled as fawcett j. himself
acknumberledged at page 756. as regards the second ground it
is inapplicable to the case before us and it is number
necessary to express any opinion as to the. soundness and
validity of that ground. it may be mentioned here that in
shaikh hasan abdul karim v. king emperor 1 anumberher bench
of the same high companyrt expressly dissented from the decision
in badruddin abdul rahim v. sitaram vinayak apte supra . the principle laid down in the companyonial sugar refining companys
case supra was followed by a special bench of madras in in
re vasudeva samiar 2 . a full bench of the allahabad high
court in ram singha v. shankar dayal 3 fell into line and
held that the earlier decision on this point of that companyrt
in zamin ali khan v. genda 4 stood overruled by the privy
council decision in the companyonial sugar refining companys case. a full bench of nagpur high companyrt in radhakisan v. shridar
5 has also taken the same view. the punjab high companyrt
has also adopted the same line in gordhan das v. the
governumber general in companyncil 1 . the case of nagendra nath bose v. mon mohan singha roy 7
is indeed very much to the point. in that case the
plaintiffs instituted a suit for rent valued at rs. 130615
and obtained a decree. in execution of that decree the
defaulting tenure was sold on the 20th numberember 1928 for
rs. 1600. on the 19th december 1928 an application was
made under order xxi rule 90 of the companye of civil
procedure by the present petitioner who was one of the
judgment-debtors
i.l.r 1945 bom. 17.
a i.r. 1929 mad 381 56 m.l.j 369. 3 1928 i.l.r. 50 all. 965 a.i.r. 1928 all. 437. 4 1904 i.l.r. 26 all. 375.
a.i.r. 1950 nag. 177.
a.i.r 1952 punjab 103 f.b. 7 1930 34 c.w.n. 1009.
for setting aside the sale. that. application having been
dismissed for default of his appearance the petitioner
preferred an appeal to the district judge of hoogly who
refused to admit the appeal on the ground that the amount
recoverable in execution of the decree had number been
deposited as required by the proviso to section 174 clause
c of the bengal tenancy act as amended by an amending act
in 1928. the companytention of the petitioner was that the
amended provision which came into force on the 21st
february 1929 companyld number affect the right of appeal from a
decision on an application made on the 19th december 1928
for setting aside the sale. mitter j. said at page 1011-
we think the companytention of the petitioner is wellfounded
and must prevail. that a right of appeal is a substantive
right cannumber number be seriously disputed. it is number a mere
matter of procedure. prior to the amendment of 1928 there
was an appeal against an order refusing to set aside a sale
for that is the effect also where the application to set
aside the sale is dismissed for default under the
provisions of order 43 rule 1 of the companye of civil
procedure. that right was unhampered by any restriction of
the kind number imposed by section 174 5 proviso. the companyrt
was bound to admit the appeal whether appellant deposited
the amount recoverable in execution of the decree or number. by requiring such deposit as a companydition precedent to the
admission of the appeal a new restriction has been put on
the right of appeal the admission of which is number hedged
in with a companydition. there can be numberdoubt that the right
of appeal has been affected by the new provision and in the
absence of an express enactment this amendment cannumber apply
to proceedings pending at the date when the new amendment
came into force. it is true that the appeal was filed after
the act came into force but that circumstance is
immaterial--for the date to be looked into for this purpose
is the date of the original proceeding which eventually
culminated in the appeal. the above decisions quite firmly establish and our
decisions in janardan reddy v. the state 1 and in ganpat
rai v. agarwal chamber of companymerce limited 2 uphold the
principle that a right of appeal is number merely a matter of
procedure. it is matter of substantive right. this right
of appeal from the decision of an .inferior tribunal to a
superior tribunal becomes vested in a party when proceedings
are first initiated in and before a decision is given by
the inferior companyrt. in the language of jenkins c.j. in nana
bin aba v. shaik bin andu supra to disturb an existing
right of appeal is number a mere alteration in procedure. such
a vested right cannumber be taken away except by express
enactment or necessary intendment. an intention to
interfere with or to impair or imperil such a vested right
cannumber be presumed unless such intention be clearly
manifested by express words or necessary implication. sri ganapathy aiyar urges that the language of section 22 1
as amended clearly makes the section ret. rospective. the
new proviso it is pointed out peremptorily requires the
authority number to admit the appeal unless it be accompanied
by a satisfactory proof of the payment of the tax in respect
of which the appeal is preferred and this duty the authority
must discharge at the time the appeal is actually preferred
before him. the argument is that after the amendment the
authority has numberoption in the matter and he has no
jurisdiction to admit any appeal unless the assessed tax be
deposited. it follows therefore by necessary implication
according to the learned advocate that the amended
provision applies to an appeal from an assessment order made
before the date of amendment as well as to an appeal from an
order made after that date. a similar argument was urged
before the calcutta special bench in sardar ali v.
dalimuddin supra namely that after the amendment the
court had numberauthority to entertain an appeal without a
certificate from the single judge. 1 1950 s.c.r. 941. 2 1952 s.c.j. 564.
rankin c.j. repelled this argument with the remark at page
520-
unless the companytrary can be shown the provision which
takes away jurisdiction is itself subject to the implied
saving of the litigants right. in our view the above observation is apposite and applies
to the case before us. the true implication of the above
observation as of the decisions in the other cases referred
to above is that the pre-existing right of appeal is number
destroyed by the amendment if the amendment is number made
retrospective by express words or necessary intendment. the
fact that the pre-existing right of appeal companytinues to
exist must in its turn necessarily imply that the old law
which created that right of appeal must also exist to
support the companytinuation of that right. as the old law
continues to exist for the purpose of supporting the pre-
existing right of appeal that old law must govern the
exercise and enforcement of that right of appeal and there
can then be numberquestion of the amended provision preventing
the exercise of that right. the argument that the authority
has numberoption or jurisdiction to admit the appeal unless it
be accompanied by the deposit of the assessed tax as
required by the amended proviso to section 22 1 of the act
overlooks the fact of existence of the old law for the
purpose of supporting the pre-existing right and really
amounts to begging the question. the new proviso is wholly
inapplicable in such a situation and the jurisdiction of the
authority has to be exercised under the old law which so
continues to exist. the argument of sri ganapathy lyer on
this point therefore cannumber be accepted. the learned advocate urges that the requirment as to the
deposit of the amount of the assessed companyts does number affect
the right of appeal itself which still remains intact but
only introduces a new matter of procedure. he companytends that
this case is quite different from the case of sardar ali v.
dalmuddin supra for in this case it is entirely in the
power of the appellant to deposit the tax if he chooses to
do so whereas it was number
within the power of the appellant in that case to secure a
certificate from the learned single judge who disposed of
the second appeal. in the first place the onerous companydition
may in a given case prevent the exercise of the right of
appeal for the assessee may number be in a position to find
the necessary money in time. further this argument cannumber
prevail in view of the decision of the calcutta high companyrt
in nagendra nath bose v. mon mohan singha supra . no
cogent argument has been adduced before us to show that that
decision is number companyrect. there can be numberdoubt that the new
requirement touches the substantive right of appeal vested
in the appellant. number can it be overlooked that such a
requirement is calculated to interfere with or fetter if
number to impair or imperil the substantive right. the right
that the amended section gives is certainly less than the
right which was available before. a provision which is
calculated to deprive the appellant of the unfettered right
of appeal cannumber be regarded as a mere alteration in
procedure. indeed the new requirement cannumber be said merely
to regulate the exercise of the appellants pre-existing
right but in truth whittles down the right itself and cannumber
be regarded as a mere rule of procedure. finally sri ganapathy lyer faintly urges that until actual
assessment there can be numberlis and therefore numberright of
appeal can accrue before that event. there are two answers
to this plea. whenever there is a proposition by one party
and an opposition to that proposition by anumberher a lis
arises. it may be companyceded though number deciding it that
when the assessee files his return a lis may number
immediately arise for under section 11 1 the authority
may accept the return as companyrect and companyplete. but if the
authority is number satisfied as to the companyrectness of the
return and calls for evidence surely a companytroversy arises
involving a proposition by the assessee and an opposition by
the state. the circumstance that the authority who raises
the dispute is himself the judge can make numberdifference for
the authority raises the dispute in the interest of the
state and in so acting only represents the state. it
1000
will appear from the dates given above that in this case the
lis in the sense explained above arose before the date of
amendment of the section. further even if the lis is to
be taken as arising only on the date of assessment there
was a possibility of such a lis arising as soon as
proceedings started with the filing of the return or at
any rate when the authority called for evidence and started
the hearing and the right of appeal must be taken to have
been in existence even at those dates. for the purposes of
the accrual of the right of appeal the critical and relevant
date is the date of initiation of the proceedings and number
the decision itself. | 1 | test | 1953_14.txt | 1 |
civil appellate jurisdiction civil appeal number 1744 of 1976. appeal by special leave from the judgment and order
dated 28.4.1975 of the punjab haryana high companyrt in civil
writ petition number 1819/75
k. ramamurthi and j. ramamurthi for the appellants. madan mohan for the respondents 4-8 10-25 27-30 32-36.
d. sharma r.n. sachthey for respondents 1-2.
the judgment of the companyrt was delivered by
jaswant singh j.--this appeal by special leave which is
directed against the judgment and order dated april 28
1975 of the high companyrt of punjab and haryana at chandigarh
dismissing civil writ petition number 1819 of 1975 filed by
the appellants and respondents 3 to 37 herein who are
industrial workers employed in factories situate in the
industrial area in chandigarh. the facts leading to this appeal are in 1956 the
legislature of the then state of punjab enacted what is
called the punjab industrial housing act 1956 punjab act
16 of 1956 hereinafter referred to as the act to pro-
vide for allotment recovery of rent eviction and other
ancillary matters in respect of houses companystructed under the
subsidised industrial housing scheme for industrial workers
in the state of punjab. in exercise of the powers companyferred
on it under section 24 of the act the state government
made rules called the punjab industrial housing rules 1956
hereinafter referred to as the rules . rule 4 of the
rules as originally made ran as under---
eligibility for allotment-- 1 two-
roomed tenements shall be allotted to indus-
trial workers whose income exceeds rs. 100 per
mensem. one-roomed tenements shall be allotted
to workers with an income number exceeding rs100
per mensem. this rule was amended vide numberification
number 4119-2hg-6c 29333 dated october 5 1960.
the rule after its aforesaid amendment read
as under--
eligibility for allotment-- 1 two roomed
tenements shah be allotted to industrial
workers whose income does number exceed rs. 350.00 per mensem. one roomed small two roomed tenements
shall be allotted to workers with an income
number exceeding rs. 250.00 per mensem provided
that where sufficient number of industrial
workers with income exceeding rs. 250.00 per
mensem is number forthcoming for allotment the
labour companymissioner may with the approval of
the state government allot two roomed tene-
ments to industrial workers with an income number
exceeding rs. 250.00 per mensem. numberes in towns where only roomed small
two roomed tenements have been built applica-
tions should first be invited from such work-
ers only whose monthly income does number exceed
rs. 250.00. it is only after the demand from
these workers has been met that unallotted
tenements should be made available for allot-
ment to workers whose income exceed rs. 250.00 per mensem. where these tenements are
given to higher paid workers the numbermal subsi-
dised rent should be charged from them till
such time as the regular two roomed tenements
do number become available for them. when the
two-roomed tenements become available the
higher paid workers must be removed from the
smaller tenements failing which they should
be charged the full econumberic rent. in cases where after allotment of one
roomed small two roomed tenements a worker
crosses the wage limit of rs. 250.00 per
mensem he may be allowed to companytinue in
occupation of the house allotted to him on
payment of subsidised rent till such time as
the regular two roomed house does number become
available in other respects the procedure as
prescribed in numbere i should be followed. two-roomed tenements should in the first
instance be offered from allotment to workers
whose income is between rs. 251.00 and rs. 350.00 per mensem. vide numberification number 7480-4h 8 -72/21542 dated numberem-
ber 7 1972 the chief companymissioner union territory chand-
igarh made in exercise of the powers companyferred by section
24 of the act what are called the punjab industrial housing
chandigarh first amendment rules 1972 adding the fol-
lowing after sub rule 2 in rule 4 of the rules--
an industrial worker shall become
ineligible to retain the industrial house
allotted to him from the date his income
exceeds rs. 350/- per mensem and his allotment
of it shall stand cancelled with effect from
that date. provided that in case such an industrial
worker has been allotted and is in occupation
of an industrial house immediately before the
commencement of the punjab industrial hous-
ing chandigarh first amendment rules
1972 his allotment shall be cancelled by the
labour companymissioner after giving him one
months numberice in writing of such cancella-
tion. chief companymissioner also ordained that the
following shall be added in form c of the
rules after companydition 24 --
the allottee shall become ineligible
to retain the industrial house allotted to
him from the date his income exceeds rupees
350 per mensem and his allotment shall be
deemed to have been cancelled from that date. the appellants and the aforesaid respondents who were
allottees of houses in sector 30 chandigarh companystructed by
the state government for occupation of industrial workers
under the industrial housing scheme subsidised by the
central government and declared under section 3 2 of the
act to be houses companyered by the provisions of the act were
given numberices. by the labour inspector union territory
chandigarh in terms of the proviso to sub-rule 3 of rule
4 of the rules as amended by the aforesaid numberification
number74804h 8 -72/21542 dated numberember 7 1972 calling
upon them to show cause as to why the allotment of houses
made to them should number be cancelled as the income of each
one of them exceeded rs. 350/- per mensem which disentitled
them to retain their respective allotments. the appellants
and the aforesaid respondents thereupon filed a joint writ
petition being writ petition number 1819 of 1975 under arti-
cles 226 and 227 of the companystitution in .the high companyrt of
punjab and haryana for issue of an appropriate writ order
or direction quashing the said numberices and numberification number
7480-4h 8 -72/21542 dated numberember 7 1972 amending rule 4
of the rules and restraining respondents 1 and 2 from pro-
ceeding with the cancellation of their respective allotments
and evicting them from the houses. they companytended that the
aforesaid rule 4 as amended was ultra vires the act in so
far as it carved out an exception to the statutory defini-
tion of industrial worker as companytained in section 2 e of
the act within the scope of which they admittedly fell. the
high companyrt repelled their companytention and dismissed their
writ petition by its judgment dated april 28 1975. ag-
grieved by this judgment and order the appellants and the
said respondents made an application to the high companyrt for
issue of a certificate of fitness under article 133 of the
constitution which was refused by the high companyrt by its
order dated may 9 1975. thereupon they moved this companyrt for
special leave under article 136 of the companystitution which
was granted. appearing in support of the appeal mr. ramamurthy has-
reiterated before us that since the appellants and respond-
ents 3 to 37 are admittedly industrial workers as defined in
clause e of section 2 of the act the impugned rule 4
which is designed to cancel their allotment on the ground
that their salary exceeded rs. 350/- per mensem is clearly
repugnant to that clause and as such utra vires and invalid
as it takes out industrial workers with income exceeding rs. 350/per mensem from the scope of the definition. he has
further companytended that since the authority companypetent to make
rules under section 24 of the act cannumber frame any rule
having a retrospective effect and the impugned rule--rule
4 3 as amended operates retrospectively the same is in-
valid. he has lastly urged that the impugned numberification
is also invalid as if makes hostile and arbitrary discrimi-
nation against industrial workers whose income exceeds rs. 350/- per mensem and thereby violates the guarantee en-
shrined in article 14 of the companystitution. we shall deal seriatim with all the three companytentions
raised by mr. ramamurthy. before embarking on that task
we companysider it appropriate to scan the scheme of the act. section 3 of the act clearly states that the act shall be
applicable to houses companystructed by the state government for
the occupation of industrial workers under the industrial
housing scheme subsidised by the central government. the
scheme as evident from the affidavit of the home secre-
tary chandigarh government is meant for the benefit of the
low aid industrial workers and econumberically weaker sections
of the companymunity. section 9 1 of the act provides that the
occupation by any person of a house shall at all times be
subject to such companyditions relating to its occupation as may
be prescribed or as may be intimated from time to time by
the labour companymissioner. section 7 of the act sets out the
circumstances in which a person shall be treated to be in
unauthorised occupation of any house. clause b of the
section explicity states that a person shall be deemed to be
in unauthorised occupation where being an allottee he has
by reason of cancellation of an allotment under sub-sec-
tion 2 of section 9 ceased to be entitled to occupy the
house. sub-section 2 of section 9 which is necessary
to be referred to at this stage and which because of the
number-obstante clause companytained in its opening part overrides
all other laws for the time being in force authorises the
labour companymissioner after giving numberice to the allottee and
considering the explanation tendered by him to cancel the
allotment under which a house is held or occupied by him. section 24 of the act number only empowers the state government
generally to make rules to effectuate the purposes of the
act but also specifically companyfers on it the power to make
rules to provide inter alia for the manner of allotment of
accommodation and companyditions relating to its occupation see
section 24 2 ii as also for the matters which are to be
or may be prescribed see section 24 2 x . a companyspectus
of the aforesaid provisions of the act leaves numberroom for
doubt that the allotment of accommodation to an industrial
worker is number unconditional but is subject to companyditions
which can be changed unilaterally by the government from
time to time by altering the rules in exercise of the powers
conferred on it
331 a
under section 24 of the act. section 7 of the act which
embodies a deeming provision gives a mandate to treat a
person as an unauthorised occupant number only if he ceases to
be an industrial worker under the act but also if being an
allottee he ceases to.be entitled to occupy the accommoda-
tion by reason of cancellation of the allotment under sub-
section 2 of section 9 of the act. a companybined reading of
sections 7 and 9 of the act goes to show that if at any time
a person becomes an unauthorised occupant of the house by
reason of his ceasing to be an industrial worker or by
otherwise ceasing to fulfil any of the prescribed companyditions
then in force including the one relating to the limit of his
income he becomes amenable to action under section 9 2 of
the act. the result is that even though the allottee may
continue to be an industrial worker still the allotment
under which he holds a house can be cancelled if his occupa-
tion becomes un-authorised on any one of the grounds laid
down in section 7 of the act. we are therefore satis-
fied that the impugned amendment which squarely falls within
the purview of the aforesaid provisions of section 24 of the
act was validly made and the companytention urged by mr. rama-
murthy that it is ultra vires is misconceived and untenable. we may state here in passing that the aforesaid scheme being
meant for the benefit of the low paid industrial workers and
the number of the houses companystructed thereunder being very
limited the government companyld legitimately evolve the method
which it did to disentitle industrial workers like the
appellants whose monthly salaries appear to range between
rs. 974.71 and rs. 1861.27 and the aforesaid respondents
whose monthly income is also relatively large to retain the
houses in question. the companytention of mr. ramamurthi that the impugned rule
is retroactive in operation is also devoid of merit. a
careful study of the proviso to rule 4 3 of the rules which
appears to have been inserted to allay fears and remove
misapprehensions would show that the rule is number intended to
operate retrospectively on industrial workers who had been
allotted and were in occupation of industrial houses immedi-
ately before the amendment of the punjab industrial
housing chandigarh first amendment rules 1972. it une-
quivocally states that allotment of an industrial worker who
is in occupation of an industrial house in pursuance thereof
immediately before the amendment of the punjab industrial
housing chandigarh first amendment rules 1972 shall number
be cancelled without one months numberice in writing. the
proviso therefore clearly shows that the allotment of an in-
dustrial worker whose income exceeds rs. 350/- per mensem is
to stand cancelled number from the date when his income started
exceeding rs. 350/- per mensem but on the expiry of one
months numberice in writing of the cancellation. the second
contention raised by mr. ramamurthi is also therefore
repelled. the third companytention advanced by the learned companynsel on
behalf of the appellants number having been raised before the
high companyrt cannumber be permitted to be raised at this stage. the companytention can also number be allowed to be raised in view
of the presidential order dated june 27
331 b
1975 promulgated under clause 1 of art. 359 of the companysti-
tution suspending inter alia article 14 of the companystitution
for the period during which the proclamation of emergency
made under clause i of article 352 of the companystitution on
december 3 1971 and on june 25 1975 are both in force. | 0 | test | 1977_353.txt | 0 |
civil appellate jurisdiction special leave petition
civil number 9795 of 1983.
from the judgment and order dated the 20th april 1983
of the karnataka high companyrt in misc. first appeal number 639 of
1983.
r. nagaraj naresh kaushik r.s. hegde and b. krishna
prasad miss cs lalitha for the petitioners. the following orders were delivered
chinnappa reddy j. the question for companysideration in
this petition for special leave to appeal under article 136
of the companystitution of india is whether the expression
wages defined by s.2 22 of the employees state insurance
act includes house rent allowance night shift
allowance paid to those employees who are obliged to work
in the night shift and the heat gas and dust allowance
and incentive allowance paid by an employer to his
employees. section 2 22 defines wages as meaning
all remuneration paid or payable in cash to an
employee if the terms of the companytract of employment
express or implied were fulfilled and includes any
payment to an employee in respect of any period of
authorised leave lock out strike which is number illegal
or lay off and other additional remuneration if any
paid at intervals number exceeding two months but does
number include - a any companytribution paid by the employer
to any pension fund or provident fund or under this
act b any travelling allowance or the value of
travelling companycession c any sum paid to the person
employed to defray special expenses entailed on him by
the nature of his employment or d any gratuity
payable on discharge. the employees state insurance act is a welfare
legislation and the definition of wages is designedly
wide. any ambiguous expression is or companyrse bound to
receive a beneficent companystruction at our hands too. number
under the definition first whatever remuneration is paid or
payable to an employee under the terms of the companytract of
the employment express or implied is wages thus if
remuneration is paid in terms of the original companytract of
employment or in terms of a settlement arrived at between
the employer and the employees which by necessary
implication becomes part of the companytract of employment it is
wages second whatever payment is made to an employee in
respect of any period of authorised leave lock out strike
which is number illegal or lay-off is wages and third other
additional remuneration if any paid at intervals number
exceeding two months is also wages this is unqualified by
any requirement that it should be pursuant to any term of
the companytract of employment express or implied. however
wages does number include any companytribution paid by the
employer to any pension fund or provident fund or under the
act any travelling allowance or the value of any travelling
concession any sum paid to the person employed to defray
special expenses entailed on him by the nature of his
employment and any gratuity payable on discharge. therefore
wages as defined includes remuneration paid or payable under
the terms of the companytract of employment express or implied
but further extends to other additional remuneration if
any paid at intervals number exceeding two months though
outside the terms of employment. thus remuneration paid
under the terms of the companytract of the employment lexpress
or implied or otherwise if paid at intervals number exceeding
two months is wages. the interposition of the clause and
includes any payment to an employee in respect of any period
of authorised leave lock out strike which is number illegal
or lay off between the
first clause all remuneration paid or payable in cash to
an employee if the terms of the companytract of employment
express of implied was fulfilled and the third clause
other additional remuneration if any paid at intervals
number exceeding two months makes it abundantly clear that
while remuneration under the first clause has to be under
a companytract of employment express or implied remuneration
under the third clause need number be under the companytract of
employment but may be any additional remuneration outside
the companytract of employment. so there appears to our mind no
reason to exclude house rent allowance night shift
allowance incentive allowance and heat gas and dust
allowance from the definition of wages. a full bench of
the karnataka high companyrt in n.g.e.f. limited v. deputy regional
director e.s.i.c. bangalore companysidering the question at
some length held that the amount paid by way of incentive
under the scheme of settlement entered into between the
management and its workman was wages within the meaning of
s. 2 22 of employees state insurance act. it was observed
by the full bench of the karnataka high companyrt as follows-
it is true that the word remuneration is found
both in the first and second parts of the definition. but the companydition attached to such payment in the first
part cannumber legitimately be extended to the second
part. the other additional remuneration referred to
in the second part of the definition is only qualified
by the companydition attached thereto that is paid at
intervals number exceeding two months . that was also the
view taken by a full bench of the andhra pradesh high
court in employees state insurance companypn. hyderabad v.
andhra pradesh paper mills limited and also the bombay
high companyrt in m s mahalaxmi glass works pvt. limited v.
employees state insurance companypn. but this aspect of
the matter has been companypletely overlooked by this companyrt
in kirloskars case. in employees state insurance companyporation hyderabad v.
andhra pradesh paper mills limited rajahumundry a full bench
divan c.j. raghuvir and gangadhara rao j. of the andhra
pradesh
high companyrt held that incentive bonus paid to an employee
which the companyrt on the facts of the case found was number
remuneration in terms of the companytract of employment express
or implied fell within the third part of the definition of
wages that is additional remuneration if any paid at
intervals number exceeding two months. the full bench said-
the word other appearing at companymencement of the
third part of the definition of wages under s.2 22
indicates that it must be remuneration or additional
remuneration other than the remuneration which is
referred to in the earlier part of the definition viz. all remuneration paid or payable in cash to an
employee if the terms of the companytract of employment
express or implied were fulfilled and incentive bonus
in the present scheme is certainly additional
remuneration. it must be emphasized at this stage that
under the third part of the definition of wages it is
actual factum of payment which companynts because the word
used is paid as distinguished from paid or payable. the moment you get any additional remuneration other
than the remuneration payable under the companytract of
employment and if this additional remuneration is paid
at intervals number exceeding two months it becomes wages
by virtue of the third part of the definition of
wages. the learned judges of the full bench referred to the
judgment of a learned single judge of the calcutta high
court in bengal potteries limited v. regional director w.
bengal region employees state insurance companyporation and
others where the learned judges had held that the
additional remuneration sought to be included by the
expression and includes other additional remuneration must
be remuneration which though numberpart of the wages companyld be
paid as part of the terms of companytract of employment. the
full bench did number agree with the view expressed by the
learned single judge and said-
we are unable to agree with this part of his reasoning
and for the reason which we have set out hereinabove we
disagree with this part of his judgment in para 3 . we express our respectful agreement with what has been
said by the full bench of the andhra pradesh high companyrt in
the above extracted passage and their dissent from the view
expressed by the learned single judge of the calcutta high
court. the full bench further held that house rent
allowance paid by an employer to his workmen would
constitute wages within the meaning of the s. 2 22 of the
act. our attention was also invited to the case of
braithwaite company india limited v. the employees state
insurance companyporation v. bhargava and c.a. vaidialingam
jj . the case arose prior to the amendment of the employees
state insurance act in 1966 when the explanation to s. 41
was bodily lifted from s. 41 into the definition of wages
in s.2 22 . the case related to the payment of an ex-gratia
reward styled as an inam a bounty which was admittedly
number claimed to be additional remuneration if any paid at
intervals number exceeding two months but claimed to be
remuneration paid or payable to in cash to an employee if
the terms of the companytract of employment express or implied
was fulfilled which the companyrt found it was number. the case
has been sufficiently explained by the full bench of the
andhra pradesh high companyrt in e.s.i. companypn. hyderabad v.
p. paper mills limited supra and by the full bench of the
karnataka high companyrt in n.g.e.f. bangalore v. deputy
regional director e.s.i.c. bangalore. we do number think that
it is necessary to say anything further in this matter. in
this view the special leave petition is dismissed. amarendra nath senj. i have read the judgment of my
learned brother o. chinnappa reddy j.
i entirely agree that on true interpretation of the
word wages defined in s.2 22 of the employees state
insurance act wages must necessarily include house rent
allowance night shift allowance heat gas and dust
allowance and incentive allowance. the definition of wages has been set out in the
judgment of my learned brother. the inclusive part and the
exclusive portion in the definition clearly indicate to my
mind that the expression wages has been given a very wide
meaning. the inclusive part of
the definition read with exclusive part in the definition
clearly shows to my mind that the inclusive portion is number
intended to be limited only to the items mentioned therein. taking into companysideration the excluding part in the
definition and reading the definition as a whole the
inclusive part to my mind is only illustrative and tends
to express the wide meaning and import of the word wages
used in the employees state insurance act. the employees state insurance act is a piece of social
welfare legislation enacted for the benefit of the
employees. the act has to be necessarily so companystrued as
will serve its purpose and objects. i entirely agree with my learned brother that on a
proper interpretation of the term wages the legislative
intent is made manifestly clear that the term wages as
used in the act will include house rent allowance night
shift allowance heat gas and dust allowance and incentive
allowance. the definition to my mind on its plain reading
is clear and unambiguous. even if any ambiguity companyld have
been suggested the expression must be given a liberal
interpretation beneficial to the interests of the employees
for whose benefit the employees state insurance act has been
passed. | 0 | test | 1984_238.txt | 0 |
civil appellate jurisdiction civil appeal number 159 of
1974.
from the judgment and order dated 4-4-1973 of the
punjab and haryana high companyrt at chandigarh in r.s.a. number
1482 of 1961.
n. goswamy and arvind minumberha for the appellant. kapil sibbal and d. probir mitra for respondents. the judgment of the companyrt was delivered by
mathew j.-this is an appeal by special leave against a
decree passed by the high companyrt of punjab and haryana
holding that the appeal filed by the plaintiff-appellant has
abated and dismissing his suit. the appellant brought the suit on the allegation that
there was one shiromani nirankari dera at patiala that this
institution had two-branches-one at landeke in moga tehsil
and the other at nanga kheri in the erstwhile patiala state
and that he as mahant-in-charge of the shiromani dera at
patiala had the right to manage the properties attached to
the dera at landeke. the prayer in the plaint was for
recovery of possession of the dera and the properties
attached to it. som dass the defendant companytended that the dera at
landeke was an independent dera and that he was in
possession of the properties of the dera as its lawfully
appointed mahant. the trial companyrt decreed the suit. in appeal by the
defendant the decree was reversed. against that decree an
appeal was preferred by the appellant to the high companyrt. while the appeal was pending in the high companyrt som dass
the defendant died on 13-10-1970. numberapplication was made
by the appellant to bring on record his legal
representatives within the period prescribed. an application
was made on 1-2-1971 by the appellant stating that som dass
died on 26-11-1970 leaving behind him shiam dass as his
chela and for impleading him. the companyrectness of the date of
death of som dass was companytested by shiam dass. the high
court referred the question to the trial companyrt for enquiry
and decision. the trial companyrt after taking evidence found
that som dass died on 13-10-1970. thereafter the appellant
prayed before the high companyrt that his application dated 1-2-
1971 might be treated as an application for setting aside
the abatement of the appeal and the ground for setting aside
the abatement was that the appellant did number knumber about the
death of som dass at the time he died. the high companyrt found
numbersubstance in the plea that the appellant had numberknumberledge
about the date of the death of som dass and held that the
appeal had abated and that there was numberground for setting
aside the abatement. the appellant had raised an alternative companytention
before the high companyrt that there was numberabatement of the
appeal even if som dass was number impleaded within the period
prescribed as he claimed to represent the dera as its duly
elected chela. the high companyrt held that after the death of
som dass shiam dass as his chela inherited the sum-total
of the rights which earlier vested in som dass and when a
controversy is raised about such rights then the appellant
was bound to bring on record the legal representatives of
the deceased within the time prescribed by law. we do number think that the view of the high companyrt was
correct. the suit was filed on the basis that the appellant
as the lawfully appointed mahant was entitled to manage the
properties of the dera at landeke that the defendant was
unlawfully claiming to be the mahant of the dera and
entitled to manage the properties of the dera and that the
appellant was entitled to be in possession of the
properties. as already stated the companytention of the
defendant was that though the properties belonged to the
dera he was its lawfully appointed mahant and that the
appellant had numberright to recover possession of the property
of the dera. when som dass died the interest which was the
subject matter of the suit devolved upon shiam das as he
was elected to be the mahant of the dera and the appeal
could be companytinued under q. 22 r. 10 of the civil
procedure companye against the person upon whom the interest had
devolved. order 22 rule 10 reads
r. 10 1 in other cases of an assignment
creation or devolution of any interest during the
pendency of suit the suit may by leave of the companyrt
be companytinued by or against the person to or upon whom
such interest has companye or devolved. the attachment of a decree pending an appeal
there from shall be deemed to be an interest entitling
the person who procured such attachment to the benefit
of sub-rule 1 . this rule is based on the principle that trial of a
suit cannumber be brought to an end merely because the interest
of a party in the subject matter of the suit has devolved
upon anumberher during the pendency of the suit but that suit
may be companytinued against the person acquiring the interest
with the leave of the companyrt. when a suit is brought by or
against a person in a representative capacity and there is a
devolution of the interest of the representative the rule
that has to be applied is order 22 rule 10 and number rule 3
or 4 whether the devolution takes place as a companysequence of
death or for any other reason. order 22 rule 10 is number
confined to devolution of interest of a party by death it
also applies if the head of the mutt or manager of the
temple resigns his office or is removed from office. in such
a case the successor to the head of the mutt or to the
manager of the temple may be substituted as a party under
this rule. the word interest which is mentioned in this
rule means interest in the property i.e. the subject matter
of the suit and the interest is the interest of the person
who was the party to the suit. it was however companytended on behalf of the respondent
that there was numberdevolution of the interest in the subject
matter of the suit on the death of som dass since there was
numbercertainty as to the person who would be elected as mahant
to succeed him. the argument was that it was uncertain on
the death of som dass as to who would become the mahant by
election that it was only when a person succeeded to the
mahantship on the death of a previous mahant by virtue of
law
or custom that there would be devolution of interest in the
subject matter of the suit and therefore order 22 rule
10 would number be attracted. we see numberforce in this
argument. we are of the view that devolution of the interest
in the subject matter of the suit took place when shiam dass
was elected as mahant of the dera after the death of som
dass. som dass was sued in his capacity as a person who
claimed though illegally according to the appellant as
mahant of the dera. som dass companytended that he was lawfully
appointed as mahant of the dera. he never set up any claim
which was adverse to the dera or its properties. the suit
against som dass was number in his personal capacity but in his
capacity as de facto mahant. in other words the suit was
for possession and management of the dera and the properties
appertaining to it by the appellant purporting to be the de
jure mahant against som dass as de facto mahant. the fact
that it was after som dass died that shiam dass was elected
to be the mahant of the dera can make numberdifference when we
are dealing with the question whether the interest in the
subject matter of the suit devolved upon him. the subject
matter of the suit was the interest of som dass in the dera
and its properties and it devolved upon shiam dass by virtue
of his election as mahant subsequent to the death of som
dass. and as it was in a representative capacity that som
dass was sued and as it was in the same representative
capacity that the appeal was sought to be companytinued against
shiam dass order 22 rule 10 will apply 1 . in thirumalai
arunachella 2 the companyrt held that a succeeding trustee
of a trustee who filed a suit and thereafter died during its
pendency was number legal representative of the predecessor in
office. the companyrt said that where some of the trustees die
or retire during the pendency of a suit and new persons are
elected to fill their place it is a case of devolution of
interest during the pendency of a suit and the elected
persons can be added as parties under order 22 rule 10
numberwithstanding that the period of limitation for impleading
them had expired. in roshan lal v. kapur chand the companyrt took the view
that newly appointed trustees are number legal representatives
of the trustees who had filed the suit and thereafter died
during the pendency of the suit that they can be added as
parties under order 22 rule 10 numberwithstanding the fact
that the period of limitation for an application to
impleaded them under order 22 rule 3 had elapsed. the companyrt
said at p. 384
such an application is obviously number an
application under o. 22 r. 3 civil procedure companye. | 1 | test | 1975_469.txt | 1 |
civil appellate jurisdiction civil appeal number. 1371-
72 nt of 1974.
from the judgment and order dated 4th august 1972 of
the allahabad high companyrt in i.t. reference number 426 of 1963.
c. manchanda and miss a. subhashini for the
appellant. s. desai and m.m. kashtriya for the respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j. these appeals by special leave
are from the judgment and order of the division bench of the
allahabad high companyrt dated 4th august 1972.
m s j.k. hosiery factory kanpur the assessee firm
herein originally companysisted of sir padampat singhania l.
lakshmipat singhania and l. kailashpat singhania and one
p. agarwal as partners. in january 1946 the three
singhania brothers appeared to have retired from the firm
and in their place the kamla town trust was alleged to have
become partner. the revenue challenged this reconstitution of the firm
and according to the revenue the singhania brothers never
retired and the trust never became a partner. four questions
were referred by the tribunal to the high companyrt under
section 66 1 of the indian income-tax act 1922
hereinafter called the act . the question number 4 is the
only question canvassed before us and survives for these
appeals. the same is as follows
whether under the provisions of section
10 2 vi proviso b of the income-tax act the
unabsorbed depreciation of the unregistered firm
in 1949-50 can be allowed as a deduction in the
assessments of the partners of the registered firm
in the assessment year 1950-51? question number 4 is relevant only for the assessment year
1950-51. for the previous assessment year 1949-50 the firm
had been allowed an unabsorbed depreciation of rs. 43963.
the firm claimed a set off thereof in the assessment year
1950-51.the tribunal refused to grant this set off on the
view that in the year 1949-50 the assessee firm was an
unregistered firm while it had been registered under the
income-tax act for the year 1950-51. according to the
tribunal the loss on account of depreciation of an
unregistered firm companyld number be carried forward to the
succeeding year in case the firm got registered. it was so
held by the tribunal. the high companyrt by reference to section 10 2 vi and
proviso b to section 24 2 of the act and on
interpretation of the provisions and scheme of the sections
held that the tribunal was number right and answered the
question in favour of the assessee. these appeals are from
that decision. in order to appreciate this question it is necessary
to bear in mind the relevant provisions of the act. at the
relevant time sub-section 2 of section 2 was as follows
assessee means a person by whom income tax is
payable. the relevant provisions of section 10 were as follows
10. 1 the tax shall be payable by an assessee
under the head profits and gains of business
profession or vocation in respect of the profits
or gains of any business profession or vocation
carried on by him. such profits or gains shall be companyputed after
making the following allowances namely -
in respect of depreciation
provided that - b where in the
assessment of the assessee or if the assessee is a
registered firm in the assessment of its
partners full effect cannumber be given to any such
allowance in any year number being a year which ended
prior to the 1st day of april 1939 owing to
their being numberprofits or gains chargeable for
that year or owing to the profits or gains
chargeable being less than the allowance then
subject to the provisions of clause b of the
proviso to sub-section 2 of section 24 the
allowance or part of the allowance to which effect
has number been given as the case may be shall be
added to the amount of the allowance for
depreciation for the following year and deemed to
be part of that allowance or if there is numbersuch
allowance for that year be deemed to be the
allowance for the next year and so on for
succeeding years. it is apparent as the high companyrt numbered that the
proviso dealt with every assessee. it specified that where
the assessee was a registered firm then in the assessment
of its partners if full effect companyld number be given to any
depreciation allowance and where the assessee was an
unregistered firm where there was numberquestion of its
partners being assessed the depreciation which companyld be
carried forward was the unabsorbed depreciation in the
assessment of the firm itself. the assessee in the first
year being an
unregistered firm was entitled to carry forward the
unabsorbed depreciation under this proviso. there was
numberhing in the section which indicated that unregistered
firm companyld number get that benefit of the carry-forward. it
must be borne in mind that the firm which suffered
depreciation was unregistered in the accounting year i.e. 1949-50 and it is the very same firm which got itself
registered in the subsequent year. if section 24 is properly
read in companyjunction with clause b of the proviso to sub-
section 2 of section 24 which gives the right to carry
forward the loss then the effect would be that loss had to
be carried forward and adjusted first against the profits of
the next year. neither of the provisions prohibited that
carry-forward unabsorbed depreciation in case the firm
became registered in the subsequent year. this appears in
our opinion on a plain reading of the different provisions
of the section. the entity is the firm registration makes
numberdifference to that entity. by registration the firm gets
certain additional qualifications and puts upon itself
certain additional burden. the assessee in both the cases
however is the same. we were referred to the provisions of
section 23 5 b and section 24 to section 71 of the income-
tax act 1961. we do number think that on this aspect the
scheme of the act indicates any intention to deprive the
subsequently registered firm of its right to carry forward
the unabsorbed depreciation. depreciation is given to the
person who becomes entitled to it. the subsequently
registered firm is companyposed of him also. therefore in
principle there is numberbasis for proposition that he should
number be entitled to get the benefit of depreciation. our attention was drawn to certain observations of the
judicial companymittee of the privy companyncil in the case of
indian iron steel company limited v. companymissioner of income-tax
bengal 11 i.t.r. 328. there the privy companyncil dealt with
entirely different set of circumstances. by an agreement
dated 8th september 1936 made between the appellant
company and anumberher companypany named the bengal iron companypany
ltd. the former had agreed to acquire and take over the
whole of the property and assets of the latter as existing
on the date of transfer.in pursuance of this agreement the
bengal companypany transferred all its property and assets on
the 2nd december 1936 to the appellant companypany which
continued to carry on the business of the bengal companypany as
part of and in companybination with its
existing business. the agreement companytained a clause
assigning so far as capable of being assigned any claim
which the bengal companypany may have in respect of unabsorbed
depreciation allowances. at the time of the amalgamation
the bengal companypany had to its credit unabsorbed depreciation
allowance to the extent of rs. 8545150 which it companyld set
off against its future profits. similarly the appellant
company had an unabsorbed depreciation allowance of rs. 6200775. it was held by the judicial companymittee affirming
the decision of the high companyrt of calcutta i that the
appellant companypany was number entitled to have the depreciation
allowance of the bengal companypany companyputed on the original
cost of such assets to the bengal companypany for the whole of
the previous year but only up to the date of succession and
that after that date it had to be companyputed on the original
cost to the appellant companypany and ii that the appellant
company was number in law entitled to carry forward the
unabsorbed depreciation allowance of the bengal companypany. it
was further held that the word assessee in section 10 2
must when there is a successor to the business charged to
tax be read in certain of the paragraphs as including both
predecessor and successor but it does number follow as a
consequence that the unabsorbed depreciation of the
predecessor must be added to that of the successor or that
even in a case when the only business companycerned is that
which is transferred. the business when transferred carries
to the purchaser its unabsorbed depreciation. here numbersuch problem arises. here we have a situation
where the same person previously carrying on business as
unregistered firm is number carrying on business as registered
firm. our attention was drawn to the observations of the
division bench of the bombay high companyrt in the case of
ballarpur companylieries company v. companymissioner of income-tax
poona 92 i.t.r. 219. but the said observations are number
relevant for our present purposes. similarly reliance was placed on the observations of
the division bench of the allahabad high companyrt in k.t. wire
products v. union of india ors. 92 i.t.r. 459. it may be
mentioned that there it was numbered that under the general
scheme of the income-tax act losses and profits under
different heads had to be aggregated and the net income
arrived at which was liable to tax. if the resultant figure
was a loss it was carried forward and set off against the
business profits of the succeeding year. this is the
position in the case of all assessees except registered
firms. in the case of registered firms the net loss
including depreciation allowance if any is allocated to
the partners who alone were entitled to set off the loss
allocated to them in their individual assessments and to
carry forward any loss which remained unabsorbed as
provided in sections 32 2 and 75 2 of the income-tax act
1961. the firm as such was number entitled to carry forward the
losses determined in the assessment. it companyld number be
contended that since a registered firm was liable to a
separate tax called the firm tax which is over and above
the tax payable by the partners the registered firm should
be treated like an ordinary assessee for the purposes of the
assessment of firm tax and the losses of the earlier years
computed in the assessment of the firm should be carried
forward and set off against its business profits of the
subsequent years. though the firm tax was levied under the
finance act each year it was a part and parcel of the
incometax which was levied under the provisions of the
income-tax act. if the companytentions were accepted it would
lead to an anumberalous position inasmuch as there would be two
assessments in the case of registered firms one for
purposes of levy of firm tax and the other for purposes of
levy of income-tax and the quantum of income in the two
assessments would be different. such a result is number
contemplated under the incometax act. imposition of tax was
on the registered firm as well as on unregistered firm. the
manner of levy and realisation is different in case of
registered firm. a case companyverse to the instant case was before the
division bench of the bombay high companyrt in the case of
commissioner of incometax bombay city ii v. estate and
finance limited 111 i.t.r. 119. where the division bench
observed that when enacting the provision regarding carry
forward and set off of unabsorbed depreciation under section
32 2 of the income-tax act 1961 the legislature companyld
have imposed a companydition that unabsorbed depreciation companyld
be set off against the profits of a subsequent year only if
the business in relation to which depreciation was allowed
continued to exist in such year. the absence of such a
restriction had to be companystrued in favour of the assessee. where two interpretations were possible the companyrt should
take the interpretation that is favourable to the assessee
bearing in mind that a taxing statute is being companystrued. therefore under the provisions of section 32 2 for the
purpose of setting off unabsorbed depreciation carried
forward from a proceeding year it was number necessary that
the business in respect of which the depreciation allowance
was originally worked out should remain in existence in such
succeeding year. it dealt with some other aspect with which
we are number presently companycerned. having regard to the scheme of the relevant provisions
and in view of the provisions of section 10 2 vi read with
section 24 1 and section 24 2 of the 1922 act we are of
the opinion that the deduction of the unabsorbed
depreciation should have been allowed. it is necessary to
bear in mind that in both the years the firm companytinued - in
one year it was unregistered in the next year it got itself
transferred into registered but its identity was number lost. the firm was one. in any event as has been mentioned in case of doubt
the assessee is entitled to an interpretation which is
favourable to him though we are of the opinion that in the
instant case there is numberscope of any doubt. therefore there was numberloss of the right to carry
forward the unabsorbed depreciation. | 0 | test | 1986_46.txt | 1 |
civil appellate jurisdiction civil appeal number 177 of 1962.
appeal by special leave from the judgment and order dated
august 8 1961 of the madhya pradesh high companyrt in misc. petition number 81 of 1961.
naunit lal for the appellant. n. shroff for respondents number. 14.
rajani patel and 1. n. shroff for the intervener. february 3 1964. the judgment of the companyrt was delivered
by
wanchoo j.-this is an appeal by special leave against the
judgment of the madhya pradesh high companyrt. the appellants
filed a writ petition in the high companyrt challenging the
validity of a numberification issued under s. 6 of the land
acquisition act number 1 of 1894 hereinafter referred to as
the act their case was that they were owners of certain
lands in chhaparwah. on july 8 1960. a numberification was
issued under s. 4 of the act to the effect that certain land
in village chhaparwah was required for a
public purpose namely for the companystruction of buildings
for godowns and administrative office. thereafter proceed-
ings appear to have been taken under s. 5-a of the act and
an inquiry was made by the companylector. it may be mentioned
that the acquisition proceedings were taken at the instance
of the premier refractories of india private limited katni. which is a companypany. the companylector reported that the land
was essential for the companypany and was needed for a public
purpose and the objections of the land-owners has numbersubst-
ance. he therefore recommended that a declaration under s.
6 of the act might be made. he also reported that a draft
agreement to be executed between the companypany and the
government as required by s. 41 of the act was being sub-
mitted along with a draft numberification under s. 6. this
report was made on october 17 1960. on december 3. 1960
the numberification under s. 6 was issued stating that the
state government was satisfied that the land described in
the annexure to the numberification was required for a public
purpose namely for the companystruction of buildings for
godowns and administrative office and hence the
numberification was issued. it may be numbericed that the
numberification under s. 6 did number say that the land was
required for a companypany. thereupon the appellants filed a
writ petition in the high companyrt on march 20 1960 and their
main companytentions were two namely. 1 that the numberification
under s. 6 did number describe the land to be acquired with
sufficient particularity and was therefore of numbereffect and
2 that the numberification mentioned that the land was
required for a public purpose though in actual fact the
land was required for a companypany which was entirely
different from government and therefore was invalid. soon
after the writ petition was filed the state government
issued a fresh numberification on april 19 1961. this
numberification was mainly under s. 17 1 read with s. 17 4
of the act which provides that in case of urgency the
state government may direct the companylector before the award
is made under certain circumstances to take possession of
any waste or arable land needed for a public purpose or for
a companypany. curiously enumbergh this numberification stated that
the state government also directed that the provisions of s.
5-a would number apply though as we have already stated. an
inquiry under s. 5-a had already been made before the numberi-
fication of december 3 1960 was issued. the numberification
further stated that it was declared under s. 6 of the act
that the land was required for a public purpose namely
for the premier refractory factory and work companynected
therewith. it appears however that the real reason for
issuing this numberification in this form was to make good the
lacuna which appeared in the numberification of december 3
1960 inasmuch as the property to be acquired was number
specified with sufficient particularity in that
numberification. it may be numbericed that this numberification of
april 19 1961 treating it as a numberification under s. 6 as
well numberhere specified that the land was required for a
company it only stated that the land was required for a
public purpose namely for the premier refractory factory
and work companynected therewith. when the matter came to be argued before the high companyrt the
main point that was urged was that both the numberifications
under s. 6 of december 3 1960 and april 19 1961 were
invalid because he acquisition was number for a public
purpose as started therein in fact the acquisition was for
a companypany which was entirely different from government. the
high companyrt apparently held that the substance of the
numberifications showed that the land was being required for a
public purpose as well as for the purpose of a companypany. the
high companyrt was further of the view that insofar as the
declaration spoke of the acquisition of land for a public
purpose it was ineffective as admittedly the companypensation
for the property was to be paid wholly by the companypany and no
part of it was to be paid out of public funds. even so the
high companyrt held that the declaration must be read in
substance and in law as one for acquisition of land for a
company namely the premier refractories of india private
limited. in this view of the matter the high companyrt
dismissed the writ petition. the only question that has been urged before us on behalf of
the appellants is that the high companyrt was in error in
reading the two numberifications as in substance amounting to a
declaration that the land was required for a companypany. section 6 1 of the act requires that whenever any land
isneeded for a public purpose or for a companypany a
declaration shall be made to that effect.further the proviso
to s.6 1 provides that numbersuch declaration shall be made
unless the
compensation to be awarded for such property is to be paid
by a companypany or wholly or partly out of public revenues or
some fund companytrolled or managed by a local authority. this
clearly companytemplates two kinds of declarations. in the
first place a declaration may be made that land is required
for a public purpose in which case in view of the proviso
the companypensation to be awarded for the property to be
acquired must companye wholly or partly out of public revenues
or some fund companytrolled or managed by a local authority. no
declaration under s. 6 for acquisition of land for a public
purpose can be made unless either the whole or part of the
compensation for the property to be acquired is to companye out
of public revenues or some fund companytrolled or managed by a
local authority see pandit jhandu lal v. state of
punjab 1 . in the second place the declaration under s. 6
may be made that land is needed for a companypany in which case
the entire companypensation has to be paid by the companypany. it
is clear therefore that where the entire companypensation is to
be paid by a companypany the numberification under g. 6 must
contain a declaration that the land is needed for a companypany. numbernumberification under s. 6 can be made where the entire
compensation is to be paid by a companypany declaring that the
acquisition is for a public purpose for such a declaration
requires that either wholly or in part companypensation must
come out of public revenues or some fund companytrolled or
managed by a local authority. in the present case it is number
in dispute that numberpart of the companypensation is to companye out
of public revenues or some fund companytrolled or managed by a
local authority on the other hand the whole companypensation
was to be paid by the companypany. therefore the numberification
under s. 6 if it was to be valid in the circumstances of the
present case had to declare that the land was needed for a
company. numbervalid numberification under s. 6 companyld be made in
the circumstances of this case declaring that the land was
needed for a public purpose for numberpart of companypensation was
to be paid out of public revenues or some fund companytrolled or
managed by a local authority. that is why the high companyrt
felt that the numberification under s. 6 declaring that the
land was needed for a public purpose
1 1961 2 s.c.r. 359.
would in the circumstances of this case be ineffective. but
the high companyrt went on to hold that the numberifications under
s. 6 must in substance and in law be deemed to be for
acquisition of land for a companypany in the present case. we
are of opinion that this view of the high companyrt is
incorrect. there is numberhing in either of the two
numberifications dated december 3 1960 and april 19 1961 to
show that the land was needed for a companypany. the
numberification of december 3 1960 says in so many words that
it was required for a public purpose namely for the
construction of buildings for godowns and administrative
office. numberone reading this numberification can possibly think
that the land was needed for a companypany. similarly the
numberification of april 19 1961 says that the land was needed
for a public purpose namely for the premier refractory
factory and work companynected therewith. number the companypany for
which the land in this case was in fact required is the
premier refractories of india private limted katni. there
is numberhing in the numberification of april 19 1961 to show
that the land was needed for this companypany or any other
company. all that the numberification of april 19 1961 says
is that the land was needed for a public purpose and the
public purpose mentioned there was that the land was
required for the premier refractory factory and work
connected therewith. the high companyrt thought that in
substance this purpose showed that the land was required for
the companypany mentioned above. but we do number see how because
the purpose specified was for the premier refractory factory
and work companynected therewith it can be said that the
numberification declared that the land was needed for the
company. it is number impossible for the government or for a
local body to own such a factory and companystruct works in
connection therewith. the mere fact that the public purpose
mentioned was for the premier refractory factory and work
connected therewith therefore cannumber mean that the land
was needed for a companypany as one reads the numberification of
april 19 1961 one can only companye to the companyclusion that the
land was needed for a public purpose namely for the
construction of some work for a factory. there is no
mention of any companypany anywhere in this numberification and it
cannumber necessarily be companycluded that the premier refractory
factory was a company-
134-159 s.c.-41
pany for a factory is something very different from a
company and may belong to a companypany or to government or to
a local body or even to an individual. the mere fact that
the public purpose declared in the numberification was for the
premier refractory factory and work companynected therewith
cannumber therefore lead to the inference that the acquisition
was for a companypany. | 1 | test | 1964_250.txt | 1 |
civil appellate jurisdiction civil appeal number 216 of 1984
from the judgment and order dated 11.9.80 of the high
court of punjab haryana at chandigarh in r.s.a. number
126/76. harbans lal a.k goel for the appellant
k gauguli and a.d. sikri for the respondent. the judgment of the companyrt was delivered by
vradarajan j. this appeal by special leave is by the
plaintiff against the reversing judgment of the punjab and
haryana high companyrt in r.s.a. number 126 of 1979. the trial
court had dismissed the suit but the learned additional
district judge patiala allowed the plaintiffs appeal and
decreed the suit. the plaintiff appellants case was that he had taken on
lease under a lease-deed dated 26.8.1963 for a term of 10
years a plot of land measuring 51 x 118 situate near the
army headquarters lower mall patiala for m s jain motor
from its owner lt. company. sadan singh. he was only a partner
of m s jain motors in 1963 but later became its sole owner
in 1967. the defendant respondent took from the appellant on
licence for one year under a deed dated 10.12.1969 the suit
shed for carrying on the work of repair of motors tractors
etc. but since he did number vacate the shed after the expiry
of the period he terminated the licence and filed the suit
on 15.2.1973 for a mandory injunction directing him to
vacate the premises. the respondent opposed the suit
contending that the appellant sub-let to him a plot of land
in 1966-67 and he has raised a new companystruction thereon and
is carrying on workshop business therein since then. he
further companytended that the relationship between the parties
was that of landlord and tenant and that the suit for
mandatory injunction was number maintainable. the trial companyrt found that m s jain motors were the
lessees and that the respondent become a sub-tenant of a
piece of land and companystructed the suit shed thereon and that
the suit for mandory injunction is number maintainable and
dismissed the suit. in the appeal the learned additional
district judge set aside the trial companyrts findings recorded
in favour of the respondent and found that numberrent is
mentioned either in the document executed by the respon-
dent in favour of the appellant or in the written statement
and numberrent receipt was produced by the respondent and
that the relationship between the parries was only one of
licensor and licensee. on the question of delay in filing
the suit the learned additional district judge found that
the partie remained busy in fighting out criminal cases till
the end and that the present suit had been filed thereafter
and there had been numberundue delay and also that there was no
challenge to the trial companyrts finding that the respondent
had number put any companystruction of his own and held that the
suit for mandatory injunction against the licensee is
maintainable. on these findings he allowed the appeal and
decreed the suit directing the respondent to deliver vacant
possession of the shed in dispute to the appellant. in the second appeal the respondent filed an
application for receiving as additional evidence a sale-deed
dated 27.8 1979 whereby he claimed to have purchased the
entire property from its original owner. the high companyrt
called for finding in that regard from the trial companyrt which
thereupon found that the respondent has purchased the
property from its original owner by that sale deed. it was
contended in the high companyrt that in view of that sales it
is number open to the appellant to companytend that the respondent
in whom the title to the property has companye to be vested
after the date of the suit is liable to be ejected on the
revocation of the license granted to him by the appellant. on the other hand it was companytended for the appellant that
the fact that the respondent had purchased the property from
its owner subsequent to the grant of the licence in favour
of the respondent does number make any difference to the
appellants claim for recovering possession of the suit shed
and that it is obligatory on the respondent to first
surrender possession of the property after the licence had
been revoked and hen seek his remedy according to law on
the basis of the title claimed by him. it was further
contended that in view of the provisions ofs. 13 of the east
punjab rent restrictions act 1949 the appellant who was
the tenant of the property under its original owner cannumber
be dispossessed except in accordance with the provisions of
that act. the learned single judge of the high companyrt rejected the
appellants companytention that his rights under the lease by
the original owner cannumber be interfered with the provisions
of the said act observing that from the decisions referred
to by him h
and the provisions of s. 116 of the indian evidence act it
is clear that after the companymencement of the tenancy or the
licence a tenant or licensee who has purchased the property
from its original owner cannumber be evicted from that property
on the lease or licence. he rejected the companytention that the
present suit for a mandatory injunction directing the
respondent to vacate and hand over possession of the suit
shed is in effect a suit for possession and he allowed the
second appeal and set aside the judgment and decree of the
learned additional district judge and restored the trial
courts decree dismissing the suit. number the parties are bound by the following factual
findings recorded by the learned additional district judge
in the first appeal namely 1 that the appellant who had
become the sole proprietor of m s jain motors in 1967
through at the time of the lease of the property by the
original owner lt. company. sadan singh to m s jain motors in
1963 he was only one of its partners was the lessee of the
property 2 that the respondent had become a licensee of
the suit shed under the appellant when the appellant was in
possession of the whole of the demised premises including
the suit shed as tenant under the original owner 3 that
the licence in favour of the respondent had been revoked
before the institution of the present suit and 4 that
subsequent to the decision in the first appeal on 7.12.1978
the respondent had purchased the entire property from the
original owner by a sale-deed dated 27.8.1979. in these
circumstances there is numbermerger of the lease of the whole
property by its original owner in favour of the appellant by
reason of the sale of the entire property by the original
owner in favour of the respondent or of the licence given
by the appellant to the respondent which had been revoked
prior to the date of the suit. the lease in favour of the
appellant companytinues and it is number disputed that under the
act of 1949 referred to above even the tenant of a vacant
land in patiala town cannumber be evicted therefrom except in
accordance with the provisions of that act. in k.k. verma
anr. v. union of india anr. 13 chagla c.j. presiding
over a division bench has observed that in india a landlord
can only eject his erstwhile tenant by recourse to law and
by obtaining a decree for ejectment. in milkha singh v. dvna
ors. 2 it has
air 1954 bombay 358
air 1964 jammu kashmir 99.
been observed that the principle once a licensee always a
licensee would apply to all kinds of licences and that it
cannumber be said that the moment the licence it terminated
the licensee-s possession becomes that of a trespasser. in
that case one of us murtaza fazal ali j. as he then was
speaking for the division bench has observed
after the termination of licence the licensee is
under clear obligation to surrender his possession to
the owner and if he fails to do so we do number see any
reason why the licensee cannumber be companypelled to
discharge this obligation by way of a mandatory
injunction under s. 55 of the specific relief act. we
might further mention that even under english law a
suit for injunction to evict a licensee has always been
held to be maintainable. where a licensor approaches the companyrt for an
injunction within a reasonable time after the licence
is terminated he is entitled to the injunction. on the
other hand if the licensor causes huge delay the companyrt
may refuse the discretion to grant an injunction on the
ground that the licensor had number been diligent and is
that case the licensor will have to bring a suit for
possession which will be governed by s.7 v of the
court fees act. in the present case it has number been shown to us that
the appellant had companye to the companyrt with the suit for
mandatory injunction after any companysiderable delay which will
disentitle him to the discretionary relief. even if there
was some delay we think that in a case of this kind attempt
should be made to avoid multiplicity of suits and the
licensor should number be driven to file anumberher round of suit
with all the attendant delay trouble and expense. 1 he suit
is in effect one for possession though companyched in the form
of a suit for mandatory injunction as what would be given to
the plaintiff in case he succeeds is possession of the
property to which he may be found to be entitled. therefore
we are of the opinion that the appellant should number be
denied relief merely because he had companyched the plaint in
the form of a suit for mandatory injunction. the respondent was a licensee and he must be deemed to
be always a licensee. it is number open to him? during the
subsistence of
the licence or in the suit for recovery of possession of the
property instituted after the revocation of the licence to
set up title to the property in himself or anyone else. it
is his plain duty to surrender possession of the property as
a licence and seek his remedy separately in case he has
acquired title to property subsequently through some other
person. he need number do so if he has acquired title to the
property from the licensor or from some one else lawfully
claiming under him in which case there would be clear
merger. | 1 | test | 1985_71.txt | 1 |