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Appeals Nos. 181 to 184 of 1960. Appeals. from the judgment and order dated March 16, 1955, of the Madras High Court in Case Referred No. 43 of 1950. A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellants. Hardayal Hardy and D. Gupta, for the respondent. 1960, December 14. The Judgment of the Court was delivered by SHAH, J. These appeals relate to Excess Profits Tax liability of the appellants in respect of two chargeable accounting periods April 1. 1944, to March 31., 1945, and April 1, 1945, to March 31, 1946. The appellants were under an agreement dated July 11, 1945, appointed managing agents for 20 years of the Coimbatore Spinning and Weaving Co, 273 Ltd. hereinafter referred to as the company. Prior to October 1, 1944, the appellants were the Managing Agents of the Coimbatore Mills Agency Ltd hereinafter referred to as the Agency Company who were the Managing Agents of the company. The year of account of the appellants ended on March 31, of the company on June 30, and of the Agency Company on September 30. Under the agreement by which the appellants were appointed 'managing agents, the following remuneration was provided: 1. Office allowance at Rs. 1,500 per mensem; 2. Commission at 1% on all purchases of cotton and stores and 21/2 on all capital expenditure incurred from time to time; and 3. Commission at 10% on the net profits of the company due and payable yearly immediately after the accounts of the company were closed. For the assessment year 1945 46, the appellants submitted a return of their income inclusive of the following items: 1. Remuneration from the Agency Company Rs. 36,000. Commission at 10% on profits from the Agency Company upto 30 9 1944 Rs. 37,953. Remuneration from company from 1 10 1944 to 31 3 1945 Rs. 9,000. Commission at 1% on cotton and stores purchased during this period Rs. 21,704. This return was accepted by the Additional Income tax Officer, Coimbatore I & II Circles, and the appellants were assessed to income tax. Excess Profits Tax was also worked out on the same basis for the chargeable accounting period ending March 31, 1945. For the assessment year 1946 47, the appellants submitted a return of their income which included the following items: 1. Remuneration from the company for one year from 1 4 1945 Rs. 18,000. Commission at 10% on the profits of the company paid in December 1945 (1 10 1944 to 30 6 1945) Rs. 1,90,889. 35 274 3. Commission at 1% on purchases of cotton and stores from 1 4 1945 to 30 6 1945 Rs. 16,777. Commission at 2 12/ %on capital expenditure from 1 10 1944 to 30 6 1945 Rs. 1,690. The Tax Officer in charge of the assessment directed that the commission on purchases and capital expenditure be taken into account for the year April 1, 1945, to March 31, 1946, and that the receipts be computed accordingly. The amount of Rs. 1,127 attributable out of item 4 was accordingly taken into the account of the previous year after reopening the assessment under section 34 of the Income tax Act, and the commission on the profits of the company was apportioned between the period October 1, 1944, to March 31, 1945, and April 1, 1945, to June 30, 1945, by the application of r. 9 of Sch. 1 of the Excess Profits Tax Act. The Tax Officer also determined the proportionate commission payable under items 3 and 4, for the period ending March 31, 1946, and as a result of the apportionment, the liability of the appel lants, original and revised, for income tax and Excess Profits Tax for the assessment year 1945 46 and chargeable accounting period April 1, 1944, to March 31, 1945, stood as follows: Original assessment of income taxRs. 1,04,654. Excess Profits TaxRs. 45,292. Revised figures Income tax (loss) Rs. 36,182. Excess Profits TaxRs. 1,41,962 11 0. For the assessment year 1946 47 and chargeable accounting period April 1, 1945, to March 31, 1946, tax liability was computed at: Income tax Rs. 1,66,271. Excess Profits Tax Rs. 1,13,163 5 0. The orders of assessmentfor income tax and Excess Profits Tax were confirmed by the Appellate Assistant Commissioner and the Income tax Appellate Tribunal. On the applications of the appellants 275 for reference under section 66(1) of the Income tax Act and section 21 of the Excess Profits Tax Act, the Tribunal drew up a statement of the case and submitted the following four questions to the High Court of Judicature at Madras: 1.Whether on the facts and in the circumstances of the case, the Income tax Officer/Excess Profits Tax Officer was right in taking action under section 34 and 15 of the Income tax and the Excess Profits Tax Act ? 2.Whether on the facts and in the circumstances of this case, the provisions of r. 9, section 1, were properly applied ? 3.Whether on the facts and in the circumstances of the case, the Income tax Officer/Excess Profits Tax Officer was correct in including the proportionate commission income of Rs. 1,127 for income tax assessment 1945 46 and Rs. 1,43,163 plus Rs. 1,127 for Excess Profits Tax assessment Tax for the chargeable accounting period ending 31st March 1945, and 4.Whether on the facts and in the circumstances of the case, the proportionate commission of Rs. 37,129 and Rs. 2,299 were rightly assessed for the assessment year 1946 47 ? The High Court answered all the questions against the appellants and in favour of the Department. Against the order passed by the High Court, these appeals have been preferred with certificate granted under section 66A(2) of the Income Tax Act read with section 21 of the Excess Profits Tax Act. Two questions were canvassed in these appeals: 1.Whether it was open to the Taxing Officer to re open the assessment for 1945 46; and 2.Whether the commission received by the appellants was liable to be apportioned under r. 9 of Sch. 1 of the Excess Profits Tax Act. The appellants maintained their books of account on cash basis and commission received from the company was credited after the accounts of the company were closed. The amounts received by the appellants from the company were included in their return and assessment for the year 1945 46 was completed 276 for the purposes of the Excess Profits Tax by the Tax Officer without apportionment appropriate to the chargeable accounting periods. In so doing, the Tax Officer committed an error. He overlooked the fact that the chargeable accounting period for the as assessment of Excess Profits Tax and the year of account of the company did not tally. Under section 15 of the Excess Profits Tax Act, if the Tax Officer discovers, in consequence of definite information which has come into his possession that profits of any chargeable accounting period chargeable to excess profits tax have escaped assessment, or have been under assessed, he may serve on the person liable to pay such tax a notice containing all or any of the requirements which may be included in a notice under section 13 and may proceed to assess or reassess the profits. The provision is substantially similar to section 34(1) of the Income tax Act before it was amended in the year 1948. It is manifest that by the assessment of income made on the assumption that the chargeable accounting period and the accounting period of the company tallied, there resulted under assessment in the computation of tax liability for Excess Profits Tax, and it was open to the Tax Officer to take action under section 15 of the Excess Profits Tax Act. Determination of the second question depends upon r. 9, Sob. 1, of the Excess Profits Tax Act. By section 2(19) of the Excess Profits Tax Act, the expression " profits " means profits as determined in accordance with Sch. 1. That schedule sets out rules for computation of profits for the purpose of the Excess Profits Tax Act; and by r. 9, it is provided in so far as it is material that: " Where the performance of a contract extends beyond the accounting period, there shall (unless the Excess Profits Tax Officer, owing to any special circumstances, otherwise directs) be attributed to the accounting period such proportion of the entire profits or loss which has resulted, or which it is estimated will result, from the complete performance of the contract as is properly attributable to the 277 accounting period, having regard to the extent to which the contract was performed therein. " The performance of the contract of managing agency extended beyond the period of account of the company which was July 1, 1945, to June 30, 1946: it covered parts of two accounting periods. The Tax Officer was therefore obliged to apportion to the, chargeable accounting periods the entire profits resulting from the complete performance of the contract in proportions properly attributable to the accounting periods and this, he proceeded to do. Counsel for the appellants contends that the contracts contemplated by r. 9 are those of the nature of engineering or works contracts and the like where execution of the contract involves a profit making operation de die in diem and not contracts where remuneration is payable at a certain time for services performed throughout the stipulated period. It is true that remuneration was paid to the appellants after the expiry of the year of account of the company ; but the contract was one the performance of which extended throughout the year of account of the company. The appellants were the managing agents of the company and they had to perform their duties as managing agents for the whole year. It is not disputed that the contract of agency for 20 years is to be regarded for assessment of excess profits tax as an annual contract. The performance of the contract unmistakably cut across the accounting period is also manifest. The remuneration for performance of the contract is not computed at a daily rate, but is computed on a percentage of the commission on the profits of the company for the whole year, but on that account, the contract is not one in which performance does not extend throughout the year of account. Normally in a managing agency contract, the managing agent may not suffer loss, but that does not rule out the application of r. 9 to managing agency contracts. The terms in which r. 9 is enacted are general: the rule is applicable to all contracts which are intended to be operative for a fixed period. If, for the performance of the entire contract, 278 remuneration is payable at rates stipulated, the profit earned out of that remuneration must be apportioned in the manner provided by r. 9 if the performance of the contract extends beyond the accounting period The judgment of this Court in E. D. Sassoon & Co., Ltd. vs The Commissioner of Income Tax, Bombay City(1) on which strong reliance was placed by the appellants has no application to this case. In that case, M/s. E. D. Sassoon & Co., Ltd. who were managing agents of three different companies transferred the managing agencies to three other companies on several dates during the accounting year. A question arose in the computation of income tax payable by M/s. E. D. Sassoon & Co., Ltd. whether the managing agency commission was liable to be apportioned between M/s. E. D. Sassoon & Co., Ltd. and their respective transferees in the proportion of the services rendered as managing agents for the respective periods of the accounting year. It was held by this court (Jagannadhadas, J., dissenting) that on a true interpretation of the managing agency agreements in each case, the contract of service between the companies and the managing agents was entire and indivisible and the remuneration or commission became due by the companies to the managing agents only on completion of definite periods of service and at stated intervals ; that complete perfor mance was a condition precedent to the recovery of wages or salary in respect thereof and the remuneration payable constituted a debt only at the end of each period of service completely performed, no remuneration or commission being payable to the managing agents for broken periods; that no income was earned by or accrued to M/s. E. D. Sassoon & Co., Ltd. and as the transfer of the agencies did not include any income which E. D. Sassoon & Co., Ltd. had earned, they were not liable to be taxed under the Income Tax Act. But that was a case dealing with liability of the assessees who did not receive any income and to whom no income had accrued to pay (1)[1955] 1 S.C. R. 313. 270 income tax on the amounts of remuneration paid to their transferees. The court was not called upon to apply to income received by the assessee the principle of apportionment under r. 9 of Sch. 1 of the Excess Profits Tax Act, or any provision similar thereto. It is r. 9 of Sch. I which attracts the principle of apportionment. The rule enunciated in M/s, E. D. Sassoon & Co. 's case (1) has therefore no application to this case, and the High Court was right in holding that the assessment made by the Excess Profits Tax Officer by apportionment of the commission income between the chargeable accounting periods was correct. The appeals therefore fail and are dismissed with costs. One hearing fee. Appeals dismissed.

Under an agreement dated July 11, 1945, the appellants were appointed managing agents of the Coimbatore Spinning and Weaving Co. Ltd., for 20 years, and certain remuneration was provided for them including 10% commission on the net profits of the company due and payable yearly immediately after the accounts of the company were closed and commissions on purchases and capital expenditure of the company. Prior to October 1, 1944, the appellants were the managing agents of the Coimbatore Mills Agency Ltd., who were the managing agents of the Coimbatore Spinning and Weaving Co. Ltd. The year of account of the appellants ended on March 31, of the company on June 30, and of the Agency Company on September 30. For the assessment year 1945 46 the appellants submitted a return of their income which included the stipulated remuneration and commissions. This return was accepted by the Income tax Officer, and Excess Profits Tax liability for the chargeable accounting period ending March 31, 1945, was also worked out on that basis. A return of income was submitted by the appellants for the assessment year 1946 47 which included commission for the period 1 4 45 to 30 6 45 on purchases of cotton and stores and on capital expenditure. The Tax Officer directed that the commission on purchases and capital expenditure be taken into account 272 for the year April 1, 1945, to March 31, 1946, and that the receipts be computed accordingly. The assessment for 1945 46 was then reopened under section 34 of the Income tax Act under section 15 of the Excess Profits Tax Act and as a result of apportionment made by the application of r. 9 of Sch. 1 of the Excess Profits Tax Act, the liability of the appellants for Income tax and Excess Profits 'fax was revised and fresh assessments were made. The orders of assessment were confirmed by the appellate authorities. Held, that as in the instant case the chargeable accounting period for the assessment of Excess Profits Tax and the year of account of the company did not tally, by the assessment of income made on the assumption that they did tally, there had resulted under assessment and it was open to the Tax Officer to take action under section 15 of the Excess Profits Tax Act. The Excess Profits Tax Officer acted properly in apportioning under r. 9 of Sch. 1 the commission received by the appellants. Rule 9 of Sch. 1 of the Excess Profits Tax Act is enacted in general terms and it is applicable to all contracts which are intended to be operative for fixed periods. If, for the performance of the entire contract, remuneration is payable at certain rates the profits earned out of that remuneration must be apportioned in the manner prescribed by 19 if the performance of the contact extends beyond the accounting period. E. D. Sassoon & Co., Ltd. vs The Commissioner of Income tax, Bombay City; , , distinguished.

The appellants who were manufacturers of cigarettes and tobacco in the State of Bihar contested the levy of sales tax on sales effected by them during the financial years 1949 5o and 1950 51 on the ground that as a direct result of every sale effected by them the goods concerned were delivered outside the State of Bihar and were, therefore, exempted from tax liability under article 286(i)(a) of the Constitution. Both the Superintendent of sales tax and the Deputy Commissioner of sales tax, Bihar, overruled the objection of the appellants, and following a previous ruling of the Board of Revenue of Bengal in a case known as the Bengal Timber Case (61 of 1952) held the appellants liable to pay the tax. The appellants paid the tax demanded but filed an application in revision to the Board of Revenue, claiming a constitutional exemption from tax on every sale effected by them as a result of which goods were delivered outside the State of Bihar whether the delivery was for consumption in the State of first delivery or not. The Board passed the following order on the revision petition. " As regards the admitted despatches of the goods outside the State after the 26th January, 1950, when the Constitution came into force, the learned lower court has been guided by the decision of the Board in the Bengal Timber Case (No. 61 of 1952). But this ruling of the Board stands superseded by the subsequent decision of the Supreme Court in the United Motors Case According to the decision of the Supreme Court, no tax could be levied on despatches to the places outside the state after the 26th January, 1950, and on this point the petitions are allowed, and the sales tax officer directed to recalculate the amount of tax payable by the assessee ". The appellants taking the above order to be in their favour claimed refund of the tax already paid by them and the sales tax authorities contested the position and claimed that they were bound to refund the tax only on those sales wherein the goods were delivered outside the State for consumption in the State of first delivery. The department thereafter sought clarification of the above order. The Board refused to clarify or explain its order and passed an order saying that " no further clarification was really required in view of the specific reference to the judgment of the Supreme Court in the United Motors Case ". Thereafter as the authorities still refused to refund the balance of the tax the appellants filed two applications in the High Court for the issue of a writ of mandamus to compel the refund. The High Court held that the Board 's decision that sales in which the goods were delivered outside the State for consumption, not in the State of first delivery but in other States were also exempted from tax, was wrong and that the appellants were not entitled to a writ of mandamus for enforcing a wrong order. On appeal by special leave, Held, that the proper construction of the Board 's orders was that the sales tax officer was directed to decide the relief that 108 should be given to the assessee on the officers ' interpretation of the decision of this Court in the United Motors Case. The Board did not determine the effect of that judgment and did not decide that every sale in which the goods were delivered outside the State of Bihar was exempted from liability to tax. The principle that a subordinate tribunal should not refuse to carry out the directions of a superior tribunal was therefore not applicable to the instant case. Bhopal Sugar Mills vs Commissioner of Income tax, [1961] 1 S.C.R. 474, held inapplicable. The United Motors Case merely decided that sales in which goods were delivered outside the State for consumption in the State of first delivery would fall under the Explanation to article 286(1) of the Constitution and would therefore be exempted from tax liability, but it did not deal with other sales in which the goods thus delivered were for consumption, not in the State of first delivery but in other states. Such sales would on the order of the Board of Revenue which was binding on the appellant be liable to tax in accordance with the previous decision of the Board of Revenue in the Bengal Timber Case. State of Bombay vs United Motors (India) Ltd. and Ors., ; , explained and applied. Board of Revenue of the State in the Bengal Timber Case, 61 of 1952, referred to.

The appellant, a firm of Surat, had a branch at Bangkok, to which it exported cloth, and the branch also made purchases locally and sold them. During the war the business of the branch had been in abeyance, but was re started after the termination of the hostilities. in its return for the assessment year 1949 50 the appellant did not include any profit of the branch, but stated that the books of account of branch were not available, and therefore its profits might now be assessed on an estimate basis subject to 561 action under s.34 or 35.The assessment was made on the basis of profit at 5 % on the export to the branch appearing in the Surat books. A similar estimate was made for year 1950 51. For the year 1951 52 also the business profits of the branch were not shown but the Income tax officerissued a notice to the assessee to produce the relevant accountsand books. The appellant excused itself by promising that in thefollowing year these accounts for the year 1950 would be produced. Thereupon the Income tax Officer made an estimate of the sales of the branch and of the net profits at 5 % thereon, amounting to Rs. 37,500/ , and the same day he issued a notice to show cause why a penalty for concealment of the particulars of the income of 1951 52 should not be levied. Subsequently, the Income tax Officer imposed a penalty of Rs. 20,000/ on it as its explanation was not acceptable. In the meantime assessment proceedings for the year 1952 53 had commenced and the appellant adopted a similar attitude. The Income tax Officer was insistent and, therefore, appellants had to produce the accounts and books of the branch, from which it appeared that for the year 1951 52 the appellant had made a profit of Rs. 1,25,520/ . The Income tax Officer issued a further notice to the appellant to show cause why penalty should not be levied for deliberately concealing income for the year 1951 52. Pursuant to this notice the Income tax Officer passed another order imposing a penalty of Rs. 68,501/ . The appellant 's appeal to the Appellate Assistant Commissioner against both the orders of penalty was rejected. On appeal, the Tribunal cancelled the first order of penalty but confirmed the second one. This hereafter, the appellant obtained a reference to the High Court on the question: "Whether the levy of Rs. 68,501/ as penalty for concealment in the original return for the assessment year 1951 52 is legal?" The High Court answered the question in the affirmative. On the appeal by special leave it was urged that the second order for penalty was illegal because there was one concealment and in respect of that a penalty of Rs. 20,000/ had earlier been imposed, that there was no jurisdiction to make the second order of penalty while the first order stood and for that reason the second order must be treated as a nullity; and that the fact that the first order was subsequently cancelled by the Tribunal would not set the second order on its feet for it was from the beginning a nullity as having been made when the first order stood. Held: (i) The contentions must be rejected. The Income tax Officer had full jurisdiction to make the second order and he would not lose that jurisdiction because he had omitted to recall the earlier order, though it may be that the two orders in respect of the same concealment could not be enforced simultaneously or stand together. When the Income tax Officer ascertained the true facts and realised that a much higher penalty could have been imposed, he was entitled to recall the earlier order and pass another order imposing the higher penalty. If he had omitted to recall the earlier order that would not make the second order invalid, 1 SCI/64 36 562 (ii)In the present case the earlier order having been cancelled and no objection to the cancellation having been taken, there is only one order, which is a legal order. C.V. Govindarajulu Iyer vs Commissioner of Income tax, Madras, , distinguished.

The two questions for determination in this appeal were, (1) whether a settlement under section 8A of the Taxation of Income (Investigation Commission) Act, 1947 (30 Of 1947) made after the commencement of the Constitution was constitutionally valid and (2) whether the waiver of a fundamental right was permissible under the Constitution. The appellant 's case was on July 22, 1948, referred by the Central Government under section 5(1) of the Act to the Investigation Commission. for investigation and report. The Commission directed the authorised official under section 6 of the Act to examine the appellant 's accounts. He submitted his final report by the end of 1953. The Commission considered the report heard the assessee and came to the conclusion that Rs. 4,47,915 had escaped assessment. Thereupon the appellant on May 20, 1954, applied to the Commission for a settlement of his case under section 8A of the Act, agreeing to pay Rs. 3,50,000 by way of tax and penalty at the concessional rate. The Commission reported to the Central Government approving of the settlement, the Central Government accepted it and it was recorded by the Commission. The Central Government directed the recovery of the said amount under section 8A(2) of the Act. The appellant was permitted to make payments by monthly instalments of Rs. 5,000 and the total amount thus paid up to September 8, 1957, aggregated to Rs. 1,28,000. In the meantime the Income Tax Officer issued a certificate and certain properties of the appellant were attached. Relying on the decisions of this Court in Suraj Mall Mohta and Co. vs A. V. Visvanatha Sastri, ; and M. Ct. Muthiah vs The Commissioner of Income tax, Madras, ; , the appellant applied to the Commissioner of Income tax challenging the validity of the settlement made under section 8A of the Act on the ground that section 5(1) Of the Act on which it was founded had been declared void by this Court, and claimed that his properties might be released from attachment and the amount paid under the settlement might be refunded to him. , On January 29, 1958, the Commissioner of Income Tax sent a reply to the appellant maintaining that the settlement was valid and 529 that the appellant was bound thereunder to pay up the arrears of instalments and requesting him to continue to pay in future. Against this decision of the Commissioner of Income Tax the. appellant came up to the Supreme Court by special leave. It was contended on behalf of the respondent that the Act laid down two distinct and separate procedures, one for investigation and the other for settlement and it was the former alone and not the D, latter that was affected by the decisions of this Court. and that the appellant by voluntarily entering into the settlement had waived his fundamental right founded on article 14 of the Constitution. Held (Per Curiam), that both the contentions must fail. It was not correct to say that the Taxation of Income (In vestigation Commission) Act, 1947, laid down two different procedures, one for investigation and assessment under section 8(2) of the Act and another for settlement under section 8A of the Act and assessment in terms of such settlement and that while the decision of this Court in M. Ct. Muthiah vs The Commissioner of Incometax, Madras, declaring section 5(1) of the Act to be discriminatory and therefore void, affected only the former procedure and not the latter. The Act laid down but one procedure and in entertaining a proposal for settlement as in the investigation itself the Commission exercised the same jurisdiction, and powers and followed the one and the same procedure as laid down by sections 5, 6 and 7 Of the Act. Since the settlement in the instant case was no exception to that rule, it was covered by the decision and must be held to be violative of article 14 Of the Constitution. M. Ct. Muthiah vs The Commissioner of Income tax, Madras, ; , applied. The observations made in the majority judgment of this Court in Syed Qasim Razvi vs The State of Hyderabad, [1953] S.C.R. 589, must be kept strictly confined to the special facts of that case and had no application to the facts of the present case. Syed Qasim Razvi vs The State of Hyderabad, [1953] S.C.R. 589, held inapplicable. Per Das, C. J., and Kapur J. There could be no waiver of the fundamental right founded on article 14 Of the Constitution and it was not correct to contend that the appellant had by entering into the settlement under section 8A of the Act, waived his fundamental right under that Article. Article 14 was founded on a sound public policy recognised and valued all over the civilised world, its language was the language of command and it imposed an obligation on the State of which no person could, by his act or conduct, relieve it. As it was not strictly necessary for the disposal of this case, the question whether any other fundamental right could be waived need not be considered in this connection. Laxamanappa Hanumantappa jamkhandi vs The Union of India; , ; Dewan Bahadur Seth Gopal Das Moht 67 530 vs The Union of India, [1955] 1 S.C.R.773; Baburao Narayanrao Sanas vs The Union Of India, [1954] 26 I.T.R. 725; Subedar vs State, A.I.R. 1957 All. 396 and Pakhar Singh vs The State, A.I.R. 1958 Punj. 294, distinguished and held inapplicable. Per Bhagwati and gubba Rao, jj. There could be no waiver '.,not only of the fundamental right enshrined in article 14 but also of any other fundamental right guaranteed by Part III of the Constitution. The Constitution made no distinction between fundamental rights enacted for the benefit of the individual and those enacted in the public interest or on grounds of the public policy. There could, therefore, be no justification for importing American notions or authority of decided cases to whittle down the transcendental character of those rights, conceived in public interest and subject only to such limitations as the Constitution had itself thought fit to impose. Article 13(2) was in terms a constitutional mandate to the State in respect of all the fundamental rights enacted in Part III of the Constitution and no citizen could by waiver of any one of them relieve the State of the solemn obligation that lay on it. The view expressed by Mahajan, C. J., in Behram Khurshed Pesikaka vs The State of Bombay, , correctly laid down the law on the point. Since the arguments in the instant case had covered the entire field of fundamental rights, there was no reason why the answer should be confined to article 14 alone. Behram Khurshed Pesikaka vs The State of Bombay, ; State of Travancore Cochin vs The Bombay Co., Ltd., and The State of Bombay vs R. M. D. Chamarbaugwala; , , referred to. Per section K. Das, J. It seems clear that article 13 itself re cognises the distinction between absence of legislative power which will make the law made by an incompetent legislature wholly void, and exercise of legislative power in contravention of a restriction or check on such power, which will make the law void to the extent of the inconsistency or contravention; therefore the mere use of the word " void " in article 13 does not necessarily militate against the application of the doctrine of waiver in respect of the provisions contained in Part III of the Constitution. Behram Khurshed Pesikaka vs The State of Bombay, , considered. Bhikaji Narain Dhakyas vs The State of Madhya Pradesh, ; ; M. Ct. Muthiah vs The Commissioner of Income tax, Madras, ; and The State of Bombay vs R.M.D. Chamarbaugwala, ; , referred to. There was nothing in the two preambles to the Indian and the American Constitutions that could make the doctrine of waiver applicable to the one and not to the other; since the doctrine 531 applied to the constitutional rights under the American Constitution, there is no reason why it should not apply to the fundamental rights under the Indian Constitution. Case law considered. But it must be made clear that there is no absolute rule, or one formulated in the abstract, as to the applicability of that doctrine to fundamental rights and such applicability must depend on (1) the nature of fundamental right to which it is sought to be applied and (2) the foundation on the basis of which the plea is raised. The true test must be whether the fundamental right is one primarily meant for the benefit of individuals or for the benefit of the general public. Where, therefore, the Constitution vested the right in the individual, primarily intending to benefit him and such right did not impinge on the rights of others, there could be a waiver of such right provided it was not forbidden by law or did not contravene public policy or public morals. As in the instant case the respondents who had raised the plea, had failed to prove the necessary facts on which it could be sustained, the plea of waiver must fail. Per Subba Rao, J. Apart from the question as to whether there could be a waiver in respect of a fundamental right, section 5(1) of the Taxation of Income (Investigation Commission) Act, 1947, having been declared void by this Court in M. Ct. Muthiah vs The Commissioner of Income tax, Madras, as being violative of the fundamental right founded on Art ' 14 Of the Constitution and such decision being binding on all courts in India, the Commissioner of Income tax had no jurisdiction to continue the proceedings against the appellant under that Act and the appellant could not by a waiver of his right confer jurisdiction on him. No distinction could be made under article 13(1) of the Con stitution between the constitutional incompetency of a legislature and constitutional limitation placed on its power of legislation, for a statute declared void on either ground would continue to be so, so long as the inconsistency continued. As the inconsistency of section 5(1) of the Act with article 14 continued, it must continue to be void. Keshavan Madhava Menon vs The State of Bombay, [1951] S.C.R. 228; Behram Khurshed Pesihaka vs State of Bombay, and Bhikaji Narain Dhakras vs State of Madhya Pradesh, ; , referred to.

The respondent, a firm carrying on tannery business, used to take out licences under the provisions of the Madras General Sales Tax Act, 1939, but did not renew the licence for the assessment year, 952 1953, and was assessed to sales tax on the sale value of tanned hides and skins during the year. It challenged the validity of the order of assessment by filing a petition before the High Court under article 226 of the Constitution of India, on the grounds that under section 5(vi) of the Act the liability to pay sales tax in respect of hides and skins could only be at a single point, that r. 16(5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, which limited the operation of this mode of taxation to licensed dealers was ultra vires as it contravened section 5(vi) and had been so held in V. M. Syed Mohammed & Co. vs The State of Madras, ; , and that section 6A was not applicable to the case of a dealer which did not take out a licence. Held, that section 3 of the Madras General Sales Tax Act, 1939, envisages multipoint taxation on the total turnover of a dealer, 149 but under section 5 an exception is made in the case of sale transactions of certain specified goods, providing for single point taxation subject to certain restrictions and conditions which include conditions as to licences, and if the conditions and restrictions are not complied with, under section 6A the tax is to be levied under section 3 as if the provisions of section 5 did not apply to such sales. Accor dingly, r. 16 (5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, is not ultra vires. Syed Mohamed & Company vs State of Andhra, [1956] 7 S.T.C. 465 and State of Mysore vs Sarvatula & Co., [1957] 9 S.T.C. 593, approved. V. M. Syed Mohammed & Company vs The State of Madras, , explained.

On the ground that the dealers have not charged and collected Central Sales Tax during the period 1st April, 1969 to 9th June, 1969 the Commercial Tax Officer, allowed exemption under section 10 of the Central Sales Tax Act in respect of certain turn over of the appellant which included the price realised on account of inter state sales. In respect of a second set of transactions which involved the purchase value of cotton sold during the year through inter state sales the Commercial Tax Officer held that the appellant was entitled to exemption under the proviso to section 6 of the A.P. General Sales Tax Act. In 1972 section 15(b) of the Central Act was amended with retrospective effect from 1st October, 1958 and in 1974 section 6 of the State Act was amended with retrospective effect from the same date. The Deputy Commissioner of Commercial Taxes revised the assessment order of the Commercial Tax Officer passed under the State Act on the ground that in view of the provisions of section 6 as amended in 1974 the appellant was not entitled to any exemption during the above period. The Sales Tax Appellate Tribunal dismissed the appellant 's appeal on the view that section 6 of the State Act did not talk of any exemption either before or after its amendment in 1974. The High Court dismissed the appellant 's appeal holding that the exemption granted by the C.T.O. was patently wrong. Dismissing the Appeal, ^ HELD: 1. Section 10 of the Central Act which makes no reference to any tax leviable under a State Act can be of no assistance to the appellant. Granting that the appellant did not collect any tax under the Central Act during the period in question on the ground that no such tax could have been levied or collected so that it becomes fully entitled to the benefit of the exemption enacted by the section, that would only mean that central sales tax cannot be charged from it in respect of sales covered by the section. No demand had been made from it for any tax leviable under the Central Act in respect of such sales and the appellant could not derive any benefit from section 10 of the Central Act in the matter of its assessment under the State Act. [1033G H] 2. In so far as the assessment under the State Act is concerned all that the C.T.O. could have meant by granting exemption was that the appellant became liable to pay a tax under the opening para of the section; but that since the appellant was also entitled to a refund of such tax the same was taken to have been paid by and refunded to it. The assessment order made 1029 under the proviso to section 6 of the State Act and section 15 (b) of the Central Act as they stood then was unexceptionable. [1034E F] 3. Under section 6 as amended the liability to tax remained unchanged but the entitlement to refund was abolished an was substituted by a right to reimbursement of the tax which arose only if the concerned goods were later on sold in the course of inter state trade under the Central Act and tax under that Act was paid in respect thereof. Such reimbursement would not be available merely because the goods in question had been sold in the course of inter state trade or commerce when they were not subjected to tax under the Central Act. No such tax was paid. The proviso to section 6 as amended in 1974 can be of no assistance to the appellant. [1035A B] 4. The language of clause (b) of section 15 of the Central Act is the same as that of the amended proviso to section 6 of the State Act. It clearly means that the tax under the State Act would be reimbursible only to a dealer who has paid tax under the State Act in respect of the sale of the goods in question in the course of inter state trade or commerce. [1035C D] 5. The argument that the Deputy Commissioner had no power to cancel the order of refund is fallacious. He has done nothing more than to revise an order of the C.T.O. which has been varied only in so far as it was not in conformity with the law deemed to have been prevailing on the date of the assessment by virtue of the retrospective amendment of section 6 of the State Act. The Deputy Commissioner had not only the power but was duty bound to strike down the order of refund as being illegal. [1035F G] 6. Rule 27A can be of little help to the appellant inasmuch as even if it can be construed as laying down something in its favour, the rule cannot override the provisions of the Act. [1036A] Daita Suryanarayana and Company vs State of Andhra Pradesh 39 S.T.C. 500 approved.

The appellant was registered as a dealer under the various Sales Tax Acts in force in Bombay from time to time i.e. Bombay Acts 5 of 1946, 3 of 1953 and 51 of 1959. In the course of its assessments to sales tax for the periods from 1st April, 1948 to 31st March, 1950, and from 1st April 1950 to 31st March, 1951, the appellant claimed exemption from tax, inter alia, in respect of certain despatches of goods from its head office in Bombay to its branches in other States. The Sales Tax Officer rejected these claims but, in appeal, the Assistant Collector accepted the claim in respect of the despatches to various branches though he rejected all other claims for exemption. He also directed a refund of the excess 'tax collected from the appellants. While revision petitions filed by the appellant against these orders were pending, a notice was issued to him on January 7, 1963 by the Deputy Commissioner of Sales Tax in Form XXIV under section 31 of the Bombay Sales Tax Act, 1953, intimating the appellant that he proposed to revise suo motu the orders passed by the Assistant Collector in so far as he had allowed deduction in respect of the entire goods despatched to the appellants ' branches outside Maharashtra because, in so doing, he had overlooked certain provisions of law which were specified in the notice. Tile appellant filed a petition under article 226 of the Institution seeking to quash the notice dated 7th January, 1963 but his petition was dismissed by the High Court. In the appeal to this Court it was contended on behalf of the appellant, inter alia (i) that in exercise of the revisional powers, the Deputy Commissioner, whether acting under the Sales Tax Act of 1946, or of 1953, or of 1959, could only proceed to take action on the basis of the material already present on the record and was not entitled to act on conjecture or to institute any enquiry so as to include additional material nor to judge the correctness of the order sought to be revised; (ii) that the notice in question was issued on 7th January, 1963, when the Act of 1959 had already come into force and the Act of 1953 had been repealed; so that any revisional jurisdiction could only be exercised by the Deputy Commissioner under the Act of 1959 and not under the Act of 1953 , as the power under section 57 of the Act of 1959 could only be exercised within five years from the date of the order sought to be revised; the notice issued by the Deputy Commissioner was time barred; and (iii) that the proceedings to be instituted were barred by time, because limitation of a reasonable time; within which the revisional Powers are to be exercised must be implied in the statute itself. 493 HELD : The proceedings initiated by the Deputy Commissioner of Sales Tax against the appellant were not incompetent and the High Court was right in refusing the writ sought by the appellant. (i) Whenever a power is conferred on an authority to revise an order, it is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as it may think fit in the circumstances of the particular case. The proceedings for revision, if started suo motu, must not be based on a mere conjecture and there should be some ground for invoking the revisional powers. Once these powers are invoked, the actual interference must be based on sufficient grounds and, if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding or directing a further enquiry and thereafter admitting additional material. [496 A C] The State of Kerala vs K. M. Cheria Ahdulla and Company, ; , explained and followed. State of Andhra Pradesh vs T. G. Lakshmnaiah Setty & Sons, 12 S.T.C. 663; disapproves. In the present case,. the notice issued by the Deputy Commissioner, on the face of it, disclosed the reasons which led him to take proceedings for exercising his revisional powers suo motu, and it could not be said on those facts that he was acting merely on conjecture. There was no reason to think that, when proceeding with his inquiry, he would not keep within the limitations indicated by this Court in K. M. Cheria Abdullas case. (ii) The effect of section 77(1) (a) of the Act of 1959 is to continue in force the Act of 1953 as well as: the Act of 1946 to the extent to which they were in force when the Act of 1959 came into force for the purposes of levy, assessment, reassessment and collection of sales tax. Fur thermore, by virtue of section 7(e) of the Bombay General Clauses Act, 1904, which was made applicable to the repeal of the Act of 1953 by section 77(3) of the 1959 Act, any legal proceeding in respect of levy, imposition or recovery of tax is to continue and any fresh investigation, legal proceeding or remedy could be instituted as if there had been no repeal by the Act of 1959. Consequently, the repeal of the Act of 1953 did not in any way affect the power of the Deputy Commissioner to institute proceedings for revision suo motu against the appellate order of the Assistant Collector which had been Passed in exercise of his power under the Act of 1946. [499 C 500 B] Although the Deputy Commissioner, in seeking to exercise revisional powers should have proceeded under section 22 of the Act of 1946 and not under section 31 of the 1953 Act, this fact was immaterial as the provisions of the two Sections were similar. [500 D E] (iii) Section 22 of the Act of 1946 and section 31 of the Act of 1953 do not lay down any period of limitation for the exercise of the power of revision by a Deputy Commissioner suo motu and no such limitation could be read in the two Acts. [500 G] The State of Orissa vs Debaki Debi and Others, 15 S.T.C. 153. Commissioner of Income tax, Bombay City 1 vs Narsee Nagsee & Co., , Manordas Kalidas vs V. V. Tatke, 11 S.T.C, 87. Disesar House vs State of Bombay, 9 S.T.C. 654, distinguished. 494 Maharaj Kumar Kamal Singh vs C.I.T., Bihar and Orissa, , referred to.

The respondent mills, a registered dealer under the Bihar Sales Tax Act, 1947 (Act 111 of 1947), was carrying on business of manufacture and sale of gunny bags, hessian and other jute products at Katihar. During the period April 1, 1950, to March 31, 1951, it sold and despatched its wares worth about Rs. 92,24,386 1 6 to dealers outside the State and realised a sum of Rs. 2,11,222 9 6 as sales tax from them. In assessing the sales tax payable by the said respondent for the relevant period the Superintendent of Sales Tax, Purnea, held that the said amount of sales tax had been realised in contravention of section 14A of the Act read with r. 19 of the Bihar Sales Tax Rules, and directed its forfeiture under the proviso to that section. The respondent challenged the validity of the said order under articles 226 and 227 of the Constitution. The High Court held that the proviso to section 14A of the Act was ultra vires the State Legislature as it violated articles 20(1) and 31(2) of the Constitution and set aside the order of forfeiture and quashed the proceedings under section 14A of the Act. The State of Bihar appealed to this Court. It was urged by way of preliminary objection on behalf of the respondent that since the proviso to section 14A of the Act had no application to the facts of the case, there was no occasion to decide its constitutional validity. The contention of the appellint was that the proviso did apply to the respondent inasmuch 332 as he had contravened the conditions and restrictions imposed by the proviso to r. 19. The question for determination, therefore, was whether the said respondent could be said to have realised any amount by way of tax in respect of such part of its turn over as was allowed to be deducted from his gross turn over for the determination of his taxable turn over under the Act or the rules, as contemplated by the later part of the said proviso. Held, that the preliminary objection must prevail. Held, further, that before the penalty of forfeiture could be imposed upon a dealer under the proviso to section 14A of the Bihar Sales tax Act, 1947, it had to be shown that he had acted contrary to the conditions and restrictions prescribed by the Rules and it was not enough to show that the collection of the sales tax made by him was otherwise illegal or improper. The contravention of the statutory provisions contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone could form the basis of the imposition of the penalty of forfeiture prescribed by the said proviso. With the insertion of section 33 into the Act with retrospective operation, prohibiting the imposition of the tax on sales taking place outside the State and in view of the decision of this Court in State of Bombaay vs The United Motors (India) Ltd. ; , the proviso to r. 19 must be construed on the basis that the sales in question were outside the scope of the Act and no tax could be imposed on them. It could not, therefore, be said that that part of the respondent 's turnover which was in question was an allowable deduction within the meaning of the said proviso. Such allowable deductions as are contemplated by the proviso are clearly based on the provisions of sections 6, 7 and 8 of the Act as is quite clear from the Explanation to section 5 of the Act. State of Bombay & Another vs The United Motors (India) Ltd. An allowable deduction under the said proviso was not the same thing as exclusion of a part of the turn over on the basis of section 33(1)(a)(1) of the Act. It stands on an entirely different footing. Transactions which fall within the said section are in substance outside the Act and no tax can be imposed on them. The transaction in question did not, therefore, fall within the proviso to r.19 and the proviso to section 14A was not attracted and the order of forfeiture passed against the respondent was unjustified and illegal.

Appeal No. 73 of 1950. Appeal from the Judgment and Decree dated the 26th January, 1944, of the High Court of Judicature at Patna (Fazl Ali C. J. and Chatterji J.) in Appeal from Original Decree No. 4 of 1941, arising out of Judgment and Decree dated the 20th September, 1940, of the Court of the Additional Subordinate Judge of Hazaribagh in Title Suit No. 45 of 1939. section N. Mukherjee for the appellant. Gangacharan Mukherjee and A. N. Sinha for the respondents. October 23. The judgment of the Court was delivered by BHAGWATI J, 110 BHAGWATI J. The judgment of the Court was delivered by BHAGWATI J. 110 BHAGWATI J. The question that arises for our consideration in this appeal is whether prior to the enactment of section 65 A of the Transfer of Property Act in 1929 a mortgagor in possession had the power to grant a permanent lease of the mortgaged property so as to bind the mortgagee. One Raja Nilkanth Narain Singh was the owner of Gadi Sirampur and he executed the 1st August, 1914, a simple mortgage of Gadi Sirampur in favour of the Chota Nagpur Banking Association Limited. In 1920 the Bank filed a suit against his son Wazir Narain Singh to enforce the mortgage security and obtained a mortgage decree the 29th November, 1921. The Bank purchased a third share of Gadi Sirampur in execution of that decree the 28th October, 1922. Proceedings were taken to set aside this sale. During the pendency of these proceedings it appears that the 5th November, 1925, Wazir Narain Singh granted a permanent lease of four villages Nawadih, Koldih, Pandna and Chihutia by a registered Patta to one Hiraman Ram who was the Manager and Karta of his joint Hindu family. The Permanent lease was taken by him in his own name and in the name of his son Chohan Ram. An agreement was subsequently arrived at between the Bank and Wazir Narain Singh that if Wazir Narain Singh paid to the Bank or before the 16th August, 1926, the sum of Rs. 1,10,631 4 0 the sale would be set aside. Wazir Narain Singh executed the 14th August, 1926, a mortgage of Gadi Sirampur in favour of the Manager of the Court of Wards in charge of the plaintiff 's estate during his minority to secure repayment of a sum of Rs. 1,47,000 and out of the same satisfied the dues of the Bank and the sale in favour of the Ban was accordingly set aside. The plaintiff through the Manager of the Court of Wards filed a suit the 4th February, 1929, to enforce this mortgage and he impleaded as co defendants in that suit Hiraman Ram as defendant 20 and his father Dilo Ram as defendant 19. A final decree for sale was passed the 18th September, 1931, and the 111 Plaintiff purchased Gadi Sirampur at the auction sale held in execution of this decree the 6th April, 1935. Delivery of possession was obtained by the plaintiff through the Court the 16th February, 1936. Dilo Ram died after the mortgage decree but Hiraman Ram and his son Chohan Ram continued in actual possession of the disputed villages and the plaintiff therefore filed the 16th November, 1939, the suit, out of which this appeal arises, in the Court of the Additional Subordinate Judge of Hazaribagh against Hiraman Ram and Chohan Ram, defendants 1 and 2, for khas possession of these villages. The plaintiff contended that he was subrogated to the position of the Bank, that the decree which had been passed in the mortgage suit was binding the defendants, that he was the auction purchaser in execution of that mortgage decree and that the Patta being subsequent to the plaintiff 's mortgage thus came to an end and he was entitled to recover khas possession from the defendants. Defendant 2 filed his written statement contesting the plaintiff 's claim. He denied that the plaintiff. was subrogated to the position of the Bank. He contended that the decree in the mortgage suit was not binding him as he was not :a party to that suit. lie further contended that the Patta could not be put an end to by the auction sale of the mortgaged property. The defendant I filed a separate written statement. He denied that he was the Manager and Karta of the joint Hindu family. He also contended that there was a partition amongst the members of the joint family within a year after their possession of the properties in suit and the properties had been allotted at that partition to the defendant 2. The trial Court hold that, the plaintiff was subrogated to the position of the Bank. It also held that the defendant 1 was the Manager and Karta of the joint family and that the defendant 2 was fully represented in the mortgage suit, that the decree in the mortgage suit was binding the defendants and that the plaintiff was entitled to recover possession 112 of the said properties and mesne profits from the defendants. The defendants appealed against this decree to the High Court of Judicature at Patna. The High Court negatived the contention in regard to constructive res judicata which was urged behalf of the plaintiff. It then considered the further contention that Wazir Narayan Singh had, after creating the mortgage in favour of the Bank no power to grant the permanent lease in question to the defendants. After considering all the authorities which were cited before it, it came to the conclusion that the question whether Wazir Narayan Singh had got such power or not had to be determined with reference to the provisions of section 66 of the Transfer of Property Act and the crucial test was whether the lease rendered the mortgagee 's security insufficient. In spite of the fact that there was no allegation in the plaint that the defendant 's lease had the effect of rendering the security of the Bank insufficient, the High Court went into this question and a calculation of some figures came to the conclusion that the lease of the disputed villages in favour of the defendants did not in any way render the security of the bank insufficient. It therefore held that the lease was valid and was not affected by the plaintiff 's mortgage, decree or by the execution sale under that decree and accordingly dismissed the plaintiff 's suit. The plaintiff obtained leave to appeal to the Privy Council from this decision of the High Court and the appeal was admitted the 9th January, 1946. Both the Courts below found that the plaintiff was subrogated to the position of the Bank. They also found that the defendant 2 was sufficiently represented in the mortgage suit. These findings were not challenged before us and the only question which survived for our consideration was whether Wazir Narayan Singh had the power to grant a permanent lease to the defendants so as to bind the plaintiff. The question whether Wazir Narayan Singh had such power has got to be determined under the law as it stood prior to the enactment of section 65 A of 113 the Transfer of Property Act by Act XX of 1929. The mortgagor 's power to lease the mortgaged property was the subject matter of conflicting judicial decisions. Relying upon the rule of English common law under which the mortgagor had no power to lease, it was held in some cases that a mortgagor could not ordinarily without the concurrence of the mortgagee execute a lease which could be binding the mortgagee. In other cases a distinction was drawn between English mortgages and other mortgages and it was considered that the mortgagor in India remained the owner and when in possession could prima facie exercise the rights of ownership inclusive of the power to grant leases of the mortgaged property. The Question was decided with reference to section 66 of the Transfer of Property Act and it was held that the mortgagor could grant leases which were not wasteful in their effect the mortgagee 's security. This was the principle deduced by Jenkins C.J. in Balmukund vs Motilal(1) from the old case of Banee Pershad vs Beet Bhunjun Singh(1). This line of reasoning was not adopted in other cases which laid down a different rule, viz., that a mortgagor in possession might grant a lease conformable to usage in the ordinary course of management but was not competent to grant a lease unusual terms or authorise the use of land in a manner, or for a purpose, different from the mode in which he himself had used it before he granted the mortgage. This was laid down by Sir Ashutosh Mukherjee J. in Madan Mohan Singh vs Raj Kishore Kumari(3)and was followed in a number of cases. There was thus a conflict of decisions which was sought to be resolved by the enactment of section 65 A of the Transfer of Property Act which dealt with the mortgagor 's power to lease while lawfully in possession of the mortgaged property. "It is an elementary rule that though a mortgagor may assign the mortgaged premises, the assignee can only take subject to the encumbrances, and if the (1) (2) (i868) (3) (i9i6) 114 property is sold or foreclosed by the mortgagee, any interest which the mortgagor may have created since the mortgage will be destroyed" '. (Ghosh Mortgage, Vol. I, p. 212.) As was observed by Lord Selborne in Corbett vs Plowden(1), "If a mortgagor left in possession, grants a lease without the concurrence of the mortgagee (and for this purpose, it makes no difference whether it is an equitable lease by an agreement under which possession is taken or a legal lease by actual demise), the lessee has a precarious title, inasmuch as although the lease is good as between himself and the mortgagor who granted it, the paramount title of the mortgagee may be asserted against both of them. " It does not however follow that a lessee from the. mortgagor acquires no interest whatever in the property demised to him. A person taking a lease from a mortgagor after the mortgage does acquire an interest in the equity of redemption and can claim to redeem that footing. But this right of redemption does not necessarily mean that a lease of this character is always operative against the mortgagee. Merely because a lessee acquires an interest in the mortgaged property which is sufficient to enable him to redeem the mortgage it does not follow that the interest which the lessee has thus acquired is operative against the mortgagee. The true position is somewhere in the middle of these two extremes. The mortgagee is not normally bound by the acts of the mortgagor with reference to the mortgaged property. " But if a mortgagee takes his security with knowledge of the purposes to which the land is applied and allows the mortgagor to remain in possession he *ill be bound by the acts done by the mortgagor in accordance with the usual course." (Ghosh Mortgage, Vol. I, p. 212.) As indicated in the observations of Sir James Parke in Pope vs Briggs (2) the mortgagor might be considered as acting in the nature of a bailiff or agent for the mortgagee. Con sequently, if the mortgagor, after he has granted the (1) at p. 681. (2) (1829) 9 Barn. & Cres. 245 at p. 258. 115 mortgage, deals with the property in the usual course of management, the interest created by him may be rightly deemed operative against the mortgagee. An illustration of this view is found in the ease of Moreland vs Richardson(1) where a person took a mortgage of a burial ground and it Was held that, as the object of the burial ground is to grant rights of burial, this ' being the mode in which such property is dealt with, the mortgagee was not entitled to disturb the graves of those who had been: buried the land, while the mortgagor continued to hold it. , The mortgagor could thus in the usual course of management create a ten ancy from year to year in the case of agricultural land or from month to month in the case of property consisting of houses and his dealings with the mortgaged property in the usual course of management would be operative against the mortgagee. [Per Mukherjee J. in Madan Mohan Singh vs Raj Kishore Kumari(2)] "Whether the mortgagor possesses any larger powers of leasing is however very questionable. The only reported case in which such a power was recognized is Banee Pershad vs BeetBhunjun Singh(1) but the report in Sutherland is very meagre. The judgment too does not give forth any certain sound (sic.). It is only said that a mortgagor is not restricted in the management of the property by making a mortgage and that so long as nothing takes place to impair the value of the mortgagee 's security the mortgagor does not exceed his powers in making a lease for a term. The learned judges add perhaps somewhat unnecessarily that their decision should not go beyond the particular facts of the case before them." (Ghosh Mortgage, Vol. I, p. 213.) This case of Banee Pershad vs Beet Bhunjun Singh(3 was considered by Jenkins C. J. in Balmukund vs Motilal(4) as an authority for the proposition that as long as nothing took place which impaired the value or impeded the operation of the mortgage, the mortgagor in creating a temporary lease acted within his powers and these observations of Jenkins C.J. were (1) ; (2) at pp. 91, 92. (3) (4) , 116 considered by the Courts as justifying the applicability of the provisions of section 66 of the Transfer of Property Act while determining the binding nature of the leases created by. the mortgagor in possession the mortgagee. ; Mukherjee J. had occasion, to consider this very case in Madan Mohan Singh vs Raj Kishore kumari(1) and he cited it in support of the proposition that the interest created by the mortgagor while dealing with the mortgaged property in the usual course of management could be rightly deemed operative against the mortgagee. The following observations of Mukberjee J. in this connection at page 91 are very apposite: "As the case is very imperfectly reported, we have examined the record and ascertained the questions in controversy. The proprietor of an estate mortgaged it the 12th March, 1861. the 7th July, t862, the mortgagor granted an ijara potta of the property for a term of ten years. The mortgagee subsequently sued the mortgagor alone and got a decree; at the execution sale which followed, the property was sold the 24th December, 1863. The purchaser sued the 12th March, 1867, to eject the lessee, the ground that as he had acquired the property in the condition in 'Which it was when mortgaged, the lease, which would otherwise run till the 7th July, 1872, did not bind him. 'The Court of first instance overruled this contention 'as too broadly formulated, and held that as the mortgagor had in good faith granted the lease for a limited term a fair and reasonable rent, the mortgagee or the purchaser in execution of his decree could not repudiate it, specially as the mortgage deed did not prohibit the grant of temporary leases to middlemen or cultivators. appeal, the District Judge affirmed this view and declined to accept the broad contention that leases of all descriptions granted by a mortgagor were void as against the mortgagee. second appeal to this Court, Jackson and Mitter JJ. took substantially the same view. " (1) 117 These observations of Mukherjee J. point out what was the ratio decidendi of that case. The question of the sufficiency or insufficiency of the security was not really gone into but the Court considered that the lease was granted in good faith, was for a limited term and stipulated a fair and reasonable rent and it was therefore operative against the mortgagee. The Court was really guided by the consideration that the mortgagor dealt with the property in the usual course of management and the interest which was thus created by the mortgagor in the usual course must rightly be deemed operative against the mortgagee. ,The case of Banee Pershxd vs Beet Bhunjan Singh(1) therefore is really no authority for the wide proposition that a mortgagor was not restricted in the management of the property by making a mortgage and that so long as nothing took place,to impair the value, or impede the operation of the mortgage the mortgagor would be well within his powers in making a lease for a term. In our opinion section 66 of the Transfer of Property Act has nothing to do with the mortgagor 's power to lease the mortgaged property. Section 66 is a statutory, enactment of the powers of the mortgagor in.possession in regard to waste of mortgaged property. The mortgagor in possession is not liable for what in terms of the English Law of Real Property is known as permissive waste, i.e., for omission to repair or to prevent natural deterioration. He is however liable for destructive waste is acts which are destructive or permanently injurious to the mortgaged property if the security was insufficient or would be rendered insufficient by such acts. This section therefore has no application to the grant of a lease by the mortgagor in possession. The only relevant consideration is whether, the mortgagor in possession having the authority to deal with the property in the usual course of management, the lease granted by him can be rightly deemed operative against the mortgagee. , The true position has been stated in the following terms by,, Mukherjee, in Madan Mohan Singh vs Baj Kishore Kumar(2) (i) 16 (2) at page 92. 118 "The true position thus is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management, for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But it is not competent to the mortgagor to grant a lease unusual terms, or to alter the character of the land or to authorise its use in a manner or for a purpose different from the mode in which he himself had used it before he granted the mortgage. " The question whether the mortgagor in possession has power to lease the mortgaged property has got to be determined with reference to the authority of the mortgagor as the bailiff or agent for the mortgagee to deal with the property in the usual course of management. It has to be determined general principles and not the distinction between an English mortgage and a simple mortgage or con siderations germane to section 66 of the Transfer of Property Act. Having regard therefore to the position that section 66 has no application to leases of the mortgaged property, the decision of Jenkins C.J. in Balmukund vs Motilal(1) and the cases following that line of reasoning do not govern the question before us. While we are this subject we would like to em phasise that it is for the lessee if be wants to resist the claim of the mortgagee to establish that the lease in his favour was granted the usual terms in the ordinary course of management. Such a plea if established and it must not be overlooked that the burden of proof in this matter is upon him would furnish a complete answer to the claim of the mortgagee. If the lessee failed to establish this position he would have certainly no defence to an action at the instance of the mortgagee. No allegation was made behalf if of the defendants that the grant of the permanent lease was a dealing with the mortgaged property in the usual course of management by the mortgagor, In the absence of (9) , 119 any such plea we are of the opinion that there was No. answer to the plaintiff 's claim and the permanent lease granted by Wazir Narayan to the defendants could not prevail against the plaintiff. We have therefore come to the conclusion that Wazir Narayan Singh had no power to grant the permanent lease in question to the defendants, that the same was not binding and operative against the plaintiff, that the defendants had ample opportunity to@ redeem the mortgage if they so desired but did not choose to exercise their right of redemption, that the execution sale of Gadi Sirampur including the four villages in question was binding them and that the plaintiff was entitled to khas possession of the four villages of which the defendants were in wrongful possession. The appeal is allowed. The decree passed by the High Court dismissing the plaintiff 's suit is set aside and the decree passed by the trial court in favour of the plaintiff is restored with costs throughout. Appeal allowed. Agent for respondent No. 1: B. B. Biswas.

Under the law as it stood prior to the enactment of section 65 A of the Transfer of Property Act, by Act XX of 1929, the question whether the mortgagor in possession had powar to lease the mortgaged property has got to be determined with reference to the 109 authority of the mortgagor as the bailiff or agent of the mortgagee to deal with the property in the usual course of management. It has to be determined general principles and not the distinction between an English mortgage and a simple mortgage or the considerations germane to s.66 of the Transfer of Property Act, and the true position is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management; for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But it is not competent to him to grant a lease unusual terms or to alter the character of the land or to authorise its use in a manner, or for a purpose, different from the mode in which he himself had used it before he granted the mortgage. And it is for the lessee, if he wants to resist the claim of the mortgagee, to establish that the lease in his favour was granted the usual terms in the ordinary course of management. Where a mortgagor granted a permanent lease of the mortgaged property in the year 1925 and the High Court upheld the lease as against a person who had purchased the properties in a sale held in execution of a decree obtained by the mortgagee the mortgage, the ground that the lease did not impair the security of the mortgagee: Held, that the lease was not binding the mortgagee or the auction purchaser as it was not a lease granted in the usual course of management, even though it did not impair the security. Madan Mohan Singh vs Raj Kishore Kumari , approved. Balmukund vs Motilal (1915) 20 C.W.N. 350, dissented from. Banee Prasad vs Beet Bhunjun Singh , explained.

By a lease dated 14th December 1948, the respondent plaintiff gave to the appellant defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi Temple Road, Mahim for a period of 15 years commencing from 1st December 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. The lease deed provided that the appellant was at liberty to erect building and structures on the two plots of land. The appellant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be erected by the defendant. On the expiration of the term of the lease, the appellant agreed to deliver back the possession of two plots to the respondent `free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the respondent '. Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease. The forfeiture clause also provided that upon forfeiture the respondent would be entitled to re enter upon not only the two plots of land but also the structure standing thereon. The appellant constructed on plot No. 12 a three storied building consisting of about 72 flats, shops with carpet area of 13,000 square feet and the cost of the building with superstructures in 1949 was about Rs. 6,00,000/ . Since the appellant defaulted not only in payment of rent but also in payment of dues in respect of lands and buildings which he erected, the respondent filed a suit in 1951 for ejectment. The appellant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950. A compromise was entered into between the parties in the suit on 5th March, 1954, by which they agreed on a rent of Rs. 435/ per month from September 1950 to February 1954. An appeal against the fixation of standard rent of Rs. 435/ per month was disposed of on 28th June, 1955 whereby standard rent was refixed at Rs. 620/ p.m. from 1st September 1950. The appellant again defaulted in payment of rent and taxes. The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September 1960. The respondent by a notice determined and forfeited the lease and called upon the appellant to deliver possession of the lands alongwith structures thereupon. The notice also specified that the notice was not only a notice of forfeiture, but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. On 1st 1016 December 1961, as the appellant failed to pay the arrears of rent and the taxes, the respondent filed the suit for ejectment and prayed for a decree for ejectment against the appellant in respect of two plots of land Nos. 12 and 13 and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.50 and mesne profits at the rate of Rs.620/ p.m. The appellant in order to get the benefit of section 12(3)(b) of the Rent Control Act, 1947, applied for time for making deposit of arrears of rent. The appellant could not make the payment within the extended time allowed, but after the issues were framed and the suit was taken up for trial, he deposited the arrears of rent and cost in the Court after the Court made an endorsement "accept without prejudice". Subsequently, on 11th November, 1964 the Trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the respondent. A decree was granted regarding arrears of rent and for mesno profits. Both the appellant and the respondent preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeals on 4th April 1965. The Appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on plot No. 12 by the appellant. It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the appellant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the respondent. It also found that the appellant was entitled to be relieved from the penalty of forfeiture of the lease under section 114 and 114A of the Transfer of Property Act. It rejected the plea of the appellant that he was always ready and willing to pay arrears of rents and found that because of repeated defaults the appellant was not entitled for relief from ejectment under section 12(3)(b) of the Bombay Rent Act. The respondent filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the appellant tenant filed an appeal against the order of appellate Court directing his ejectment from the two plots of lands Nos. 12 and 13. The High Court disposed of both the revision petition and the cross appeal by a common judgment whereby it allowed the revision petition of the respondent/landlord and dismissed the appeal of the appellant/tenant and decreed the suit of the respondent directing the appellant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the appellant on the demised lands. It also confirmed the decree regarding arrears of rents and mesne profits. Hence the appeal by certificate. Dismissing the appeal, the Court. ^ HELD: 1. Section 28 of the Bombay Rent Act, 1947 confers jurisdiction on the Court of Small Cause. Bombay to entertain try any suit for proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of that part applied. The Jurisdiction thus conferred enables the Court to try any Suit between the landlord and the tenant relating to recovery of possession of the premises. [1022 A B] Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors. ; Babulal Bhura Mal and Anr. vs Nandram Shivram and Ors., ; ; followed. 1017 Raizada Tapen Das and Anr. vs M/s Gorakhram Gokalchand ; ; Sushila Kashinath Dhonde and Ors. vs Harilal Govinji Bhogani and Ors., ; explained and distinguished. The conditions specified in section 12(3)(b) of the Bombay Rent Act, 1947 will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the section. In the instant case, the persistent default of the appellant tenant on various occasions and his clear statement that he was not in a position to pay the arrears would exclude any relief under section 12(3) (b) of the Act. The respondent plaintiff would be entitled to a decree for possession of the plots under the provisions of the Bombay Rent Act and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures. [1023 D G, 1025 D E] Ganpat Lodha vs Sachikant Vishnu Shivale. ; ; applied. 3. To contend that as the respondent plaintiff has sought two reliefs one under the Bombay Rent Act and another under the contract, the entire plaint must be rejected is wrong. In asking for the relief for possession of the land. the respondent plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structure, that is he is entitled to ask for the demolition of the superstructure. The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court. [1025 E. F G] Ramachandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalekar. ; Khimjee Thakorsee vs Pioneer Fibre Co. Ltd., AIR 1941 Bom. 337 and K Arumugham Naicker and Anr. vs Tiruvalluva Nainar Temple by its Trustee. AIR 1954 Mad. 985; approved.

The appellant had filed a suit in the High Court of Calcutta for a declaration that the properties set out in the schedule belonged to a joint family and that the trust created by the father of the plaintiff/appellant in respect of the said properties was void. Pending the suit, a Receiv er was appointed by Justice A.N. Sen. While making the appointment the learned Judge had passed an order restrain ing the Receiver from selling or ' 'transferring ' ' any of the properties. The property in dispute is a building at Alipore, Calcutta, which comprised of four fiats. Grindlays Bank Ltd., respondent No. 1, had taken all the four flats on lease for 10 years from 1st June, 1958. After the expiry of the period of lease, Grindlays continued to be the tenant. On 1st April, 1978 Grindlays surrendered a portion of the tenancy, namely, two fiats i.e. fiats Nos. 1 and 2, in favour of Tatas. The Receiver let out these two fiats to M/s Tata Finlay Ltd. with effect from February 1979. Questioning the action of the Receiver, an application was filed in the High Court contending that the Receiver had no authority to create 962 any tenancy, that he had virtually created two new tenancies after terminating the original tenancy of Grindlays, and that neither Grindlays nor Tatas was entitled to occupy the premises and they were liable to be evicted summarily. The learned Single Judge was not inclined to order summary eviction as prayed for. An appeal was filed before the Division Bench. The Division Bench inter alia observed that any such relief could be obtained in a suit but the same could not be filed in the High Court inasmuch as the per mises in question was situated outside the Original Side Jurisdiction of the High Court. Before this Court it was contended on behalf of the appellant that (i) the Receiver had only such powers as were expressly granted by the Court; (ii) "transfer" included lease and therefore the Receiver by creating a new lease i.e. tenancy, had violated the injunction order passed by Justice A.N. Sen; (iii) after the expiry of the stipulated period of lease in favour of Grindlays, the tenancy turned to be a monthly tenancy and therefore the entire character of tenancy changed, and the monthly tenancy therefore was a new tenancy; (iv) protection under the West Bengal Premises Tenancy Act could not be extended to the tenant of a Receiv er; (v) the break up of the tenancy affected the integrity of the tenancy inasmuch as by virtue of this break up two new tenancies had come into existence; and (vi) the lease in favour of Grindlays had expired and by creating a monthly tenancy which may even go beyond three years, the Receiver had created a new lease in violation of Chapter 21 Rule 5(a) of the Original Side Rules. In reply, it was contended on behalf of Tatas that a monthly tenancy in respect of the said two flats had been created in their favour and therefore they were entitled to protection under the Tenancy Act. On behalf of Grindlays it was contended that after the expiry of the period of the original lease in 1968, rela tionship between Grindlays and the Trust continued to be of landlord and tenant; that at all material times they re tained the tenancy in respect of flats Nos. 3 and 4, and were governed by the Tenancy Act; that the surrender of flats Nos. 1 and 2 by the Grindlays and their continuation as tenants at reduced rent did not amount to a new lease in respect of flats Nos. 3 and 4, and hence there was no trans fer and no violation of the injunction. Dismissing the appeal as against respondent No. 1 and allowing it against respondent No. 2, this Court, HELD: (1) In the Transfer of Property Act, the word 'trans fer ' is 963 defined with reference to the word 'convey '. Similarly, the term 'transfer ' as used in Section 11 or Section 88 of the Bengal Tenancy Act, included a lease, as a lease is a trans fer of an interest in immovable property. A lease, there fore, comes within the meaning of the word 'transfer ' [968A B] Hari Mohan alias Hari Charan Pal vs Atal Krishana Bose & Ors., XXIII Vol. Indian Cases 925, referred to. (2) Surrender of part of the tenancy did not amount to implied surrender of the entire tenancy. Likewise the mere increase or reduction of rent also would not necessarily import a surrender of an existing lease and the creation of a new tenancy. [972C D] Konijeti Venkayya & Anr. vs Thammana Peda Venkata Subba rao & Anr. AIR 1957 A.P. 619 and N.M. Ponniah Nadar vs Smt. Kamalakshmi Ammal, AIR 1989 S.C. 467, referred to. (3) The Tenancy in favour of Grindlays continued as monthly tenancy for a period exceeding three years. It was an accretion to the old tenancy and not a new tenancy It could not therefore be said that the Receiver had created tenancy for a period exceeding three years in violation of Chapter 21 Rule 5(a) of the Original Side Rules. Merely because there was change in the character of a tenancy, namely that it had become a monthly tenancy, it did not amount to a new tenancy. [972G H] Utility Articles Manufacturing Co. vs Raja Bahadur Motilal Bombay Mills Ltd., , referred to. (4) A clear injuction order was passed by Justice A.N. Sen specifically restraining the Receiver from creating any new tenancy. But the injunction did not apply to the tenancy in favour of Grindlays in respect of fiats Nos. 3 and 4 inasmuch as it was an old tenancy though in a modification form. The Grindlays were therefore entitled to the protec tion under the provisions of the Tenancy Act. [974G H; 975A, C] Damadilal & Ors. vs Parshram & Ors., [1976] Supp. SCR 645 and Biswabani (P) Ltd. vs Santosh Kumar Dutta, ; , referred to. Ashrafi Devi & Anr. vs Satyapal Gupta & Ors., Suit No. 966 58 dated 9th Sept. 1977. Calcutta High Court and Armugha Gounder vs Ardhanari Mudaliar & Ors., , distinguished. 964 (5) In the case of Tatas, it was a new tenancy. Such a lease came within the meaning of 'transfer ' and in view of the injunction order passed by Justice A.N. Sen, creation of such a new tenancy was legally barred. Consequently the Tatas could not claim any protection under the provisions of the Act and were liable to be evicted. [978C] Kanhaiyalal vs Dr. D.R. Banaji, ; at p. 729; Smt. Ashrafi Devi & Anr. vs Satyapal Gupta & Ors., (supra) and Armugha Gounder vs Ardhanari Mudalier, (supra), referred to.

This was an appeal by the defendants in a suit for possession on redemption of certain mortgages instituted in the Court of the Special judge exercising jurisdiction under the Sangli State Agriculturists Protection Act (1 of 1936). Their case was that the mortgaged properties had been sold at auction and purchased by their father who had sold most of them to other persons more than 12 years before the institution of the suit and as such the suit was barred by limitation. The trial Court dismissed the suit. On appeal the High Court of Sangli permitted the plaintiff to amend the plaint originally filed so as to include the relief for redemption and remanded the suit. The trial court, thereafter, decreed the suit in part, holding that the claim in respect of portions only of the mortgaged properties was barred by limitation. Both the parties appealed to the High Court of Bombay and the appeals were heard together. The High Court dismissed the defendant 's appeal and allowed the plaintiff 's appeal holding that article 148 and not article I34 Of the Limitation Act applied. In the result, the plaintiff 's suit was decreed in its entirety. Held, that the preliminary objection that the Special judge had no jurisdiction under the Sangli State Agriculturists Protection Act to entertain the suit must be overruled. The fixing of ,915 as the date line by the Act had reference to such reliefs as could be had only by way of reopening of closed transactions and could not, therefore, preclude the Special Judge from granting other reliefs in respect of transactions entered into prior to 1915. Nor could it be contended in bar that the plaintiff was bound in the first instance to set aside an auction sale of the mortgaged properties in execution of a money decree in which she was not substituted in place of her deceased father as his true heir and legal representative nor made a party and no controversy was raised by the parties nor decided by the Court as to who was the true legal representative. The plaintiff was entitled to ignore the sale and the suit was not barred under article 12 of the Limi tation Act. 480 Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa, (1900) L.R. 27 I.A. 216, doubted and distinguished. In order that article I34 of the Limitation Act might be attracted to a suit for possession on redemption, it was necessary for the defendant to prove affirmatively that the mortgagee or his succesor in interest had transferred a larger interest than was justified by the mortgage. Where, as in the present case, this was not done, article 134 could not apply and the only other article which could apply was article 148 Of the Limitation Act. Under the Mitakshara School of Hindu Law partition may be either (1) a severance of the joint status of the coparcenary by mere defining of shares but without specific allotments or (2) partition by allotment of specific properties by metes and bounds according to shares. The latter, if reduced to writing becomes compulsorily registrable under section I7(1)(b) of the Indian Registration Act but the former does not. Consequently, in the present case such unregistered docu ments as were adduced by the plaintiff for the limited purpose of proving partition in the former sense did not fall within the mischief Of section 49 of the Indian Registration Act and were admissible in evidence.

Respondent, an Income tax Officer, called an assessee to his house and took a sum of Rs. 800 from him. Immediately afterwards a search was made and the respondent, after some evasion, produced the money. The respondent 's defence was that he had taken the money as a loan and not as illegal, gratification. The Special judge who tried the respondent found him guilty under section 16i, Indian Penal Code, and sen tenced him to six months simple imprisonment. On appeal, the High Court acquitted the respondent. The State obtained special leave and appealed. Held, that the words used in article I36 of the Constitution show that in criminal matters no distinction can be made as a matter of construction between a judgment of conviction and one of acquittal. The Supreme Court will not readily interfere with the findings of fact given by the High Court but if the High Court (i) A.I.R. (1954) S.C. 680. 581 acts perversely or otherwise improperly interference will be called for. The findings of the High Court are halting and its approach to the case has been erroneous as it disregarded the special rule of burden of proof under section 4 Of the Prevention of Corruption Act (II Of 1947). The judgment of the High Court shows that certain salient pieces of evidence were missed or were not properly appreciated. In this situation the Supreme Court can interfere in an appeal by special leave. Where it is proved that a gratification has been accepted, the presumption under s 4 Of the Prevention of Corruption Act shall at once arise. It is a presumption of law and it is obligatory on the Court to raise it in every case brought under section 4. The evidence and circumstances in this case lead to the conclusion that the transaction was not one of loan but of illegal gratification.

Suits were filed by the representatives of the mortgagors to redeem ,certain mortgages beyond 60 years from the dates of the mortgages. In order to get over the bar of limitation the plaintiffs relied upon certain acknowledgments made by the mortgagors. The acknowledgments were alleged to have been made more than 30 years ago in mutation proceedings and certified copies of the statements were produced. With respect to .Some mortgages, applicants were made under section 4 of the Redemption of Mortgages (Punjab) Act, 1913, and they were dismissed under section 10. It was contended that the suits filed with respect to those mortgages were within time under section 12 of that Act, because, they were filed within one year of the date of the dismissal of the applications. HELD : (1) As the originals of the acknowledgments were not produced and no witness was examined to speak to the fact that the persons who we 're shown to have signed the originals have in fact signed them or that they were the mortgagors or their representatives, there was no proof of the signatures; and the Court cannot raise any presumption under section 90 of the Evidence Act. [106 F G] Harihar Prasad Singh vs Mst. of Munshi Nath Prasad ; , followed. Section 114(e) of the Evidence Act does not apply because the identification of an executant or the genuineness of a signature in a statement filed before an official has nothing to do with the regularity of his act, unless he had a duty to take the signature in his presence and to identify the person who signed. [107 B C] Section 44 of the Punjab Land Revenue Act deals with the presumption as regards entries in the record of rights, but this case is not concerned with any such entry. [107 A] (2)Section 12 of the Redemption of Mortgages (Punjab) Act, 1913, merely provides that a summary order made under sections 6 to II of that Act becomes final unless a suit to establish the rights of the mortgagors is instituted within the prescribed period of one year. From this provision it cannot be held that the period of limitation fixed for redemption of mortgages is enlarged. [108 G H]

The plaintiffs, who were Thekedars, filed two suits for possession of land Leased out by the Zamindars to the defendants lessees on the ground that since the Thekedars had become hereditary tenants under section 12 of the U.P. Zamindari Abolition and Land Reforms Act, 1 950 and were in possession of that land on 1st day of May, 1950, the Zamindars had no right to grant lease and the lessees had no right to enter and remain in possession of that land after that date. The lessees pleaded that they were in cultivatory possession of the land during the year 1359 Fasli and were entitled to all the rights of adhivasis under the U.P. Land Reforms (Supplementary) Act, 1952. The trial court dismissed the suits observing that the Thekedars had acquired rights of hereditary tenants but the lessees were in cultivatory possession in 1359 Fasli who had therefore acquired the right of adhivasi. The first appellate court dismissed the appeals. The High Court in second appeal reversed the decision of the trial court and the first appellate court and decreed the suits. On appeal, it was contended that since there was no authority given to the Thekedars for personal cultivation of the lands comprised in the Theka the Thekedars did not acquire the right of hereditary tenants under section 12 of the 1950 Act. Dismissing the appeals, ^ HELD: Section 12 of the 1950 Act provides that if any land was given to a person for personal cultivation by him on the 1st day of May 1950, as a Thekedar thereof, then because of the non obstante clause occurring in sub section (I) of section 12 the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold the land as such and liable to pay rent at hereditary rates. If such hereditary tenant has lost possession he is entitled to regain his possession. If, however, the land was in the personal cultivation of the Thekedar who was appointed merely to collect rent from other tenants and incidentally allowed to cultivate the Sir, or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13 928 of the Act. Before a Thekedar can claim the status of a hereditary tenant, A he must not only be a Thekedar but the Theka must be specifically granted for personal cultivation of the land included in the Theka by the Thekedar. [931 H, 932 A C] Babu Noorul Hasan Khan vs Ram Prasad Singh and Ors [1980] I SCR 977 and Raghunandan Singh and Ors vs Brij Mohan Singh and Ors. , ; , referred to. In the instant case the Theka was created exclusively for personal cultivation of the land involved in the Theka be the Thekedars and not as a consideration for some other duties to be performed by the Thekedars to the Zamindars. The Thekedars were in possession of the land and were personally cultivating the land on the 1st day of May, 1950. The Thekedars acquired the status of hereditary tenants under section 12 of the 1950 Act. [933 C E] Section 3 of the 1952 Act provides that any person who has not become a bhumidar, sirdar, adhivas. Or asami under the 1950 Act if he is in cultivatory possession of any land during the year 1359 Fasli and if the bhumidar or sirdar was not such a person, such person in cultivatory possession would acquire the status of an adhivasi. To obtain the benefit of section 3 the person claiming to be in cultivatory possession must show that his or her possession was lawful. [933 F G, 934 F] Sonawati and Ors. vs Sri Ram and Anr., [1968] I SCR 617, referred to. In the instant case since the Thekedars had acquired the status of hereditary tenants as Theka was up to and inclusive of the year 1359 Fasli, the Zamindars had no right to induct lessees in possession after depriving the Thekedars of their possession and therefore possession of the lessees in 1359 Fasli was not lawful. Therefore the lessees did not acquire the right of adhivasi. [933 H, 935 A]

The appellant executed a mortgage in 1934 in favour of the proprietrix of a firm in the State of Hyderabad. The mortgage amount became due in 1943. The first respondent, who was the daughter 's son of the mortgagee, claiming to be her adopted son. filed a suit for foreclosure of the mortgage, in 1954, after the death of the mortgagee. The trial Court dismissed the suit on the ground that the adop tion was not established. The first respondent appealed to the High Court and, pending the appeal, applied for adding his natural mother as a co plaintiff and her two sisters as defendants as they were not willing to join as plaintiffs, and sought consequential amendments in the plaint. The High Court granted the application under 0. 1, r. 10(1), Civil Procedure Code, on 4th November, 1958 and thereafter, disposed of the appeal by passing a preliminary decree for foreclosure in favour of the added parties. The High Court did not go into the question of adoption but dismissed the first respondent 's suit. HELD: (Per Sarkar, C.J.): The order adding parties cannot be supported under either sub r.(1) of sub r. (2) of 0. 1, r. 10. Sub r. (1) provided for addition of plaintiffs and could not therefore justify the addition of defendants. In the case of addition of parties under sub r. (2), the provisions of section 22 of the Limitation Act admittedly apply and under it in the present case, a suit by the added parties, on the date they were added, would have been barred. It would have been futile, therefore, to make an order under sub r. [190 G H; 191 D E] Ravji vs Mahadev 's case (I.L.R. doubted. There is no reason to think that section 22 of the Limitation Act does not apply to O.1, r. 10, sub r. [191 G] A person suing as the proprietor of a firm does not sue in a representative capacity. He sues in his personal capacity. [192 E F] Per Mudholkar and Bachawat JJ: The High Court bad power to join the co plaintiff under 0. 1, r. 10(1) and to join her sisters as defendants under 0. 1, r. (2), and to allow onsequential amendments of the plaint under 0. VI, r. 17, but, as regards the added parties, by reason of section 22(1) of the Indian Limitation Act, 1908. the suit must be regarded as instituted on the date on which they were added and was therefore barred by limitation. [197 C] In 1951, the Hyderabad Limitation Act was repealed and the Indian Limitation Act was extended to the State. The Indian Act abridged the period of limitation for the enforcement of the mortgage, 189 but did not impair or take away any vested right. Therefore, on the date of the institution of the suit, the law of limitation applicable was the Indian Act. [194 E F] The respondent, as the original plaintiff, sued in his own right and on his own behalf. Therefore, the parties added must be regarded as a new plaintiff and new defendant respectively. Section 22 of the Limitation Act in express terms applies whenever a new plaintiff or a new defendant is substituted under 0. 1, r. 10(1) or (2). The effect of the section is that the suit must be deemed to have been instituted by the new plaintiff when he was made a party. [196 E G] Ravji vs Mahadev, Bom. 672, disapproved. Since the suit in the instant case was for foreclosure only it was governed by article 132 of the Limitation Act and must be regarded as instituted in November 1958, beyond 12 years from the date when the mortgage money was due. [195 C] Vasudeva Mudaliar vs K. section Shriniwas Pillai I.L.R, 34 I.A. 186, applied.

Appeal No. 475 of 1960. Appeal by special leave from the Award dated March 31, 1960, of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 227 of 1959. M. C. Setalvad, Attorney General for India, G. B. Pal and J. B. Dadachanji, for the appellant. I. N. Shroff, for the respondents. December 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from an industrial dispute between the appellant, the Alembic Chemical Works Co. Ltd., and the respondents, its workmen. The said dispute related to a single demand made by the respondents with regard to leave. This demand consisted of three parts, (a) one month 's privilege leave with full salary and dearness allowance on completion of eleven months service in a year with a right to accumulate upto six months, (b) one month 's sick leave with full salary and dearness allowance for each year of service with right to accumulate for the entire period of service, and (c) every workman should be entitled to take leave in proportion to the number of days he is in service of the company at the time of his application for the same. This dispute was referred by the Government of Bombay for adjudication before the Industrial Tribunal under section 10(1)(d) of the XIV of 1947. The Tribunal considered the contentions raised by the appellant against the respondents ' demands, took into account awards or agreements between employers and their employees in comparable concerns and made its award. In regard to privilege leave the Tribunal has ordered that leave should be granted to the staff members covered by the reference as follows: Privilege leave upto 3 . 16 days as at present completed years of service per year. Up to 9 completed years. 22 days per year. And thereafter . One month for every 11 months of service. 299 The award allows accumulation of privilege leave upto three years. As regards sick leave, the Tribunal has ordered that the appellant should give its staff covered by the present award 15 days sick leave in a year with full pay and dearness allowance with a right to accumulate upto 45 days. It has also directed that no medical certificate should be demanded if sick leave for three days or less is asked for. In regard to the third item of demand concerning leave in proportion the Tribunal has made appropriate direction which it is unnecessary to set out for the purpose of this appeal. Before the Tribunal the main contention raised by the appellant was in regard to the propriety and reasonableness of the demand and in regard to the practice prevailing in comparable concerns. Before this Court, however, the provision made by the award in regard to privilege leave has been attacked mainly on the ground that the Tribunal had no jurisdiction to make such an award having regard to the provisions of section 79 of the (63 of 1948) (hereafter called the Act). It is urged that section 79 of the Act has made exhaustive and self contained provisions with regard to the granting of annual leave with wages to the employees to whom the said Act applies, and the effect of section 79 is to introduce standardisation in the matter of leave; which means neither the employer voluntarily, nor an Industrial Tribunal by its award, can add to the leave prescribed by the, said section. In the matter of leave section 79 is a complete code, and no additions to the said leave can be made either by a contract or by an award. It is common ground that the respondents are governed by the pro visions of the Act. This point was not raised before the Tribunal, but since it is a point of law which arises on admitted facts we have permitted the learned Attorney General to argue it before us. The Act was first enacted in 1934 as Act 25 of 1934. Since then it has been amended from time to time. Its main object is to consolidate and amend the law regulating labour in factories. For the purpose of determining which concerns and which employees 300 would be governed by the Act section 2(m) and (1) define "factory" and "worker" respectively. Even a broad view of the scheme of the Act and a perusal of its provisions would clearly indicate that the Act is a beneficent measure and its policy is to make reasonable provisions for the preservation of health of the workmen, their safety and their welfare. With that object in view, the Act has made provisions for the regulation of working hours of adults, has regulated the employment of young persons, and has also provided for annual leave with wages to the workmen. The amendments made in the relevant provisions of the Act from time to time indicate that the Act has been pursuing its beneficent policy slowly but steadily and is attempting to provide for the workmen better and larger amenities in their employment. It is in the light of this obvious policy and object of the Act that we have to decide the question raised before us by the appellant. Section 79(1) occurs in Chapter VIII which deals with annual leave with wages. It provides thus: "79. Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of (i). if an adult, one day for every twenty days of work performed by him during the previous calendar year; (ii). if a child, one day for every fifteen days of work performed by him during the previous calendar year. Explanation 1 For the purpose of this sub section (a) any days of lay off, by agreement or contract or as permissible under the standing orders; (b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and (c). the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker 301 has worked in a factory for the computation of the period of 240 days or more, but he shall not earn, leave for these days. " This section has 11 other sub sections which deal with different aspects and make relevant provisions in regard to annual leave with wages. It is not disputed that the award purports to make provisions for privilege leave in excess of the annual leave sanctioned by section 79. Can the Industrial Tribunal direct the appellant to provide such additional privilege leave to its employees?; in other words, does section 79 purport to standardise annual leave with wages so that no departure from the said standard is permissible either way? The appellant 's contention is that except for pre existing awards, agreements, contracts or except for pre existing law no departure from the standardised provision is permissible after section 79 was enacted. This argument raises the question of construing section 79 in the light of the other relevant provisions of the Act. It may be conceded that the provisions made by section 79 are elaborate, and in that sense may be treated as self contained and exhaustive. It is also clear that section 79(1) does not use the expression "not more than or not less than" as it might have done if the intention of the Legislature was to make its provisions correspond either to the minimum or the maximum leave claimable by the employees; but even so, when section 79(1) provides that every worker shall be allowed leave as therein prescribed, the provision prima facie sound,% like a provision for the minimum rather than for the maximum leave which may be awarded to the worker. If the intention of the Legislature was to make the leave permissible under section 79(1) the maximum to which a workman would be entitled, it would have used definite and appropriate language in that behalf. We are, therefore, inclined to think that even on a plain construction of section 79(1) it would be difficult to accede to the argument that it prescribes standardised leave which inevitably would mean the maximum permissible until section 79(1) itself is 302 Even on the basis that section 79(1) is capable of the construction sought to be placed on it by the appellant, the question would still remain whether the Raid construction should be preferred to the alternative construction which, as we have just indicated, is reasonably possible. The answer to this question must be in the negative for two reasons; first, having regard,to the obvious policy and object of the Act, if section 79(1) is capable of two constructions that construction should be preferred which furthers the policy of the Act and is more beneficial to the employees in whose interest the Act has been passed. It is well settled that in construing the provisions of a welfare legislation courts should adopt what is sometimes described as a beneficent rule of construction; but, apart from this general consideration about the policy and object of the Act, sections 78 and 84 occurring in the same Chapter as section 79 clearly indicate that section 79(1) is not intended to standardise leave provisions as contended by the appellant, and that is the second reason why the appellant 's argument cannot be accepted. Let us then consider the provisions of Bs. 78 and 84. Section 78(1) provides that the provisions of Chapter VIII shall not operate to the prejudice of any right to which a worker may be entitled under any other law, or under the terms of any award, agreement or contract of service. There is a proviso to this sub section which lays down that when such award, agreement or contract of service provides for longer annual leave with wages than provided in this Chapter the worker shall be entitled only to such longer annual leave. Section 78(2) exempts specified workers from the operation of Chapter VIII. The first difficulty which this section raises against appellant 's argument is that it undoubtedly recognises exceptions to the leave prescribed by section 79(1). It is well known that standardisation of conditions of service in industrial adjudication generally does not recognise or permit exceptions; if the hours of work are standardised, for instance, or the wage structure is standardised, it is intended to make hours of work and wages uniform in the whose industry brought 303 under the working of standardisation Standardisation thus inevitably means levelling up of those whose terms and conditions of service were less favourable than the standardised ones, and levelling down those of such others whose terms and conditions were more favourable than the standardised ones. That being so, if section 79(1) intended to standardise annual leave with wages it would normally not have made provisions in regard to exceptions as section 78(1) obviously does. Besides, the scope and extent of the exceptions recognised by section 78(1) are decisively against the appellant 's construction of section 79(1). The learned Attorney General has strenuously contended that the saving provision of section 78(1) applies only to existing law and existing awards, agreements or contracts of service; in other words, his argument is that the Legislature has deliberately decided to except pre existing arrangements and in that sense it is a departure from the usual concept of standardisation. In our opinion, the assumption that section 78(1) is confined to existing arrangements is plainly inconsistent with a fair and reasonable construction of the said provision. When s.78(1) refers to any other law it could not have been intended that it is only to existing laws that the reference is made and that the idea underlying the provision was that no law can be passed in future which would grant more generous leave to the employees. Such a restriction on the legislative activities of the appropriate Legislatures cannot obviously have been intended. If the reference to law is not confined only to existing law there is no reason why reference to any award, agreement or contract of service should be similarly circumscribed or limited. We feel no difficulty in holding that what section 78(1) protects are laws, awards, agreements or contracts of service which were then existing or which would come into existence later; that is to say section 78(1) does not affect preexisting arrangements and does not also prohibit future arrangements which would be more generous than section 79(1). A law may be passed making more generous provisions, or agreements or contracts may 304 be entered into or awards made with the same result. If that be the true position section 78(1) clearly negatives the theory that section 79(1) provides for standardisation of annual leave with wages. The provisions of section 84 would also lead to the same result. Section 84 provides that where the State Government is satisfied that the leave rules applicable to workers in a factory provide benefits which in its opinion are not less favourable than those for which Chapter VIII makes provision it may by written order exempt the factory from all or any of the provisions of Chapter VIII subject to such conditions as may be specified in the order. Now, the power to exempt factories has to be exercised having regard to the effect of the totality of the benefits which may be afforded to the workers by their respective factories. This power to exempt also necessarily postulates the existence of better amenities than those guaranteed by Chapter VIII, and that means that if a factory provides better leave amenities to its employees, the State Government may in the interest of the employees exempt the factory from the operation of this Chapter. The scope of section 84, like the scope of section 78, cannot be limited only to the more favourable benefits which may be existing at the date when the Act was passed. What is true about the existing benefits would be equally true about the benefits which may be granted by an employer to the employees in future. Let us illustrate what the con sequence would be if the appellant 's argument is accepted. Take the case of an employer who has been exempted under section 84 on the ground that the benefits of leave conferred by him on his employees are more favourable to them. In such a case, the employer may make his benefits still more favourable after exemption is accorded to him; but an employer who has already not provided more favourable benefits would be effectively precluded from making any such provisions in future. It is difficult to imagine that such a consequence could have been intended by the provisions of this welfare legislation. 305 The history of the amendments made in the relevant provisions of the Act also indicates that the Act has been gradually making more liberal provisions in ' the interest of workmen to whom it applies. In the original Act as it was passed (25 of 1934) section 34 provided for weekly holiday but no provision was made for holidays with pay. When the said Act was amended by Act 3 of 1945, section 49A which is equivalent to present section 78(1) without the proviso was inserted; and section 49B provided, inter alia, that every worker who has completed a period of twelve months continuous service in a factory shall be allowed during the subsequent period of twelve months holidays for a period of ten days. That is how provision for holidays came to be made. By the ; 'amending Act 63 of 1948, section 78 with the present proviso was enacted; and section 79 made a provision for annual leave with wages. While making provision for annual leave with wages the section then prescribed a minimum of ten days; subsequently, by amending Act 25 of 1954, section 79 as it stands at present was enacted; and in section 78 the word "annual" has been added to qualify leave in the proviso. We have thus briefly referred to some changes made in the Act from time to time in order to show that subsequent amendments have sought to make the provisions more liberal. There is one more point which may incidentally be mentioned whilst we are considering the amendments made in the Act from time to time. Section 49A which broadly corresponds to section 78 of the present Act saved other laws and terms of any award, agreement or contract of service just as section 78(1) does. Now, if the said section is construed on the lines which the appellant wants us to construe section 78(1) it would only be arrangements existing at the date when the said amending Act came into force on January 1, 1946, that would be protected and saved, and nothing that happened either by way of legislation or by way of awards or contracts subsequent to the said date would attract the provisions of the said section 49A or section 78 which subsequently took its place. This obviously is not 39 306 intended by the Legislature which incidentally shows that section 78(1) cannot be confined to existing arrangements or laws, but takes within its sweep future laws, agreements, contracts or awards. Therefore, the challenge to the validity of the award based on the assumption that section 79(1) provides for standardised award of annual leave with wages fails. Then it is urged that the provision made by the award for privilege leave introduces discrimination between the clerical staff covered by the present reference and operatives covered by the earlier awards made by the same Tribunal. We were told that operatives had made a similar claim for privilege leave before the same Tribunal, and the said claim had been rejected. The argument is that the provision for privilege leave made by the present award would create discontent amongst the operatives to whom similar leave has been denied, and that would disturb industrial peace. We are not impressed by this argument. It is not seriously disputed that a distinction has generally been made between operatives who do manual work and clerical and other staff; in fact the appellant 's standing orders themselves make different relevant provisions for the two categories of its employees. It is also not disputed that in practice such distinction is made by comparable concerns, and awards based on the same distinction are generally made in respect of the two separate categories of employees. We are, therefore, unable to appreciate the argument that in granting privilege leave to the present staff the Tribunal has either overlooked its earlier award or has made a decision which suffers from the vice of discrimination. The practice prevailing in comparable concerns and the trend of awards both seem to show that a distinction is generally made between the two categories of employees, and since the said distinction is perfectly justifiable no question of discrimination can arise. It is then argued that making liberal provisions for privilege leave and sick leave are really opposed to the modern trend in industrial thought, and so such liberal awards should be discouraged and corrected. 307 There is no doubt that when industrial adjudication seeks to do social justice it cannot ignore the needs of national economy; and so in considering matters of leave, either in the form of privilege leave or sick leave, the Tribunals should not ignore the consideration that unduly generous or liberal leave provisions would affect production and obviously production of essential commodities is in the interest of not only the employers and the employees but also of the general community; but it is difficult for us to accept the argument that we should make suitable modifications in the provisions made by the award in regard to privilege leave or sick leave. These are matters primarily for the Industrial Tribunal to consider and decide. The Tribunal is more familiar with the trend prevailing in comparable concerns, and unless it appears that the impugned provisions cannot be sustained on any reasonable ground or that they mark a violent departure from the prevailing practice or trend, we would be reluctant to interfere with the decision of the Tribunal. After all, in deciding what ,would be a reasonable provision for privilege leave or sick leave, the Tribunal has to take into account all relevant factors and come to its own decision. As we have already indicated, in making the present award the Tribunal has considered previous decisions which were relevant and prevailing agreements in comparable concerns. We have carefully considered the criticism made by the learned Attorney General against the provisions contained in the award, but we are not satisfied that a case has been made out for interference in an appeal under article 136. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

It is not correct to say that section 79 of the , standardises the grant of annual leave with wages to employees to whom the Act applies and that neither the employer by voluntary agreement nor the Industrial Tribunal by its award can vary that standard. It is well settled that in construing the provisions of a welfare legislation, such as the Act in question which has for its object the preservation of the health, safety and welfare of the workmen, courts should apply the rule of beneficent construction and moreover, sections 78 and 84 of the Act put it beyond doubt that section 79(1) is not intended to standardise annual leave with wages by providing the maximum. Rightly construed section 78(1) of the Act not only protects past laws, awards, agreements and contracts but also those that are to come into existence in the future and does not prohibit a more generous agreement than that prescribed by section 79(1). Likewise the scope of section 84 of the Act which, in empowering the State to exempt a factory from all or any provisions of Ch. VIII of the Act, contemplates better amenities than those guaranteed by the Chapter, cannot be limited to benefits existing at the date of the Act but must also apply to future benefits which an employer may grant to his employees. Consequently, in a case where the Industrial Tribunal, on a consideration of awards and agreements between employers and employees in comparable concerns, awarded annual leave in excess of what is prescribed by section 79(1), Held, that the award was not open to challenge. Held, further, that the distinction generally made between operatives doing manual work and clerical and other staff is perfectly justifiable and so the award of privilege leave to the clerical staff could not be said to be discriminatory. Although the Industrial Tribunals in awarding privilege leave or sick leave must not fail to consider their effect on production and so on the interest of the community in general, this Court would be reluctant under article 136 of the Constitution to interfere with an award unless its provisions are unsustainable on any reasonable grounds and make a violent departure from the practice and trend prevailing in comparable concerns. 38 298

The Industrial Court, Bombay, awarded bonus equal to 4 1/2 months ' wages to the operatives of the Tata Mills Ltd. and directed that those operatives who were no longer in the service of the Mills should be paid the bonus in one lump sum by a fixed date and in such cases claims in writing should be made to the Manager of the Mills. The operatives who made a claim before the date fixed were duly paid but payment was refused to operatives who applied after that date. The operatives who had been refused payment made applications to the Authority under the Payment of Wages Act. The Mills contended that the Authority had no jurisdiction to entertain the application, but the contention was rejected. The Mills filed a writ petition before the Bombay High Court which was dismissed by a Single judge and an appeal against that decision was also dismissed by a Division Bench: Held, that the bonus awarded by the Industrial Court was not wages within the meaning of section 2(Vi) of the Payment of Wages Act and as such the Authority had no jurisdiction to entertain the applications made to it under section I5 of the Act. Though such bonus was remuneration it was not remuneration payable on the fulfilment of the terms of the contract of employment, express or implied, as required by section 2(vi). F. W. Heilgers & Co. vs N. C. Chakravarthi, [1949] F.C.R. 356, followed.

The respondent was an employee of the appellant. After a domestic inquiry in respect of alleged misconduct he was dismissed. As an industrial dispute was pending an application was made to the Industrial Tribunal under section 33(2)(b) of the . The tribunal held that though the enquiry was fair, the findings of the enquiry Officer were perverse and therefore it did not give its approval the order of dismissal. By special leave the appellant came to this Court, contending that since the enquiry was held to be fair the Tribunal no jurisdiction to interfere with the findings of fact arrived at by the Enquiry Officer. HELD: (i) Earlier decisions of 'this Court make it clear that when in Industrial Tribunal is asked to give its approval to an order of dismissal under section 33(2)(b) of the Act, it can disregard the findings given y the Enquiry Officer only if the findings are perverse. The findings are reverse when either they are not based on legal evidence or they are such as no reasonable person could have arrived at on the basis of material before the domestic tribunal. [739 G 740 C] Bangalore Woolien, Cotton and Silk Mills Company Ltd. vs Dasappa B) (Binny Mills Labour Union) & Ors. [1960] II L.L.J. 39, Lard Krishna Textile Mills vs Its Workmen, ; , State lndhra Pradesh vs section Sree Rama Rao; , , applied. (ii) A domestic tribunal though not bound by the technical rules rout evidence contained in the Indian Evidence Act cannot ignore subsintive rules which would form part of principles of natural justice. The principle that a fact sought to be proved must be supported by statements lade in the presence of the person against whom the enquiry is held nd that statements made behind the back of the person charged are not be treated as substantive evidence, is one of such basic principles which. domestic tribunal cannot disregard. The previous statement of a witness not substantive evidence unless affirmed as truthful by the witness when actually examined in the presence of the workman charged. A finding by the domestic tribunal based not on substantive evidence but on hearsay, is perverse, because hearsay is not legal evidence. [743 C E; 745 Khardah Co. Ltd. vs Their Workmen, ; , State of ysore V.S.S. Makapur; , and M/s. Kesoram Cotton ills Ltd. vs Gangadhar, ; , relied on. (iii) In the present case the findings of the Enquiry Officer were held by the Industrial Tribunal to be perverse as they were not sed on legal evidence and were not justified by the material before m. [749 C E] 736

An industrial dispute arose between the appellant and its workmen as to 'whether the employers were required to pay wages for the festival holidays allowed to their workmen in a year. The appellant contested the workmen 's claim mainly on the grounds that neither in law nor in practice was there any provision for festival holidays with wages, that the appellant was already paying wages for three holidays allowed to the workmen under the U.P. Industrial Establishment (National Holidays) Act, 1961 and that in the entire region in which this mill is situated, no textile mill pays wages for festival holidays. The mill was stated to be an uneconomic unit and, therefore, not in a position to b@r an extra burden. The workmen, on the other band, in their separate written statements, filed through three Unions. pleaded that the grant of holidays without wages was illegal and against social justice. In their rejoinder the appellant pleaded that the holidays mentioned by the Unions were (,ranted because the workmen had demanded the same and those holidays were substituted by other days in lieu of holidays and as they were paid for the days on which they worked on account of those holidays there was no loss of wages caused to them. The Tribunal by its award made the appellant liable to pay to their daily rated and piece rated workmen for 17 festival holidays, besides three national holidays, plus arrears, on the ground that the Secretary of,the appellant mill admitted that the festival holidays were paid holidays in the sense that workers were allowed to work on their unpaid rest days in substitution of the said festival holidays. The appellant being aggrieved by the award presented a writ petition before the High Court which was dismissed by a single Judge. Special leave to a Divisional Bench of the High Court was dismissed in Iimine, but the Bench certified the case to be fit for appeal to this Court. The appellant was held entitled ' to certificate either under cl. (a) or cl. (b) of article 133(1) of the Constitution on the ground that value of the subject matter of dispute or claim The respondent in the Supreme Court objected to the competence of the certificate on the ground that though the judgment of the Division Bench was one of affirmance the certificate did not disclose on its face the existence 'of any substantial question of law. This objection was upheld but as the case was considered fit for special leave, on oral request special leave was granted on the condition that the appellant would file a formal application for special leave accompanied by an application for condoning the delay 911 Allowing the appeal on the merits, HELD : By reading the statement of the Secretary of the appellant along with the pleadings as disclosed in the respective statement of cases of the parties, it is not possible to bold that the appellant had admitted that the 17 festival holidays were being given by them as paid holidays dispensing with the enquiry into the question referred for adjustment to the Industrial Tribunal. Even the workmen did not plead that the festival holidays were treated as paid holidays. The Secretary 's statement that no festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays. This statement clearly explains that sense in which the Secretary meant to say that the festival holidays were paid. The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as the festival holidays are. This statement read with the detailed explanation could not logically serve as a ground for ignoring the unequivocal denial in the written state ment. The industrial Tribunal, was therefore, wrong in holding that the statement made by the Secretary was an admission on behalf of the appellant. The learned single Judge also missed the real point and held that the Secretary 's statement constituted an admission and all 'facts evidence was therefore, excluded. The Division Bench fell into the, same error in summarily dismissing the appeal in limine. (920 A EJ (ii) The U.P. Industrial Establishments (National Holidays) Act, 1961 and rules provide for paid National Holidays but that Act dotes not deal with festival holidays. In determining the number of paid festival holidays per year, certain facts, like custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased produCtion are some of the relevant factors to be taken into account. The question affects national economy and does not remain confined only to the establishment concerned but has its impact on other concerns as well. This aspect has been completely ignored by the, Industrial Tribunal. Further the Tribunal proceeded solely on the basis of misreading of the Secretary 's statement. thereby ignoring the plea taken by the appellant. There is. thus the manifest error of law apparent on the fact of the record which resulted in grave failure of justice, because evidence on the only material point was illegally shut out. [921 A] The District Board (afterwards Zila Parishad Allahabad vs Syed Tahir Hussain & ors C.A. No. 57 8 of 1963 decided oh July 23, 1965, Shiri Durga Prasad & Anr. vs The Banaras Bank Ltd., [1964] 1 S.C.R.475.preferred to.

% The Ist respondent was working in the appellant company as an Internal Auditor on a monthly salary of Rs.1186 60P per month. The appellant alleged that the respondent started absenting himself from 28th January, 1978 and as such was not entitled to any salary for any period beyond the said date. The respondent was thereafter placed under suspension on 30th March, 1978. On 4th May, 1978 the respondent filed an application under section 33C(2) of the claiming a total sum of Rs.4746 40p on account of salary from Ist January, 1978 to 30th April, 1978. The appellant objected on the ground that the respondent was not a 'workman '. On 9th November, 1978 there was an order dismissing the respondent from service. On 2nd January, 1979 the respondent filed an application under section 28A of the Rajasthan Shops and Commercial Establishments Act, 1958 which was dismissed on 31st July, 1979 on the ground of limitation. On the 2nd August, 1979 the Labour Court held that the respondent was doing clerical duties and as such was a 'workman ' under the and he was entitled to Rs.2060 98p as salary 986 from 9th March, 1978 to 30th April, 1978. There was also a reference under section 10 of the on 8th August, 1960 arising out of the dismissal of the respondent. The appellant filed a writ petition challenging this order. All the aforesaid writ petitions were disposed of by a Single Judge of the High Court on 16th March, 1982 holding that the respondent was not a 'workman '. Division Bench of the High Court, however reversed the aforesaid judgment and held that the respondent was a 'workman '. The two writ petitions of the appellant were dismissed, while the writ petition of the respondent was allowed. Aggrieved by the aforesaid orders the appellant appealed to this Court. On the questions: (1) whether the respondent was a 'workman ' or not within the definition of section 2(s) of the and (2) whether the or the Rajasthan Shops and Commercial Establishments Act, 1958 would apply. Dismissing the appeals, ^ HELD: 1.(a) Whether a person was performing supervisory or managerial work is a question of fact. One must, therefore, look into the main work and that must be found out from the main duties. A supervisor has to take some kind of decision on behalf of the company. One who was reporting merely as to the affairs of the company and making assessment for the purpose of reporting is not supervisor. [992A B] (b) There is no controversy in the instant case, that the respondent is not employed in any managerial or administrative capacity. Distribution of work may easily be the work of a manager or an administrator but "checking" the work so distributed or "keeping an eye" over it is certainly supervision. A manager or administrator 's work may easily include supervision but that does not mean that supervision is the only function of a manager or an administrator. Where there is a power of assigning duties and distribution of work there is supervision. [990C,991A B,991D] Mcleod and Co. vs Sixth Industrial Tribunal West Bengal and others, A.I.R. 1958 Calcutta 273; All India Reserve Bank Employees Association vs Reserve Bank of India, ; ; Llyods Bank 987 Ltd. vs Pannalal Gupta, ; Burmah Shell Oil Storage & Distribution Co. Of India. vs Burmah Shell Management Staff Association & Ors. ; ; The Punjab Co operative Bank Ltd. vs R.S. Bhatia (dead) through Lrs, ; Maheshwari vs Delhi Administration Delton Cable India (P) Ltd.; , and Hind Construction and Engineering Company Ltd. vs Their Workmen, referred to. (c) A checker on behalf of the management or employer is not a supervisor. [993E] In the instant case, the nature of duties performed by Respondent No. 1 were mainly reporting and checking up on behalf of the management. A reporter or a checking clerk is not a supervisor. The respondent does not appear to be doing any kind of supervisory work. He was undoubtedly checking up on behalf of the employer but he had no independent right or authority to take decision and his decision did not bind the company. The Division Bench came to the conclusion that the respondent was a 'workman ' within the meaning of section 2(s) of the taking into consideration the evidence recorded before the Labour Court that the respondent is a workman and not a supervisor. That conclusion on the appreciation of evidence cannot be interfered with under Article 136 of the Constitution. [993A C] 2.(a) In order to raise the question of repugnancy two conditions must be fulfilled. The State law and the Union law must operate in the same field and one must be repugnant or inconsistent with the other. These are two cumulative conditions which are required to be fulfilled. [995E] Deep Chand vs The State of Uttar Pradesh and others, [1959] Suppl. 2 S.C.R. 8 and M/s. Hoechst Pharmaceuticals Ltd. and others vs State of Bihar and others; , at page 87 referred to. (b) In this case there is a good deal of justification to hold that these laws, the and the Rajasthan Shops and Commercial Establishments Act, 1985 tread on the same field and both laws deal with the rights of a dismissed workman or employee. But these two laws are not inconsistent or repugnant to each other. The basic test of repugnancy is that if one prevails the other cannot prevail. That is not the position in this case. [995F G] 988 (c) The application under section 28A of the Rajasthan Act was dismissed not on merits but on limitation. There is a period of limitation provided under the Rajasthan Act and it may be extended for reasonable cause. But there is no period of limitation as such provided under the . Therefore, that will be curtailment of the rights of the workmen or employees under the . In that situation section 37 declares that law should not be construed to curtail any of the rights of the workmen. [996A B] (d) Social Welfare and labour welfare broadens from legislation to legislation in India. It will be a well settled principle of interpretation to proceed on that assumption and section 37 of the Rajasthan Act must be so construed. In no way the Rajasthan Act could be construed to curtail the rights of the workman to seek any relief or to go in for adjudication in case of the termination of the employment. [996C] (e) There is, therefore, no conflict between the and Rajasthan Shops and Commercial Establishments Act, 1985 and there is no question of repugnancy. These two Acts are supplemental to each other. [994G H; 996D]

An award of an Industrial Tribunal is intended to have a long term of operation, and can be reopened under section 19(6) of the Industrial Disputes Act XIV of 1947 only when there has been a material change in the circumstances on which it was based. To hold otherwise would be to defeat the two basic objects which all industrial legislations have in view, namely, to ensure to the workmen, a fair return for their labour and to prevent disputes between the employers and employees, so that production might not be affected and the interests of the society might not suffer. That although the rule of res judicata as enacted by section 11 of the Code of Civil Procedure does not in terms apply to such an award, its underlying principle which is founded on sound public policy and is of universal application must apply. The Army & Navy Stores Ltd., Bombay vs Their Workmen, ([1951] and Ford Motor Co. of India Ltd. vs Their Workmen, ([1951] , approved and applied. Sheoparson Singh vs Bamnandan Prasad Singh, ([1916] L.R. 43 I.A. 91), referred to. Consequently, where, as in the instant case, the Union of the employees of a certain section of the appellant Company served a notice on the Company under section 19(6) of the Act terminating a previous award which had applied to its members the scales of pay and dearness allowance fixed by the Bengal Chamber of Commerce with slight modifications, and demanded that the more favourable Scale of pay adopted by the Mercantile Tribunal in its award might be applied to them, and the Tribunal appointed to adjudicate the dispute, held that, there having been no change in the circumstances in which the previous award had been made, the same was binding between the parties and could not be modified, but the Appel 102 782 late Tribunal in appeal held otherwise and brushed aside the previous award, held that the order of the Appellate Tribunal was erroneous in law and as such liable to be set aside. Hold further, that the reason for the grant of a bonus being that the workers should be allowed to share in the prosperity to which they have contributed, unless the profits for a particular year were adequate for a payment of bonus to all the workers of the Company in all its sections, no claim for it could at all arise either in law or equity. Karam Chand Thappar & Bros. ' Workmen vs The Company ([1953] L.A.C. 152), referred to. That an order passed by the Tribunal refusing reinstatement would be appealable under section 7(1)(a) of the Industrial Disputes (Appellate Tribunal) Act of 1960 if it involved a substantial question of law and it was not necessary to decide in the present case whether the decision of the Appellate Tribunal that an appeal lay to it under that section was final and not open to question in a civil court, as the correctness of that decision was challenged not collaterally or in an independent proceeding but in an appeal under article 136 of the Constitution and it was open to the Supreme Court in such an appeal to consider the legality or otherwise of the orders passed either by the Tribunal or by the Appellate Tribunal in appeal. Pankaj Kumar Ganguli vs The Bank of India, ([1966] 60 C.W.N. 602) and Upper Ganges Valley Electric Employees Union vs Upper Ganges Valley Electricity Supply Co. Ltd. and another, (A.I.R. 1956 All. 491), distinguished. That the omission to draw up a formal charge sheet against a workman could not vitiate an order of dismissal if he was aware of the charge framed against him and had an opportunity of offering his explanation.

The respondent, the Textile Labour Association at Ahmedabad, entered into a five years pact with the Ahmedabad Mill Owners ' Association, representing the member mills, in regard to payment of bonus to the employees of the mills for the years 1953 57. The Labour Union demanded bonus for the year 1958 on the basis of the pact, but the mill owners claimed that the pact was contrary to the formula evolved by the Full Bench in Mill Owners ' Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, Bombay, , which was approved by the Supreme Court in The Associated Cement Companies Ltd. vs Its Workmen, , inasmuch as (1) rehabilitation provided in the Agreement differed vitally from rehabilitation as explained in that decision, (2) the Agreement provided for payment of a minimum bonus even though there may be no available surplus and even though the particular mill might have made actual loss, and (3) while the Full Bench Formula, as approved by the Supreme Court treated a particular year as a self sufficient unit, there was provision for set off and set on in the Agreement. The Industrial Tribunal to which the dispute was referred in the. form of sixty six references, one relating to each mill, took the view that the pact did not in any way run counter to the law laid down by the Supreme Court, and that the extension of the agreement for one more year would help in promoting peace in the industry in Ahmedabad. Held (Subba Rao, J. dissenting) that the Agreement in question departed from the Full Bench Formula in the matter of bonus, in certain vital aspects and that the Tribunal when it extended the Agreement for the year 1958 was ignoring the law as laid down by the Supreme Court as, to what profit, bonus,was and how it should be worked out. 2 The Tribunal had no power by extending the Agreement to make it possible for payment of a minimum bonus for the year 1958 even when there was either insufficient available surplus to pay bonus or no available surplus at all or even actual loss. The jurisdiction of the Tribunal was limited by its terms of reference, which was not on industry cum region basis, but one for each mill to consider the question of bonus for each mill for the year 1958 and, consequently, it had no jurisdiction to apply the principle of set off and set on to be found in the Agreement in respect of payment of bonus or take into account the profits of the industry as a whole in Ahmedabad. Per Gajendragadkar, Sarkar, Wanchoo and Mudholkar, JJ.It is open to an industrial court in an appropriate case to impose new obligations on the parties before it or modify contracts in the interest of industrial peace or give awards which may have the effect of extending Agreement or making new one, but this power is conditioned by the subject matter with which it is dealing and also by the existing industrial law and it would,not be open to it while dealing with a particular matter before it to overlook the industrial law relating to that matter as laid down by the legislature or by the Supreme Court. Western India Automobile Association vs Industrial Tribunal, Bombay, , Rohtas Industries Limited vs Brijnandan Pandey; , and Patna Electricity Supply Co.v. Patna Electric Supply Workers ' Union, [1959] SUPP. 2 S.C.R. 761, relied on. Per Subba Rao, J. (1) The impugned five years pact was not contrary to industrial law as laid down by the Supreme Court. (2) The pact also did not infringe the principle that bonus depends upon profits; but it applied the same by evolving a formula of set off and set on to a complicated situation of the entire industry in a particular area for a number of years. (3) The Full Bench Formula in regard to rehabilitation was not contravened by the pact. The decisions of the Supreme Court did not preclude employers and employees from agreeing to a particular valuation of the block having regard to the circumstances obtaining at the time of the agreement. (4) Neither the Full Bench Formula nor the decisions of the Supreme Court affirming it precluded the Tribunal from extending the terms of the pact by another year if that was necessary to maintain industrial peace.

The Company after regular enquiry and pending permission of the Industrial Tribunal under section 33 of the , suspended some workmen without pay, whereupon the workmen filed applications under section 33A of the Act before the 'Industrial Tribunal on the ground that their suspension without pay beyond ten days was against the provisions of the Standing Orders governing their conditions of service to the effect that an employee might be suspended provided the suspension without pay, whether as punishment or pending enquiry, did not exceed ten days. The Tribunal dismissed the workmen 's applications under section 33A and granted permission to the Company to dismiss the workmen concerned. The workmen appealed. The Appellate Tribunal upheld the order granting permission to dismiss the workmen but came to the conclusion that the words " pending enquiry " in cl. 27 Of the Standing Orders included proceedings before the Industrial Tribunal and that there was breach of the Standing Orders. Held, that the employer could apply under section 33 Of the , for permission to dismiss an employee when after a regular enquiry he had come to the finding that the case against the employee was proved and that the punishment of dismissal was the proper punishment. The Industrial Tribunal had not to enquire into the conduct of the employee or the merits of dismissal but see whether a Prima facie case had been made out and a fair enquiry made by the employer. The time taken before the Tribunal in such proceedings was beyond the control of the employer. Standing Orders were concerned with employers and employees and not with Tribunals. In the instant case, the words " pending enquiry " in cl. 27 of the Standing Orders, referred only to the enquiry by the employer and not to the pro ceedings before the Tribunal. The principle laid down in Lakshmi Devi Sugar Mill 's case that workmen would not be entitled to payment of wages during the whole period of suspension if the Tribunal gave permission to, dismiss them, would apply only to cases where there was a ban under section 33 and the employer had to apply under that section for lifting the ban after completing the enquiry. 720 Rampalat Chamay vs The Assam Oil Co. Ltd., (195 4) L.A.C. 78, dissented from. The Automobile Products of India Ltd. vs Rukamji Bala, , referred to. Lakshmi Devi SugaR Mills Ltd. vs Pt. Ram Sarup, ; , followed and explained.

Appeal No. 311 of 1959. Appeal from the judgment and order dated October 31, 1955, of the Travancore Cochin High Court, Ernakulam, in Original Petition No. 75 of 1955. A. N. Kripal and D. Gupta, for the appellant. Sardar Bahadur, for the respondent. December 13. The Judgment of the Court was delivered by 238 KAPUR, J. This is an appeal pursuant to a certificate of the High Court of Kerala against the judgment and order of that court and the question for decision is the applicability of section 35 of the Indian Income tax Act (hereinafter termed the 'Act '). The facts which have given rise to the appeal are these: The respondent is a limited company which owns a spinning mills at Alwaye. It commenced business in January, 1951, and its first accounting year ended on December 31, 1951, and the relevant assessment year is 1952 53. It filed its return showing an income Rs. 3,21,284 without taking into account the amount allowable under section 15C of the Act. On February 2, 1953, the net assessable income of the respondent was determined at Rs. 1,47,083 after deducting Rs. 1,79,081 under section 15C. The respondent however declared a dividend of Rs. 4,72,415 which attracted the application of section 2 of the Finance Act, 1952, read with Part B, proviso (ii) of First Schedule and thus it became liable to the payment of additional income tax and this fact was overlooked by the Income tax Officer. After giving notice under section 35 of the Act, the Income tax Officer by an order dated January 25, 1954, rectified this error and imposed an additional tax at the rate of one anna in the rupee. He later discovered that this was also erroneous and the rate should have been 5 annas in a rupee. By an order dated August 12, 1954, he rectified the error. Under section 18A, advance income tax had to be paid and the respondent company had deposited only Rs. 5,000 and therefore became liable to penal interest under section 18A(8) of the Act. By the same order this omission to impose penal interest was ' corrected and this error was thus rectified. Against this order the respondent company went in revision under section 33A(2) to the Commissioner of Income tax but the revision was dismissed. Thereupon the respondent company filed a petition in the High Court of Kerala under article 226 of the Constitution on the ground that section 35 of the Act did not apply and that on the merits additional tax could not be imposed. The High Court by its judgment dated October 31, 239 1955 held that the orders made were without jurisdiction and therefore granted a writ of certiorari quashing the orders and the Income tax Officer has brought this appeal pursuant to a certificate of that High Court. According to the High Court, section 35 of the Act was a provision for rectification of "mistakes apparent on the record" and in the opinion of the High Court it was a mistake analogous to O. 47, r. 1 of the Code of Civil Procedure for grant of review on the ground of mistake or error apparent on the face of the record and it construed it in the following words: "i.e. an evident error which does not require any extraneous matter to show its incorrectness. The error may be one of fact but is not limited to matters of fact and include also errors of law. But the law must be definite and capable of ascertainment. An erroneous view of law on a debatable point or a wrong exposition of the law or a wrong application of the law or a failure to apply the appropriate law cannot be considered a mistake or error apparent on the face of the record. See Chitaley 's C.P.C. Col. III pp. 3549 50, 5th edition. " On the ground that the applicability of proviso (ii) of Part B of the First Schedule of the Finance Act was a complex question which could not be said to be "apparent on the face of the record", the High Court held that the necessary foundation for the exercise of the powers under section 35 had not been laid and therefore the Income tax Officer had no jurisdiction to make the order that he did. The High Court also held that the levy of penal interest under section 18A(8) of the Act for failure to make advance deposit under section 18A(3) was also without jurisdiction. The learned Judges of the High Court seem to have fallen into an error in equating the language and scope of section 35 of the Act with that of O. 47, r. 1, Civil Procedure Code. The language of the two is different because according to section 35 of the Act which provides for rectification of mistakes the power is given to the various income tax authorities within four years from the date of any assessment passed by them to rectify 240 any mistake "apparent from the record" and in the Civil Procedure Code the words are "an error apparent on the face of the record" and the two provisions do not mean the same thing. This court in Maharana Mills (Private) Ltd. vs Income tax Officer, Porbandar (1) has laid down the scope of section 35 at p. 358 in the following words: "The power under section 35 is no doubt limited to rectification of mistakes which are apparent from the record. A mistake contemplated by this section is not one which is to be discovered as a result of an argument but it is open to the Income tax Officer to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error provided that if the result is enhancement of assessment or reducing the refund then notice has to be given to the assessee and he should be allowed a reasonable opportunity of being heard. " In that case the error arose because of an initial mistake in determining the written down value which was subsequently rectified. In an earlier case M. K. Venkatachalam vs Bombay Dyeing & Manufacturing Co. Ltd. (2) where as a consequence of a subsequent amendment of the law having retrospective effect, the Income tax Officer reduced the amount of interest under section 18A(5) of the Act and the assessee obtained from the High Court a writ of prohibition against the Income tax Officer on the ground that the mistake contemplated had to be apparent on the face of the order and not a mistake resulting from an amendment of the law even though it was retrospective in its effect, it was held that it was a case of error apparent from the record. Gajendragadkar, J. in his judgment said: "At the time when the Income tax Officer applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1, 1952. " Thus this court has held that discovery of an error on (1) (2) ; 241 the basis of assessment due to an initial mistake in determining the written down value is a mistake from the record and so is a misapplication of the law even though the law came into operation retrospectively. The Income tax Officer, can, under section 35 of the Act, examine the record and if he discovers that he has made a mistake he can rectify the error and the error which can be corrected may be an error of fact or of law. The restrictive operation of the power of review under 0. 47 R. 1, Civil Procedure Code is not applicable in the case of section 35 of the Act and in our opinion it cannot be said that the order of the Income tax Officer in regard to assessment in dispute was without jurisdiction. In regard to section 18A (8) also the learned Judges have misdirected themselves because that section is mandatory. It provides: section 18A(8) "Where, on making the regular assessment, the Income tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of the regular assessment. " Therefore the Income tax Officer was required to calculate the interest in the manner provided under the provisions of that sub section and had to add it to the assessment. Counsel for the respondent sought to raise the question as to the applicability of proviso (ii) of Part B of First Schedule of the Finance Act 1952 and relied upon the judgments of this Court in Commissioner of Income tax vs Elphinstone Spinning & Weaving Mills Co. Ltd. (1) and similar cases reported as Commissioner of Income tax, Bombay City vs Jalgaon Electric Supply Co. Ltd.(1) and Commissioner of Income tax, Bombay City vs Khatau Makanji Spinning and Weaving Co. Ltd. (3); but the facts of those cases were different. In the first case there was no total income and the (1) (2) (3) [1960] 40 I.T.A. 189. 31 242 Finance Act was not applicable in that case. In the second there was no profit in any preceding year and therefore the fiction failed because it postulates that there should be undistributed profits of one or more years immediately preceding the previous year. In the third case also the Finance Act was inapplicable because the additional tax was not properly laid upon the total income and what was actually taxed was never a part of the total income of the previous year. In our opinion the order of the High Court was erroneous. We therefore allow this appeal and set aside the judgment and order of the High Court with costs in this court and in the High Court. Appeal allowed.

After the respondents net assessable income for the years ,952 53 was determined, it declared dividends which attracted provisions of the Finance Act, 1952, and became liable to the 237 payment of additional income tax, which fact was overlooked by the Income tax Officer, who, after giving notice under section 35 of the Income tax Act, rectified the error and imposed an additional tax at the rate of one anna in the rupee. He later discovered that this was also erroneous and the rate should have been five anmas in a rupee and rectified the error; by the same order the omission to impose penal interest under section 18A(8) was rectified and penal interest was imposed. The respondent 's case before the High Court was that section 35.of the Act did not apply and that on the merits the additional tax could not be imposed. The High Court held that the necessary foundation for the exercise of the powers under section 35 bad not been laid and therefore the Income tax Officer had no jurisdiction to make the order; and also that the penal interest under section 18A(8) of the Act for failure to make advance deposit was also without jurisdiction. Held, that the language and scope of section 35 of the Indian Income tax Act, 1922, could not be equated with that of O. 47, r. 1 of the Code of Civil Procedure. The Income tax Officer could under section 35 of the Act examine the record and if he discovered that a mistake had been made, could rectify the error both of law and fact. The restrictive operation of the powers of review under 0. 47, r. of the Code of Civil Procedure was not applicable in the case of section 35 of the Income tax Act. Held, further, that the section 18A(8) was a mandatory one and the Income tax Officer was required to calculate the interest in the manner provided under the provisions of that sub section and had to add it to the assessment. Maharana Mills (P.) Ltd. vs Income tax Officer, and M. K. Venkatachalam vs Bombay Dyeing & Manu facturing Co. Ltd.; , , discussed. Commissioner of Income tax vs Elphinstone Spinning & Weaving Mills Co. Ltd. , Commissioner of Income tax, Bombay City vs Jalgaon Electric Supply Co. Ltd., and Commissioner of Income tax, Bombay City vs Khatau Makanji Spng. & Weavg to. Ltd., not applicable.

The respondent assessee had made certain purchases before 30th June, 1974 and sold them subsequently in the course of inter state trade or commerce. The rate of purchase tax under Item 71 of the First Schedule to the Kerala General Sales Tax was increased from 3% to 5% with effect from 1st July, 1974. The High Court held that the purchases made by the respondent prior to 30th June, 1974 were taxable at the rate of 3 %. Dismissing the appeal to this Court, ^ HELD: The assessee could not be made liable to tax on the purchases made by it prior to 30th June, 1974, unless the purchases acquired the quality of being last purchases in the State In the instant case there can be no doubt that the assessee became liable to pay tax on the purchases made by it prior to 30th June, 1974, as soon as it became determined though subsequent to 30th June, 1974, that these purchases were last purchases inside the State and were subsequently eligible to tax. Since the purchases took place before 30th June, 1974, the assessee would be liable to be taxed at the rate of 3% which was prevailing at the time when the purchases were made. [8S2F H; 853B] State of Madras vs T. Narayanaswami Naidu & Anr., ; , referred to. Seaso Rubbers vs State of Kerala, 48 S.T.C. 256, approved.

The appellant is a Cooperative Society engaged in the business of banking According to section 8] (i) (a) of the Income 'Tax Act, 1961, a Cooperative Society engaged in the business of banking is not liable to pay income tax on its business income. The Finance Act, 1963, however, by section 2(i) (a), 2(8), 3, paragraph A(ii) of Part I of the First Schedule and clause of that portion of Part I called surcharge on Income Tax provides for levy of additional surcharge for the purposes of the Union calculated on the amount of the residual income at the rates mentioned therein. The total income of the appellant for the assessment year 1963 64 was Rs. 10,00,098. Out of this Rs. 9,48,335 was its business income. 'The tax amounting to Rs. 23,845 was charged on Rs. 51,763 Applying the Finance Act of 1963, the residual income of the appellant was computed at Rs. 5.39,386 and a surcharge thereon was levied of Rs. 52,828 Thus, the total tax imposed on the appellant came to Rs. 76,674. The assessment order passed by the Income Tax officer levying the tax as aforesaid was challenged by the appellant in the High Court by a Writ Petition. The main grievance of the appellant before the High Court was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674 was imposed on it. The relevant provisions of the Finance Act were challenged as invalid on the ground that(i) they imposed additional surcharge on income which was exempt from tax under the provisions of the Income Tax Act and that (ii) the additional surcharge was intended as additional levy on the income tax and had no independent existence apart from it The High Court rejected these contentions. On an appeal by certificate, dismissing the appeal, ^ HELD : 1. It is indisputable that the appellant is not required to pay income tax on the banking income. In view of section 81. It is also not liable to pay surcharge on its business income in view of section 99(1)(v). [139C] 2. The, grievance of the appellant that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income Tax Act or the Finance Act. Harshness of a taxing statute, apart from a possible challenge to it under article 13 of the Constitution cannot be an invalidating circumstance. But, the grievance on this score is misconceived. It assumes what has to be examined that no part of the income exempted from Income Tax and Super Tax under the Income Tax Act can be brought to tax by a Finance Act, [140G H] 3. The concession of the counsel for the appellant giving up challenge to the power. of the Parliament to impose a new charge by Finance Act was Properly made. Under article 246(11) of the Constitution, Parliament has the exclusive power to make laws with respect ' 'o any of the matters in List of the Seventh Schedule. Entry 82 in List I relates to tax on income other than agricultural income. The Income Tax Act, 1961 and the annual Finance Acts are enacted by the Parliament in exercise of the powers conferred by Art 246(1) read with entry 82 of List I. Once the Parliament has the legislative competence to enact a law with respect to certain subject matter, the limits of 136 that competence cannot be judged further by the form or manner in which that power is exercised. Exigencies of the Financial year determine the scope and nature of the provisions of the Finance Act. The primary purpose of the Finance Act is to describe the rates at with the Income Tax will be charged under the Income Tax Act but that does not mean that new and distinct tax cannot be charged under Finance Act. Therefore, what is not income under the Income Tax Act can be made income by the Finance Act. An exemption granted by the Income Tax A, t can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge. [141D E; G H] 4. The contention of the appellant that surcharges are nothing but income tax and, therefore, expression income tax occurring in Sec. 4 and 81 of the Act includes surcharges and AS such exempted cannot be accepted. The case of the C.I.T. Kerala vs K. Srinivasan distinguished. There the essential point for determination was whether surcharge is additional mode or rate for charging income tax. The Court held there that it was so. The question before us is whether even if the surcharge is an additional mode or rate for charging income to the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income Tax, Act, 1961. The residual income as defined by the 1963 Finance Act is not the same as the business income of a Cooperative Bank which is exempted under see. The additional surcharge is a distinct charge not dependent for its leviability on the assessee 's liability to pay income tax or Super Tax. The decision of Allahabad High Court in Allahabad District Co operative Bank Ltd vs Union of India over ruled. [143D E] 5. The additional surcharge though levied by the Finance Act 1963 independently of the Income Tax Act is but a mode of levying tax on a portion of the assessee 's income computed in accordance with the definition in section 2(8) of the Finance Act 1963. [147F] ARGUMENTS For The Appellant 1. Under section 81 read with section 4 of the Income tax Act, 1961, income tax is not payable by the appellant. a Co operative Society, in respect of its income from banking business. Similarly super tax is not payable under section 99(i)(v) read with section 4. 2. The primary purpose of the annual Finance Acts as envisaged by section 4 of the Income tax Act is to prescribe the rates of income tax on the total income of an assessee, and this function as contemplated by section 4 is to be "subject to the other provisions of this Act", namely, the Income tax Act, 1961, which would include, inter alia, section 81. 3. The history of Indian income tax shows that surcharges by way of increase to the amount of income tax, which are added to the basic amount, in view of article 271 of the Constitution of India, are nothing other than income tax and a part of income tax alone. Therefore the expression 'income tax ' in section 4 and 81 of the Income tax Act, 1961, and section and Schedule I, Part 1 of the Finance Act, 1953, includes surcharges. Section 2 of the Finance Act, 1963, and Schedule I, Part I, Paragraph A all clearly contemplate that the surcharge. special surcharge and additional surcharge are all only by way of increase of the amount of income tax and not only partake of the character of income tax but are actually a part of income tax. They are merely rates of income tax. The main part of section 2(1) (a) says that "Income tax shall be charged at the rates specified in Part I of the First Schedule" and clause (ii) of that section provides in the ease referred to therein that income tax "shall further be increased by an additional surcharge for the purpose of the Union calculated in the manner provided in the First Schedule. Similarly in Paragraph A of Part I of the First Schedule the heading to the provisions prescribing rates of surcharge is "surcharges on income tax" in the plural. The main part in the heading also provides that "the amount of 137 income tax. shall be increased by the aggregate of the surcharges calculated as under " Clause (c) thereafter provides for the additional surcharge for the purpose of the Union. Paragraph A also therefore clearly indicates that the three surcharges are only of the same nature and that all the three surcharges are only by way of increase of the amount of income tax; in other words part of the income tax. Is either section 2 nor paragraph A of Part I of the First Schedule can even remotely be said to contemplate any separate levy of additional surcharge other than income tax. From the assessment order it is seen that the following have been charged only on the real taxable income of the appellant namely Rs. 51,763: (i) income tax (ii) surcharge on income tax (iii) special surcharge on income tax (iv) super tax and (v) surcharge on super tax. These items have not been charged on the total income of Rs. 10,00,098, because income tax is not payable on the balance of the total income under section 81. The Income tax officer has sought to impose only additional surcharge under clause (c) in respect to the total income of Rs. 10,00,098. In view of section 81 no additional surcharge is payable on the total income of Rs. 10,00,098. It is payable only on the taxable income of Rs. 51,763. Section 2 read with Paragraph A Part I of Schedule I to the Finance Act merely purports to lay down the method of computation where income tax is payable. It does not either dire thy or by implication make any amendment or modification in section 81. 7. Section 3 of the Finance Act ]963 also applies to a stage of computation only and in regard to relief, rebate etc. It does not impose any liability or any tax. It operates only where additional surcharge is payable and not other wise, and where relief, rebate etc. is to be given from the tax payable by the assessee, e.g. deduction of tax based on life insurance premia provident fund contribution. donations to charitable institution etc. Section 81 does not provide for any such relief or rebate. Section 2(8) of the Finance Act, 1963, defining "residual income" which requires deduction from the total income of income tax, surcharge and special surcharge to ascertain residual income also does not have the effect of imposing any liability or any tax but merely provides for computation. In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied." "In a case of reasonable doubt. the construction most beneficial to the subject is to be adopted. " The court will be very slow in reading an implied amendment in a tax law because there is no intendment. Income tax is one tax, not several taxes on several heads or several items of income: For the Respondent 1. It is open to the Parliament to pass an Act relating to more than one topic or field of operation, covered by the Entries in List 1. It is not as if there must be as many Enactments as the topics which the enactment covers. The legislature has a wide range of selection and freedom in appraisal not only in the subjects of taxation and the manner of taxation but also in the determination of the rate or rates applicable. If production were always to be taken into account there will have to be a settlement for every year and the tax will become a kind of income tax. The burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack. The burden is on the person complaining of discrimination. The burden is proving not possible 'inequality ' but hostile 'unequal ' treatment. This is more so when uniform taxes are levied. The State cannot be asked to demonstrate equality. Income which is exempt from taxation is income which is assessable to tax and therefore liable to tax but tax is not imposed on account of the exemp 138 tion. This exemption can by subsequent legislation be wholly or partially withdrawn both as regards items of income and levies imposed for the purpose of taxation. Thus where the Income tax Act 1961 says that business income of a co operative society will be exempt from income tax it would be open to the Parliament by enactment of the Finance Act of 1963 to say that this exemption shall be partially withdrawn as regards residual income and this partial exemption will operate only for the purpose of income tax but not surcharge on residual income. The net result of the partial withdrawn of the exemption would mean that though the business income of a co operative society will be exempt from tax the residual income which is only a part of the exempted business income could be subjected to surcharge on income tax only. 4. Income tax and surcharge on income tax are two different levies though the computation of the latter is based upon a percentage of the former. The to are inclusive for the purpose of imposing tax but they are not one levy only.

During the course of the hearing of an appeal against an assessment order made under the Wealth Tax Act for the assessment year 1964 65, the respondent who was the assessee, claimed deduction of an amount in the computation of net wealth which inter alia included the income tax and wealth tax liabilities created in consequence of certain rectification orders made under section 154 of the Income Tax Act and section 35 of the Wealth Tax Act. The rectification order related to assessment of income tax/wealth tax for the previous years and had been made after the completion of the assessment proceedings under the Wealth Tax Act for the assessment year 1964 65. The deduction claimed was allowed by the Appellate Assistant Commissioner and his decision was upheld by the Appellate Tribunal and the High Court. Dismissing the appeal, ^ HELD: The rectification of an assessment must be treated on the same basis as an original assessment for the purpose of a claim to deduction in the computation of the assessee 's net wealth. The rectification merely quantifies the true tax liability which had already been crystalized and become a debt on the last day of the previous year in the case of income tax liability, and, on the valuation date in the case of a wealth tax liability. [484 C D] Commissioner of Wealth Tax, Gujarat vs Shri Vadilal Lallubhai (C.A. Nos. 1524 to 1527 of 1973 decided on 21.10.1983) referred to. When an appeal is filed against an assessment order before the Appellate Assistant Commissioner, the assessment case is thrown open and the appellate proceeding constitutes a continuation of the assessment proceeding. Even if the tax liabilities, of which a deduction is claimed, are created by rectification orders or by assessment orders made after the date of the wealth tax assessment order under appeal, the law requires the claim to deduction being considered on the same basis as if it had been made in the original wealth tax assessment proceeding. [483 F H] 481 In the instant case, it is true that the rectification orders related to tax liabilities which were not claimed by the assessee in the course of the original assessment proceeding before the Wealth Tax officer but as the Appellate Assistant Commissioner permitted the claim to be made during the hearing of the appeal, there is no reason why the assessee should be denied consideration of his claim. [483 H; 484 A]

The appellants who are merchants carrying on business as dealers in jute in Calcutta, submitted returns of turnover for purposes of sales tax due under the Assam Sales Tax Act, 1947, but as they did not comply with the requisition of the Superintendent of Taxes to produce their books, the latter made a "best judgment assessment" under section 17(4) of the Act. Their appeals to the Assistant Commissioner of Taxes and revision petitions to the Commissioner of Taxes, Assam were dismissed. The appellants then moved the High Court of Assam by petitions under article 226 and contended that Explanation to section 2(12) of the Act was ultra vires the Assam Legislature and that the tax could not be levied on sales irrespective of the place where the contracts were made. They also contended that the finding of the Commissioner that the goods were actually in the State of Assam at the time when the contract was made was based on mere speculation. The writ petitions were dismissed by the High Court and the appellants appealed to the Supreme Court with certificate under article 132(1) of the Constitution. Before the Supreme Court the appellants applied for leave under article 132(3) of the Constitution to challenge the correctness of the decision of the High Court that the goods were actually within the State of Assam when the contracts were made. Held:(i) Leave under article 132(3) be refused and the appeal must be restricted to the question of law as to the interpretation of the Constitution, certified by the High Court. If these questions were desired to be raised the appellants ought to have moved the Commissioner to refer the case to the High Court under section 32 of the Act. They could have moved the High Court if the Commissioner refused to refer the case to the High Court. The Act provided machinery for obtaining relief and the same had to be resorted to and could not be allowed to be by passed. Ordinarily, the High Court does not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. The High Court does not generally enter upon questions which demand an elaborate examination of evidence to establish the rights to enforce which the writ is claimed. The High Court does not in exercise of its jurisdiction under article 226 act as a court of appeal against the decision of a court or Tribunal correct errors of fact. 656 The scheme of the Assam Sales Tax Act is that all questions of fact are to be decided by the taxing authorities. The opinion of the High Court can be obtained on questions of law arising out of the decisions of the taxing authorities. The High Court has under the Act no power to decide questions of fact which are exclusively within the competence of the taxing authorities. (ii)Explanation to section 2(12) of the Act is not ultra vires the Legislature.

The assessee company, which derived its income from the manufacture and sale of sugar and confectionery, was as sessed for the years 1958 59 by the Income Tax Officer under the Income Tax Act, 1922 by making additions of Rs.48,500 for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700 for salary of outstation staff. The assessee did not chal lenge the said assessment order. Later in the year 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 in respect of the assessment year 1958 59 for imposing penalty. Before the Inspecting Assistant Commissioner the assessee admitted that these amounts, which were not included in the return by the compa ny, represented income. On finding that there was deliberate understatement of income he imposed a penalty of Rs.70,000. On appeal the Tribunal held that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipsofacto indicate any criminality in its action to conceal any portion of the income, and that the assessee could very well have argued against the additions of the two sums, namely, Rs.67,500 and Rs.21,700. As regards the sum of Rs.48,500 it found that the assessee had agreed to similar addition in the earlier years and so the penalty was war ranted in similar amount for this year and taking into consideration that the sum involved was Rs.48,500, it con sidered that a smaller penalty of Rs.5,000 was imposable. The High Court took the view that the onus of proving concealment was on the Revenue because proceedings for penalty were penal in character, and held that so far as the sum of Rs.48,500 was concerned it was not proved that there was any deliberate concealment, that the Tribunal had not set aside the finding of the Assistant Inspecting Com 693 missioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly estab lished concealment, that the assessee in fact had surren dered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income, that acceptance by the assessee was material to give proper weight to judge the criminality of the action which in its opinion was not given, and that the Tribunal omitted to take into account the fact that the assessee had admitted that the amount of Rs.21,700 repre sented its income. In the appeal by special leave on the question as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts. Allowing the appeal, HELD: 1.1 In an income tax reference a finding on a question of pure fact could be reviewed by the High Court only on the ground that there was no evidence to support it or that it was perverse. If the High Court found that there was no such evidence, those circumstances would give rise to question of law and could be agitated in a reference. [700G 701A, 702H 703A] 1.2 When a conclusion has been reached on an apprecia tion of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue is an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found in such a case would be a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an infer ence from the facts could not be regarded as one of law. The proposition that an inference from. facts is one of law is, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts is as much a question of fact as the evidence of the facts. [701A D] In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material 694 which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. It took into account all the relevant facts in a proper light in rendering a finding of fact. Therefore, no question of law arises. [703BC, 701DE] Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, ; Omar Salay Mohamed Sait vs Com missioner of Income tax, Madras, ; Udhavdas Kewalram vs Commissioner of Income tax Bombay City 1, and Remeshwar Prasad Bagla vs Commissioner of Income tax, U.P., , referred to. 2.1 The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the assessee. The Tribunal had taken into considera tion the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings. The time when the assessee admitted the addi tions was also considered. But to admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars. There may he hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the Revenue to prove the mens rea of quasi criminal offence. [703BC, 702AB, 701A, 702BC] 2.2 It is for the Income tax authority to prove that a particular receipt is taxable. If however, the receipt is accepted and certain amount is accepted as taxable, it could be added. But in the instant case, it was not accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income. [702EF] 3. The High Court observed that the time of admission was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal. That is not correct. The Tribunal had made additions during the assessment pro ceedings. In any event that would be appreciation of evi dence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise. Nonappreciation may give rise to the question of law but not mere misappreciation even if there he any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. [703CD] The High Court in preferring one view to another view of factual 695 appreciation in the instant case, has therefore, trans gressed the limits of its. jurisdiction under the Income Tax Reference in answering the question of law. [703F]

These appeals raised an identical question. Civil Appeals Nos 4291 and 4292 of 1984 were preferred against the judgment of the Madras High Court in Writ Appeals Nos. 561 and 562 of 1983. The appellant in these two appeals, an employee in the Bank of India, which is a Nationalised Bank, was dismissed. Aggrieved, he preferred an appeal under section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Tamil Nadu Shops Act). A preliminary objection was raised by the Bank to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the exemption contained in Section 4(1)(c) thereof. The Appellate Authority held that the preliminary objection might be decided along with the appeal. The bank thereupon filed two writ petitions in the High Court, one for a direction to the Appellate Authority to dispose of the preliminary objection before disposing of the appeal on merits, and the other, for a direction to the Appellate Authority not to proceed with the appeal. Both the Writ Petitions were allowed by a Single Judge of the High Court on the ground that the Bank was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in section 4(1)(c). Against that decision, two writ appeals aforementioned were filed, which were dismissed by a Division Bench of the High Court by the Judgment under appeal in these two appeals. The same judgment of the High Court had disposed of Writ Petition No. 1550 of 1981 also, which had arisen out of an application under section 51 of the Tamil Nadu Shops Act made by the employees of the State Bank of India before the Commissioner of Labour for a direction that all the provisions of that Act would apply to them, being employed in the State Bank. The State Rank had contended that it was an establishment under the Central 663 Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it. The Commissioner of labour had rejected the plea of the State Bank and held that the provisions of the Act were applicable to it. Civil Appeal No. 4329 of 1984 was preferred against the said Judgment by the State Bank 's Staff Union and Civil Appeal No. 4735 of 1984 was preferred by the employees concerned. Civil Appeal No. 1120 of 1976 was preferred by Syndicate Bank, a Nationalised Bank, against the judgment of the Andhra Pradesh High Court (Division Bench), dismissing the Writ Appeal No. 268 of 1975 and upholding the order of a Single Judge dismissing the Writ Petition No. 5973 of 1973 filed by the appellant Syndicate Bank. The services of Respondent No. 3 in the appeal had been terminated by the appellant Syndicate Bank. An appeal was preferred by the said respondent before the Labour officer under the Andhra Pradesh Shops and Establishment Act, 1966 (the Andhra Pradesh Shops Act). The Labour officer allowed the appeal which was confirmed in a second appeal by the Labour Court. Aggrieved by these orders, the Bank filed the Writ Petition above said. It was urged by the appellant Bank that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf. Civil Appeal No. 1042 was preferred by the Syndicate Bank against the judgment of the Andhra Pradesh High Court, dismissing the Writ Petition No. 86 of 1979. Respondent No. 3 in the appeal had been dismissed by the appellant bank. He preferred an appeal which was allowed. The Bank preferred a second appeal before the Labour Court, which was dismissed. The Bank filed the aforesaid writ Petition before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act were not applicable to it in view of the exemption contained in this behalf. The High Court dismissed the Writ Petition. Civil Appeal No. 837 of 1984 was preferred by the Bank of India a nationalised bank, against the judgment of the Kerala High Court dismissing the Writ Petition No. 1419 of 1978. Respondent No. 1 in the appeal had preferred an appeal under section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (the Kerala shops Act) against an order passed by the appellant Bank, discharging him from service. A preliminary objection was raised by the Bank with regard to the maintainability of the appeal on the ground that it being an establish 664 ment under the Central Government within the meaning of section 3(1)(c) of that Act, the provisions thereof including section 18 above said were not applicable to it. The objection was overruled by the appellate authority. The Bank filed the original Petition abovementioned in the High Court which dismissed the same. Dismissing the Civil Appeals Nos . 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984, and allowing the Civil Appeal Nos. 1120 of 1976, 1042 of 1979 and 837 of 1984, the Court, ^ HELD: The common question which arose for consideration in all these appeals was as to whether the Nationalised Banks and the State Bank of India were establishments under the Central Government within the meaning of the Acts above said and consequently the provisions of the said Acts were not applicable to these Banks in view of the exemption contained therein in this behalf. [670E] In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the said Acts, it was not disputed even by counsel for the banks, that a bank is an establishment. Consequently, unless exempted, the provisions of the said Acts would apply to the State Bank of India and the nationalised banks also. [670F G] A conspectus of the provisions of the (Act No. 23 of 1955) and the (Act No. 5 of 1970), read with the dictionary meaning of the term "under" leaves no manner of doubt that the State Bank of India and the nationalised banks are clearly establishments under the Central Government.[677D] For the employees of these banks, it was urged that these banks were autonomous corporations having distinct juristic entity with a corporate structure of their own and could not as such be treated to be owned by the Central Government. According to counsel, the word "under" used in the expression "under the Central Government" con noted complete control in the sense of being owned by the Central Government. Disagreeing with that submission it was held that the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced that they cannot be establishments under the Central Government. [677E F; 678A] 665 If the criteria laid down in Ajay Hasia, etc. vs Khalid Mujib Sehravardi & Ors. etc. ; , decided by a Constitution Bench of this Court, was applied to the facts of these cases, it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and their employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks. As pointed out by this Court in Biharilal Dobray vs Roshan Lal Dobray; , , the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control. [679G H;682E F] In view of these considerations, no exception could be taken to the view of the Madras High Court in its judgments which were the subjectmatter of the Civil Appeal Nos. 4291 and 4292 of 1984, 4375 of 1984 and 4329 of 1984. As regards the judgment of the Kerala High Court and the judgment of the Andhra Pradesh High Court under appeal even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein particularly with regard to deep and pervasive control are relevant for deciding the point in issue, and also it was sufficient to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration, it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government. As regards the circumstances that even though the Reserve Bank of India is mentioned specifically in the relevant clause containing exemption, neither the State Bank of India nor the nationalised banks are so mentioned, it is to be pointed out that the Reserve Bank of India was established as shareholders ' Bank under Act 2 of 1934. The Kerala Shops Act and the Andhra Pradesh shops Act, of the years 1960 and 1966, were modelled almost on the pattern of the Tamil Nadu Shops Act, which is of the year 1947. When section 4(1)(c) of this Act referred to the Reserve Bank of India in 1947, it obviously referred to it as the Shareholders ' Bank. The Reserve Bank Transfer to Public ownership Act (Act 82 of 1948) came into force on 1st January, 1949, and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government. In this background, no undue emphasis could be placed on the circumstances that the State Bank of India or the nationalised banks did 666 not find mention in the provision containing exemption even though the Reserve Bank of India was specially mentioned therein. For the response stated above, the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserved to be set aside.[683C H] On the view the Court had taken that the State Bank of India and the nationalised banks are establishments under the Central Government, the Court did not consider the question as to whether these banks were establishment, which not being factories within the meaning of the , were, in respect of matters deal with in the Tamil Nadu Shops Act, governed by a separate law for the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub section (1) of section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act. [684A B] Civil Appeals Nos. 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984 were dismissed. Civil Appeal No. 1120 of 1976 was allowed and the judgment of the High Court in Writ Appeal No. 268 of 1975 as also the Judgment of the Single judgement the Writ Petition No. 5973 of 1973 as well as the orders of the Labour officer in the appeal filed by respondent No. 3 and of the Second Appellate Authority m the second appeal filed by the appellant Bank under the provisions of the Andhra Pradesh Shops Act were set aside. Civil Appeal No. 1042 of 1979 was allowed and the judgment of the Andhra Pradesh High Court in the Writ Petition No. 86 of 1979 as also the orders passed by the first and second appellate authorities in the appeals preferred by respondent No. 3 and the bank under the Andhra Pradesh Shops Act were set aside. Civil Appeal No. 837 of 1984 was allowed and the judgment of the Kerala High Court in Writ Petition No. 1419 of 1978 was set aside. The preliminary objection raised by the bank before the Appellate Authority in the appeal filed by respondent No. I under section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable was upheld, with the result that if the said appeal was still pending would be disposed of as not maintainable and in case it had been decided, the said decision should be treated as without jurisdiction.[684C F] The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act referred to above had been held to be not maintainable and the orders passed therein had been set aside, would be at liberty to take recourse to such other remedies as might be available to them in law. [684G] 667 Ajay Hasia, etc. vs Khalid Mujib Sehravardi & etc. ; , ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., ; Hindustan Aeronautics Ltd. vs The Workmen and Ors., ; ; Graham vs Public Works Commissioner, ; Regional Provident Fund Commissioner, Karnataka vs Workmen represented by the General Secretary, Karnataka Provident Fund Employees ' Union and Another, [1984] II L.L.J. 503; Western Coalfields Ltd. vs Special Area Development Authority, Korba and Anr., ; ; Rashriva Mill Mazdoor Sangh, Nagpur vs The Model Mills, Nagpur and Anr., ; ; Union of India & Ors. vs N. Hargopal and Ors., ; Thote Bhaskara Rao vs The A.P. Public Service Commission and Ors., Judgment Today and Biharilal Dobray vs Roshan Lal Dobray, ; , referred to.

Respondent, assessee (M/s. Alagappa Textiles (Cochin) Limited company was carrying on business of manufacture and sale of yarn. It entered into an Agreement dated November 10, 1955 with Kamala Mills Ltd., Coimbatore for financing and managing the assessee Mills at Alagappa Nagar for a period of five years. Clause 8 of the Agreement provided that Kamala Mills Ltd. shall be paid for the services, rendered by it by way of purchases, sales and management remuneration at the rate of 1% on all purchases made by it for the assessee Mills and at half a percent on all sales of yarn, yarn waste and cotton waste and other products of the Mill. Clause 13 of the agreement was to the effect that "the company (assessee) either represented by its managing Agent or Board of Directors shall not exercise the powers delegated to the Managers (Kamala Mills Ltd. under the foregoing clauses, except by way of general supervision and advice nor interfere with discretion of the managers in the exercise of their functions and powers vested in them by virtue of this Agreement." Clause 14, provided that the Managers (Kamala Mills Ltd.) powers were limited in the manner aforesaid and shall not be deemed to be manager in charge of the whole affairs of the company within the meaning of section 2(9) of the companies Act, 1913. Clause 16 provided that the agreement shall be in force for a period of five years commencing from the date thereof and that "this Agreement for management being an Agency coupled with interest" could be revoked before the expiry of the said period of five years by 12 months ' notice in writing being given by one party to the other, but if the assessee were to revoke it the assessee shall be liable to compensate Kamala Mills for the loss of remuneration for, the unexpired period of the Agreement at the average rate at which Kamala Mills Ltd. had been earning by way of remuneration under the Agreement fill the date of such notice of termination Pursuant to the aforesaid terms, Kamala Mills Ltd. drew remuneration to the tune of Rs. 1,03,547/ and Rs. 18,249/ respectively for the calendar years 1957 and 1958 corresponding to the assessment years 1958 59 and 1959 60. The amounts were assessed to tax in the hands of Kamala Mills Ltd. Respondent, Assessee in its assessment proceedings for the said two assessment years claimed deduction in respect of the said two Amounts as business expenditure under section 10(2)(xv) of the Income tax Act. The claim was disallowed by the Income Tax officer on the ground that under section 384 of the companies Act. 1956 which had come into force on April 2, 1956 the continuation of a 724 body corporate as manager was prohibited for the period beyond six months from the coming into force of the Act, that the remuneration paid to Kamala Mills Ltd. subsequent to October 1, 1956 was illegal being in violation of section 381. The Appellate Assistant Commissioner rejected the Appeal mainly on the ground that the assessee by its own conduct had disputed its liability to pay any remuneration to Kamala Mills Ltd. as after October 1, 1956 and in that behalf he relied on an admitted fact that the assessee had filed a suit against Kamala Mills to recover such remuneration which had been paid to it in contravention of section 384 of the on the basis that since the payment was illegal Kamala Mills was holding such amounts of remuneration in trust for and on behalf of the assessee. Respondent carried the matter in further appeals to the Tribunal, but the Tribunal confirmed the view of the taxing authorities. On a reference, the High Court answered the question in the negative in favour of the assessee and against the Revenue. The High Court held that Kamala Mills could not be said to be "subject to the superintendence, control and directions of the Board of Directors" of the respondent and therefore was not a "manager" of the assessee within the meaning of section 2(14) of the , so as to attract the illegality under section 384 ibid. and (b) that in view of the provisions of section 41(1) of the Income tax Act, the pendency of an appeal against the Judgment the suit for recovery could not be a valid ground for disallowing the deduction permissible under ) section 10(2)(xv) of the Income tax Act. Dismissing the appeal by Revenue by special leave, the Court ^ HELD: 1. Section 384 of the in express terms prohibits, after the commencement of the Act, the appointment of a firm or a body corporate or an association of persons as manager as also the continuation of such employment after expiry of six months from such commencement. To attract the prohibition or disqualification, under this section, a firm, body corporate or association must be a "manager" within the meaning of section 2(24), that is to say, it should be in management of the whole or substantially the whole of the affairs of a company and should be under superintendence, control and direction of the Board of Directors of the company [730 C D, E F] 2. Section 2(24) of the requires three conditions to be satisfied: (a) the Manager must be an individual, which means that a firm or body corporate or an association is excluded and cannot be a Manager (a fact which is expressly made clear in section 384). (b) he should have the management of the whole or substantially the whole affairs of the company and (c) he should be subject to the superintendence, control and directions of the Board of Directors in the matter of managing the affairs of the company. Subject to the changes made in the aspect covered by (a) and (b), in both the definitions [section .2(9) of 1913 Act and section 2(24) of the 1956 Act], the aspect that a Manager has to work or exercise his powers under the control and directions of the Board of Directors is common and essential. In fact, it is this aspect which distinguishes 'Manager ' from "Managing Agent". A comparison of the definition of "Manager" as given in s; 2(24) of the 1956 Act with that of "Managing Agent" in section 2(25) makes it clear that though there is an overlapping of the functions of the Manager as well as the Managing Agent of the company the essential distinction is that whereas the 725 Manager has to be subject to the superintendence, control and direction of the Board of Directors, the managing Agent is not so subject. [729 G H, 730 A C] 3. On a perusal of the clauses and in particular clauses 8, 13, 11 and 16 of the Agreement dated November 10, 1955 in the instant case, two or three things stand out very clearly. It is true that at the commencement of the deed Kamala Mills Ltd. has been described and referred to as the "Managers" of the asses see throughout the document but mere label or nomenclature given to a party in the document will not be decisive. It is also true that the several powers and functions were entrusted to Kamala Mills Ltd. under clause 1 of the Agreement to enable it "to manage or run the Mill" of the assessee. But simply because powers and functions were given to Kamala Mills Ltd. for the purpose of "managing and running the Mills" of the assessee, it could not follow that Kamala Mills Ltd. was in truth and substance a 'manager ' of the assessee within the meaning of section 2(24) of the 1956 Act. For this purpose the Agreement will have to be read as a whole and the Court w ill have to decide what was the true intention of the parties in entering into such Agreement. [733 E G] 4. The dominant object with which the Agreement was entered into was that Kamala Mills Ltd. should really act is a financier so that the assessee Mill could run and since heavy finances were to be procured by Kamala Mills Ltd. large powers and functions connected with the working of the mill were entrusted to it. This aspect become abundantly clear from cl. 16 of the Agreement wherein the parties expressly provided that this Agreement for management was by way of and amounted to an Agency coupled with interest so far as Kamala Mills Ltd. was concerned and, therefore, revocation of the Agreement before the expiry of five years ' period was made dependent upon 12 months ' notice in writing being given by one party to the other and further if such revocation was done by the assessee suitable compensation was made payable to Kamala Mills Ltd. In other words, managerial functions were incidental and had to be entrusted to Kamala Mills because of the financier 's role undertaken by it. The large powers and functions entrusted to Kamala Mills Ltd. under the several sub clauses of cl. 1 of the Agreement do show that management of substantially the whole, if not the whole, of the affairs of the assessee company had been made over to Kamala Mills Ltd. [734 B E] 5. Clause 13 of the Agreement which is very eloquent. provided that so far as the powers conferred and the functions entrusted to Kamala Mills Ltd. were concerned, the Board of directors shall not exercise or perform the same except by way of general supervision and advice and it was further made clear that the Board of Directors shall not interfere with the discretion of Kamala Mills Ltd in the exercise of their functions and powers vested in it by virtue of the Agreement. In other words, the general supervision or advice of the Board of directors was of such character that the Board had no way whatsoever nor could it interfere with the discretion of Kamala Mills Ltd. in the matter of the exercise of the powers and the discharge of the functions entrusted to Kamala Mills Ltd. under the Agreement. It is thus clear that the dominant object of the Agreement was that Kamala Mills Ltd. should act as financiers of the assessee Mill and in the matter of the exercise of its powers and discharge of its functions Kamala Mills Ltd. was never "subject to the superintendence control or direction" of the Board of 726 directors of the assessee. This is the position which clearly emerges on true construction of the Agreement. [734 F H, 735A] 6. Therefore, Kamala Mills Ltd. was not acting or working as the "Manager" of the assessee within the meaning of section 2(24) of the and as such the illegality of section 384 of the Act was not attracted. In this view of the matter, the remuneration paid by the assessee to Kamala Mills Ltd. for the two calendar years 1957 & 1958 relevant to the assessment years 1958 59 and 1959 60 could not be regarded as being in violation of section 384 of the companies Act, 1956 and as such the expenditure incurred by way of paying such remuneration would be deductible as "Business Expenditure" under section 10(2)(xv) of the Income tax Act, 1922. [735A D]

Appeals Nos. 223 and 224 of 1960. Appeals from the order dated November 23, 1956, of the Andhra Pradesh High Court, Hyderabad, in Tax Revision Cases Nos. 17 and 18 of 1956. 268 C. K. Daphtary, Solicitor General of India and T. V. B. Tatachari, for the appellants. K. N. Rajagopal Sastri and D. Gupta, for the respondent. December 14. The Judgment of the Court was delivered by HIDAYATULLAH, J. These are two appeals on certificates granted by the High Court of Andhra Pradesh against a common judgment in a sales tax revision filed by the appellants in the High Court. The facts are as follows: In the year 1952 53, for which the assessment of sales tax was in question, the appellants dealt in gunnies, and purchased them from two Mills in Vishakapatnam District and in respect of which they issued delivery orders to third parties, with whom they had entered into separate transactions. The procedure followed by the appellants was this: They first entered into contracts with the Mills agreeing to purchase gunnies at a certain rate for future delivery. Exhibit A 1 is a specimen of such contracts. The appellants also entered into agreements with the Mills, by which the Mills agreed to deliver the goods to third parties if requested by the appellants. The Mills, however, did not accept the third parties as contracting parties but only as agents of the appellants. Exhibits A 2 and A 2(a) are specimen agreements of this kind. Before the date of delivery, the appellants entered into agreements with third parties, by which they charged something extra from the third parties and handed over to them the delivery orders, which were known as kutcha delivery orders. Exhibits A 3 and A 4 are specimens of the agreement and the delivery orders respectively. The Mills used to deliver the goods against the kutcha delivery orders along with an invoice and a bill, of which Exs. A 6 and A 7 are specimens respectively, and collected the sales tax from the third parties. The tax authorities, however, treated the transaction between the appellants and third parties as a fresh sale, and sought to levy sales tax on it 269 again, which, the appellants, contended, was not demandable, as there was no second sale. The appellants failed in their contentions before the Deputy Commercial Tax Officer, Guntur, and their appeals to the Deputy Commissioner of Commercial Taxes, Guntur and the Andhra Sales Tax Appellate Tribunal, Guntur, were unsuccessful. The appellants then went up in revision to the High Court under the Madras General Sales Tax Act, 1939 (as amended by Madras Act No. 6 of 1951), but were again unsuccessful. The High Court, however, granted certificates, on which these appeals have been filed. The contentions of the appellants are that the agreement and the delivery of the kutcha delivery order did not amount to a sale of goods, but was only an assignment of a right to obtain delivery of the gunnies, which were not in existence at the time of the transaction with third parties, and were not appropriated to the contract, or, in the alternative, that this was only an assignment of a forward contract. They seem to have relied in the High Court upon the deci sions of this Court reported in The Sales Tax Officer, Pilibhit vs Messrs. Budh Prakash Jai Prakash(1) and Poppatlal Shah vs The State of Madras (2) to show that these transactions were not sales. These cases were not relied upon by the appellants before us, presumably because the High Court has adequately shown their inapplicability to the facts here. The learned Solicitor General appearing for the appellants rested his case entirely upon the first contention, namely, that there was only an assignment of a right to obtain delivery of the gunnies and not a sale. He contended that there was only one transaction of sale between the Mills and the third parties, who, on the strength of the assignment of the right to take delivery, had received the goods from the Mills. in our opinion, this does not represent the true nature of the transactions, either in fact, or in law. To begin with, the Mills had made clear in their agreements that they were not recognising the third parties as contracting parties having privity with (1) ; (2) ; 270 them, and that delivery would be given against the kutcha delivery orders to the third parties as agents of the appellants. The Mills, therefore, recognised only the appellants as contracting parties, and there was thus a sale to the appellants from the Mills, on which ,;sales tax was correctly demanded and was paid. In so far as the third parties were concerned, they had purchased the goods by payment of an extra price, and the transaction must, in law and in fact, be considered a fresh transaction of sale between the appellants and the third parties. A delivery order is a document of title to goods (vide section 2(4) of the Sale of Goods Act), and the possessor of such a document has the right not only to receive the goods but also to transfer it to another by endorsement or delivery. At the moment of delivery by the Mills to the third parties, there were, in effect, two deliveries, one by the Mills to the Appellants, represented, in so far as the Mills were concerned, by the appellants ' agents, the third parties, and the other, by the appellants to the third parties as buyers from the appellants. These two deliveries might synchronise in point of time, but were separate, in point of fact and in the eye of law. If a dispute arose as to the goods delivered under the kutcha delivery order to the third parties against the Mills, action could lie at the instance of the appellants. The third parties could proceed on breach of contract only against the appellants and not against the Mills. In our opinion, there being two separate transactions of sale, tax was payable at both the points, as has been correctly pointed out by the tax authorities and the High Court. The appellants relied upon a decision of the Andhra Pradesh High Court in The State of Andhra vs Kolla Sreeramamurty (3), but there, the facts were different, and the Division Bench itself in dealing with the case, distinguished the judgment under appeal, observing that there was no scope for the application of the principles laid down in the judgment under appeal, because in the cited case, "the property in the goods did not pass from the mills to the assessee and (3) Second Appeals Nos. 194 & 195 of 1954 decided on June 27, 1957. 271 there was no agreement of sale of goods to be obtained in future between the assessee and the third party". In the result, the appeals tail, and are dismissed with costs. One hearing fee. Appeals dismissed.

The respondents dealt in gunnies. They first entered into contracts with two Mills agreeing to purchase gunnies at a certain rate for future delivery, and also entered into agreement with third parties, by which they charged something extra from those third parties and handed over the delivery order known as kutcha delivery order. The Mills however did not accept the third parties as contracting parties, but only as the agents of the appellants and delivered the goods against the kutcha delivery orders, and collected the Sales Tax from the third parties. The tax authorities treated these transactions between the appellant and the third parties as fresh sales and sought to levy sales tax again, which the appellants contended, was not demandable as there were no second sales; the delivery of a kutcha delivery order did not amount to a sale of goods, but was only an assignment of a right to obtain delivery of gunnies which were not in existence and not appropriated to the contract; this was only an assignment of a forward contract. Held, that the agreements between the parties showed that third parties were not recognised by the sellers. A delivery order being a document of title to goods, the possession of such a document not only gave the right to recover the goods but also to transfer them to another by endorsement or delivery. There being two separate transactions of sale, one between the Mills and the original purchasers and the other between the original purchasers and third parties, tax was payable at both the points. The Sales Tax officer, Pilibhit vs M/s. Budh Prakash jai Prakash; , , Poppatlal Shah vs The State of Madras, ; , and The State of Andhra vs Kolla Sreeramamurthy, decided on June 27, 1957, referred to.

The Andhra Pradesh Land Revenue (Additional Assessment) and Cess Revision Act, 1962 (Act 22 of 1962) was passed with the object of bringing uniformity in assessment of land revenue in the Telengana and Andhra areas of the State. It also provided for additional levies on certain classes of land. When the assessment of land revenue was sought to be collected from the respondents, they filed writ petitions in the High Court challenging the constitutional validity of the Act and the petitions were allowed. In appeal by the State to this Court. , HELD : The Act offended article 14 of the Constitution and was there fore void. Both in Andhra as well as Telengana area under the Ryotwari system, the land revenue which was a share of the produce of the land commuted in money value varied according to the classification of soil based upon its productivity; the soils of similar grain values were bracketed together in orders called 'tarams ' or 'Bhagana ' and the rates were further adjusted in the dry land having regard to the water supply. But in both the cases, the quality and the grade of the soil divided in 'Tarams ' or 'Bhaganas ' was the main basis for assessment. [37 E G] Sections 3 and 4 of the Act, in fixing the minimum flat rate for dry or wet lands, ignored the well established taram principle; and in the case of wet lands an attempt had been made to classify different systems on the basis of the ayacuts; but this test was unreasonable and had no relation to either the duration of water supply or to the quality or the productivity of the soil. The classification attempted in either case had No. reasonable relation to the objects sought to be achieved, namely, imposition of fair assessments and rationalisation of the revenue assessment structure. An arbitrary method has been introduced displacing one of the most equitable and reasonable methods adopted for many years in the revenue administration of the State. [44 C E] Further, the imposition of assessment was left to the arbitrary discretion of the officers not named in the Act without giving any notice, opportunity or remedy to the assessees for questioning the correctness of any of the important stages in the matter of assessment such as ayacut taram, rate or classification or even in regard to the calculation of the figures. It is not possible to read into the section the entire series of the Standing Orders of the Board of Revenue which deal with the mode of assessment: for if it was the intention of the Legislature that 29 the Standing Orders of the Board of Revenue should be brought into the Act by incorporation, it would have certainly used appropriates words to convey that idea. [45 D E; 48 E F] Kunnathat Thathunni Moopil Nair vs The State of Kerala, ; , East India Tobacco Co. vs State of Andhra Pradesh, ; and Khandige Sham Bhat vs The Agricultural Income tax Officer, ; , applied. C. V. Rajagopalachariar vs State of Madras, A.I.R. 1960 Mad. 543 and H. H. Vishwasha Thirtha Swamiar of Sri Pejavar Mutt vs The State of Mysore, , distinguished.

In January 1937 one M & Co. sold and delivered jewellery valued at about 13 lakhs to the respondent Prince of Berar. The Prince acknowledged in writing the purchase of the jewellery and the price thereof and passed various acknowledgments in respect of the debts due and the last of such acknowledgments was made for sum of Rs. 27,79,000. In April 1948, the appellants presented their bill and were informed in January, 1949, that the Nizam had passed the bill. In February, 1949, when Hyderabad was under military occupation, a Committee was set up by the Military Governor to scrutinise all debts of the Prince of Berar and his younger brother. The claim of the appellants was considered by the Committee which recommended that the appellants should be paid a sum of Rs. 20 lakhs in full satisfaction of their claim. The appellants were paid the sum of Rs. 20 lakhs in two instalments. The appellants tried to pass a receipt when they received the second instalment reserving their right to recover the balance under the pronote from the 169 Prince of Berar. The relevant authorities refused to make payment on the said receipt. Thereupon the appellants dis charged all the previous pronotes and on each one of them recorded a satisfaction of the full amount. The appellants thereafter sued the respondent for the recovery of the balance of the monies due to them on the pronote. The trial court decreed the suit on the ground that there was no accord and satisfaction when the plaintiff received the second cheque from the Accountant General, Hyderabad. In appeal by the respondent the Appellate Court set aside the decree holding that the appellants had accepted the sum of Rs. 20 lakhs in full satisfaction of their claim and duly discharged the promisory notes by endorsing full satisfaction thereon. The appellants came up to the Supreme Court in appeal by certificate granted by the High Court. Held, that when payment is accepted on the condition on which it is offered, it is not open to the person receiving the payment to say, either in fact or in law, that they have accepeted the money but not the condition. A promisee accepting performance of the promise from a third person, can not afterwards enforce it against the promiser. In the present case the appellants had given a full discharge when they received the second instalment; and as they accepted the money in full satisfaction of their claim, they were not entitled to sue the respondent for the balance. Obiter : When a statute clearly covers the case it is hardly necessary to refer to a decision.

The Collector validated certain transfers on the applications of appellants U/5. 6 of the M. P. Abolition Act 1950 but a revision was taken by the Commissioner section 50 of the M. P. Land Revenue Code 1959 (for short, the Code) against the order Or the Collector. The appellants ' contention before the Commissioner that he had no jurisdiction or power to revise the order of the Collector was rejected. The Board of Revenue in the revision and the High Court in a writ petition filed by the appellants confirmed the view of the Commissioner. Hence this appeal. The appellants contended (i) that the order of the Collector was not revisable under the Code because the Abolition Act was a Code or a law complete in itself and conferred no powers of revision or appeal outside the Abolition Act and therefore the Commissioner had no jurisdiction to entertain suo moto revision; (ii) that since there was a right of appeal under sec. 84 of the Abolition Act, no revisional power could be exercised either by Commissioner or by the Board of Revenue under the Code; and (iii) that even assuming that the Abolition Act and the Code were statutes in pari materia, they possess two clear cut and separate powers, that is to say, no suo moto revision could lie to the Revenue Officers unless a revision or appeal was Sled before the Commissioner by the party. Dismissing the appeal, to this Court ^ HELD: (1) A perusal of the schemes of the Abolition Act and the Code clearly indicates that the two Acts were in pari materia and the revenue officers were exercising powers under both the Acts cognately. There was no clearcut distinction between a Revenue Officer acting under the Abolition Act and acting under the Code. This being the position, it is manifest that the revisional powers could be exercised by the Revenue Officers under section 50 of the Code and even under the Abolition Act as well. [802D E] 801 (2) Under the provisions of, the Abolition Act as also the Code, both the Commissioner and the Board were appellate as also revisional authorities. Thus, when two powers were conferred on the said officers in a sort of a combined capacity, it cannot be said that merely because the formality of filing a regular appeal before the Commissioner or the Board was not adopted, a suo moto revision would not lie [802H; 813A B] In the instant case, both the Commissioner and the Board of Revenue had appellate as also revisional powers Both these powers being conferred on the same authority, the difference between the exercise of a revision or appeal was a mere idle formality and was of no consequence [803C D]

The Income tax Officer (respondent No.(1) served a notice under section 22 of the Income tax Act on the appellant. Upon the receipt of the notice, the appellant appeared before the Income tax Officer. The appellant pleaded before the Income tax Officer that it did not fall under any of the five categories of assessees under section 3 of the Income tax Act. The appellant also raised the contention that it was a local authority exempt from income tax. All these contentions were rejected by respondent No. 1 with the result that the impugned orders of assessment came to be passed. The appellant filed Writ Petitions before the High Court in which it challenged the impugned orders of assessment passed by respondent No. 1. In its Writ Petitions, the appellant claimed an ,order, writ or other appropriate direction quashing the assessment orders passed by respondent No. 1. The High Court dismissed these writ petitions. The High Court held that the appellant could not claim the exemption under article 289(1) because it was not a state owned Corporation. The High Court granted a certificate under article 133 of the Constitution and hence the appeal. Held: (i) article 289 of the Constitution consists of three clauses. The first clause confers exemption from union taxation on the property and income of a State. Clause (2) then provides that the income from trade or busi ness carried on by the Government of a State or on its behalf which would not have been taxable under cl. (1), can be taxed, provided a law is made by Parliament in that behalf. In other words cl. (2) is an exception to cl. Clause (3) then empowers Parliament to declare by law that any trade or business would be taken out of the purview of cl. (2) and restored to the area covered by cl. (1) by declaring that the said trade or business is incidental to the ordinary functions of Government. In other words, cl. (3) is an exception to the exception prescribed by cl. (ii) A trading activity carried on by the corporation (appellant) is not a trading activity carried on by the State departmentally, nor is it a trading activity carried on by a State through its agents appointed in that behalf because according to statute the Corporation has a personality of its own and this personality is distinct from that of the State or other shareholders. All the relevant provisions of the impugned Act also emphatically bring out the separate personality of the Corporation. Section 30 of the Act also does not suggest that the income of the 18 Corporation is the income of the State. All that section 30 requires is that a part of that income may be entrusted to the State Government for a specific purpose of road development. Therefore, the income derived by the appellant from its trading activity cannot be said to be the income of the State either under cl. (1) or cl. (2) of article 289. The American doctrine of the immunity of State agencies or instrumentalities from Federal taxation has no application to the present case. Akadasi Padhan vs State of Orissa [1963] Supp. 2 S.C.R. 691, distinguished. Mark Graves, John J. Merrill and John P. Hennessy vs People of the State of New York Upon the Relation of James B.O 'keefe, ; and Clallan County vs United States of America, ; , no application. State of West Bengal vs Union of India [1964] 1 S.C.R. 371, relied on. M 'Culloch vs Maryland, ; , Bank of Toronto vs Lambe and Webb vs Outrim [1907] A.C. 81, referred to. Tamlin vs Hansaford, , relied on. (iii)It is hardly necessary for the Act to make a provision that tax,if chargeable would be paid. In fact, the Companies Act which deals with companies does not make such a specific provision, though no one can seriously suggest that there would be repugnancy between the provisions of the Companies Act and the Income tax Act. There is no repugnancy between the charging section of the Income tax Act and sections 29 and 30 of the Act. All that sections 29 and 30 of the impugned Act purport to do is to provide for the administration of the funds vesting in the Corporation and their disposal. These provisions are not inconsistent with the liability to pay tax which is imposed by the Income tax Act.

Section 2(1)(s) of the Andhra Pradesh General Sales Tax Act, defines 'turnover" to mean the total amount set out in the bill of Sale as the consideration for the sale or purchase of goods including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods. The appellants in the first two sets of appeals are manufacturers of Indian liquors. A buyer of Indian liquor from the distilleries pays, in the first instance, the excise duty in the Treasury and obtains a distillery pass for the release of liquor. On presentation of the distill ery pass an invoice is prepared by the manufacturers showing the price of liquor. Neither invoice. nor the account books of the manufacturers show the excise duty paid by the purchasers. Under the system in vogue in the second set of appeals, the appellant who is the owner of a bonded warehouse pre pares a bill for the liquor required by the purchaser who pays the countervailing duty in the Treasury in his own name and obtains a pass from the excise authorities for the removal of the liquor from the warehouse. In both the, cases the Sales Tax Authorities included the excise duty in the taxable turnover of the appellants. The High, Court dismissed the writ petition of the appel lants impugning the orders of the Sales Tax Officers. Allowing the appeal, HELD: (1) Excise duty and countervailing duty paid directly by the buyers for the Indian liquors did not con stitute a part of the turnovers or, the appellants. [924 C] (2) The phrase 'any sums charged by the dealer ' occur ring in the definition of 'turnover ' has to be understood in its ordinary popular sense. So construed, it means what is demanded and collected or received by the dealer. [923 B] In the instant case the excise duty or the countervail ing duty has not been charged or received by the dealer but has been charged by the excise authorities and deposited directly by the buyers of the liquor in the State exchequer. It cannot be said that the excise duty or the countervailing duty was charged by the appellants. In M/s. George Oakes (Private) Ltd. vs The State of Madras & Ors., this Court held in relation to the definition of turn over that the aggregate amount includes the tax as part of the price paid by the buyer; the amount goes into the common till of the dealer till 'he pays the tax; it is the money which he keeps using for his business till he pays the tax; it is the money which he keeps using for his busi ness till he pays it over to Government; it becomes a part of the circulating capital of the tradesman and is turned over in his business. Secondly the price paid by the pur chaser was not so much money for the cause turnover means the amount of money which is turned over in the busi ness. [923 E G] 915 In the instant case the excise and the countervailing duties did not go into the common tills of the appellants and did not become a part of their circulating capital. The Sales tax authorities were not competent to include in the turn overs of the appellants the excise duty and the countervail ing duty which was not charged by them but was charged by and. paid directly to the excise authorities by the buyers of the liquors. [924 A] A. V. Fernandez vs The State of Kerala ; followed. R.C. Jail vs Union of India [1962] Supp. 3 S.C.R. 436, Sea Customs ACT ; , A B. Abdul Kadir & Ors. vs State of Kerala , Kalyani Stores vs The State of Orissa & Ors. ; & M/s Mohan Megkin Brewaries Ltd. vs Excise & TaxatiOn Commisisoner, Chandigarh & Ors. ; referred to. Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors. (122 S.T.C. 476) and (13 S.T.C. 98) referred to and distinguished. The Government of Andhra (now Andhra Pradesh) vs East India Commercial Co. Ltd. (8 S.T.C. 114) distinguished.

The appellants, after trial by the Court of Additional Sessions Judge on a charge of murder under section 302 read with section 34 of the Indian Penal Code, were acquitted giving them the benefit of doubt. The respondent, a son of the deceased victim, preferred a criminal revision petition before the High Court under section 397/401 Cr. P.C. challenging the order of acquittal. A Single Judge allowed the revision petition, set aside the acquittal of the appellants and remitted the case to the trial Court for re trial. The appellants appealed to this Court, inter alia, contending that the Single Judge of the High Court has transgressed the bounds of his revisional jurisdiction in reappreciating the evidence and setting aside their acquittal. Allowing the appeal, ^ HELD: 1. The High Court has clearly transgressed the limits of its revisional jurisdiction under section 439(4) of Cr. P.C. in setting aside the order of acquittal passed by the Additional Sessions Judge and directing a re trial of the case. [197F] 2. Even in an appeal against an order of acquittal no interference will be made with the judgment of the trial Court except in rare and exceptional cases where there has been some manifest illegality in the approach to the case or in the appreciation of the evidence or where the conclusion of fact recorded by the Trial Judge is wholly unreasonable so as to be liable to be characterised as perverse and there bas been a 192 resultant miscarriage of justice. The revisional jurisdiction of the High Court while dealing with an order of acquittal passed by the trial court is more narrow in its scope. It is only in glaring cases of injustice resulting from some violation of fundamental principles of law by the trial court, that the High Court is empowered to set aside the order of the acquittal and direct a re trial of the acquitted accused. From the very nature of this power it should be exercised sparingly and with great care and caution. [195A C] K.C. Reddy vs State of Andhra Pradesh, ; ; D. Stenbens vs Nosibolla, ; ; Jogendranath Jha vs Polailal Biswas, ; ; Akalu Ahir and Ors. vs Ramdeo Ram, [1974] I SCR 130; Amar Chand Aggarwal vs Shanti Bose; , ; and Satyendra Nath Dutta and Anr. vs Ram Narain, ; followed. The mere circumstance that a finding of fact recorded by the trial court may in the opinion of the High Court be wrong, will not justify the setting aside of the order of acquittal and directing a re trial of the accused. [197C] In the instant case, the High Court did not keep in mind the principles regarding the limits of its revisional powers while dealing with the order of acquittal passed by the Additional Sessions Judge, which did not suffer from any manifest illegality. The dominant justification of the order of acquittal recorded by the trial court is the view it took of the evidence of the two eye witnesses. Having carefully gone through the records of the case, this Court is satisfied that it was a possible view and it cannot be characterised as illegal or perverse. It may well be that the Single Judge of the High Court was not inclined to agree with the trial Court 's finding on the basis of his independent scrutiny and appreciation of the evidence adduced in the case but that would not furnish any justification for interference in revision with the order of acquittal passed by the Additional Sessions Judge. Even in an appeal the Appellate Court would not have been justified in interfering with an acquittal merely because it was inclined to differ from the findings of fact reached by the trial court on the appreciation of the evidence. The revisional power of the High Court is much more restricted in its scope. [ 197B F]

This appeal arose out of a case under the Kerala General Sales Tax Act. The assessee firm (assessee) had been appointed as distributor by the Travancore Cochin Chemicals Ltd. (the "said company") to effect sale of their product under an agreement. In the assessment of the assessee firm for the period 1967 68 under the Kerala General Sales Tax Act, final assessment was completed and the turnover as reported by the assessee was accepted and tax, levied on that basis. Later, the assessing authority alleged that certain transactions in the aforesaid period had been wrongly excluded from the turnover reported by the assessee in the return and the turnover had escaped assessment. The contention of the assessee that the transactions did not constitute sales by the said company to the assessee was rejected by the Assessing Officer and it was held that the said turnover was liable to be included in the taxable turnover as escaped turnover. An appeal by the assessee to the Appellate Assistant Commissioner was dismissed. In second appeal to the Tribunal, the Tribunal held that the transactions in question had taken place directly between the said company and the consumers and the assessee was merely an agent of the company, and allowed the appeal. The High Court on revision held that the Tribunal was wrong in concluding that the assessee was acting only as an agent in respect of the said transactions between the said company and the consumers, and allowed the Revision Application. The assessee firm appealed to this Court by special leave against the decision of the High Court. Dismissing the appeal, the Court, ^ HELD: Both the parties proceeded on the footing that the transactions in question were effected pursuant to the agreement, sub clause (a) of clause 2 whereof provided that the distributor had the right of sale 880 of the product within the stipulated area. Bulk supplies were effected in waggon load or lorry load by the said company direct to the consumer pursuant to orders booked by the assessee firm. The distributor arranged the payment as per the agreement and also took the responsibility to bear entirely the resultant effects and risk from the said direct dispatches. It was true that the price at which the goods were to be sold to the customers was fixed by the company but that did not lead to the conclusion that the assessee acted merely as an agent of the said company. The mere fact that the manufacturer fixes the sale price by itself cannot lead to the conclusion that the distributor is merely an agent. Under the agreement, what the distributor got was described as a "rebate" and not "Commission", as is normally expected in an agreement of agency. This is a factor, by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee. More important, the supplies were made to the distributor against payment immediate or deferred as provided in the agreement, and even when the goods were destined directly to the customer, the distributor had to guarantee to arrange the payment, as per clause 8. Where there was some time lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee. This circumstance clearly showed that in respect of the goods dispatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company. In respect of the goods in question, despatched through public carriers, although the invoices were prepared in the names of the customers of the goods and the goods were consigned to the destination through public carrier booked to self, the bills were endorsed and delivered to the assessee. In the light of the agreement, these circumstances clearly showed that in respect of these transactions the property in the goods dispatched passed to the distributors on the bills being endorsed and handed over to the distributors. [884D H;885A D] Although the Court had referred to the assessee being described in the agreement as "distributor" and not as "agent" and to the fact that what they got was described as "rebate" and not "commission", the Court had not treated these circumstances as decisive. But these descriptions considered in the light of the general tenor of the agreement and the circumstances surrounding the transactions between the parties showed that the assessee was not an agent but really a purchaser from the company in respect of the goods in question, and the transactions were liable to be included in the turnover of the assessee. [885G H;886A] 881 The Bhopal Sugar Industries Ltd. vs Sales Tax Officer, Bhopal, ; ;and Pollack & Mulla 's Commentary on the Sale of Goods & Partnership Acts, 4th Edition, p. 114, referred to.

Appeal No, 145 of 1960. Appeal by special leave from the judgment and order dated March 18, 1958, of the Kerala High Court in Tax Revision Case No. 12 of 1957. V.A. Seyid Muhamad and Sardar Bahadur, for the appellant. C.K. Daphtary, Solicitor General of India, Thomas Vellapally, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent. December 15. The Judgment of the Court was delivered by 286 KAPUR, J. This is an appeal by special leave against the judgment and order of the High Court of Kerala in Tax Revision No. 12 of 1957. The respondent who is the assessee owned an estate of 590 acres in South Malabar district, now in Kerala State. Out of that area 85 acres were covered by Pepper, Arecanut, Paddy and Coconut cultivation while the rest i.e. 505 acres had rubber plantations upon it. Of that area 235 acres were occupied by immature non bearing rubber trees and 270 ' acres had mature rubber trees. The assessment relates to the year 1955 56, the accounting year being the year ending March 31, 1955. The respondent claimed from out of the income expenses relating to the maintenance and upkeep of immature non bearing rubber trees. The Agricultural Income tax Tribunal held that the expenses incurred on the whole area under rubber plantations were deductible expenses and remanded the case for ascertaining the expenses incurred in forking and manuring of the "non bearing and immature" rubber grown areas also. The appellant then preferred a revision application to the High Court under section 54(1) of the Madras Plantations Agricultural Income Tax Act, 1955 (Mad. V of 1955). The High Court held that the amount spent on the upkeep and maintenance of immature rubber trees was a deductible expenditure under section 5(e) of that Act which provides: S.5 "Computation of agricultural income: The agricultural income of a person shall be computed after making the following deductions, namely:. . . . . :. . . (e) any expenditure incurred in the previous year (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of the plantation;". The provisions of section 5(e) of the Madras Act, applicable to the present case, are the same as those of section 5(j) of the Travancore Cochin Agricultural Income Tax Act (Act XXII of 1950). The only difference is in the last few words. In place of "for the purpose of the plantation" in the former, the words "for the purpose of 287 deriving the agricultural income" are used in the latter. If anything the words of the former Act are more favourable to the respondent. In Travancore Rubber and Tea Company Ltd. vs Commissioner of Agricultural Income Tax, Kerala (1), which was an assessment under the Travancore Cochin Act, we have decided the question of deductibility of sums expended for purposes of forking, manuring etc. of immature rubber trees. That judg ment will govern this case also. This appeal therefore fails and is dismissed with costs in this court and the High Court.

The assessee owned an Estate of 590 acres out of which 235 acres were occupied by immature non bearing rubber trees, for the maintenance and upkeep of which the respondent claimed expenses from out of the income, which was allowed both by the Agricultural Income Tax Tribunal and the High Court. The appellant came up by special leave. Held, that the provisions of section 5(e) of the Madras Planta tions Agricultural Income Tax Act, 1955 (Mad. V of 1955), applicable to the present case, and those of section 5(1) of the Travancore Cochin Agricultural Income Tax Act, 1950 (Tr. Co. XXII of 1950) being the same, the judgment in Travancore Rubber & Tea Co. Ltd. vs The Commissioner of Agricultural Income tax, Kerala, in which the question of deductibility of sums expended for purposes of forking, manuring etc. of immature rubber trees had been decided, will govern this case. Travancore Rubber & Tea Co. Ltd. vs The Commissioner of Agricultural Income tax, Kerala, ; , applied.

The assesses Company used to purchase sugarcane from the sugarcane growers to prepare sugar in its factory, in which a very large percentage of shares was owned by the Government of Mysore. As a part of its business operation it entered into written agreements with the sugarcane growers and advanced them seedlings, fertilizers, and also cash. The cane growers entered into these agreements known as "oppige" by which they agreed to sell sugarcane exclusively to the assessee company at current market rates and to have the 977 advances adjusted towards the price. An account of each "Oppigedar" was opened by the company. These agreements were entered into for each crop. In the year 1948 49 due to drought, the assessee company could not work its mills and the "oppigedar" could not grow or deliver the sugarcane and thus the advances made in the year remainded unrecovered. The Mysore Government realising the hardship appointed a committee to investigate the matter and make a report. The Committee recommended that the assessee company should ex gratia forgo some of its dues, and in the year of account ending June 30, 1952, the company waived its rights in respect of Rs. 2,87,422/ . The Company claimed this as a deduction under section 10 (2) (xi) and section 10 (2) (xv) 'but the Income Tax Officer declined to make the deduction and the appeal before the Appellate Assistant Commissioner also failed. The Tribunal was also of the opinion that these advances were made to ensure to steady supply of quality surgarcane and the loss, if any, must be taken to represent a capital loss and not a trading loss but the tribunal referred the. question thereby arising for the decision of the High Court. The High Court relying upon a decision of this Court in Badridas Daga vs Commissioner of Income tax held, that the expenditure was not in the nature of a capital expenditure, but was a revenue expenditure and that this amount was deductible in computing. the profits of the business for the year in question under section 10 (1) of the Income tax Act. The central point for decision in the present case, was whether the money which was given up, represented a loss of capital or must be treated as a revenue, expenditure. Held, that section 10 (2) does not deal exhaustively with the deductions which must be made to arrive at the true profits and gains. It mentions certain deductions in cls. (i) to (xiv) and if an expenditure comes within any of the emunerated classes of allowance the case has to be considered under the appropriate class. Clause (xv) is a general clause which allows an expenditure to be deducted, if laid out or expended wholly and exclusively for the purpose of such business, which is not in the nature of capital expenditure or personal expenses of the assessee. But the general scheme of the section is that profits or gains must be calculated after deducting outgoings reasonably attributable as business expenditure but not so as to deduct any part of a capital expenditure. To find out whether an. expenditure is on the capital account or on revenue, one must consider the expenditure in 978 relation to the business. The questions to consider in this connection are for what was the money laid out ? Was it to acquire an asset of an enduring nature for the benefit of the business, or was it an outgoing in the doing of business ? If money be lost in the first circumstance it, is a loss of capital, but it lost in the second circumstance, it is a revenue loss. In the first, it bears the character of an investment, but in the second, it bears the character of current expenses. English Crown Spelter Co. Ltd. vs Baker, , Charles Marsden & Sons Ltd. vs The Commissioners of Inland Revenue, and Raid 's Brewery Co. Ltd. vs Nale, , applied. Badridas Daga vs Commissioner of Income tax (1959) section C. R. 690 and Commissioner of Income tax vs Chitnavis, (1932) L. R : 59 I. A. 290, referred to. Held, in this case, there was hardly any element of investment which contemplate more than payment of advance price. The resulting loss to the assessee company was just as much a loss on the revenue side as would have been, if it had paid for the ready crop which was not delivered,

By virtue of the notifications issued by the Government of Maharashtra in exercise of its powers under section 41 of the Bombay Sales Tax Act, the new industries set up in backward areas for the production of edible as well as non edible oils came to enjoy the benefit of exemption from paying purchase tax/sales tax. Subsequently, the Government of Maharashtra amended the Act and introduced section 41A by virtue of which the tax exemption facility originally granted under the Package Scheme of Incentives, 1979 to edible oil units stood withdrawn earlier than stipulated in the exemption notifications. The withdrawal of the tax exemption however did not apply to units engaged in producing non edible oils. The petitioner in one petition has challenged the constitutional validity of section 41, while the petitioners in the other two writ petitions challenged the validity of section 41A. The petitioner in the first petition, who was engaged in the production of washed cottonseed oil, in an old unit, contends that (i) the power of exemption can be granted on any specified class of sales or purchases from payment of tax, and the Government was not entitled to grant exemption only in favour of new units set up in backward areas, (ii) section 41 confers arbitrary powers of exemption on the State Government so as to exempt new units from the payment of purchase tax, sales tax and central sales tax, thus placing old units in a very disadvantageous position, and PG NO 72 PG NO 73 (iii) washed cottonseed oil is also edible oil although it requires some processing for making it fit for human consumption, and therefore the new washed cottonseed oil units should also be classified as units producing edible oils and subjected to purchase tax and sales tax. The petitioners in the other two petitions contend that the Government was precluded by Promisory Estoppel from going back on the lncentive Scheme before the expiry of the full term of tax exemption benefit period. Dismissing the writ petitions, it was, HELD: (l) Section 41 has been provided in order to enable the State (government to grant exemption from payment of purchase tax/ sales tax on any specified class of sales or purchases in public interest. It is not as if the power has been given to the government to act in an arbitrary manner or for conferring largess on any section of manufacturers or traders. Section 41 has withstood the test of time and has enabled the government to promote public interest, by granting tax exemption benefit, whenever needed. [81A D] (2) The words "exempt any specified class of sales or purchases ' could well be construed as applying to the grant of exemption of the new units because the sales and purchases effected by new entrants would constitute a specified class by themselves in contra distinction with the class of sales and purchases effected by the older and seasoned units. [82C D] (3) Even though edible and non edible oils may fall under the general heading of 'oils they undoubtedly constitute two separate groups which are capable of distinct classification on intelligible basis. [83A B] (4) The Package Incentives Scheme was only evolved to provide incentive to entrepreneurs to start new units in backward areas. It could never have been the intention or the object of the Government that the entrepreneurs should unjustly enrich themselves at the cost of the public exchequer or to be given competing ability with the older units to such an extent as to virtually drive the latter out of the business. (5) Since the very foundation of the Scheme for giving tax exemption benefits is public interest, the government PG NO 74 was not only entitled but it was under an obligation to withdraw the tax exemption benefit when the continuance of the Scheme was going against public interest. (6) As long as the washed cottonseed oil that is produced is sold without further processing, it will not constitute edible oil. [82Fl (7) The government had neither acted arbitrarily nor practised any discrimination against edible oil units started newly or had interfered with the rights of the owners of the new units in running their business and trade in any manner when it enacted Section 41A. (8) Section 41A is fully in accordance with law and not violative of Articles 14, 19(i)(g) and 300A of the Constitution. [83E] Tapti Oil Industries vs The State of Maharashtra. AIR 1984 Bom. 161 Olympic Oil Industries Ltd. W.P. No. 3275 of 1985 in Bombay High Court and S.L.P. (Civil) No. 10144 and 10550 of 1986 in the Supreme Court, referred to.

The business of the appellant consisted in the purchase of copra, manufacture of cocoanut oil and cake therefrom and sale of oil and cake to parties inside the State of Travancore Cochin and sale of oil to parties outside the State. Before the coming into force of the Constitution of India, under the provisions of the Travancore Cochin General Sales Tax Act, 1125, and the rules made thereunder, for the purposes of assessment to sales tax, the appellant wag entitled to include in his gross turnover the total value of the oil sold by him whether inside the State or outside the State and to deduct therefrom the whole of the value of the copra purchased by him. Subsequently, in 1951, the Act was amended by the addition of section 26 which, inter alia, provided: "Notwithstanding anything contained in this Act. a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter ,State trade. . For the year 1951 1952, the Sales Tax Officer assessed the appellant to sales tax on a net assessable turnover by taking the value of the whole of the copra purchased by him, adding thereto the respective values of the oil and the cake sold inside the State and deducting only the value of the copra corresponding to the oil sold inside the State. It was contended for the appellant that in the calculation of the net turnover he was entitled to include the total value of the oil sold by him, both inside and outside the State, and deduct therefrom the total value of the copra purchased by him, and further that, under the overriding provision of the Act under section 26, he was entitled to have the value of the oil sold outside the State deducted. Held, that the calculation made by the Sales Tax Officer of the net turnover was correct. The non obstante provision contained in section 26 of the Act has the effect of taking transactions relating to inter State trade out of the purview of the Act and they are excluded in the calculation 108 838 of the gross turnover as well as the net turnover on which sales tax can be assessed. Aswani Kumar Ghosh vs Arabinda Bose, ; , relied on.

In respect of the assessment year 1949 50, the appellant while submitting his return disclosing his turnover of the sale of oil, included therein the value of the hydrogenated oil that he sold and claimed a deduction under r. 18 of the Turnover and Assessment Rules in respect of the value of the groundnuts which had been utilised for conversion into hydrogenated oil on which he had paid tax at the point of their purchase. The sales tax authorities rejected the claim on the ground that hydrogenated groundnut oil was not groundnut oil within that rule. This view was upheld by the High Court on February 11, 1955, in the Tax Revision Case No. 120 of 1953 filed by the appellant, but, on application, the High Court granted a certificate of fitness under article 133(1) of the Constitution of India on the ground that substantial questions of law arose for decision in the case. For the assessment years 1950 51, 1951 52 and 1952 53, the same question as to whether hydrogenated groundnut oil was raised and decided against the appellant by the sales tax authorities and the High Court. The appellant then applied for a certificate of fitness under article 133(1) of the Constitution, but the High Court dismissed the petition on September 4, 1959, stating: "The judgment sought to 175 be appealed against is one of affirmance. We do not think that it involves any substantial question of law . . . nor do we regard this as a fit case for appeal to the Supreme Court. " On November 23, 1959, applications for review were filed under 0. 47, r. 1, of the Code of Civil Procedure but they were dismissed. The appellant then applied for special leave under article 136 of the Constitution against the orders dismissing the applications for review and leave was granted after notice to the respondent. When the appeal came on for hearing in the Supreme Court, the respondent raised a preliminary objection that the special leave granted to the appellant should be revoked. The grounds for revoking the special leave were not urged by the respondent at the time of the hearing of the applications under article 136, nor were they set out in the statement of case filed by the respondent under O.XVIII of the Supreme Court Rules, 1950. Held (i) that where notice is given to the respondent before the hearing of the application for grant of special leave, no objection to the maintainability of the appeal or to the granting of special leave would be permitted to be urged at any stage after the grant of it, except possibly where the ground urged happens to arise subsequent to the grant of leave or where it could not be ascertained by the respondent at that date notwithstanding the exercise of due care. (ii) that the statement in the order dated September 4, 1959, that the case did not involve any substantial question of law,was an "error apparent on the face of the record" within the meaning of 0. 47, r. 1, of the Code of Civil Procedure inasmuch as this was a case where without any elaborate argument one could point to the error and say that here was a substantial point of law which stared in the face.

For the assessment years 1961 62 and 1962 63, the corresponding valuation dates of which were March 31, 1961 and March 31, 1962, assessment orders were made under the Wealth Tax Act on March 24, 1961 and March 23, 1962 respectively while the notice of demands were served on the assessee on April 11, 1961 and April 11, 1962 respectively. Against the said notices of demand the assessee preferred appeals on May 9, 1961 and May 9, 1962 respectively. For the purpose of determining the assessee 's net wealth, the assessee 's claim for a deduction of certain sums representing the estimated liabilities on account O? ' income tax and wealth tax was rejected in both assessments by the Wealth Tax Officer. On appeal by the assessee, the Appellate Assistant Commissioner of Wealth Tax allowed a part of the claim. In appeal before the Appellate Tribunal, the Revenue contended that since the assessee had disputed the wealth tax liability of Rs. 22,679/ in respect of the assessment year 1960 61 and the sum of Rs. 39,692/ in respect of the assessment year 1961 62, he was not entitled to a deduction of the same, being barred by reason of the provisions of section 2(m) (iii) (a) of the Wealth Tax Act. The Tribunal rejected the said contention and held that section 2 (m)(a) was not attracted as the tax had not become payable on the relevant valuation dates. The Wealth Tax References made at the instance of the Revenue were decided in favor of the assessee by the High Court of Gujarat by its common judgement in Commissioner of Wealth Tax vs Kantilal Manilal reported in The present appeal by special leave arises therefrom. Dismissing the appeal, the Court ^ HELD: 1.1 In order to invoke the bar prescribed by Section 2(m) (iii) (a) of the Wealth Tax Act it is necessary for the Revenue to establish that both 298 requirements therein are satisfied, that is to say, that an amount of the tax is outstanding on the valuation date and further that the amount is claimed by the assessee in an appeal as not being payable by him. [302E F] 1.2 An amount of tax is outstanding if it is payable and has remained unpaid. In other words, if there is a debt due and there has been no payment of the debt. There are three stages in respect of an income tax liability. The tax liability comes into existence on the last day o f the previous year relevant to the assessment year. Thereafter when the assessment proceedings take place an assessment order is made quantifying the assessable income and determining the tax payable. Thereupon, a notice of demand is served for payment of the tax, and the tax then becomes payable and a debt becomes due to the Revenue. A survey of the provisions of the Wealth Tax Act contained in Sections 14 to 17 and Section 30 makes it clear that in all material respects the scheme of the Wealth Tax Act is in this regard substantially, the same as that incorporated in the Income Tax Act. The notice of demand requiring payment of the tax, interest or penalty is issued pursuant to Section 30 of the Act. If the amount remains unpaid within the periods specified in the notice the amount of the tax is said to be outstanding [303D F] 1.3 Section 2(m)(iii)(a) of the Wealth Tax Act comes into play only after a demand for payment of tax has been made. The clause, read in its entirety, speaks of a debt owed by the assessee represented by an amount of tax "payable in consequence of any order" passed under the relevant tax statute and "outstanding on the valuation dates." [303H; 304A] 1.4 The expression "debt owed" is a debt which the assessee is under an obligation to pay and, therefore, it includes both a liability to pay in present as well as a liability to pay in future an ascertainable sum of money. Both kinds of liabilities are included within the expression "debt owed". But Section 2(m)(iii)(a) narrows the scope down to a liability which exists in present time because the clause speaks of tax outstanding in consequence of an order passed under the relevant taxing statute. [304B C] 1.5 In the present case, the notice of demand in each case was served after the valuation date had been passed. There was no demand already subsisting on the respective valuation dates. As the notices of demand respecting the wealth tax liability of Rs. 22,679 and Rs. 39,692 were served on the assessee subsequent to the valuation dates, if cannot be said that on the respective valuation dates the amount of tax were outstanding. In the result a material requirement of Section 2(m) (iii) (a) is not satisfied and therefore, it cannot be invoked by the Revenue. [304D E] Commissioner of Wealth Tax vs Kantilal Manilal, , approved. Doorga Prasad vs The Secretary of State, , quoted with approval 299 Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta, ; , followed. 1.6 The appeals in the present case, though filed subsequent to the respective valuation dates, would none the less have sufficed to bring the second requirement of section 2 (m) (iii) (a) into operation. But for Section 2 (m) (iii) (a) an amount of a tax outstanding on the valuation date would constitute a debt owed by the assessee on the valuation date, and the assessee would be entitled to claim its deduction in the process of computing his net wealth. Parliament, however, intended that if the amount of the tax was challenged by the assessee as not being payable by him by recourse to any of the statutory remedies prescribed in the relevant Act, such claim to deduction would be barred. Plainly, in order to give full effect to that intent it is immaterial whether the statutory remedy is being availed of on the valuation date or has been taken thereafter. A challenge by the assessee that the amount outstanding is not payable by him is sufficient to bar his claim to deduction whether the challenge is subsisting on the valuation date or is initiated after the valuation date has passed. [305 D; A C] Late P. Appauoo Pillai vs Commissioner of Wealth Tax, Madras, overtuled.

The assessee company, which derived its income from the manufacture and sale of sugar and confectionery, was as sessed for the years 1958 59 by the Income Tax Officer under the Income Tax Act, 1922 by making additions of Rs.48,500 for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700 for salary of outstation staff. The assessee did not chal lenge the said assessment order. Later in the year 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 in respect of the assessment year 1958 59 for imposing penalty. Before the Inspecting Assistant Commissioner the assessee admitted that these amounts, which were not included in the return by the compa ny, represented income. On finding that there was deliberate understatement of income he imposed a penalty of Rs.70,000. On appeal the Tribunal held that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipsofacto indicate any criminality in its action to conceal any portion of the income, and that the assessee could very well have argued against the additions of the two sums, namely, Rs.67,500 and Rs.21,700. As regards the sum of Rs.48,500 it found that the assessee had agreed to similar addition in the earlier years and so the penalty was war ranted in similar amount for this year and taking into consideration that the sum involved was Rs.48,500, it con sidered that a smaller penalty of Rs.5,000 was imposable. The High Court took the view that the onus of proving concealment was on the Revenue because proceedings for penalty were penal in character, and held that so far as the sum of Rs.48,500 was concerned it was not proved that there was any deliberate concealment, that the Tribunal had not set aside the finding of the Assistant Inspecting Com 693 missioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly estab lished concealment, that the assessee in fact had surren dered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income, that acceptance by the assessee was material to give proper weight to judge the criminality of the action which in its opinion was not given, and that the Tribunal omitted to take into account the fact that the assessee had admitted that the amount of Rs.21,700 repre sented its income. In the appeal by special leave on the question as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts. Allowing the appeal, HELD: 1.1 In an income tax reference a finding on a question of pure fact could be reviewed by the High Court only on the ground that there was no evidence to support it or that it was perverse. If the High Court found that there was no such evidence, those circumstances would give rise to question of law and could be agitated in a reference. [700G 701A, 702H 703A] 1.2 When a conclusion has been reached on an apprecia tion of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue is an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found in such a case would be a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an infer ence from the facts could not be regarded as one of law. The proposition that an inference from. facts is one of law is, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts is as much a question of fact as the evidence of the facts. [701A D] In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material 694 which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. It took into account all the relevant facts in a proper light in rendering a finding of fact. Therefore, no question of law arises. [703BC, 701DE] Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, ; Omar Salay Mohamed Sait vs Com missioner of Income tax, Madras, ; Udhavdas Kewalram vs Commissioner of Income tax Bombay City 1, and Remeshwar Prasad Bagla vs Commissioner of Income tax, U.P., , referred to. 2.1 The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the assessee. The Tribunal had taken into considera tion the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings. The time when the assessee admitted the addi tions was also considered. But to admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars. There may he hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the Revenue to prove the mens rea of quasi criminal offence. [703BC, 702AB, 701A, 702BC] 2.2 It is for the Income tax authority to prove that a particular receipt is taxable. If however, the receipt is accepted and certain amount is accepted as taxable, it could be added. But in the instant case, it was not accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income. [702EF] 3. The High Court observed that the time of admission was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal. That is not correct. The Tribunal had made additions during the assessment pro ceedings. In any event that would be appreciation of evi dence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise. Nonappreciation may give rise to the question of law but not mere misappreciation even if there he any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. [703CD] The High Court in preferring one view to another view of factual 695 appreciation in the instant case, has therefore, trans gressed the limits of its. jurisdiction under the Income Tax Reference in answering the question of law. [703F]

This appeal arose out of a case under the Kerala General Sales Tax Act. The assessee firm (assessee) had been appointed as distributor by the Travancore Cochin Chemicals Ltd. (the "said company") to effect sale of their product under an agreement. In the assessment of the assessee firm for the period 1967 68 under the Kerala General Sales Tax Act, final assessment was completed and the turnover as reported by the assessee was accepted and tax, levied on that basis. Later, the assessing authority alleged that certain transactions in the aforesaid period had been wrongly excluded from the turnover reported by the assessee in the return and the turnover had escaped assessment. The contention of the assessee that the transactions did not constitute sales by the said company to the assessee was rejected by the Assessing Officer and it was held that the said turnover was liable to be included in the taxable turnover as escaped turnover. An appeal by the assessee to the Appellate Assistant Commissioner was dismissed. In second appeal to the Tribunal, the Tribunal held that the transactions in question had taken place directly between the said company and the consumers and the assessee was merely an agent of the company, and allowed the appeal. The High Court on revision held that the Tribunal was wrong in concluding that the assessee was acting only as an agent in respect of the said transactions between the said company and the consumers, and allowed the Revision Application. The assessee firm appealed to this Court by special leave against the decision of the High Court. Dismissing the appeal, the Court, ^ HELD: Both the parties proceeded on the footing that the transactions in question were effected pursuant to the agreement, sub clause (a) of clause 2 whereof provided that the distributor had the right of sale 880 of the product within the stipulated area. Bulk supplies were effected in waggon load or lorry load by the said company direct to the consumer pursuant to orders booked by the assessee firm. The distributor arranged the payment as per the agreement and also took the responsibility to bear entirely the resultant effects and risk from the said direct dispatches. It was true that the price at which the goods were to be sold to the customers was fixed by the company but that did not lead to the conclusion that the assessee acted merely as an agent of the said company. The mere fact that the manufacturer fixes the sale price by itself cannot lead to the conclusion that the distributor is merely an agent. Under the agreement, what the distributor got was described as a "rebate" and not "Commission", as is normally expected in an agreement of agency. This is a factor, by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee. More important, the supplies were made to the distributor against payment immediate or deferred as provided in the agreement, and even when the goods were destined directly to the customer, the distributor had to guarantee to arrange the payment, as per clause 8. Where there was some time lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee. This circumstance clearly showed that in respect of the goods dispatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company. In respect of the goods in question, despatched through public carriers, although the invoices were prepared in the names of the customers of the goods and the goods were consigned to the destination through public carrier booked to self, the bills were endorsed and delivered to the assessee. In the light of the agreement, these circumstances clearly showed that in respect of these transactions the property in the goods dispatched passed to the distributors on the bills being endorsed and handed over to the distributors. [884D H;885A D] Although the Court had referred to the assessee being described in the agreement as "distributor" and not as "agent" and to the fact that what they got was described as "rebate" and not "commission", the Court had not treated these circumstances as decisive. But these descriptions considered in the light of the general tenor of the agreement and the circumstances surrounding the transactions between the parties showed that the assessee was not an agent but really a purchaser from the company in respect of the goods in question, and the transactions were liable to be included in the turnover of the assessee. [885G H;886A] 881 The Bhopal Sugar Industries Ltd. vs Sales Tax Officer, Bhopal, ; ;and Pollack & Mulla 's Commentary on the Sale of Goods & Partnership Acts, 4th Edition, p. 114, referred to.

Appeals Nos. 134 to 137 of 1959. Appeals by special leave from the judgment and order dated September 20,1957, of the Bombay High Court in Income Tax Reference No. 14 of 1957. R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants. K. N. Rajagopal Sastri and D. Gupta, for the respondent. January 3. The Judgment of the Court was delivered by HIDAYATULLAH, J. This judgment governs the disposal of Civil Appeals Nos. 134 to 137 of 1959. They have been filed by four assessees with special leave, and arise out of similar facts, and it is not necessary to refer to more than one case to consider the point in question. The assessment year under consideration is 1952 53, and the previous year, the Calendar year, 1951. In that year, Mr. Tulsidas Kilachand, one of the four appellants, made a declaration of trust in favour of his wife, a portion of which may be quoted here: ". . . 1, Tulsidas Kilachand hereby de clare that I hold 244 shares of Kesar Corporation Ltd. and 120 shares of Kilachand Devchand & Co., Ltd upon trust to pay the income thereof to my wife Vimla for a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable." In the year of account, a sum of Rs. 30,404 was received as dividend income on those shares, and the assessee contended that this income, after being grossed up, was not liable to be included in his total income, in view of the third proviso to section 16(1)(c) of the Indian Income tax Act. The Income tax Officer did not accept this contention, and though the assessment order is not before us, we gather from the statement of the case that the reason he gave was that the income had accrued to or had arisen in the hands of 353 Mr. Tulsidas Kilachand and had been paid by him to his wife. The Income tax Officer held that the words of the proviso "income arising to any person by virtue of a settlement or disposition" did not apply to this income. On appeal, the Appellate Assistant Commissioner held that the case was governed by section 16(3)(b), and need not be considered under the third proviso. to section 16(1)(c) of the Act. It appears to have been conceded before him that if the former provision applied, the proviso would not save the income from being assessed in the hands of Mr. Tulsidas Kilachand. The appeal was dismissed. In the appeal before the Tribunal, Mr. Tulsidas Kilachand again relied upon the third proviso to section 16(1)(c), and contended that the case was riot governed by section 16(3)(b) and that the dividend income could not be included in his assessment. The Tribunal came to the conclusion that the case was covered either by section 16(3)(a)(iii) or by section 16(3)(b), and that the income from the shares was, therefore, liable to be included in the income of Mr. Tulsidas Kilachand. The Tribunal, however, raised and referred the following question under section 66(1) of the Act to the High Court of Bombay: "Whether on a true construction of the deed of declaration of trust dated 5th March , 1951, the net dividend income of Rs. 30,404 on 120 shares of Kilachand Devchand & Co., Ltd. and 244 shares of Kesar Corporation Ltd. held under trust by the assessee for the benefit of his wife was income liable to be included in the total income of the assessee? The High Court came to the conclusion that, though section 16(1)(c) was not satisfied in view of the third proviso, section 16(3)(b) was applicable to the case, and answered the question in the affirmative. In the appeal before us, the case for the Department was based both on section 16(3)(a)(iii) and section 16(3)(b), while the appellants contended that this disposition fell within the third proviso to section 16(1)(c). The relevant provisions are: 45 354 " 16. Exemptions and exclusions in determining the total income. (1) In computing the total income of an assessee. . . . . . . . . (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (7 of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided. . . . . . . . . Provided further. . . . . . . . Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him. (2). . . . . . . . (omitted) (3). In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i). . . . . . . . . (ii). . . . . . . . . . (iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (b). so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or 355 association by such individual for the benefit of his wife or a minor child or both. " The object of framing section 16 can almost be taken from the observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners (1), where he stated as follows: "This legislation . (is) designed to overtake and circumvent a growing tendency on the part of taxpayers to endeavour to avoid or reduce tax liability by means of settlements. Stated quite generally, the method consisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income. The legislature 's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly. " These observations apply also to the section under consideration, and the Indian provision is enacted with the same intent and for the same purpose. Section 16 thus lays down certain exemptions and exclusions in determining the total income of an assessee. Some of the provisions lay down the conditions for inclusion of certain income, while others lay down the conditions for exclusion of other income. We are concerned with the income accruing in case of settlements and the conditions under which income of a wife is treated as the income of the settlor or disponer or as the income of the husband. We have to see if the pro visions for exclusion or inclusion apply to this case. Section 16(1)(c) provides that income from assets remaining the property of the settlor or disponer or arising to any person by virtue of a revocable transfer of assets shall be deemed to be the income of the transferor. What cl. (c) means was decided by this Court in Provat Kumar Mitter vs Commissioner of Income tax (2). There, Provat Kumar Mitter had assigned the dividends only, and had not transferred the relevant shares. It was held by this Court that this (1) , 329. (2) 356 was a case of application of one 's own income and not assignment of the source from which the income was derived, which alone saved the income from tax, subject, however, to provisions like section 16(1)(c) and section 16(3). The deed in favour of the wife in that case gave only a right to the dividends, and not being a transfer of an existing property of the assessee, section 16(1)(c) and the third proviso were not attracted. That case thus has no application to the facts of the present case, where the disposition is differently made. The disposition here is for a period of seven years or the life of the settle ' whichever is shorter. During that period or the life of the settlee, Mr. Tulsidas Kilachand has bound himself upon trust to pay the dividends to his wife and not to revoke the settlement. The intention is obviously to put this case within the third proviso to section 16(1)(c), because cl. (c) does not apply to any income arising to any other person provided the disponer derives no direct or indirect benefit, even though the assets remain his property. If it were only a question of the application of the proviso, this disposition would be exempt. But by the deed of trust, the settlor holds the shares in trust; the shares do not remain the property of the settlor. Section 16(1)(c) has, therefore, no application, and the proviso is not attracted. The section goes on to deal with other situations and to provide for them specially. Sub section (3) provides specially for assets transferred to the wife or minor child. Income from assets transferred to the wife is still to be included in the total income of the husband, (a) if the assets have been transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration [vide sub section (3)(a)(iii)], or (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife [vide sub section (3)(b)]. The first question is whether there can be said to be transfer of assets to the wife or to 'any person ' for the benefit of the wife. The second question is whether there was adequate consideration for the transfer, if 357 there was one The contention of the assessee is that there was no transfer of any assets at all. It is contended that the ownership of shares involves a bundle of rights, and that they are, generally speaking, (a) right to vote, (b) right to participate in the distribution of assets on dissolution, and (c) right to participate in the profits, e. g., dividends which might be Hi, .declared. It is pointed out that none of these rights was transferred to the wife, because transfer of assets connotes a creation of a right in the assets in praesenti. It is urged that there was no transfer of assets either to the wife or to any person for the benefit of the wife but merely a creation of a trust in respect of the shares, the dividends from which were payable to the wife, and that thus section 16(3)(a)(iii) or section 16(3)(b) was not applicable. It is lastly contended that even if it be held that there was such a transfer, it was for adequate consideration, being for love and affection, which is a good consideration. The contention that there was no transfer at all in this case is not sound. The shares were previously held by Mr. Tulsidas Kilachand for himself. After the declaration of trust by him, they were held by him not in his personal capacity but as a trustee. No doubt, under sections 5 and 6 of the Indian Trusts Act if the declarer of the trust is himself the trustee also, there is no need that he must transfer the property to himself as trustee; but the law implies that such a transfer has been made by him, and no overt act except a declaration of trust is necessary. The capacity of the declarer of trust and his capacity as trustee are different, and after the declaration of trust, he holds the assets as a trustee. Under the Transfer of Property Act, there can be a transfer by a person to himself or to himself and another person or persons. In our opinion, there was, in this case, a transfer by Mr. Tulsidas Kilachand to himself as a trustee, though there was no formal transfer. The assessee also stresses the words "any person or association of persons" in section 16(3)(b), and contends that such a person must be other than the husband, who transfers. The word "any person" is wide 358 enough to include the husband, when he transfers property to himself in another capacity. The change of capacity makes him answer the description "any person". This deed must be regarded as involving a transfer by the husband to a trustee, and even though the husband is the same individual, in his capacity as a trustee he must be regarded as a person distinct from the transferor. In our opinion, section 16(3)(b) covers the case. It remains to consider whether there was adequate consideration for the transfer. Reliance has been placed only upon love and affection. The words "adequate consideration" denote Consideration other than mere love and affection, which, in the case of a wife, may be presumed. When the law insists that there should be "adequate consideration" and not good consideration", it excludes mere love and affection. They may be good consideration to support a contract; but adequate consideration to avoid tax is quite a different thing. To insist on the other meaning is really to say that consideration must only be looked for, when love and affection cease to exist. In our opinion, this case falls within the special rules concerning wife and minor child, laid down in section 16(3)(b) and not within the third proviso to section 16(1)(c). It must thus be held that there was a transfer of the assets to the husband trustee for the benefit of the wife, The answer given by the High Court was thus correct. The appeals fail, and are dismissed with costs. One hearing fee. Appeals dismissed.

By a deed dated March 5, 1951, the appellant made a declaration of trust in favour of hiswife as follows: "I hereby declare that I hold 244 sharesupon trust to pay the income thereof to my wifefor a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable". In the year of account, 1951, a sum of Rs. 30,404 was received as dividend income on those shares and the appellant claimed before the income tax authorities that this sum was not liable to be included in his total income in view of the third proviso to section 16(1)(c) of the Indian Income tax Act, 1922, but this claim was rejected on the ground that the case was covered either by section 16(3)(a)(iii) or by section 16(3)(b) of the Act. The appellant 's contention was that under the deed of trust there was no transfer of assets either to the wife or to any person for the benefit of the wife but merely a creation of a trust in respect of the shares, the dividends from which were payable to the wife, that even if it be held that there was such a transfer, it was for adequate consideration being for love and affection which was a good consideration, and that thus section 16(3)(a)(iii) or section 16(3)(b) was not applicable. Held, that on a true construction of the deed dated March 15, 1951, there was a transfer of the shares by the husband to himself as a trustee for the benefit of the wife and that even though the husband was the same individual, in his capacity as a trustee he must be regarded as a person distinct from the transferor. Held, further, that the words "adequate consideration" in section 16(3) of the Indian Income tax Act, 1922, denoted considera tion other than mere love and affection, which, in the case of a wife, may be presumed. Accordingly, the present case fell within section 16(3)(b) of the Act and not within the third proviso to section 16(i)(c). Provat Kumar Mitter vs Commissioner of 'Income tax; , , distinguished.

A Hindu undivided family consisting of the father (Karta) and his three sons carried on business. Land was acquired in the name of the Karta and the price was paid out of the books of the family, and a building was constructed on the land. Another building was constructed on another plot of land. On a partial partition of the above Hindu undivided family its business was taken over by a partnership firm consisting of the Karta and the two elder sons and the firm debited a certain sum of money in the building account of the firm for the assessment year 1955 56 and a similar sum in respect of the other property for the assessment year 1956 57. The appellants (assessees) who were members of the partnership firm, filed separate returns in their individual status for the assessment years 1955 56 and 1956 57 claiming that the two properties belonged to the four members of the family in their individual capacity. The Income Tax Officer however regarded the properties as belonging to the partnership firm, and in the assessment proceedings of the firm for the said years, estimated the cost of construction at a higher figure, than the cost disclosed, and made additions accordingly to the returned income of the firm. Allowing the appeals of the partnership firm the Appellate Assistant Commissioner deleted the additions holding that as the money was advanced by the firm and debited to the account of each co owner, the partnership firm was not the owner of the properties and therefore it could not be said to have earned any concealed income. The Income Tax Officer then initiated proceedings under section 147(a) of the I.T. Act 1961 against the individual assessees for the assessment years 1955 56 and 1956 57 and the additions on account of concealed income originally made in the assessments of the partnership firm were divided between the assessees and included in their individual assessment, rejecting the plea of the assessees that there was no case for invoking the said section, as they had already disclosed that they had invested in the properties when filing their original individual returns. On appeal the Appellate Assistant Commissioner though agreeing that there was no default on the part of the assessees to warrant proceedings under section 147(a) and though ordinarily the assessments would be barred by limitation, maintained the assessments on the ground that section 153(3)(ii) of the Act applied. 273 The Income Tax Appellate Tribunal though rejecting the contention that the assessees were not covered by the expression "any person" in section 153(3)(ii), pointed out that the provision could not be availed of by the Income Tax Officer as there was neither any "finding" nor a "direction" on the earlier order of the Appellate Assistant Commissioner in consequence of which, or to give effect to which, the impugned assessment could be said to have been made and that no opportunity had been afforded to the assessees of being heard as was required by Explanation 3 to section 153(3) before that earlier order was made. It held that the Appellate Assistant Commissioner had no jurisdiction to convert the assessments made by the Income Tax Officer under section 147(a) to "assessments passed under section 153(3)(ii)". The High Court on Reference by the Tribunal observed that the finding that the properties did not belong to the partnership firm and therefore the excess amount of the cost of construction could not be regarded as the concealed income of the firm, was necessary for the disposal of the appeals filed by the firm and as a corollary it was held that the buildings belonged to the co owners. This necessitated the "direction" to the Income Tax officer that he was free to assess the excess amount in the hands of the co owners. It held that the Appellate Assistant Commissioner could convert the provisions of section 147(i) into those of section 153(3)(ii) of the Act and that the provisions of section 153(3)(ii) of the Act applied to the case. In the assessee 's appeals to this Court on the question whether section 153(3)(ii) can be invoked. Allowing the appeals, ^ HELD: (1) The provisions of section 153(3)(ii) of the Income Tax Act, 1961 are not applicable to the instant case. [280 C] (2) The expression "finding" and "direction" are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. [277G] (3) Where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A 's income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A 's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. The same principles apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year. [278A B] (4) It is now well settled that the expression "direction" in section 153(3) (ii) of the Act must mean an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or court is empowered to give while deciding the case before it. [278C] 274 5. (i) Section 153(3) (ii) is not a provision enlarging the jurisdiction of the authority or court. It is a provision which merely raises the bar of limitation for making an assessment order under section 143 or section 144 or section 147. [278D] Income Tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; N. Kt. Sivalingam Chettiar vs Commissioner of Income tax, Madras, ; referred to. In the instant case all that has been recorded is the finding that the partner ship firm is not the owner of the properties. The finding proceeds on the basis that the cost has been debited in the accounts of the four co owners. But that does not mean, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees. The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees. That is plainly required by Explanation 3 to section 153(3). The finding contemplated in Explanation 3, is a finding that the amount represents the income of another person. [278H 279B, D] (ii) It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals. [279C] (iii) The observation of the Appellate Assistant Commissioner cannot be described as such a finding in relation to the assessee. [279D] (iv) It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the co owners. The observation that the Income Tax Officer "is free to take action" cannot be described as a "direction". A direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and direction of the Income Tax Officer whether or not to take action it cannot be described as a direction. [279E F] (v) The order of the Appellate Assistant Commissioner contains neither a 'finding ' nor a 'direction ' within the meaning of section 153(3)(ii) of the Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have been taken. [279G] Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., ; referred to.

Respondent, a non resident company, in the accounting year supplied goods which were sent F. O. R. Bhopal to the buyers in British India. The railway receipts were handed over to a Bank in Bhopal with instructions to hand over the railway receipts to the buyers, who were named as consignees, only on receipt of payment of the bill and collection charges. The branches of the Bank within the taxable territory collected the amounts due from the buyers and transmitted them to Bhopal to the credit of the respondent. The question was whether the profits in the goods were received or deemed to be received in British India. Held, that the decision of this Court in Commissioner of Income tax vs P. M. Rathod & Co. applied to this case; and the income, profits or gain must be deemed to have been received within the taxable territory. The fact of payment to the agent determines the place where the money can be said to be received by the seller. Since in the instant case the railway receipts were not to be handed over to the buyers by the Bank, as per instructions of the seller, unless payment for the value of the goods were received by the Bank which instructions the buyers could not countermand, this was sufficient to make the Bank an agent of the seller. Held, also, that a railway receipt is a document of title to goods, and, for all purposes, represents the goods. When the railway receipt is handed over to the consignee on payment, the property in the goods is transferred. The Commissioner of Income tax vs P. M. Rathod and Co., ; , relied on.

Dismissing the Revenue appeal by special leave, the Court ^ HELD: (1) The credit entries made in the books of a statutory agent do not by themselves amount to receipt by assessees who are non residents as long as the amounts so credited in their favour are not at their disposal or control. [592 F] The non resident assessees in this case neither received nor could be deemed to have received the sums in question when their accounts with the statutory agent were credited, since a credit balance without more only represents a debt and a mere book entry in the debtor 's own books does not constitute payment which will secure discharge from the debt. They cannot, therefore, be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period. [592 F G] P. V. Raghava Reddi & Anr. vs Commissioner of Income tax [1962] Supp. 2 S.C.R. 596, distinguished. (2) Under clause (a) of the Explanation to clause (i) of sub section (1) of section 9 of the Income Tax Act. in the case of the business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India. If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India. [593 B D] 588 In the instant case the non resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by clause (a) of the Explanation to section 9(1)(i) of the Act. The commission amounts which were earned by the non resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India. [593 E G] Commissioner of Income tax, Punjab vs R. D. Aggarwal & Co. & Anr. and M/s. Carborandum Co. vs C.I.T. Madras ; , referred to.

In August 1957 the appellant created two Trusts by two sepa rate deeds, one of which was a charitable trust and the other a family trust. He then transferred certain shares to the family trust the scheme of which was that during the minority of each of three children of the appellant the property in Schedules A, B and C to the deed qua each beneficiary was to remain vested in the trustees for the benefit of the charitable trust, and after the expiry of the period specified in each case, the corpus and income was to be herd for the beneficial, ownership of the three children. By Clause 9 of the family trust deed, it was provided that the interests granted or created in the respective beneficiaries shall vest in them immediately upon execution of the deed; Clause 21 conferred upon the trustees power either to use the income accruing under the trust for the benefit of the charitable trust during the period prescribed in each case upto the time that each of the three children attained majority or to accumulate the income and deliver it on the expiry of the periods specified to the trustees of the charitable trust. Clause 26 provided that notwithstanding anything. contained in Clauses 21 to 25 the trustees could expend the income accruing under the settlement to each of the beneficiaries therein for the maintenance, education, health, marriage and. advancement of the beneficiaries. In computing the nett wealth of the assesses under the Wealth Tax Act 1957, as on March 31, 1958 and March 31, 1959, the valuation dates respectively for the assessment years 1958 59 and 1959 60, the Wealth Tax Officer and the Appellate Assistant Commissioner included the value of the shares held by the trustees under the family trust, on the ground that these shares were held by them for the benefit of the minor children within the meaning of Section 4(1)(a) (iii) of the Act. On appeal the Appellate Tribunal reversed this decision but. upon a reference, the High Court decided the issue against the assessee. In the appeal to this court, it was contended on behalf of the Revenue that the word "benefit" in the Section meant immediate or deferred benefit and the amendment of Section 4(1)(a)(iii) by Act 46 of 1964 whereby the words "immediate or deferred" were introduced before the word "benefit" in the Section, was in effect only declaratory; and that in any event it was clear from the recitals in the preamble and the other terms of the family trust deed that the intention of the appellant was to make a settlement for the benefit of his minor children within the meaning of the Section prior to its amendment. 420 HELD: (per Wanchoo and Sikri, JJ.). Considering the terms of the family trust deed as a whole, the shares transferred to the trustees were not held for the benefit of the three minor children as on March 31, 1958 and March 31, 1959 within the meaning of section 4(1)(a) (iii)and could not therefore be included in the nett wealth of the as e. [426E] By the terms of the deed, it, war. the charitable trust which was entitled to the income of the shares in Schedules A, B and C during the years before the minor children attained majority; upto that time the children had no interest whatsoever in that income. It could not therefore be said that the settlement was for the immediate benefit of the minor children. [426B C] Although the non obstante clause 26 purported to override the provisions of Clauses 21 to 25, the inclusion of Clause 21 appeared to be a typographical error. In any event even assuming that there was a conflict between Clauses 21 and 26, the earlier disposition under Clause 21 would Prevail over the later directions contained in Clause 26. Sahabzada Mohammed Kamgar Shah vs Jagdish Chandra Deo Dhabal Deo ; , 611. and Ramkishore Lai vs Kamal Narain (1963) Supp. 2 S.C.R. 417, 425; referred to. [427B C] (per Shah J. dissenting): The primary intention of the appellant as disclosed in the preamble of the family trust deed was to make provision for his children; from the terms of the trust deed and particularly from reading Clauses 9 & 26 together, it was clear that there was a vested interest immediately arising in favour of the children on the execution of the instrument, and that they were the real beneficiaries. The High Court had therefore rightly held that the shares transferred to the family Trust were for the immediate benefit of the settlor 's minor children within the meaning of Section 4(1)(a)(iii) and were liable to be included in the computation of wealth of the appellant. [435C E] (By the Court): The words "immediate or deferred" introduced into Section 4(1) (a)(iii) by Act 1946 of 1964 were not merely declaratory. The amendment made a deliberate change. The word 'benefit ' must therefore be construed apart from the amendments and in the context meant "for the immediate benefit of the individual or his wife or minor child". [422C, D]

These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act. Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure. A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed. There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court. Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,. R. , approved. There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award. The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable. There can be no difference in law between an arbitaration by agreement of parties and one under a statute. A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator. If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it. An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on. National Telephone Company Limited vs Postmaster General, , explained.

The respondent company, which was incorporated in New York and carried on business in spices, brought a suit in the original side of the Bombay High Court against the appellant for recovery of a sum of Rs. 92,884 4 10 on the basis of a judgment of the Supreme Court of the State of New York affirming two awards obtained by it and also on the awards in the alternative. 20 The respondent was a partnership firm carrying on import and export business in Bombay. By two letters exchanged between them, the appellant and the respondent agreed to do business in turmeric fingers on the terms and conditions of the American Spice Trade Association, one of which was an arbitration clause which ran as follows : "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Asso ciation printed on the reverse side thereof. This contract is made as of in New York. " The appellant failed to supply turmeric in terms of the two contracts it entered into with the respondent. The respondent put the matter into arbitration in pursuance of the arbitration clause. The appellant took no part in it. The arbitrators gave the two awards in favour of the respondent for damages. The appellant did not pay. The respondent then took appropriate proceedings and got the awards confirmed by the judgment of the Supreme Court of the State of New York. The single judge of the Bombay High Court who tried the suit held that it was not maintainable either on the foreign judgment or on the awards and (dismissed the suit. The Division Bench on appeal held that the suit was maintainable on the awards, though not on the judgment, as part of the cause of action had arisen in Bombay and the relevant facts had been proved by the Public documents produced by the respondent and the admissions made by the appellant and decreed the suit. Held, (per Dayal and Mudholkar JJ.) The decision of the Single judge of the High Court that the suit was not maintainable on the foreign judgment must be affirmed but on other grounds. Apart from the provisions of the Arbitration Protocol and Conventions Act, 1937, foreign awards and foreign judgments based upon award arc enforceable in India on the same grounds and in the same circumstances in which they are enforceable in England under the Common Law on grounds of justice, equity and good conscience. On the original side of the Bombay High Court English Common Law is also applicable under cl. 19 of the Letters Patent read with cl. XLI of the Charter of that Court. If the award is followed by a judgment which is rendered in a proceeding in which the person against whom judgment is sought can take objections as to the validity of the award, the judgement will be enforceable in England. Even then the plaintiff will have the right to sue on the original course of action. Secondly, even a foreign award will be enforced only if it satisfies mutate 's mutandis the tests applicable to the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration. But there is a difference of opinion in this connection on two matters, (1) whether an award which 21. is followed by a judgment can be enforced as an award or whether the judgment alone can be enforced, and (2) whether an award which is not enforceable in the country in which it was made without an enforcement order or a judgement, can be enforced or in such a case the only remedy is to sue on the original cause of action. Thirdly, both a foreign judgment and a foreign award may be sued upon provided certain conditions are fulfilled one of which is that it has become final. Although, therefore, the respondent could sue on the original cause of action in the Bombay High Court that cause of action must be distinguished from the one furnished by the 'judgment of the New York Supreme Court which must be held to have arisen in New York and not in Bombay and was a cause of action independent of the one afforded by the contracts and the Bombay High Court would, consequently, have no jurisdiction to try the suit based on that judgment. East India Trading Co. vs Carmel Exporters & Importers Ltd., , Schibsby vs Westenholz., and Re Davidson 's Settlement Trust, (1873) L. R. 15 Eq. 383, referred to. In a suit based on a foreign award the plaintiff has to prove,. (1) that the contract between the parties provided for arbitration by a tribunal in a foreign country, (2) that the award is in accordance with the agreement, (3) that the award is valid according to the law of that country (4) that it was final according to that law and, (5) that it was subsisting award at the date of the suit. The essential difference between a foreign judgement and 2 foreign award is that while the former is a command of the foreign, sovereign and the coming of nations accords international recognition to it if it fulfill certain basic requirements, the latter is founded on the contract between the parties and is not given the status of a judgment in the country in which it is made 'and cannot claim the same international status as the act of a foreign sovereign. Even though an award may not have obtained the status of judgment in the country in which it is made, if it possesses the essential attribute of a judgment, that is finality, it can be sued upon in in other country. Union Nationaledes Cooperatives Agricoles de Careales vs Robert Catterall & Co. Ltd. ' , referred to. But the finality that r. 15, cl. (E) of the American Spice Trade Association gives to the awards in question is no more than a matter of contract between the parties and must be subject to the law of the State. A reference to the laws of the State of New York makes it abundantly clear that the relevant provisions of the laws of the 22 State under which alone the awards could become final had not been complied with and they could not, therefore, provide a cause of action for the suit. For an award to furnish a fresh cause of action, it must be final. If the law of the country in which it was made gives finality to the judgment based on an award and not to the award itself, the award cannot furnish a cause of action in India. Although the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question not being final the suit must fail. Per Subba Rao J. The doctrine of non merger of the original cause of action with the foreign judgment pronounced upon it is a well established doctrine. Popat vs Damodar, , Oppenbeim and Co. vs Mohmed Haneef, Mad. 496 and Nil Ratan Mukhopahya vs Cooch Behar Loan Office, Ltd. I.L.R. , referred to. If the contract does not merge in the judgment, by a parity of reasoning an award on which a foreign judgment is passed cannot also merge in the judgment. There is no distinction between a foreign award which would require an enforcement order to be enforceable in law and an award which cannot be enforced except by a judgment. An en forcement order as well as a judgment on an award serves the same purpose and they are two different procedures for enforcing, an award. Meerifield Ziegler & Co. vs Liverpool Cotton Association Ltd., , referred to. A suit would, therefore, lie on a foreign award completed according to the law of that country and before a decree can be passed on it three things must be proved, (1) arbitration agreement, (2) that the arbitration was conducted in accordance with the agreement, and (3) that the award was valid according to the law of the country when it was made. Norske Atlas Insurance Co. Ltd. vs London General Insurance Company Limited. , referred to. It was not correct to say that the High Court had gone wrong in holding that the three necessary conditions had been proved by the admission of the appellants in their pleadings. Rules 3, 4 and 5 of the Order VIII of the Code of Civil Procedure form an integrated code dealing with the manner in ,which the allegations of fact made in a plaint has to be traversed :and the legal consequences that follow from its non compliance. 23 The written statement must deal specifically with each allegation of fact made in the plaint and if the defendant denies any such fact, such denial must not be evasive, he must answer the point of substance and if he fails to do so the said fact must be take to be admitted. The discretion under the proviso to r. 5 has to be exercise by the court as justice demands and particularly according to the nature of the parties, standard of drafting prevailing in the locality and the practice of the court. There can be no doubt that pleadings on the original side of the Bombay High Court have to be strictly construed in the light of the said provisions unless the court thinks fit to exercise it discretion under the proviso. Tildesley vs Harper, and Laxmi narayan vs Chimniram Girdharilal, Bom. 89 referred to. The said three conditions were also proved by the exhibited record of the proceedings of the Supreme Court of New York containing the certificate of the Consul General of India in New York and certified copies of the order and judgment of the Supreme Court. While under section 78(6) of the Indian Evidence Act, proof of the character of the document according to the law of the foreign country, is condition precedent to its admission, such admission is not a condition precedent for drawing the requisite presumption under section 86 of the Act. That presumption can be drawn before the document is admitted. The judgment of the Supreme Court of New York, therefore, which satisfied the first two conditions laid down by section 78(6), could be legitimately admitted into evidence. The contracts between the parties having been concluded within the local limits of the original jurisdiction of the Bombay High Court, a part of the cause of action must have arisen there. and that court had jurisdiction to try the suit on the awards.

The Income tax Officer, Madura, issued notice under section 18A (1) of the Indian Income Tax Act, 1922, for payment of advance tax. R, the then manager of the Hindu Undivided family availed of the option to submit a revised estimate for the years 1946 47 and 1948 49. The assessment of these two years were completed respectively in November, 1950 and February, 1951, as the total income assessed far exceeded the estimate submitted by R, the Income tax Officer ordered the respondent, the legal representative of R, to pay the interest under section 18A (6) of the Act. On appeal, the Income tax Appellate Tribunal reduced the income and the Income tax Officer in giving effect to the said order reduced the interest and called upon the respondent to make payment. The respondent asked the Income tax Officer not to levy interest under section 18A (6), submitting that the levy was illegal and unjustified, alternatively he requested that the interest be waived by virtue of the powers vested on the Income tax Officer under proviso 5 to section 18A (6) which was added by section 13 of Act 25 of 1953, with retrospective effect from April 1952. The Income tax Officer and the Inspection Assistant Commissioner declined to accede to the request. The respondent then moved the High Court at Madras for a writ under article 226 cancelling the levy of interest on the ground among others that refusal by the Revenue authorities to cancel the levy was arbitrary and not based on any judicial exercise of the discretion vested by the Act. The High Court upheld the plea, ordered the Income tax Officer to decide whether the respondent had made out a case for the exercise of the discretion. The only question in the appeal before the Supreme Court was whether benefit of the said 5th proviso to section 18A (6) may be granted in respect of assessments of income which were completed by the Income tax officer before April 1952. 614 ^ Held, that the jurisdiction under 5th proviso of section 18A (6) of the Income tax Act may be exercised by the income tax Officer in all cases which were pending on April 1, 1952 before him or any superior authority having under the Act power to modify the assessment of income.

Appeal No. 315/1958. Appeal by special leave from the judgment and order dated February 5, 1957, of the Bombay High Court in I.T.R. No. 34/1956. 372 R. J. Kolah, and I. N. Shorff, for the appellant. A. N. Kripal and D. Gupta, for the respondent. January 6. The Judgment of the court was delivered by KAPUR, J. This is ail appeal against the judgment and order of the High Court of Judicature at Bombay in Income tax Reference No. 34 of 1956. The appellant is a non resident Bank incorporated under the National Bank Act of the United States of America with its head office in that country and with branches all over the world including some branches in India. It was assessed under the Business Profits Tax Act (Act XXI of 1947), hereinafter termed the " Act ", in respect of the chargeable accounting periods: 1 4 1946 to 24 12 1946, 25 12 1946 to 24 12 1947, 25 12 1947 to 23 12 1948, and 24 12 1948 to 31 3 1949 and the sole question for decision in this appeal is the meaning of the word " reserves " in R. 2(1) of Schedule 2 of the Act and how the capital of the appellant during the above mentioned chargeable accounting periods has to be computed for the purpose of allowing the " abatement " under the Act. The appellant contended that in computing the amount for the purpose of abatement it was entitled to include what is termed in the United States " Undivided Profits ", the contention being that this item falls within the word " reserves" in R. 2(1) of Schedule 11 of the Act which provides: "Where the company is one to which rule 3 of Schedule I applies, its capital shall be the sum of the amounts of its paid up share capital and of its reserves in so far as they have not been allowed in computing the profits of the company for the purpose of the Indian Income tax Act, 1922 (XI of 1922), diminished by the cost to it of its investments or other property the income from which is not includable in the profits, so far as that cost exceeds any debt for money borrowed by it. " 373 It is not necessary to give the details of all the years; but it will be sufficient as an illustration if we: were to confine ourselves to the " Undivided Profits " in the Balance Sheet as on December 31, 1946, wherein the relevant entries were as follows : Capital . $ 77,500,000 00 Surplus . $ 152,500,000.00 Undivided Profit . $ 29,534,614.21 The Report of the Directors dated January 14, 1947, was as follows: " At the year end, Capital of the Bank remains at $ 77,500,000 surplus has increased to $ 152,500,000 by the transfer of Rs. 10,000,000 from Undivided Profits. After this transfer, Undivided Profits are $ 29,534,614 an increase of $ 240,376 from a year ago. The Trust Company has Capital of $ 10,000,000 surplus of s 10,000,000 and Undivided Profits of $ 8,097,020. The two institutions thus show total capital funds, that is Capital, Surplus and Undivided Profits of $ 287,631,634 or $ 46 39 per share compared with $ 44.60 per share at the end of 1945. " According to the Balance Sheet of 1948, capital funds since 1939 had increased from $ 169,768 thousands to $ 320,795 thousands in the year 1948 and there had been a progressive increase both in what is called " Surplus " as well as " Undivided Profits ", the former increased from $ 62,500 thousands to $ 182,500 thousands and the latter from $ 19,768 thousands to $ 50,795 thousands. The question in this case is whether this large sum of money shown as " Undivided Profits " is a part of the Reserves or is equivalent to the unallocated amount carried forward at the end of a year of account in the balance of Profit & Loss Account as we know it. It was the sum of $ 29,534,614.21 and similar sums for the other chargeable Accounting Periods which are the subject matter of controversy in this appeal. Both the Income tax Officer and the Appellate Assistant Commissioner excluded these amounts in determining the capital of the Bank under R. 2(1) of Schedule II on the ground that they were not a part of the reserves of the Bank. 374 The appellant took an appeal to the Income tax Appellate Tribunal which was dismissed on the ground that " Undivided Profits " meant nothing more than the " Balance of the profits and loss account" and that no distinction could be drawn merely because in the nomenclature used in the United States, the amount was shown as " Undivided Profits" and not balance of the profit and loss account. At the instance of the appellant the following question of law was referred to the High Court. " Whether on the facts and in the circumstances of the case I Undivided Profits ' of $ 29,534,614.21 shown in the condensed statements of conditions as of December 31, 1946, can be treated as reserves and added to the capital, as required by rule 2(1) of Schedule II to the Business Profits Tax Act for the chargeable accounting period 25 12 1946 to 24 12 1947?" In its order the Tribunal said that the Treasury Rules in United States divided capital account into four different heads, Capital, Reserve, Surplus and the Undivided Profits. The reserves are really reserves for liabilities including the reserves for dividends. " The general reserves as shown by the balance sheet in India is equivalent to the Surplus. The undivided profits is equivalent to the balance of profit and loss account. " In the statement of the Case submitted to the High Court, the Appellate Tribunal stated that the question whether the Undivided Profits meant the same thing as balance of the profit and loss account was a question of fact and it did not matter what name was given to it. But this was the very question which was referred to the High Court. The High Court after referring to the Directors ' Report to the shareholders held that the Undivided Profit of $ 29,534,614.21 did not constitute " reserves " because no direction had been given in regard to it, it had never been transferred to any reserve and had never been earmarked for any particular purpose and that the only act of volition on the part of the Directors of the Bank was the transfer of 10 million 375 dollars to the Surplus. In its judgment the High Court said : "It is true that these large amounts (of Un divided Profits) remain with the Bank, that the Bank uses them, that business is carried on with the help of those funds and that they are as much capital of the Bank as capital in the strict sense of the term. " The High Court however held that they did not satisfy the test laid down by the Supreme Court in Century Spinning & Manufacturing Co. Ltd. vs C.I.T., Bombay (1) as the amount was not transferred to any reserve and there being no act of volition on the part of the Directors this could not be regarded as Reserve. The correctness of this view is challenged before us. The Directors ' report dated January 14, 1947, shows that the surplus increased as a result of the allocation made by the Directors, by 10 million Dollars, which was taken from Undivided Profits and the Undivided Profits themselves increased to $29,534,614.21 which was an increase of $240,376 in the year 1946 and therefore the Capital Funds of the company which included Capital, Surplus and Undivided Profits along with similar items from the Trust Company had increased considerably which was reflected in per share increase, i.e., 44.60 per share at the end of 1945 to 46.39 per share at the end of 1946 thus showing that it was the result of an act of the Directors that Surplus was increased and a particular sum was left in the Undivided Profits. It was contended that no sum could be treated as 'Reserves ' unless the Directors recommended it to be so allocated and it was so adopted by the shareholders. But this argument ignores the evidence placed by the appellant. Under the Treasury Rules of the United States of America containing " Instructions for Preparation of Reports of Condition by National Banking Associations ", certain sums had to be specifically allocated under section 5211 of the revised Statute of the United States (Title Items 25 to 28, according to these instructions, deal (1) ; 376 with Capital Account. Item 26 deals with 'Surplus ' and item 27 with 'Undivided Profits ' and item 28 with ' Reserves ' (and retirement account for preferred stock). The following Reserves come under item 28: (a). Reserve for dividends payable in Common stock. (b) Reserves for other undeclared dividends. (c) Retirement account for,preferred stock. (d) Reserves for contingencies, etc. Item 29 was as follows " Total capital accounts ". This item is the sum of items 25 to 28, inclusive. Along with this the appellant has placed a copy of the letter from the Deputy Controller of Currency, Washington, the relevant portion of which is as follows : " In connection with this matter we wish to assure you that your position as stated is in complete accord with that of the Office of the Comptroller of the Currency. In the United States, the 'Undivided Profits ' as reflected in the accounting of a bank actually represents a part of its capital funds. All of the other bank supervisory agencies in the United States consider the 'Undivided Profits ' of a bank as a part of its capital funds. In any calculation for the purpose of determining the adequacy of capital in a: commercial bank in the United States, the supervisory authorities include 'Undivided Profits ' as an integral part of the capital structure as it would not be possible otherwise to make an accurate computation. When losses occur in banks, it is the usual practice in many banks to charge them against the 'Undivided Profits ' account which by any reasoning would be inappropriate if the account were regarded as ' Undistributed Profits '. In commercial banks in the United States, it is not customary to maintain any account that could be regarded specifically as 'Undistributed Profits ' in the same. sense as applied to similar accounts in the other corporations in India. The term 'Undivided Profits ' simply follows a bank accounting nomenclature used ill the 'United States to 377 designate profits set aside, after provisions for expenses and taxes, dividends and reserves, for continuous future use in the business of the bank ' and it bears a close, if not identical, relationship to the Earned Surplus Account of an industrial corporation. Balance sheets of three other banks of the United States relied on by the appellant show that Capital Fund comprises three kinds of funds, i.e., Capital, Surplus and Undivided Profits. The documents placed on the record show that these three different kinds of funds put together make up what is called " Capital Fund '. The creation and maintenance of the item known as Undivided Profits is a requirement of the Treasury Rules which are made under the Statute and therefore it cannot be said that the amount of Undivided Profits in the Balance Sheet was not allocated as a result of either a resolution of the Directors, accepted by the shareholders or on account of the requirements of the law. The " Undivided Profits " have to be employed in the manner indicated by the letter of the Deputy Controller of Currency. They are set up for expenses, taxes, dividends and reserves for continuous use in the business of the Bank and are a part of the capital funds and an integral part of the capital structure and without it, it would not be possible to make an accurate computation. The reason for the existence of this fund, as shown by that letter is that when there are losses, they can be charged against "Undivid ed Profits " which expression means profits set apart after provision for expenses and taxes etc. for continuous use in the business of the Bank. There is a difference between the system of accounting of Banking Companies in India and the United States; the failure to appreciate this difference has led the Appellate Tribunal as well as the High Court to arrive at an erroneous conclusion. In India at the end of an year of account the unallocated profit or loss is carried forward to the account of the next year and such unallocated amount gets merged in the account of that year, In the system of accounting in the 48 378 U.S. A. each year 's account is self contained and ,nothing is carried forward. If after allocating the profits to diverse heads mentioned above any balance remains, it is credited to the " Undivided Profits " which become part of the capital fund. If in any year as a result of the allocation there is a loss the accumulated undivided profits of the previous years are drawn upon and if that fund is exhausted the Banking Company draws upon the surplus. In its very nature the Undivided Profits are accumulation of amounts of residue on hand at the end of year of successive periods of accounting and these amounts are by the prevailing accounting practice and the Treasury directions regarded as a part of the capital fund of the Banking Company. The nature of " Undivided Profits" was considered by the Supreme Court of America in Fidelity Title and Trust Co. vs United States (1). In that case a suit was brought by the Fedelity Co. to recover the tax assessed on its whole capital and undivided profits under section 2 of the Spanish War Revenue Act. In the Supreme Court it was contended by the company that the terms "Capital", " Surplus " and " Undivided Profits " have a precise and definite meaning in the business of banking and that Undivided Profits are not surplus and cannot therefore be taxed as " Surplus ". The Government on the other hand contended that the undivided profits were taxable as being a part of Capital or Surplus. The Court held that " Undivided Profits ". were taxable as being a part of the Capital employed. Mr. Justice Brandeis delivering the opinion of the Court said at p. 955: " The Act declares that 'in estimating capital surplus shall be included, ' and that the 'annual tax shall in all cases be computed on the basis of the capital and surplus for the preceding fisical year. . . . . . . " As it is the use or employment of capital in banking, not mere possession thereof by the banker, which determines the amount of tax, the fact that a portion of the capital so used or employed is (1) ; ; 379 designated 'undivided profits ' is of no legal signi ficance." As to what the word " Reserves " as used in the Business Profits Tax Act connotes, was considered by this Court in the Commissioner of Income tax vs Century Spinning & Manufacturing Co. Ltd. (1). It was held that the true nature and character of a sum disputed as reserve was to be determined with reference to the substance of the matter. The amount in dispute in that case was the profits after the deduction of depreciation and tax which amount was carried to the Balance Sheet and was later recommended by the Directors to be appropriated mainly to dividends and balance to be carried forward to the next year 's account. Thus on the crucial date, i.e., April 1, 1946, from which the Chargeable Accounting Period began the sum in dispute had not been declared as reserve; on the other hand the Directors had earmarked it for distribution as dividend and it remained as a mass of undistributed profits available for distribution. At page 209 Ghulam Hassan J. said: "The reserve may be a general reserve or a specific reserve, but there must be a clear indication to show whether it was a reserve either of the one or the other kind. The fact that it constituted a mass of undistributed profits on the 1st January ' 1946, cannot automatically make it a reserve . . . . .A reserve in the sense in which it is used in rule 2 can only mean profit earned by a company and not distributed as dividend to the shareholders but kept back by the directors for any purpose to which it may be put in future. . . . " Applying this test to the disputed sum, it cannot be said that the amount is not "Reserve" within the meaning of the Rules. As is shown by the instruction under section 5211 of the Revised Statute of the United States and the letter of the Deputy Controller referred to above, the appellant bank was required to keep a, certain sum of money under the head " Undivided ,Profits " and that is an integral part of the capital (1) ; 380 structure. Under these circumstances it would be erroneous not to treat the amount of " Undivided Profits " as a part of the capital fund. In our opinion therefore the amount designated as Undivided Profits " is a part of the reserves and has to be taken into account when computing the capital and reserves within R. 2(1) of Schedule 11 of the Act. The question which was referred by the Tribunal should have been decided in the affirmative and in favour of the appellant and the amount should have been added to the capital as allowed by R. 2(1) for the Chargeable Accounting Periods. In the result the appeal is allowed. The appellant will have its costs in this Court and in the High Court. Appeal allowed.

The appellant, a non resident Banker incorporated under the National Bank Act of the United States of America with its Head Office in America, was assessed under Business Profits Tax Act, 147. Under the Treasury Rules of the United States of America and Instructions for preparation of reports of conditions by the National Banking Association certain sums had to be specifically allocated under section 5211 of the Revised Statute of the United States, and the appellant bank was required to keep a certain sum of money under the head " undivided profits " and that was an integral part of tile capital structure. The reason for the existence of this fund was that when losses occurred according to the practice they could be charged against " undivided profits ", i.e., profits set apart after provision for expenses and taxes etc. for continuous use in the business of the Bank. The appellant contended that in computing the amount for the purpose of " abatement " it was entitled to include the undivided profits " which fell within the word " reserves ". The question was whether the large sum of money shown as " undivided profits " was a part of the reserves. Held, that the amount designated as " undivided profits was a part of the reserves and had to be taken into account when computing the capital and reserves within Rule 2(1) of Sch. II of the Business Profits Tax Act, 1947.

In the computation of the net wealth of the appellant company under section 2(m) of the Wealth Tax Act 1957, two deductions were claimed the company : (i) the amount of estimated income tax for the assessment year and (ii) the amount of gratuity payable by the company to its employees under certain industrial awards. HELD : The first claim was allowable but not the second. [776 D] Under section 2(m) of the Act, the Wealth Tax Officer must first determine the aggregate value of all the assets belonging to the assessee on the valuation date, and then determine the aggregate value of all the debts owed by the assessee on the valuation date. Excess of the aggregate value of the assets over the debts is the net wealth. But on the terms of the awards the liability to pay gratuity did not exist in present : it was contingent upon the determination of employment by death, incapacity, retirement or resignation of the employee, and not before. Therefore, it was not a debt owned by the assessee on the valuation date. [772 C D; 775 H] Nor could the appellant company claim the deduction under section 7(2)(a) of the Act. The aggregate, value of the assets must be computed in accordance with the provisions of section 7. But in the aggregation of the value of all the debts owned by the assessee on the valuation date, section 7 has not operation. Section 7 does not deal with the computation of net wealth but only with the determination of the not value of the assets as a whole. [776 A C] Kesoram Industries and Cotton Mills Lid. vs Commissioner of Wealth Tax (Central) (Calcutta), ; , followed. Observations Contra in Commissioner of Wealth Tax, Gujarat vs Ajit Mills Ltd. and Commissioner of Wealth Tax Gujarat vs New Rajpur Mills , disapproved. Southern Railway of Peru vs Owen (Inspector of Taxes) ; , explained.

Certain amounts were imposed as penalty upon the assessee (respondent) under sections 271(1)(c) and 274(2) of the Income tax Act, 1961, for concealment of particulars of income and for furnishing inaccurate particulars. The assessee preferred appeals before the Appellate Tribunal and prayed for stay of recovery of the penalties pending disposal of the appeals, but the Tribunal declined to stay on the ground that it had no power to do so. The assessee moved the High. Court under article 226 and the High Court held that the Tribunal had the power to stay and directed the Tribunal to dispose of the stay application in accordance with law. In appeal to this Court, HELD: The Tribunal has the power to order the stay of recovery of the penalty as an incidental and ancillary power to its appellate jurisdiction. [72 C] Under section 220(6) the Income tax Officer has a power not to treat an assessee as being in default, when an appeal under section 246 before the Appellate Assistant Commissioner is pending. But neither the Income tax Officer nor any other departmental officer has the power to stay the recovery of penalty when an appeal is pending before the Tribunal. The Act is silent in that behalf, and there is no provision in the Act or the Income tax Appellate Tribunal Rules, 1963, granting expressly such a power to the Tribunal. That is because, the Tribunal, though not a court, exercises in its appellate jurisdiction under section 254 judicial powers of an appellate court of the widest possible amplitude 'and such a statutory power impliedly grants the power of doing all such acts, or employing such means as are essentially necessary to the execution of such jurisdiction and carries with. it the power to stay proceedings in proper cases. In view of the special nature of taxation 'and revenue laws. such power can be exercised after imposing conditions for safeguarding the revenue only in deserving and appropriate cases where the appeal will be otherwise frustrated or rendered nugatory. The general principle that in a taxing statute there is no room for what could be called equitable construction applies only to the taxing part of the statute and not to its procedural part. [68 C E; 69 E; 70 D E; 72 F G] Burhanpur Tapti Mills Ltd. vs Board of Revenue, Madhya Pradesh, (1955) 6 S.T.C. 670, referred to. Observations in Vatcha Sreeramamurthy vs I.T.O. Vizianagaram, at p. 271, disapproved.

The assessee company went into liquidation on August 8, 1960. The Income tax officer, while determining the taxable income of the assessee company at Rs. 5,79,978 for the assessment year 1963 64, was of the opinion that this amount would attract liability for super profits tax also and therefore asked the assessee company to file its return. The assessee company submitted its return showing the chargeable profits as 'nil ', contending that there could be no liability to super profits tax in respect of a company in liquidation since the formula laid down in the Second Schedule to the for calculation of the 'standard deduction ' was inapplicable on account of the fact that a company in liquidation could not be said to have paid up share capital as on the first day of the previous year relevant to the assessment year which was long subsequent to the winding up. The Income Tax officer however overruled the aforesaid contention and worked out the chargeable profits at Rs. 2,04,740 after adopting a minimum amount of Rs. 50,000 mentioned in s.2 (9) of tho Act as a "standard deduction". The said order was confirmed in appeal by the Appellate Assistant Commissioner. But, on further appeal by the assessee company the Income tax Appellate Tribunal while allowing the appeal held: (1) that in the hands of the liquidator there is only one integral fund which could not be split up into share capital, reserve profits and therefore s.27 of the Act was clearly attracted to the case; and (ii) that no assessment to super profits could be made on a company in liquidation since section 4 of the Act would not apply to the assessee company in liquidation as the standard deduction was incapable of ascertainment. The High Court, rejected the reference made at the instance of the Revenue. 972 Dismissing the appeal by the Revenue, ^ HELD: (1) After a company has gone into liquidation it cannot be said that as on the first day in any subsequent year forming the previous year relevant to the assessment year, there exists in the hands of the liquidator any amount distinctly forming the paid up share capital of the company or any sum that can be characterized as "reserve. " The distinction between capital, reserve and tho accumulated profits disappears in respect of a company in liquidation after the date of its winding up and there is only one integrated or consolidated fund in the hands of the liquidator. The concept of a fluctuating share capital or reserve which is the basic premise necessary to attract the applicability of rule 1 of the Second Schedule is wholly foreign in respect of a company in liquidation. [977H; 978E F] (2) It is clear from the definition of "standard deduction" that for the purpose of calculation of "standard deduction" one has to ascertain the capital of the company as computed in the manner specified in Second Schedule. But, it is important to notice from the terms of Rule I of Second Schedule that unless the company can be said to have a paid up share capital as on the first day of the previous year relevant to the assessment year the formula laid down in the rule for computation of capital of the company cannot have any application and the calculation of "standard deduction" being based wholly on the capital of the company, it becomes wholly incapable of ascertainment. [976B; 977F G] Commissioner of Inland Revenue vs George Burrell, 1924 2 [K.B.] 52, 63 and Birch vs Cropper [1889] L.R. 14 App. 525, 546 referred to. Commissioner of Income tax vs Girdhars and Co. Private Ltd, ; followed. (3) Under the scheme of the Income tax Act 1961, charge of tax will not get attracted unless the case or transaction falls under the governance of the relevant computation provisions. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus, the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all. it is evident that such a case was not intended to fall Within the charging section. The scheme of the being similar to that of the Income tax Act 1961, it has to be held that inasmuch as the provisions contained in the Act for computing the capital of the company and its reserves and cannot have any application in respect of a company in liquidation and consequently the 'standard deduction ' is incapable of ascertainment, the charge of super profits tax under section 4 of the Act is not attracted to such a cases. [978G H ; 979A C] Commissioners of Income tax, Bangalore vs B.C. Srinivasa Setty; , ; referred to.

Respondent was residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State,. His income arising therein during the accounting year 1949 50 was sought to assessed to income tax 'for the year 1950 51 under the Indian Income tax Act 'as amended by the Indian Finance Act. He presented ' a petition under article 226 to the High Court praying 542 for the issue of a writ directing the Union of India not to assess income tax on his income which had accrued to him prior to April 1, 1950, because no income tax was leviable in Rajasthan (except in the State of Bundi) under any provision of law in force there. The High Court having accepted his petition, the Union of India preferred the present appeal to the Supreme Court. Section 3 of the Finance Act 1950 (Act XXV of 1550) made certain amendments in the Indian Income tax Act with effect from the 1st day of April, 1950" and substituted therein the present el. (14 A) in section 2 in place of previous el. (14 A) defining "taxable territories". Held, that under sub el. (i) of el. (b) of the proviso, the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of section 4 A of the Indian Income tax Act "as respects any period" The words "any period" mean any period before or after March 31, 1950. Respondent was therefore resident in the taxable territories during the accounting year 1949 50 and his income, whetherderived within or without the taxable territories was taxable under section 4 sub section (I) cl. (b) sub el. (ii) of the Indian Income tax Act. Further, all that section 2 (14 A) does is to define what the ex pression "taxable territories" means in certain cases and for certain purposes. wherever that expression is used in the various provisions of the Indian Income tax Act, and as the expression is used in the charging section 4 in connection with the conditions which are to determine liability to tax, sub el. (iii) of cl. (b) of the definition must, when read with section 4 of the Indian Income tax Act, have reference to chargeabiiity of income and not merely to its computation, and therefore sections 3 and 4 of the Indian Income tax Act read in the light of the definition in proviso (b) to the amended section Y. (14 A) and section 2 of the I inance Act, 1950, authorise the imposition of Indian income tax and super tax on the income derived by the respondent in the year 1949 50 in the territory of Rajasthan. Held also, that while it is true that the Constitution has no restrospective operation except where a different intention clearly appears, it is not correct to say that in bringing into existence now legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively. Articles 245 and 246 reda with entry No. 82 of List I of the Seventh Schedule empower Parliament to make laws with to taxes on income for the whole territory of India and limitation or restriction is imposed in regard to retroactive legislation &ad it is, therefore competent for Parliament to make a law imposing a tax on the income of any year prior to the the amendment of section 2, cl (14 A) of the Indian income tax Act by the Finance act by the Finance act the Indian Income tax Act by the Finance ,1950, so as to the authorise the levy of the authorise the levy of tax on income accuring in the territory of Rajasthan in the year 1949 50 ie therefore valid.

The appellant company and the respondent firm were carrying on business in the erstwhile patiala State, and were non residents in British India. The appellant, acting as commission agent for the respondent, entered into several forward transactions with a Hapur firm of commission agents. The profits accruing on these transactions amounted to Rs. 29,275 2 6 on which the Hapur firm paid a sum Of Rs. 9,314 13 4 as income. In 1943 the appellant was ordered to be wound up and the respondent was placed on the list of contributories. The Official Liquidator applied to the Liquidation judge for a payment order for a sum which included the amount of income tax paid by the Hapur firm for and on behalf of the respondent. The main contention raised on behalf of the respondent was that it had no taxable income in the year in dispute and was not liable to pay any income tax and that, consequently, it was not liable for the income tax paid by the Hapur firm. Held, that the Liquidator was entitled to claim from the respondent the amount of income tax paid by the Hapur firm irrespective of the consideration whether its world income was taxable or not. Under the law the Hapur firm was an agent of the respondent for the business of the agency which was entrusted to it, and was as such liable under ss 40(2) and 42(1) Income tax Act, as an assessee for income tax on the profits made on the respondent 's transactions at Hapur and was entitled to retain the estimated amount of income tax payable on the amount of the respondent 's profits. As the Hapur firm had rightly paid the tax on the profits, the respondent could not be allowed to challenge the liability on the ground that his total world income was not taxable and he was entitled to his profits without deductions. That was a question which must be agitated by the non resident assessee at the time of his assessment. As between the parties the tax paid by the agent had to be taken into account irrespective of the result of the assessment on the non resident.

One Nanalal Karsandas, who was a brick manufacturer, held a priority certificate for purchasing coal under the Colliery Control Order and purchased a certain quantity of coal from M/s. section G. Rungta Colliery through the respondents who were commission agents. The respondents applied to the Collector for determining whether they could be described as "dealers" under the Bombay Sales Tax Act, 1953. The Collector held that they were dealers but the Sales Tax Tribunal held otherwise. No step was taken thereafter for a reference to the High 368 Court under sections 34(1) and 30(1) of the Act. On appeal by the State of Bombay by special leave, Held, that the respondents could not be described as "dealers" under the Act as the nature of their business as disclosed by them did not show that they were carrying on the business of selling goods in the State of Bombay but were only commission agents arranging sales to other persons. The proper course for the appellant was to move the High Court and exhaust all his remedies before invoking the jurisdiction of this court under article 136 of the Constitution.

The Banaras Bank Ltd. was ordered by the Allahabad High Court to be compulsorily wound up. The High Court passed an order under section 187 of the Indian Companies Act, 1913, directing the appellants, whose names had been placed on the list of contributors, to pay a certain sum of money to the official Liquidator. The official Liquidator applied for execution of the order more than three years after the making thereof. The appellants contended that the execution application, not having Been preferred within three years as prescribed by article 182 of the Limitation Act was barred. The official Liquidator contended that the order was made in the exercise of ordinary original civil jurisdiction by the High Court and the application was governed by article 183 which prescribed a period of limitation of twelve years. ^ Held, that article 183 was applicable to the case and the application for execution was within time. The order was Made by the High Court in the exercise of its ordinary original civil jurisdiction as contemplated in article 183. Though the Letters Patent did not invest the High Court with any original jurisdiction it could be conferred by legislation. The Indian Companies Act, 1913, invested the High Court with the jurisdiction to order payment of amounts due by debtors of companies ordered to be wound up. The jurisdiction was ordinary, it did not depend on and extraordinary action on the part of the High Court. It was original as a petition for the exercise of it was entertained by the High Court as a court of: first instance and not as an appellate court, and since the High Court adjudicated upon the liability of the debtor to pay debts due by him to the company the jurisdiction was civil. In the matter of Candas Narondas, Navivahu and C. A; Turner, I. L. R. and P. T. Munia Cervai 74 vs The Hunuman Bnak Ltd., I.L.R , referred to

Appeal No. 10 of 1960. Appeal from the judgment and decree dated February 24, 1959, of the Bombay High Court in First Appeal No. 540 of 1958. M. C. Setalvad, Attorney General for India, A. P. Bhatt, Rameshwar Nath, section N. Andley, P. L. Vohra and J. B. Dadachanji, for the appellants. The respondent did not appear. December 16. The Judgment of the Court was delivered by SARKAR, J. Dadoba Tukaram Thakoor carried on a business under the name and style of Oriental Metal Pressing Works. On May 26,1955, a private company was incorporated under the name of Oriental Metal Pressing Works Ltd., hereafter called the Company, 331 to take over the aforesaid business. On July 7, 1955, Dadoba transferred his business to the Company. On the same date, an agreement was made between him and the Company by which he was appointed the managing director of the Company for life and was given the power "by deed inter vivos or by will or codicil to appoint any person to be a managing director in his place and stead". Regulation 109 of the articles of the Company reproduced these provisions. The shareholders of the Company were Dadoba, his brother, the respondent Bhaskar, and his two sons, the appellant Govind and the respondent Harish, of whom the first three were the directors, Dadoba being the managing director. This constitution of the Company continued till Dadoba 's death on January 14, 1957. Dadoba had died leaving a will whereby he purported to appoint the appellant Govind the managing director of the Company in his place from the date of his death. Shortly after Dadoba 's death, disputes arose between the appellant Govind and the respondent Bhaskar. The appellant Govind was contending that the respondent Bhaskar had ceased to be a director on account of his failure to attend the directors ' meetings. He also purported to co opt the appellant Bhal chandra as a director. The respondent Bhaskar contended that be had not ceased to be a director and challenged the legality of the appointment of the appellant Bhalchandra as a director. He further contended that the appointment of the appellant Govind as the managing director of the Company by the will of Dadoba, was void. On November 22, 1957, the respondent Bhaskar filed a suit in the City Civil Court of Bombay against the Company, the appellants Govind and Bhalchandra and the respondent Harish for the following declarations and for reliefs incidental thereto: (a). the appointment of the appellant Govind as the managing director was void; (b). the appointment of the appellant Bhalchandra as director was illegal and inoperative; and (c). he (the respondent Bhaskar) was and continued to be a director. 332 The learned Judge of the City Civil Court accepted all the contentions of the respondent Bhaskar and made the declarations claimed. The Company and the appellants Govind and Bhalchandra appealed from this decision to the High Court at Bombay. The appeal came up for hearing before a bench of two learned Judges of that Court. These learned Judges having taken different views, the matter was referred to another learned Judge of the same High Court. In the eventual result according to the opinion of the majority of the learned Judges, the appeal was dismissed and the decree of the City Civil Court was confirmed. The High Court however granted a certificate under article 133(1)(c) of the Constitution and the present appeal has been filed by the Company, Govind and Balchandra pursuant thereto. The respondents to this appeal are Bhaskar and Harish. It appears that while the appeal was pending in this Court, the respondent Bhaskar sold his holding in the Company to the appellant Govind and has now no interest in the Company or the appeal. No one has consequently appeared to contest the appeal in this Court, the respondent Harish apparently not being interested in doing so. In these circumstances, the questions whether the respondent Bhaskar continues to be a director and whether the appellant Bhalchandra was legally co opted as a director are no longer live issues and have not been canvassed in this appeal. On those questions therefore we express no opinion. Another result, rather unfortunate, has been that we have not had the advantage of arguments against the appeal. The Courts below held that the appointment of the appellant Govind as managing director by the will of Dadoba was void in view of the provisions of section 312 of the . That section reads thus: section .312. "Any assignment of his office made after the commencement of this Act by any director of a company shall be void. " The Act came into force on April 1, 1956 and Dadoba had both made his will and died, after that date. The appointment of the appellant Govind as managing 333 director was, therefore, made after the commencement of the Act. Now, section 312 makes the assignment of his office by a director void. It does not on the face of it, say that an appointment by a director of another person as the director in his place, would be void. The High Court, however, took the view that the word "assignment" in the section included "appointment", and so, such an appointment would also be void under the section. What we have to decide is whether the High Court was right in this view. Before we proceed to examine this question, we have to point out one thing. It appears that the High Court thought that the appellants had conceded that an appointment by a director of another in his place by act inter vivous be an assignment of the office of a director within section 312, and had only contended that such an appointment by will, which is what had been done by Dadoba, would not be an assignment and would not therefore be rendered void by the section. The learned Attorney General, appearing for the appellants, said that in this the High Court was in error and no such concession had been made. He further expressly withdrew that concession. This he was clearly entitled to do. It, therefore, becomes unnecessary for us to deal with the seasonings of the High Court in support of the view accepted by it, which were based on the concession. We have given the views of the High Court a most respectful and anxious consideration but we do not find ourselves able to agree with them. We will presently state our reasons for this conclusion, but now we wish to point out that in the view that we have taken of the matter it will not be necessary for us to deal with the argument advanced in the High Court that the section only forbade a director from appointing his successor, assuming assignment included appointment, but it did not prevent a managing director from assigning his office, or appointing his successor which was what Dadoba had done. If the section did not prevent a director from appointing his successor, which we do not think it did, then, clearly, there is nothing 334 in it which can justify the view that a managing director cannot appoint his successor. The section says that a director shall not be able to assign his office. It may be, as the High Court pointed out, that apart from "transfer" another meaning of the word "assignment" is, "appointment". But on a plain reading of the language used in the section, it does not seem to us possible to hold that the word "assignment" in it, can mean "appointment". First, the section talks of "assignment of his office" by a director. The word "his" would indicate that the office contemplated was one held by the director at the time of assignment. An appointment to an office can be made only if the office is vacant. It is legitimate, therefore, to infer that by using the word "his" the Legislature indicated that an appointment by a director to the office which he previously held but did not hold at the date of the appointment, was not to be included within the word "assignment". Again, there can be no doubt that the section was intended to render void a transfer of his office by a director for, if the section had intended only to avoid an appointment by a director of his successor, it would have clearly said so and would not have used the word "assignment". Therefore, even if it is possible for the word "assignment" to have the meaning of "appointment", then it would have to be given both the meanings of "transfer" and "appointment" in the section. This is what the High Court did. That would produce a curious result. Transfer and appointment are clearly entirely different things. Even apart from considerations arising from the law of conveyance, which the High Court was unable to entertain in connection with the transfer of an office, a transfer from its very nature inevitably imports the passing of a thing from one to another; a transfer without the passing of the thing transferred, even when that thing is an office, cannot be conceived. An "appointment", on the other band, has nothing to do with anything passing from one to another; it connotes the putting in of someone in a vacancy. The acts constituting a transfer and an appointment are 335 therefore wholly dissimilar. It would be an unusual statute which by the use of a single word intended to prohibit at the same time, two wholly different acts. We do not think that a construction leading to such a result is permissible. Secondly, section 255 of the Act permits one third of the total number of directors of a public company and all the directors of a private company to be appointed otherwise than by the company at a general meeting, if the articles make provision in this regard. The Act therefore expressly permits directors to be appointed otherwise than by the company. It follows that within the limit as to the number prescribed by the section, a power of appointment of directors can be legitimately conferred by the articles on any person including one who holds the office of a director. The Act expressly permits such power being conferred. In order, however, that a director may exercise this power of appointment, there must be a vacant office of a director. He may himself bring about that vacancy by resignation of his office. The vacancy would again be caused by his death or by the expiry of the term of his office. It would follow that the Act contemplates an appointment by a director of another person as director to take his office, when made vacant by his resignation or death or the expiry of the term of his office. There will be nothing illegal, if the power is exercised in the case of the death of the director, by an appointment made by his will. It will not be right so to interpret section 312, when its language does not compel it, as to bring in conflict with the provisions of section 255. This would happen, if the word " assignment"in section 312 was interpreted as including "appointment" and thereby making it prevent a director from appointing his successor when section 255 permits him to do that. Therefore again we think that in section 312 the word "assignment" does not mean "appointment". The High Court was of the view that unless "assignment" included "appointment", the object of ,the Act would be defeated. It was said that the intention and the object of the section was to restrain and 336 prevent a director from putting some one in his place and stead by any act on his part. This point was further expressed more clearly in the following words: "It is now well understood that the new , aims at eradicating many serious mischief which the principle of perpetual management of companies had caused in the past". The High Court felt that it would be defeating that aim by reading section 312 as if the words "assignment of his office" only meant a "transfer of office" and did not include the appointment of his successor by a director. Apparently the High Court thought that by making it possible for a director to choose his successor, the management of the company would be permitted to remain all along in one hand and this the Act wanted to prevent. It does not seem to us that the Act wanted to prevent this. The act by enacting section 255 shows that it does not disapprove of a person having power to appoint a succession of directors and in the case of a private company, a succession even of all the directors. Such a person would have what has been described as "per petual management". It would follow that the Act did not consider this as an evil which required prevention. If perpetual ma nagement by an outsider is not an evil, nor would such management by one who is a director of the company be so. This aspect is very clearly illustrated by the case in hand. Dadoba had this "perpetual management". But the whole of the Company 's undertaking was really a largess from him. In fact he held nearly 43% of the shares of the Company. It is inconceivable that perpetual manage ment by him would have worked to the detriment of the Company. We are therefore unable to agree that it was the object of the Act or of section 312 to prevent a director from appointing his successor. In view of the clear provisions of section 255 we do not think that it can be said, as was done in the High Court, that sections 254 and 317 of the Act, impliedly indicate that there should be no perpetual management. Section 254 says that a corporation or an association of persons shall not be eligible as a director. But this is not because, otherwise, there would be perpetual 337 management. The persons comprising the corporation or the association must change from time to time and so, even if they were appointed directors, there would be no perpetual management. We rather think that the idea behind section 254 is that as the office of a director is to some extent an office of trust, there should be somebody readily available who can be held responsible for the failure to carry out the trust and it might be difficult to fix that responsibility if the director was a corporation or an association of persons. Turning to section 317, we find that it provides that a managing director cannot be appointed for a term exceeding five years at a time. Section 315 however makes section 317 inapplicable to a private company. Therefore, section 317 is not available to support an argument that the Act does not want a private company and we are concerned with that type of a company to be under perpetual management. But indeed section 317 does not support that argument in the case of a public company either. It forbids an appointment of a managing director for more than five years "at a time". It permits the managing director to be reappointed after a term is over. If he is so reappointed, then there would be "perpetual management" by him. The Act does not, therefore, intend by section 317, to prevent that. Lastly, section 317 is not concerned with the directors, which section 312 is. Another argument that has to be dealt with is that if section 312 does not prohibit an appointment by a director of his successor, that section can easily be rendered infructuous by a director adopting the simple device of appointing a person as his successor in office instead of transferring the office to him. It seems to us that the question does not really arise. A director can legally and effectively appoint his successor only to the extent the articles permit this subject, of course, to the limit prescribed in section 255 in the case of a public company. An appointment so legally made does not result in an evasion of section 312 for, as we have earlier said, the section could not have intended to prevent what another section in the same 43 338 Act made legal. An appointment made outside the powers legally conferred by the articles is wholly ineffective ' and therefore is not an appointment at all and hence again, does not result in an evasion of section 312. We have now to consider an argument based on the first proviso to section 86B of the of 1913. The main part of section 86B contained a provision analogous to that of section 312 of the new Act. It made an assignment of his office by a director to another person, under an agreement with the company, void, unless such assignment was approved by a special resolution of the company. Under the new Act the assignment has been made altogether void and would not become valid even if approved by a special resolution of the company. Now, the proviso laid down that the exercise by a director of a power to appoint an alternate director to act for him during an absence of not less than three months from the district in which meetings of the directors are ordinarily held, if done with the approval of the board of directors, would not be deemed to be an assignment of office within the meaning of this section. The High Court took the view that this proviso showed that in certain circumstances an appointment by a director of another in his place might be deemed to bean assignment of his office and that since the new Act is a consolidating Act, it must be deemed to have continued the policy of the earlier Act and, therefore, for the purpose of section 312, an "assignment" must include an "appointment". The learned Attorney General pointed out that in the new Act there is no proviso, and therefore the rule of construction applied by the High Court, which enables by raising a presumption, something to be included in the main part of a section by reason of a provision in a proviso to it, has no application to the new Act for, here the provision in the proviso has been enacted in the form of an independent section, namely, section 313. According to him, this departure from the old arrangement of the provisions, in the new Act shows that it was not intended to continue the policy 339 of the old Act. He also said that the proviso in substance stated that the appointment by a director of an alternate director might in certain circumstances be deemed to be an assignment. He pointed out that by using the word "deemed" the proviso made it clear that the appointment of an ' alternate director was not a real assignment of office but was only to be fictionally taken as one. His contention was that such fiction could arise in a case coming strictly within the proviso but could not by extension be made to arise in any other case. These seem to us to be arguments of weight. Further in section 313 of the new Act, which has taken the place of the first proviso to section 86B of the old Act, the power to appoint an alternate director hag been given to the board and not to the director who intends to absent himself No scope for any deeming provision as in the Act of 1913 remains. Therefore again an argument based on the proviso to section 86B would not be available for the purpose of the present Act. It further seems to us that the proviso to section 86B does not indicate that it was intended that the word "assignment" in the main part of the section would include "appointment". The rule of construction on which the High Court relied in arriving at the view that it did, was put in these words: "It is a well established principle of construction that when one finds a proviso to a section, the presumption is that but for the proviso the enacting part of the section would have included the subject matter of the proviso." This rule would enable the court to hold in regard to section 86B at the most that an appointment of an alternate director by a director intending to absent himself would have been an assignment of his office but for the proviso. It would be an unwarranted extension of this principle to hold that all appointments of their successors by directors would be assignments within the main part of the section. In any case, in our view, as in section 312 of the new Act, so under the main part of section 86B of the old Act, an appointment of a successor to his office by a director, was not an assignment of his office by him for, the old Act contained in section 83B, 340 provisions substantially similar to those contained in section 255 of the new Act. , and the reasons which have inclined us to the view that in section 312 the word "assignment" does not include "appointment" would equally lead to the same conclusion in regard to section 86B. If the enacting part did not prohibit the appointment of his successor by a director, such prohibition cannot be read into it, in reliance upon a proviso. We may read here the observations of Lord Watson in The Guardians of the Poor of the West Derby Union vs The Metropolitan Life Assurance Society (1) "I am perfectly clear that if the language of the enacting part of the statute does not contain the provisions which are said to occur in it, you cannot derive these provisions by implication from a proviso. " It may be that the proviso was enacted ex abundanti cautela or it may be again, to prevent a possible argument that by the appointment of alternate directors an evasion of the main part of section 86B was being attempted. In view of the fact that the power to appoint alternate directors was not given by the old Act, but had to be given by the articles, such an argument might not have been unlikely. Therefore, it seems to us that the proviso to section 86B of the old Act does not assist the argument that in section 312 of the new Act, the word "assignment" would include "appointment". We think we ought to say something about what strikes us to be the policy behind section 312 of the new Act. We have earlier said that under section 255 of that Act a certain Dumber of directors in a public company has to be appointed by the company in a general meeting. In the case of a private company likewise, the directors have to be appointed similarly except to the extent the articles otherwise provide. It would therefore appear to be the policy of the Act that to a certain extent the appointments of the directors have to be made by the shareholders. It is intended that a certain number of directors would be the chosen representatives of the shareholders. If a director appointed (1) , 652. 341 by the company was permitted to assign his office, then the new incumbent would not be the chosen representative of the shareholders, and the intention of the Act would be defeated. It seems to us that it is to prevent this result that the Act forbids a director by section 312 from assigning his office. Where however a director has been appointed otherwise than by the company in a general meeting, the shareholders have nothing to do with his appointment. Such a director is not the chosen representative of the shareholders and the shareholders cannot claim to have a say in the appointment of his successor. We can discern no policy in the Act which can. be said to be liable to be defeated by the appointment of the successor of such a director by him. Therefore section 312 was not concerned with such an appointment. In the present case Dadoba had power under the articles to appoint a person to be the managing. director in succession to him, and in exercise of that power he bad appointed the appellant Govind as the managing director to hold the office after his death. Such power was clearly recognised by, and legal under, section 255 of the new Act. For the reasons earlier stated, the exercise of such power does not offend section 312. It follows that the appellant Govind had been lawfully and validly appointed the managing director of the Company. We, therefore, declare that the appellant Govind had been validly appointed the managing director of the Company, and set aside the decisions of the Courts below that he had not been so appointed. We have not been asked to interfere with the rest of the judgment under appeal and we do not do so. We also make no order for costs as no costs have been asked. Appeal allowed.

By section 312 of the , "Any assignment of his office made after the commencement of this Act by any direc tor of a company shall be void. " 42 330 The managing director of a private company, empowered by the terms of the agreement between him and the company and the articles thereof to appoint, by deed or by will, any person to be the managing director in his place and stead, died leaving a will whereby he appointed one of the appellants the managing director in his place from the date of his death. The High Court took the view that the word 'assignment ' in the section included 'appointment ' and as such the appointment in question was void. Held, that section 312 of the , cannot be interpreted in such a way as to bring it into conflict with section 255 of the Act since its language does not compel such an interpretation. The word 'assignment ' in that section does not mean appointment and the section is intended to render a transfer of his office by a director void and not an appointment by him of his successor. Section 255 of the Act, which expressly permits directors to be appointed otherwise than by the company, shows that, sub ject to the limit as to numbers prescribed by it, a director, authorised by the articles of the company, can appoint another to take his office when rendered vacant by his resignation or death or on expiry of his term of office. The proviso to section 86B of the old Act cannot lend any support to the argument that the word 'assignment ' in section 312 of the new Act includes 'appointment '. The Guardians of the Poor of the West Derby Union vs The Metropolitan Life Assurance Society, , referred to.

On August 5, 1947, the appellant booked two consigments by the N. W. Railway from Gujranwala, now in Pakistan, to jagadhari. The consignments were not delivered and, on January 22, 1948, the appellant gave a notice to the railway under section 80 of the Code of Civil Procedure claiming the value of the goods by way of compensation. It was stated in the notice that the cause of action had arisen on August 21 and 30, 1947, when delivery was refused. On December 1, 1948, the railway informed the appellant that the consignments were still lying at Gujranwala and could be despatched on the appellant obtaining the necessary permits from the Pakistan authorities. On December 13, 1949, the appellant bro ught a suit for compensation for non delivery of the goods. The respondent contended that the suit was beyond time as it was not filed within one year from the time "when the goods ought to be delivered" as prescribed by article 31 of the Limitation Act. Held, that the suit was barred by time. The words "when the goods ought to be delivered" in article 31 had to be given their strict grammatical meaning and equitable consi derations were out of place. Under article 31 limitation started on the expiry of the time fixed between the parties for delivery of the goods and in the absence of any such agreement the limitation started after reasonable time had elapsed on the expiry of which the delivery ought to have been made. The reasonable time was to be determined according to the circumstances of each case. The view taken by some High Courts that time began to run from the date when the railway finally refused to deliver was not correct ; where the legislature intended that time should run from ' the date of refusal it had used appropriate words in that connection. The starting point of limitation could not generally be affected by the conduct of the parties or by the correspondence between them, unless it contained an acknowledgment of liability by the carrier or showed something affecting the reasonable time In the present case delivery ought to have been made within five or six months, as is also indicated by the s, 80 notice given 71 by the appellant and the suit was filed more than a year after that expiry of that time. Dominion of India vs Firm Aminchand Bholanath (F. B.) decided by Punjab High Court on May 2, 1956, approved. Jugal Kishore vs The Great Indian Peninsular Rat (1923) I. L. R. 45 All. 43 ; Bengal and North Western Railway Company vs Maharajadhiraj Kameshwar Singh Bahadur, (1933) I. L. R. 12 Pat. 67, 77 ; Jai Narain vs The Governor General of India, A. I. R. ; and Governor General in Council vs section G. Ahmed, A. 1. R. , disapproved. Nagendranath vs Suresh, A. 1. R. and General Accident Fire and Life Insurance Corporation Limited vs Janmahomed Abdul Rahim, A. I. R. , referred to.

The grandfather and great grand father of the respondents and the father of the appellant were brothers. By a registered deed (Ext. 39) the elder brother purportedly gave the younger brother (appellant 's father) some lands for separate living and maintenance of himself, and his male lineal descendants for ever. The lands in dispute were a part of the lands covered by the deed. In their suit, the plaintiffs alleged that the suit lands were part of Desgat Watan estate which, by virtue of an immemorial family and territorial custom, was impartible and the junior members were given lands only for their maintenance, and that till his death, the appellant 's father continued, to be an undivided member of the joint family consisting of himself and the plaintiffs, and that on the death of the appellant 's father the lands should go to them. The trial court held: (1) that the impartibility of the estate and the rule of primogeniture had not been proved; (2) that there was severance of the joint family in 1902 since when the brothers were living separately; (3) that on the abolition of Watans by Bombay Act 60 of 1950, the suit lands which originally were Watan lands, were re granted in favour of the appellant 's father and that the plaintiffs tacitly assented to the regrant of the lands exclusively in his favour. On appeal, the High Court affirmed the view of the trial court that the estate was not impartible and that the onus of proving partition was on the defendant (appellant herein). It was held that Ext. 39 did not establish that the brothers were divided in 1902 and that the suit lands were allotted to the appellant 's father; that on the erroneous but honest belief that Desgat lands were impartible, the elder brother granted the lands to his brother and his descendants in the male line in lieu of their maintenance and that the younger brother having died without male issue, the tenure came to an end whereupon the plaintiffs who were the surviving male members of the family, were entitled to resume the lands. The High Court remitted the matter to the trial court with certain directions. In appeal to this Court, the appellant contended: (i) that her father prior to the execution of Ext. 39, had clearly intimated to his brother his intention to divide the estate and to live separately after division, resulted in a severance of the joint family status, and that such severance was evident from the recitals in Ext. 39 and the subsequent conduct of the members of the erstwhile family. 162 Since the appellant 's father after such division was holding, the suit lands as his separate property, the same were inherited by the appellant to the exclusion of the plaintiffs. (ii) Since the regrant of the suit lands to the appellant 's father created new rights exclusively in his favour, the regrant did not enure for the benefit of the plaintiffs. Allowing the appeal and dismissing the plaintiff 's suit ^ HELD: 1. Unity of ownership and commonsality of enjoyment are the essential attributes of an undivided Hindu family of Mitakshra concept. So long as the family remains undivided no member can predicate a definite share to himself. Cesser of this unity and commonsality means cesser or severance of the joint family status, which in Hindu Law amounts to partition, irrespective of whether it is accompanied or followed by a division of the properties by metes and bounds. Disruption of joint status covers both division of right and division of property. Division of joint status may be brought about by any adult member of the joint family by intimating the others his intention to separate and enjoy his share in the family property in severalty. Such intimation may be an explicit declaration (written or oral) or manifested by conduct of the members of the family. [170A B] (i) In the instant case, Ext. 39 speaks of a division of the joint family status and separation of interests. The trial judge translated the term "Vibhaktarahave" in Marathi, as connoting division of status. But the High Court did not agree with the translation made by the trial judge, and preferred to rely on the translation by the High Court translator. Except for the English translation of the word "Vibhaktarahave" there is no substantial difference between the two translations. [171 A B] The word "Vibhaktarahave" is a compound of two words viz., "Vibhakta" and "Rahave". "Vibhakta" appears to have its roots in the Sanskrit word "Vibhaga". "In the Mitakshra, Vijnanesvara, defines the word 'Vibhaga ', which is usually rendered into English by the word 'partition ' as the adjustment of diverse rights regarding the whole by distributing them in particular portions of the aggregate". "Rahave" means "living". Understood in its etymological sense the word "Vibhaktarahave" means living separately after division.[172H] (ii) None of the four features which, according to the High Court, militate against the literal interpretation of the word "Vibhaktarahave", viz., that the deed was one for maintenance, that it was executed by the elder brother, that the lands were given to the appellant 's father and his descendants in the male line and that the appellant 's father would not have remained contended with only a small portion instead of claiming entire half share detracts from the conclusion that in substance and reality the document evidence a division of joint family status as a result of an intimation by the appellant 's father to his brother of his intention to live separately after division. [173D] 2. Section 92 of the Evidence Act prohibits only the varying of terms of a document, not the memorandum or recitals of facts, bereft of dispositive terms, particularly when the correctness of the whole or any part of the recital is in question. [174E] 163 In the instant case the preliminary recital does not fall under the dispositive or operative portion of the document. The bar under section 92 against the admissibility of extrinsic evidence for the purposes of showing that the insertion of the words 'for your maintenance ' in the recital is wrong, is not attracted. [174G] 3. (a) When there is a dispute in regard to the true character of a writing evidence de hors the document can be led to show that the writing was not the real nature of the transaction but was only illusory which cloaked something else and that the apparent state of affairs was not the real state of affairs. [174H] Chandi Prasad Singh vs Piari Bidi, CA No. 75 of 1964, decided on 16 3 1966, Bhagwan Dayal vs Reoti Devi, ; ; referred to. (b) The preliminary recital in Ext. 39 raises an inference that sometime prior to the date of the deed the younger brother had clearly intimated to his coparcener of his intention to sever the joint family status and to enjoy the joint family property in severalty. Disruption of the joint family status ensued. From that date onwards the brothers ceased to be coparceners. That is, at the time of the execution of the deed, joint family status did not exist. There is no evidence that after the severance of the joint family status there was a re union. [175 E F] (c) It cannot be said that the preliminary recital furnished little or no evidence that the younger brother intimated in clear terms his intention to sever the joint family status. The document had been let in evidence more than 70 years after its execution. All those who might have given evidence were dead. In such a situation it is permissible to draw reasonable inferences to fill the gap of details obliterated by time. [175H; 176A] Chintamanibhatla Vankat Reddy vs Rani of Wadhawan; 47 I.A. 6 at p. 10; Sree Sree Iswar Gopal Jien Thakur vs Pratapmal Begaria, ; referred to. (d) Once it is found that the division of joint status preceded the execution of the deed, the elder brother had no power to impose a condition that the land was being given to his younger brother and male lineal descendants for their maintenance. [176 E F] (e) The expression 'Potgi ' (maintenance) or 'Nirwahkrit ' used in the deed could not be construed as conferring an estate with restricted rights of ownership to the younger brother and his descendants. The deed evidences a permanent transfer of land to be enjoyed from generation to generation. Moreover the younger brother remained in full ownership of the land till his death. After the abolition of Watans he alone applied for re grant of this land in his favour. The plaintiffs were aware of this position. [177A B]

The eviction of the Respondent 'from the appellants premises, which was used as a factory, was decreed and application for execution of an order for possession was made. The respondents resisted the execution on the plea that the machinery installed in the factory could not be re moved without the prior permission of chief Inspector of Factories as provided by the East Punjab Factories (Control of Dismantling) Act. The premises was allowed. Both parties appealed. The appellate Court took of the machinery was stayed, but the Possession of the part the premises was allowed. Both parties appealed. The appellate Court took the view that the machinery and spare parts were lying practically in all the rooms, and the locking and sealing of the factory would result in its closure which would be against the provisions of the Act, and therefore directed the appellant to pursue the matter with the State Government. The order dated April 22, 1953 was not challenged by any appeal. But the appellant restarted the execution proceedings in which it was held that the State Government had refused permission for demolition of the factory, so the file was ordered to be consigned to the record room. 'Me appellant filed an appeal, which was dismissed, but in further revision the High Court by its order dated July 13, 1955 observed that on the record it was not possible to decide whether the execution of the decree would defeat the provisions of section 3 of the Act, so it set aside the order and directed the executing court to give decision on points that arose under section 3 of the Act. 'Me executing court found that the provisions of the Art did not prohibit the execution and as such the respondents were liable to ejectment but since the application had become over a year old it would be 'struck off the file with liberty to make a fresh application. The respondents appealed. The District Judge held that the Act did not apply to involuntary dismantling of factories and that the issue raised by the executing court did not arise but in fact it had been decided against the appellant by the High Court in revision. The appellant 's appeal to High Court was dismissed by a Single Judge, and in the Letters Patent Appeal, it was held that the delivery of possession was not barred in execution of decree by the Act, but the matter had become res judicata in consequence of the decisions in the first execution application and the decision of the High Court dated July 13 1955 in the second execution applica tion. Allowing the appeal, HELD : The Act does not bar the delivery of possession in execution, of a decree. It makes no reference to any decree for Possession against the owner of a factory. By ordering delivery of possession of the premises, the executing court does not make an order for dismantling a factory and a bailiff charged with execution of a warrant for possession, does not infringe the provision of law by rendering possession of the property to the decree holder. [510 C D] 507 There was no final order about the inexecutability of the decree on the first application for execution. Further the High Court by its order dated July 13, 1955, did Dot decide the question as to whether the decree for possession would be inexecutable in view of the Act. It stated expressly that it was not possible for it to decide whether the execution of the decree would defeat the provisions of the Act, and being unable to come to a decision on the record it remanded the matter to the court of execution. It found itself unable to interpret the section on the evidence beforeit. The proceedings subsequent to the remand order culminated in theorder of the Division Bench from which the present appeal arose. The order dated July 13, 1955 was not a final order which put a seal on the proceedings. [510 F H]

Prior to January 18, 1944 six companies including M/s. Lakshmiratan. Cotton Mills Co. Ltd. (the appellant company) and the Aluminium Corporation of India Ltd. (respondent corporation) were jointly managed by two groups known as the Singhania and Gupta groups. As a result of disputes between the two groups there was a reference to arbitration. After January 18, 1944, the date of the award, the aforesaid six concerns were brought under the management and control of one or the other of the two groups The Corporation came under the control and management of the Singhania group. In cl. 9 of the award it was said that the award did not cover the advances which either party or their separate firms may have made to all or any of them or their moneys which may be in deposit with them and that they would be payable and paid in their usual course. After the award the appellant Company sent a statement of account in respect of advances made to the respondent corporation, and expenditure incurred on its behalf. The statement was objected to. on the ground that the appellant company had not properly maintained its accounts during the period of joint management. Efforts at reconciliation of accounts having faded the appellants filed two suits claiming Rs. 3,56,207.9.6 and Rs. 72,595.4.6 from the Corporation, being suits Nos. 63 and 65 of 1949. In suit No. 63 of 1949 it was claimed that the suit was within time as after adjustment of several items in 1946 and 1947 a sum of Rs. 2,96,110. 11.6 was found due to the appellant company and that in any event the suit was saved from being barred by limitation by a letter (exhibit 1) dated April 16, 1946 addressed by s the Secretarycum Chief Accountant of the Corporation, thereby acknowledging the liability of the Corporation to pay the amount which would be found due and payable under the said accounts. Similar averments were made in, Suit No. 65 of 1949. The written statements filed on behalf of the Corporation inter alia pleaded that the said claim was barred by limitation, that the said letter didnot amount to an acknowledgement within the meaning of section 19 of theLimitation Act, 1908 which was then applicable to the suits, and lastly,that even if the said letter did amount to an acknowledgement, it wasnot binding on the Corporation. The trial court decreed the suits but theHigh Court dismissed them as being time barred. In appeals to this Courtthe questions that fell for consideration were (i) whether the letter in question amounted to an acknowledgment;(ii) whether it was an acknowledgement by the corporation, and if not (iii) whethe 'r the Secretary cum Chief Accountant had authority express or implied. to acknowledge liability on behalf of the Corporation so as, to bind that corporation. Allowing the appeals, HELD: (1) (a) From the provisions of section 19(1) of the Limitation Act, 1908 it is clear that the statement on which the plea of acknowledgement is founded must relate to a subsisting liability as the section requires 624 that it must be made before the expiration of the period prescribed by the Act. It need not, however, amount to a promise to pay, for an acknowledgement does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the partes such as, for instance, that of a debtor and a creditor and the intention to admit such a jural relationship Such an intention need not be in express terms and can be inferred by implication or the nature of the admission and the surrounding circumstances. Generally speaking a liberal construction of the statement in question should be given. That of course does not mean that where a statement is made without intending to admit the existence of a particular jural relationship, such an intention should be fastened on the person making the statement by an involved or a far fetched reasoning. [629 C E] Khan Bchadur Shapoor Freedoom Mazda vs Durga Prosad Chamaria, , Tilak Ram vs Nathu, A.I.R. , 938, 939, Green vs Humphreva, [1884] 26 Ch. D. 474, 481, Tajpal Saraogi vs Lallanjee Jain, C.A. No. 766/62 dt. 8 2 1965 and Abdul Rahim Oosman & Co. vs Ojamshee Prushottamdas & Co., Cal. 6,39, referred to. (b) From the correspondence between the parties and the surrounding circumstances it must follow that there was a subsisting account in the name of the appellannt company in the books of the Corporation in which interest on the balance shown therein from time to time was being credited and in which amounts in respect of items passed during the course of reconciliation were also duly credited. The statement in the letter exhibit 1 that "after all the above adjustments the position will be as per statement attached", that is to say, that there 'was a balance of Rs. 107447/13/11 due and payable to the appellant company must clearly amount to acknowledgement within the meaning of section 19(1). If the letter be looked at in the background of the controversy between the parties which controversy was limited to the question as to the correct ness of the amount claimed by the appellant company as also the correspondence which ensued in regard to it, it would be impossible to say that the letter and the statement of account enclosed therewith were merely explanatory and did not amount to an admission of the jural reship of debtor and creditor and of the liability to pay the amount found due at the foot of the account on finalisation. [635 D F] The mere fact that letter called for confirmation of the amount of the balance mentioned therein and the fact that the appellant company failed to confirm it, could not lead to a conclusion that the admission of liability was conditional and therefore could not operate as an acknow ledgement. The confirmation sought in the letter was not a condition to the admission as to the existence of a subsisting account and the liability to pay when accounts were finalised but to the specific amount which according to the corporation would be the amount payable by it according to its calculation. 'There was no condition subject to which the admission was to be made which remained unperformed. [635 G; 636 F G; 637 B] Maniram vs Rupchand, L.R. 33 I.A. 165, Raja Kayali Arunachella Row Bahadur vs Sri Rajah Rangiah Appa Row Bahadur, Mad. 519 and Ballapragada Ramamurthy vs Thammana Gopayya, Mad. 701, distinguished. 625 LAXMIRATAN COTTON MILLS V. ALUMINIUM CORP. (Shelat, J.) In re River Steamer Co. vs Mitchell, , 828, referred to. , (ii) The plea that the letter exhibit I should be regarded as an acknowledgement by the corporation itself was not included among the issues formulated before the courts below. It could not be allowed to be raised for the first time in this Court. [628 B] (iii) If the correspondence between the parties together with the statements of accounts enclosed therewith was closely examined it became clear that S was authorised to scrutinise the claim made by the appellant company, the various items for which the appellant _company claimed credit and to reject the same and, what is important, to allow others. That he had such an authority was clear from the fact that in respect of such of the items which he allowed, credit was given to the appellant and necessary entries to the credit of the appellant company were posted in the account maintained by the Corporation in its books of account. It was impossible to say that in the course of finalising the accounts, S accorded his assent to various items claimed by the appellant company without having been authorised so to do. Nor was it possible to say that on his passing those items necessary entries were made in the books of accounts of the corporation without his having so authorised. Further, he could not have sent to the appellant company statements of account showing the balance due to it "as per the ledger" unless he was authorised to finalise the accounts and arrive at the amount due and payable to, the company. [637 E F; 638 B C] Uma Shankar vs Govind Narain, I.L.R. 46 All. 982, referred to.

One M carried on the business of printer and publisher. In 1953 his brother in law alongwith some other persons floated two companies a publishing firm and a printing press. Under an agreement dated May 29, 1953 M agreed to transfer his business to the newly floated companies, and on January 24, 1954 he wrote letters intimating that the shares in the companies be allotted to his wife, his 3 sons, his brother in law and an ex employee. The companies allotted the shares accordingly. 502 shares were allotted to M in his own name in the publishing firm and 225 shares in the printing press. Of the remaining, 2002 shares in the publishing firm and 1602 shares in the printing press were allotted to M and his nominees. M died on February 11, 1957. On his death the respondent, the accountable person filed a return of estate duty in which he included the value of the 502 shares in the publishing firm and 225 shares in the printing press. The Assistant Controller of Estate Duty did not accept this part of the return and included the 2002 shares in the publishing firm and 1602 shares in the printing press standing in the name of the wife of the deceased, his 3 sons, brother in law and the ex employee, since they were holding these shares benami, and included the value of these shares in the principal value of the estate of the deceased. In appeal, the Central Board of Direct Taxes, the Appellate Tribunal affirmed this order. It observed that the mere fact that the subject matter was the shares in the two companies would not throw any more onus of proof on the Assistant Controller than would be thrown if the subject matter was some other property. When money was paid by the deceased, it was for the accountable person to prove the gift. The deceased had clearly mentioned in his letters dated January 24, 1954 to the two companies that the shares should be issued and allotted in the names of the persons nominated by him. If the deceased intended to make an outright gift of the shares, he would have very 944 well said so in the letters. There being no presumption of advancement, the mere fact that the shares were got issued in their names without making any indication of gift, would not make the nominees recipients of any gift. The High Court answered the reference against the appellant and in favour of the accountable person. Following the decisions of the Andhra Pradesh High Court in Shantabai Jadhav vs Controller of Estate Duty and Smt. Denabai Bomab Shah vs Controller of Estate Duty (1964) 51 ITR (ED) 1 it observed that since the shares stood in the name of the wife and sons etc., benami for the deceased, the deceased had no power to transfer since he had not obtained a release from the benamidars or a declaration from an appropriate court. As the deceased, remained incompetent to transfer the shares till his death, the property in them would not be deemed to pass upon his death by reason of section 6 and therefore, they would not be included in the estate of the deceased under section 5(1) of the Act. Allowing the appeal, to this Court ^ HELD: 1. The liability to pay estate duty under section 5(1) of the Act arises upon the death of the real owner and not of the benamidar, who is merely an ostensible owner. The test lies in whether upon the death of the benamidar, there would be incidence of liability to estate duty. [961B] 2. The finding being that the shares were purchased by the deceased benami in the name of his wife and sons, the real ownership of the property was vested in the deceased who was entitled to deal with the same as if it were his own and the benamidars held it in trust under section 82 of the Trust Act, 1882 for the benefit of the deceased. The estate, therefore, belonged to the deceased who died possessed of the same and under section 5(1) of the Act the entire value of the shares was includible in the principal value of the estate of the deceased on his death. [961C E] 3. (i) The imposes a tax upon the principal value of all properties, settled or not settled passing on death or deemed to pass on death. Estate duty is chargeable at percentage rates rising with the value of the estate on all property passing on death, including property of which the deceased was competent to dispose and gifts made within limited period before death. Primary liability falls on the deceased 's estate. [950H; 951A] (ii) The scheme of the Act is two fold. Firstly there are properties which pass on the death of a person. Section 5(1) imposes duty on their value. Secondly, there are properties in which the deceased had an interest or power of appointment and which really do not pass on his death. The scheme of the Act is to impose duty on the value of such properties also. In the second class will fall provisions like sections 6, 7, 8, 9 and 10. The Act creates a fiction of law to declare that the properties mentioned in those sections will be deemed to pass on the death of a person, though they do not 'pass ' in fact. [957D E] (iii) The object of section 6 is to catch properties in the net of section 5(1) which do not really pass on the death of a person. For instance, property comprised in a revocable gifts is property which the donor is competent to dispose of whether the gifts is revoked or not and will be covered by section 6. Similarly property in respect of which the deceased had the power of appointment will also fall within section 6. [957H; 958A] O.S. Chawla vs Controller of Estate Duty (1973) 90 ITR approved. 945 4. In applying the Act to any particular transaction, regard must be had to its substance, that is, its true legal effect, rather to the form in which it is carried out. [958B] 5. By no rule of construction can the operation of sub section (1) of section 5 of the Act be curtailed by the operation of section 6. It is in addition to or supplemental of the provisions of sub section (1) of section 5, which is the charging section. [951E] In the instant case, it has been established that the deceased was the real owner of the shares. The ownership which the deceased had in the shares passed on his death and must be brought to charge under sub section (1) of section 5. [958C] Smt. Denabai Bomab Shah vs Controller of Estate Duty and Smt. Shantabai Jadhav vs Controller of Estate Duty (1964) 51 ITR (ED) 1 disapproved. (i) The provisions of sections 5 and 6 of the Act are somewhat similar to those of sections 1 and 2 of the Finance Act, 1894 in England. [955F] (ii) The precise relationship between sections 1 and 2, before the law was amended in 1969, was a question on which judicial opinion fluctuated widely. For over sixty years they were regarded as mutually exclusive and having in dependent fields of operation, the view was that property could not be liable to duty concurrently. In a situation where both sections 1 and 2 might apply, section 1 took priority and excluded liability. [952D E] Earl Cowley vs Inland Revenue Commissioners, L.R. , Attorney General vs Milne, L.R. [1914] A.C. 765, Nevill vs Inland Revenue Commissioners, LR [1924] A.C. 385 referred to. (iii) In Public Trustee vs Inland Revenue Commissioners (Re Ambody) LR the House of Lords struck the discordant note, holding that section 1 imposed the charge in general terms and section 2 by exclusion and inclusion, defined area of that charge. In Weir 's Settlement Trusts, Re Mc Pherson vs Inland Revenue Commissioners LR [1971] Ch.D. 145 the Court of Appeal resolved the doubts as to the relationship of these two sections. [954C; G, 955A] 7. When a property is purchased by a husband in the name of his wife or by a father in the name of his son, it must be presumed that they are benamidars, and if they claim it as their own by alleging that the husband or the father intended to make a gift of the property to them, the onus rests upon them to establish such a gift. When the benamidar is in possession of the property, standing in his name, he is in a sense the trustee for the real owner; he is only a name lender or an alias for the real owner. [1958F; 959A] Gopeekrist Gosain vs Gungapersaud Gosain (1854) 6 MIA 53, Sura Lakshmiah Chetty vs Kothandarama Pillai L.R. [1924 25] 52 IA 286, Shree Meenakshi Mills Ltd. C.I.T. referred to. 946 8. A benamidar has no interest at all in the property standing in his name A benamidar is an ostensible owner and if a person purchases from a benamidar, the real owner cannot recover unless he shows that the purchaser had actual or constructive notice of the real title. But from this it does not follow that the benamidar has real title to the property, he is merely an ostensible owner thereof. [960E] Mayne Hindu Law 11th Edn. p. 953 referred to.

The National Syndicate, a Bombay firm, acquired on January 11, 1945, a tailoring business as a going concern for Rs. 89,321 which included the consideration paid for sewing machines and a motor lorry. Soon after the purchase the respondent found it difficult to continue the business, therefore closed its business in August, 1945. Between August 16, 1945, and February 14, 1946, sewing machines and the motor lorry were sold at a loss. The respondent closed its account books on February 28, 1946, showing the two losses and writing them off. For the assessment year 1946 47, the. respondent claimed a deduction under section 10(2)(Vii) of the Indian Income Tax Act. The Appellate Tribunal held that the sales of machines and the motor lorry were made in the course of the winding up of the assessee 's business after the business had been stopped and that, therefore, the deduction could not be claimed under section 10(2)(Vii). Respondent moved the High Court and obtained an order under section 66(2) of the Income Tax Act, and the following two questions were referred : " (1) Whether the Tribunal was justified in law in holding that the petitioner had carried on its business only till twenty eight day of August, One Thousand Nine Hundred and Forty Five ? (2) Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was justified in law in not allowing the sum of Rs. 41,998 (Rupees forty one thousand nine hundred and ninety eight) on sale of machines and Rs. 3,700 (Rupees three thousand and seven hundred) on the sale of lorry as a deduction from the total income of the applicant ?" The High Court answered the first question in the affirma tive, and the second question in the negative. The Commissioner of Income tax questioned the finding of the High Court and came up in appeal by special leave and con tended that an allowance could only be claimed if sale of machines, etc. took place when the business was being continued and not if the business had come to a close. The respondent on the other hand submitted that section 10(2)(Vii) would be applicable 230 in a case where the business continued for a part of the account year, even though the sale of machinery, plant, etc. took place after the closure of the business during the course of the account year. Held, that if the profits or gains of a business for a particular year are to be taxed, they must be computed for the whole year taking into account losses incurred during the same year, provided that the business had been " carried on by the assessee " ; the building, machinery or plant had been " used for the purpose of the business "; the sale etc. had taken place during the year of account, and the loss had been brought into the books of the assessee and written off. There is no other condition to be found expressly in the section or in the Act. It is nowhere stated that the business of the assessee should have been carried on for the whole year, or that the machinery or plant should have been used for the whole of the accounting period. There are no words which would show that, if the assessee worked only for a part of the year and then sold out, the loss that he incurred was not a business loss, or that he must pay tax on the small profit that he might have made, and bear the loss in addition. The Liquidators of Pursa Limited vs Commissioner of Income Tax, Bihar, ; , Commissioner of Income tax vs Express Newspapers Ltd. , distinguished. Indian Iron & Steel Co., Ltd. vs Commissioner of Incometax, Bengal, , Commissioner of Income tax vs Shaw Wallace & Co., Ltd., (1932) L.R. 59 I.A. 206, referred to.

The question for decision in this appeal was whether a dispute raised by the workmen ' relating to a person who was not a workman could be an industrial dispute as defined by section 2(k) of the , as it stood before the amendments Of 1956. The appellants, who were the workmen of Dimakuchi Tea Estate, espoused the cause of one Dr. K. P. Banerjee, Assistant Medical Officer, who had been dismissed unheard with a month 's salary in lieu of notice but who had accepted such payment and left the garden and the dispute raised was ultimately referred by the Government for adjudication under section 10 of the Act. Both the Tribunal and the Appellate Industrial Tribunal took the view that as Dr. Banerjee was not an workman within the meaning of the Act, the, dispute was not an industrial dispute as defined by section 2(k): Held, (per Das, C. J., and section K. Das, J., Sarkar, J., dissenting), that the expression 'any person ' occurring in section 2(k) of the , cannot be given its ordinary meaning and must be read and understood in the context of the Act and the object the Legislature had in view. Nor can it be equated either with the word 'workman ' or 'employee '. The two tests of an industrial dispute as defined by the section must, therefore, be, (1) the dispute must be a real dispute, capable of being settled by relief given by one party to the other, and (2) the person in respect of whom the dispute is raised must be one in whose employment, non employment, terms of employment, or conditions of labour (as the case may be), the parties to the dispute have a direct or substantial interest, and this must depend on the facts and circumstances of each particular case. Applying these tests, the dispute in the present case which was in respect of a person who was not a workman and belonged to a different category altogether, could not be said to be a dispute within the meaning of section 2(k) of the Act and the appeal must fail. Narendra Kumar Sen vs All India Industrial Disputes (Labour Appellate) Tribunal, , approved. Western India Automobile Association vs The Industrial Tribunal, Bombay, , distinguished 1157 Case law discussed. Per Sarkar, J. There is no reason why the words 'any person ' in section 2(k) of the Act should not be given their natural meaning so as to include an employee who is not a workman within the meaning of the Act. Consequently, a dispute concerning a person who is not a workman may be an industrial dispute within that section. The primary object which the Act has in view is the preservation of the industrial peace. The Act does not make the interest of the workmen in the dispute a condition of the existence of an industrial dispute. Such interest is incapable of definition and to make it a condition of an industrial dispute would defeat the object of the Act. Western India Automobile Association vs The Industrial Tribunal of Bombay, ; Narendra Kumar Sen vs The All India Industrial Disputes (Labour Appellate) Tribunal, and United Commercial Bank Ltd. vs Kedar Nath Gupta, , referred to. Even assuming that the workmen must be interested in order that there can be an industrial dispute, the present case satisfies that test and falls within the purview of section 2(k) of the Act.

Appeal No. 22 of 1956. Appeal by special leave from the judgment and order dated July 4, 1954, of the Custodian General, Evacuee Property, in Revenue Case No. 427/R/ Judl. A. V. Viswanatha Sastri and R. Ganapathy Iyer, for the appellant. H.N. Sanyal,Additional Solicitor General of India, N. S.Bindra and D. Gupta, for the respondent. January 12. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave is directed against the order passed by the respondent, the Custodian General of Evacuee Property, New Delhi, in a revision petition confirming the orders of the subordinate authorities whereby the application made by the appellant for confirmation of the sale transaction in question has been rejected under section 40 (4) (a) of the Administration of Evacuee Property Act, XXXI of 1950. The appellant, Rabia Bai, who is a citizen of India having her residence at Grange, Yercaud, in the Salem District, came to know in 1949 that premises No. 20, Godown Street, G.T., Madras, was for sale. Since the appellant desired to acquire some immoveable property she arranged for 57 450 the purchase of the said premises through her husband. The said premises belonged to one Mohamad Gani Jan Mohamad who had left for Pakistan in 1947 and had settled there. The said Mohamad Gani Jan Mohamad had executed a power of attorney in favour of his nephew, Ahmed Abdul Gani. The said Gani came to Madras in April, 1949, and arranged for the sale, and as a result of negotiations between him and the appellant 's husband the latter entered into a written agreement with the former on April 29, 1949, to purchase the said property for Rs. 2,40,000/ . A substantial part of the consideration to the extent of Rs. 1,50,000 / was paid immediately in the form of cash and bank drafts. Thereafter the sale deed was duly engrossed and sent to Karachi for execution by the vendor. After it was received back duly executed it was presented at the Collector 's Office, Madras, and was duly stamped on June 27, 1949. Income tax clearance certificate had, however, to be obtained before the said document could be registered, and soon after the said certificate was obtained the document was presented for registration and was duly registered on August 11, 1949. The balance of the consideration of Rs. 30,000/ was paid before the registering officer to Mr. M. H. Ganni who also held a power of attorney from the vendor. That is how the appellant obtained title to the property in suit. As we will point out the appellant applied for confirmation of this sale deed and her application has been rejected. Before we refer to the relevant facts in connection with the said proceedings it is material to set out very briefly the history of the application of the evacuee laws to the State of Madras. Within a fortnight after the registration of the sale deed in favour of the appellant Ordinance No. XII of 1949 which had been promulgated on June 13,1949, was extended to Madras on August 23, 1949. Section 25(1) of the Ordinance imposed restrictions on transfers by evacuees. In substance this sub section provided that transfers made by or on behalf of evacuees of any right or interest in their property after such date as may be specified in that behalf with reference to any 451 Province by the Central Government by notification in the official gazette shall not be effective unless they are confirmed by the Custodian. Section 25(2) provided that an application for confirmation of such transfer may be made by the transferor or the transferor or any person claiming under, or lawfully authorised by, either of them to the Custodian within two months from the date of registration of the deed of transfer or within two months from the commence ment of the Ordinance whichever is later. The proviso to the said sub section empowered the Custodian to admit an application even if it was made after the period of limitation prescribed therefor if he was satisfied that there were sufficient reasons for doing so, and it imposed on the Custodian an obligation to record such reasons. Sub section (3) required the Custodian to hold a summary enquiry into the application in the prescribed manner, and authorised him to reject the application for confirmation if he was of opinion that (a) the transaction had not been entered into in good faith or for valuable consideration, or (b) the transaction was prohibited under any law for the time being in force, or (c) the transaction ought not to be confirmed for any other reason. Sub section (4) provides that if the application is not rejected under sub section (3) the Custodian may confirm the transfer either unconditionally or subject to such terms and conditions as he thinks fit to impose. Ordinance No. XII of 1949 was, however, repealed by Ordinance No. XXVII of 1949 which came into force on October 18, 1949. Section 38 of this latter Ordinance corresponds to section 25 of the earlier Ordinance except in one material particular. It provides that no transfer of any right or interest in the property made in any manner whatsoever after the 14th day of August, 1947, by or on behalf of an evacuee as therein specified shall be effective unless it is con firmed by the Custodian., In other words, whereas section 25 of the earlier Ordinance left it to the Central Government to specify the relevant date in reference to any Province by notification in the official gazette, section 38(1) has prescribed the date for all the Provinces 452 where the Ordinance applied. The rest of the relevant provisions of section 38 are the same as those of section 25 of the earlier Ordinance. On April 17, 1950, this Ordinance was in turn ,repealed by Act XXXI of 1950 by section 58. Section 40(1) and (4) are similar to the relevant provisions of sections 25 and 38 of the earlier Ordinances. One of the changes made is in regard to the relevant dates prescribed by section 40(1). Under section 40(1) the transfers which are affected by its provisions are those which are made after the 14th day of August, 1947, but before the 7th day of May, 1954; and in respect of them the said section provides, inter alia, that they shall not confer any rights on the parties thereto, if at any time after the transfer the transferor becomes an evacuee within the meaning of section 2 or the property of the transferor is declared or notified to be evacuee property within the meaning of this Act unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act. Section 40(4) deals with an application made under sub section (1) for the confirmation of the transfer. This sub section and its three clauses (a), (b) and (c) correspond to sections 25(3) (a), (b) and (c) and 38(4)(a), (b) and (c) of the two earlier Ordinances. Thus it is clear that the relevant provisions, which conferred power on the Custodian to hold an enquiry on the application made for the confirmation of the transfer and to reject confirmation in certain cases, continued to be the same. The position, therefore, is that Ordinance No. XII of 1949 which was extended to Madras on August 23, 1949, was in operation only until October 18, 1949. Thereafter Ordinance No. XXVII of 1949 took its place, and in turn this Ordinance was repealed by Act XXXI of 1950 on April 17, 1950. The application made by the appellant for confirmation of her purchase has been dealt with under the relevant provisions of the Act, and we would therefore refer to the said provisions hereafter. On December 19, 1949, the appellant applied for confirmation of the sale transaction in her favour. This application was resisted by the tenants who urged several grounds in support of their plea that the 453 transfer should not be confirmed. It appears that on January 11, 1951, the Assistant Custodian of Evacuee Property, Madras City, had declared the property of the vendor to be evacuee property since he was of the opinion that the vendor 's case fell within the four corners of the definition of " an evacuee " under section 2(d)(ii) of the Act. The declaration that the vendor 's property was evacuee property was made under section 7(1) of the Act. The Assistant Custodian considered the appellant 's application for confirmation of the transfer in the light of the declaration already made by him that the vendor was an evacuee and that his property was evacuee property. He referred to the relevant features of the transaction and came to the conclusion that he would not be justified in confirming it. It appears that in reaching this conclusion he relied on the provisions of section 40(4)(c) of the Act. In his opinion the feverish hurry disclosed by the conduct of the vendor attracted the provisions of section 40(4)(c). The order refusing to confirm the transaction was passed on July 31, 1951. The appellant challenged the correctness of this conclusion by preferring an appeal before the Custodian. The Custodian found in favour of the appellant that the sale transaction in question was supported by valuable consideration; even so he proceeded to examine the question as to whether it could be said to have been entered into in good faith. In dealing with this question the appellate authority considered the fact that the vendor had left for Pakistan in June, 1947, evidently on account of civil disturbances or in fear of such disturbances and that it was obvious that he was permanently settled in Pakistan. According to the appellate authority the vendor was desirous of disposing of his properties in India in order to convert them into cash and take them away to Pakistan. In this connection reliance was placed on a letter written by the vendor to Mohideen on July 4, 1949. In this letter the vendor had stated that " if the matter is delayed there would be many sort of new difficulties as you know that the Government are passing new rules every day ". He took the view that this letter 454 clearly disclosed that the vendor 's intention was to dispose of his properties as quickly as possible so as to evade the restrictions of the evacuee laws which he apprehended would be extended to Madras any day. this finding the appellate authority came to the conclusion that the transaction had been entered into otherwise than in good faith, and so it could not be confirmed under section 40(4)(a). The appellate judgment shows that according to the appellate authority the request for confirmation could be rejected also under section 40(4)(c) of the Act. This order was pronounced on February 4,1953. The appellant then moved the respondent, the Custodian General in his revisional jurisdiction. The respondent considered the matter afresh, and agreed with the finding of 'the appellate authority that though the transaction was supported by valuable consideration it could not be said to have been entered into in good faith. In support of this conclusion he relied on the conduct of the vendor, the haste with which the transaction was attempted to be completed and the anxiety disclosed by him in his letter to Mohideen. In substance the respondent came to the conclusion that the vendor wanted to evade the restrictions of the evacuee law which he knew would soon be extended to Madras, and that showed that he was not acting in good faith. It is on this view that the revisional application preferred before him by the appellant was dismissed by him on July 4, 1954. In his opinion the appellant 's case fell under section 40(4)(a) of the Act. He did not, therefore, consider the question about the applicability of section 40(4)(c). It is clear that if a transaction is affected by absence of good faith either in the vendor or the vendee its confirmation may properly be rejected under section 40(4)(a); in other words, good faith is required both in the vendor and the vendee. In that sense the provisions of section 40(4)(a) are more rigorous and stringent than those of section 53(1) of the Transfer of Property Act. Under the latter section which deals with fraudulent transfers the rights of a transferee in good faith and for consideration are expressly protected; that, 455 however, is not the position under section 40(4)(a). Therefore the fact that the appellant paid valuable consideration for the transaction and is not shown to have acted otherwise than in good faith in entering into the transaction would not justify her claim for confirmation of the said transaction if it is shown that the vendor had not acted in good faith in entering into the said transaction. The fact that consideration was paid by the appellant and that she was acting in good faith may perhaps be relevant in determining the character of her conduct in regard to the transaction; but it would not be relevant or material in determining the character of the conduct of the vendor in relation to the transfer. This position is not seriously disputed before us. Mr. Sastri, however, contends that in considering the good faith of the vendor it would be necessary to bear in mind that at the relevant time when negotiations were going on between the parties in respect of the transaction in question evacuee law had not been applied to Madras, and so evacuees like the appellant 's vendor were absolutely free to deal with their properties as they liked. He also attempted to argue that even where the evacuee law applied, the policy adopted by the Government of India was to confirm transfers made by Mohammedan evacuees in favour of Indian nationals unless a certificate signed by the prescribed income tax authority certifying that the transferor had paid all taxes due from him to the income tax department in respect of his property, business or undertaking, or has made satisfactory arrangements for the payment thereof, had not been produced, and unless he had failed to pay any other dues outstanding against him in the Custodian 's register in respect of his own property and third party claims recognised exparte by the Custodian. This argument is based upon a copy of the press note alleged to have been issued by the Government of India in the Ministry of Rehabilitation on May 13, 1949. On the other hand, the learned Additional Solicitor General has relied on a copy of a circular issued by the Government of India on March 9, 1950, where it has been stated that the instructions 456 issued by the Government of India are subject to other requirements of section 38(4) of the Central Ordinance No. XXVII of 1949 ; in other words, whatever may be the nature of the circulars and directions issued by the Government of India, the appropriate authorities administering the provisions of the evacuee law had to deal with the matters brought before them under the relevant provisions of the said law. We do not think we can attach much importance to the argument that even where the evacuee law applied confirmation of sale transactions was intended to be automatic subject to the satisfaction of the two conditions specified in the press note. We are bound to assume that the question about confirming sale transactions was required to be, and was in fact, dealt with by the appropriate authorities under the relevant statutory provisions which were in force at the material time. It is, however, true that no evacuee law had been extended to Madras at the time when the impugned transaction was completed, and that naturally raises the question as to whether if a transaction had been entered into deliberately and consciously with the object of evading the application of evacuee law which it was apprehended would soon be extended to Madras, does that fact attract the provisions of section 40(4)(a) of the Act? As we have already indicated the respondent has answered this question in the affirmative, and Mr. Sastri contends that this conclusion is erroneous in law. Mr. Sastri 's argument is that the expression " good faith " in section 40(4)(a) should be construed in the sense attributed to the said expression by section 3, sub section (22) of the General Clauses Act, X of 1897. The said provision lays down that a thing shall be deemed to be done in good faith where it is in fact done honestly whether it is done negligently or not. The argument is that the vendor could not be said to have acted dishonestly when no evacuee law applied to Madras, and an intention to avoid a law which may be applied to Madras in future cannot be said to introduce an element of dishonesty in his conduct. In our opinion this argument cannot be accepted. In this connection it is necessary to bear in mind that section 3 of the General 457 Clauses Act itself provides that the definitions prescribed by the said section are applicable " unless there is anything repugnant in the subject or context ", and so it would not be unreasonable to hold that the content of the expression " good: faith " would depend,, substantially on the context of the statute which uses it. In determining the denotation of the said expression in section 40(4)(a) it would be essential to take into account the scope and effect of the main provisions of section 40(1). As we have already noticed, this section provides, inter alia, that no transfer made after the 14th day of August, 1947, shall be effective so as to confer any rights in respect of the said transfer on the parties thereto if, at any time after the transfer, the transferor becomes an evacuee within the meaning of section 2, or the property of the transferor is declared or notified to be An evacuee property within the meaning of the Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act. It would thus be clear that all transfers made after the 14th day of August, 1947, but before the 7th day of May, 1954, are hit by this section, and that obviously would bring within the mischief of the section a large number of transfers effected at a time when no evacuee law was in force in respect of them. Reading section 40(1) and (4) together it appears that the transfers hit by the former provision would be valid only if they are confirmed under the latter provision. It is possible that a transfer made during the prohibited period may have been entered into in good faith or was for valuable consideration and did not attract any of the provisions contained in cls. (a), (b) and (c) of a. 40(4). In such a case merely because it was affected within the prohibited period it would not become void and the Custodian may have to confirm it; but where such a transfer attracts the provisions of section 40(4)(a) for instance, it would not be affirmed and it would remain inoperative. This shows that the main object of the Act was to preserve the property of persons who had migrated to Pakistan till the Government of India could come to some understanding with the Pakistan Government in regard to adjustment of claims of Indian 58 458 evacuees in respect of the properties left by them in Pakistan. The idea then presumably was that the two Governments should agree on the valuation of the evacuee properties left by evacuees in the two respective countries and the difference in the said valuation should be amicably adjusted between them. After such adjustment was made it was intended to compensate the evacuees in regard to the loss incurred by them in respect of the properties left by them in the two respective countries. That this intention did not succeed is an other matter. There can, however, be no doubt about the policy and object of the Act, and in determining the content of the expression " good faith " in the context of the main provision of section 40(1) this object and policy of the Act must be borne in mind. Section 40(4) refers to three kinds of cases where the transfer may not be confirmed; cl. (a) deals with transactions which are not entered into in good faith or for valuable consideration; cl. (b) deals with transactions which are prohibited under any law for the time being in force; and cl. (c) deals with cases of transactions which are not confirmed for any other reason. It would thus be seen that the scope of the three clauses is very wide. It is not only transactions prohibited under any law that fall within the mischief of section 40(4); but transactions which are not entered into in good faith or for valuable consideration also fall within its mischief Now, if the test prescribed by section 3(22) of the General Clauses Act as interpreted by Mr. Sastri is held to be relevant a large number of transactions may have to be confirmed even though they are shown to have been deliberately entered into with the object of evading the provisions of section 40(1). In our opinion, the fact that the evacuee law had not been extended at the relevant time to Madras would not be decisive in the matter. It was well known that the said law was being extended from Province to Province as it was deemed necessary, and indeed the letter written by the vendor to Mohideen clearly shows that the vendor knew as much. The history of the evacuee laws passed in several States and by the 459 Central Government and Legislature from time to time shows that the Legislatures were attempting to meet with an unprecedented problem, and the laws passed by them in India and Pakistan at the material time made it perfectly clear to the evacuees from both the countries that the two countries were adopting appropriate legislative measures to protect the evacuee properties and prevent their transfers. Therefore, if a vendor sold his property not for any necessity or for any other legitimate purpose but solely with the object of converting it into cash and removing it to Pakistan, that clearly was intended to defeat the provisions of the Act which he knew would soon be extended to Madras, and so it would be difficult to hold that he was acting honestly within the meaning of section 40(4)(a) of the Act. An intention to defeat the provisions of the Act cannot be said to be honest in the context. If despite his intention to defeat the application of the Act a transaction is upheld as entered into in good faith many transactions may escape the application of section 40(1), and that clearly would defeat the purpose of the Act. It is significant that though the provisions of section 40(1) are drastic they have been deliberately made retrospective, and that emphatically brings out the aim and object of the Act; and it would be unreasonable to ignore this aim and object of the Act in construing the expression " good faith " in section 40(4)(a). We would, therefore, hold that having regard to the aim and object of the emergency legislation with which we are concerned in the present case the expression " good faith " used in section 40(4)(a) has been property construed by the respondent when he held that a deliberate intention to defeat the apprehended application of the evacuee law which was responsible for the transfer in question brings the transfer within the ' mischief of section 40(4)(a). The result is the appeal fails and is dismissed with costs. Appeal dismissed.

M who had gone to Pakistan in 1947, sold his property in the State of Madras to the appellant on August II, 1949. At that time there was no legislation with respect to evacuee property in Madras. On August 23, 1949, the Administration of Evacuee Property (Chief Commissioners Provinces) Ordinance, 1949 (XII of 1949), was extended to Madras. The appellant made an application for the confirmation of the sale. Subsequently, M was declared an evacuee and the property as evacuee property. It was found that M had entered into the transaction with the object of evading the evacuee law which it was apprehended, would be extended to Madras. Consequently, confirmation of the sale was refused under section 40(4)(a) of the Administration of Evacuaee 449 Property Act, 950, on the ground that the transaction had not been entered into in good faith. The appellant contended that there was no lack of good faith on the part of M as he could not be said to have acted dishonestly when at the time of the sale no evacuee law had been applied to Madras and that an intention to avoid a future law could not be said to be dishonest. Held, that the vendor had not entered into the transaction in " good faith " and the confirmation of the sale was rightly refused under section 40(4)(a) of the Act. Having regard to the aim and object of the emergency legislation a deliberate intention to defeat the apprehended evacuee law motivating a sale amounted to want of " good faith ". If the vendor sold his property not for any necessity or any other legitimate purpose but solely with the object of converting it into cash and removing it to Pakistan, he intended to defeat the provisions of the evacuee law which he knew was to be extended to Madras soon and he acted dishonestly within the meaning of section 40(4)(a).

A house belonging to the petitioner in the Bangalore City fell vacant on the 1st September, 1949, and on the 13th September, 1949, an order was passed by the Rent Con troller 745 under the Mysore House Rent and Accommodation Control Order, 1948, allotting the house to another person and directing the petitioner to deliver possession to the lat ter. The petitioner protested and took various steps to get the order vacated but he was unsuccessful and forcible possession was taken from him under an order made on the 11th April, 1950. He applied to the Supreme Court under article 32 of the Constitution for quashing the order allotting the house and the subsequent orders made to enforce that order, on the ground, infer alia, that these orders contravened the provisions of articles 31 (2) and 19 (1) (f) of the Consti tution: Held, (i) that as the order of allotment was made before the Constitution came into force and at a time when the Control Order provided, validly, that a house could be taken for the occupation of a private individual, the order could not be impugned on the ground that it contravened article 31 (2) or 19 (1)(f) of the Constitution: (ii) the fact that possession was actually taken only in pursuance of an order made on the 11th April, 1950, was immaterial as the peti tioner 's right to possession was lost earlier; (iii) article 31 (2) was inapplicable for another reason also, namely, that there was no acquisition of the house by the State, as taking of possession can only be from a person who is enti tled to possession and the landlord lost his right to pos session by reason of the Controller 's order. Held also, that the power conferred by cl. (bb) of sub cl. (2) of Rule 81 of the Defence of India Rules (under which the Control Order was made) was not confined to cases where the house was available for letting or subletting in the sense that the landlord did not require the house for his own use or had not let it to another himself.

On July 7, 1949, the then State of Mysore passed the Mysore Administration of Evacuee Property (Emergency) Act, 1949, providing, inter alia, for the appointment of a Custodian of Evacuee Property for the State of Mysore for the purpose of administering evacuee property in the State. By section 6 all evacuee property vested in the Custodian under section 5 had to be notified by him in the Mysore Gazette, while section 8 provided that any person claiming any right to any property notified under section 6 might prefer a claim to the Custodian on the ground that the property was not evacuee property. Section 30 provided for an appeal to the High Court where the original order under section 8 had been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian. This Act was replaced by the Mysore Administration of Evacuee Property (Second) (Emergency) Act, 1949, which came into force on November 29, 1949. Section 53(2) of that Act provided that anything done or any action taken in the exercise of any power conferred by the earlier Act shall be deemed to have been done or taken in the exercise of the powers conferred by the later Act. Under the second Act, instead of the High Court an appeal from the order of the Custodian lay to the Custodian General, appointed by the Government of India under the provisions of the Administration of Evacuee property Ordinance, 1949, which had come into force on October 18, 1949 ; and in addition, section 25 Of that Act provided for revision by the Custodian General of orders passed by the Custodian. The , which was passed by Parliament and which came into force on April 17, 1950, provided substantially for all matters contained in the second 856 Mysore Act. Section 27 gave the Custodian General powers of revision against the orders of the Custodian, and section 58 as amended and given retrospective operation, provided that " if, immediately before the commencement of this Act, there was in force in any State to which this Act extended any law which corresponded to this Act and which was not repealed. . that corresponding law shall stand repealed. " On September 21, 1949, the Custodian issued a notification declaring the properties of the respondents as evacuee properties, and claims filed by them under section 8 of the earlier Mysore Act were investigated by the Deputy Custodian who dismissed the same on April 17, 1950. Appeals were filed against the said order before the Custodian and were allowed on August 22, 1950. on the ground that there was not sufficient evidence to prove the respondents as evacuees and consequently the properties in question could not be treated as evacuee properties. On October 3, 1950, the Custodian General gave notice to the respondents under section 27 of the , in respect of the order of the Custodian dated August 22, 1950, and asked them to show cause why the said order be not revised. On February II, 1952, the Custodian General set aside the order and directed the Custodian to dispose of the cases afresh. On December 2, 1952, the Custodian passed an order by which he held that the respondents were evacuees and that their properties were evacuee properties. Against this order the respondents filed two appeals to the High Court, and also two writ petitions under article 226 of the Constitution as they had doubts whether any appeal lay to the High Court. The High Court took the view that the Custodian General bad no power under section 27 of the Act to revise the order of the Custodian and that as the proceedings in these cases began under section 8 of the first Mysore Act and as there was nothing corresponding to that section either in the second Mysore Act or in the Act of 1950, the High Court was entitled to hear the appeal from the order of December 2, 1952, as that order must be held to have been passed in proceedings under the first Mysore Act. The High Court then went into the matter as an appellate court and came to the conclusion that the order of the Custodian dated December 2, 1952, 'Was erroneous. Held, that the High Court erred in holding that the order of the Custodian General dated February II, 1952, was without jurisdiction. Considering the purpose for which the Administra tion of Evacuee Property Act, 195o, was passed and the successive saving clauses in the second Mysore Act and in the Act, the Custodian General bad the power under S ' 27 to call for the record of the proceeding in which the order of August 22, 1950, was passed and consider its legality or propriety. Held, further, that the High Court was also in error in holding that appeals to it lay from the order of December 2, 1952. 857 An order made in a proceeding commenced under section 8 of the. first Mysore Act must be deemed to be an order made under section 5(1) of the second Mysore Act or under section 7(1) of the Act, in view of section 53(2) of the second Mysore Act and section 58(3) of the Act. Consequently, by necessary intendment, the legislature must have intended that the provision as to appeals provided by subsequent legislation should supersede the provision as to appeals under the first Mysore Act. Garikapatti Vecraya vs N. Subbiah Choudhury ; , referred to. Since the main question for decision in these cases was whe ther the respondents were evacuees, and as such a question was one of fact, the High Court was not justified in looking into the order of December 2, 1952, as an appellate court in dealing with applications for a writ of certiorari under article 226 of the, Constitution. Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; , applied.

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

The plot in question, being an evacuee property was included in the compensation pool under section 14 of the Displaced Persons (Compensation and Rehabilitation Compensation) Act, 1954 and put to auction sale on August 24, 1959. The highest bid of the appellant was provision ally accepted and he deposited l/5th of the amount, but failed to deposit the balance amount. The Managing officer, therefore, cancelled the auction sale. The Chief Settlement Commissioner set aside the order of the Managing officer and allowed time to the appellant to deposit the balance of purchase price by May 30, 1968, but the appellant again failed to deposit the amount within time. Consequently the Settlement officer by his order dated October 2, 1968 cancelled the auction sale made in appellant 's favour and the property was put to auction sale on January 17, 1969. Respondents Nos. 2 and 3 made the highest bid and deposited 20% of the amount. The appellant appealed before the Assistant Settlement officer against the order dated October 2, 1968 cancelling the auction sale, which was rejected on April 2, 1969. His revision petition was also dismissed on August 13, 1969. However, in the petition under section 33 of the Act made before the Central Government, the order cancelling the auction sale held on August 24, 1959 was 947 set aside by the authority exercising the delegated powers of the Central Government and granted 15 days ' time to the appellant for depositing the balance of the purchase price with a condition that on failure to deposit the balance of the auction price the petition shall stand dismissed. The appellant again failed to deposit the amount within time, but on a request made by him, the time was extended till February 28, 1970 and the appellant deposited the remaining auction price within the extended time. A petition under Article 226 filed by the respondents Nos. 2 and 3 challenging the order dated February 6, 1970 setting aside the order cancelling the auction sale held on August 24, 1959 and order extending time till February 28, 1970 and also for a direction to the authorities to finalise the auction sale held in their favour on January 17, 1969 was dismissed by a Single Judge. The Division Bench, however, allowed the Letters Patent Appeal, quashed the orders of delegated authority and directed the authorities to finalise the auction sale held in respondents ' favour and held: (1) that sale of urban agricultural property which formed part of the compensation pool could be held only in accordance with the Rules framed under the Act as contemplated by sections 8 and 40. Since no rules had been framed for the disposal of the urban agricultural property, the Central Government could not lawfully provide for sale of the urban agricultural land by executive directions and consequently auction sale held on August 24, 1959 was illegal; (2) that the delegated authority exercising powers under section 33 had no jurisdiction to grant time to the appellant for making deposit or to further extend the time to enable him to deposit balance of auction price by February 28, 1970; and (3) that the delegated authority had passed orders in violation of natural justice as no notice was issued to the respondent Nos. 2 and 3 and no opportunity of hearing was afforded to them. Allowing the appellant 's appeal partly and modifying the order of the High Court, the Court, ^ HELD: 1. Sections X and 20 of the Displaced Persons (Compensation and Rehabilitation Compensation) Act 1954 provide for payment of compensation to displaced persons in any of the forms as specified including by sale to the displaced persons of any property from the compensation pool and setting off the purchase money against the compensation to them. [956B C] 2. Section 16 confers power on the Central Government to take 948 measures which it may consider necessary for the custody, management and disposal of compensation pool property. The Central Government had, therefore, ample powers to take steps for disposal of pool property by auction sale and for that purpose it had authority to issue administrative directions. [956C D] 3. Section 40(2) (j) of the Act provides for framing of rules prescribing procedure for the transfer of property out of the compensation pool and the adjustment of the value of the property so transferred against the amount of compensation. Neither section 8, 16, 20 nor section 40 lay down that payment of compensation by sale of the pool property to a displaced person shall not be done unless rules are framed. These provisions confer power on the Central Government and the authorities constituted under the Act to pay compensation to displaced persons by sale, or allotment of pool property to them in accordance with rules, if any. [956D E] 4. Framing of rules regulating the mode or manner of disposal of urban agricultural property by sale to a displaced person is not a condition precedent for the exercise of power by the authorities concerned under sections 8, 16 and 20. If the legislative intent was that until and unless rules were framed power conferred under the said sections could not be exercised, that intent could have been made clear by using the expression "except in accordance with the rules framed" a displaced person shall not be paid compensation by sale of pool property. In the absence of any such provision the framing of rules, could not be a condition precedent for the exercise of power. [956E G] 5. Where a statute confers powers on an authority to do certain act or exercise power in respect of certain matters subject to rules, the exercise of such power does not depend on the existence of Rules unless the statute expressly provides for the same. In other words, framing of rules is not a condition precedent to the exercise of the power expressly and unconditionally conferred by the statute. [954H; 955A B] 6. The expression "subject to Rules" only means in accordance with the rules, if any. If rules are framed, the powers so conferred on authority could be exercised in accordance with those rules. But if no rules are framed, there is no void and the authority is not precluded from exercising the Power conferred by the statute. [955B C] Bishan Singh vs The Central Govt. and others 1961(63) Punjab Law Reporter p. 75, over ruled. 949 T. Cajee vs U. Jormanik Siem and Anr. , ; , B.N. Nagarajan and Ors. vs State of Mysore and Ors. , , Mysore State Road Transport Corporation vs Gopinath, ; , U.P. State Electricity Board vs City Board Mussoorie and Ors., ; , relied upon. The Central Government had ample jurisdiction to issue administrative directions regulating the payment of compensation to the displaced persons by sale of the urban agricultural property. The view taken by the High Court in Bishan Singh 's case is not sustainable. The High Court was, therefore, in error in holding that the auction sale held in appellant 's favour on August 24, 1959 was illegal and void. [956G H] 8. So far as the challenge to the validity of the order of the delegated authority extending time to enable the appellant to deposit the auction sale money is concerned, the High Court had quashed the same although that order was not before it, as none of the parties filed the same. Respondents who had challenged that order should have filed a copy thereof. In the absence of the impugned order the High Court could not quash the same. (9) Normally whenever an order of Government or some authority is impugned before the High Court under Article 226 of the Constitution, the copy of the order must be produced before it. In the absence of the impugned order it could not be possible to ascertain the reasons which may have impelled the authority to pass the order. It is, therefore, improper to quash the order which is not produced before the High Court in a proceeding under Article 226 of the Constitution. [957E F] (10) The power conferred upon the Central Government under section 33 of the Act is a residuary power in nature. It confers wide powers on the Central Government to call for the record of any case and to pass any order which it may think fit in the circumstances of the case. The only limitation on exercise of this power is that the Central Government shall not pass any order which may be inconsistent with any of the provisions of the Act and the rules made thereunder. Therefore, the Central Government or the delegated authority has power to set aside any order of the subordinate authorities, or to issue directions which it may consider necessary on the facts, of the case subject to the aforesaid rider. This power is intended to be used to do justice and to mitigate hardship to a party unbriddled by technicalities. Therefore, the 950 delegated authority while exercising powers of the Central Government under section 33 had ample jurisdiction to grant time. [957H; 958A C] 11. Extension of time to enable the appellant to deposit the money did not amount to review of the earlier order dated 6.2.70 and the default cause therein was intended to ensure compliance of the order. [958D] Mahanta Ram Das vs Ganga Das, ; , relied upon. After cancellation of the auction sale held in appellant 's favour, the property in dispute was again put to auction sale and at that auction sale respondent Nos. 2 and 3 were the highest bidders. Their bid was provisionally accepted and they had deposited one fifth of the auction sale amount. [959D E] 13. The highest bidder at an auction sale does not get any right or interest in the property till the auction sale is approved, confirmed and the sale deed is executed in his favour. The respondents have been in possession of the property since long and furthermore on the basis of their highest bid made at the subsequent sale they had sufficient interest in the matter to contest the appellant 's petition made under section 33 of the Act. The High Court was, therefore, right in holding that the respondents should have been afforded opportunity of hearing before any order on the appellant 's petition was passed. Since no such opportunity was afforded, the High Court was justified in quashing the order. The High Court 's order to that extent is upheld. [960A D] Bombay Salt and Chemical vs Johnson and Ors., AIR 1958 SC 289, referred to. The Central Government or the authority exercising its power under section 33 of the Act is directed to consider the appellant 's petition afresh in accordance with law after giving notice and affording opportunity of hearing to respondent Nos. 2 and 3. [960D E]

The predecessor in interest of the present appellant applied to the land officer of the respondents for the settlement of the subject,matter of dispute, situated in,Jamshedpur. The land was let out to him as tenant from month to month at a rent of Re. 1 / per month. There was no document creating the lease. The application for settlement contained averments to the effect that the applicant wanted it 1 for garden purposes" that he agreed to hold the land "on monthly tenancy" and that would abide by the "house building rules". Following a notice to quit the respondents who are the owners of the plot filed a suit for eviction of the appellant and for arrears of rent. The defence raised was that there was no monthly tenancy and the lease was for agricultural and horticultural purposes and the appellant was an agricultural tenant within the meaning of sections 4 and 6 of the Chotanagpur Tenancy Act who has fixity of tenure. _The trial court upheld the contention and on appeal it was confirmed by the Subordinate Judge. On second appeal the High Court of Patna held that the lease was not for agri cultural purposes and ordered eviction. The present appeal is by way of special leave granted by this Court. The main contention before this Court was that since the application for Jew made it clear that the land was for "garden 2 purpose" the appellant was raiyat within the meaning of section 6 of the Act. Held, that the statement of the purpose had to considered alongwith the other facts mentioned in the document, viz. that the application was for a monthly tenancy, and that the applicant agreed to abide by the house building rules. On such consideration, it was clear that the lease was not for horticultural or agricultural purposes.

Maganlal executed a mortgage in favour of M.P. State Financial Corporation as security for a loan. The amount of loan not having been paid, the Corporation initiated pro ceedings before the District Judge under section 31 of the for attachment and sale of the mortgaged property, which was ultimately auc tioned and purchased by M/s Jaiswal Industries, the first purchaser Maganlal made an application under Order 21 Rule 90 of the Code of Civil Procedure with the result that the sale was set aside by the Additional District Judge. The first purchaser preferred an appeal against the order set ting aside the sale and also sought stay of further proceed ings for re sale. The High Court did not grant stay but only ordered that the fresh sale shall not be confirmed till the disposal of the appeal. Fresh auction was held and sale was knocked down in favour of Ramnarayan, the second purchaser. The appeal of the first purchaser was subsequently allowed by the High Court and the first sale in his favour was confirmed. Both Maganlal and Ramnarayan have filed two separate appeals in this Court challenging the order of the High Court. Maganlal made an application before this Court under Order 34 Rule 5 of the Code, being C.M.P. No. 9940 of 1982, for redemption of the mortgage, and has urged that in case C.M.P No. 9940 of 1982 is allowed, it would not be neces sary for him to press the merits of the appeal. This conten tion has not been seriously disputed by the first and the second purchasers. They have however opposed this applica tion on the ground that: (i) an order of sale of the mort gaged property passed 697 by the District Judge under section 32 of the Act after affecting an attachment under section 31 thereof will not come within the purview of a final decree for sale of mort gaged property contemplated by Order 34 Rule 5 of the ' Code and as such the benefit of that provision could not be extended to Maganlal; (ii) the High Court having confirmed the sale in first purchaser 's favour, an application under Order 34 Rule 5 of the Code is not maintainable inasmuch as the said provision contemplates payment 'on or before the day fixed or at any time before the confirmation of a sale '; and (iii) section 32(8) of the State Finance Corporation Act makes the manner provided in the Code applicable only "as far as practicable" and there was neither a decree nor was the Financial Corporation a decree holder in a suit for sale it was only deemed to be a decree holder by legal fiction because of the expression "in execution of a decree as if the Financial Corporation were the decree holder". On the other hand, it is contended on behalf of Maganlal that (i) Order 34 Rule 5 of the Code is attracted even to an order of sale of mortgaged property passed under section 32 of the Act and since the right of redemption which vests in Maganlal has not yet extinguished in view of the pendency of these appeals, there is no impediment in the relief contem plated by Order 34 Rule 5 of the Code being granted. and (ii) in view of sub section (8) of section 32 of the Act the applicability of the provisions of Order 34 Rule 5 of the Code cannot be denied to the facts of the instant case. Allowing the CMP and the appeal filed by Maganlal and granting consequential reliefs to the first and the second purchasers, this Court. HELD: (1) In case the provisions of Order 34 Rule 5 of the Code are held to be applicable to the facts of the instant case, appropriate relief can be granted thereunder as the order of confirmation of the sale passed by the High Court in favour of the first purchaser has not become abso lute due to the pendency of these appeals against that order nor has the right of redemption of Maganlal yet extin guished. [707F G] Chandra Mani vs Anarjan Bibi, A.I.R. 1934 P.C. 134; Nilayam Ramkrishan Rao vs Kandokari Chellayamma & Anr., ; ; S.V. Ramalingam & Ors. vs K.E. Rajagopa lan & Ors., ; M. Sevugan Chettiar vs V.A. Narayana Raja, A.I.R. 1984 Mad 334; Raghunath Singh & Ors. vs Pt. Hansraj Kunwar & 698 Ors., A.I.R. 1934 P.C. 205 and Mhadagonda Ramgonda Patil & Ors. vs Shripal Balwant Rainade & Ors., , referred to. (2) An application under section 31(1) of the Act cannot be put on par to a suit for enforcement of a mortgage nor the order passed thereon under section 32 of the Act be put on par as if it was an order in a suit between a mortgagee and the mortgagor for sale of mortgaged property. On the other hand, the substantive relief in an application under section.31(1) is something akin to an application for at tachment of property in execution of a decree at a stage posterior to the passing of the decree. [710E F] Gujarat State Financial Corporation vs M/s Natson Manu facturing Co. (P) Ltd.; , and M/s Everest Industrial Corporation & Ors. vs Gujarat State Financial Corporation, ; , referred to. (3) The purpose of enacting sections 31 and 32 of the Act was apparently to provide for a speedy remedy for recov ery of the dues of the Financial Corporation. This purpose however was, in cases covered by clause (a) of sub section (1) of section 31, confined to the stage of obtaining an order asking to a decree in a suit, in execution whereof "the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance" could be sold. Sections 31 and 32 of the Act cut across and dispense with the provisions of the Code from the stage of filing a suit to the stage of obtaining a decree in execution whereof such properties as are referred to in clause (a) of sub section (1) of section 31 could he sold. After this stage was reached, sale in execution of an order under section 32 of the Act was for purposes of execution put at par with sale in execution of a decree obtained in a suit, by enacting sub section (8) of section 32 of the Act. [711H 7 12B] (4) If in its anxiety to ensure speedy recovery of the dues of the Financial Corporation Parliament had intended also to cut across and dispense with the procedure contained in the Code for execution of a decree for sale of such properties as are referred to in clause (a) of sub section (1) of section 31 of the Act, it would have made some provi sion analogous to provisions contained in the enactments for revenue recovery. But that was not done. Instead, sub sec tion (8) was incorporated in section 32 of the Act. [712F] (5) As is apparent from the plain language of section 32(8) of the 699 Act, the legal fiction was created for the purpose of exe cuting an order under section 32 of the Act Tim ' sale of attached property as if such order was a decree in a suit for sale and the financial Corporation was the decree holder whereas the debtor was the judgment debtor. [714B] It is settled law that a legal fiction is to he limited to the purpose for which it was created and should not he extended beyond the legitimate field. [713H] The Bengal Immunity Company Ltd. vs The State of Bihar & Ors., ; East End Dwellings Company Ltd. vs Finsbury Borough Council, [1952] Appeal Cames 109; The Commissioner of Income tax, Bombay vs Amarchand N. Shroff, [1963] Supp. 1 S.C.R. 699; Commissioner of Income Tax, Gujarat vs Vedilal Lallubhai, ; and Nation al Sewing Thread Co. Ltd. vs Jamesh Chadwick & Bros. Ltd., ; , referred to. (6) The provisions of the Code of Civil Procedure with regard to execution of a decree for sale of mortgaged property contained in Order 21 of the Code including the right to file an appeal against Such orders passed during the course of execution which are appealable shall apply mutasis mutandis to provisions of an order under section 32 of the Act unless such provision is not practicable to he applied. [714C] (7) Since, in the instant case, the equity of redemption has not extinguished, there is no good ground to take the view that even though all the remaining provisions with regard to execution of a decree for sale of mortgaged property will apply to execution of an order under section 32 of the Act, the provision contained in Order 34 Rule 5 of the Code shall not apply. Nothing has been brought to the notice of the Court as to how and why it is not practicable to apply the said provision. [7 14F]

The respondent No. 1 sued the second respondent (defendant No. 1) and the appellants (defendant Nos. 2 and 3) for specific performance of a contract whereunder the second respondent had agreed to sell his lands to the first respondent for Rs. 5,000 out of which Rs.4,000 were paid, and the balance Rs.1,000 was to be paid within 5 years whereafter the second respondent was to execute a sale deed in favour of the first respondent. The Munsif decreed the suit only for recovery of Rs,4,850 plus pendente lite and future interest on Rs.4,000 and this order was confirmed by the Civil Judge by dismissing the appeal of respondent No.1. A second appeal was preferred to the High Court by respondent N. 1 contending that the transfers in favour of the appellants, by respondent No. 2 were void being in contravention of Section 168 A of the U.P. Zamindari Abolition and Land Reforms Act, 1950. The appellants contested the appeal contending that for a transfer being hit by Section 168 A of the Act should be in respect of a specific piece of land and not a share in a holding and that the transfers were of a portion of the shares of respondent No. 1 in the disputed plot. The High Court allowed the appeal holding that the two transfers made were clearly hit by the provisions of Section 168 A(2) of the Act and that the benefit of Section 43 of the Transfer of property Act could not be availed of by the appellants as the sale deeds were void in the eye of law. 700 The appellant in their appeal to this Court contended that the sale made by respondent No. 2 to the 2nd appellant being hit by the provisions of Section 168 A of the Act, the subject matter of transfer got vested in the Government and the interest of respondent No. 2 in that part of the holding stood extinguished on the date of transfer and that the sale being void, he was left only with the subject matter of transfer, and that the respondent No. 2 having transferred that whole portion to the first appellant by sale deed such transfer being a transfer of the whole area it would be covered by the proviso under Section 168 A and as such, the sale would not be hit by the provisions of Section 168 A. The first respondent contended that as the sale deeds in favour of the two appellants have been held to be void, the High Court rightly decreed the suit; that he having been in possession of the land and the second respondent 's fragmented sales having been found to be void, even if the land would vest in the State, the first respondent would not be divested automatically and the State has to seek possession in accordance with the law. On the question as to what would be the effect of the two fragmented sales in favour of the appellants, setting aside the order of the High Court and remanding the matter, this Court, HELD: 1. The U.P. Zamindari Abolition and Land Reforms Act was passed as it was considered expedient to provide for the abolition of the Zamindari system which involved intermediaries between the tiller of the soil and the State in Uttar Pradesh and for the acquisition of their rights, title and interest and to reform the law relating to land tenure consequent upon such abolition and acquisition and to make provision for other matters connected therewith. [705E F] 2. The original Act did not define fragment. The definition of 'fragment ' was added by Section 2 of the U.P. Act XVIII of 1956 with a view to prevent fragmentation and promote consolidation of holdings in order to avoid uneconomic units. [705F G] 3. The object of the section 168 A(1) was to prevent fragmentation of land situated in a conolidated area and transfers that would result in fragmentation or further fragmentation shall be void and to such transfers, Section 167 will mutatis mutandis be applicable, when a fragment situated in a consolidated area is transferred. If transfer of a fragment is made in favour of tenure holder who has a plot contiguous to the fragment, the purpose of law is not defeated inasmuch as it will be 701 consolidated with the contiguous plot of the transferee. When the land held by a person in a consolidated area is already a fragment then as was provided previous to the amendment in 1961 the whole of the plot to which the fragment pertained was to be transferred. [708F 709A] 4. After the amendment, the invalidity and applicability of Section 167 is limited to a case where the transfer is not in favour of any such tenure holder and to the whole or so much of the plot in which the person has bhumidhar rights which pertains to fragment is thereby transferred. If the transferor has bhumidhari rights on the whole of the fragment the whole has to be transferred. If the person has bhumidhari rights only in a part of the plot that part on which he has bhumidhari rights can be transferred. The part on which the person has not bhumidhari rights is not covered by the provisions not because that would not result in further fragmentation but because he had transferable bhumidhari rights only on that portion and not on the other portion. [709A C] 5. The substitution of the words "bhumidhar with transferable rights" for the word "bhumidhar" would not make any difference when the bhumidhar had transferable rights but would make a difference where the bhumidhar had also lands with non transferable rights. [710C D] 6. Under the amended provisions the interest of a bhumidhar with transferable rights in his holding or in part thereof shall be extinguished when the holding or part thereof with bhumidhar rights has been transferred or let out in contravention of the provisions of the Act. In other words, when he had bhumidhar rights on the entire holding and the same is transferred or let out in contravention of the provisions of the Act his interest shall be extinguished. If he had bhumidhari rights only on a part thereof and it has been transferred or let out in contravention of the provisions of the Act his interest in bhumidhari rights in that part shall be extinguished. The reason behind the provision to make fragmentation is the need to prevent further fragmentation if the bhumidhar with his bhumidhari rights over a fragment tries to transfer the fragment, his right over the fragment is extinguished. [710D E] 7. In the instant case, the bhumidhar respondent No. 2 's land measuring 10 bighas, 12 biswas and 10 biswansis was a fragment. He entered into an agreement to sell the land on 5.4.1966 and the first respondent on payment of advance of Rs.4,000 is stated to have had possession of the land. That sale would attract the provisions of Section 702 168 A, if it resulted in transfer of the fragment. The sales to the appellant No. 1 was dated 2.9.1966 and to appellant No. 2 was dated 21.12.1966. These two sales would be convered by the old provisions of sections 166 and 167, which section did not deal with the case of bhumidhar but only by sirdar or asami. But section 168 A would be attracted and the provisions of Section 167 would mutatis mutandis be applicable. [710G 711B] 8. The High Court did not examine the facts of the case in light of the laws prevailing at the time. Festination justiate est noverea informateeni. Hasty justice is step mother of misfortune. Injustuim est nisitota lege inspecta, de una aliqua ejus particula proposita judicare vel respondere. It is unjust to decide or respond to any particular part of a law without examining the whole of the law. [711B, 711D E]

Appeals Nos. 142 and 143 of 1960. Appeals from the judgment and order dated July 21, 1955, of the Madras High Court in C.R. No. 32 of 1952. G. section Pathak and Naunit Lal, for the appellants. K. N. Rajagopal Sastri and D. Gupta for the respondent. January 10. The Judgment of the Court was delivered by HIDAYATULLAH J. These are two appeals by the legal representatives of one A. R. Rangachari, who died during the pendency, in the High Court at Madras, of proceedings in a reference under section 66(1) of the Income tax Act made by the Income tax Appellate Tribunal, Madras Bench. The following question was referred to the High Court for its decision: 382 " Whether the inclusion in the assessee 's total income of the profits settled by him on his wife and two daughters is justified in law ? " The High Court answered the question in the affirmative. The appeals have been filed with a certificate granted by the High court. Rangachari was one of five partners of a firm, Messrs. Chari and Ram, and held a six anna share in the profits and loss of the partnership. On September 22, 1947, he executed three deeds of settlement, which are marked Exts. A, A 1 and A 2, in favour of his wife,, a married adult daughter and a minor daughter. To each of them, he assigned a fourth share of the profits of the firm payable to him (but not the losses), for a period of 8 years, vesting the right in them to receive the said share of profits absolutely and exclusively and declaring the settlements to be irrevocable during the above period. It is not necessary to refer to the three documents, because the terms are the same. A few clauses of the deed, exhibit A, may be quoted. After recitals which included the following: " Whereas the Settlor has settled upon his minor daughter, Srimathi Meera Bai, one fourth of his share of profits payable to him from the firm for a period of eight years; And whereas out of natural love and affection, the Settlor is desirous of conferring upon the Beneficiary a similar portion of his share of profits from the firm ", the deed goes on to say " Now this Indenture witnesseth as follows: 1. .The Settlor hereby assigns unto the Beneficiary all the rights of the Settlor in respect of one fourth of his share of profits in the firm (but not the losses) payable to him during a period of eight years commencing from the date hereof to be taken and enjoyed by the Beneficiary in absolute and exclusive right. 2. .The Settlor shall not have any manner of right or interest in the said one fourth share hereby settled and the right to receive from the firm one fourth of 383 the Settlor 's share during the said period of eight years shall exclusively vest in the Beneficiary. 3. .The Beneficiary shall be entitled directly to receive and collect from the firm the share of profits hereby transferred for the said period of eight years. . . . 8. This settlement shall be irrevocable. " For the assessment year 1947 48 corresponding to a previous year ending on April 13, 1947, the profits due to Rangachari amounted to Rs. 86,491 13 0. This amount was credited to the account of Rangachari, and Rs. 21,622 15 3, being one fourth thereof, were transferred to the accounts of each of the three disponees. In the same way, the profits of the previous year ending April 13, 1948, were disposed of. The assessee claimed that these amounts could not be included in his total income for purposes of assessment, being excluded by reason of the third proviso to section 16(1)(c) of the Income tax Act. He also contended that the amount payable to his wife and two daughters never became his income, being diverted by an overriding title, and that the case was governed by the rule laid down by the Privy Council in Bijoy Singh Dudhuria vs Commissioner of Income tax, Bengal (1). The assessee 's contentions were not accepted by the Income tax Officer, and his appeals to the Appellate Assistant Commissioner and the Tribunal also failed. In so far as the assessment year 1947 48 was concerned, the Income tax Officer held that the income had already accrued to the assessee, because the deeds were executed five months after the close of the account year. He also held that the transfer to the minor daughter fell within section 16(3), as there was no adequate consideration for the transfer. With regard to the wife and married daughter, he held that section 16(1)(c) was not applicable, because what had been transferred was income first accruing to the assessee, while section 16(1)(c) contemplated income which accrued to a person, to whom the transfer was made. The same reasons (except the first) were given for rejecting the, (1) 384 assessee 's contentions in respect of the other assessment year. It is not necessary to refer in detail to the decisions of the Appellate Assistant Commissioner, the Tribunal ,,,and the High Court. The High Court in an elaborate judgment pointed out that section 16(1)(c) did not apply to these proceedings, and that the third proviso was, therefore, not attracted. It also held that the income had accrued to the assessee in the first instance, and had then been applied for payments under the deeds. This Court has recently decided three cases which have a direct bearing in this connection. In Provat Kumar Mitter vs Commissioner of Income tax, West Bengal (1), the assessee had executed a deed of trust under which dividends from certain shares which continued to be his assets, were transferred to his wife. It was held that the case did not fall within section 16(1)(c), and that the rule in Bijoy Singh Dudhuria 's case (2) also did not apply. In Tulsidas Kilachand vs The Commissioner of Income tax, Bombay(1), the husband had created a trust of the shares, constituting himself as the trustee to pay to the wife dividends from those shares for a period of seven years. It was held that the case was not governed by section 16(1)(c) but by section 16(3)(b). In The Commissioner of Income tax, Bombay vs Sitaldas Tirathdas (4), the rule laid down by the Privy Council in Bijoy Singh Dudhuria 's case was considered along with the case of the Privy Council in P. C. Mullick vs Commissioner of Income tax, Bengal (5), and it was pointed out that the rule in Bijoy Singh Dudhuria 's case (2) applied only to those cases where it could be said that by an overriding title the income was diverted in such a way as never to become the income of the assessee. These three cases, in our opinion, afford a complete answer to the contentions of the appellants. An examination of the deeds of settlement shows that the disponer had stated that from the profits " payable to him " certain amounts in specified shares were to be paid to his wife and two daughters. No (1) ; (3) ; (2) (4) ; , (5) 385 doubt, the assessee in those deeds created a right in favour of the disponees to get the amounts direct from the firm, of which he was a partner. The tenor of the documents shows that the profits were first to accrue to him and were then applied for payments to the disponees. Learned counsel for the appellants contended that what had been assigned was an actionable claim, to wit, the right to profits, and therefore the profits were diverted, before they accrued to the disponer. This, in our opinion, is neither in accord ance with the law of partnership nor with the facts as we have found on the record. Under the law of partnership, it is the partner and the partner alone who is entitled to the profits. Astranger, even if he were an assignee, has not and cannot have a direct claim to the profits. By the deeds in question, the assessee merely allowed a payment to his wife and daughters to constitute a valid discharge in favour of the firm; but what was paid was, in law, a portion of his profits, or, in other words, his income. A glance at the account books of the firm, Messrs. Chari and Ram, clearly shows that the amounts were first credited in the Khata of Rangachari and then under his directions were transferred from his Khata to those of his wife and daughters. The dispositions, therefore, were, in law and in fact, portions of the income of Rangachari, after the income had accrued to him, and tax was payable by him at the point of accrual. In view of the decision of this Court in Sitaldas Pirathdas 's case (1), it cannot be said that the profits were diverted by an overriding title before they accrued to Rangachari; and the rule in Bijoy Singh Dudhuria 's case (2) cannot be called in aid. For the above reasons, we are in entire agreement with the High Court in the answer given and dismiss these appeals with costs. Appeals dismissed.

One Rangachari, a partner of a partnership firm, assigned by means of a deed of settlement a fourth share of the profits of the firm each to his wife, a married adult daughter and a minor daughter for 8 years with the right to receive the said share of profits absolutely and exclusively from the firm. The question which arose before the High Court on a reference under section 66(1) of the Income tax Act was " Whether the inclusion in the assessee 's total income of the profits settled by him on his wife and two daughters is justified in law ?" The assessee Rangachari relying on the rule laid down by the Privy Council in Bijoy Singh Dudhuria 's case claimed that the amounts payable to his wife and two daughters never became his income, being diverted by an overriding title and that those amounts could not be included in his total income for the purposes of assessment being excluded by reason of the third proviso to section 16(1)(c) of the Income tax Act. The High Court held that the third proviso was not attracted and that the income had accrued to the assessee in the first instance, and had then been applied for payments under the deeds. On appeal with a certificate of the High Court: Held, that the answer given by the High Court was correct. 381 An examination of the deeds of settlement showed that the disponer had stated that from the profits " payable to him " certain amounts in specified shares were to be paid to his wife and two daughters. No doubt, the assessee in those deeds created a right in favour of the disponees to get the amounts direct from the firm, of which he was a partner. The tenor of the document In, showed that the profits were first to accrue to him and were then applied for payments to the disponees. Under the law of partnership, it is the partner and the partner alone who is entitled to the profits. A stranger, even if he were an assignee, has not and cannot have a direct claim to the profits. By the deeds in question, the assessee merely allowed a payment to his wife and daughters to constitute a valid discharge in favour of the firm, but what was paid was, in law, a portion of his profits or, in other words, his income. The rule in Bijoy Singh 's case was not applicable to this case, and in view of the decision of this court in Sitaldas Tirathdas 's case it cannot be said that the profits were diverted by an overriding title before they accrued to the assessee. Provat Kumar Mitter vs Commissioner of Income tax, West Bengal ; Tulsidas Kilachand vs The Commissioner of Income tax ; The Commissioner of Income tax, Bombay vs Sitaldas Tirathdas ; , applied. Bijoy Singh Dudhuria vs Commissioner of Income tax, Bengal , held inapplicable.

The respondent No. 1 sued the second respondent (defendant No. 1) and the appellants (defendant Nos. 2 and 3) for specific performance of a contract whereunder the second respondent had agreed to sell his lands to the first respondent for Rs. 5,000 out of which Rs.4,000 were paid, and the balance Rs.1,000 was to be paid within 5 years whereafter the second respondent was to execute a sale deed in favour of the first respondent. The Munsif decreed the suit only for recovery of Rs,4,850 plus pendente lite and future interest on Rs.4,000 and this order was confirmed by the Civil Judge by dismissing the appeal of respondent No.1. A second appeal was preferred to the High Court by respondent N. 1 contending that the transfers in favour of the appellants, by respondent No. 2 were void being in contravention of Section 168 A of the U.P. Zamindari Abolition and Land Reforms Act, 1950. The appellants contested the appeal contending that for a transfer being hit by Section 168 A of the Act should be in respect of a specific piece of land and not a share in a holding and that the transfers were of a portion of the shares of respondent No. 1 in the disputed plot. The High Court allowed the appeal holding that the two transfers made were clearly hit by the provisions of Section 168 A(2) of the Act and that the benefit of Section 43 of the Transfer of property Act could not be availed of by the appellants as the sale deeds were void in the eye of law. 700 The appellant in their appeal to this Court contended that the sale made by respondent No. 2 to the 2nd appellant being hit by the provisions of Section 168 A of the Act, the subject matter of transfer got vested in the Government and the interest of respondent No. 2 in that part of the holding stood extinguished on the date of transfer and that the sale being void, he was left only with the subject matter of transfer, and that the respondent No. 2 having transferred that whole portion to the first appellant by sale deed such transfer being a transfer of the whole area it would be covered by the proviso under Section 168 A and as such, the sale would not be hit by the provisions of Section 168 A. The first respondent contended that as the sale deeds in favour of the two appellants have been held to be void, the High Court rightly decreed the suit; that he having been in possession of the land and the second respondent 's fragmented sales having been found to be void, even if the land would vest in the State, the first respondent would not be divested automatically and the State has to seek possession in accordance with the law. On the question as to what would be the effect of the two fragmented sales in favour of the appellants, setting aside the order of the High Court and remanding the matter, this Court, HELD: 1. The U.P. Zamindari Abolition and Land Reforms Act was passed as it was considered expedient to provide for the abolition of the Zamindari system which involved intermediaries between the tiller of the soil and the State in Uttar Pradesh and for the acquisition of their rights, title and interest and to reform the law relating to land tenure consequent upon such abolition and acquisition and to make provision for other matters connected therewith. [705E F] 2. The original Act did not define fragment. The definition of 'fragment ' was added by Section 2 of the U.P. Act XVIII of 1956 with a view to prevent fragmentation and promote consolidation of holdings in order to avoid uneconomic units. [705F G] 3. The object of the section 168 A(1) was to prevent fragmentation of land situated in a conolidated area and transfers that would result in fragmentation or further fragmentation shall be void and to such transfers, Section 167 will mutatis mutandis be applicable, when a fragment situated in a consolidated area is transferred. If transfer of a fragment is made in favour of tenure holder who has a plot contiguous to the fragment, the purpose of law is not defeated inasmuch as it will be 701 consolidated with the contiguous plot of the transferee. When the land held by a person in a consolidated area is already a fragment then as was provided previous to the amendment in 1961 the whole of the plot to which the fragment pertained was to be transferred. [708F 709A] 4. After the amendment, the invalidity and applicability of Section 167 is limited to a case where the transfer is not in favour of any such tenure holder and to the whole or so much of the plot in which the person has bhumidhar rights which pertains to fragment is thereby transferred. If the transferor has bhumidhari rights on the whole of the fragment the whole has to be transferred. If the person has bhumidhari rights only in a part of the plot that part on which he has bhumidhari rights can be transferred. The part on which the person has not bhumidhari rights is not covered by the provisions not because that would not result in further fragmentation but because he had transferable bhumidhari rights only on that portion and not on the other portion. [709A C] 5. The substitution of the words "bhumidhar with transferable rights" for the word "bhumidhar" would not make any difference when the bhumidhar had transferable rights but would make a difference where the bhumidhar had also lands with non transferable rights. [710C D] 6. Under the amended provisions the interest of a bhumidhar with transferable rights in his holding or in part thereof shall be extinguished when the holding or part thereof with bhumidhar rights has been transferred or let out in contravention of the provisions of the Act. In other words, when he had bhumidhar rights on the entire holding and the same is transferred or let out in contravention of the provisions of the Act his interest shall be extinguished. If he had bhumidhari rights only on a part thereof and it has been transferred or let out in contravention of the provisions of the Act his interest in bhumidhari rights in that part shall be extinguished. The reason behind the provision to make fragmentation is the need to prevent further fragmentation if the bhumidhar with his bhumidhari rights over a fragment tries to transfer the fragment, his right over the fragment is extinguished. [710D E] 7. In the instant case, the bhumidhar respondent No. 2 's land measuring 10 bighas, 12 biswas and 10 biswansis was a fragment. He entered into an agreement to sell the land on 5.4.1966 and the first respondent on payment of advance of Rs.4,000 is stated to have had possession of the land. That sale would attract the provisions of Section 702 168 A, if it resulted in transfer of the fragment. The sales to the appellant No. 1 was dated 2.9.1966 and to appellant No. 2 was dated 21.12.1966. These two sales would be convered by the old provisions of sections 166 and 167, which section did not deal with the case of bhumidhar but only by sirdar or asami. But section 168 A would be attracted and the provisions of Section 167 would mutatis mutandis be applicable. [710G 711B] 8. The High Court did not examine the facts of the case in light of the laws prevailing at the time. Festination justiate est noverea informateeni. Hasty justice is step mother of misfortune. Injustuim est nisitota lege inspecta, de una aliqua ejus particula proposita judicare vel respondere. It is unjust to decide or respond to any particular part of a law without examining the whole of the law. [711B, 711D E]

Against the judgment of the Single judge of the Punjab High Court dated January 5, 1953, in which he followed the decision of a Division Bench holding that section 7A of the Delhi and Ajmer Rent Control Act, 1947, was unconstitutional and void, the appellants preferred an appeal under the Letters Patent. Meanwhile the judgment or the Division Bench was brought up by way of appeal to the Supreme Court, and as the appeal was getting ready to be heard, the appellants made an application on January 5, 1959, for special leave to appeal to the Supreme Court against the judgment of the Single judge. No notice was given to the respondent to the application, and special leave was granted ex parte. The Letters Patents appeal was thereafter withdrawn by the appellants. When the appeal came on for hearing in due course, the respondent raised an objection to the hearing of the appeal on the grounds that the application for special leave was barred by limitation, that there were no sufficient reasons for condoning the long. delay of four years, and that the special leave granted ex parte should be revoked. 243 Held, that, in the peculiar circumstances of the case, leave should not be revoked. Expect in very rare cases, if not invariable, the Supreme Court should adopt as a settle rule that the delay in making an application for special leave should not condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant of the leave. Desirability of the Rules of the Supreme Court being amended suitably pointed out.

The respondent was one of the partners in a partnership firm registered under section 26A of the Indian Income tax Act, 1922. The Incometax Officer in making assessments for the assessment years 1944 45, 1945 46, and 1946 47 and 1947 48 determined the shares of each of the partners and taxed them according to the provisions of section 25 (3) (a) of the Indian Income tax Act,. One of the partners defaulted in the payment of tax and the Income tax Officer sought to recover the unpaid tax attributable to the share of the defaulting partner in the firm from the respondent. The respondent 's petition tinder article 226 challenging the attempted recover was allowed by the single Judge whose order was confirmed by the Division Bench. The Revenue by special came to this Court. It was urged on behalf of the Revenue that even though by section 23 (5) (a) the total income of each member of a registered firm is taxed it is the firm which is assessed to tax so that the tax attributable to the share of one partner can be recovered from another, the responsibility of all being joint and several. Reliance was also placed on section 44 of the Act. HELD : (i) Undoubtedly contractual obligations of a firm are enforceable jointly and severally against the partners. But the liability to pay income tax is statutory" it does not arise out of any contract, and its incidence must be determined by the statute. If the statute which imposes the liability has not made it enforceable jointly and severally against the partners, no such implication can arise merely because contractual liabilities (if a firm may be jointly and severally imposed against the partners.[825E F] (ii) There is nothing in section 44 of the Act which supports the contention that for payment of tax assessed against a partner of a registered firm individually under section 23(5)(a) of the Act, another partner becomes liable jointly and severally with the first partner to pay tax. [825C] The entire scheme of taxing the income of a registered firm in the hands of the individual partner is inconsistent with any assumption that for payment of tax assessed against a partner, other partners are liable. The tax assessed against a partner of a registered firm is assessed on his total income inclusive of the share in the firm 's income and the rate applicable is determined by the quantum of the total income of the partners[1825D E] Commissioner of Income tax, Madras vs section V. Angidi Chettiar, , Commissioner of Income tax, Bomaby vs Amritlal Bhogilal & Company, and Shivram Poddar vs lncometax Officer, Central Circle II, Calcutta, , distinguished.

Two groups known as the Singhania group and the Gupta Group were partners in M/s. India Supplies. Both were also interested in the business of Lakshmi Ratan Cotton Mills. In the present litigation the Gupta group was represented by the appellants and the Singhania group by the respondent. In the year 1942 Lakshmi Rattan Cotton Mills was the creditor of M/s. India Supplies for the approximate sum of Rs. 4,00,000. Lakshmi Ratan Cotton Mills was a debtor to the respondent for the approximate sum of Rs. 400,000. Lakshmi Ratan Cotton Mills demanded the sum of Rs. 4,00,000 from India Supplies. India Supplies could not repay Lakshmi Ratan Cotton Mills. Thereafter India Supplies proposed that the respondent should deposit a sum of Rs. 4,00,000 with India Supplies to wipe out the indebtedness of the India Supplies to Lakshmi Ratan Cotton Mills. The respondent accepted the 'said proposal and thereafter a letter dated 29, September 1942 was written by the head of the Gupta group on behalf of India Supplies to the respondent recording the agreement that "a sum of Rs. 4,00,000 should be debited to India Supplies as deposit at the usual rate of interest as agreed upon. " The respondent was to place to the credit of Lakshmi Ratan Cotton Mills a sum of Rs. 4,00,000 in its account with the respondent thus reducing the indebtedness of Lakshmi Ratan Cotton Mills from Rs. 9,00,000 to Rs. 5,00,000. Disputes and differences arose between the two groups thereafter. In 1944 there was an arbitration award. The Sing Hanias went out of both India Supplies and Lakshmi Ratan Cotton Mills, and the Gupta group carried on both the businesses. The present suit was, filed by the respondent in 1953. The claim was based on the aforesaid deposit of Rs. 4,00,000. The suit though originally filed in the court of the Civil Judge, Kanpur was tried by the Allahabad High Court in its original jurisdiction. The suit was decreed in favour of the respondent. With certificate appeal was filed in this Court. The questions for consideration were : (i) whether the money was deposited under an agreement and payable on demand so that limitation would commence from the date of demand within three years of which it was filed, or whether it was a loan made on 30th December 1942 in respect of which the suit was barred under article 59 by limitation, the same not having been filed within three years from the date of the loan; (ii) whether there was a demand for a part of the amount in 1943 and therefore limitation would start from that date. HELD: (i) The amount was a deposit and not a loan. The case of a deposit is something more than a mere loan of money. It will depend on the facts of each case whether the transaction is clothed with the character of a deposit of money. The surrounding circumstances, the relationship and character of the transaction and the manner in which the parties treated the transaction will throw light on the true form of the transaction. [577 H] 574 V.E, A. Annamalai Chettiar & Anr. vs section V. V. section Veerappa Chettiar, and Nawab Major Sir Mohammad Akbar Khan vs Attar Singh & Ors., 63 I.A. 279, referred to. Some of the partners of the appellant and the respondent in the year 1942 were common. It would be more explicable and natural course of events that monies would be kept in deposit with the appellant in order to enable them to have financial accommodation without immediate worry of repayment. The mere fact that money in specie was not paid would not be destructive of the case of deposit. The respondent acted as bankers. The way in which the respondent made entries in the pass book of the appellant was consistent with the roznamcha, khata and nakalbahi books. It was not a case of the respondent giving loan to the appellant for the obvious reason that the history of the transaction between the appellant and Lakshmi Cotton Mills showed that the appellant had to be put on a footing of financial stability by giving the appellant the use of the sum of Rs. 4,00,000 for a long time. The absence of any negotiable instrument was significant. A hundi or a promissory note would have been consistent with the case of a loan. The relationship between the parties the surrounding circumstances at the time of the transaction, the pecuniary position of the appellant were all overwhelming features to corroborate the oral as well as the documentary evidence of the respondent that the amount was deposited with the appellant. [580 E H] The arbitration award in the dispute between the parties gave directions on the basis that there were advances between the parties which were in the nature of deposit and were not covered by the award. , [581 A B] In contemporarious documents the appellant never said that it was a case of advancing loan. The non production of the appellant 's accounts coupled with the appellant 's staying away from the witness box indicated the inherent infirmities of the appellant 's case. [581 D] (ii)There is a consensus among the High Courts that there must be an unqualified demand for the whole sum before the limitation can start in case of demand for return of the amount deposited. Further, a demand in the year 1943 for a part of the amount would not be effective because there were common partners in the firms of respondent and the appellant. 1581 E G] Jogendranath Chakerbutty vs Dinkar Ram, A.I.R. 1921 Cal. 644, Motigauri vs Naranji, A.I.R. 1927 Bom. 362 and Subbaih Chetty & Ors. The appeal must accordingly be dismissed.

The appellant company which carried on business in tea garden tools and requisites and also acted as agents for selling tea, derived the bulk of its income from selling commission on tea. The assessment year in question is 1950 60. In the relevant previous year which ended on June 30, 1958 the assessee for the first time in its history entered into certain transactions in jute. On April 17, 1958 the assessee had contracted to purchase 1100 bales of B Twill and 2500 bales of corn sacks. the contract for B Twill was with two parties, M/s. Raghunath Sons (P) Ltd. for 500 bales and M/s. Mahadeo Ramkumar for 600 bales. The corn sacks were all purchased from Tulsider Jewaraj under three contracts for 800 bales, 1000 bales and 700 bales respectively. On June 18, 1958 the assessee entered into a contract with M/s. Lachhminarain Kanoria & Co. to sell the aforesaid quantities of B Twill and corn sacks. The assessee had no godown for keeping the goods and had not handled them. The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands. The amount realised on sale to M/s. Lachhminarain Kanoria & Co. came to Rs. 10,49,865/=. The assessee had however purchased the corn sacks and D Twill for Rs. 11,48,399/ . The transactions thus resulted in a loss of Rs, 98,534/=/ to the assessee and the assessee claimed adjustment of this loss in the computation of its income for the assessment year 1959 60. The Income tax officer held that the transactions involving mere transfer of delivery notes and not actual delivery of the goods were of a speculative character as contemplated in explanation 2 to sec. 24(1) and the loss could be set off only against speculation profits, and as there were no speculation profits is that year, he held that the loss would be carried forward and set off against speculation profits in the future. The appellate Commissioner on appeal by the assessee held that the transaction were not speculative and the loss should be treated as business loss. In appeal by the Department, the Tribunal held that this case came within the scope of Sec. 24(1 ) read with explanation 2 and restored the order of the Income tax officer. In reference, the High Court answered the question formulated by the Tribunal in the affirmative and against the assessee. Section 24(1) of the Indian Income tax Act, 1922, provides 'that where an assessee sustains a loss under any of the heads of income chargeable to income tax as enumerated in 9. 6 of the Act in any year, he shall be entitled to have the loss set off against his income, profits or gains under any other head in that year. This general provision is qualified by the first proviso which permits the set off of a loss in speculative business against the assessee 's profit and gains, if any, in a similar business only. Explanation 1 says that where the speculative transactions are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business. Explanation 2 defines a speculative transaction as a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity. This appeal has been preferred by the assessee company after obtaining special leave from this Court, Dismissing the appeal, 181 ^ HELD: The words actual delivery in explanation 2 means real as opposed to notional delivery. For the income tax purposes speculative transaction means what the definition of that expression in explanation 2 says. Whether a transaction is speculative in the general sense or under the Contract Act is not relevant for the purpose of this explanation. The definition of "delivery" in section 2(2) of the which has been held to include both actual and constructive or symbolical delivery has no bearing on the definition of speculative transaction in the explanation. A transaction which is otherwise speculative would not be a speculative transaction within the meaning of explanation 2 if actual delivery of the commodity or the scrips has taken place; on the other hand, a transaction which is not otherwise speculative in nature may yet 'be speculative according to explanation 2 if there is no actual delivery of the commodity or the scrips. The explanation does not invalidate speculative transactions which are otherwise legal but gives a special meaning to that expression for purpose of income tax only. The question referred to the High Court in the present case has been correctly answered. [186E G; 187D] D. M. Wadhwana vs Commissioner of Income tax West Bengal , approved. Raghunath Prasad Poddar vs Commissioner of Income fax, Calcutta , over ruled. Duni Chand Rataria vs Bhuwalka Brothers Ltd. ; Bayana Bhimayya and Sukhdevi Rathi vs The Government of Andhra Pradesh ; and The State of Andhra Pradesh vs Kolla Sreeramamurthy, ; , held inapplicable. Manalal M. Varma & Co. (P) Ltd. vs Commissioner of Income tax, and Butterworty vs Kingsway, , referred

One Hariba Bhagwat had a son Appaji and daughter Baja bai. Appaji in turn had a son Rakhmaji and a daughter Bhiku bai, the plaintiff who had flied a suit for possession and mesne profits of two houses. The suit was decreed by the Trial Court but on appeal reversed by the High Court. The Legal representative of the plaintiff then preferred this appeal by special leave confined to one of the houses, the parties having settled their dispute regarding the other house. Bajabal and her husband Ganpat Rao Page being issueless had adopted Rakhmaji. All of them belonged to villages situated in Ahmednagar District of Bombay Province, and are Dhangars (Shepards) by caste but had migrated to Indore. On Rakhmaji 's death Sonubai his childless widow succeeded to the properties as limited owner. She gifted the suit proper ty i.e. house No. 88 to Shanker Lanke a Brahmin, the first defendant by a registered gift deed dated October 31, 1944. Shanker Lanke in turn hypothecated the House to one Hira Lal, the first respondent on September 21, 1948. Sonubai died in 1947. The case of the plaintiff was that the family is gov erned by the Bombay School of Hindu Law wherein female Bandhu is an heir and thereby she was entitled to succeed to the estate of Rakhmaji; Sonubai, the issueless widow of Rakhmaji as limited owner had no power to dispose of the properties, so the gift deed and mortgage are void and do not bind her and the respondents are in unlawful possession as trespassers. The material defence relevant for the dis posal of this appeal is that the persons concerned are governed by the Banaras School of Hindu Law under which a female bandhu is not an heir. Hiralal 's case was that he had no objection to hand over the possession provided he was paid the consideration of Rs. 12,000 borrowed by Shanker Lanke, the donee. 760 The Trial Court came to the conclusion that the parties are governed by the Bombay School and not the Banaras School ,of Hindu Law and the plaintiff is the heir of Rajkhmaji. The gift deed was declared void and not binding on the plaintiff and the suit was decreed and the claim for refund of the mortgage money was rejected. Hira Lal appealed. It was contended before the High Court that the plaintiff 's family belonged to Dhangar caste, being migrants from U.P. (Mathura) to Aurangabad from where they had migrated to Central Province (now Madhya Pradesh) and were governed by the Banaras School of Hindu Law. This contention found favour with the High Court which placing reliance solely on the recital of the Gazetteer concluded that the parties had migrated from Mathura and thereby they were governed by the Banaras School of Hindu Law under. which the female Bandhu is not an heir to succeed to the estate of the last male holder. Reversing the decree passed by the Trial Court, the suit was dismissed. This Court in allowing the appeal by the legal represen tative of the plaintiff, HELD: In India a Hindu is governed by his personal branch of law which he carries with him where ever he goes. But the law of the province wherein he resides prima facie governs him and in this case and to this extent only the law of domicile is of relevance or importance. But if it is shown that a person came from another Province, the presump tion will be that he is governed by the law or the special custom by which he would have been governed in his earlier home at the time of migration. [767B C] Migration is changing one 's abode, quitting one 's place of birth and settling permanently at another place. The burden of proving migration lies on the person setting up the plea of migration. Migration can not be presumed but it mast be established by abduction of evidence. [764D G] Section 37 of the Evidence Act 1872 postulates that any statement made in Govt. Gazette of a public nature is a relevant fact. Section 57(13) declares that on all matters of public history, the Court may resort for its aid to appropriate books or documents of reference and section 81 draws a presumption as to the genuineness of Gazettes coming from proper custody. [764H; 765A] The State of facts contained in the official Gazetteer made in the course of the discharge of the official duties on private affairs or on 761 historical facts in some cases is best evidence of facts stated therein and is entitled to due consideration but should not be treated as conclusive in respect of matters requiring judicial adjudication. [766B C] The onus lies on the person alleging that the family had renounced the law of the origin and adopted that prevailing in the place to which he had migrated. The plaintiff and her family on migration from Ahmednagar carried with them to Indore their personal law, namely the Bombay School of Hindu Law under which a Hindu female is recognised to be an heir to last male holder of the Estate and takes the property as an absolute owner. The Plaintiff being the only nearest bandhu of Rakhmaji, is entitled to succeed to his estate as an heir and thus entitled to the possession of the House in question with mesne profits. [767D; 768B; A] Keshao Rao Bapurao & Anr. vs Sadasheorao Dajiba, AIR 1938 Nagpur 163; Rajah Mattu Ramalinga Setupati vs Peria nayagum Pillai, [1873 74] L.R. 11A 209 at p. 238; Martand Rao vs Malhar Rao, [1927 28] L.R. 551 A 45 at 48; Arunachel lam Chetty vs Venkatachellapathi Guru Swamigal, [1919] L.R. 46 IA 204; Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors., ; at p. 788; The Poohari Fakir Sadavarthy of Bomdilipuram vs The Commission er, Hindu Religious & Charitable Endowments, [1962] Suppl. 2 SCR 276: Mahant Shri Srinivasa Ramanuj Das vs Surajnarayan Dass & Anr., [1966] Snpp. SCR 436 at p. 447; Balwant Rao & Ors. vs Bali Rao & Ors., AIR 1921 P.C. 59; Udebhan Rajaram vs Vikram Ganu, ; Bhagirathibai vs Kah nujirav, ILR 11 Bombay 285; Girdhari Lall Roy vs The Bengal Government, [1867 79] Moore 's Indian Appeals 448 and Muthus wami Mudaliyar & Ors. vs Sunamedu Muthukumaraswami Muddali yar, [1895 96] LR 23 IA 83, referred to.

Under a scheme a Board of Trustees was appointed for administration of the Durga and a Masjid for the maintenance of which the Nawab of Carnatic had granted two villages in Inam. The income of the institution after disbursing the expenses had since long been shared by the descendants in four families in equal shares. The scheme also provided that the surplus income was to be distributed amongst the members of the said four families. One of the descendants died leaving him surviving his wife and two daughters who were obstructed in the performance of the "Urs" by the appellant 's father. The said Muslim female members filed a suit for declaration that they were entitled to enjoy the properties and to manage the Durga, perform the "Urs" festival and receive all incomes, endowments and perquisites thereof once in every eight years according to their turn. The right to a share in the income was denied by the appellant contending that by custom in the family, females were excluded from inheritance and that the claim was barred by the law of limitation and that, in any event, the suit for mere declaration was not maintainable. Held, that a suit for declaration of rights with a consequential relief for injunction was not a suit for declaration simpliciter; it was a suit for declaration with further relief and was not barred under article 120 Of the Indian Limitation Act merely because the contesting defendant did not recognise the right. The period of six years prescribed by article 120 is to be computed from the date when the right to sue accrued and there could be no right to sue until there was an accrual of the right asserted in the suit and its infringement or at least a clear and unequi vocal threat to infringe that right. If under the law a person was entitled to any legitimate right, the mere denial of the right will not set the period of limitation running against the person entitled to such right. 68 Held, further, that on the enactment of the Shariat Act 26 Of 1937, as amended by the ' Madras Act r8 Of 1949, the Muslim Personal Law applies in all cases relating to the matters specified notwithstanding any customer usage to the contrary even at the stage of appeals, if other conditions prescribed under the Act are fulfilled. Kunj Behari Prasadji Purshottam Prasadji vs Keshavld Hiralal. 567, discussed. Syed Roshan Ali vs Mt. Rehmat Bibi and Others, A.I.R. 1943 Lah. 219, disapproved.

Appeals Nos. 480 to 487 of 1960. Appeals by special leave from the judgment and order dated July 15, 1960, of the Allahabad High Court in Civil Misc. Writ Nos. 1554, 1561, 1553, 1560, 1556, 1558, 1559 and 1557 of 1960. N. C. Chatterjee, R. K. Garg, section C. Agarwal, D. P. Singh, K. K. Sinha, V. A. Seyid Muhamad and M. K. Ramamurthi, for the appellants (in C. As. Nos. 480 and 481 of 60). R. K. Garg, M. K. Ramamurthi, section C. Agarwal, D. P. Singh, V. A. Seyid Muhamad and K. K. Sinha, for the appellants (in C. As. 482 to 487 of 60). G. N. Kunzru and I. N. Shroff, for the respondents. January 10. The Judgment of the Court was delivered by HIDAYATULLAH, J. These are eight appeals against the judgment and " decree " of the High Court of Allahabad dated July 15, 1960, with special leave granted by this Court. By the writ petitions, which failed before the High Court, the appellants had asked that Resolutions Nos. 90, 94 to 96 and 99 to 102 passed by the Executive Council of the Banaras Hindu University on May 15, 1960, terminating their services from June 1, 1960, be quashed. The names of the appellants, the posts they held and the gist of the Resolutions passed against them have been set down below : Group I 1. Dr. Akshaibar Lal: Reader in College of (C. A. No. 480 of 1960) Agriculture. (Resolution No. 100 4months ' pay in lieu of notice) 2. Dr. Gopal Tripathi Professor of Chemi (C. A. No. 482 of 1960) cal Engineering and Principal, College of Technology. (Resolution No. 101 4months ' pay in lieu of notice) 389 3. Pandit Ram Vyas Pandey : Reader and Head of (C. A. No. 486 of 1960) Department of Jyotish Sanskrit Maha vidyalaya. (Resolution No. 99 under cls. 4 and 7 of the agreement dated March 26, 1931, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice) 4. Dr. Gauri Shankar Tiwari : Lecturer in Chemis (C. A. No. 487 of 1960) (Resolution No. 102 4 months ' pay in lieu of notice) Group II 5. Dr. Rain Deo Misra: Professor and Head (C. A. No. 481 of 1960) of Department of Botany, College of Science. (Resolution No. 94 under cls. 4 and 7 of the agreement dated February 3, 1959, and Ordinance No. 6 of the Ordinances of the University 4 months ' pay in lieu of notice) 6. Mr. Ganesh Prasad Singh: Lecturer in Physical (C. A. No. 483 of 1960) (Resolution No. 95 under cls. 4 and 7 of the agreement dated January 18, 1946, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice) 7. Mr. Radhey Shyam Sharma: Lecturer, College of (C. A. No. 484 of 1960) Technology. (Resolution No. 90 under cls. 4 and 9 of the agreement dated January 21, 1957, and Ordinance No. 6 of the Ordinances of the University 4 months ' pay in lieu of notice) 8. Dr. Ram Yash Roy: Lecturer in Botany, (C. A. No. 485 of 1960) College of Science. (Resolution No. 96 under cls. 4 and 7 of the agreement dated August 12, 1932, and Ordinance No. 6 of the Ordinances of the University 6 months ' pay in lieu of notice). 390 The cases of the appellants are very similar; but fall into two groups as indicated above. The differences are not many, and some of them are indicated in the gist of the resolutions noted against their names. Other differences will appear from the facts, which are given below. The affairs of the Banaras Hindu University, for reasons with which we are not concerned, had been deteriorating, and a situation had arisen which required intervention immediately. The President of India, in his capacity as Visitor and in exercise of the powers conferred by section 5(2) of the , appointed a Committee of Enquiry (known as the Mudaliar Committee) consisting of: 1. Dr. A. L. Mudaliar (President) 2. Mr. M. C. Mahajan 3. Dr. P. Subbarayan 4. Sucheta Kripalani 5. Dr. Nairoji Wadia (Members) to enquire into and report, inter alia, on the general state of discipline in the University, keeping in view the disturbances in some of the Institutions of the University, and to suggest remedies and measures of reform for the betterment of academic life and efficient functioning of the University. The Committee made a report suggesting that a " Screening Committee " should be appointed to review the appointments made to the teaching staff and the work of the teaching staff, and that action should be taken in the light of the findings of the Screening Committee. On June 14, 1958, the President of India promulgated an Ordinance (IV of 1958) to amend the . By section 8 of the Ordinance, the Statutes of the University were amended, and in place of Statute No. 30, another Statute was substituted, which set up a " Screening Committee ", consisting of (a) a person who is or has been a Judge of a High Court (Chairman), (b) the Vice Chancellor (Ex officio) and (c) a person having administrative or other experience in educational matters, to examine the cases of all persons holding teaching, administrative or other 391 posts in the University at the commencement of the Ordinance, in respect of whom there was reason to believe that their continuance in office would be detrimental to the interests of the University, and to forward its recommendations to the Executive Council to take such action as it may deem fit. The Ordinance of the President was repealed by the Banaras Hindu University (Amendment) Act, 1958 (XXXIV of 1958), which re enacted Statute No. 30 as follows: " 30. (1) If the Executive Council has reason to believe that the continuance in office of any person who on the 14th day of June, 1958, was holding any teaching, administrative or other post in the University would be detrimental to the interests of the University, it may, after recording briefly the grounds for such belief, refer the case of any such person, together with the connected papers, if any, in its possession, to the Solicitor General to the Government of India: Provided that, where an allegation of the nature referred to in this subsection relates to a member of the Executive Council who was holding any teaching, administrative or other post in the University on the said date, the Executive Council shall, without considering the allegation, refer the case of such person, together with a copy of the allegation, to the Solicitor General to the Government of India. (2) If on any such reference the Solicitor General to the Government of India is of opinion that there is a prima facie case for inquiry, he shall refer the case of the person concerned to a Committee to be constituted for the purpose by the Central Government and known as the Reviewing Committee, which shall consist of the following persons, namely : (a) a person who is or has been a Judge of a High Court nominated by the Central Government who shall be the Chairman of the Committee; and (b) two persons nominated by the Central Government from among persons who have had administrative or other experience in educational matters, 392 (3) It shall be the duty of the Reviewing Committee to examine the case of every person referred to it by the Solicitor General; and the Reviewing Committee shall, after holding such inquiry into the case as it may think fit, and after giving to the person concerned an opportunity of being heard, if he so desires, forward its recommendations to the Executive Council. (4) The meetings of the Reviewing Committee shall be convened by such person as may be appointed for this purpose by the Chairman. (5) On receipt of the recommendations of the Reviewing Committee, the Executive Council shall take such action thereon as it may think fit: Provided that when the recommendations relate to any such person as is referred to in the proviso to sub section (1), such person shall not take part in any meeting of the Executive Council in which the recommendations are considered. (6) Before taking any action against any person on the recommendations of the Reviewing Committee, the Executive Council shall give him a reason. able opportunity of being heard. " Under the powers granted by this Statute and after sundry procedure, the Solicitor General sent up the cases of the appellants (and some others, who are not before us) to the Reviewing Committee. The appellants appeared before the Reviewing Committee and represented their cases. Except in the case of Mr. Radhey Shyam Sharma (Civil Appeal No. 484 of 1960), whose case was kept pending because certain matters were sub judice, the Reviewing Committee sent its findings to the University. These findings were considered in respect of the four appellants in Group I (above), and on February 13, 1960, the Executive Council passed Resolutions Nos. 436 to 439 calling upon them to show cause why their services be not terminated, in view of the findings of the Reviewing Committee that the continuance in office of those appellants was detrimental to the interests of the University, which the Executive Council had accepted. These four appellants showed cause on March 5, 1960, No notices 393 were, however, sent to the four appellants in Group II above, and this is one distinguishing feature in the cases. The four appellants (Group I) filed petitions under article 226 of the Constitution (W. Ps. Nos. 712 to 715 of 1960) on March 9,1960, in the High Court of Allahabad for relief against the proposed action. On the same day D. section Mathur, J. passed an ad interim order as follows: " The respondents Nos. 1 to 3 are directed until further orders, not to take any further proceedings against the petitioners. " The Registrar of the University then applied to the High Court, and on April 25, 1960, Jagdish Sahai, J., made the following order: " In supersession of the interim order dated 9 3 1960, I order that the proceedings before respondent No. 2, Executive Council of Banaras Hindu University, arising out of the recommendations of the Reviewing Committee shall remain stayed. " On May 15, 1960, the Executive Council of the University passed a number of Resolutions. Resolution No. 89 took into consideration the explanations sent by the four appellants (Group 1) on March 5, 1960, and the order of the High Court, and it was resolved: ". . that the consideration of the above cases be postponed till after the writ petitions above mentioned are disposed of by the High Court. " On the same day, however, Resolutions Nos. 99 to 102 were passed terminating the services of the four appellants (Group 1) from June 1, 1960, giving to them four or six months ' salary, in lieu of notice. In the Resolution concerning Pandit Ram Vyas Pandey, there was a mention that the action was taken under cls. 4 and 7 of the agreement executed by him and Ordinance No. 6 of the Ordinances of the University. In the remaining three cases, it was not stated under what exercise of power the action was taken. Even earlier than the notice to show cause issued on February 13, 1960, explanations were called from Pandit Ram Vyas Pandey and Dr. Gopal Tripathi by Resolutions Nos. 278 and 281 dated September 9, 1959, and these explanations were ordered to be filed by Resolution No. 103 50 394 passed on the same day. Four Resolutions were also passed terminating the services of the other appellants belonging to Group II. It was after these Resolutions were communicated that the eight petitions were filed by the appellants in the High Court of Allahabad. The High Court by a common judgment, which is under appeal, dismissed all the petitions with costs. The case of the appellants, broadly stated, is that the Executive Council could not take recourse to the provisions of Ordinance No. 6 of the Ordinances of the University, having started action under Statute No. 30, that Ordinance No. 6 was subordinate to, Statute No. 30 and could not prevail where Statute No. 30 applied, that action against the four appellants in Group I was stayed by the High Court and Resolution No. 89, and that any action thereafter under the agreement or Ordinance No. 6 was incompetent. The action of the Executive Council was characterised as mala fide and a fraud upon the University Act and Statute No. 30. The High Court did not accept any of these contentions. Before us, the same points have been urged again, and in reply, the University contends that the Executive Council could take action Under the terms of the agreements, where such agreements existed, or under Ordinance No. 6 or Statute No. 30 at its Option, and that where alternative remedies were provided by law, all or any. of the remedies could be invoked. Before we deal with these arguments, it is necessary to examine closely the powers of the Executive Council of the University, as they can be gathered from the , the Statutes and Ordinanaces framed under it. The Act was passed in 1915 (XVI of 1915), but it was amended in 1930, 1951 and 1958. Originally, the Act provided for the framing of Statutes and Regulations by the University ; but in 1951, the existing Regulations were deemed to be the first Ordinances under section 18(2) of the amended Act. A further power to make Regulations was conferred by section 19. Thereafter, there were Regulations in addition ,to the University Act, Statutes and Qrdinances, We 395 are not concerned with the Regulations, and no reference need be made to them except to say that they ranked below the Ordinances and had to be consistent, with the Act, the Statutes and the Ordinances. In the Act, the word "Statute" was defined to ' mean " the Statutes for the time being in force ", and ' there was an analogous definition of the word " Ordinances ". Section 17(2) of the Act enacted that " the first Statutes shall be those set out in Schedule I ". The power to frame Statutes was conferred on the Executive Council by section 17(3), but was subject to the previous approval of the Visitor. This sub section, as it was amended by section 4 of the Banaras Hindu University (Amendment) Act, 1958, read as follows: " The Executive Council may, from time to time, make new or additional Statutes or may amend or repeal the Statutes; but every new Statute or addition to the Statutes or any amendment or repeal of a Statute shall require the previous approval of the Visitor who may sanction, disallow or remit it for further consideration. Section 4A of the Act invested the University with powers, and sub sections (7) and (13) may be quoted here: " (7) to institute professorships, readerships, lectureships and other teaching posts required by the university and to appoint persons to such professorships, readerships, lectureships and other posts; (13) to create administrative, ministerial and other necessary posts and to make appointments thereto. " Section 7 of the Act named the officers and authorities of the University, but power was reserved to the University to declare, by statutes, other officers and authorities of the University. In addition to being an authority of the University, the Executive Council was appointed the executive body of the University. Sub section (2) of section 10 of the Act laid down: " The Executive Council shall exercise such powers and perform such duties as may be vested in it by the Statutes. " Section 17 of the Act provided how the statutes were to be framed and what they were to contain. We 396 have already referred to the first Statutes of the Uni versity which were placed in Schedule of the Act and the power of the Executive Council to make new or additional Statutes or to amend or repeal existing Statutes subject to the prior approval of the Visitor. Section 17 provided: " 17(1). Subject to the provisions of this Act, the Statutes may provide for all or any of the following matters, namely: (c) the appointment, powers and duties of the officers of the University. " From the above analysis, it is clear that the Act created the Executive Council as an authority and the executive body of the University; but its powers were conferred and its duties were created by the Statutes. The source of power and duties in respect of the Executive Council was thus the Statutes under the authority of the Act. Section 18 of the Act (as amended in 1951) provided: " 18(1). Subject to the provisions of this Act and the Statutes, the Ordinances may provide for all or any of the following matters, namely: Ordinances: emoluments and terms and conditions of service of teachers of the University. " The Ordinances were thus made subordinate to the Act and the Statutes, and could not go beyond them or derogate from them. One more provision of the Act as amended in 1951 may be read here. It is s.19A,which provided: " 19A. (1) Every salaried officer and teacher of the University shall be appointed under a written con. tract, which shall be lodged with the University and a copy of which shall be furnished to the officer or teacher concerned. (2) Any dispute arising out of a contract between the University and any of its officers or teachers shall, at the request of the officer or teacher concerned or at the instance of the University, be referred to a Tribunal of Arbitration consisting of one member appointed 397 by the Executive Council, one member nominated by the officer or teacher concerned and an umpire, appointed by the Visitor, and the decision of the Tribunal shall be final. " The powers granted to the Executive Council by the Statutes may now be seen. Statute No. 18 was amended in 1958, and is referred to as amended. It laid down: " 18(1). The Executive Council shall, subject to the control of the Visitor, have the management and administration of the whole revenue and property of the University and the conduct of all administrative affairs of the University. (2) Subject to the provisions of the Act, the Statutes and the Ordinances, the Executive Council shall, in addition to all other powers vested in it, have the following powers, namely: (i) To appoint, from time to time,. Principals of Colleges and institutions established by the University, and such Professors, Readers, Lecturers and other members of the teaching staff, as may be necessary, on the recommendation of Selection Committees constituted for the purpose (Proviso omitted) (ii) to appoint members of the administrative staff or to delegate the power of appointment to such authority or authorities, or officers as the Executive Council may, from time to time, by resolution, either generally or specially direct;. " The power of appointment was thus conferred by the Statutes on the Executive Council. We now turn to the Ordinances, where the disciplinary rules are to be found. On October 13, 1958, the Executive Council by Resolution No. 181 reconstituted the material Ordinance. Chapter III in part I of the Banaras Hindu University Calendar (1958) contains the terms of appointment, grades, salary and conditions of service of teachers, officers and other employees of the University. That Chapter is divided into many sections and sub sections. Section 5 deals with teaching and administrative posts, and section 6, with the conditions 398 of service and terms of appointment. Ordinance No. 2 in this section lays down: " The conditions of service of the staff shall be embodied in the Agreement Form of service. Every employee shall on confirmation sign the agreement Form. " Ordinance No. 6, before its amendment, read: " The Executive Council shall be entitled to terminate the engagement of an employee (i) on grounds of misconduct and (ii) physical unfitness for good cause and after calling for and considering his explanation and after giving four months ' notice in writing or payment of four months ' salary in lieu of notice. The Ordinance was unhappily worded. The expression "physical unfitness for good cause" hardly makes sense. More difficulty arises by the use of the conjunction "and". That word used for the first time in the Ordinance is obviously used disjunctively; but on the second and third time it is used conjunctively, introducing two conditions precedent. So far, there is no dispute, though much bad drafting. Dispute arises over the last use of the conjunction 'and" in the Ordinance. The appellants contend that it must be read conjunctively as introducing a third condition precedent, while the University urges that it is a separate power of termination unconnected with the others. The High Court was persuaded to read the clause as interpreted by the University and, in our opinion, rightly. In 1958, the Executive Council re framed this Ordinance but surprisingly enough, without any better success. The re enacted Ordinance, as printed in the amendment slip, read: " 6. The Executive Council shall be entitled to terminate the engagement of an employee for (i) misconduct, or (ii) physical unfitness, or (iii) inefficiency, or (iv) breach on his part of one or more of the terms of his agreement with the University, after 399 calling for and considering his explanation in each of the cases mentioned above; or (v) after giving four months ' notice or payment ' of four months ' salary in lieu thereof. The dispute this time arises from the careless use of the word "or". The Ordinance mentions four reasons for termination of services, which are numbered (i) to (iv). In each of those cases, there is the condition precedent that explanation must be called for and considered. So far, the meaning is clear, even though the drafting is far from commendable. Then follow a semi colon and "or" and number (v). The word "or" does not seek to create an option between calling for and considering an explanation and a four months ' notice, etc. The number (v) and the semi colon between " mentioned above " and " or " do not permit this reading. The difficulty, however, does not end there. If we read the fifth clause as connected independently with the opening words, we get this: " The Executive Council shall be entitled to terminate the engagement of an employee for . . . . . . . . . (v) after giving four months ' notice. . . which makes the word "for " superfluous in the sentence. In our opinion, the sense of the Ordinance can be obtained by rearranging the matter thus: " 6. The Executive Council shall be entitled to terminate the engagement of an employee for (i) misconduct, or (ii) physical unfitness, or (iii) inefficiency, or (iv) breach on his part of one or more of the terms of his agreement with the University, after calling for and considering his explanation in each of the cases mentioned above; or (v) after giving four months ' notice or payment of four months ' salary in lieu thereof " This means that, if action is taken under cls. (i) to (iv), an opportunity of showing cause against the termination of the service must be given; but action can also be taken to terminate the service, without assigning a 400 cause, on four months ' notice or four months ' salary ,in lieu of notice. The case of the University is that all these orders of termination of service were passed under the power granted by cl. (v) of this Ordinance, modified by the terms of the agreements as they existed. The result of this analysis shows that the power of the University to terminate the services of the incumbents was derived from (a) agreements, (b) Ordinances, and (c) Statute No. 30. The agreements merely represented the general right of a master to terminate the services of incumbents, where they were subject to agreements, after reasonable notice, without giving any reason. The Ordinances, in addition to preserving that right, gave power to terminate service for proved misconduct, inefficiency or physical unfitness. These powers, unless used according to the stated conditions, were unexercisable, and in the case of a service which was protected against arbitrary action, being perma nent, could only be invoked in an appropriate instance. In those cases which would fall within the categories of proved misconduct, inefficiency and physical unfitness, the University was required to take action in accordance with the Ordinance and the Rules. This was the position before the new Statute No. 30 was added by Parliament. This legislative measure was undertaken as the result of the sorry state of affairs of the University, and a special ground was required to be proved. It was that the continuance of an incumbent was detrimental to the interests of the University. The power to terminate the services of an incumbent on this ground was hedged in with appropriate safeguards, due to the struggle for power which it is said, had arisen in the University in the past; and though the Mudaliar Committee had suggested a Screening Committee to go into the cases of all teachers, Parliament thought it necessary that before any case reached the Screening Committee (renamed the Reviewing Committee) it should be scrutinised by the Solicitor General. The procedure which the new Statute enacted, ensured fair play and proper scrutiny. First, the Executive Council had to resolve that the continuance in office of any particular person 401 was detrimental to the interests of the University. The reasons for such belief had to be recorded briefly, and the Resolution together with the connected papers had to be sent to the Solicitor General. In the case of a teacher who was a member of the Executive Council, the Executive Council was not to consider the allegations but to send the papers to the Solicitor General. The Solicitor General had to decide if there was a prima facie case for enquiry, and then he was to refer suitable cases to the Reviewing Committee. The Reviewing Committee was then to enquire into the matter, and forward its recommendations to the Executive Council. The Executive Council was thereafter required to proceed under cl. (6), which was as follows: " Before taking any action against any person on the recommendations of the Reviewing Committee, the Executive Council shall give him a reasonable opportunity of being heard. " The power of the Executive Council was conferred by cl. 5, which provided: " On receipt of the recommendations of the Reviewing Committee, the Executive Council shall take such action thereon as it may think fit. " The procedure laid down in Statute No. 30 was followed by the University. The cases of the appellants went before the Solicitor General and then before the Reviewing Committee. In seven cases out of eight, ' the Reviewing Committee gave its opinion. In four out of seven cases, a show cause notice was issued under cl. 6 but not in others; and the four appellants (Group 1) also showed cause. They also obtained a stay from the High Court of Allahabad against action under Statute No. 30, and the Executive Council decided to postpone consideration of their cases. But the Executive Council abandoned action under Statute No. 30, and proceeded to act under powers which, it thought, flowed from the agreements and the Ordinances, and terminated the services of the eight appellants, giving four or six months ' salary in lieu of notice. 51 402 In so far as the power of terminating services with. out notice was concerned, the general power could not be invoked, when allegations of conduct detrimental to the interests of the University had already been made and scrutinised by the Solicitor General and the Reviewing Committee and the matter was pending before the Executive Council. The powers granted by the Ordinances are expressly subject to the Statutes, and the Ordinances cannot prevail over the Statutes. Statute No. 30 provided for special action in special circumstances. The existence of the special circumstances is expressly admitted, inasmuch as the cases were referred to the Reviewing Committee. The existence of the special circumstances and the special remedy excluded the right of the University to invoke its general powers, not to start with, but after the special procedure had been deliberately adopted and had commenced. If the cases of these appellants had not been sent to the Solicitor General and the Reviewing Committee at all, other considerations might have arisen. The question is whether after the special procedure was once invoked, it could be dropped in the middle and other powers exercised. The University relies on three arguments in this connection. It is first contended that the powers of the University were cumulative, and that the University could resort to any of the remedies open to it. Reliance is placed in support of this argument on Shankar Sahai vs Din Dial (1) (observations of Mahmood, J., at p. 418), Om Prakash Gupta vs State of U. P. (2), The State of Madhya Pradesh vs Veereshwar Rao Agnihotry 3 ), Brockwell vs Bullock (1), Seward vs " Vera Cruz" (5) and Barker vs Edger (6). It is not necessary to refer to these cases in detail. It has been laid down recently by this Court that, where the law allows alternative remedies, one or the other or both can be invoked unless one remedy is expressly or by necessary implication excluded by the other (See State (1) All. 409. (2) ; (3) ; , (4) (5) (6) [1898] A.C. 748 (P.C.), 403 of Kerala vs G. M. Francis and Co. (1)). The question thus is whether there is anything expressly stated by law or clearly implied which would exclude powers under the agreements and the Ordinances, when action has been taken under the Statutes. The University Act expressly makes the Ordinances subject to the Statutes, and in case of any clash between them, the Ordinances must be made to stand down. Further, Statute No. 30 was enacted by Parliament to meet a special situation, and contained a code for dealing with certain special kinds of cases. To that extent, the implication is not only one way, but is also clear. The University could not, having started enquiries under Statute No. 30, abandon the enquiries in midcourse and pass on to something else. This is illustrated by the contradictory Resolutions passed on the same day. In the case of the four appellants belonging to Group I, action under Statute No. 30 was deferred till after the decision of the High Court. But one is tempted to ask what possible further action was con templated when their services were terminated the same day. It may be pointed out here that dropping of action under Statute No. 30 deprived the appellants of the right to show cause against what had been alleged against them or found by the Reviewing Committee. The appellants characterised the whole action as lacking in bonafides. The action can only be questioned if it is ultra vires ' and proof of alien or irrelevant motive is only an example of the ultra vires character of the action, as observed by Warrington, L.J., in the following passage: " My view then is that only case in which the Court can interfere with an act of a public body which is, on the face of it, regular and within its powers, is when it is proved to be in fact ultra vires, and that the references in the judgments in the several cases cited in argument to Lad faith, corruption, alien and irrelevant motives, collateral and indirect objects, and so forth, are merely intended when properly understood as examples of matters (1) ; 404 which if proved to exist might establish the ultra vires character of the action in question " (Short vs Poole Corporation (1). We are not concerned so much with the motives, nor even with the justice of the action as with its legality, and, in our opinion, having invoked Statute No. 30 in the special circumstances and having gone on with that procedure, it was not possible to undo everything and rely upon other powers, which were not only subordinate but were clearly not available in those special circumstances which led, to action under Statute No. 30. The next argument is that Statute No. 30 itself left liberty of action, inasmuch as el. 5 gave power to the Executive Council to act as it thought fit. To begin with, it is wrong to think that the words conferring discretion are to be read in the abstract. Those words have to be read within the four corners of Statute No. 30. Tile words are permissive, no doubt, as to the choice of action, but are imperative in so far as they require some act completing the intent and purpose of the enquiry itself. The words " shall take such action thereon as it may think fit " give liberty of action on the recommendations of the Reviewing Committee, but lay a duty to form an opinion. The words do not give a discretion to take action outside the Statute. Lastly, it is argued that the Executive Council as the appointing authority had the power also to dismiss, and reference is made to sections 4(7) and 4(13) of the Act and section 16 of the General Clauses Act. None can deny that the University did possess such a power. The question is whether it exercised it correctly under the Statutes and Ordinances. We are quite clear that the Executive Council did not. We may say here that we have not accepted the contention that the action of the Executive Council was based upon malice or any indirect or oblique motive. The error was in thinking that there were cumulative or alternative powers, even after the adoption of the special procedure under Statute No. 30. We are, therefore, of opinion that (1) , 91. 405 the impugned Resolutions were ultra vires and should be quashed. In the result, the appeals are allowed. Resolutions Nos. 90, 94 to 96 and 99 to 102 dated May 15, 1960, of the Executive Council of the Banaras Hindu University are quashed, and an appropriate writ or writs shall issue to the respondents to that effect. The respondents shall pay the costs of these appeals, as also of the High Court. Only one set of hearing fee here and in the High Court shall be allowed. Appeals allowed.

On June 14, 1958, the President of India promulgated an Ordinance to amend the . By section 8 of the Ordinance, the Statutes of the University were amended, and in place of Statute NO. 30, another statute was substituted, which set up a " Screening Committee " to examine the cases of all persons holding teaching, administrative or other posts in the University at the commencement of the Ordinance, in respect of whom there was reason to believe that their continuance in office would be detrimental to the interests of the University, and to forward its recommendations to the Executive Council to take such action as it may deem fit. The Ordinance was repealed by the Banaras Hindu University (Amendment) Act, 1958, which re enacted Statute No. 30. Under the re enacted Statute before any action could be taken by the Executive Council as referred to above, the matter had first to be referred to the Solicitor General of the Government of India, who, if he was of the opinion that there was prima facie case for inquiry, shall refer the case of the person concerned to a committee, known as the Reviewing Committee. On receipt of the recommendations of the Reviewing Committee, the Executive Council was to take such action thereon as it thought fit, after giving the person concerned a reasonable opportunity for being heard. Apart from Statute No. 30, added by Parliament, the Executive Council could terminate the engagement of an employee by taking action under the terms of the agreement, where such agreement existed, or under Ordinance No. 6, framed under the Act, without assigning a cause, on four months ' notice or four months ' salary in lieu of notice. The cases of the appellants who held posts under the Univer sity were considered in accordance with the procedure laid down in Statute No. 30 by the Solicitor General who then sent up their cases to the Reviewing Committee. The appellants appeared before the Committee and made their representations. The Committee sent its findings in respect of the appellants except one to the Executive Council who then called upon four of them to show cause why their services should not be terminated, in view of the 387 findings of the Committee that the continuance in office of those appellants was detrimental to the interests of the University. No notices, however, were sent to appellants 2, 4, 5 and 6. Appellants 1, 3, 7 and 8 having filed petitions in the High Court of Allahabad under article 226 of the Constitution of India for relief against the proposed action and proceedings having been stayed, the Executive Council passed a resolution, No. 89, on May 15, 1960, that the consideration of their cases was postponed till after the writ petitions were disposed of by the High Court. On the same day, however, the Executive Council passed resolutions, Nos. 90, 94 to 96 and 99 to 102, terminating the services of all the appellants giving them four or six months ' salary in lieu of notice. The appellants challenged the validity of the resolutions on the grounds, inter alia, (1) that the Executive Council could not take recourse to the provisions of Ordinance No. 6 having started action under Statute NO. 30, (2) that Ordinance No. 6 was subordinate to Statute NO. 30 and could not prevail where Statute NO. 30 applied, (3) that action against respondents 1, 3, 7 and 8 was stayed by the High Court and resolution No. 89 and that any action thereafter under the agreement or Ordinance No. 6 was incompetent, and (4) that, in any case, the action of the Executive Council was mala fide and a fraud upon the Univer sity Act and Statute NO. 30. The case for the University authorities was that the Executive Council could take action under the terms of the agreements, where such agreements existed or under Ordinance No. 6 or Statute NO. 30 at its option, and that where alternative remedies were provided by law, all or any of the remedies could be invoked: Held, that the impugned resolutions were ultra vires and should be quashed. The power of terminating services without notice could not be invoked in the present case, where allegations of conduct detrimental to the interests of the University had already been made and scrutinised by the Solicitor General and the Reviewing Committee and the matter was pending before the Executive Council. The powers granted by the Ordinances were expressly subject to the Statutes, and the Ordinances could not prevail over the Statutes. State of Keyala vs C. M. Francis and Co. [1961] 3 S.C.R. 181, distinguished. The words " shall take such action thereon as it may think fit " in Statute No. 30, gave liberty of action on the recommendations of the Reviewing Committee but lay a duty to form an opinion. The words did not give a discretion to take action outside the Statute. The action taken by the University authorities could only be questioned if it was ultra vires and proof of alien or irrelevant motive was only an example of the ultra vires character of the action. The court was not concerned so much with the motives, 388 nor even with the justice of the action taken by a public body, like the University, as with its legality. Short vs Poole Corporation , relied on.

The respondents, Section Officers in the offices of the Accountant General I, II and III, Allahabad, filed a writ petition before the High Court challenging the validity of administrative instructions contained in Circular No. 172 NGE 11/56 72 I dated 25th January, 1973 issued by the first appellant, regarding the reservations for Scheduled Castes and Scheduled Tribes in relation to filling up of posts by promotion on the basis of seniority subject to fitness, and praying that the first appellant and two others be re strained from promoting three of the Section Officers, belonging to the Scheduled Castes to the post of Accounts Officer, contending that since the respondents were senior, those three Section Officers could not be promoted to the post of Accounts Officers through seniority quota before the respondents. It was also contended that the promotion to the post of Accounts Officers was regulated by Indian Audit & Accounts Department (Administrative Officers, Assistant Accounts Officers and Assistant Audit Officers) Recruitment Rules 1963 made by the President in exercise of the powers conferred by proviso to Article 309 and clause (5) of Arti cle 148 of the Constitution after consultations with the Comptroller and Auditor General of India, which laid down that recruitment to the post of Administrative Officers, Assistant Accounts Officers and Assistant Audit Officers in the Indian Audit and Accounts Department was by promotion, that the rules did not contain any specific provisions for reservation for Scheduled Castes and Scheduled Tribes and hat the administrative instructions contained in the circu lar could not be said to be rules made by the President after consultation with the first 483 appellant as contemplated by Article 148(5) of the Constitu tion. Allowing the writ petition, the High Court held that there was no reservation for scheduled castes and scheduled tribes made under the rules, that the administrative in structions contained in the circular in question did not make provision for the proposed reservation in pursuance to the policy decision and that the statutory rules were not silent on the subject of promotion to the post of Assistant Accounts Officers, subsequently designated as Accounts Officers and, therefore, it was not open to the Government to supplement the statutory rules to fill up the gaps, which could be done by only amending the statutory rules in com pliance with the provisions of Article 148(5) of the Consti tution. Hence the appeal by the Department. Allowing the appeal, this Court, HELD: 1.1 The High Court is not right in stating that there cannot be an administrative order directing reserva tion for Scheduled Castes and Scheduled Tribes as It would alter the statutory rules in force. The rules do not provide for any reservation. In fact, they are silent on the subject of reservation. The Government could direct the reservation by executive orders. No doubt, administrative orders cannot be Issued In contravention of the statutory rules, but they could be issued to supplement the statutory rules. In fact, similar circulars were issued by the Railway Board introduc ing reservations for Scheduled Castes and Scheduled Tribes In the Railway Services both for selection and non selection categories of posts. They were issued to Implement the policy of the Central Government. [491 D F] Santram Shams vs State of Rajasthan and Anr., ; and Akhil Bhartiya Soshit Karamchari Sangh (Rail ways) vs Union of India & Ors., ; , referred to. 1.2 It is true that the President has not issued the circular in question but the first appellant has issued it. There was, however, proper consultation between the Govern ment and the first appellant for issuing the circular. The infirmity pointed out that it was not issued in the name of the President, therefore, relates only to the form and not with regard to the substance. The circular, of course, ought to have been issued in the name of the President as required under. Article 148(5) of the Constitution, as it 484 affects the service conditions of persons in the Audit and Accounts Department. But since the Government has approved the circular and the circular was in accordance with the declared policy of reservation, the first appellant cannot be restrained from enforcing it. [491 G H, 492 A B] The circular in question is valid and binding. The circular by itself provides for reservation. The authorities concerned must take that into account while effecting promo tions under the rules. [492 B]

In exercise of the power under section 6 of the the undertakings of the appellant company at Allahabad and Lucknow were taken over by the State Electricity Board, U.P. with effect from September 17, 1964. The workmen of the company were taken into the employment of the Board without any break in continuity of employment. Certain workmen of the Allahabad undertaking filed before the Labour Court applications under section 6 H(2) of the U.P. , for payment of retrenchment compensation and salary in lieu of notice. A group of workmen 'from the Lucknow undertaking also sub mitted applications under section 6 H(2) with the same prayers; in addition they claimed compensation for accumulated earned leave not enjoyed by them till September 16, 1964. The Labour Court allowed the applications. The Company appealed to this Court by special leave. According to the company there was no retrenchment of the workmen because they had voluntarily left the service of the company to join the service of the Board with no break in their service. The questions that fell for consideration wer (i) Whether the matter was to be decided under the provisions of the or those of the U.P. ; (ii) Whether the Labour Court had jurisdiction under section 6 H(2) of the U.P. Act to decide the applications or because of there being dispute as to the liability to pay retrenchment compensation the matter was in view of item 10 of the second schedule to the U.P. Act within the exclusive jurisdiction of the Industrial Tribunal; (iii) Whether section 6 0 of the U.P. Act also necessitated that the question of liability to pay retrenchment compensation be first determined; (iv) Whether in view of sections 6 & 7 of the and sections 57 & 57A of the Indian read with Cl. V of the sixth schedule thereto, the liability to pay retrenchment compensation was that of the Board and not that of the company; (v) Whether the claim of the Lucknow workmen for compensation for earned leave not enjoyed by them was allowable. Held : (i) Under the Seventh Schedule to the constitution legislation in respect of 'Trade Union Industrial and Labour Disputes ' falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation. Act 1 of 1957 added to the U.P. , section 6 R(2) which enacts that the rights and liabilities of employers and workmen relating to lay off and retrenchment shall be determined in accordance with the provisions of 508 sections 6 J to of 1957 received the assent of the President and by virtue of article 254(2) of the Constitution section 6 R(2) of the U.P. Act prevails notwithstanding any prior law made by the Parliament. The rights and obligations of the parties had therefore to be decided under the U.P. Act including section 6 R(2). [511 H 512 D] Rohtak & Hissar Districts Electric Supply Company vs State of U.P., , distinguished. (ii) Section 6 H(1) and (2) of the U.P. Act were substantially the same as sub sections (1) and (2) of section 33 C of the Central Act and cases decided by this Court under the latter provisions were applicable in the interpretation of the former. According to the rule laid down in section 6 H(2) the Labour Court was competent to determine what each workman was entitled to receive from the employer by way of retrenchment compensation payable in terms of money and the denial of liability of the company did not affect the jurisdiction of the Labour Court. Where, however, as in the present case, the dispute was whether the workmen had been retrenched and computation of the amount of compensation was subsidiary or incidental, the, Labour Court had no authority to trespass upon the powers of the industrial Tribunal which had exclusive jurisdiction under item 10 of the second schedule of the U.P. Act to decide disputes relating to retrenchment. [514 B D 517 F] The Central Bank of India, Ltd. vs P. section Rajagopalan etc. ; and Bombay Gas Co. Ltd. vs Gopal Bhiva and Others, ; , applied. The Board of Directors of the South Arcot Electricity Distribution Co. Ltd. vs N. K. Mohammad Khan etc., , explained. Chief Mining Engineer, East India Coal Co. Ltd. vs Rameswar and Others, [1968] 1 S.C.R. 140, State Bank of Bikaner and Jaipur vs R. L. Khandelwal, and Punjab National Bank Ltd. vs K. L. Kharbanda, [1962] Supp. 2 S.C.R. 977, referred to. (iii) Assuming that the Labour Court had jurisdiction to determine the liability of the company to pay retrenchment compensation no order awarding retrenchment compensation could still be made without recording a finding that workmen were retrenched and compensation was payable for the retrenchment. For section 6 0 of the U.P. Act deprives the workmen of the right to retrenchment compensation in the conditions mentioned therein. The company asserted , that the conditions precedent to the exercise of the jurisdiction did not exist while the workmen asserted the existence of the conditions. Without deciding the, issue the Labour Court could not compute the amount of compensation payable to the workmen on the assumption that the workmen had been retrenched and their claim fell within section 6 0. [518 B; 519 B C] (iv) Sections 6 and 7 of the did not support the case of the Company that the liability was enforceable against the Board after it took over the undertaking. Under these sections when the undertaking vests in the purchaser, any debt, mortgage or similar obligation attaches to the purchase money in substitution of the undertaking. The liability to pay retrenchment compensation is a debt : if it arises on transfer it will attach to the purchase money payable to the Company in substitution of the undertaking. [521 A B] 509 (v) The provisions of sections 57 and 57A of the Indian , also did not assist the case of the Company. These sections deal with the licencee 's charges to consumers and the Rating Committees. In the Sixth Schedule to the Act (incorporated into every license by section 57 'aforesaid) it is provided by cl. IV that certain amount shall be appropriated towards Contingencies Reserve from the revenues of each year of account. Clause V then provides for the appropriation of the Contingencies Reserve :it requires the undertaking to hand over the Contingencies Reserve to the purchaser. If the retrenchment compensation becomes properly due to the employees of the Company, it would, by virtue of cl. V sub cl. (2) proviso, be charged upon the Contingencies Reserve and the balance alone would be handed over to the purchaser. In the present case however there was no finding by the Labour Court that the Contingencies Reserve had been paid over to the purchaser. 521 C 522 Cl (vi) The claim of the Lucknow workmen to compensation in lieu of earned leave not enjoyed by them could not be allowed. After the company closed its business it could obviously not give any earned leave to these workmen 'and the latter could not claim it. In the absence of a statutory provision to that effect no such compensation was payable. [522 E]

By a notification of the Delimitation Commission dated July 24, 1964 issued in terms of section 10(1) of the , Ujjain City, which had been a general constituency, was notified as reserved for the Scheduled Castes. The appellant who was a resident of Ujjain and a citizen of India, Mad a petition under article 226 praying for a writ of certiorari for quashing the notification on the ground that he had a right to be candidate for parliament from the Ujjain City constituency which had been taken away. The petition was rejected by the High Court on the short ground that the notification could not be questioned in any court because under article 329(a) of the Constitution the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 327 or article 328, could not be called in question in any court. In appeal to this Court it was contended on behalf of the appellant that the impugned notification, which was an order under section 9 and published in accordance with the provisions of section 10(1) of the Act, was not a law within the meaning of section 329; that in any event under section 10(2) such an order was to have the force of law but was not itself a law; and that the notification was not made under article 327 but article 82 of the Constitution. HELD : dismissing the appeal, The impugned notification was a law relating to the delimitation of constituencies or the allotment of seats to such constituencies made under article 327 of the Constitution. An examination of sections 8 and 9 of the Act showed that the matters therein dealt with were not to be subject to the scrutiny of any court of law. Section 10(2) clearly demonstrates the intention of the legislature that the orders under sections 8 and 9 published under section 10(1) were to be treated as law which was not to be questioned in any court. There was very good reason behind such a provision. If the orders made under sections 8 and 9 were not to be treated as final, the result would be that any voter, if he so wished, could hold up an election indefinitely by questioning the delimitation of the constituencies from court to court. [410 B C, G, H] Although an order under section 8 or section 9 published under section 10(1) is not part of an Act of Parliament, its effect is to be the same. Section 10(4) puts such an order in the same position as a law made by the Parliament itself which could only be made by it under article 327. [415 E] 401 Case law referred to. Article 82 merely envisages that upon the completion of each census the allocation of seats in the House of the People and the division of each State into territorial constituencies may have to, be readjusted. It is article 327 which enjoins upon Parliament to make provision by law from time to time with respect to all matters relating to or in connection with elections to either House of Parliament, delimitation of constituencies and all other matters necessary for securing the due constitution of such House or Houses. [406 C]

On July 1, 1956, the appellants made a rule that every workman employed on or before that date would be entitled to 30 days leave with wages after working for II months and workmen employed after that date would be entitled to earned leave in accordance with the provisions of s.79 of the Indian . The State Government referred for adjudication to the Industrial Tribunal the question whether all the employees should be allowed 30 days earned leave with full wages for every II months ' service without discrimination. The Tribunal held that ail the workmen were entitled to 30 days earned leave without making any distinc tion between workmen who joined before July 1, 1956, and those who joined subsequently. The appellants contended that they were entitled to fix the terms of employment on which they would employ the workmen and it was open to the workmen to accept those terms or not and the tribunal was not justified in interfering in such a matter. Held, per Gajendragadkar and Das Gupta, JJ., that the Tribunal was justified in directing the appellants to provide for the same uniform rule as to earned leave for all their employees. The doctrine of absolute freedom of contract had to yield to the higher claims for social justice and had to be regulated. In industrial adjudication no attempt should be made to answer questions in the abstract for evolving any general or inflexible principles. Each dispute has to be decided on its own facts without enlarging the scope of the enquiry. If some principles have to be followed or evolved, care has to be taken not to evolve larger 931 principles. In order that industrial adjudication should be free from the tyranny of dogmas or the sub conscious pressure of preconceived notions it is important that the temptation to lay down broad principles should be avoided. Accordingly it is not necessary to decide the broad contention whether industrial adjudication can interfere with the contract between the employers and the employees. In the present case, all the workmen were governed b the same terms and conditions of service, except in regard to earned leave. The discrimination was not based upon any principle and was bound to lead to disaffection amongst the new employees. The financial burden imposed by the award on the employers was slight. The provisions for earned leave in respect of old employees were not unduly generous or extravagant. Earned leave provided for by s.79 was the minimum statutory leave. If the appellants thought it necessary to provide for additional earned leave for their old employees, there was no reason why they should not make a similar provision in respect of new employees as well. Western Indian Automobile Association vs Industrial Tribunal, Bombay, and Bharat Bank Ltd. vs The Employees of Bharat Bank Ltd. , referred to. Per Mudholkar, J. The Tribunal was not justified in interfering with the rule made by the appellants. It was open to the appellants to grant leave according to s.79 , to all the employees but still they did not wish to reduce the leave of 30 days which they were already giving to the old employees. The appellants have put into one category persons who enjoyed the same kind of benefits until July 1, 1956, and have put in another category persons who did not enjoy such benefits. All persons in each category were treated alike, and the question of dis crimination did not in fact arise. If the State had pro vided that persons entering its service after a certain date would be governed by a set of conditions which were different and less favorable than those governing the existing servants its action would not be open to an attack under article 14 of the Constitution. An identical action of a private employer could also not be regarded as discriminatory. An award made with the intention of promoting social justice must take into consideration the interests of the community. Even if there was discrimination it could not be a perpetual source of bitterness as gradually the old employees would fade out 932 till only one category of workers would remain. The facts that the dispute was comparatively of a minor character and that the financial burden imposed on the appellants was small did not entitle the tribunal to alter the contract between the employer and employees. Since the appellant had provided for its new entrants such leave facilities as were recognised by the itself as fair, it was not open to the Tribunal to revise the relevant term of the contract. Budhan vs State of Bihar, A.I.R. 1956 section C. 191, Khandige Sham Bhat vs Agricultural Income Tax Officer [1963] 3 S.C.R. 809, State of M.P. vs Gwalior Sugar Co. Ltd. C.A. Nos. 98 & 99 of 1959, dated 30.1 1.60, Ramjilal vs Income tax Officer, Mohindargarh, ; , Sardar Inder Singh vs The State, of Rajasthan, ; and Hathisingh .Mfg. Co. vs Union of India, A.1 R. 1960S. C. 931 referred to.

The petitioner, an officer of the Madras Government, was employed in Central Provinces and Berar for the purchase of grains on behalf of the Madras Government. He along with many others, was under prosecution before a Special Magistrate, Nagpur (Mad by a Pradesh), on charges for offences under section 420 of the Indian Penal Code etc. for causing loss to the Madras Government. The Special Magistrate trying the case was appointed by the Madhya Pradesh Government under section 14 of the Code of Criminal Procedure and as the petitioner was a servant of the Government of Madras, the prosecution against him was initiated with the sanction given by the Government of Madras under section 197 of the Code of Criminal Procedure. Held, (i) that section 14 of the Criminal Procedure Code in so far as it authorises the Provincial Government to confer upon any person all or any of the powers conferred or conferrable by or under the Code on Magistrates of the first, second or third class in 169 respect of particular oases and thereby to constitute a Special Magistrate for the trial of an individual case, does not violate the guarantee under article 14 of the Constitution as the Special Magistrate in the present case had to try the case entirely under the normal procedure and no discrimination of the kind contemplated by the decision in Anwar Ali Sarkar 's Case ([1952] S.C.R. 284) arose in the present case. A law vesting discretion in an authority under such circumstances cannot be discriminatory and is, therefore, not hit by article 14 of the Constitution. (ii) It is not for the very Government which accords sanction under section 197(1) to specify also the Court before which the trial is to be held under section 197(2) and therefore in a case to which section 197(1) applies, the exercise of any power under section 14 is not excluded. The word "Court" in sub section (2) of section 197 is not the same thing as a "person" in sub section (1) of section 14. The practice of direct approach to the Supreme Court under article 32 (except for good reasons) in matters which have been taken to the High Court and found against, without obtaining leave to appeal therefrom, is not be encouraged. Gokulchand Dwarkadas Morarka vs The King (A.I.R. 1948 P. C. 82) referred to; and Anwar Ali Sarkar 's case ([1952] S.C.R. 284) distinguished.

In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family. The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ . Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition. The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962. This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained. The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal. However, the High Court granted a certificate of fitness for appeal to this Court. Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section (1) of section 25A. So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected. [508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied. Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors. vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr. v, Commissioner of income Tax. Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable

Pursuant to the directions of the Supreme Court in Dr. Dinesh Kumar & Ors vs Motilal Nehru Medical College Allahabad, & Ors. ; regarding uniformity in post graduate medical education, respondent No. 1 the University of Delhi, decided to adopt the three years course for the post graduate degree and a two years course for the diploma commencing from the academic session of 1988. However, with a view to mitigating hardship to candidates/students who had already completed the house job and had become entitled to undergo the post graduate course in two years, as a transitory provision, the respondent University decided to continue the practice prevailing prior to 1988 for a year. It evolved a scheme whereunder, the number of seats for the post graduate course and diploma course available in the previous year for a student who had completed one year 's housemanship were left untouched. As a transitional provision, the University agreed to fix 75% quota, for the 1988 session only. As per a Note in the scheme, candidates who had done house job/Junior Residency for period of one year were not eligible for admission to 3 years post graduate degree and 2 years post graduate diploma course. The prospectus, however, prescribed one common selection test for both the categories. A set of writ petitions were filed before the High Court challenging the scheme of the University mainly on the basis that when there was one selection test, merit should prevail and classification in the manner indicated by the scheme was bad. The High Court made an interim 763 order requiring the University to have the selection completed on the basis of merit adjudged in the common selection test. Disposing of the Writ Petitions and some cases transferred from the High Court, ^ HELD: The seniors who have already done one year 's housemanship and freshers belong to two categories and cannot be said to be equal. The question of test of comparative merit would not have arisen if the University had not prescribed a common selection test for these two categories. If the merit list of the selection test is followed, more seniors are entitled to admission and the scheme of reservation would not work. [765F G] While selection in the higher course should be on the basis of merit in the peculiar facts and circumstances of this case, purely confined to a transitory measure, the situation has to be handled not by first principles but by a somewhat informed pragmatic adhocism especially because the situation would not reoccur. [766D] The impasse created on account of rival claims by freshers and seniors has to have a rough and ready solution yet not arbitrary and as acceptable and satisfying as possible. [766F] With a view to providing some more seats for seniors, the respondent University should create one seat in every speciality. Thus, 21 additional seats will be available over and above the seats fixed by the University representing 75%. From the reserved seats made for the freshers, 21 seats, being one from every speciality, should be taken away and made available to the seniors. Thus, 42 seats in all will be available for the seniors in the Post Graduate course to be filled up on the basis of inter se merit, keeping the senior group apart. [766G H; 767A B] The Central Government should make the necessary provisions for funds. The Indian Medical Council may provide the necessary accommodation by relaxing the requirements. [767D] Dr. Dinesh Kumar vs Motilal Nehru College, Allahabad & Ors., ; , referred to.

72 of 1950. Petition under article 32 of the Constitution of India for a writ of mandamus. V.K.T. Chari, J.S. Dawdo, Alladi Kuppuswami, and C.R. Pattabhi Raman, for the petitioner. M.C. Setalvad, Attorney General for India (G. N. Joshi with him) for opposite party Nos. 1 and 2. G.N. Joshi, for opposite party Nos. 3 to 5 and 7 to 10. 1950. December 4. The Court delivered Judgment as follows. KANIA C.J. This is an application by the holder of one ordinary share of the Sholapur Spinning and Weaving Company Ltd. for a writ of mandamus and certain other reliefs under article 32 of the Constitution of India. The authorized capital of the company is Rs. 48 lakhs and the paid up capital is Rs. 32 lakhs, half of which is made up of fully paid ordinary shares of Rs. 1,000 each. 875 I have read the judgment prepared by Mr. Justice Mukher jea. In respect of the arguments advanced to challenge the validity of the impugned Act under articles 31 and 19 of the Constitution of India, I agree with his line of reasoning and conclusion and have nothing more to add. On the question whether the impugned Act infringes article 14, two points have to be considered. The first is whether one individual shareholder can, under the circum stances of the case and particularly when one of the re spondents is the company which opposes the petition, chal lenge the validity of the Act on the ground that it is a piece of discriminatory legislation, creates inequality before the law and violates the principle of equal protec tion of the laws under article 14 of the Constitution of India. The second is whether in fact the petitioner has shown that the Act runs contrary to article 14 of the Con stitution. In this case having regard to my conclusion on the second point, I do not think it is necessary to pro nounce a definite opinion on the first point. I agree with the line of reasoning and the conclusion of Mr. Justice Mukherjea as regards the second point relating to the inva lidity of the Act on the ground that it infringes article 14 of the Constitution and have nothing more to add. In my opinion therefore this petition fails and is dismissed with costs. FAZL ALI J. I am strongly of the opinion that this peti tion should be dismissed with costs. The facts urged in the petition and the points raised on behalf of the petitioner before us are fully set forth in the judgments of my brethren, Sastri, Mukherjea and Das JJ., and I do not wish to repeat them here. It is sufficient to say that the main grounds on which the Sholapur Spinning and Weaving Company (Emergency Provisions) Act, 1950 (Act No. XXVIII of 1950), which will hereinafter be referred to as "the Act", has been assailed, is that it infringes three fundamental rights, these being: 876 (1) the right to property secured by article 31 of the Constitution; (2) the right to acquire, hold and dispose of property, guaranteed to every citizen by article 19 (1) (f); and (3) the right to equal protection of the laws, guaran teed by article 14. It has been held in a number of cases in the United States of America that no one except those whose rights are directly affected by a law can raise the question of the constitutionality of that law. This principle has been very clearly stated by Hughes J. in McCabe vs Atchison(1), in these words : "It is an elementary principle that in order to justify the granting of this extraordinary relief, the complainant 's need of it and the absence of an adequate remedy at law must clearly appear. The complainant cannot succeed because someone else may be hurt. Nor does it make any difference that other persons who may be injured are persons of the same race or occupation. It is the fact, clearly established, of injury to the complainant not to others which justifies judicial interference. " On this statement of the law, with which I entirely agree, the scope of the discussion on this petition is greatly restricted at least in regard to the first two fundamental rights. The company and the shareholders are in law separate entities, and if the allegation is made that any property belonging to the company has been taken possession of without compensa tion or the right enjoyed by the company under article 19 (1) (f) has been infringed, it would be for the company to come forward to assert or vindicate its own rights and not for any individual shareholder to do so. In this view, the only question which has to be answered is whether the peti tioner has succeeded in showing that there has been an infringement of his rights as a shareholder under articles 31 and 19 (1) (f) of the Constitution. This question has been so elaborately dealt with by Mukherjea J., that I do not wish to add anything to what he has said in his judg ment, and all that is necessary for me to say is that I adopt his conclusions, (1) 235 u.s. 151. 877 without committing myself to the acceptance of all his reasonings. The only serious point, which in my opinion, arises in the case is whether article 14 of the Constitution is in any way infringed by the impugned Act. This article corresponds to the equal protection clause of the Fourteenth Amendment of the Constitution of the United States of America, which declares that "no State shall deny to any person within its jurisdiction the equal protection of the laws". Professor Willis dealing with this clause sums up the law as prevail ing in the United States in regard to it in these words: "Meaning and effect of the guaranty The guaranty of the equal protection of the laws means the protection of equal laws. It forbids class legislation, but does not forbid classification which rests upon reasonable grounds of distinction. It does not prohibit legislation, which is limited either in the objects to which it is directed or by the territory within which it is to operate. 'It merely requires that all persons subjected to such legislation shall be treated alike under like circumstances and condi tions both in the privileges conferred and in the liabili ties imposed. ' 'The inhibition of the amendment . was designed to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation '. It does not take from the states the power to classify either in the adoption of police laws, or tax laws, or eminent domain laws, but permits to them the exercise of a wide scope of discretion, and nullifies what they do only when it is without any reasonable basis. Mathematical nicety and perfect equality are not required. Similarity, not identity of treatment, is enough. If any state of facts can reasonably be conceived to sustain a classification, the existence of that state of facts must be assumed. One who assails a classification must carry the burden of showing that it does not rest upon any reasonable basis."( ') Having summed up the law in this way, the same learned author adds : "Many different classifications (1) Constitutional Law by Prof. Willis, (1st Edition). p.579. 878 of persons have been upheld as constitutional. A law apply ing to one person or one class of persons is constitutional if there is sufficient basis or reason for it. " There can be no doubt that article 14 provides one of the most valuable and important guarantees in the Constitution which should not be allowed to be whittled down, and, while ac cepting the statement of Professor Willis as a correct exposition of the principles underlying this guarantee, 1 wish to lay particular emphasis on the principle enunciated by him that any classification which is arbitrary and which is made without any basis is no classification and a proper classification must always rest upon some difference and must bear a reasonable and just relation to the things in respect of which it is proposed. The petitioner 's case is that the shareholders of the Sholapur company have been subjected to discrimination visa vis the shareholders of other companies, inasmuch as section 13 of the Act subjects them to the following disabilities which the shareholders of other companies governed by the Indian Companies Act are not subject to: : "(a) It shall not be lawful for the shareholders of the company or any other person to nominate or appoint any person to be a director of the company. (b) No resolution passed at any meeting of the share holders of the company shall be given effect to unless approved by the Central Government. (c) No proceeding for the winding up of the company or for the appointment of a receiver in respect thereof shall lie in any court unless by or with the sanction of the Central Government. " Primafacie, the argument appears to be a plausible one, but it requires a careful examination, and, while examining it, two principles have to be borne in mind : (1) that a law may be constitutional even though it relates to a single individual, in those cases where on account of some special circumstances or reasons applicable to him and not applica ble to others, 879 that single individual may be treated as a class by himself; (2) that it is the accepted doctrine of the American courts, which I consider to be well founded on principle, that the presumption is always in favour of the constitutionality 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. A clear enunciation of this latter doctrine is to be found in Middleton vs Texas Power and Light Company(1), in which the relevant passage runs as follows : "It must be presumed that a legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds. " The onus is therefore on the petitioner to show that the legislation which is impugned is arbitrary and unreasonable and there are other companies in the country which should have been subjected to the same disabilities, because the reasons which led the Legislature to impose State control upon the Sholapur company are equally applicable to them. So far as article 14 is concerned, the case of the share holders is dependent upon the case of the company and if it could be held that the company has been legitimately sub jected to such control as the Act provides without violation of the article, that would be a complete answer to the petitioner 's complaint. Now, the petitioner has made no attempt to discharge the burden of proof to which I have referred, and we are merely asked to presume that there must necessarily be other compa nies also which would be open to the charge of mismanagement and negligence. The question cannot in my opinion be treated so lightly. On the other hand, how important the doctrine of burden of proof is and how much harm can be caused by ignor ing it or tinkering with it, will be fully illustrated, by referring to the proceedings in the Parliament in connec tion with the enactment of the (1) ,157. 880 Act, where the circumstances which necessitated it are clearly set out. I am aware that legislative proceedings cannot be referred to for the purpose of construing an Act or any of its provisions, but I believe that they are relevant for the proper understanding of the circumstances under which it was passed and the reasons which necessitat ed it. A reference to the Parliamentary proceedings shows that some time ago, a representation was made on behalf of a section of the shareholders of the Sholapur company to the Registrar of Joint Stock Companies in Bombay, against the conduct of the managing agents, and the Government of Bombay was moved to order a special inquiry into the affairs of the company. For the purpose of this inquiry, two special inspectors were appointed by the Bombay Government and their report revealed "certain astounding facts" and showed that the mill had been grossly mismanaged by the Board of Direc tors and the managing agents. It also revealed that the persons who were responsible for the mismanagement were guilty of certain acts and omissions which brought them under the purview of the law. The Bombay Government accept ed the report of the inspectors and instructed the Advocate General of Bombay to take legal proceedings against certain persons connected with the management of the company. Thereafter, the Government of India was approached by the Provincial Government and requiested to take special action in order to secure the early opening of the mill. The Government of India found that they had no power to take over the management of a particular mill, unless its working could be ensured through the existing management acting under the direction of a Controller appointed under the Essential Supplies Act, but they also found that a peculiar situation had been created in this case by the managing agents themselves being unable or unwilling to conduct the affairs of the company in a satisfactory and efficient manner. The Government of India, as a matter of precaution and lest it should be said that they were going to interfere unnecessarily in the affairs 881 of the company and were not allowing the existing provisions of the law to take their own course, consulted other inter ests and placed the matter before the Standing Committee of the Industrial Advisory Council where a large number of leading industrialists of the country were present, and ultimately it was realized that this was a case where the Government could rightly and properly intervene and there would be no occasion for any criticism coming from any quarter. It appears from the discussion on the floor of the House that the total number of weaving and spinning mills which were closed down for one reason or other was about 35 in number. Some of them are said to have closed for want of cotton, some due to overstocks, some for want o[ capital and some on account of mismanagement. The Minister for Indus try, who sponsored the Bill, in explaining what distin guished the case of the Sholapur mill from the other mills against whom there might be charges of mismanagement, made it clear in the course of the debate that "certain condi tions had to be fulfilled before the Government can and should intervene", and he set out these conditions as fol lows : "(1) The undertaking must relate to an industry which is of national importance. Not each and every undertaking which may have to close down can be taken charge of tempo rarily by Government. (2) The undertaking must be an economic unit. If it appears that it is completely uneconomic and cannot be managed at all, there is no sense in Government taking charge of it. If anything, it will mean the Government will have to waste money which belongs to the taxpayer on an uneconomic unit. (3) There must be a technical report as regards the condition of the plants, machinery, etc. which either as they stand, or after necessary repairs and reconditioning can be properly utilised. (4) Lastly, and this is of considerable importance there must be a proper enquiry held before Government take any action. The enquiry should show that 113 882 managing agents have so misbehaved that they are no longer fit and proper persons to remain in charge of such an impor tant undertaking. "(1) It appears from the same proceedings that the Sholapur mill is one of the largest mills in Asia and employs 13,000 workers. Per shift, it is capable of producing 25 to 30 thousand pounds of yarn, and also one lakh yards of cloth. It was working two shifts when it was closed down on the 29th August, 1949. The closure of the mill meant a loss of 25 lakhs yards of cloth and one and a half lakhs pounds of yarn per month. Prior to 1947, the highest dividend paid by the company was Rs. 525 per share and the lowest Rs. 100, and, in 1948, when the management was taken over by the managing agents who have been removed by the impugned Act, the accounts showed a loss of Rs. 30 lakhs, while other textile companies had been able to show very substantial profits during the same period. Another fact which is brought out in the proceedings is that the. managing agents had acquired control over the majority of the shares of the company and a large number of shareholders who were dissatisfied with the management had been rendered powerless and they could not make their voice heard. By reason of the preponderance of their strength, the managing agents made it impossible for a controller under the Essential Supplies Act to function and they also made it difficult for the company to run smoothly under the normal law. It was against this background that the Act was passed, and it is evident that the facts which were placed before the Legislature with regard to the Sholaput mill were of an extraordinary character. and fully justified the company being treated as a class by itself. There were undoubtedly other mills which were open to the charge of mismanagement, but the criteria adopted by the Government which, in my opinion, cannot be said to be arbitrary or unreasonable, is not applicable (1) parliamentary Debates, Volume III, No. 14; 31st March 1950, pp.2394 5 883 to any of them. As we have seen, one of the criteria was that a mere allegation of mismanagement should not be enough and no drastic step such as is envisaged in the Act should be taken without there being a complete enquiry. In the case of the Sholapur mill, a complete enquiry had been made and the revelations which were made as a result of such enquiry were startling. We are familiar with the expression "police power" which is in vogue in the United States of America. This expression simply denotes that in special cases the State can step in where its intervention seems necessary and impose special burdens for general benefit. As one of the judges has pointed out, "the regulations may press with more or less weight upon one than upon another, but they are designed not to impose unequal or unnecessary restrictions upon anyone, but to promote, with as little individual inconvenience as possible, the general good. "(1) It need not be emphasized that the principles underlying what is known as police power in the United States of America are not peculiar to that country, but are recognized in every modern civilized State. Professor Willis dealing with the question of classification in exercise of police power makes the following observa tions: "There is no rule for determining when classification for the police power is reasonable. It is a matter for judicial determination, but in determining the question of reasonableness the Courts must find some economic, political or other social interest to be secured, and some relation of the classification to the objects sought to be accomplished. In doing this the Courts may consider matters of common knowledge, matters o[ common report, tile history of the times, and to sustain it they will assume every state of facts which can be conceived of as existing at the time Of legislation. The fact that only one person or one object or one business or one locality is affected is not proof of denial of the equal protection of the laws. For such (1) Per Field J. in Barbier vs Connally. ; 884 proof it must be shown that there is no reasonable basis for the classification. " In this particular case, the Government initially took control of the Sholapur Company by means of an Ordinance (Ordinance No. II of 1950), of which the preamble runs as follows : "Whereas on account of mismanagement and neglect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudicially af fected the production of an essential commodity and has caused serious unemployment amongst a certain section of the community; And whereas an emergency has arisen which renders it necessary to make special provision for the proper manage ment and administration of the aforesaid Company; Now, therefore,. . . . " In the course of the Parliamentary debate, reference was made to the fact that the country was facing an acute cloth shortage, and one of the reasons which apparently influenced the promulgation of the Ordinance and the passing of the Act was that the mismanagement of the company had gravely affected the production of an essential commodity. The facts relating to the mismanagement of this mill were care fully collected and the mischief caused by the sudden clos ing of the mill to the shareholders as well as to the gener al public were fully taken into consideration. Therefore, it seems to me that to say that one particular mill has been arbitrarily and unreasonably selected and subjected to discriminatory treatment, would be an entirely wrong propo sition. Article 14 of the Constitution, as already stated, lays down an important fundamental right, which should be closely and vigilantly guarded, but, in construing it, we should not adopt a doctrinaire approach which might choke all benefi cial legislation. The facts to which I have referred are to be found in a public document, and, though some of them may (1) Constitutional Law by Prof. Willis (1st Edition) p. 580. 885 require further investigation forming as they do part of a one sided version, yet they furnish good prima, facie grounds for the exercise of the utmost caution in deciding this case and for not departing from the ordinary rule as to the burden of proof. In the last resort, this petition can be disposed of on the simple ground that the petitioner has not discharged the onus which lies upon him, and I am quite prepared to rest my judgment on this ground alone. I think that the petitioner has failed to make out any case for granting the writs or directions asked for, and the petition should therefore be dismissed with costs. PATANJALI SASTRI J. This is an application under article 32 of the Constitution seeking relief against alleged infringe ment of certain fundamental rights of the petitioner. The petitioner is a shareholder of the Sholapur Spinning and Weaving Company, Limited, Sholapur, in tim State of Bombay, (hereinafter referred to as "the Company "). The authorised share capital of the Company consisted of 1590 fully paid up ordinary shares of Rs. 1,000 each, 20 fully paid up ordinary shares of Rs. 500 each and :32,000 partly paid up redeemable cumulative preference shares of Rs. 100 each, of which Rs. 50 only was paid up. Of these, the petitioner held one ordinary share in his own name and 80 preference shares which, however, having been pledged with the Bank of Baroda Ltd., now stand registered in the Bank 's name. The company was doing flourishing business till disputes arose recently between the management and the employees, and in or about August, 1949, the mills were temporarily closed and the company, which was one of the largest producers of cotton textiles, ceased production. Thereupon, the Gover nor General intervened by promulgating on the 9th January, 1950, an Ordinance called the Sholapur Spinning and Weaving Company (Emergency Provisions) Ordinance (No. II ' of 1950), which empowered tim Government of India to 886 take over the control and management of the company and its properties and effects by appointing their own Directors and to delegate all or any of their powers to the Provincial Government. In exercise of the powers thus delegated, the Government of Bombay appointed respondents 3 to 9 as Direc tors to take charge of the management and administration of the properties and affairs of the company. Subsequently, on 10th April, '1950, the Ordinance was repealed and was re placed by an Act of Parliament containing similar provisons, namely the Sholapur Spinning and Weaving Company (Emergency Provisions) Act (No. XXVIII of 1950) (hereinafter referred to as the "impugned Act"). The petitioner complains that the impugned Act and the action of the Government of Bombay pursuant thereto have infringed the fundamental rights conferred on him by arti cles 11, 19 and 31 of the Constitution with the result that the enactment is unconstitutional and void, and the inter ference by the Government in the affairs of the company is unauthorised and illegal. He accordingly seeks relief by way of injunction and mandamus against the Union of India and the State of Bombay impfended as respondents 1 and 2 respec tively in these proceedings and against respondents a to 9 who are now in management as already stated. The company is irapleaded proforma as the 10th respondent. Before discussing the issues involved, it is necessary to examine the relevant provisions of the impugned Act in order to see in what manner and to what extent the petition er 's rights have been affected thereby. The preamble to the repealed Ordinance stated that "on account of mis management and neglect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudicially affected the production of an essen tial commodity and has caused serious unemployment amongst a certain section of the community and that an emergency has arisen which renders it necessary to make special provi sion for the proper management and administration of the aforesaid 887 Company." This preamble was not reproduced in the impugned Act. Section a empowers the Central Government to appoint as many persons as it thinks fit to be directors of the company "for the purpose of taking over its management and administration. " Section 4 states the effect of the order appointing directors to be that (1) the old directors shall be deemed to have vacated their office, (2) the contract with the managing agents shall be deemed to have been termi nated, (3) that the properties and effects of the company shall be deemed to be in the custody of the new directors who are to be "for all purposes" the directors of the compa ny and "shall alone be entitled to exercise all the powers of the directors of the company whether such powers are derived from the Companies Act or from the memorandum or articles of association or otherwise. " Section 5 defines the powers of the new directors. They are to manage the busi ness of the company "subject to the control of the Central Government" and shall have the power to raise funds offering such security as they think fit, to carry out necessary repairs to the machinery or other property in their custody and to employ the necessary persons and define the necessary conditions of their service. Section 12 provides for the restoration of the management to directors nominated by the shareholders when the purpose of the Government 's interven tion has been fulfilled. Section 13 is important and reads thus: "13. Application of the Companies Act. (1) Notwith standing anything contained in the Companies Act or in the memorandum or articles of association of the company (a) it shall not be lawful for the shareholders of the company or any other person to nominate or appoint any person to be a director of the company; (b) no resolution passed at any meeting of the shareholders of the company shall 'be given effect to unless approved by the Central Government; (c) no proceeding for the winding up of the company or for the appointment of a receiver in respect, thereof shall lie in any Court unless by or with the sanction of the Central Government. (2) Subject. 888 to the provisions contained in sub section (1) and to the other provisions of this Act. and subject to such excep tions, restrictions and limitations as the Central Govern ment may, by notified order, specify, the Companies Act shall continue to apply to the company in the same manner as it applied thereto before the issue of the notified order under section 3. " By section 14 the provisions of the Act are to have effect "notwithstanding anything inconsistent therewith contained in any other law or in any instrument having effect by virtue of any law other than this Act. " Section 16 provides for delegation of powers to the Govern ment of Bombay to be exercised subject to the directions of the Central Government, and section 17 bars suits or other proceedings against the Central Government or the Government of Bombay or any director "for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act. " As a result of these provisions all the properties and effects of the company passed into the absolute power and control of the Central Government or its delegate the Gov ernment of Bombay, and the normal functioning of the company as a corporate body came to an end. The shareholders have been reduced to the position of interested, if helpless, onlookers while the business is carried on against their will and, may be, to their disadvantage by the Government 's nominees. The declared purpose of this arrangement was, according to the Preamble of the repeated Ordinance to keep up the production of an essential commodity and to avert serious unemployment amongst a certain section of the commu nity. The question accordingly arises whether the impugned Act. which thus affects the petitioner and his co sharehold ers, while leaving untouched the shareholders of all other companies, including those engaged in the production of essential commodities, denies to the petitioner the equal protection of the laws under article 14 of the Constitution. The correct approach to 889 this question is first to see what rights have been con ferred or protection extended to persons similarly situated. The relevant protection is to be found in the provisions of the Indian Companies Act which regulates the rights and obligations of the shareholders of incorporated companies in India. Section 21 of the Act assures to the shareholders the protection of the stipulations contained in the memoran dum and articles of association by constituting. them a binding contract, so that neither the company nor the share holders have the power of doing anything inconsistent there with. The basic right of the shareholders to have their undertaking managed and conducted by the directors of their own choice is ensured by section 83B. Their right to exer cise control and supervision over the management by the directors by passing resolutions at their general meeting is regulated by various provisions of the Act. The important safeguard of winding up the company in certain unfavourable circumstances either through court or by the shareholders thems elves voluntarily is provided for in sections 162 and 203. All these rights and safeguards, on the faith of which the shareholders embark their money in their undertaking, are abrogated by the impugned Act in the case of the share holders of this company alone. In fact, the Central Govern ment is empowered to exclude, restrict or limit the opera tion of any of the provisions of the Companies Act in rela tion to this company. It is thus plain that the impugned Act denies to the shareholders of this particular company the protection of the law relating to incorporated joint stock companies in this country is embodied in the Companies Act and is primafacie within the inhibition of article 14. It is argued, however, that article 14 does not make it incumbent on the Legislature always to make laws applicable to all persons generally, and that it is open to the Legis lature 'to classify persons and things and subject them to the operation of a particular law according to the aims and objects which that law is designed to secure. In the present case, Parliament, 114 890 it was said, came to the conclusion, on the materials placed before them, that the affairs of the company were being grossly mismanaged so as to result in the cessation of production of an essential commodity and serious unemploy ment amongst a section of the community. In view if the detriment thus caused to public economy, it was competent for Parliament to enact a measure applicable to this company and its shareholders alone, and Parliament must be the judge as to whether the evil which the impugned Act was designed to remedy prevailed to such an extent in this company as to call for special legislation. Reliance was placed in support of this argument on certain American decisions dealing with the equal protection clause of the Fourteenth Amendment of the Federal Constitution. It is, however, unnecessary to discuss those decisions here, for it is undeniable that equal protection of the laws cannot mean that all laws must be quite general in their character and application. ' A legislature empowered to make laws on a wide range of sub jects must of necessity have the power of making special laws to attain particular objects and must, for that pur pose, possess large powers of distinguishing and classifying the persons or things to be brought under the operation of such laws, provided the basis of such classification has a just and reasonable relation to the object which the legis lature has in view. While, for instance, a classification in a law regulating labour in mines or factories may be based on age or sex, it may not b`e based on the colour of one 's skin. It is also true that the class of persons to whom a law is made applicable may be large or small, and the degree of harm which has prompted the enactment of a particular law is a matter within the discretion of the law makers. It is not the province of the court to canvass the legislative judgment in such matters. But the issue here is not whether the impugned Act was ill advised or not justified by the facts on which it was based, but whether it transgresses the explicit constitutional restriction on legislative power imposed by article 14. 891 It is obvious that the legislation is directed solely against a particular company and shareholders and not against any class or category of companies and no question, therefore, of reasonable legislative classification arises. If a law is made applicable to a class of persons or things and the classification is based upon differentia having a rational relation to the object sought to be attained, it can be no objection to its constitutional validity that its application is found to affect only one person or thing. For instance, a law may be passed imposing certain restric tions and burdens on joint stock companies with a share capital of, say, Rs. 10 crores and upwards, and it may be found that there is only one such company for the time being to which the law could be applied. If other such companies are brought into existence in future the law would apply to them also, and no discrimination would thus be involved. But the impugned Act, which selects this particular company and imposes upon it and its shareholders burdens and disa bilities on the ground of mismanagement and neglect of duty on the part of those charged with the conduct of its under taking, is plainly discriminatory in character and is, in my judgment, within the constitutional inhibition of article 14. Legislation based upon mismanagement or other miscon duct as the differentia and made applicable to a specified individual or corporate body is not far removed from the notorious parliamentary procedure formerly employed in Britain of punishing individual delinquents by passing bills of attainder, and should not, I think, receive judi cial encouragement. It was next urged that the burden of proving that the impugned Act is unconstitutional lay on the petitioner, and that, inasmuch as he has failed to adduce any evidence to show that the selection of this company and its shareholders for special treatment under the impugned Act was arbitrary, the application must fail. Whilst all reasonable pre sumption must undoubtedly be made in support of the consti tutional validity of a law made by a competent legislature, the circumstances of the present case would seem, to my 892 mind to exclude such presumption. Hostile discrimination is writ large over the face of the impugned Act and it dis closes no grounds for such legislative intcrvcntion. For all that appears no compelling public intercsts were involved. Even the preamble to the original Ordinance was omitted. Nor did respondents 1 and 2 file any counter statement in this proceeding explaining the circumstances which led to the enactment of such an extraordinary measure. There is thus nothing in the record even by way of allegation which the petitioner need take steps to rebut. Supposing, howev er, that the impugned Act was passed on the same grounds as were mentioned in the preamble to the repealed Ordinance, namely, mismanagement and neglect prejudicially affecting the production of an essential commodity and causing seri ous unemployment amongst a section of the community, the petitioner could hardly be expected to assume the burden of showing, not that the company 's affairs were properly man aged, for that is not his case, but that there were also other companies similarly mismanaged, for that is what, according to the respondents, he should prove in order to rebut the presumption of constitutionality. In other words, he should be called upon to establish that this company and its shareholders were arbitrarily singled out for the impo sition of the statutory disabilities. How could the peti tioner discharge such a burden ? Was he to ask for an inves tigation by the Court of the affairs of other industrial concerns in India where also there were strikes and lock outs resulting in unemployment and cessation of production of essential commodities? Would these companies be willing to submit to such an investigation ? And even so, how is it possible to prove that the mismanagement and neglect which is said to have prompted the legislation in regard to this company was prevalent in the same degree in other companies ? In such circumstances, to cast upon the petitioner a burden of proof which it is as needless for him to assume as it is impracticable to discharge is to lose sight of the realities of the case. 893 Lastly, it was argued that the constitutionality of a statute could not be impugned under article 32 except by a person whose rights were infringed by the enactment. and that, inasmuch as there was no infringement of the individ ual right of a shareholder, even assuming that there was an injury to the company as a corporate body, the petitioner was not entitled to apply for relief under that article. Whatever validity the argument may have in relation to the petitioner 's claim based on the alleged invasion of his right of property under article 31, there can be little doubt that, so far as his claim based on the contravention of article 14 is concerned, the petitioner is entitled to relief in his own right As has been pointed out already, the impugned Act deprives the shareholders of the company of important rights and safeguards which are enjoyed by the shareholders of other joint stock companies in Indian under the Indian Companies Act. The petitioner is thus denied the equal protection of the laws in his capacity as a sharehold er, and none the less so because the other shareholders of the company are also similarly affected. The petitioner is thereled to seek relief under article 32 of the Constitu tion. In this view it becomes unnecessary to consider the questions raised under articles 19 and 31 of the Constitu tion. In the result]t, I would allow the application. MUKHERJEA J. This is an application presented by one Chiranjitlal Chowdhuri, a shareholder of the Sholapur Spinning and Weaving Company Limited (hereinafter referred to as the company), praying for a writ of mandamus and certain other reliefs under article 32 of the Constitution. The company, which has its registered office within the State of Bombay and is governed by the provisions of the Indian Companies Act, was incorporated with an authorised capital of Rs. 48 lakhs divided into 1590, fully paid up ordinary shares of Rs. 100 each, 20 fully paid up ordinary shares of Rs. 500 each and 32,000 partly paid up cumulative preference shares of Rs. 100 each. The 894 present paid up capital of the company is Rs. 32 lakhs half of which is represented by the fully paid up ordinary shares and the other half by the partly paid up cumulative prefer ence shares. The petitioner states in his petition that he holds in his own right three ordinary shares and eighty prefercnce shares in the company, though according to his own admission the ,preference shares do not stand in his name but have been registered in the name of the Baroda Bank Limited with which the shares are pledged. According to the respondents, the petitioner is the registered holder of one single ordinary share in the company. It appears that on July 27, 1949, the directors of the company gave a notice to the workers that the mills would be closed, and pursuant to that notice, the mills were in fact closed on the 27th of August following. On January 9, 1950, the Governor General of India promulgated an Ordinance which purported to make special provisions for the proper man agement and administration of the company. It was stated in the preamble to the Ordinance that "on account of mis management and neglect, a situation has arisen in the af fairs of the Sholapur Spinning and Weaving Company Limited which has prejudicially affected the production of an essen tial commodity and has caused serious unemployment amongst a certain section of the community ", and it was on account of the emergency arising from this situation that the promulga tion of the Ordinance was necessary. The provisions of the Ordinance, so far as they are material for our present purpose, may be summarised as follows: Under section 3 of the Ordinance, the Central Government may, at any time, by notified order, appoint as many persons as it thinks fit, to be directors of the company for the purpose of taking over its management and administration and may appoint one of such directors to be the Chairman. Section 4 provides that on the issue of a notified order under section 3 all the directors of the company holding office as such immediately before the issue of the order shall be deemed to have vacated their offices. and any existing 895 contract of management between the company and any managing agent thereof shall be deemed to have terminated. The directors thus appointed shall be for all purposes the directors of the company duly constituted under the Compa nies Act and shall alone be entitled to exercise all the powers of the directors of the company. The powers and the duties of the directors are specified in section 5 and this section inter alia empowers the directors to vary or cancel, with the previous sanction of the Central Government, any contract or agreement entered into between the company and any other person if they are satisfied that such contract or agreement is detrimental to the interests of the company. Section 10 lays down that no compensation for premature termination of any contract could be claimed by the managing agent or any other contracting party. It is provided by section 12 that so long as the management by the statutory directors continues, the shareholders would be precluded from nominating or appointing any person to be a director of the company and any resolution passed by them will not be effective unless it is approved by the Central Government. This section lays down further that during this period no proceeding for winding up of the company, or for appointment of a receiver in respect thereof could be instituted in any court, unless it is sanctioned by the Central Government, and the Central Government would be competent to impose any restrictions or limitations as regards application of the provisions of the Indian Companies Act to, be affairs of the company. The only other material provision is that contained in section 15, under which the Central Government may, by notified order, direct that all or any of the powers exercisable by it under this Ordinance may be exercised by the Government of Bombay. In accordance with the provisions of section 15 men tioned above, the Central Government, by notification issued on the same day that the Ordinance was promulgated, delegat ed all its powers exercisable under the Ordinance to the Government of Bombay, 896 On the next day, the Government of Bombay appointed respond ents 3 to 7 as directors of the company in terms of section 3 of the Ordinance. On the 2nd of March, 1950, the re spondent No. 9 was appointed a director and respondent No. 5 having resigned his office in the meantime, the re spondent No. 8 was appointed in his place. On the 7th of April, 1950, the Ordinance was repealed and an Act was passed by the Parliament of India, known as the Sholapur Spinning and Weaving Company (Emergency Provisions)Act which re enacted almost in identical terms all the provisions of the Ordinance and provided further that all actions taken and orders made under the Ordinance shall be deemed to have been taken or made under the corresponding provisions of the Act. The preamble to the Ordinance was not however repro duced in the Act. The petitioner in his petition has challenged the con stitutional validity of both the Ordinance and the Act. As the Ordinance is no longer in force and all its provisions have been incorporated in the Act, it will not be necessary to deal with or refer to the enactments separately. Both the Ordinance and the Act have been attacked on identical grounds and it is only necessary to enumerate briefly what these grounds are. The main ground put forward by the petitioner is that the pith and substance of the enactments is to take posses sion of and control over the mills of the company which are its valuable assets and such taking of possession of proper ty is entirely beyond the powers of the Legislature. 'The provisions of the Act, it is said, amount to deprivation of property of the shareholders as well as of the company within the meaning of article 31 of the Constitution and the restrictions imposed on the rights of the shareholders in respect to the shares held by them constitute an unjustifia ble interference with their rights to hold property and as such are void under article 19 (1) (f). It is urged that there was no public purpose for which the Legislature could authorise the taking possession or acquisition of 897 property and such acquisition or taking of possession with out payment of compensation is in violation of the funda mental rights guaranteed by article 31 (2) of the Constitu tion. It is said further that the enactment denies to the company and its shareholders equality before the law. and equal protection of laws and thus offends against the provi sions of article 14 of the Constitution. The only other material point raised is that the legislation is beyond the legislative competency of the Parliament and is not covered by any of the items in the legislative lists. On these allegations, the petitioner prays, in the first instance. that it may be declared that both the Act and the Ordinance are ultra vires and void and an injunction may be issued restraining the respondents from exercising any of the powers conferred upon them by the enactments. The third and the material prayer is for issuing a writ of mandamus, "restraining the respondents 1 to 9 from exercising or purporting to exercise any powers under the said Ordinance or Act and from in any manner interfering with the manage ment or affairs of the company under colour of or any pur ported exercise of any powers under the Ordinance or the Act," The other prayers are not material for our purpose. Before I address myself to the merits of this applica tion it will be necessary to clear up two preliminary matters in respect to which arguments were advanced at some length from the Bar. The first point relates to the scope of our enquiry in the present case and raises the question as to what precisely are the matters that have to be inves tigated and determined on this application of the petition er. The second point relates to the form of relief that can be prayed for and granted in a case of this description. Article 32 (1) of the Constitution guarantees to every body the right to move this court, by appropriate proceed ing, for enforcement of the fundamental rights which are enumerated in Part 1II of the Constitution. Clause (2) of the article lays down that the 115 898 Supreme Court shall have the power to issue directions or orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari whichever may be appropriate for the enforcement of any of the rights conferred by this part. Thus anybody who complains of infraction of any of the fundamental rights guaranteed by the Constitution is at liberty to move the Supreme Court for the enforcement of such rights and this court has been given the power to make orders and issuue directions or writs similar in nature to the prerogative writs of English law as might be considered appropriate in particular cases. The fundamental rights guaranteed by the Constitution are available not merely to individual citizens but to corporate bodies as well except where the language of the provision or the nature of the right compels the inference that they are applicable only to natural persons. An incorporated company, there fore, can come up to this court for enforcement of its fundamental rights and so may the individual shareholders to enforce their own; but it would not be open to an individual shareholder to complain of an Act which affects the funda mental rights of the company except to the extent that it constitutes an infraction of his own rights as well. This follows logically from the rule of law that a corporation has a distinct legal personality of its own with rights and capacities, duties and obligations separate from those of its individual members. As the rights are different and inhere in different legal entities, it is not competent to one person to seek to enforce the rights of another except where the law permits him to do so. A well known illustra tion of such exception is furnished by the procedure that is sanctioned in an application for a writ of habeas corpus. Not only the man who is imprisoned or detained in confine ment but any person, provided he is not an absolute stranger, can institute proceedings to obtain a writ of habeas corpus for the purpose of liberating another from an illegal imprisonment. 899 The application before us under article 32 of the Con stitution is on behalf of an individual shareholder of the company. Article 32, as its provisions show,. is not di rectly concerned with the determination of constitutional validity of particular legislative enactments. What it aims at is the enforcing of fundamental rights guaranteed by the Constitution, no matter whether the necessity for such enforcement arises out of an action of the executive or of the legislature. To make out a case under this article, it is incumbent upon the petitioner to establish not merely that the law complained of is beyond the competence of the particular legislature as not being covered by any of the items in the legislative lists, but that it affects or invades his fundamental rights guaranteed by the Constitu tion, of which he could seek enforcement by an appropriate writ or order. The rights that could be enforced under article 32 must ordinarily be the rights of the petitioner himself who complains I of infraction of such rights and approaches the court for relief. This being the position, the proper subject of our investigation would be what rights, if any, of the petitioner as a shareholder of the company have been violated by the impugned legislation. A discussion of the fundamental rights of the company as such would be outside the purview of our enquiry. It is settled law that in order to redress a wrong done to the company, the action should prima facie be brought by the company itself. It cannot be said that this course is not possible in the circumstances of the present case. As the law is alleged to be unconstitutional, it is open to the old directors of the company who have been ousted from their position by reason of the enactment to maintain that they are directors still in the eye of law, and on that footing the majority of shareholders can also assert 'the rights of the company as such. None of them, however, have come forward to institute any proceeding on behalf of the compa ny. Neither in form nor in substance does the present application purport to be one made by the company itself. Indeed, the company 900 is one of the respondents, and opposes the petition. As regards the other point, it would appear from the language of article 32 of the Constitution that. the sole object of the article is the enforcement of fundamental rights guaranteed by the Constitution. A proceeding under this article cannot really have any affinity to what is known as a declaratory suit. The first prayer made in the petition, n seeks relief in the shape of a declaration that the Act is invalid and is apparently inappropriate to an application under article 32; while the second purports to be framed for a relief by way of injunc tion consequent upon the first. As regards the third pray er, it has been contended by Mr. Joshi, who appears for one of the respondents, that having regard to the nature of the case and the allegations made by the petitioner himself, the prayer for a writ of mandamus, in the form in which it has been made, is not tenable. What is argued is that a writ of mandamus can be prayed for, for enforcement of statutory duties or to compel a person holding a public office to do or forbear from doing something which is incumbent upon him to do or forbear from doing under the provisions of any law. Assuming that the respondents in the present case are public servants, it is said that the statutory duties which it is incumbent upon them to discharge are precisely the duties which are laid down in the impugned Act itself. There is no legal obligation on their part to abstain from exercising the powers conferred upon them by the impeached enact ment which the court can be called upon to enforce. These is really not much substance in this argument, for according to the petitioner the impugned Act is not valid at all and consequently the respondents cannot take their stand on this very Act to defeat the application for a writ in the nature of a mandamus. Any way, article 32 of the Constitution gives us very wide discretion in the matter of framing our writs to suit the exigencies of particular cases, and the application of the petitioner cannot be thrown out simply on the 901 ground that 'the proper writ or direction has not been prayed for. Proceeding now to the merits of the case, the first contention that has been pressed before us by the learned Counsel for the petitioner is that the effect of the Shola pur Spinning and Weaving Company Limited (Emergency Provi sions) Act, has been to take away from the company and its shareholders, possession of property and other interests in commercial undertaking and vest the same in certain persons who are appointed by the State, and the exercise of whose powers cannot be directed or controlled in any way by the shareholders. As the taking of possession is not for any public purpose and no provision for compensation has been made by the law which authorises it, such law, it is said, violates the fundamental rights guaranteed under article 31 of the Constitution. To appreciate the contention, it would be convenient first of all to advert to the provisions of the first two clauses of article 31 of the Constitution. The first clause of article 31 lays down that "no person shall be deprived of his property save by authority of law" The second clause provides: "No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken posse sion of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given. " It is a right inherent in every sovereign to take and appropriate private property belonging to individual citi zens for public use. 'this right, which is described as eminent domain in American law, is like the power of taxation, an offspring of political necessity, and it is supposed to be based upon an implied reservation by Govern ment that private property acquired by its 902 citizens under its protection may be taken or its use con trolled for public benefit irrespective of the wishes of the owner. Article 31 (2) of the Constitution prescribes a two fold limit within which such superior right of the State should be exercised. One limitation imposed upon acquisition or taking possession of private property which is implied in the clause is that such taking must be for public purpose. The other condition is that no property can be taken, unless the law which authorises such appropriation contains a provision for payment of compensation in the manner laid down in the clause. So far as article S1 (2) is concerned, the substantial question for our consideration is whether the impugned legislation authorises any act amounting to acquisition or taking possession of private property within the meaning of the clause. It cannot be disputed that acquisition means and implies the acquiring of the entire title of the expropriated owner, whatever the nature or extent of that title might be. The entire bundle of rights which were vested in the original holder would pass on acquisition to the acquirer leaving nothing in the former. In taking possession on the other hand, the title to the property admittedly remains in the original holder, though he is excluded from possession or enjoyment of the property. Article 31 (,?) of the Constitu tion itself makes a clear distinction between acquisition of property and taking possession of it for a public purpose, though it places both of them on the same footing in the sense that a legislation authorising either of these acts must make provision for payment of compensation to the displaced or expropriated holder of the property. In the context in which the word "acquisition" appears in article 31 (2), it can only mean and refer to acquisition of the entire interest of the previous holder by transfer of title and I have no hesitation in holding that there is no such acquisition either as regards the property of the company or of the shareholders in the present case. The question, therefore, narrows down to this as to whether the legisla tion in 903 question has authorised the taking of possession of any property or interest belonging to the petitioner. It is argued by the learned Attorney General that the taking of possession as contemplated by article 31 (2) means the taking of possession of the entire bundle of rights which the previous holder had, by excluding him from every part or item thereof. If the original holder is still left to exercise his possession with regard to some of the rights which were within the folds of his title, it would not amount to taking possession of the property for purposes of article 31 (2) of the Constitution. Having laid down this proposition of law, the learned Attorney General has taken us through the various provisions of the impugned Act and the contention advanced by him substantially is that nei ther the company nor the shareholders have been dispossessed from their property by reason of the enactment. As regards the properties of the company, the directors, who have been given the custody of the property, effects and actionable claims of the company, are, it is said, to exercise their powers not in their own right but as agents of the company, whose beneficial interest in all its assets has not been touched or taken away at all. No doubt the affairs of the company are to be managed by a body of directors appointed by the State and not by the company, but this, it is argued, would not amount to taking possession of any property or interest within the meaning of article 31 (2). Mr. Chari on the other hand, has contended on behalf of the petitioner that after the management is taken over by the statutory directors, it cannot be said that the company still retains possession or control over its property and assets. Assuming that this State management was imposed in the interests of the shareholders themselves and that the statutory directors are acting as the agents of the company, the possession of the statutory directors could not, it is argued, be regarded in law as possession of the company so long as they are bound to act in obedience to the dictates of the Central Government and not of the company itself in the administra tion of its affairs. Possession of an 904 agent, it is said, cannot juridically be the possession of the principal, if the agent is to act not according to the commands or dictates of the principal, but under the direc tion of an exterior authority. There can be no doubt that there is force in this con tention, but as I have indicated at the outset, we are not concerned in this case with the larger question as to how far the inter position of this statutory management and control amounts to taking possession of the property and assets belonging to the company. The point for our consider ation is a short one and that is whether by virtue of the impugned legislation any property or interest of the peti tioner himself, as a shareholder of the company, has been taken possession of by the State or an authority appointed under it, as contemplated by article 31 (2) of the Constitu tion. The petitioner as a shareholder has undoubtedly an interest in the company. His interest is represented by the share he holds and the share is movable property according to the Indian Companies Act with all the incidence of such property attached to it. Ordinarily, he is entitled to enjoy the income arising from the shares in the shape of divi dends; the share like any 'other marketable commodity can be sold or transferred by way of mortgage or pledge. The hold ing of the share in his name gives him the right to vote at the election of directors and thereby take a part, though indirectly, in the management of the company 's affairs. If the majority of shareholders sides with him, he can have a resolution passed which would be binding on the company, and lastly, he can institute proceedings for winding up of the company which may result in a distribution of the net assets among the shareholders. It cannot be disputed that the petitioner has not been dispossessed in any sense of the term of the shares he holds. Nobody has taken the shares away from him. His legal and beneficial interest in respect to the shares he holds is left intact. If the company declares dividend, he would be entitled to the same. He can sell or otherwise dispose of the shares at any 905 time at his option. The impugned Act has affected him in this way that his right of voting at the election of direc tors has been kept in abeyance so long as the management by the statutory director continues; and as a result of that, his right to participate in the management of the company has been abridged to that extent. His rights to pass resolutions or to institute winding up proceedings have also been restricted though they are not wholly gone; these rights can be exercised only with the consent or sanction of the Central Government. In my opinion, from the facts stated above, it cannot be held that the petitioner has been dispossessed from the property owned by him. I may apply the test which Mr. Chari himself formulated. If somebody had taken possession of the petitioner 's shares and was clothed with the authority to exercise all the powers which could be exercised by the holder of the shares under law, then even if he purported to act as the petitioner 's agent and exer cise these powers for his benefit, the possession of such person would not have been the petitioner 's possession if he was bound to act not under the directions of the petitioner or in obedience to his commands but under the directions of some other person or authority. There is no doubt whatsoever that is not the position in the present case. The State has not usurped the shareholders ' right to vote or vested it in any other authority. The State appoints directors of its own choice but that it does, not in exercise of the share holders ' right to vote but in exercise of the powers vested in it by the impugned Act. Thus there has been no dispos session of the shareholders from their right of voting at all. The same reasoning applies to the other rights of the shareholders spoken of above, namely, their right of passing resolutions and of presenting winding up petition. These rights have been restricted undoubtedly and may not be capable of being exercised to the fullest extent as long as the management by the State continues. Whether the restric tions are such as would bring the case within 116 906 the mischief of article 19 (1) (f) of the Constitution, 1 will examine presently; but 1 have no hesitation in holding that they do not amount to dispossession of the shareholders from these rights in the sense that the rights have been usurped by other people who are exercising them in place of the displaced shareholders. In the view that I have taken it is not necessary to discuss whether we can accept as sound the contention put forward by the learned Attorney General that the word "property" as used in article 31 of the Constitution con notes the entire property, that is to say the totality of the rights which the ownership of the object connotes. According to Mr. Setalvad, if a shareholder is not deprived of the entirety of his rights which he is entitled to exer cise by reason of his being the owner or holder of the share and some rights, however insignificant they might be, still remain in him, there cannot be any dispossession as contem plated by article 31(2). It is difficult, in my opinion, to accept the contention formulated in such broad terms. The test would certainly be as to whether the owner has been dispossessed substantially from the rights held by him or the loss is only with regard to some minor ingredients of the proprietory right. It is relevant to refer in this connection to an observation made by Rich J. in a Full Bench decision of the High Court of Australia,(1) where the ques tion arose as to whether the taking of exclusive possession of a property for an indefinite period of time by the Com monwealth of Australia under Reg. 54 of the National Securi ty Regulation amounted to acquisition of property within the meaning of placitum 31, section 51, of the Commonwealth Constitution. The majority of the Full Bench answered the question in the affirmative and the main reason upon which the majority decision was based is thus expressed in the language of Rich J. "Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. But there is nothing in (1) See Minister of Stain for the Army vs Dalziel, 68 C L.R. p. 261, 907 the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriat ing. " It is not, however, necessary for my purpose to pursue the matter any further, as in my opinion there has been no dispossession of the rights of a shareholder in the present case. Mr. Chari in course of his opening relied exclusively on clause (2) of article 31 of the Constitution. During his reply, however, he laid some stress on clause (1) of the article as well, and his contention seems to be that there was deprivation of property in the present case in contra vention of the terms of this clause. It is difficult to see what exactly is the contention of the learned Counsel and in which way it assists him for purposes of the present case. It has been argued by the learned Attorney General that clause (1) of article 31 relates to a power different from that dealt with under clause (2). According to him, what clause (1) contemplates is confiscation or destruction of property in exercise of what are known as 'police powers ' in American law, for which no payment of compensation is neces sary. I do not think it proper for purposes of the present case to enter into a discussion on this somewhat debatable point which has been raised by the learned Attorney General. In interpreting the provisions of our Constitution, we should go by the plain words used by the Constitution makers and the importing of expressions like 'police power ; which is a term of variable and indefinite connotation in American law can only make the task of interpretation more difficult. It is also not necessary to express any opinion as to wheth er clauses (1) and (2) of article 31 relate to exercise of different kinds of powers or they are to be taken as cumula tive provisions in relation to the same subjectmatter, namely, compulsory acquisition of property. If the word "deprived" as used in clause (1) connotes the idea of de struction or confiscation of property, obviously no such thing has happened in the present 908 case. Again if clauses (1) and (2) of article 31 have to be read together and "deprivation" in clause (1) is given the same meaning as compulsory acquisition in clause (2), clause (1), which speaks neither of compensation nor of public purpose, would not by itself, and apart from clause (2), assist the petitioner in any way. If the two clauses are read disjunctively, the only question that may arise in connection with clause (1) is whether or not the depriva tion of property is authorised by law. Mr. Chari has raised a question relating to the validity of the legislation on the ground of its not being covered by any of the items in the legislative list and to this question I would advert later on; but apart from this, clause (1) of article 31 of the Constitution seems to me to be altogether irrelevant for purposes of the petitioner 's case. This leads me to the consideration of the next point raised by Mr. Chari, namely, whether these restrictions offend against the provision of article 19(1)(f) of the Constitution. Article 19(1) of the Constitution enumerates the dif ferent forms of individual liberty, the protection of which is guaranteed by the Constitution. The remaining clauses of the article prescribe the limits that may be placed upon these liberties by law, so that they may not conflict with public welfare or general morality. Article 19(1)(f) guarantees to all citizens ' the right to acquire, hold or dispose of property. ' Any infringement of this provision would amount to a violation of the fundamental rights, unless it comes within the exceptions provided for in clause (5) of the article. That clause permits the imposition of reasonable restrictions upon the exercise of such righ teither in the interests of the general public or for the protection of the interests of any Scheduled Tribe. Two questions, therefore, arise in this connection: first, whether the restrictions that have been imposed upon the rights of the petitioner as a shareholder in the company under the Sholapur Act amount to infringement of his.right to acquire, hold or dispose of property within the meaning of article 19(1)(f) of the Constitution and 909 secondly, if they do interefere with such rights, whether they are covered by the exceptions 1aid down in clause (5) of the article. So far as the first point is concerned, it is quite clear that there is no restriction whatsoever upon the petitioner 's right to acquire and dispose of any property. The shares which he holds do remain his property and his right to dispose of them is not lettered in any way. If to 'hold ' a property means to possess it, there is no infringe ment of this right either, for, as I have stated already, the acts complained of by the petitioner do not amount to dispossession of him from any property in the eye of law. It is argued that 'holding ' includes enjoyment of all benefits that are ordinarily attached to the ownership of a property. The enjoyment of the fruits of a property is undoubtedly an incident of ownership. The pecuniary benefit, which a share. holder derives from the shares he holds, is the dividend and there is no limitation on the petitioner 's right in this respect. The petitioner undoubtedly has been precluded from exercising his right of voting at the elec tion of directors so long as the statutory directors contin ue to manage the affairs of the company. He cannot pass an effective resolution in concurrence with the majority of shareholders without the consent or sanction of the Central Government and without such sanction, there is also a disa bility on him to institute any winding up proceedings in a court of law. In my opinion, these are rights or privileges which are appurtenant to or flow from the ownership of property, but by themselves and taken independently, they cannot be reck oned as property capable of being acquired, held or disposed of as is contemplated by article 19 (1) (f) of the Constitu tion. I do not think that there has been any restriction on the rights of a shareholder to hold, acquire or dispose of his share by reason of the impugned enactment and conse quently article 19 (1) (f) of the Constitution is of no assistance to the petitioner. In this view, the other point does not arise for consideration, but I may state here that even if it is conceded for argument 's sake that the 910 disabilities imposed by the impugned legislation amount to restrictions on proprietory right, they may very well be supported as reasonable restraints imposed in the interests of the general public, viz., to secure the supply of a commodity essential to the community and to prevent a seri ous unemployment amongst a section of the people. They are, therefore, protected completely by clause (5)of article 19. This disposes of the second point raised by Mr. Chari. The next point urged on behalf of the petitioner raises an important question of constitutional law which turns upon the construction of article 14 of the Constitution. It is urged by the learned Counsel for the petitioner that the Sholapur Act is a piece of discriminatory legislation which offends against the provision of article 14 of the Constitu tion. Article 14 guarantees to all persons in the territo ry of India equality before the law and equal protection of the laws and its entire object, it is said, is to prevent any person or class of persons from being singled out as a special subject of discriminatory legislation. It is pointed out that the law in this case has selected one particular company and its shareholders and has taken away from them the right to manage their own affairs, but the same treatment has not been meted out to all other companies or shareholders situated in an identical manner. Article 14 of the Constitution, it may be noted, corre sponds to the equal protection clause in the Fourteenth Amendment of the American Constitution which declares that "no State shall deny to any person within its jurisdiction the equal protection of the laws. " We have been referred in course of the arguments on this point by the learned Counsel on both sides to quite a number of cases decided by the American Supreme Court, where questions turning upon the construction of the 'equal protection ' clause in the Ameri can Constitution came up for consideration. A detailed examination of these reports is neither necessary nor prof itable for our present purpose but we think we can cull a few general principles from some of the pronouncements of 911 the American Judges which might appear to us to be consonant with reason and help us in determining the true meaning and scope of article 14 of our Constitution. I may state here that so far as the violation of the equality clause in the Constitution is concerned, the peti tioner, as a shareholder of the company, has as much right to complain as the company itself, for his complaint is that apart from the discrimination made against the company, the impugned legislation has discriminated against him and the other shareholders of the company as a group vis a vis the shareholders of all other companies governed by the Indian Companies Act who have not been treated in a similar way. As the discriminatory treat ment has been in respect to the shareholders of this company alone, any one of the shareholders, whose interests are thus vitally affected, has a right to complain and it is immate rial that there has been nodiscrimination inter se amongst the shareholders themselves. It must be admitted that the guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions. As has been said by the Supreme Court of America, "equal protection of laws is a pledge of the protection of equal laws( ')," and this means "subjection to equal laws applying alike to all in the same situation("). " In other words, there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is the same. I am unable to accept the argument of Mr. Chari that a legislation relating to one individual or one family or one body corporate would per se violate the guarantee of the equal protection rule. There can certainly be a law applying to one person or to one group of persons and it cannot be held to be (1) Yick Wo vs Hopkins, 118 U.S. at 369 (2) Southern Raliway Company vs Greene, ; ,412. 912 unconstitutional if it is not discriminatory in its charac ter (1). It would be bad law "if it arbitrarily selects one individual or a class of individuals, one corporation or a class of corporations and visits a penalty upon them, which is not imposed upon others guilty of like delinquency(2). " The legislature undoubtedly has a wide field of choice in determining and classifying the subject of its laws, and if the law deals alike with all of a cer tain class, it is normally not obnoxious to the charge of denial of equal protection; but the classification should never be arbitrary. It must always rest upon some real and substantial distinction bearing a reasonable and just rela tion to the things in respect to which the classification is made; and classification made without any ' substantial basis should be regarded as invalid(3). The question is whether judged by this test the im pugned Act can be said to have contravened the provision embodiedin article 14 of the Constitution. Obviously the Act purports to make provisions which are of a drastic character and against the general law of the land as laid down in the Indian Companies Act, in regard to the admin istration and management of the affairs of one company in indian territory. The Act itself gives no reason for the legislation but the Ordinance, which was a precursor of the Act expressly stated why the legislation was necessary. It said that owing to mismanagement and neglect, a situation had arisen in the affairs of the company which prejudicially affected the production of an essential commodity and caused serious unemployment amongst a certain section of the community. Mr. Chari 's contention in substance is that there are various textile companies in India situated in a simi lar manner as the Sholapur company, against which the same charges could be brought and for the control and regulation of which all the reasons that are mentioned in the preamble to the Ordinance (1) Willis Constitutional Law, p. 580. (2) Gulf C. & section F.R. Co. vs Ellis. , at 159. (3) Southern Railway Co. vs Greene, ; , at 412 913 could be applied. Yet, it is said, the legislation has been passed with regard to this one company alone. The argument seems plausible at first sight, but on a closer examination I do not think that I can accept it as sound. It must be conceded that the Legislature has a wide discretion in determining the subject matter of its laws. It is an accepted doctrine of the American Courts and which seems to me to be well founded on principle, that the presumption is favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a transgression of constitutional principles. As was said by the Supreme Court of America in Middleton vs Texas Power and Light Company(1), 'It must be presumed that a Legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds. " This being the position, it is for the petitioner to establish facts which would prove that the selection of this particular subject by the Legislature is unreasona ble and based upon arbitrary grounds. No allegations were made in the petition and no materials were placed before us to show as to whether there are other companies in India which come precisely under the same category as the Sholapur Spinning and Weaving Company and the reasons for imposing control upon the latter as mentioned in the preamble to the Ordinance are applicable to them as well. Mr. Chari argues that these are matters of common knowledge of which we should take judicial notice. I do not think that this is the correct line of approach. It is quite true that the Legislature has, in this instance, proceeded against one company only and its shareholders; but even one corporation or a group of persons can be taken as a class by itself for the purpose of legislation, provided it exhibits some excep tional features which are not possessed by others. The courts should prima facie (1) 219 u.s. 152 at p. 157. 117 914 lean in favour of constitutionality and should support the legislation if it is possible to do so on any reasonable ground, and it is for the party who attacks the validity of the legislation to place all materials before the court which would go to show that the selection is arbitrary and unsupportable. Throwing out of vague hints that there may be other instances of similar nature is not enough for this purpose. We have not even before us any statement on oath by the petitioner that what has been alleged against this particular company may be said against other companies as well. If there was any such statement, the respondents could have placed before us the whole string of events that led up to the passing of this legislation. If we are to take judi cial notice of the existence of similar other badly managed companies, we must take notice also of the facts which appear in the parliamentary proceedings in connection with this legislation which leave been referred to by my learned brother, Fazl Ali J. in his judgment and which would go to establish that the facts connected with this corporation are indeed exceptional and the discrimination that has been made can be supported on just and reasonable grounds. I purpose ly refrain from alluding to these facts or basing my deci sion thereon as we had no opportunity of investigating them properly during the course of the hearing. As matters stand, no proper materials have been placed before us by either side and as I am unable to say that the legislature cannot be supported on any reasonable ground, I think it to be extremely risky to overthrow it on mere suspicion or vague conjectures. If it is possible to imagine or think of cases of other companies where similar or identical condi tions might prevail, it is also not impossible to conceive of something" peculiar" or "unusual" to this corporation which led the legislature to intervene in its affairs. As has been laid down by the Supreme Court of America, "The Legislature is free to recognise degrees of harm and it may confine its restrictions to those cases where the need is deemed to be the clearest"(1). We should (1) Radics, vs New York, 264 U.S. 915 bear in mind that a corporation, which is engaged in produc tion of a commodity vitally essential to the community, has a social character of its own, and it must not be regarded as the concern primarily or only of those who invest their money in it. If its possibilities are large and it had a prosperous and useful career for a long period of time and is about to collapse not for any economic reason but through sheer perversity of the controlling authority, one cannot say that the legislature has no authority to treat it as a class by itself and make special legislation applicable to it alone in the interests of the community at large. The combination of circumstances which are present here may be of such unique character as could not be existing in any other institution. But all these, I must say, are matters which require investigation on proper materials which we have not got before us in the present case. In these circum stances I am constrained to hold that the present applica tion must fail on the simple ground that the petitioner made no attempt to discharge the primafacie burden that lay upon him and did not place before us the materials upon which a proper decision on the point could be arrived at. In my opinion , therefore, the attack on the legislation on the ground of the denial of equal protection of law cannot succeed. The only other thing that requires to be considered is the argument of Mr. Chari that the law in question is in valid as it is not covered by any of the items in the legis lative list. In my opinion, this argument has no substance. What the law has attempted to do is to regulate the affairs of this company by laying down certain special rules for its management and administration. It is fully covered by item No. 43 of the Union List which speaks inter alia of "incor poration, regulation and winding up of trading corporations. " The result is that the application fails and is dis missed with costs. DAS J. As I have arrived at a conclusion different from that reached by the majority of this Court, I 916 consider it proper, out of my respect for the opinion of my learned colleagues, to state the reasons for my conclusions in some detail. On January 9, 1950, the Governor General of India, acting under section 42 of the Government of India Act, 1935, promulgated an Ordinance, being Ordinance No. II of 1950, concenrning the Sholapur Spinning and Weaving Company, Limited, (hereafter referred to as the said company). The preambles and the provisions of the Ordinance have been referred to in the judgment just delivered by Mukherjea J. and need not be recapitulated by me in detail. Suffice it to say that the net result of the Ordinance was that the managing agents of the said company were dismissed, the directors holding office at the time automatically vacated their office, the Government was authorised to nominate directors, the rights of the shareholders of this company were curtailed in that it was made unlawful for them to nominate or appoint any director, no resolution passed by them could be given effect to without the sanction of the Government and no proceeding for winding up could be taken by them without such sanction, and power was given to the Government to further modify the provisions of the Indian Companies Act in its application to the said company. On the very day that the Ordinance was promulgated the Central Government acting under section 15 delegated all its powers to the Government of Bombay. On January 10, 1950, the Government of Bombay appointed Respondents Nos. 3 to 7 as the new directors. On March 2, 1950, Respondent No. 5 having resigned, Respondent No. 8 was appointed a director in his place and on the same day Respondent No. 9 was also appointed as a director. In the meantime the new Constitu tion had come into force on January 26, 1950. On February 7, 1950, the new directors passed a resolution sanctioning a call for Rs. 50 on the preference shares. Thereupon a suit being Suit No. 438 of 1950 was filed in the High Court of 917 Bombay by one Dwarkadas Shrinivas against the new directors challenging the validity of the Ordinance and the right of the new directors to make the call. Bhagwati J. who tried the suit held that the Ordinance was valid and dismissed the suit. An appeal (Appeal No. 48 of 1950) was taken from that decision which was dismissed by a Division Bench (Chagla C.J. and Gajendragadkar J.) on August 29, 1950. In the meantime, on April 7, 1950, the Ordinance was replaced by Act No. XXVIII of 1950. The Act substantially reproduced the provisions of the Ordinance except that the preambles to the Ordinance were omitted. On May 29, 1950, the present petition was filed by one Chiranjitlal Chowdhuri. The petitioner claims to be a shareholder of the said company holding 80 preference shares and 3 ordinary shares. The preference shares, according to him, stand in the name of the Bank of Baroda to whom they are said to have been pledged. As those preference shares are not registered in the name of the petitioner he cannot assert any right as holder of those shares. According to the respondents, the petitioner appears on the register as holder of only one fully paid up ordinary share. For the purposes of this application, then, the petitioner 's interest in the said company must be taken as limited to only one fully paid up ordinary share. The respondents are the Union of India, the State of Bombay and the new directors besides the company itself. The respondent No. 5 having resigned, he is no longer a director and has been wrongly impleaded as respond ent. The reliefs prayed for are that the Ordinance and the Act are ultra vires and void, that the Central Government and the State Government and the directors be restrained from exercising any powers under the Ordinance or the Act, that a writ of mandamus be issued restraining the new direc tors from exercising any powers under the Ordinance or the Act or from in any manner interfering with the management of the affairs of the company under colour of or in purported exercise of any powers under the said Ordinance or Act. 918 The validity of the Ordinance and the Act has been challenged before us on the following grounds: (i) that it was not within the legislative competence (a) of the Gover nor General to promulgate the Ordinance, or (b) of the Parliament to enact the Act, and (ii) that the Ordinance and the Act infringe the fundamental rights of the shareholders as well as those of the said company and are, therefore, void and inoperative under article 13. Re (i) . The present application has been made by the petitioner under article 52 of the Constitution. Sub section (1) of that article guarantees the right to move this Court by appropriate proceedings for the enforcement of the rights conferred by Part [1] of the Constitution. Sub section (2) empowers this Court to issue directions or orders or writs, including certain specified writs, whichever may be appro priate, for the enforcement of any of the rights conferred by that Part. It is clear, therefore, that article 32 can only be invoked for the purpose of the enforcement of the fundamental rights. Article 32 does not permit an applica tion merely for the purpose of agitating the competence of the appropriate legislature in passing any particular enact ment unless the enactment also infringes any of the funda mental rights. In this case the claim is that the fundamen tal rights have been infringed and, therefore, the question of legislative competence may also be incidentally raised on this application. It does not appear to me, however, that there is any substance in this point for, in my opinion, entry 33 of List I of the Seventh Schedule to the Government of India Act, 1935, and the corresponding entry 43 of the Union List set out in the Seventh Schedule to the Constitu tion clearly support these pieces of legislation as far as the question of legislative competency is concerned. Sec tions 83A and 83 B of the Indian Companies Act can only be supported as valid on the ground that they regulate the management of companies and are, therefore, within the said entry. Likewise, the provisions of the Ordinance and the Act relating to the appointment of directors by the 919 Government and the curtailment of the shareholders ' rights as regards the election of directors, passing of resolutions giving directions with respect to the management of the company and to present a winding up petition are matters touching the management of the company and, as such, within the legislative competence of the appropriate legislative authority. In my judgment, the Ordinance and the Act cannot be held to be invalid on the ground of legislative incompe tency of the authority promulgating or passing the same. Re (ii) The fundamental rights said to have been in fringed are the right to acquire, hold and dispose of property guaranteed to every citizen by Article 19(1)(f) and the right to property secured by article 31, In Gapalan 's case (1) 1 pointed out that the rights conferred by article 19 (1) (a) to (e) and (g) would be available to the citizen until he was, under article 21, deprived of his life or personal liberty according to procedure established by law and that the right to property guaranteed by article 19 (1)(f) would likewise continue until the owner was, under article 31, deprived of such property by authority of law. Therefore, it will be necessary to consider first whether the shareholder or the company has been deprived of his or its property by authority of law under Article 31 for, if he or it has been so deprived, then the question of his or its fundamental right under article 19 (1) (f) will not arise. The relevant clauses of article 31 run as follows "31. (1) No person shall be deprived of his property save by authority of law. (2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorisingthe taking of such possession or such acquisition, unless the law provides for compensation for the property taken posses sion of or acquired (1) ; 920 and either fixes the amount of the compensation, or speci fies the principles on which, and the manner in which, the compensation is to be determined and given. " Article 31 protects every person, whether such ' person is a citizen or not. and it is wide enough to cover a natu ral person as well as an artificial person. Whether or not, having regard to the language used in article 5, a corpora tion can be called a citizen and as such entitled to the rights guaranteed under article 19, it is quite clear that the corporation is protected by article 31, for that article protects every "person" which expression certainly includes an artificial person. The contention of the peitioner is that the Ordinance and the Act have infringed his fundamental right to property as a shareholder in the said company. Article 31, like article 19(1) (f), is concerned with "property ". Both the articles are in the same chapter and deal with fundamental rights. Therefore, it is reasonable to say that the word "property" must be given the same meaning in construing those two articles. What, then, is the meaning of the word "property"? It may mean either the bundle of rights which the owner has over or in respect of a thing, tangible or intangible, or it may mean the thing itself over or in respect of which the owner may exercise these rights. It is quite clear that the Ordinance or the Act has not deprived the shareholder of his share itself. The share still be longs to the shareholder. He is still entitled to the dividend that may be declared. He can deal with or dispose of the share as he pleases. The learned Attorney General contends that even if the other meaning of the word "proper ty" is adopted, the shareholder has not been deprived of his" property" understood in that sense, that is to say he has not been deprived of the entire bundle of rights which put together constitute his "property ". According to him the" property" of the shareholder, besides and apart from his right to elect directors, to pass resolutions giving directions to the directors and to present a winding up petition, consists in his right to participate 921 in the dividends declared on the profits made by the working of the company and, in case of winding up, to participate in the surplus that may be left after meeting the winding up expenses and paying the creditors. Those last mentioned rights, he points out, have not been touched at all and the shareholder can yet deal with or dispose of his shares as he pleases and is still entitled to dividends if and when declared. Therefore, concludes the learned Attorney General, the shareholder cannot complain that he has been deprived of his "property", for the totality of his rights have not been taken away. The argument thus formulated appears to me to be somewhat too wide, for it will then permit the legisla ture to authorise the State to acquire or take possession, without any compensation, of almost the entire rights of the owner leaving to him only a few subsidiary rights. This result could not, in my opinion, have been intended by our Constitution. As said by Rich J. in the Minister for State for the Army vs Datziel (i) while dealing with section 31 (XXXI) of the Australian Constitution "Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencurnbered estate in fee simple in possession has the largest possible bundle. But there is nothing in the placi tum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it is expropriating. " The learned Judge then concluded as follows at p. 286 : "It would in my opinion, be wholly inconsistent with the language of the placitum to hold that whilst preventing the legislature from authorising the acquisition of a citi zen 's full title except upon just terms, it leaves it open to the legislature to seize possession and enjoy the full fruits of possession indefinitely, on any terms it chooses or upon no terms at all." (1) ; 118 922 In my judgment the question whether the Ordinance or the Act has deprived the shareholder of his "property" must depend, for its answer, on whether it has taken away the substantial bulk of the rights constituting his "property". In other words, if the rights taken away by the Ordinance or the Act are such as would render the rights left un touched illusory and practically valueless, then there can be no question that in effect and substance the "property" of the shareholder has been taken away by the Ordinance or the Act. Judged by this test can it be said that the right to dispose of the share and the right to receive dividend, if any, or to participate in the surplus in the case of winding up that have been left to the shareholder are illu sory or practically valueless, because the right to control the management by directors elected by him, the right to pass resolutions giving directions to the directors and the right to present a winding up petition have, for the time being, been suspended ? I think not. The right still pos sessed by the shareholder are the most important of the rights constituting his "property", although certain privi leges incidental to the ownership have been put in abeyance for the time being. It is, in my opinion, impossible to say that the Ordinance or the Act has deprived the shareholder of his "property" in the sense in which that word is used in article 19 (1) (f) and article 31. The curtailment of the incidental privileges, namely, the right to elect directors, to pass resolutions and to apply for winding up may well be supported as a reasonable restraint on the exercise and enjoyment of the shareholder 's right of property imposed in the interests of the general public under article 19 (5), namely, to secure the supply of an essential commodity and to prevent unemployment. Learned counsel for the petitioner, however, urges that the Ordinance and the Act have infringed the sharehold er 's right to property in that he has been deprived of his valuable right to elect directors, to give directions by passing resolutions and, in case of apprehension of loss, to present a petition for the winding 923 up of the company. These rights, it is urged, are by them selves "property" and it is of this "property" that the shareholder is said to have been deprived bythe State under a law which does not provide for payment of compensation and which is, as such, an infraction of the shareholder 's funda mental right to property under article 31 (2). Two ques tions arise on this argument. Are these rights "property" within the meaning of the two articles I have mentioned ? These rights, as already stated, are, no doubt, privileges incidental to the ownership of the share which itself is property, but it cannot, in my opinion, be said that these rights, by themselves, and apart from the share are "proper ty" within the meaning of those articles, for those articles only regard that as "property" which can by itself be ac quired, disposed of or taken possession of. The right to vote for the election of directors, the right to pass reso lutions and the right to present a petition for winding up are personal rights flowing from the ownership of the share and cannot by themselves and apart from the share be ac quired or disposed of or taken possession of as contemplated by those articles. The second question is assuming that these rights are by themselves "property ", what is the effect of the Ordinance and the Act on such "property". It is nobody 's case that the Ordinance or the Act has autho rised any acquisition by the State of this "property" of the shareholder or that there has in fact been any such acquisi tion. The only question then is whether this "property" of the shareholder, meaning thereby only the rights mentioned above, has been taken possession of by the State. It will be noticed that by the Ordinance or the Act these particular rights of the shareholder have not been entirely taken away, for he can still exercise these rights subject 0 course, to the sanction of the Government. Assuming, however, that the fetters placed on these rights are tantamount to the taking away of the rights altogether, there is nothing to indicate that the Ordinance or the Act has, after taking away the rights from the shareholder, 924 vested them in the State or in any other person named by it so as to enable the State or any other person to exercise those rights of the shareholder. The Government undoubtedly appoints directors under the Act, but such appointment is made in exercise of the the powers vested in the Government by the Ordinance or the Act and not in exercise of the shareholder 's right. As already indicated, entry 43 in the Union List authorises Parliament to make laws with respect, amongst other things, to the regulation of trading corpora tions. There was, therefore, nothing to prevent Parliament from amending the Companies Act or from passing a new law regulating the management of the company by providing that the directors, instead of being elected by the shareholders, should be appointed by the Government. The new law has undoubtedly cut down the existing rights of the shareholder and thereby deprived the shareholder of his unfettered right to appoint directors or to pass resolutions giving direc tions or to present a winding up petition. Such depriva tion, however, has not vested the rights in the Government or its nominee. What has happened to the rights of the shareholder is that such rights have been temporarily de stroyed or kept in abeyance. The result, therefore, has been that although the shareholder has been for the time being deprived of his "property", assuming these rights to be "property", such "property" has not been acquired or taken possession of by the Government. If this be the result brought about by the Ordinance and the Act, do they offend against the fundamental rights guaranteed by article 31 ? Article 31 (1) formulates the fundamental right in a nega tive form prohibiting the deprivation of property except by authority of law. It implies that a person may be deprived of his property by authority of law. Article 31 (2) prohib its the acquisition or taking possession of property for a public purpose under any law, unless such law provides for payment of compensation. It is suggested that clauses (1) and (2)o[ article 31 deal with the same topic, namely, compulsory acquisition or taking possession 925 of property, clause (2) being only an elaboration of clause (1). There appear to me to be two objections to this sug gestion. If that were the correct view, then clause (1).must be held to be wholly redundant and clause (2), by itself, would have been sufficient. In the next place, such a view would exclude deprivation of property otherwise than by acquisition or taking of possession. One can conceive of circumstances where the State may have to deprive a person of his property without acquiring or taking possession of the same. For example, in any emergency, in order to prevent a fire spreading, the authorities may have to demolish an intervening building. This deprivation of property is sup ported in the United States of America as an exercise of "police power ".This deprivation of property is different from acquisition or taking of possession of property which goes by the name of "eminent domain" in the American Law. The construction suggested implies that our Constitution has dealt with only the law of "eminent domain ", but has not provided for deprivation of property in exercise of police powers ' '. I am not prepared to adopt such construction, for I do not feel pressed to do so by the language used in article 31. On the contrary, the language of clause (1) of article 31 is wider than that of clause (2), for deprivation of property may well be brought about otherwise than by acquiring or taking possession of it. I think clause (1) enunciates the general principle that no person shall be deprived of his property except by authority of law, which, put in a positive form, implies that a person may be de prived of his property, provided he is so deprived by au thority of law. No question of compensation arises under clause (1). The effect of clause (2) is that only certain kinds of deprivation of property, namely those brought about by acquisition or taking possession of it, will not be permissible under any law, unless such law provides for payment of compensation. If the deprivation of property is brought about by means other than acquisition or taking possession of it, no compensation is required, provided that such deprivation is by 926 authority of law. In this case, as already stated, although the shareholder has been deprived of certain rights, such deprivation has been by authority of law passed by a compe tent legislative authority. This deprivation having been brought about otherwise than by acquisition or taking pos session of such rights, no question of compensation can arise and, therefore, there can be no question of the infraction of fundamental rights under article 31 (2). It is clear, therefore, that so far as the shareholder is concerned there has been no infringement of his fundamental rights under article 19 (1) (f) or article 31, and the shareholder cannot question the constitutionality of the Ordinance or the Act on this ground. As regards the company it is contended that the Ordi nance and the Act by empowering the State to dismiss the managing agent, to discharge the directors elected by the shareholders and to appoint new directors have in effect authorised the State to take possession of the undertaking and assets of the company through the new directors appoint ed by it without paying any compensation and, therefore, such law is repugnant to article 31 (2) of our Constitution. It is, however, urged by the learned Attorney General that the mills and all other assets now in the possession and custody of the new directors who are only servants or agents of the said company are, in the eye of the law, in the possession and custody of the company and have not really been taken possession of by the State. This argument, however, overlooks the fact that in order that the posses sion of the servant or agent may be juridically regarded as the possession of the master or principal, the servant or agent must be obedient to, and amenable to the directions of, the master or principal. If the master or principal has no hand in the appointment of the servant or agent or has no control over him or has no power to dismiss or discharge him, as in this case, the possession of such servant or agent can hardly, in law, be regarded as the possession of the company(1). In this view of the (1) See Elements of Law by Markby. 6th Edition. Para 371. p. 192. 927 matter there is great force in the argument that the proper ty of the company has been taken possession of by the State through directors who have been appointed by the State in exercise of the powers conferred by the Ordinance and the Act and who are under the direction and control of the State and this has been done without payment of any compen sation. The appropriate legislative authority was no doubt induced to enact this law, because, as the preamble to the Ordinance stated, on account of mismanagement and neglect, a situation had arisen in the affairs of the company which had prejudicially affected the production of an essential com modity and had caused serious unemployment amongst a certain section of the community, but, as stated by Holmes J. in Pennsylvania Coal Company vs Mahon(1), "A strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional. way of paying for the change. " Here, there fore, it may well be argued that the property of the company having been taken possession of by the State in exercise of powers conferred by a law which does not provide for payment of any compensation, the fundamental right of the company has, in the eye of the law, been infringed. If the fundamental right of the company has been in fringed, at all, who can complain about such infringement ? Primafacie the company would be the proper person to come forward in vindication of its own rights. It is said that the directors having been dismissed, the company cannot act. This, however, is a misapprehension, for if the Act be void on account of its being unconstitutional, the directors appointed by the shareholders have never in law been dis charged and are still in the eye of the law the directors of the company, and there was nothing to prevent them from taking proceedings in the name of the company at their own risk as to costs. Seeing that the directors have not come forward to make the application on behalf of the company and in its name the question arises whether (1) ; 928 an individual shareholder can complain. It is well settled in the United States that no one but those whose rights are directly affected by a law can raise the question of the constitutionality of that law. Thus in McCabe vs Atchison(1) which arose out of a suit filed by five Negros against five Railway Companies to restrain them from making any distinction in service on account of race pursuant to an Oklahoma Act known as ' 'The Separate Coach Law," in uphold ing the dismissal of the suit Hughes J. observed : "It is an elementary principle that in order to justify the granting of this extraordinary relief, the complainants ' need of it and the absence of an adequate remedy at law must clearly appear. The complaint cannot succeed because some one else may be hurt. Nor does it make any difference that other persons who may be injured are persons of the same race or occupation. It is the fact, clearly established, of injury to the complainant not to others which justi fies judicial interference. " In that case there was no allegation that anyone of the plaintiffs had ever travelled on anyone of the rail roans or had requested any accommodation in any of the sleeping cars or that such request was refused. The same principle was laid down in Jeffrey Manufacturing Company vs Blagg(2), Hendrick vs MaCyland(3) and Newark Natural Gas and Fuel Company vs The City of Newark(1). In each of these cases the Court declined to permit the person raising the question of constitutionality to do so on the ground that his rights were not directly affected by the law or Ordinance in ques tion. On the other hand, in Truax vs Raich(5) and in Bu chanan vs Warley(5) the Court allowed the plea because in both the cases the person raising it was directly affected. In the first of the two last mentioned cases an Arizona Act of 1914 requiring employers employing more than five workers to employ not less than eighty per cent. native born citi zens was (1) 235 u.s. 151. (4) 242 u.s. 403. (2) 235 u.s. 571. (5) 239 u.s. 33. (3) ; (6) 245 u.s. 60. 929 challenged by an alien who had been employed as a cook in a restaurant. That statute made a violation of the Act by an employer punishable. The fact that the employment was at will or that the employer and not the employee was subject to prosecution did not prevent the employee from raising the question of constitutionality because the statute, if en forced, would compel the employer to discharge the employee and, therefore, the employee was directly affected by the statute. In the second of the two last mentioned cases a city Ordinance prevented the occupation of a plot by a colored person in a block where a majority of the residences were occupied by white persons. A white man sold his property in such a block to a Negro under a contract which provided that the purchaser should not be required to accept a deed unless he would have a right, under the laws of the city, to occupy the same as a residence. The vendor sued for specific performance and contended that the Ordinance was unconstitutional. Although the alleged denial of con stitutional rights involved only the rights of coloured persons and the vendor was a white person yet it was held that the vendor was directly affected, because the Courts below, in view of the Ordinance, declined to enforce his contract and thereby directly affected his right to sell his property. It is, therefore, clear that the constitutional validity of a law can be challenged only by a person whose interest is directly affected by the law. The question then arises whether the infringement of the company 's rights so directly affects its shareholders as to entitle any of its shareholders to question the constitutional validity of the law infringing the company 's rights. The question has been answered in the negative by the Supreme Court of the United States in Darnell vs The State of Indi ana(1). In that case the owner of a share in a Tennessee corporation was not allowed to complain that an Indiana law discriminated against Tennessee corporations in that it did not make any allowance, as it did in the case of Indiana corporations, where the corporation (1) 119 930 had property taxed within the State. This is in accord with the well established legal principle that a corporation is a legal 'entity capable of holding pro perty and of suing or being sued and the corporators are not, in con templation of law, the owners of the assets of the corpora tion. In all the cases referred to above the question of constitutionality was raised in connection with the equal protection clause in the Fourteenth Amendment of the American Federal Constitution. If such be the require ments of law in connection with the equal protection clause which corresponds to our article 14, it appears to me to follow that only a person who is the owner of the property can raise the question of constitutionality under article 31 of a law by which he is so deprived of his property. If direct interest is necessary to permit a person to raise the question of constitutionality under article 14, a direct interest in the property will, I apprehend, be necessary to entitle a person to challenge a law which is said to infringe the right to that property under article 31. In my opinion, although a shareholder may, in a sense be interested to see that the company of which he is a shareholder is not deprived of its property he cannot, as held in Darnell vs Indiana(1), be heard to complain, in his own name and on his own behalf, of the infringement of the fundamental right to property of the company, for, in law, his own right to property has not been infringed as he is not the owner of the company 's properties. An interest in the company owning an undertak ing is not an interest in the undertaking itself. The interest in the company which owns an undertaking is the "property" of the shareholder under article 31 (2), but the undertaking is the property of the company and not that of the shareholder and the latter cannot be said to have a direct interest in the property of the company. This is the inevitable result of attributing a legal personality to a corporation. The proceedings for a writ in the nature of a writ of habeas corpus appear to be somewhat different for the (1) 226 u. section 338 931 rules governing those proceedings permit, besides the person imprisoned, any person, provided he is not an utter strang er, but is at least a friend or relation of the imprisoned person, to apply for that particular writ. But that special rule does not appear to be applicable to the other writs which require a direct and tangible interest in the appli cant to support his application. This must also be the case where the applicant seeks to raise the question of the constitutionality of a under articles 14, 19 and 31. For the reasons set out above the present petitioner cannot raise the question of constitutionality of the impugned law under article 31. He cannot complain of any infringement of his own rights as a shareholder, because his "property" has not been acquired or taken possession of by the State although he has been deprived of his right to vote and to present a winding up petition by authority of law. Nor can he complain of an infringement of the compa ny 's right to property because he is not, in the eye of law, the owner of the property in question and accordingly not directly interested in it. In certain exceptional cases where the company 's property is injured by outsiders, a shareholder may, under the English law, alter making all endeavours to induce the persons in charge of the affairs of the company to take steps, file a suit on behalf of himself and other shareholders for redressing the wrong done to the company, but that principle does not apply here for this is not a suit, nor has it been shown that any attempt was made by the petitioner to induce the old directors to take steps nor do these proceedings purport to have been taken by the petitioner on behalf of himself and the other shareholders of the.company. The only other ground on which the Ordinance and the Act have been challenged is that they infringe the the fundamen tal rights guaranteed by article 14 of the Constitution. "Equal protection of the laws", as observed by Day 3. in Southern Railway Company vs Greene (1), "means subjection to equal laws, applying (1) ; 932 alike to all in the same situation". The inhibition of the article that the State shall not deny to any person equality before the law or the equal protection of the laws was designed to protect all persons against legislative discrim ination amongst equals and to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation. It does not, howev er, mean that every law must have universal application, for all persons are not, by nature, attainment or circumstances, in the same position. The varying needs of different class es of persons often require separate treatment and it is, therefore, established by judicial decisions that the equal protection clause of the Fourteenth Amendment of the Ameri can Constitution does not take away from the State the power to classify persons for legislative purposes. This classi fication may be on different bases. It may be geographical or according to objects or occupations or the like. If law deals equally with all of a certain well defined class it is not obnoxious and it is not open to the charge of a denial of equal protection on the ground that it has no applica tion to other persons, for the class for whom the law has been made is different from other persons and, there fore, there is no discrimination amongst equals. It is plain that every classification is in some degree likely ' to produce some inequality, but mere production of inequality is not by itself enough. The inequality produced, in order to encounter the challenge of the Constitution, must be "actually and palpably unreasonable and arbitrary. " Said Day J. in Southern Railway Company vs Greene(1) : " While reasonable classification is permitted, without doing vio lence to the equal protection of the laws, such classifica tion must be based upon some real and substantial distinc tion, bearing a reasonable and just relation to the things in respect to which such classification is imposed; and the classification cannot be arbitrarily made without any substantial basis. Arbitrary selection, it has been said, cannot be justified by calling it classification". Quite conceivably there may be a law 933 relating to a single individual if it is made apparent that, on account of some special reasons applicable only to him and inapplicable to anyone else, that single individual is a class by himself. In Middieton vs Texas Power and Light Company(1) it was pointed out that there was a strong presumption that a legislature understood and correctly appreciated the needs of its own people, that its laws were directed to problems made manifest by experience and that the discriminations were based upon adequate grounds. It was also pointed out in that case that the burden was upon him who attacked a law for unconstitutionality. In Lindsley vs Natural Carbonic Gas Company(2) It was also said that one who assailed the classification made in a law must carry the burden of showing that it did not rest upon any reasonable basis but was essentially arbitrary. If there is a classi fication, the Court will not hold it invalid merely because the law might have been extended to other persons who in some respects might resemble the class for which the law was made, for the legislature is the best judge of the needs of the particular classes and to estimate the degree of evil so as to adjust its legislation according to the exigency found to exist. If, however, there is, on the face of the stat ute, no classification at all or none on the basis of any apparent difference specially peculiar to any particular individual or class and not applicable to any other person or class of persons and yet the law hits only the particular individual or class it is nothing but an attempt to arbi trarily single out an individual or class for discriminating and hostile legislation. The presumption in favour of the legislature cannot in such a case be legitimately stretched so as to throw the impossible onus on the complainant to prove affirmatively that there are other individuals or class of individuals who also possess the precise amount of the identical qualities which are attributed to him so as to form a class with him. As pointed out by Brewer J. in the Gulf, Colorado and Santa Fe 'Railway vs W.H. Ellis (3), while good faith (1} ; (2) ; (3) 165 U.S. 150. 934 and a knowledge of existing conditions on the part of a legislature was to be presumed, yet to carry that presump tion to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain indi viduals or corporations to hostile and discriminating legis lation was to make the protecting clause a mere rope of sand, in no manner restraining State action. The complaint of the petitioner on this head is formu lated in paragraph 8 (iii) of the petition as follows : "The Ordinance denied to the company and its sharehold ers equality before the law and equal protection of the laws and was thus a violation of article 14 of the Constitution. The power to make regulations relating to trading corpo rations or the control or production of industries was a power which consistently with article 14 could be exercised only generally or with reference to a class and not with reference to a single company or to shareholders of a single company. " The Act is also challenged on the same ground in paragraph 9 of the petition. The learned Attorney General contends that the petitioner as an individual shareholder cannot complain of discrimination against the company. It will be noticed that it is not a case of a shareholder complaining only about discrimination against the company or fighting the battle of the company but it is a case of a shareholder complaining of discrimination against himself and other shareholders of this company. It is true that there is no complaint of discrimination inter se the share holders of this company but the complaint is that the share holders of this company, taken as a unit, have been discrim inated vis a vis the shareholders of other companies. Therefore, the question as to the right of the shareholder to question the validity of a law infringing the right of the company does not arise. Here the shareholder is com plaining of the infringement of his own rights and if such infringement can be established I see no reason why the shareholder cannot come within article 32 to vindicate his own rights. The fact that these proceedings have been taken by 935 one single shareholder holding only one single fully paid up share does not appear to me to make any the least difference in principle. If this petitioner has, by the Ordinance or the Act, been discriminated against and denied equal protec tion of the law, his fundamental right has been infringed and his right to approach this Court for redress cannot be made dependent on the readiness or willingness of other shareholders whose rights have also been infringed to join him in these proceedings or of the company to take substan tive proceedings. To take an example, if any law discrimi nates against a class, say the Punjabis, any Punjabi may question the constitutionality of the law, without joining the whole Punjabi community or without acting on behalf of all the Punjabis. To insist on his doing so will be to put a fetter on his fundamental right under article 32 which the Constitution has not imposed on him. Similarly, if any law deprives a particular shareholder or the shareholders of a particular company of the ordinary rights of sharehold ers under the general law for reasons not particularly and specially applicable to him or them but also applicable to other shareholders of other companies, such law surely offends against article 14 and any one so denied the equal protection of law may legitimately complain of the infringe ment of his fundamental right and is entitled as of right to approach this Court under article 32 to enforce his own fundamental right under article 14, irrespective of whether any other person joins him or not. To the charge of denial of equal protection of the laws the respondents in the affidavit of Sri Vithal N. Chandavar kar filed in opposition to the petition make the following reply: "With reference to paragraph 6 of the petition, I deny the soundness of the submissions that on or from the 26th January, 1950, when the Constitution of India came into force the said Ordinance became void under article 13(1) of the Constitution or that the provisions thereof were inconsistent with the provisions of Part III of the said Constitution or for any of the other grounds mentioned in paragraph 8 936 of the said petition. " In the whole of the affidavit in opposition there is no suggestion as to why the promulgation of the Ordinance or the passing of the Act was considered necessary at all or on what principle or basis either of them was founded. No attempt has been made in the affidavit to show that the Ordinance or the Act was based upon any principle of classification at all or even that the particu lar company and its shareholders possess any special quali ties which are not to be found in other companies and their shareholders and which, therefore, render this particular company and its shareholders a class by themselves. Neither the affidavit in opposition nor the learned Attorney General in course of his arguments referred to the statement of the objects and reasons for introducing the bill which was eventually enacted or the Parliamentary debates as showing the reason why and under what circumstances this law was made and, therefore, apart from the question of their admis sibility in evidence, the petitioner has had no opportunity to deal with or rebut them and the same cannot be used against him. The learned Attorney General takes his stand on the presumption that the law was founded on a valid basis of classification, that its discriminations were based upon adequate grounds and that the law was passed for safeguard ing the needs of the people and that, therefore, the onus was upon the petitioner to allege and prove that the classi fication which he challenged did not rest upon any reasona ble basis but was essentially arbitrary. I have already said that if on the face of the law there is no classification at all or, at any rate, none on the basis of any apparent difference specially peculiar to the individual or class affected by the law, it is only an instance of an arbitrary selection of an individual or class for discriminating and hostile legislation and, therefore, no presumption can, in such circumstances, arise at all. Assuming, however, that even in such a case the onus is thrown on the complainant, there can be nothing to prevent him from proving, if he can, from the text of. the law itself, that 937 it is "actually and palpably unreasonable and arbitrary" and thereby discharging the initial onus. The Act is intituled an Act to make special provision for the proper management and administration of the Sholapur Spinning and Weaving Company, Limited. " There is not even a single preamble alleging that the company was being misman aged at all or that any special reason existed which made it expedient to enact this law. The Act, on its face, does not purport to make any classification at all or to specify any special ' vice to which this particular company and its shareholders are subject and which is not to be found in other companies and their shareholders so as to justify any special treatment. Therefore., this Act, ex facie, is nothing but an arbitrary selection of this particular compa ny and its shareholders for discriminating and hostile treatment and read by itself.is palpably an infringement of Article 14 of the Constitution. The learned Attorney General promptly takes us to the preambles to the Ordinance which has been replaced by the Act and suggests that the Act is based on the same consider ations on which the Ordinance was promulgated. Assuming that it is right and permissible to refer to and utilise the preambles, do they alter the situation ? The preambles were as follows : "Whereas on account of mismanagement and ne glect a situation has arisen in the affairs of the Sholapur Spinning and Weaving Company, Limited, which has prejudi cially affected the production of an essential commodity and has caused serious unemployment amongst a certain section of the community;And whereas an emergency has arisen which renders it necessary to make special provision for the proper management and administration of the aforesaid compa ny; " The above preambles quite clearly indicate that the justification of the Ordinance rested on mismanagement and neglect producing certain results therein specified. It will be noticed that apart from these preambles there is no material whatever before us establishing or even suggesting that this company and its shareholders have in fact been guilty of any 938 mismanagement or neglect. Be that as it may, the only reason put forward for the promulgation of the Ordinance was mismanagement resulting in falling off of production and in producing unemployment. I do not find it necessary to say that mismanagement and neglect in conducting the affairs of companies can never be a criterion or basis of classifica tion for legislative purposes. I shall assume that it is permissible to make a law whereby all delinquent companies and 'their shareholders may be brought to book and all companies mismanaging their affairs and the shareholders of such companies may, in the interest of the general public, be deprived of their right to manage the affairs of their companies. Such a classification made by a law would bear a reasonable relation to the conduct of all delinquent compa nies and shareholders and may, therefore, create no inequal ity, for the delinquent companies and their shareholders from a separate class and cannot claim equality of treatment with good companies and their shareholders who are their betters. But a distinction cannot be made between the delinquent companies inter se or between shareholders of equally delinquent companies and one set cannot be punished for its delinquency while another set is permitted to continue, or become, in like manner, delinquent without any punishment unless there be some other apparent difference in their respective obligations and unless there be some cogent reason why prevention of mismanagement is more imperative in one instance than in the other. To do so will be nothing but an arbitrary selection which can never be justified as a permissible classiffication. I am not saying that this particular company and its shareholders may not be guilty of mismanagement and negligence which has brought about seri ous fall in production of an essential commodity and also considerable unemployment. But if mismanagement affect ing production and resulting in unemployment is to be the basis of a classification for making a law for preventing mismanagement and securing production and employment, the law must embrace within its 939 ambit all companies which now are or may hereafter become subject to the vice. This basis of classification, by its very nature, cannot be exclusively applicable to any partic ular company and its shareholders but is capable of wider application and, therefore, the law founded on that basis must also be wide enough so as to be capable of being ap plicable to whoever may happen at any time to fall within that classification. Mismanagement affecting production can never be reserved as a special attribute peculiar to a particular company or the shareholders of a particular company. It it were permissible for the legislature to single out an individual or class and to punish him or it for some delinquency which may equally be found in other individuals or classes and to leave out the other individu als or classes from the ambit of the law the prohibition of the denial of equal protection of the laws would only be a meaningless and barren form of words. The argument that the presumption being in favour of the legislature, the onus is on the petitioner to show there are other individuals or companies equally guilty of mismanagement prejudicially affecting the production of an essential commodity and causing serious unemployment amongst a certain section of the community does not, in such. circumstances, arise, for the simple reason that here there has been no classification at all and, in any case, the basis of classification by its very nature is much wider and cannot, in it application, be limited only to this company and its shareholders and, that being so, there is no reason to throw on the petitioner the almost impossible burden of proving that there are other companies which are in fact precisely and in all particu lars similarly situated In any event, the petitioner, in my opinion, may well claim to have discharged the onus of showing that this company and its shareholders have been singled out for discriminating treatment by showing that the Act, on the face of it, has adopted a basis of classifica tion which, by its very nature, cannot be exclusively ap plicable to this company and its shareholders but Which may be equally appplicable to other companies 940 and their shareholders and has penalised this particular company and its shareholders, leaving out other companms and their shareholders who may be equally guilty of the alleged vice of mismanagement and neglect of the type referred to in the preambles. In my opinion the legislation in question infringes the fundamental rights of the petitioner and offends against article 14 of our Constitution. The result, therefore, is that this petition ought to succeed and the petitioner should have an order in terms of prayer (3) of the petition with costs. Petition dismissed. Agent for the petitioner: M.S.K. Aiyengar. Agent for opposite party Nos. 1 & 2:P.A. Mehta. Agent for opposite party Nos. 3 to 5 and 7 to 10: Rajinder Narain.

The Governor General of India, finding that on account of mismanagement and neglect a situation had arisen in the affairs of the Sholapur Spinning and Weaving Company Ltd. which had prejudicially affected the production of an essen tial commodity and had caused serious unemployment amongst a certain section of the community, and that an emergency had thereby arisen which rendered it necessary to make special provision for the proper management and administration of the said company, promulgated an Ordinance, which was subse quently reenacted in the form of an Act of the Legislature called the sholpur Spinning and Weaving Company (Emergency Provisions)Act, 1950, the net result of which was that the Managing Agents of the said company were dismissed, the directors holding office at the time automatically vacated their office, the Government was authorised to appoint new directors, the rights of the shareholders of the company were curtailed in the matters of voting, appointment of directors, passing of resolutions and applying for winding up, and power was also given to the Government to further modify the Indian Companies Act in its application to the company; and in accordance with the provisions of the Ordi nance new directors were appointed by the Government. A shareholder of the company made an application under article 32 of the Constitution for a declaration that the Act was void and for enforcement of his fundamental rights by a writ of mandamus against the Central Government, the Government of Bombay and the directors, restraining them from exercising any powers under the Act and from interfering with the management of the company, on the ground that the Act was not within the Legislative competence 870 of the Parliament and infringed his fundamental rights guaranteed by articles 19 (1) (f), 31 and 14 of the Constitu tion and was consequently void under article 13. The company was made a respondent and opposed the petition. Held per KANIA C.J., FAZL ALI, MUKHERJEA and DAS JJ. (i) that the impugned Act did not infringe any fundamental right of the petitioner under article 31 (1), as if did not deprive the company or the petitioner of any property save under authority of law; (ii) that the impugned Act did not infringe any fundamen tal right guaranteed by article 31 (2.) inasmuch as it did not authorise the "acquisition" of any property of the company or of the shareholders or "the taking possession" of the property of the petitioner, namely, the shares which he held in the company, though he was disabled from exercising some of the rights which an ordinary shareholder in a company could exercise in respect of his shares, such as the right to vote, to appoint directors, and to apply for winding up; and, if the Act had authorised the "taking possession" of the property of the company, the petitioner was not entitled to any relief on that score under article 32; (iii) that, as the Act did not impose any restrictions on the petitioner 's right "to acquire, hold and dispose of" his shares, there was no infringement of article 19 (1) (f); and assuming that the restrictions imposed on the right of voting etc. were restrictions on the right to acquire, hold or dispose of property within article 19 (1) (f), such restric tions were reasonable restrictions imposed in the interests of the public, namely, to secure the supply of a commodity essential to the community and to prevent serious unemploy ment amongst a section of the people, and were therefore completely protected by cl. (5) of article 19. Held also per KANIA C.J., FAZL ALI, and MUKHERJEA JJ. (PATANJALI SASTRI AND DAS JJ. dissenting). that though the Legislature had proceeded against one company only and its shareholders, inasmuch as even one corporation or a group of persons can be taken to be class by itself for the purposes of legislation, provided there is sufficient basis or reason for it and there is a strong presumption in favour of the constitutionality/of an enactment, the burden was on the petitioner to prove that there were also other companies similarly situated and this company alone had been discrimi nated against, and as he had failed to discharge this burden the impugned Act cannot be held to have denied to the peti tioner the right to equal protection of the laws referred to in article He and the petitioner was not therefore entitled to any relief under article 32. Per PATANJALI SASTRI J. As the impugned Act plainly denied to the shareholders of this particular company the protections of the law relating to incorporated Joint Stock Companies as embodied in the Indian Companies Act. it was Prima facie within 871 the inhibition of article 14; and, even though when a law is made applicable to a class of persons or things and the classification is based on differentia having a rational relation to the object sought to be attained, it can be no objection to its constitutional validity that its applica tion is found to affect only one person or thing. since the impugned Act selected a particular company and imposed upon it and its shareholders burdens and disabilities on the ground of mismanagement and neglect of duty on the part of those charged with the conduct of its undertaking no ques tion of reasonable classification arose and the Act was plainly discriminatory in character and within the constitu tional inhibition of article 14. Whilst all reasonable pre sumptions must undoubtedly be made in favour of the consti tutional validity of a law made competent legislature, no such presumption could be raised in this case as on the face of it the Act was discriminatory and the petitioner could not be called upon to prove that similar mismanagement existed in other companies. The issue was not whether the impugned Act was ill advised or not justified by the facts on which it was based but whether it transgressed the ex plicit constitutional restriction on legislative power imposed by article 14. Per DAs J. The impugned Act, ex facie, is nothing but an arbitrary selection of a particular company and its shareholders for discriminating and hostile treatment, and, read by itself, is palpably an infringement of article 14 of the Constitution. Assuming that mismanagement and neglect in conducting the affairs of a company can be a basis of classification and that such a classification would bear a reasonable relation to the conduct of all delinquent compa nies and shareholders and may therefore create no inequali ty, a distinction cannot be made between the delinquent companies inter se or between shareholders of equally delin quent companies, and one set cannot he punished for its delinquency while another set is permitted to. continue, or become, in like manner, delinquent without any punishment unless there be some other apparent difference in their respective obligations and unless there be some cogent reason why prevention of mismanagement is more imperative in one instance than in the other. The argument that the pre sumption being in favour of the Legislature, the onus is on the petitioner to show that there are other individuals or companies equally guilty of mismanagement prejudicially affecting the production of an essential commodity and causing serious unemployment amongst, certain section of the community does not, in such circumstances, arise, for the simple reason that here there has been no classification at all and, in any case, the basis of classification by its very nature is much wider and cannot, in its application, be limited only to this company and its shareholders; and that being so, there is no reason to throw on the petitioner the almost impossible burden of proving that there are other companies which are in fact precisely and in all particulars similarly situated. In any event the petitioner, 872 may well claim to have discharged the onus of showing that this company and its shareholders have been singled out for discriminating treatment by showing that the Act, on the face of it, has adopted a basis of classification which, by its very nature, cannot be exclusively applicable to this company and its shareholders but which may be equally ap plicable to other companies and their shareholders and has penalised this particular company and its shareholders, leaving out other companies and their shareholders who may be equally guilty of the alleged vice of mismanagement and neglect of the type referred to in the preamble in the Ordinance. Per PATANJALI SASTRI, MUKHERJEA and DAS JJ. (KANIA, C.J,, dubitante). In so far as the petitioner 's rights as a shareholder were curtailed he was entitled to apply for relief under article 30, in his own right on the ground that the Act denied to him the equal protection of the laws and therefore contravened article 14 even though the other share holders did not join him in the application. Per MUKHERJEA J. The fundamental rights guaranteed by the Constitution are available not merely to individual citizens but to corporate bodies as well except where the language of the provision or the nature of the right, com pels the inference that they are applicable only to natural persons. An incorporated company, therefore, can come up to the Supreme Court for enforcement of its fundamental rights and so may the individual shareholders to enforce their own; but as the company and its shareholders are in law separate entities, it would not be open to an individual shareholder to complain of a law which affects the fundamental right of the company except to the extent that it constitutes an infraction of his own rights as well. In order to redress a wrong to the company the action should prima facie be brought by the company itself. Article 32 of the Constitution is not directly concerned with the determination of the constitutional validity of particular enactments, what it aims at is the enforcement of fundamental rights guaranteed by the Constitution and to make out a case under the Article it is incumbent on the petitioner to establish not merely that the law complained of is beyond the competence of the Legislature but that it affects or invades his fundamental rights guaranteed by the Constitution, of which he could seek enforcement by an appropriate writ or order. Under article 32 the Supreme Court has a very wide discre tion in the matter of framing writs to suit the exigencies of particular cases and an application under the article cannot be thrown out simply on the ground that the proper writ or direction has not been prayed for. In the context in which the word "acquisition" is used in article 31 i2) it means and implies the acquiring of the entire title of the expropriated owner whatever the nature or extent of that right might be, 873 The guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions. It means only that there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is the same. Quaere : Whether the word "property" in article 31 means the totality of the rights which the ownership of the property connotes, and whether clause (1) of article 31 contem plates only confiscation or destruction of property in exercise of what are known as police powers in American law for which no compensation is necessary. DAS J. The question whether an Act has deprived a person of his "property" must depend on whether it has taken away the substantial bulk of the rights constituting his property. Where the most important rights possessed by the shareholders of a company are still preserved by an Act even though certain privileges incidental to the ownership of the shares have been put in abeyance, the shareholders cannot be said to have been deprived of their "property" in the sense in which that word is used in article 19(1) (f) and article 31. If on the face of the law there is no classification at all, or at any rate none on the basis of any apparent dif ference specially peculiar to the individual or class af fected by the law, it is only an instance of an arbitrary selection of an individual or class for discriminating and hostile legislation and, therefore, no presumption can, in such circumstances, arise at all Assuming, however, that even in such a case the onus is thrown on the complainant, there can be nothing to prevent him from proving, if he can, from the text of the law itself, that it is actually and palpably unreasonable and arbitrary and thereby discharging the initial onus. The right to vote, to elect directors, to pass resolu tions and to present an application for winding up, are privileges incidental to the ownership of a share, but they are not by themselves apart from the share, "property" within the meaning of article 19 (1) (f) and article 31; and even assuming that they are "property" such rights cannot be said to have been acquired or taken possession of by the Govern ment in this case within article 31 (2). The language of clause (1) of article 31 is wider than that of clause (2), for deprivation of property may well be brought about otherwise than by acquiring or taking possession of it and in such a case no question payment of compensation arises. FAZAL ALI MUKHERJEA and DAS JJ. Except in the matter writs in the nature of habsas corpus no one but those whose rights are directly affected by a law can raise the question of the constitutionality of a law and claim relief under article 39. A corporation being a different entity from the shareholders, a 112 874 share holder cannot complain on the ground that the rights of the company under articles 19 (1) (f) or 31 are infringed. FAZL ALl J. A classification which is arbitrary and which is made without any basis is no classification and a proper classification must always rest upon some difference and must hear a reasonable and lust relation to the things in respect of which it is proposed. But the presumption is always in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles. Though article 14 lays down an important fundamental 'right, which should be closely and vigilantly guarded, a doctri naire approach which might choke all beneficial legislation should not be adopted, in construing it. i A.K. Gapalan vs The State ([1950] S.C.R. 87), Minister of State for the Army vs Dalziel ; , Yick Wo vs Hopkins , Southern Railway Co. vs Greene ; , Gulf C. & S.F. Co. Ellis ; , Middle ton vs Texas Power and Light & Co. ; , Badice vs New York (264 U.S. Pennsylvania Coal Co. vs Mahon (960 U.S. 3931, McCabe vs Archison ; , Jeffrey Manufactur ing Co. vs Blang , Newark Natural Gas and Fuel Co. vs City of Nework U.S 403), Truax vs Raich (939 U.S. 33), Buchanan vs W 'arley ; Darnell vs The State of Indiana , Lindely vs Natural Carbonic Gas Co. , and Barbier vs Connolly ; referred to.

The appellant was the recipient of a hereditary military pension called Bachat granted by the Rulers of Gwalior to his ancestors in recognition of military service. The right to receive the said pension was recognised by the Kalambandis of 1912 and 1935 issued by the said Rulers. When Gwalior integrated with Indore and Malwa in 1948 to form a union, section 4 Of 122 958 Act No. 1 of 1948 provided for the continuance of all laws, ordinances, rules and regulations having the force of law in the covenanting states. After the formation of the State of Madhya Bharat under the Constitution, the Government of that State, which remained liable to pay the said pension, by an executive order, terminated the right. The appellant moved the High Court against the said order under article 226 of the Constitution. and his case was that the right to receive the said pension, having been statutorily recognised by the State of Gwalior, could not be extinguished by an executive order. The Full Bench of the High Court held against him. The question was whether the Kalambandis of 1912 and 1935, on which the appellant rested his case, were existing law within the meaning of article 372 Of the Constitution. Held, that the question must be answered in the affirmative, No distinction could be made between an executive order and a legislative command made by an absolute monarch, such as the Rulers of the Indian State of Gwalior were, since they have the same force of law, passed in whichever capacity they may be, and govern the rights of the subjects. Ameer un Nissa Begum vs Mahboob Begum, A.I.R. 955 S.C. 352 and Director of Endowments, Government of Hyderabad vs Akram Ali, A.I.R. 1956 S.C. 6o, referred to. Consequently, even supposing that the Kalambandis did not amount to a quanun or law technically so called, they would nevertheless be orders or regulations having the force of law in the State at the material time and would be existing law within the meaning of article 372 Of the Constitution. Edward Mills Co., Ltd., Beawar vs State of Ajmer, ; , referred to. The contents of the two Kalambandis and the character of their provisions clearly show that they could not be mere administrative orders, and if not statutes, must, in any event, be rules and regulations having the force of law.

After dismissal by this Court of the petition impugning the order of his detention under section 3 of the the petitioner filed the present petition urging additional grounds which were not urged in the previous petition. He alleged that (i) despite his request for the supply of all the documents relied upon by the detaining authority while passing the order of detention the respondent failed to do so; (ii) that many of the documents were either incomplete or had been wholly withheld and in particular 236 documents out of 460 documents purported to have been supplied to him were not supplied; (iii) that though his representation dated July 17, 1980 for revocation of the detention order was forwarded by the jailer to the Central Government it had not been disposed of and (iv) that lastly serving the grounds of detention in English which is a language not known to him, without supplying a translation in his mother tongue, was a breach of the constitutional imperative embodied in article 22(5) and that for these reasons the order of detention should be held void. A preliminary objection was raised on behalf of the respondent State that the present petition was barred as constructive res judicata. Overruling the preliminary objection, ^ HELD: In the present petition fresh additional grounds had been taken by the detenu to challenge the legality of his continued detention. Therefore the subsequent writ petition is not barred as res judicata. [359 B C] 1. By a long line of decisions this Court has held that the application of the doctrine of constructive res judicata is confined to civil actions and civil proceedings. This principle of public policy is entirely in applicable to illegal detentions and does not bar a subsequent petition for the writ of habeas corpus 353 under article 32 of the Constitution on fresh grounds which were not taken in the earlier petition for the same relief. [359 A B] Ghulam Sarwar vs Union of India & Ors. [1967] 2 S.C.R. 271, Daryao vs State of Uttar Pradesh A.I.R. 1961 SC. 1457=[1962] 1 S.C.R. 574, Niranjan Singh vs State of Madhya Pradesh ; and Calcutta Gas Co. (Proprietary) Ltd. vs State of West Bengal, A.I.R. 1965 S.C. 596 referred to. 2(a). One of the constitutional imperatives embodied in Art 22(5) of the Constitution is that all the documents and materials relied upon by the detaining authority in passing the order of detention must be supplied to the detenu as soon as practicable to enable him to make an effective representation. [360 G] In the instant case the materials and documents which were not supplied to the detenu were a part of the basic facts and materials which should have been supplied to him, ordinarily within 5 days of the order of detention and for exceptional reasons to be recorded, within 15 days of the commencement of the detention. The respondent did not state that the documents which were not supplied were not relevant to the case of detenu. [362 C] Smt. Icchu Devi Choraria vs Union of India & Ors. ; applied. (b) In the first petition no specific ground was taken by the detenu that documents covering 236 pages relied upon by the detaining authority were suppressed and not supplied to him. He had now stated that he had come to know about the non supply of these documents from the judgment of the Gujarat High Court which was subsequent to the dismissal of his earlier petition. This assertion has remained unchallenged. [360 E F] (c) In matters touching the personal liberty of a person preventively detained, the constitutional imperative in article 22(5) is that any representation made by the detenu should be dealt with the utmost expedition which in this is has been honoured in breach. [362 E] (d) Merely explaining the grounds of detention in the mother tongue of the detenu would not be sufficient compliance with the mandate of article 22(5) which requires that the grounds of detention must be communicated to the detenu. "Communicate" is a strong word. It means that sufficient knowledge of the basic facts constituting the grounds should be imparted effectively and fully to the detenu in writing in a language understood by him. Its whole purpose is to enable him to make a purposeful and effective representation. If the grounds are only verbally explained without giving them to him in writing in a language that he understands, its purpose is not served and the constitutional mandate is infringed. [362G H] Haribandhu Das vs District Magistrate Cuttack & Anr. ; Smt Razia Umar Bakshi vs Union of India and Harikisan vs State of Maharashtra [1962] Supp. 2 S.C.R. 918 followed.

The point in controversy in these petitions was the con stitutional validity of the Punjab Security of Land Tenure Act (Punj. X Of 1953), as amended by Act XI of 1955, which sought to "provide for the security of land tenure and other incidental matters ". The impugned Act which admittedly dealt with holdings as defined by the Punjab Land Revenue Act, 1887, limited the area which might be held by a land owner for the purpose of self cultivation and thereby released surplus area to be utilised for resettling ejected tenants ; and by section 18 conferred upon the tenants the right to purchase from the land owners the lands held by them and thus themselves to become the landowners on prices which would be below the market value. It was contended on behalf of the petitioners, who were,landowners affected by the impugned Act, that under Entry 18 in List II of the Seventh Schedule to the Constitution, the State Legislature was incompetent to enact a law limiting the extent of the land to be held by a land owner and that the provisions of the impugned Act contravened the petitioners ' fundamental rights under articles 14, 19(1)(f)and 31 of the Constitution. Held, that the contentions must fail. The words " rights in or over land " and " land tenures occurring in Entry 18 in List 11 of Seventh Schedule to the Constitution were sufficiently comprehensive to include measures of land tenure reforms, such as the impugned Act, that sought to limit the extent of land in cultivating possession of the landowner in order to release larger areas of land to be made available for cultivation by tenants and that Entry read with article 246(3) of the Constitution gave the State Legislature exclusive power to enact such measures. Such determination of the relation of landlord and tenant as was contemplated by section 18 and other provisions of the impugned Act, which sought to convert a tenant into a land owner, was well within the ambit of Entry 18. 749 The United Provinces vs Mst. Atiqa Begum, and Megh Raj vs Allah Rakhi, (1946) L.R. 74 I.A. 12, referred to. It was beyond doubt that the impugned Act substantially modified the land owner 's rights to hold and dispose of his property in any estate or portion thereof and thus fell within the purview of article 31A(1)(a) of the Constitution and was immune from any attack on the ground that it contravened articles 14, 19and 31 of the Constitution. The observations made by this Court in Thakur Raghubir Singh vs Court of Wards, Ajmer, ; , in connection with another Act, with absolutely different provisions, must be limited to the facts of that case and were wholly inapplicable. Thakur, Raghubir Singh vs Court of Wards, Ajmer, ; , distinguished and held inapplicable. The words " any estate or of any rights therein " occurring in article 31A(1)(a) read in the light of article 31A(2) included any kinds of rights either quantitative or qualitative in the area encompassed by an estate or any portion of it and thus included holdings as defined by the Punjab Land Revenue Act, 1887, and any shares or portions thereof. Regard being had to the legal maxim that the greater must include the less, it was, inappropriate to suggest that the Constitution should have specifically mentioned "portion of an estate" in article 31A if it intended to give that Article such a comprehensive construction. Bhagirath Ram Chand vs State of Punjab, A.I.R. 1954 Pun. 167, approved. State of Punjab vs section Kehar Singh, (1958) 60P.L.R. 461, dis approved. Ram Narain Medhi vs The State of Bombay, [1959] SUPP. (1) S.C.R. 489, applied. Hukam Singh vs The State of Punjab, , referred to.

A complaint filed by respondent Pratap Bhanu Prakash Singh alleging that the appellant to whom he has entrusted the 27000 shares purchased by him from Rohtas Industries against a loan of Rs. 1.82 lacs advances by the latter, has committed a breach of trust of the amount covered by the shares by selling them against his express directions, was inquired into the trial magistrate and was dismissed later on 28 10 71. The revision filed before the Sessions Judge Delhi failed. In the further revision, the High Court set aside the order of discharge and directed that the appellant be committed to the Court of Sessions. Dismissing the appeal by special leave, the Court HELD : 1. it is not for the Supreme Court in appeal by special leave to go into the sufficiency or insufficiency of the material before the magistrate which may afford a justification for passing an order of discharge. Under sec tion 213, sub clause (2) of the Crl. Procedure. Code, 1898, a magistrate can discharge the accused if he finds that there are no sufficient grounds for committing the accused. [490 B D] 2. Under section 437 of the Criminal Procedure Code 1898, the revisional Court in hearing a revision petition against an order of discharge passed by the magistrate may direct a commitment without any inquiry at all or he may direct a fresh inquiry. There are two courses open to the revisional Court : (1) either to set aside the order of disc charge and direct a fresh inquiry to be made under Section 436 in which case, the inquiry will automatically revive or (2) that instead of directing any fresh inquiry an order committing the accused for trial to the Court of Sessions. An order of the second category amounts to an order of commitment and there is no necessity of any further inquiry at all. [491 E F, H, 492 A] 3. The first part of Section 484 clearly excludes the application of 1973 code to any appeal, application, trial, inquiry etc. pending at the time when the 1973 Code comes into force. The provision to section 484 (1) (2) carves out an exception to the general rule contained in Section 484(2) (a) and provides that where a commitment inquiry is pending at the commencement of the 1973 Code, it is to be governed by 1973 Code and not by 1898 Code. In the instant case, the High Court has not passed any order to the effect that the commitment inquiry was to be revived, but has in absolutely clear and unequivocal terms ordered, "the, respondent shall stand committed to the Court of Sessions u/s 409. " Since by virtue of the High Court the magistrate had no control or siesin of the case at all,the of any inquiry pending before him does not arise. [491 B, C,E 492 B C] 489

In a suit for decree for Rs. 1,30,000/ instituted by the respondent/plaintiff in May, 1971, the appellants/de fendants filed their written statement admitting that by virtue of an agreement dated April 7, 1967, the plaintiff worked as their Stockist cum Distributor. After three years the defendants filed an interlocutory application under Order VI, Rule 17 to amend the written statement by substi tuting paragraphs 25 and 26 with a new paragraph in which they took the fresh plea that the plaintiff was a mercantile agent cum purchaser. The trial court rejected the said application and the High Court, in revision, affirmed the judgment of the trial court. Dismissing the appeal by special leave the Court, HELD: It is true that inconsistent pleas can be made in pleadings. The defendants cannot be allowed to change completely the case and substitute an entirely different and new case. In the instant case, the effect of substitution of paragraphs 25 and 26 is not making inconsistent and alternative pleadings. but it is seeking to displace the plaintiff completely from the admissions made by the defend ants in the written statement. If such amendments are allowed, the plaintiff will be irretrievably prejudiced by being denied the opportunity of extracting the admission from the defendants. [729 G]

Subsequent to an order made for the winding up of a company, the Company Judge made a direction for action to be taken under provisions of section 153 of the Indian Companies At the meeting of the unsecured creditors of the company a resolution was passed by the creditors present, either in person or through proxy, by majority in number as well as three fourths in value. At this meeting the appellant claiming to represent two of the creditor companies cast his votes on behalf of the said companies in support of the resolution. No objection was taken at the meeting to the validity of the votes by any of the creditors who opposed the resolution. When the matter came up for orders before the Company Judge an objection was raised that the votes cast by the appellant on behalf of the two creditor companies were not valid, inasmuch as section 153(2) of the Act requires that the creditors should be present either in person or by proxy at the meeting and that, in the present case, the two creditor companies, being corporations, could not be considered to have been present at the meeting "in person". The Company Judge overruled the objection on the grounds that it was raised at a late stage and that, in any case, the votes were valid because the appellant 's attendance at the meeting amounted to the attendance of the companies "in person". On appeal, a Division Bench of the Patna High Court rejected the contention that no appeal lay to the High Court from the order of the Company Judge but only to the Supreme Court and, on the merits, set aside his order. ^ Held, that: (1) the word "Court" in section 153(7) of the Indian Companies Act, 1913, means the Court exercising original jurisdiction, and. therefore, an appeal from the order of the Company Judge lay to the High Court under cl. 10 of the Letters Patent; (2) though under the , a company is a "person" so that whenever the word "person" is used in any statute a company would be included thereunder, unless there is some special provision by a law a company which is not a physical person cannot "be present" at any place "in person"; and (3) in the present case the votes cast by the appellant were not valid in law and it being admitted that if the votes were invalid the requisite majority of three fourths in value requisite under section 153(2) of the Indian Companies Act, 1913, would not be obtained and therefore no further action could be taken by the Court in the matter, the delay in raising the objection would not entitle the Court to ignore the legal defect of the votes.

In these petitions in the nature of public interest litigation under Article 32 of the Constitution, the relief asked for is one for mandamus to the Union of India to fill the vacancies of Judges in the Supreme Court and the several High Courts of the country and ancillary orders or direc tions in regard to the relief of filling up of vacancies. In response to the rule, the Union of India, relying upon S.P. Gupta vs Union of India, [1982] 2 SCR 365, raised a preliminary objection as to the justiciability of the issue. The objection, however, was later withdrawn by the succeed ing Attorney General who made a statement that it was the constitutional obligation of the Union of India to provide the sanctioned Judge strength in the superior courts and default, if any, was a matter of public interest, and the writ petitions requiring a direction to the Union of India to fill up the vacancies were maintainable. Disposing of the petitions, this Court, HELD: (1) The ratio in S.P. Gupta 's case left the matter of fixing Up Of the Judge strength to the President of India under the constitutional scheme, and the choice of Judges to the prescribed procedure, but once the sanctioned strength was determined it was the obligation of the Union of India to maintain the sanctioned strength in the superior Courts. [437H; 438A] (2) It is too late in the day to dispute the position that justice has to be administered through the courts and such administration would relate to social, economic and political aspects of justice. The Judiciary therefore be comes the most prominent and outstanding wing of the Consti tutional System for fulfilling the mandate of the Constitu tion. 434 For its sound functioning, it is necessary that there must be an efficient judicial system and one of the factors for providing the requisite efficiency is ensuring adequate strength. [440E F] (3) For the availability of the appropriate atmosphere where a Judge would be free to act according to his con science it is necessary that he should not be over burdened with pressure of work which he finds it physically impossi ble to undertake. This necessarily suggests that the judge strength should be adequate to the current requirement and must remain under constant review in order that commensurate Judge strength may be provided. [441F G] Bradley vs Fisher, ; 1871, referred to. (4) It is a matter for immediate attention of all con cerned and of Government in particular that the Adminis tration of Justice is made a plan subject and given appro priate attention. [444C] (5) Backlog in Courts has become a national problem. The adjudicatory process is being blamed for not equalling itself to the challenge of the times. There is a general complaint that the judicial system is on the verge of col lapse. It is, therefore, the obligation of the constitution al process to keep the system appropriately manned. There is no justification for the sluggish move in such an important matter. [447C D] (6) If in a given case the Chief Justice of the High Court has recommended and the name has been considered by the Chief Minister and duly processed through the Governor so as to reach the hands of the Chief Justice of India through the Ministry of Justice and the Chief Justice of India as the highest judicial authority in the country, on due application of his mind, has given finality to the process at his level, there cannot ordinarily be any justi fication for reopening the matter merely because there has been a change in the personal of the Chief Justice or the Chief Minister of the State concerned. This has to be the rule and the policy adopted by the Union of India should immediately be given up. [448B D] (7) In the functioning of public offices there is and should be continuity of process and action and all objective decisions taken cannot be transformed into subjective issues. That being the position, recommendations finalised by the Chief Justice of India unless for any particular reason and unconnected with the mere change of the Chief 435 Justice or the Chief Minister justifying the same should not be reopened and if in a given case the Union of India is of the view that the matter requires to be looked into again a reference should be made to the Chief Justice of India and there can be a fresh look at the matter only if the Chief Justice of India permits such a review of the case. [448E F] (8) Consistent with the constitutional purpose and process it becomes imperative that the role of the institu tion of the Chief Justice of India be recognised as of crucial importance in the matter of appointments to the Supreme Court and the High Courts of the States. This aspect dealt with in Gupta 's case requires re consideration by a larger bench. [450E] (9) In India the judicial institutions, by tradition, have an avowed a political commitment and the assurance of a non political complexion of the judiciary cannot be divorced from the process of appointments. Constitutional phraseology of "consultation" has to be understood and expounded consistent with and to promote this constitutional spirit. These implications are, indeed, vital. The constitutional values cannot be whittled down by calling the appointment of Judges as an executive act. The appointment is rather the result of collective, constitutional process. It is a participatory constitutional function. It is, perhaps, inappropriate to refer to any `power ' or `right ' to appoint judge. It is essentially a discharge of a constitutional trust of which certain constitutional functionaries are collectively repositories. [457D F] (10) The executive, on whose advice the President acts, as a participant in the process has its own important and effective role. To say that the power to appoint solely vests with the executive and that the executive, after bestowing such consideration on the result of consultations with the judicial organ of the State, would be at liberty to take such decision as it may think fit in the matter of appointments, is an over simplification of a sensitive and subtle constitutional sentence subversive of the doctrine of judicial independence. [457F G] (11) The word "consultation" is used in the constitu tional provision in recognition of the status of the high constitutional dignitary who formally expresses the result of the institutional process leading to the appointment of judges. To limit that expression to its literal limitations, shorn of its constitutional background and purpose, is to borrow Justice Frankfurter 's phrase, "to stick in the bark of words". [458B] (12) Judicial Review is a part of the basic constitutional structure 436 and one of the basic features of the essential Indian Con stitutional policy. This essential constitutional doctrine does not by itself justify or necessitate any primacy to the executive wing on the ground of its political accountability to the electorate. [458C] (13) It might under certain circumstances be said that Government is not bound to appoint a judge so recommended by the judicial wing. But to contemplate a power for the execu tive to appoint a person despite his being disapproved or not recommended by the Chief Justice of the State and the Chief Justice of India would be wholly inappropriate and would constitute an arbitrary exercise of power. [458D E] (14) The purpose of the `consultation ' is to safeguard the independence of the judiciary and to ensure selection of proper persons. The matter is not, therefore, to be consid ered that the final say is the exclusive prerogative of the executive government. The recommendations of the appropriate constitutional functionaries from the judicial organ of the State has an equally important role. "Consultation" should have sinews to achieve the constitutional purpose and should not be rendered sterile by a literal interpretation. [458F G] (15) There are preponerant and compelling cousideratious why the views of the Chief Justices of the States and that of the Chief Justice of India should be afforded a decisive import unless the executive has some material in its posses sion which may indicate that the appointment is otherwise undesirable. [458G H] (16) The correctness of the opinion of the majority in S.P. Gupta 's case relating to the status and importance of consultation, the primacy of the position of the Chief Justice of India and the views that the fixation of Judge strength is not justiciable should be reconsidered by a larger bench. [459B] (17) In view of the fact that the bulk of vacancies in the High Courts have been filled up, and in view of the assurance held out by the learned Attorney General that prompt steps are being taken to fill up the remaining vacan cies, further monitoring for the time being is not neces sary. [459F]

Appeal No. 166 of 1951. Appeal from the Judgment and Decree dated September 15, 1948, of the High Court of Judicature for the State of Punjab at Simla (Mahajan and Teja Singh JJ.) in Regular Second Appeal No. 1844 of 1945 from the Judgment and Decree dated June 5, 1945, of the Court of the District Judge, Gurgaon, in Civil Appeal No. 171 of 1943, arising out of the Judgment and Decree dated August 27, 1943, of the Court of the Subordinate Judge, Gurgaon, in Civil Suit No. 11 of 1943. Tarachand Brijmohanlal for the appellant. Gurubachan Singh (Radha Krishan Aggarwal, with him) for the respondent. 1952, November 7. The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J. The plaintiffs, Joti Prasad and Sat Narain, sued for partition and possession of their two fifths share in the suit properties alleging that the first defendant wag alone in possesSion of the same, having redeemed a mortgage executed by the joint family of which the plaintiffs and defendants were members, in favour of one Raghumal in the year 1896 on paying Rs. 5,800. Defendants 2 to 5 were impleaded as co sharers. Out of them, defendants 2 and 3 admitted the claims of the plaintiffs. Defendant 4 died pending suit, and her name was struck off. Defendant 5 supported the first defendant. On the date of the trial court 's decree, the two plaintiffs were held entitled to one sixth share each. The first defendant resisted the plaintiffs ' claim. He contended that the redemption by him in 1920 was not on behalf of the joint family as alleged by the plaintiffs but on his own account as there had been a disruption of the joint family status much earlier, and that before the plaintiffs could get arty relief, they were bound to pay him not merely a proportionate share in the sum of Rs. 5,800 which he paid to the mortgagee for redemption but their share in the original mortgage debt of Rs. 11,200. He also denied that the original mortgage was executed on behalf of the joint family. The Subordinate Judge, and on appeal, the High Court found that the original mortgage was a mortgage transaction of the joint family, and that the first defendant, Ganeshi Lal, redeemed the mortgage on his own account and for his own benefit at a time when there was no longer any joint family in existence. It was further held by the trial court that the plaintiffs and other co sharers were bound to pay their proportionate share of the amount paid by the first defendant to redeem the mortgage, namely, Rs. 5,800. But from this a sum of Rs. 1,200 which he had already received by way of redemption of certain mortgage rights had to be deducted. The District Judge enhanced this sum of RS. 4,600 to 245 Rs. 5,000, as the first defendant had paid taxes due on the property up to 1940, but he confirmed the main findings of the Subordinate Judge. A second appeal preferred by the first defendant was dismissed by the High Court at Simla (Mehr Chand Mahajan and Teja Singh JJ.). They repelled the contention of the first defendant that a suit for partition and possession was not maintainable without bringing a suit for redemption. They also negatived his right to get a proportionate share in the amount of Rs. 11,200 due on the mortgage. Two other learned Judges gave leave to appeal under section 109 (c) of the Civil Procedure Code, as a substantial question of law was involved. Three points were argued before us by learned counsel for the appellant; firstly, there was an assignment of the mortgage in favour of the appellant with the result that the entire rights of the mortgagee vested in him; secondly, even viewing the question as one of legal subrogation, he was entitled, under the principles of justice, equity and good conscience which governed the State of Punjab, as the has not been applied to the State, to recover from the co mortgagors not merely their shares in the sum of Rs. 5,800 which he had paid for redemption but their shares in the full amount of Rs. 11,200 due under the mortgage; and thirdly, that the suit for partition without asking for redemption was not maintainable. Points Nos. 1 and. 3 have no force whatever. The registered deed of redemption does not contain any words of assignment. To say that Ganeshi Lal shall be the owner of the entire amount due from the mortgaged property is something different from stating that the security has been assigned in his favour. On the other hand, the endorsement of receipt of payment on the back of the mortgage deed itself and the statement of the mortgagee that he has released the mortgaged property from his mortgage go to show that there was no assignment. 246 The non maintainability of the suit does not seem to have been in issue either before the trial court or before the District Judge, and it appears to have been raised for the first time before the High Court. It was pointed out by the learned Judges, and quite rightly, that so long as no question of limitation was involved, there was no objection to a claim for redemption and one for possession and partition being joined together in the same suit. Only the second point remains for consideration, and this raises an interesting question of law. It is not denied that Ganeshi Lal who redeemed the prior mortgage is subrogated to the mortgagee 's rights, but the controversy is about the extent of his rights as subrogee. By virtue of the redemption, does he get all the rights of the mortgagee and hold the mortgage as a shield against the co mortgagors for the full amount due on the mortgage on the date of redemption whatever he may have himself paid to get it discharged, or does he stand in the mortgagee 's shoes only to the extent of getting reimbursed from the comortgagors for their shares in the amount actually paid by him? The lower courts have held that the latter is the correct position in law, but the appellant has challenged it as unsound. The first two clauses of the present section 92 of the run in these terms: " Any of the persons referred to in section 91 (other than the, mortgagor) and any co mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems. " It is a new section and was inserted by the amending Act XX of 1929. The original sections 74 and 247 75 conferred the right to redeem in express terms only on second or other subsequent mortgagees, though the co mortgagor 's right to subrogation on redemption was recognised even before the Act. As the has not been extended to the State of East Punjab, it is unnecessary to decide whether section 92 is retrospective in its operation, on which point there has been a conflict of opinion between the several High Courts. Section 95 of the Act which removed the confusion caused by the old section which, conferring on the co mortgagor what was called a charge, and thus seeming to negative the application of the doctrine of subrogation, is also inapplicable to the present case. We therefore steer clear of sections 74 and 75 of the old Act and sections 92 and 95 of the present Act, and we are free to decide the question on principles of justice, equity and good conscience. If we remember that the doctrine of subrogation which means substitution of one person in place of another and giving him the rights of the latter is essentially an equitable doctrine in its origin and application, and if we examine the reason behind it, the answer to the question which we have to decide in this appeal is not difficult. Equity insists on the ultimate payment of a debt by one who in justice and good conscience is bound to pay it, and it is well recognised that where there are several joint debtors, the person making the payment is a principal debtor as regards the part of the liability he is to discharge and a surety in respect of the shares of the rest of the debtors. Such being the legal position as among the co mortgagors, if one of them redeems a mortgage over the property which belongs jointly to himself and the rest, equity confers on him a right to reimburse himself for the amount spent in excess by him in the matter of redemption; he can call upon the co mortgagors to contribute towards the excess which he has paid over his own share. This proposition is postulated in several authorities. In the early case of Hodgson vs Shaw (1) Lord Brougham said: (1) ; ; 248 "The rule is undoubted, and it is one founded on the plainest principles of natural reason and justice, that the surety paying off a debt shall stand in the place of the creditor, and have all the rights which he has, for the purpose of obtaining his reimbursement. " I have italicised the word " reimbursement Sheldon in his well known treatise on Subrogation has got the following passage in section 13 of the Second Edition: " There is another class of cases in which he who has paid money due upon a mortgage of land to which he had some title which might be affected or defeated by the mortgage, and who was thus entitled to redeem, has the right to consider the mortgage as subsisting in himself, and to hold the land as if it subsisted, until others interested in the redemption, or who held also the right to redeem, have paid a contribution. " Be it noted that what is spoken of here is a contribution. Dealing with the subject of subrogation of a, surety by payment of a promissory note and citing the observations of the Alabama Court, Harris says in his work on Subrogation (1889 Edition) at page 125: " The rule is, that a surety paying a debt, shall stand in the place of the creditor; and is entitled to the benefit of all the securities which the creditor had for the payment of the debt, from the principal debtors; in a word, he is subrogated to all the rights of the creditor; the surety, however, cannot avail himself of the instrument on which he is surety, by its payment. By payment it is discharged and ceases to exist, and the payment will not, even in equity, be considered an assignment; the surety merely becomes the creditor of the principal to the amount paid for him. " To compel the co debtors or co mortgagors to pay more than their share of what was paid to the creditor or mortgagee would be to perpetrate an inequity or 249 injustice, as it would mean that the debtor who is in a position to pay and pays up can obtain an advantage for himself over the other joint debtors. Such a result will not be countenanced by equity; the favouritism shown by law to a surety, high as it is, does not extend so far. The surety can ask to be indemnified for his loss: he can invoke the doctrine of subrogation as an aid to his right of contribution. Sheldon says in section 105 of his book : " The subrogation of a surety will not be carried further than is necessary for his indemnity; if he buys up the security at a discount, or makes his payment in a depreciated currency, he can enforce it only for what it cost him. He cannot speculate at the expense of his principal ; his only right is to be repaid. " In section 178, Harris is still stronger. " Since subrogation is founded on principles of equity, the surety who would avail himself of the doctrine and invoke equity must do equity ; and while ' he is entitled to a reimbursement in all that he pays out properly for his principal, debt, interest and cost, he is not entitled, in any way to recover more than he has paid. For instance, if he pays the debt of his principal, in depreciated currency, the rule would seem to be that he could demand from the principal only the value of that currency at the time he made the payment. Nor would he upon principles of equity be permitted to purchase the debt at a discount and then be subrogated to collect the whole face value of the debt, and especially if he held securities, or if the creditor held securities which would fall into his hands, out of which to pay the debt; because the securities are trust funds for the purpose, and set aside for the payment of that debt and an assignee of trustee cannot speculate in the purchase of claims against the fund in his hands. It would not be equality; it would not be equity. " While it can be readily conceded that the joint debtor who pays up and discharges the mortgage 250 stands in the shoes of the mortgagee, and secures to himself the benefit of the security by such payment, the extent to which he can enforce his right as against the other joint debtors is a different matter altogether. In his monumental work on Equity Jurisprudence, Pomeroy points out that he will be subrogated to the rights of the mortgagee only to the extent necessary for his own equitable protection. (See page 632 of Volume IV of the Fifth Edition by Symons). Clearer still is the passage found at page 640 of the same book: " The mortgagor himself who has conveyed the premises to a grantee in such manner that the latter has assumed payment of the mortgage debt becomes an equitable assignee on payment, and is subrogated to the mortgagee, so far as is necessary to enforce his equity of reimbursement or exoneration from such grantee. " It is as regards the excess of the payment over his own share that the right can be said to exist. Pomeroy says this at pages 660 and 661: "In general, whenever redemption by one of the above mentioned persons operates as an equitable assignment of the mortgage to himself, he can keep the lien of it alive as security against others who are also interested in the premises, and who are bound to contribute their proportionate shares of the sum advanced by him, or are bound, it may be, to wholly exonerate him from and reimburse him for the entire payment. . The doctrine of contribution among all those who are interested in having the mortgage redeemed, in order to refund the redemptor the excess of his payment over and above his own proportionate share, and the doctrine of equitable assignment in order to secure such contribution, are the efficient means by which equity completely and most beautifully works out perfect justice and equality of burden, under these circumstances. . . . " Whatever the difference might be between the English law and the Indian law as regards the right 251 to enforce decrees and securities for the due payment of a debt in the case of a surety who discharges a simple money debt and a surety who pays up a mortgage, it is still noteworthy that Section V of the Mercantile Law Amendment Act of 1856 (England) provided for indemnification by the principal debtor( for the advances made and loss sustained by the surety. There is a distinction in this respect between a third party who claims subrogation and a co mortgagor who claims the right, and this is brought out by Sir Rashbehary Ghose in his Law of Mortgage in India, Volume I, 5th Edition. He says at page 354, pointing out that co mortgagors stand in a fiduciary relation : " I should add that an assignee of a mortgage is entitled, as a rule, to recover whatever may be due on the security. But if he stands in a fiduciary relation, he can only claim the price which he has actually paid together with incidental expenses. " The right of the co mortgagor who redeems the mortgage is spoken of as the right of reimbursement at page 372 in the following passage : "Strictly speaking, therefore, when one of several mortgagors redeems a mortgage, he is entitled to be treated as an assignee of the security which be may enforce in the usual way for the purpose of re imbursing himself. " The redeeming co mortgagor being only a surety for the other co mortgagors, his right is, strictly speaking, a right of reimbursement or contribution, and in law, when we have regard to the principles of equity and justice, there should be no difference( between a case where he discharges an unsecured debt and a case where he discharges a secured debt. It is unnecessary for us to decide in this appeal whether section 92 of the was intended to strike a departure from this position when it states that the co mortgagor shall have the same 252 rights as the mortgagee whose mortgage he redeems, and whether it was intended to abrogate the rule of equity as between co debtors, and provide for the enforcement of the liability on the basis of the amount due under the mortgage ; and this is because, as has been already stated, we are governed not by the statute but by general principles of equity and justice. If it is equitable that the redeeming co mortgagor should be substituted in the mortgagee 's place, it is equally equitable that the other co mortgagors should not be called upon to pay more than he paid in discharge of the encumbrance. In this connection, reference may be made with advantage to the decision of Sir Asutosh Mookerjoe and Teunon JJ. in DigambarDas vs Harendra Narayan Panday (1) where the question arose as regards the the rate of interest and the period for which the redeeming co mortgagor would be entitled. There is an elaborate examination of the nature of the right of subrogation obtained by one of several joint comortgagors who redeems the mortgaged property, and in the course of the discussion the following observations occur: " In so far as the amount of money which he is entitled to recover from his co mortgagors is concerned, he can claim contribution only with reference to the amount actually and properly paid to effect redemption to which sum he can add his legitimate expenses . . The substitution, therefore, of the new creditor in place of the original one, does not place the former precisely in the position of the latter for all purposes. . If therefore one of several mortgagors satisfies the entire mortgage debt, though upon redemption he is subrogated to the right and remedies of the creditor, the principle has to be so administered as to attain the ends of substantial justice regardless of form ; in other words, the fictitious cession in favour of the person who effects the redemption, operates only to the extent to which it is necessary to apply it for his indemnity and protection." (1) 258 There is a definite expression of opinion by the Madras High Court on the point in the decision reported in Suryanarayana vs Sriramulu(1). In that case, a purchaser of a half share of the equity of redemption claimed to recover half of the amount of the mortgage on the security of the other share in the hands of the defendant, and it was held that as his purchase of the decree on the mortgage was prior to his purchase of the equity of redemption, he was entitled to the full amount claimed by him. The learned Judges distinguish the case from one where one of two mortgagors discharges an encumbrance binding on both, and say that in such a case the mortgagor doing so could not recover from his comortgagors more than a proportionate share of the amount actually paid by him. After this rather lengthy discussion of the subject, we consider it unnecessary to notice and comment on the several decisions cited for the appellant. It may be said generally that they only lay down that in cases where the , as it stood originally or as amended in 1929, is not applicable, we are governed by the principles of equity, justice and good conscience, and that sections 92 and 95 embody such principles. None of the cases deals with the extent or degree of subrogation, and there is nothing in them which runs counter to the view that the doctrine must be applied along with other rules of equity, so that the person who discharges the mortgage is amply protected, and at the same time there is no injustice done to the other joint debtors. He who seeks equity must do equity, and we shall be violating this rule if we give effect to the appellant 's contention. The High Court, in our opinion, reached the correct conclusion. The parties are not agreed on the shares to which the plaintiffs are entitled, and this is because after the date of the final decree some of the branches have become extinct by the deaths of their representatives. Whether under customary law in the Punjab, uncles (1) 254 exclude nephews or they take jointly, and whether succession is per stirpes or per capita, was the subject of disagreement at the Bar before us. This question must therefore be left over for determination by the trial court, and the case will have to go back to that court for effecting partition and delivery of possession according to the shares to which the plaintiffs may be found entitled. Subject to what is contained in the foregoing paragraph, the appeal will stand dismissed with costs. Appeal dismissed.

On principles of equity, justice and good conscience, which apply to the Punjab (where the , is not in force) if one of several joint mortgagors redeems the entire Mortgage by paying a s less than the full amount due under the mortgage, he is entitled to receive from his co mortgagors, only their proportionate shares on the amount actually paid by him. He is not entitled to claim their proportionate shares on the amount which was due to the mortgagee under the terms of the mortgage on the date of redemption. Hodgson vs Shaw ; , Digambar Das vs Harendra Narayan Panday [(1910) and Suryanarayana vs Sriramulu [(1913) referred to. Judgment of the High Court of Punjab at Simla affirmed.

One Govind Rao Harshe mortgaged some agricultural land and a house to Lakshmi Chand and Duli Chand Modi. The mortgagees filed a suit and obtained a preliminary decree and later a final decree for sale of the property for realisation of Rs. 5001/13/6 on 26.3.1938, and applied for execution of the said decree, which was stayed ' because the mortgagor applied for relief under the C.P. and Berar Relief of Indebtedness Act, 1939, to save the property from being sold at auction. Consequent upon his failure to comply with the conditions of the order passed in those proceedings, the decree holders alleging default again applied for the revival of the execution proceedings and prayed for sale of the house property in dispute. The judgment debtor did not appear before the Executing Court and the said Court held that the decree holders were entitled to execute the decree for the recovery of the debt. Thereupon the judgment debtor submitted an application for setting aside the ex parte order, which was dismissed and an appeal filed against the said order was also dismissed by the District Judge. In the meantime the house was put to auction and the highest bid of Rs. 6905 was knocked down in favour of one Gopal Rao Mutatkar on 20.8.1942 and the sale was confirmed vide order dt. 10.4.1943. Applications filed by the judgment debtor and his adult sons seeking to set aside sale were dismissed and the appeals failed even upto the High Court. In the meantime the appellant, a registered educational institution, through its Secretary, moved an application for granting a sale certificate stating that the house in question was auctioned by the Court and was purchased by Gopal Rao Mutatkar a member of the appellant institution, on 20.8.1942, for Mahila Vidyalaya, which sale was confirmed on 10.4.43. The appellant prayed that the certificate be granted in its favour. A stamp requisite for the purpose was also supplied. The execution court on 26.2.1944, ordered that the sale certificate will issue in the name of Mahila Vidyalaya, Sagar, through Secretary, G.R. Wakhle and 907 accordingly the sale certificate was issued in favour of the appellant on 8.4.1944. The four sons of the mortgagor filed a suit impleading the auction purchaser, G.R. Wakhle, Secretary, mortgagees and their father mortgagor, as defendants, praying that the execution sale was not binding on their interest. The auction purchaser and the former Secretary of the appellant institution objected to their being impleaded as parties to the suit, as according to them they had ceased to be the functionaries of the appellant and the suit should have been filed against the appellant itself and not against its office bearers. Thereafter the plaintiffs impleaded the appellant as party. This suit by the sons of the mortgagor was dismissed. The appellant thereupon as auction purchaser applied for the delivery of possession, which was granted. Some portion of the property was in occupation of the widowed sister, Radhabai, of the original mortgagor and other portions were in the possession of tenants. The Secretary of the appellant agreed to the request of the tenants that they will not be ousted as they were willing to execute rent notes. The appellant later required the premises and moved the Rent Controller for permission to serve notices on the tenants to vacate the premises. All the tenants except Radhabai and the original mortgagor who had also started living with his sister, vacated the premises. The appellant then instituted a suit against them. The trial court dismissed the suit for ejectment but passed a decree for arrears of rent. The appeal filed by the appellant against that order was allowed by the District Judge. The original mortgagor 's appeal failed before the High Court whereupon the appellant filed a execution application for ejectment of the occupants which is still pending as a result of stay order passed in a subsequent suit filed by Govind Rao Harshe, original mortgagor, against the appellant for a declaration, possession and permanent injunction. This suit giving rise to the present appeal was dismissed by the Trial Court. An appeal preferred against that order by the legal representatives of the deceased plaintiff, was allowed by the District Judge granting the declaration, delivery of possession of the house together with a mandatory injunction directing demolition of some new constructions made by the appellant. The appellant filed a second appeal before the High Court which was dismissed by the impugned special leave. The High Court held that as Goapl Rao Mutatkar was the auction purchaser, no sale certificate could be issued by the executing court in favour of the appellant, his bid being in his personal capacity and not one for and on behalf of the appellant. It was also held by High Court that Gopal Rao Mutatkar could transfer his proprietary right by sale or a gift which he did not do. According to the High Court the act of the executing court was clearly without jurisdic 908 tion and the sale certificate being void and inoperative, conferred no right or title upon the appellant over the suit property. Allowing the appeal, this Court HELD: Once an order is made under Order XXI rule 92, confirming the sale, the title of the auction purchaser related back to the date of sale as provided under Section 65, C.P.C. The title in the property thereafter vests in the auction purchaser and not in the judgment debtor. The issue of sale certificate under order XXI, rule 94, C.P.C. in favour of the auction purchaser though mandatory but the granting of certificate is a ministerial act and not judicial. [917H 918B] The sale of the property in question was perfectly valid and as soon as the sale was confirmed in favour of Gopal Rao Mutatkar under Order XXI Rule 92, C.P.C. Govind Rao Harshe had no right or title in the property and Gopal Rao Mutatkar became the owner of the property. [918G] The High Court did not consider the case in a proper perspective and took a wholly erroneous view in holding that the appellant was a trespasser and Govind Rao Harshe could have filed a suit for possession. The plaintiff Govind Rao Harshe himself had come forward with a plea that the execution proceedings and the sale was null and void and unless he was able to succeed in this regard, which he did not in the present case, no decree for possession could at all have been passed in his favour. [919C D]

One 'BC ', governed by the Mitakshra School of Hindu Law, being issueless and apprehending the claim to his property after his death as reversioners by his only brother 'RR ' and his nephew 'K ' who were inimical to him since the partition of their ancestral property in 1899, and possible harassment of his wife and 'G ', the respondent, executed a Will on September 21, 1916, in the Urdu script. The respondent 'G ' being the son of the testator 's sister married to testator 's wife 's brother was doubly related. As per the Will, 'G ' was to perform the obsequies and other annual death ceremonies etc. , being his 'waris ' and the "Malik Kamil ' absolute owner" having all the proprietary powers and the power of making transfers of all sorts", while his wife was to be in possession and enjoyment of the property during her life time. From the date of death of the testator in 1918 for about 18 years the widow and 'G ' lived in cordiality but got estranged later due to estrangement of feelings resulting in several civil and criminal litigation between them. The widow died in 1948 executing a gift deed and a Will in respect of certain properties in favour of the appellant 'NL '. 'G ' filed a civil suit claiming his rights under the Will dated 21 September, 1916, and the appellant defendant contested it on pleas that the widow of 'BC ' having an absolute right over the property under the said Will validly made the gift deed and the Will of 1948 in his favour and that the respondent plaintiff had no locus standi to file the suit. The suit was decreed. On appeal to the Allahabad High Court, as there was a difference of opinion between the Judges of the Division Bench on the nature of the widow 's estate, one opining as the Will conferring a "limited estate" and the other opining as conferring an "absolute estate" the appeal was set down to a third Judge who agreed with the view that the Will conferred only a "limited estate" upon the widow and dismissed the appeal. Confirming the decree of the courts below and dismissing the appeal by certificate, the Court, ^ HELD : (1) The following are the established principles for construing the language of the Will. (a) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances being considered to find out the intended meaning of such words employed therein. [927F G] (b) In construing the language of the Will the court is entitled to put itself into the testator 's armchair and is bound to bear in mind also other matters than merely the words used like the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense all as an aid to arriving at a right construction of the Will, and to ascertain the meaning of its language when used by that particular testator in that document. [927G H, 928A] (c) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the Will as a whole with all its provisions and ignoring none of them as redundant or contradictory. [928B] (d) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of 925 the expression inoperative. The court will look at the circumstances under which the testator makes his Will, such as the state of his property, of his family and the like. Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator. Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create and such hiatus. [928C E] (e) It is one of the cardinal principles of construction of Wills that to the extent that it is legally possible effect should be given to every disposition contained in the Will unless the law prevents effect being given to it. Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the Will. [928E G] Ram Gopal vs Nand Lal and others ; Venkata Narasimha vs Parthasarathy, 42 Indian Appeals 51/72; Gnanambal Ammal vs T. Raju Ayyar and others, ; Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer, ; Pearey Lal vs Rameshwar Das [1963] Supp. SCR 834/839/842 and Ramachandra Shenoy and Anr. vs Mrs. Hilda Brite and others. , applied. (ii) The term "malik" when used in a Will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian Will must always depend upon the setting in which it is placed, the subject to which it is related and the locality of the testator from which it may receive its true shade of meaning. The intention of the testator will have to be gathered from all the relevant and material contents in the entire Will made in situation in which the testator was placed in life in the background of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence. Hence, even the words "malik muakkil" can be qualified by other words and circumstances appearing in the document. [930 B C & G H] Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others, 49 Indian Appeals 25/35; Musammat Surajmani and others vs Rabi Nath Ojha and another, 35 Indian Appeals 17; Krishna Biharilal vs Gulabchand and others, (1971) Supp. SCR 27 and Dhyan Singh and anr. vs Jugal Kishore and anr. , [1952] SCR 478, discussed. (iii) In the instant case, the testator intended a life estate for his wife so long as she lived as is clear from the reading of the present Will as a whole. This is consistent with his description of Gokul as "my heir (waris)" after his death. It is further consistent with the recital that "if per chance, Mrs. Jarian dies in my life time, then Gokul, aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aurusko har qism ke aktiyarat inteqalat hasil honge)". In obvious contrast even though Smt. Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt. Jarian 's death. While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts". This power of making transfers which was prominent in the mind of the testator at the time of execution of the Will is conspicuous by total omission in relation to Smt. Jarian 's enjoyment of the property. The testator has made the distinction between mere ownership of property and ownership of the same coupled with a transfer in every way. [931 A D] 926 Further, from the recitals in the Will about his only reversioners viz., his brother and nephew "might trouble and harass my wife Mst. Jarian and my sister 's son Gokul", it is clear that the testator never intended that his property should pass to his brother and nephew. This intention would be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the Will on the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator. There was no other heir of Mst. Jarian to inherit the property after her death. [931 G H, 932 A B] A plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law. No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument. The testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul. [932B C]

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

% The appellant Bank filed a suit against respondents including respondent firm and its partners, who were agriculturists, for recovery of a sum of Rs.18,14,817.91 being balance of three principal amounts severally advanced by the Bank to the firm under cash credit account on three different dates. The last loan was advanced by the Bank after its nationalisation on July 7, 1969. The Bank alleged that, to secure repayment of the aforesaid amount of loan, in addition to hypothecation made in its favour of the properties in `A ' and`B 'Schedules of the plaint, equitable mortgage of properties in Schedule `C ', `D ' and `E ' was also created in its favour by respondent No. 2, respondent No. 3 and his deceased father. The appellant Bank prayed for the sale of the said properties for the recovery of the amounts claimed by it. The respondents, including the firm, and Respondents No.4 to 12, who were alienees, denied creation of any equitable mortgage in favour of the appellant Bank. The respondent firm and its partners, namely, third respondent 's deceased father and the second respondent also filed counter claim against the appellant Bank. Dismissing the suit against respondent Nos. 4 12, the Subordinate Judge held that no equitable mortgage was created in favour of the appellant Bank and that the claim of the appellant Bank, except to the extent of Rs.1,00,418.55, was barred by limitation. The counter claim against the Bank was decreed. 962 Setting aside the Judgment and decrees of the Subordinate Judge, the High Court, in appeal, decreed the suit instituted by the appellant, but held that the Bank was entitled to recover the amount claimed by it, only after scaling down the debt in accordance with the provisions of the Andhra Pradesh (Andhra Area) Agriculturists Relief Act IV of 1938. In the appeal by special leave, it was submitted on behalf of the appellant Bank that in view of section 4(e) of the Act, the provisions of the Act were not applicable to the appellant Bank and as such, it was entitled to recover the entire amount without the same being scaled down as provided in section 13 of the Act, and that the words "special Indian Law" in section 4(e) referred to and related to law made by an Indian Legislature. On behalf of the respondents, it was contended that the words "special Indian law" meant a special Indian Law enacted by the Parliament of the United Kingdom, that even assuming that the expression "special Indian law" meant a law enacted by the Indian Legislature and that the Banking Act was such a law, still the provision of section 4(e) of the Act did not apply inasmuch as the appellant Bank was not formed in pursuance of "special Indian law", but by or under "special Indian law", that is, the Banking Companies Act, and as such, it was not a Corporation within the meaning of section 4(e) of the Act, that as the appellant Bank was nationalised and/or created under Ordinance VIII of 1969 promulgated on July 19, 1969 and the Banking Companies Act only ratified the already created bank under the said Ordinance, it was not formed or created under any `special Indian Law ' and that since a major part of the loan was contracted before the nationalisation of the appellant Bank, the provision of section 4(e) was not applicable. Allowing the appeal, ^ HELD: 1. The provisions of the Act are not applicable to the appellant Bank, and there is no question of scaling down the debt due to the Bank by the respondents. [972E] In the instant case, the amounts of loan were advanced by the Bank to the firm under the cash credit account opened in favour of the firm. Normally, the advances that are made from the cash credit account are repaid and thereafter fresh advances are made. It is not known what was the actual balance on the date the Bank was nationalised, and whether the first two amounts were repaid by the firm and, thereafter fresh advances were taken on the cash credit account. [971B D] 963 2.4 The Banking Companies Act is a special Indian law and the provision of section 4(e) Andhra Pradesh (Andhra Area) Act IV of 1938 is applicable to the appellant Bank.[969G] 2.2 In interpreting the words of the provision of a statute, while it may sometimes be necessary to take into consideration the setting in which such words are placed, that is not the only and the surest method of interpretation, and when such words convey a clear meaning, a different interpretation or meaning need not be given to them because of the setting. [968D] R.L. Arora vs State of Uttar Pradesh, ; , referred to. In the instant case the expression `special Indian law ' has a clear and unambiguous meaning. There is no reasonable justification to think that the expression must be an enactment of the British Parliament since there were in existence Indian Legislatures, including a Legislatures at the Centre. [968E] Section 3(27)(a) of the General Clauses Act, as it stood on the day the Act was passed, defines `Indian Law ' as meaning any Indian law enacted by the Indian Legislature. The expression `special Indian law ' therefore, means a special Indian law enacted by the Indian Legislature. [968F G] Indian Bank, Alamuru vs Krishna Murthy, AIR 1983 Andhra Pradesh 347,over ruled. 2.3 Inasmuch as the words `any special Indian law ' in section 4(e) of the Act refer and relate to a law made by the Indian Legislature and not by the British Parliament, the Banking Companies Act is quite legal and valid. [972C D] 2.4 Theoretically, there may be a distinction between the words `in pursuance of ' and the words `by or under ' but by using the expression `in pursuance of ' in section 4(e), the Legislature has not meant that the corporation, in question, should be formed by a third party in pursuance of the law and not by the law itself in order to come within the purview of section 4(e) of the Act. The intention of the Legislature is very clear in that the provision of section 4(e) would apply to a corporation which is the creature of a special Indian law, whether it is created in pursuance of or by or under the special Indian law. There is no difference 964 Or distinction whatsoever between the corporation formed in pursuance of,and a corporation by or under a special Indian law. [969E F] 2.5 An Ordinance is as much a law as an enactment of Parliament or Legislature. Therefore, it must be held that the bank was created under a special Indian law even assuming that the bank was created under the Ordinance VIII of 1969 and not under the Banking Companies Act. It is also manifestly clear from sub section (1) of section 3 of the Banking Companies Act which provides that on the commencement of the Banking Companies Act there shall be constituted such corresponding new Banks as are specified in the first Schedule, that the appellantBank, which is mentioned in the first Schedule, has been created under the provisions of the Banking Companies Act with effect from July 19, 1969.[970C,E F] R.C. Cooper vs Union of India, ; and Life Insurance Corporation of India vs Kota Ramabrahmam, ; , referred to.

The appellants obtained a decree against the respondent in the court of Sub Judge, Bankura (West Bengal) on December 3, 1949. On March 28, 1950 they applied to the court which passed the decree to transfer the decree with a certificate of non satisfaction of the court at Morgan in the then State of Madhya Bharat. It was ordered accordingly. The Judgment debtors resisted the execute on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed ex parte. The court accepted that contention and dismissed the execution petition on December 29, 1950. On April , 1951 the Code of Civil Procedure (Amendment) Act 2 of 1951 came into force. By this Act the Code was extended to the former State of Madhya Bharat as well as various other places. Meanwhile the appellants appealed against the order of the Additional District Judge Morena dismissing the execution petition to the High Court of Madhya pradesh. The appeal was allowed. In further appeal this Court 'restored the order of the Addl. District Judge, Morena. Thereafter on February 15, 1963 the appellants filed another execution case before the Bankura Court praying for the transfer of the decree to the Molrena Court for execution. The Bankura Court again ordered the transfer of the decree of the Morena Court. The judgment debtors resisted execute on the flowing grounds : (1) that it was barred by yes judicature in view of the aforesaid decision of this Court; (2) that it was barred by section 48 of the Code of Civil Procedure; (3) that it was barred by limitation and (4) that it was not executable because it was the decree of a foreign court. The Addl. District Judge rejected the objections. The High Court in appeal agreed with the executing court that the execution petition was neiber barred by resjudicata nor was there any bar of limitation but it disagreed with that court and held that the decree was not executable as the court which passed the decree was a foreign court. The decree holders filed the present appeal by special leave. The questions which fell for consideration were : (i) whether the decree under execution was not executable by courts situate in the area comprised in the former State of Madhya Bharat; (ii) whether the decree was barred by section 48 of the Code. HELD:Per Sikri C.J., Mitter, Hyde and Bhargava JJ. (1) (a) On the date when the decree under execution was passed foreign court ' was 8 1 100 SupCII71 816 defined in section 2(5) of the Code as a court situate beyond the limits of British India which had no authority in British India and was not established or continued by the Central Government. After the amendment of the Code of Civil Procedure in 1951. 'foreign court ' under the Code means a court situate outside India and not established or continued by the authority of the Central Government. Whether we take the earlier definition or the present definition the Bankura Court could not be considered as a foreign court within the meaning of that expression in the Code. 'Foreign judgment ' is defined as the 'judgment of a foreign court '. Hence the decree under execution could not be considered as a foreign decree for the purpose of the Code. [820 D G] Accordingly the judgment debtors could not take advantage of the provision in section 13(b) of the Code under which the ex parte decree of a foreign court is not conclusive. Nor could they take advantage of section 13(d). They were served with notice of suit but did not choose to appear before the court. Hence, there was Po basis for the contention that any principle of natural justice has been contravened. Further section 13(d) was not applicable because the judgment in question was not a foreign judgment. [821 D] (b) Under Private International Law a decree passed by a foreign court to whose juri diction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred jurisdiction on the domestic courts over the foreigners either generally or in specified circumstances. Clause (c) of section 20 of the Code provides that subject to the limitations mentioned in the earlier sections of the Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part, arises. This provision confers jurisdiction on a court in India over foreigners when the cause of action arises within its jurisdiction. There was not dispute in the present case that the cause of action for the suit which led up to the decree under execution arose within the jurisdict on of the Bankura Court. Hence, it must be held that the suit in question was properly instituted. Accordingly the decree in question was a valid decree though it might not have been executable at one stage in courts in the former Indian States [822 B F] Sardar Gurdyal Singh vs The Rajah of Faridkot, 21 I.A. 171, referred to. (c) A combined reading of sections 2(12), 38, 39 and 40 of the Code shows that a decree can be transferred for execution only to a court to which the Code apple . This is what was ruled by this Court in Hansraj Nathu Ram 's case. But by the date the transfer in the present case was made, the Code had been extended to the whole of India. It followed that the transfer of the decree in question which was not a foreign decree, to the Morena Court, was in accordance with the provisions of the Code. [823 B D] Hansraj Nathu Ram vs Lalii Raja & Sons of Bankura, , applied. Narsingh Rao Shitole vs Shri Shankar Saran & Ors., ; , distinguished. (d) Section 20(1)(b) of the Code of Civil Procedure Amendment Act, 1951 by which the Code was extended to Madhya Bharat and other areas undoubtedly protects the right acquired and privileges accrued under the law repealed by the amending Act. But even by straining the language of the provision it cannot be said that the non executabilitv of the decree within a particular territory can be considered a privilege [824 E F] 817 Nor is it a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950. In the first peace in order to get the benefit of this provision the non executability of the decree must be a right, and secondly it must be a right that had accrued from the provisions of the repealed law. It Was difficult to consider the non executability of the decree in Madhya Bharat as a vested right of the judgment debtors. The non executability in question pertained to the jurisdiction of certain courts and not to the "rights of the judgment debtors. Further the relevant provision of the Code of Civil Proedue in force in Madhya Bharat did not confer the, right claimed by the judgment debtors. All that had happened in view of the extension of +he Code to the whole of India in 1951 was that the decrees which could have been executed only by courts in British India were made ' executable in the whole of India. The change made was one relating to procedure and jury diction. By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court was now competent to execute the decree [825 A E] Hamilton Gell vs White , Abbot vs Minister for Lands, and G. Ogden Industries Pvt. Ltd. vs Lucas, , applied. (ii)The execution was also not barred, by section 48 of the Cod . For considering the true impact of cl. (b) of sub section 2 of section 48 of the Code provisions of articles 181 and 182 of the Limitation Act, 1908 have also to be taken into consideration. These provisions clearly go to indicate that the period prescribed under section 48(1) of the Code is a period of limitation. This interpretation is strengthened by the subsequent history of the legislation. By the section 48 of the Code is deleted. It , place has not been taken by article 136 of the Limtation Act of 1963 The High Courts also are now unanimous that section 48 of tile (ode is controlled by the provisions of the Limitation Act, 1908. [828 A C] Kandaswami Pillai vs Kamappa Chetty, A I R, , Durg vs Poncham, I.L.R. [1939] All. 647, Sitaram vs Chunnilalsa, I.L.R. , Amarendra vs Manindra, A.I.R. '1955 Cal. 269, Krishna Chandra v Parovatamma, A.I.R. 1953 Orissa 13 and Ramgopal vs Sidram, A.I.R. 1943 Bom. 164 referred to. Per Jaganmohan Reddy, J. (Concurring) No question of 'a vested right or privilege arose to entitle the respondent to challenge execution proceedings in Morena Court. The decree granted by the Bankura Court was executable by the Courts governed by the same Code, by talk Court which passed it or by the Court to which it was transferred. One the Code was made applicable to the whole of India by Amendment Act 11 of 1951 the decree was no longer a foreign decree qua the Morena Court which was a court under the Code to which the Bankura Court could transfer the decree for execution. No doubt in ' Shitole 's case it was observed that section 13 of the Code creates substantive rights and not merely procedural and therefore defenses that were open to the resno dents were not taken away by any constitutional changes, but the ratio of the decision was that the Gwalior Court not being a court that passed the decree after the coming into force of Act 11 of 1951 the Allahabad Court could not execute it. The impediment did not exist now in that the Bankura Court bad transferred the decree to a court under the Code. the plea that section 48 Civil Procedure Code presents a bar of limitation was also not tenable. [831 F H] 818 Kishendas vs Indo Carnatic Bank Ltd. A.I.R. 1958 A.P. 407 Sardar Gurdayal Singh V. Raja of Firidkote, 21 I.A. 171, Rai Rajendra Sardar Maloji Narsingh Rao Shirole vs Shri Shankar Saran, ; and Hansaj Nathuram Y. Lalji Raja

The Estate of Maharaja Man Singh of Ayodhya Raj devolved on his death successively on his two widows and thereafter, according to V the plaintiff a minor on his grandfather G, who died in 1942. Respondent claimed the estate as adopted son of the junior widow of the Maharaja. V filed a petition for leave to sue in forma pauperis for declaration of title to the estate making his father R a party. The plaintiff 's petition was rejected by the Subordinate Judge, on the ground that it disclosed no cause of action. R 's application to be transposed as petitioner was also rejected. V and R preferred revision applications to the High Court of Allahabad. The plaintiff 's application was rejected by the High Court holding inter alia that there was nothing in the petition to show that succeeded to the estate as the nearest male reversioner of the last male holder. R 's application was rejected by the High Court on the ground that relief in an application to sue in forma pauperis is personal to the applicant and nobody else can be made a co applicant, because 1, R. 10 of the Code of Civil Procedure does not apply to a proceeding for permission to sue as a pauper. ^ Held, that O. XXXIII of the Code of Civil Procedure lays down the procedure for institution of a suit by pauper. By cl. 5 (d) the court is required to ascertain whether the allegation made in the petition show a cause of action, but it does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner. By the statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown: the jurisdiction does not extended to trial of issues which must fairly be left for decision at the hearing of the suit. An application to sue in forma pauperis, is but a method prescribed by the Code for institution of a suit by a pauper without payment of Court fee; and there is nothing personal in such an application. The suit commences from the 676 moment an application for permission to sue in forma pauperis as required by O. 33 of the Code is presented, and O. 1 r. of the Code would be as much applicable in such a suit as in a suit in which court fee had been duly paid. A person who claims to join a petitioner praying for leave to sue in forma pauperis must himself be a pauper. Claim to join by transposition as an applicant must be investigated; it is not liable to be rejected on the ground that the claim made by the original applicant is personal to himself.

The appellants being mother and son of one Jagmohan Swarup who was governed by the and who died intestate on June 15, 1967 filed Civil Suit No. 122 of 1970 on the file of the first Additional Civil Judge, Dehradun for a declaration to the effect that they were together entitled to 2/3rd share of the amount due and payable under the insurance policies though the deceased assured has nominated the respondent his widow as the person to whom the amounts were payable. The respondent contested the suit claiming that she has the absolute right to the amounts to the exclusion of her son and her mother in law. The suit was dismissed. The First Appeal before the Dt. Judge, Dehradun and the Second Appeal before the High Court were dismissed. Hence the appeal after obtaining special leave of the Court. Allowing the appeal, the Court, ^ HELD: 1.1 A mere nomination made under Section 39 of the does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the accused. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them. [1009G, 1004 B D] 1.2 An analysis of the provisions of Section 39 of the Act clearly established that the policy holder continues to hold interest in the policy during his life time and the nominee acquires no sort of interest in the policy during the life time of the holder. If that is so, on the death of the policyholder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him. such succession may be testamentary or intestate. The tenuous character of the right of a nominee becomes more pronounced when one contrasts the provisions of Section 39 with that of 993 Section 38. Section 39 of the Act was not intended to act as a third mode of succession provided by the stature and incorrectly styled as "statutory testament" by the Delhi High Court. [998 C E] 1.3 The language of Section 39 of the Act is neither capable of altering the course of succession under law nor can be said to have equated a nominee to an heir or legatee. [999F] section Fauza Singh vs Kuldip Singh & Ors. AIR 1978 Delhi 276; Mrs. Uma Sehgal & Anr. vs Dwarka Dass Sehgal and Ors. AIR 1982 Delhi 36; overruled. Rama Bhallav Dhandhania vs Gangadhar Nathmall AIR 1966 Cal. 275; D. Mohananardu Mudaliar and Anr. vs Indian Insurance and Banking Corporation Ltd., Salem and Anr. ; Sarojini Amma vs Neelakanta Pillai AIR 1961 Kerala 126, Life Insurance Corporation of India vs United Bank of India Ltd. & Anr. ; Raja Ram vs Mata Prasad and Anr. AIR 1972 All. 167; Mallidei and Anr. vs Kanchan Prana Dei AIR 1973 Orissa 83; Lakshmi Amma and Anr. vs Saguna Bhagathi & Ors. ILR 1973 Karnataka 827; Atmaram Mohanlal Panchal vs Gunavantiben and Ors. AIR 1977 Gujarat 134 approved. Karuppa Gounder & Ors. vs Palaniammal & Ors. AIR 1963 Madras 245; B. M. Mundkur vs Life Insurance Corporation of India and Ors. AIR 1977 Mad. 72, discussed and distinguished.

Appeal No.449 of 1958. Appeal by special leave from the judgment and decree dated August 7, 1956, of the Patna High Court in Misc. Judicial Case No. 604 of 1953. 406 D. P. Singh, for the appellant. section P. Varma, for the respondent. January 11. The Judgment of the Court was delivered by SHAH, J. The High Court of Judicature at Patna answered in the affirmative the following question which was submitted by the Board of Agricultural Income tax, Bihar, under section 28(3) of the Bihar Agricultural Income tax Act, XXXII of 1948 hereinafter referred to as the Act: " Whether, in the facts and circumstances of the case, the petitioner could be legally assessed for the income of the Estate in 1355 Fasli when the Estate was in the hand of the Receiver ? " With special leave under article 136 of the Constitution, this appeal is preferred against the order of the High Court. The appellant is the Mahant of the Asthal Estate, Salauna, in the District of Bhagalpur in Bihar. In a suit concerning that estate, a Court Receiver was appointed by the First Class Subordinate Judge, Monghyr, to manage the estate. The Receiver functioned till sometime in December, 1949, and under the order of the Subordinate Judge he handed over charge of the estate to the appellant on January 8, 1950. On January 15, 1950, the appellant submitted a return of income of the estate to the Agricultural Income tax Officer, Monghyr, for the Fasli year 1355 corresponding to September 16, 1948, to September 15, 1949. The Agricultural Income tax Officer assessed on August 7, 1950, the agricultural income of the estate at Rs. 90,507 2 6 and ordered the appellant to pay Rs. 20,290 13 0 as agricultural income tax. Appeals against the order of assessment preferred to the Commissioner of Agricultural Income tax and the Board of Agricultural Income tax, Bihar, were unsuccessful. The Board however referred the question set out hereinbefore to the High Court under section 28(3) of the Act as arising out of its order. The only question which falls to be determined in this appeal is whether the appellant was liable to be assessed to pay agricultural income tax for the year 407 in which the estate was in the management of the Court Receiver. Section 3 of the Act which is the charging section provides: " Agricultural income tax shall be charged for each financial year in accordance with and subject to the provisions of this Act on the total agricultural income of the previous year of every person. " By section 4,it is provided: Save as hereinafter provided, this Act shall apply to all agricultural income derived from land situated in the State of Bihar. " The income of the estate of the appellant was not exempt from payment of tax and by virtue of section 3, agricultural income tax was charged upon the income for the assessment year in question, and the appellant was prima facie liable as owner of the estate to pay tax on that income. The appellant however relied upon section 13 of the Act which provides: " Where any person holds land, from which agricultural income is derived, as a common manager appointed under any law for the time being in force, or under any agreement or as receiver, administrator or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom, the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him shall be assessed on such common manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income tax so payable by each such person and shall be liable to pay the same. " The appellant urged that if the land from which agricultural income is derived is held by a Receiver and the income is received by the Receiver, the Receiver alone can, by virtue of section 13, be deemed to be the assessee and the Receiver alone is liable to pay the tax in respect of that income. In support of his contention, the appellant relies upon the definition of the word. , " person " in s, 2, cl. (m) which estates; 408 Person ' mean,% any individual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu family, firm or company. " In our view, there is no substance in the contention raised by the appellant. The liability to pay tax is charged on the agricultural income of every person. The income though collected by the Receiver was the income of the appellant. By section 13, in addition to the owner, the Receiver is to be deemed to be an assessee. But the fact that the Receiver may, because he held the property from which income was derived in the year of account, be deemed to be an assessee and liable to pay tax, does not absolve the appellant on whose behalf the income was received from the obligation to pay agricultural income tax. Section 13 merely provides a machinery for recovery of tax, and is not a charging section. When property is in the possession of the Receiver, common manager or administrator, the taxing authorities may, but are not bound to, treat such persons as assessees and recover tax. The taxing authorities may always proceed against the owner of the income and assess the tax against him. The definition in the connotation of" person " undoubtedly included a receiver, trustee, common manager, administrator or executor, and by such inclusion, it is open to the taxing authorities to assess tax against any such persons; but on that account, the income in the hand of the owner is not exempt from liability to assessment of tax. Counsel for the appellant urged that the income received by the appellant from the Receiver did not retain its character of agricultural income and therefore also the appellant was not liable to pay agricultural income tax. But this contention was never raised before the taxing authorities and no such question has been referred to this court. The character of the income was accepted to be agricultural 409 income in the hands of the appellant and the only question which was sought to be referred and raised before the Board of Agricultural Income tax was one as to the liability of the appellant to be assessed to agricultural income tax for the year in question. In that view of the case, the appeal fails and is dismissed with costs. Appeal dismissed.

The appellant was the Mahant of the Asthal Estate in Bihar which was in the management of a Receiver appointed by the Civil Court in a suit relating to the estate. On appeal the question that arose for decision in this Court was whether the appellant Mahant was liable to be assessed under the Bihar Agricultural Income tax Act, 1948, to pay agricultural income tax for the year in which the estate was in the management of the Court Receiver. Held, that the income though collected by the Receiver was the income of the appellant. By virtue of the provisions of sections 2, cl. (m) and 13 of the Bihar Agricultural Income tax Act it was open to the taxing authorities to treat the Receiver as the assessee because he held the property from which income was derived, but on that account the income in the hand of the owner was not exempt from liability to assessment of tax. Section 3 of the Act provides for charging agricultural income of every person " as defined in section 2, cl. (m) which includes a receiver and section E3 merely provides a machinery for recovery of tax from "Persons" including receivers and is not by itself a charging section.

% As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982. The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal. On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application. The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent. The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties. A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent. The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge. Allowing the Appeal by the State this Court, ^ HELD: l. The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing. The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of. [823G H] 2. The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter. [824A B] 3. The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed. [824B c] 4. The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives. It could not be said that the appeal is disposed of as observed by the High Court. It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law. [824C D]

The appellant was a clerk in the Excise Department of the State of Bihar. In a disciplinary proceeding instituted against him, the Inquiring Officer found that six out of seventeen charges framed against him had been established and submitted his report accordingly on 9.11.1960. The Excise Commissioner accepted the report of the Inquiring Officer and issued a show cause notice dated 8.9.1961 to the appellant as to why he should not be removed from service. The appellant submitted his reply to the said notice on 1.11.1961. After the submission of the Report by the Inquiring Officer, the civil surgeon of the area issued a certificate to the effect that the appellant was an invalid and he could not discharge his duties properly in the state of his health. On 31.1.1962, an order was passed by the Excise Commissioner directing the retirement of the appellant on invalid pension under Rule 116 of the Bihar Pension Rules with effect from 19.7.1961. On 5.10.1963 the Government of Bihar passed an order revoking the order of retirement under Rule 73(f) of the Bihar Service Code and thereafter the Excise Commissioner passed an order on 1.11.1963 dismissing the appellant from service. The appellant challenged the said order of revocation of the order of retirement and the order of dismissal passed later on in the Patna High Court. The High Court dismissed the writ petition but granted a certificate of fitness to appeal. Allowing the appeal, the Court, ^ HELD: 1.1 In the absence of a provision which entitled the State 231 Government to revoke an order of retirement on medical grounds which had become effective and final, the order dated 5.10.1963 passed by the State Government revoking the order of retirement is without the authority of law. The order of dismissal passed thereafter is also a nullity. [234E F] 1.2. The expression "compulsory retirement" found in Rule 73(f) of the Bihar Service Code refers to retirement of a Government servant on his attaining the age of superannuation. The appellant 's case is not one of retirement from service on his attaining the age of superannuation. No order asking the appellant to continue in service before he had attained the age of superannuation for the purpose of concluding a departmental inquiry instituted against him had also been passed by the competent authority. On the other hand the appellant had been permitted to retire from service on invalid pension on medical grounds even before he had attained the age of superannuation. Rule 73(f) of the Bihar Service Code is clearly inapplicable to the case of the appellant. Further at the time the order of retirement on medical grounds was passed the Excise Commissioner had also before him the medical certificate of the Civil Surgeon. At that stage two courses were open to the Excise Commissioner. He could have either dimissed the appellant if he felt that the charges had been established or he could have ordered his retirement on invalid pension under rule 116 of the Bihar Pension Rules. The Excise Commissioner, however, passed an order directing the retirement of the appellant on January 31, 1962 with effect from July 19, 1961. Thus the appellant ceased to be a Government employee. Any order of dismissal passed thereafter would be unsustainable unless it was permissible under law to the State Government to revoke the order of retirement and to reinstate him in his former status as Government servant before the order of dismissal was passed. [234B E; 233F G]

The appellant instituted two suits in the Court of Assistant Collector (a Revenue, Court) against the respondent under sections 60, 61 and 180 of the U.P. Tenancy Act, 1939. The suits were decreed, and the appellant took symbolical possession of the lands. The Assistant Commissioner. affirmed the decrees, and during the pendency of the respondent 's second appeals in the High Court, the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952 came into force. The Board of Revenue held that in view of the Rules. the pending appeals as also the suits had a ate. The respondent filed applications for 'restitution of the lands under section 114 C.P.C. in the Court of Assistant Collector. The Assistant Collector referred the issue whether the appellant had acquired Bhumidari rights to the civil court. He refused to recall the 'reference in spite of the respondent 's Plea that he had no power to pass the order as no question of pro prietary title bad arisen. The civil court answered the issue in the negative, and the Asstt. Collector allowed the applications for restitution. As the appellant was not certain about the proper forum of appeals against these orders of the Assistant Collector, he filed anneals in the revenue court as also in the civil court. The Assistant Commissioner held that the revenue court had no Jurisdiction to entertain appeals and the appeals lay to the civil court under sections 286(4) and 265(3) off the U.P. Tenancy Act. The appellant filed revision petitions against the orders before the Board of Revenue. In the meantime the appeals filed before the civil court came up for hearing:. The respondent submitted to the jurisdiction of the civil court, and did not contend that the civil court had no Jurisdiction to entertain the appeals. The Civil Judge allowed the anneals and dismissed the application for restitution. Because of this decision. the appellant did not proceed with the pending revision petitions 'before the Board of Revenue and there the petitions were dismissed. The respondent filed second appeals in the High Court against the appellate orders of the civil court, without taking the plea that the civil court 'had no Jurisdiction to entertain the anneals. but later on he took the plea by adding a new ground. The High Court held that the appeals lay to the revenue court and the respondent was not estopped from raising the contention. In appeals to this Court the appellant contended that the anneals lay to the civil court and not for the revenue court and in the circumstances of this case, and in view of section 289(2) of the U.P. Tenancy Act. the respondent was precluded from raising the objection that the appeals did not lie to the civil court. Allowing the appeals this Court. HELD : In this case the doctrine of approbate and reprobate could not be pressed into service to preclude the respondent from raising the objection that the appeals did not lie to the civil court as the court in which the proceeding were originally filed suo motu raised the objection. 232 But the effect of upholding his objection would be that the, appellant would be deprived of his right of appeal altogether, and section 289(2) of the U.P, Tenancy Act is intended to prevent such grave miscarriage of justice. [237 F] Section 289(2) applies whenever any suit, application or appeal having been rejected either by the civil court or revenue court on account of want of jurisdiction is subsequently filed in the court of the other description and the latter court disagrees with the finding of the former. In such a case,, a reference to the High Court is compulsory and the conflict of opinion is resolved by a decision of the High Court which is binding on all courts. A court subordinate to the Collector cannot make the reference without the previous sanction of the Collector under section 289(3). It is implicit in section 289(3) that if the Collector refuses to give the sanction, the case will proceed as if there is no disagreement with the finding of the former court. [237 H] In a case falling within section 289(2), only the court in which the proceeding is subsequently instituted can disagree with the finding of the former court on the question of jurisdiction. If it so disagrees, it must refer the matter to the High Court; and only the High Court on such a reference can override the finding. No other court can disagree with the finding and make the reference. If no such reference is made, the finding of the former court on the question of jurisdiction becomes final and conclusive; and the objection that it is erroneous cannot be entertained by the appellate or revisional court or any other court. [238 D] Having regard to the circumstances of this case, it was not open to the respondent to raise the objection in the High Court that the civil court was not competent to hear the appeals. In view of the fact that no reference under section 289(2) was made, the finding of the revenue court that the civil court was competent to entertain the appeals could not be challenged in the High Court. The case must be decided on the footing that the Civil Judge was competent to entertain the appeals. [238 F] On the merits the respondent had no case. The Civil Judge found that the appellant was in possession of the lands on the dates of the institution of the suits. The High Court agreed with this finding. No ground has been made for setting aside this concurrent finding of fact. The appel lant did not obtain possession of the lands by executing the decrees passed in the two suits. Even assuming that the suits had abated and the decrees passed therein had been set aside or reversed, no case for restitution of the lands under section 144 of the Code of Civil Procedure was made out. The applications under section 144 C.P.C., were rightly rejected. Nathan vs Harbans Singh, A.I.R. 1930 All. 264, Mohammad Mehdi Khan vs Mussammat Sharatunnissa, 3 Oudh Cases 32, 35 37, Mahadeo Singh vs Pudal Singh, A.I.R. 1931 Oudh 123 and Saira Bibi vs Chandrapal Singh, I.L.R. 4 Luck. 150, 166, referred to.

As a result of a notification dated December 30, 1967 under section 59(1) of the Madras General Sales Tax Act and later by Act 2 of 1968 sales of jaggery became liable to tax. But while by notification under section 17 'palm jaggery was exempted from tax 'cane jaggery ' was not. The appellants who were dealers in 'cane jaggery ' challenged the levy by writ petitions in the High Court which were, however, dismissed. In appeal before this Court it was contended (i) that the tax on 'cane jaggery ' while exempting 'palm jaggery ' was ,discriminatory and violative of article 14 of the Constitution; (ii) that taxation of 'cane jaggery ' was restrictive of trade and commerce and therefore violative of article 301; (iii) that the impugned legislation constituted a colourable exercise of power. HELD: (i) The evidence on record clearly showed that 'cane jaggery ' and 'palm jaggery ' were commercially different commodities. The methods of production of 'palm jaggery ' and 'cane jaggery ' were different; they reached the consumers through different channels of distribution; the prices at which they were sold differed and they were consumed by different sections of the community. 'Cane jaggery ' and 'palm jaggery ' did not thus belong to the same class and in differently treating them for the purpose of taxation there was no unlawful discrimination. [620 B E; 621 C D] It was incorrect to say that the State Legislature had always treated the two products on the same footing. For nearly three years before April 1, 1958 sales of 'palm jaggery ' were exempt from tax but sales of 'cane jaggery ' were not. [620 B] Further, it is for the legislature to determine the objects on which tax shall be levied. The courts will not strike down an Act as denying equal protection merely because other objects could have been but are not taxed by the legislature. [621 B C] N. Venugopala Ravi Varma Rajah vs Union of India, ; , applied. (ii) Freedom of trade, commerce and intercourse guaranteed by article 301 of the Constitution is protected against taxing statutes as well as other statutes, but by imposition of tax on transactions of sale of 'cane jaggery ' no restriction on the freedom of trade or commerce or in the course of trade with or within the State. was imposed. [621 D F] State of Madras vs N. K. Nataraja Mudaliar. ; , referred to. (iii) The plea of colourable exercise of power had no substance because the legislature had power in the present case to. levy the tax.[621 G] 4 Sup. C.I./69 616 K.C. Gajapati Narayan Deo & Ors. vs State of Orissa, [1954] S.C.R.1, applied.

The appellant assessee is a company carrying on the business of manufacturing and selling Textile at Porbunder (formerly a princely State) in Saurashtra in the State of Gujarat. No income tax was levied by the former Porbunder State prior to 1948. In 1949 the princely State of, Porbund er integrated into newly formed Saurashtra State. In 1949 the State of Saurashtra promulgated the Saurashtra Income Tax Ordinance wherein provision for grant of depreciation based on written down value was made. On 26.1.1950, State of Saurashtra became a part of the Union of India as a Part 'B ' State and thus the Income Tax Act, 1922 became applicable to the State of Saurashtra from 1st April 1950 under the Fi nance Act, 1950. The said Saurashtra Income Tax Ordinance was repealed under Sec. 13 of the Finance Act, 1950. Section 12 of that Act provided for removal of difficulties, if any, arising in giving effect to the Income Tax Act. The Central Govt. on 2.12.50 issued an order known as "Taxation Laws (Part B States) Removal of Difficulties) Order 1950". Clause 2 of the said order provided the manner in which the aggre gate depreciation allowance and written down value were to be computed. On March 9, 1953, the Central Government in the exercise of its powers under Sec. 60A of the Indian Income Tax Act, 1922, added an Explanation to the said clause (2). The vires of the said Explanation was challenged before the Andhra Pradesh High Court which held that the Explanation referred to above was ultra vires the powers of the Central Government under Sec. 60A of the Income Tax Act. Commissioner of Income Tax, Hyderabad vs D.B.R. Mills Ltd., Thereupon, the Central Government issued another notifi cation dated the 8th May, 1956 in exercise of its powers under Section 12 of the Finance Act 1950, whereby an Expla nation in identical terms as the earlier Explanation was added to Clause (2) of the Removal of Difficulties Order, 1950. The validity of the said Explanation added by the notification dated 8th May, 1956 was upheld by this Court in The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; On the appeal from the said decision of the High Court 2 of the Andhra Pradesh in Commissioner of Income tax, Hydera bad vs D.B.R. Mills, The assessee was assessed under the Indian Income Tax Act from 1940 41 in respect of the income arising or deemed to arise in British India from 1940 41 onwards. For these years its income was assessed on receipt basis but in calcu lating the world income depreciation was taken into consid eration for arriving at the income outside British India. The assessee was also assessed for the assessment year 1949 50 under the Saurashtra Income Tax Ordinance, 1949. From 1950 51 it was assessed under the Income Tax Act. The assessment years concerned in this case are 1957 58, 1958 59 and 1959 60, the corresponding previous years being the Calender years 1956, 1957 and 1958 respectively. The case of the assessee is that during the course of the assessment of its income, depreciation was allowed for the assessment year 1950 51 and thereafter on the original cost of the assets as reduced by the depreciation allowance given under the Sau rashtra Income Tax Ordinance 1949. The respective written down values for the assessment years 1951 52 and 1952 53 were fixed on the basis of the written down value for the assessment year 1950 51. But later the concerned Income Tax Officer rectified the calculations of depreciation allowance by further reducing the written down value of the assets of the assessee. The Income Tax Officer took the written down value for the assessment years 1940 41 as the starting point. The assessee was not satisfied with this rectification. Its contention was that the depreciation for the previous years should have been calculated only on the basis of Clause (2) of the Taxation Laws (Part B States) (Removal of Difficulties) Order 1950, which provided for computation of the aggregate depreciation allowance on the basis of the deduction which was actually allowed under the Saurashtra Income Tax Ordinance, 1949. Regarding the explanation, the assessee contended that it was ultra rites the powers of the Central Government as it was not necessary for the removal of any difficulty. The contentions of the assessee were rejected by the Income Tax authorities as well as by Income Tax Appellate Tribunal. It was contended by the assessee before the Tribu nal that the decision of this Court in Commissioner of Income Tax Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; was no longer good law in view of the later decision of this Court in Straw Products Ltd. vs Income Tax Officer "A" Ward, Bhopal and Ors., The Tribunal having rejected the said contentions, at the in stance of the assessee a reference was made to the Gujarat High Court in which the following question was raised: 3 "Whether on the facts and in the circumstances of the case. the Tribunal was justified in holding that the depreciation allowable and not 'actually allowed ' under the Saurashtra Income tax Ordinance, 1949, should be taken into account in computing the aggregate depre ciation allowance and written down value under Sec. 10(2)(vi) of the Income Tax Act 1922. " The High Court held that in its advisory jurisdiction under the Income Tax Act, it could not go into the question of the vires of the said Explanation and therefore answered the question against the assessee. Therefore, the appellant filed Special Civil Application 1797 of 1972 in the High Court. The Division Bench of the High Court in its judgment disposing of the said special Civil Application pointed out that the decision of this Court in the Commissioner of Income Tax, Hyderabad vs Dewan Bahadur Ramgopal Mills, case, referred to above had upheld the validity of the Explanation in question. The High Court further opined that some of the arguments which did not find favour with this court in the said case were accepted by a Bench of 7 Learned Judges in the Straw Products Ltd. vs Income Tax Officer, "A" Ward, Bhopal and Ors., The High Court fur ther pointed out that in its decision in the said case of Straw Products this court had considered the decision in Dewan Bahadur Ramgopal Mills Ltd. and explained that on the facts of that case a difficulty had arisen and it was for removing that difficulty that the Order of 1956 was issued. For the said reason the High Court considered that decision was good law and following the same, it dismissed the Spe cial Civil Application. Hence this appeal by the assessee. In this appeal the Explanation added by the Central Government by its notification dated May 8, 1956 as well as the assessments made on the assessee for the assessment year 1957 58 to 1959 60 have been assailed. It was inter alia contended on behalf of the assessee that there was no diffi culty which had arisen in giving effect to the provisions of the Indian Income Tax Act in the State of Saurashtra and hence the pre condition on which the Central Government was authorised to make an Order under the Removal of Difficul ties Order and add the Explanation in question had never come into existence and as such the Explanation was without the authority of Law, invalid and of no legal effect. It was further contended by the assessee that under the scheme of the Income Tax Act, generally speaking, almost the entire cost of a capital asset used for purposes of business or profession should 4 be allowed to be written off by way of depreciation, whether worked on the basis of straight line method or written down value. The assessee disputed the mode of assessment and the applicability of the Explanation. Following this Court 's decision in Dewan Bahadur Ramgo pal Mills ' Ltd. ; this Court dismissing the appeal, HELD: The Saurashtra Income Tax Ordinance was repealed by Section 13 of the Finance Act 1950 and not by any provi sion in the Indian Income Tax Act. The basic and normal scheme of depreciation under the Indian Income Tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeeding years actual cost less all deprecia tion actually allowed under the Income Tax Act or any Act repealed thereby etc. [18D E] Commissioner of Income Tax Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; The Saurashtra Income Tax Ordinance having been repealed not by the Indian Income Tax Act but by Sec. 13 of the Finance Act 1950, a difficulty had come into existence, and hence it could not be said that the Government had no good basis to come to the conclusion that a difficulty had, in fact, arisen. [18F G] Madeva Upendra Sinai vs Union of India & Ors., [1975] 98 I.T.R. 209.

The appellant had issued notice to the respondents under section 34(1)( of the Income Tax Act, 1922 in respect of an escaped income of Rs. 47,595 for the assessment year 1944 45. The case of the respondents was that the impugned notice was bad because the Income Tax Officer proceeded against the respondents without obtaining the necessary sanction of the Central Board of Revenue as required by cl. (iii) of the proviso to section 34(1) of the Act. The respondents filed a writ petition in the High Court challenging the notice issued under section 34(1) of the article The respondents succeeded before the High Court. 438 Held: (i) The sanction under cl. (iii) of the proviso to section 34(1) is, however, necessary only where the notice in question is issued under cl. (ii) of the proviso. That is evidently what the legislature meant when it said "in any case failing under cl. (ii)". The words "in any case" used in cl. (iii) only mean a case in which notice can be issued under cl. Such a notice can be issued only when the escaped income is of one lakh of rupees and over. Clause (iii) requires such sanction where the notice is issued under cl. (ii) and when on a construction of cl. (ii), no notice can be issued with respect to a class of escaped assessments, there can possibly be no requirement of the sanction of the Central Board of Revenue. If a notice is issued by virtue of some other provision sub as the second proviso to sub section (3) of section 34, it would be a notice "in any other case" referred to in cl. (iii) of the proviso to sub section (1) of section 34 and in such a case the sanction which is required is only that of the Commissioner. Such a sanction was obtained in this case and therefore, the notice cannot be said to be bad because the sanction of the Central Board of Revenue had not been obtained. In the present case the income which has escaped assessment is below one lakh of rupees and more than eight years have elapsed since the assessment year in respect of which the income is alleged to have escaped assessment. Clearly, therefore, no notice could issue under cl. (ii) The High Court erred in holding that the provisions of the second proviso to section 34(3) would not apply to a case where the escaped assessment is of an amount less than a lakh of rupees and more than eight years have elapsed. Apparently, the High Court has overlooked the fact that the second proviso to sub section (3) of section 34 was amended first by Act 25 of 1953 and then by Act. 18 of 1956. The amendment of 1956 would govern the whole of section 34(1) and would consequently include even an escaped assessment with respect to which limitation is provided in cl. (ii) of the first proviso to section 34(1). The result would be the same even if the case fell to be governed by the Amending Act of 1953, though not by that of the Amending Act of 1956.

The appellant, assessee in an Abkari contractor. It filed a return of its income for the assessment year 1959 60, disclosing a total turnover of Rs. 10,92,132/ and an income of Rs. 7,704/ . The Income Tax Officer did not accept the correctness of the return. He found that on 12th December, 1957 and 16th January, 1958 the excess of expenditure over the disclosed available cash was Rs. 17,726/ and Rs. 65,066 respectively. He also noticed several deposits, totalling Rs. 28,200, entered in the names of certain Sendhi shopkeepers. The Income Tax Officer rejected the account books of the assessee and his explanations for the discrepancies thereof and estimated the assessee 's income on an overall figure of Rs. 5,00,018. In appeal before the Appellate Assistant Commissioner and thereafter before the Income Tax Appellate Tribunal the assessee succeeded in getting the assessed income reduced to Rs. 1,30,000 in addition to the books profits. Penalty proceedings were taken against the assessee and the case was referred to the Inspecting Assistant Commissioner, who imposed a penalty of Rs. 75,000 under section 271(1)(c) of the Income Tax Act, 1961. On appeal by the assessee, the Appellate Tribunal held that there was no positive material to establish that the cash deposits represented concealed income. In regard to the cash deficits, the Appellate Tribunal noticed that for the assessment year 1957 58 an addition of Rs. 2,00,000 had been made to the book profits, and it observed that some part of that amount could have been ploughed back into the business. It held that an amount of Rs. 90,000 representing unledgerised cash credits of that year could be said to have been introduced in that year. Allowing the appeal, the Appellate Tribunal set aside the penalty order made by the Inspecting Assistant Commissioner. On a reference to the High Court, at the instance of the Commissioner of Income Tax, the High Court held that the Appellate Tribunal was not justified in holding that no penalty was leviable. Hence the appeal by special leave. Directing the Appellate Tribunal to take up the appeal under section 260(1) of the Income Tax Act, the Court ^ HELD: An order imposing a penalty is the result of quasi criminal proceedings. The burden of proof lies on the Revenue to establish that the disputed amount represents income and that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars. It is for the Revenue to prove these ingredients before a penalty can be imposed. [622B C] 619 Since the burden of proof in a penalty proceeding varies from that involved in an assessment proceedings a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted as a finding to that effect in the penalty proceeding. In the penalty proceeding the taxing authority is bound to consider the matter afresh on the material before it and, in the light of the burden to prove resting on the Revenue, to ascertain whether a particular amount is a revenue receipt. No doubt, the fact that the assessment order contained a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. Before a penalty can be imposed the entirety of the circumstances must be taken into account and must point to the conclusion that the disputed amount represents income and that the assessee has consciously concealed particulars of his income or deliberately furnished inaccurate particulars. The mere falsity of the explanation given by the assessee is insufficient without there being in addition cogent material or evidence from which the necessary conclusion attracting a penalty could be drawn. [622C G] Commissioner of Income Tax, West Bengal and Anr. vs Anwar Ali ; Commissioner of Income Tax, Madras vs Khoday Eswara and Sons, ; applied. When an 'intangible ' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee. That income although commonly described as 'intangible ', is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. It could be available to the assessee as the book profits could be. [623A B] 3. Secret profits or undisclosed income of an assessee earned in an earlier assessment year may constitute a fund, even though concealed, from which the assessee may draw subsequently for meeting expenditure or introducing amounts in his account books. Any part of that fund need not necessarily be regarded as the source of unexplained expenditure incurred or of cash credits recorded during a subsequent assessment year. The mere availability of such a fund cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year It is a matter for consideration by the taxing authority, in each case, whether the unexplained cash deficits and the cash credits can be reasonably attributed to a pre existing fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year. In each case the true nature of the cash deficit and the cash credit must be ascertained from an overall consideration of the particular facts and circumstances of the case. Evidence may exist to show that reliance cannot be placed completely on the availability of a previously earned undisclosed. income. A number of circumstances of vital significance may point to the conclusion that the cash deficit or cash credit cannot reasonably be related to the amount covered by the intangible addition but must be regarded as pointing to the receipt of undisclosed income earned during the assessment year under consideration. It is open to the Revenue to rely on all the circumstances pointing to that conclusion. What those several circumstances can be is difficult to enumerate and indeed, from the nature of the enquiry, it is almost impossible to do so. However, they must be such as can lead to the firm conclusion that 620 the assessee has concealed the particulars of his income or has deliberately furnished inaccurate particulars. [623C H, 624A] Lagadapti Subha Ramiah vs Commissioner of Income Tax, Madras, ; section Kuppuswami Mudaliar vs Commissioner of Income Tax, Madras, ; approved. In an income tax reference, a High Court should confine itself to deciding the question of law referred to it on facts found by the Appellate Tribunal. It is the Appellate Tribunal which has been entrusted with the authority to find facts. [624D E]

Appeals Nos. 158 to 164 of 1960. Appeals from the judgment and order dated October 8, 1958, of the Bombay High Court in I.T.A. Nos. 7505, 7506, 5046 to 5048, 5149 and 5150 of 1956 57. A. V. Viswanatha Sastri, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the. appellants. R. Ganapathy Iyer and D. Gupta, for the respondent. January 12. The Judgment of the Court was delivered by HIDAYATULLAH, J. These seven appeals have been filed on a certificate granted by the High Court of Bombay against the judgment and order of the High Court dated October 8, 1958, in a case referred by the Income tax Appellate Tribunal, Bombay. The first appellant is the Bhor Industries, Ltd., a Company incorporated in 1944 in the former Bhor State with its registered office also situated in the town of Bhor. It did the business of dyeing, printing and bleaching cloth, cloth proofing, etc., in Bhor State. The remaining five appellants are the shareholders of this Company, which, admittedly, was a private Company limited by shares, at all material times. We are concerned in these appeals with the account years of the Company, 1946 and 1947. During these years, the income of the Company was as follows: Assessment Total Income accruing Total World year Income or arising in the Income (Sum Indian State of of 2 & 3) Bhor. 1 2 3 4 1947 48 Rs. 4,32,542 Rs. 2,24,542 Rs. 6,57,084 1948 49 Rs. 4,32$709 Rs. 3,47,416 Rs. 7,80,125 412 The Company held its general meetings to declare dividends at Bhor on August 17,1947, and August 19, 1948, respectively. For the account years 1946 and 1947 respectively it declared a dividend of Rs. 2,580/and Rs. 1,140/ . Bhor State merged with the Province of Bombay by virtue of the States Merger (Governors ' Provinces) Order, 1949, which came into force on August 1, 1949. By the Taxation Laws (Extension to Merged States and Amendment) Act, 1949, which received the assent of the Governor General on December 31, 1949, the Indian Income tax Act was extended to the merged States with effect from April 1, 1949. That Act also introduced section 60A in the Income tax Act, by which power was given to the Central Government, if it considered necessary or expedient so to do, to avoid any hardship or anomaly or to remove any difficulty in the application of the Income tax Act to merged States, to make a general or special order granting exemption, reduction in rate or other modification. Under the power thus conferred, the Central Government notified the Merged States (Taxation Concessions) Order, 1949. For the assessment years 1947 48 and 1948 49 corresponding to the account years of the Company, 1946 and 1947, the Income tax Officers assessed the Company as non resident, and held that the Company was not a public Company within the meaning of section 23A of the Indian Income tax Act. The Income tax Officer who passed the order for the assessment year 1947 48 under section 23A, held that the assessable income in British India of the Company in 1946 minus the taxes, must be deemed to be distributed among the shareholders in the proportion of their shareholdings. The Incometax Officer calculated the amount deemed to be distributed as follows: 413 1946 (assessment year 1947 48). Total Income . Rs. 4,32,542 Taxes . Rs. 1,89,237 Amount available for distribution . Rs. 2,43,305 as dividend Dividend declared . Rs. 2,580 Balance of the amount available and deemed to be distributed . Rs. 2,40,725 For the account year 1947, the Income tax Officer took the total world income less the taxes as the amount available for distribution as dividend. According to him, that amount was as follows: 1947 (assessment year 1948 49). Total income . Rs. 4,32,709 Income in Bhor State . Rs. 3,47,416 Total world income . Rs. 7,80,125 Taxes . Rs. 2,43,399 Amount available for distribution as dividend . Rs. 5,36,726 Dividend declared . Rs.1,140 Balance of the amount available for distribution . Rs.5,35,586 The Income tax Officer then apportioned it among the shareholders as on August 19, 1948. This worked out at Rs. 539.9 per share. The Income tax Officer then divided this amount of Rs. 539.9 in the proportion the total income bore to the income in Bhor State and taxed the former in the hands of the shareholders, but the balance was included and considered for purposes of rate only. The Tribunal in the statement of the case illustrated this by citing the case of one of the shareholders (Pushpakumar M. D. Thackersey) as follows: 414 "The portion of Rs. 5,35,586 apportionable to his 90 shares at the rate of Rs. 539.9 per share worked out at Rs. 50,211/ . This amount of Rs. 50,21/was divided into two smaller amounts in the ratio already mentioned and the amount of Rs. 27,851/was actually brought to tax whereas the amount of Rs. 22,360/ attributable to Bhor State income of Rs. 3,47,416/ was merely included in the total income for rate purposes." In computing these " deemed dividends ", the two Income tax Officers did not deduct the interest charged to the Company under section 18A(8), from the assessable income along with income tax and super tax under section 23A(1). The Company as well as the shareholders appealed to the Appellate Assistant Commissioner, but their appeals were unsuccessful. Their further appeals to the Tribunal were also dismissed. They raised the contentions that section 23A was not applicable to the Company, that the deemed income arising from a fictional distribution of the dividends could not be taxed in the hands of the shareholders because section 23A did not apply to them, and that they were protected by the Concessions Order in the same way in which the Company was. They also raised the contention that in. determining the balance of the amount available for distribution, interest charged under section 18A(8) ought to have been deducted. All these contentions were not accepted by the Department and the Tribunal. At the instance of the Company and the shareholders, the Tribunal drew up a statement of the case, and referred three questions to the High Court for its decision. These questions were as follows: " 1. Whether paragraph 12 of the Merged States (Taxation Concessions) Order, 1949, precluded the Income tax Officer from making an order under Section 23A in the case of the assessee company in respect of its profits and gains of the previous year ended 31st December, 1946 ?/ 31st December, 1947 ? 415 2. Whether in making an order under Section 23A in respect of the profits and gains of the year 1946/1947 the assessable income of that previous year is to be reduced not only by the amount of incometax and super tax payable by the company in respect thereof but also by the amount of interest charged to it in accordance with the provisions of Section 18A ? 3. Having regard to the order passed by the Income tax Officer under Section 23A in respect of the Company 's profits of the year 1947 and having apportioned the sum of Rs. 17,641/ to the shareholder, Pushpakumar, as his proportionate share in the distribution made by the Income tax Officer under Section 23A and having regard to the provisions of Section 14(2) (c), whether the said sum of Rs. 17,641/has been properly included in his total income for the purpose of charging it to tax ? " The third question was a typical question, as similar questions also arose in the case of other shareholders with variation in the amount. The amount of Rs. 17,641/ , the Tribunal stated, replaced Rs. 50,211/in view of certain directions given by the Tribunal. The High Court framed one more question as the second part of question No. 1 in disposing of the reference, which read as follows. : " Whether paragraph 12 of the Merged States (Taxation Concessions) Order, 1949, precluded the Income tax Officer from making any order under Section 23A so as to affect the assessee shareholders in respect of their profits and gains for the assessment year 1949 50 ? The High Court answered the first and second questions and the question framed by it in the negative, and the third question, in the affirmative. The High Court, however, granted a certificate under section 66A of the Income tax Act, and the present appeals have been filed. The contentions raised before the High Court have been raised before us. The Company questions the application of section 23A to the two assessment years, 1947 48 and 1948 49, while the shareholders 416 question the application of section 23A to the Company and also to them in the assessment year, 1949 50. Both the Company and the shareholders contend that interest under section 18A(8) ought to have been deducted along with the income tax to find out the available surplus. The shareholders claim the benefit of section 14(2) (c) in respect of the entire amount of the balance deemed to be distributed. To begin with, one must remember that the Indian Income tax Act was applied to Bhor State from April 1, 1949, and that there was no income tax law in force in Bhor State prior to its merger. This position also obtained in many other Indian States, which merged with the Provinces in British India. The fact that income tax is charged in an assessment year on the income, profits or gains of the previous year would have made persons resident in merged States to pay tax on income which, but for the extension of the Indian Income tax Act, was either not liable to income tax at all or was liable at a lesser rate. In view of the apprehended difficulties and anomalies, the Extension Act itself gave power to remove such anomalies and hardships. Section 60A was added to the Income tax Act, and it read as follows: " If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly, or removing any difficulty, that may arise as a result of the extension of this Act to the merged States, the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income tax in favour of any class of income, or in regard to the whole or any part of the income of any person or class o f persons. . " The Concessions Order, 1949, was passed in furtherance of this power. We are concerned only with paragraph 12 of the Concessions Order, 1949, which has been relied upon by the Company and the share. holders, who are appellants before US. It is not necessary to refer to paragraphs 4, 5 and 6 to which passing reference Was made in the arguments, because 417 they deal with income in an Indian State, which has not been taxed in these cases at all. Paragraph 12 provided for the application of section 23A to a previous year ending on or after August 1, 1949, but not to a previous year ending before August 1, 1949. It may be quoted here: "The provisions of section 23A of the Indian Income tax Act shall not be applied in respect of the profits and gains of any previous year ending before 1st day of August, 1949, unless the State law contains a provision corresponding thereto." Reading the Extension Act, section 60A and the Concessions Order, 1949, together, the following position emerges. The Indian Income tax Act applied to and from the assessment year 1949 50 (April 1, 1949 to March 31, 1950) in the merged States. Corresponding previous years were comprehended. The difficulty which was likely to be felt was with respect to the fact that the merger with the Province of Bombay operated from August 1, 1949, and not from April 1, 1949. In respect of the exemption under section 14 (2) (c), the position was preserved by applying paragraphs 5 and 6 to the exempted income. These two paragraphs made the State rate applicable to that exempted income. Similarly, previous years ending after March 31, 1948, were to be assessed to Indian income tax, but the excess of the tax computed at Indian rates over the tax computed at State rates was to be given away as rebate, and profits and gains of companies of any previous year ending before August 1, 1948, earned in an Indian State were saved from section 23A, unless there was, in the State, a provision corresponding to section 23A. It must be remembered that the Income tax Officer in the present case did not seek by his order under section 23A to distribute the Bhor State income of the shareholders of the Company as dividend; he restricted his order to the British Indian income. There was, in fact, in the State of Bhor no law of Income tax, and no order taxing income which arose in Bhor could be passed by the Income tax Officer. 418 By the definition in section 2(5A) of the Indian Incometax Act. a company formed in pursuance of an Act of an Indian State was a company for the purposes of the Act, and it was open to the Income tax Officer exercising powers under section 23A to declare the income of such a company accruing or arising within the taxable territory as distributed among the shareholders. The right of the Department to pass an order under section 23A(1) of the Indian Income tax Act was not chal lenged before the Tribunal, and it was not the subject of a decision in the High Court. The argument still has been, on behalf of the Company as well as the shareholders, that paragraph 12 of the Concessions Order saved the profits and gains, whether made in Bhor State or in British India, from the application of section 23A, and that indirectly the shareholders were entitled to the same benefit. Paragraph 12 of the Concessions Order depends on whether a company was being assessed under the Indian Income tax Act in respect of its profits and gains in an Indian State for any previous year ending before the first day of August, 1949. By the application of the Indian Act to an Indian State, the income of a company in an Indian State was likely to be taxed to Indian income tax from the assessment year, 1949 50. For the earlier assessment years a company 's income in the Indian State was exempt without the assistance of the Concessions Order. The exemption granted by the Concessions Order was to operate in respect of those profits and gains which, but for the exemption, would have been included in the assessment year, 1949 50 and subsequent years. In so far as paragraph 12 of the Concessions Order was concerned, it gave exemption in respect of action under section 23A to income of " any previous year " ending before the first day of August, 1949. The date, August 1, 1949, was chosen because the merger with the Provinces took place on that date. The word " any " does not refer to all the previous years prior to and ending before August 1, 1949, but to a previous year in relation to the assessment year, 1949 50 and ending before the first day of August, 1949. The words 419 any previous year mean, therefore, only one previous year, which would be a previous year for the purposes of the assessment year, 1949 50 but which, to get the exemption, must end before the first day of August, 1949. The exemption, therefore, did not apply to previous years other than the one described, and in respect of the earlier previous years, paragraph 12 of the Concessions Order was hardly needed. Otherwise, there would be no need to mention in the paragraph the date on which the previous year must end. It is thus quite clear that paragraph 12 provided for income, profits and gains of those previous years which were specially mentioned and in respect of which anomalies were likely to arise by reason of the fact that the merger took place on August 1, 1949, while the Income tax Act was applied from April 1, 1949. In view of the fact that specific terminii of previous years are expressly mentioned in the Concessions Order, it is not possible to accept the argument on behalf of the appellants that " all " previous years before the date mentioned were comprehended in paragraph 12. The application of that paragraph must be limited to one previous year only which ended prior to August 1, 1949. The previous years, with which we are concerned, ended on December 31, 1946, and December 31, 1947, respectively. In the case of this Company, the previous year which would answer the description in paragraph 12 would be the previous year ending December 31, 1947. To that previous year, the provisions of section 23A were not applicable, and the profits and gains made in Bhor State would be protected. The position which obtained in the assessment year 194748 would thus obtain also in the assessment year 1948 49 in so far as the Company was concerned, and its profits and gains in Bhor State could not be considered for purposes of application of section 23A. The position was, however, different in regard to the income in British India which formed the total income of the Company in the taxable territory. It was not contended that the assessable income of the Company in the taxable territories would not attract 420 s.23A, if the distribution of dividends from that income was below the mark set in section 23A. There is thus no difference between the assessment years 194748 and 1948 49, and the method of calculation adopted in the first year is also applicable to the second. To this extent, the answer to the first question (first part) must be deemed to be modified in respect of the previous year ending December 31, 1947. It is next contended that interest that was charged to the Company under section 18A(8) ought to have been deducted along with the income tax before the fictional dividends were computed. Section 18A(8) reads as follows: " Where, on making a regular assessment, the Income tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of the section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of regular assessment. " The words of the sub section are clear to show that interest as interest is added to the tax as determined. There is nothing to show that it is to be treated as tax, and it thus retains its character of interest but is recoverable along with the tax. Indeed, section 29 of the Income tax Act makes a distinction between tax, penalty and interest. Since section 23A speaks of deduction only of income tax and super tax, no deduction could be made in respect of this interest. Question No. 2 was thus correctly answered by the High Court. In so far as the shareholders who were all resident in the taxable territories were concerned, paragraph 12 of the Concessions Order did not, in terms, protect them. Section 23A enjoins that dividends to the extent of 60 per cent. of the assessable income of the Company after deduction of income tax and super tax must be paid. When the assessable income of the Company has been determined and after the necessary deductions have been made, if dividends are not distributed in accordance with section 23A, the fiction applies to that portion of the profits and gains which were taxable as assessable income of the Company in the 421 taxable territories and which ought to have been so dis tributed. Section 23A, as it was before the amendment in 1955, mentioned 60 per cent. of the assessable income of a company as reduced by the amount of income tax and super tax payable by a company, and provided further that the undistributed portion of the assessable income of a company as computed and reduced shall, subject to certain conditions, be deemed to have been distributed as dividends amongst the shareholders. We have already shown that the benefit of paragraph 12 is not available in respect of these fictional dividends, in so far as the assessable income of the Company was concerned. It is, however, contended that these dividends would be deemed to be declared in Bhor State and to have been received there, and that unless another fiction is engrafted upon the fiction created by section 23A, these deemed dividends cannot be taxed in the hands of the shareholders. No doubt, the section implies a fiction; but if the fiction is given effect to, such income must be deemed to be distributed to the shareholders, and the fiction thus transcends all questions of accrual or receipt in the taxable territories. What is deemed to be distributed must be deemed to have accrued and also received by the person to whom it is deemed to be distributed [See sections 4(1)(a) and 4(1)(b)(i) and (ii)]. Paragraph 12 of the Concessions Order saved the Company in respect of income in Bhor State for the assessment year 194849 for the corresponding previous year ending before August 1, 1949, but it did not save the operation of a. 23A in respect of the assessable income of the Company in the taxable territories and the distribution of dividends to the shareholders from that income. In our opinion, the High Court was right in holding that the dividends deemed to have been distributed out of the Assessable income of the Company in the taxable territories were ' rightly assessable in the total income of the shareholders resident in the taxable territories. No question has been referred on the method of calculation of the dividends deemed to 422 have been distributed, and we need, therefore, express no opinion on that part of the case. The shareholders (appellants 2 to 6) claim the benefit of a 14(2)(o) of the Act, which provides: " 14(2). The tax shall not be payable by an assessee (c) in respect of any income, profits or gains accruing or arising to him within an Indian State, unless such income, profits or gains are received or deemed to be received in or are brought into British India in the previous year by or on behalf of the assessee, or are assessable under Section 12 B or Section 42. " We have already shown that the force of the fiction makes the dividends which ought to have been distributed, to be so distributed. We have also said that this fiction transcends all questions of accrual and receipt. The effect of section 23A is to make dividends payable out of the British Indian income to the shareholders. Paragraph 4 of the Concessions Order and section 14(2)(c) saved for the shareholders the income of the Company outside the taxable territories only, that is to say, the income earned in Bhor State. They do not affect the operation of section 23A on the assessable income of the Company which, by reason of the application of the Indian Income tax Act even prior to the Extension Act, was assessable under the Indian Income tax Act. Dividends payable out of that portion of the income will attract section 23A, and section 14(2)(c) does not apply. Section 14(2)(c) saves only that portion of the income which was not assessable in the taxable territories by reason of its accrual in the State. The Income tax Officer in assessing the income of the shareholders for the assessment year, 1949 50, ought to have deducted the income which accrued in Bhor State, while applying section 23A to them. This he, in effect, did, but he adopted a method on which no question has been raised, and the correctness of the method cannot be examined. The answer to question No. 1 is thus in the negative, with the modification that section 23A applied only to that 423 portion of the income which was earned in British India and not in Bhor State. The answer to the second question is in the negative. The answer to the third question is in the affirmative. The question posed and answered by the High Court hardly arises, in view of the answer to the first questions That question and the answer to it are set aside as being not necessary. The appeals thus fail except for a slight modification in the answer to the first question, and subject to that modification, are dismissed. The appellants must bear the costs of these appeals. There shall be one hearing fee. Appeals dismissed.

The appellant had been incorporated in 1944 as a private company limited by shares in the former State of Bhor with its registered office in Bhor. The shareholders of the company were at all material times resident in British India. By virtue of the States Merger (Governors ' Provinces) Order, 1949, the State was merged with the Province of Bombay with effect from August 1, 1949. The provisions of the Indian Income tax Act, 1922, were extended to the merged State with effect from April 1, 1949. Under the power given by section 60A of the Act which enabled the Central Government to remove any difficulty in the application of the Act to merged States by making a general or special order granting exemption or other modification, the Central Government notified the Merged States (Taxation Concessions) Order, 1949. Paragraph 12 of that Order stated that " the provisions of section 23A of tile Indian Income tax Act shall not be applied in respect of the profits and gains of any previous year ending before 1st day of August, 1949, unless the State law contains a provision corresponding thereto. " The total world income of the company for 1946 and 1947 was Rs. 6,57,084 and 7,8o, 125 respectively and for those years the company declared dividends of Rs. 2,580 and Rs. 1140. For the assessment years 1947 48 and 52 410 1948 49, corresponding to the account years 1946 and 1947, the Income tax Officers assessed the company as nonresident ; for the assessment year 1947 48, the Officer held that ' the assessable income of the company in British India for 1946 less the taxes must be deemed to be distributed among the shareholders in the proportion of their shareholdings, under section 23A of the Act, while for the account year 1947, the total world income less the taxes was deemed to be is tributed, the part proportionate to the income in Bhor State being excluded, except for purposes of rate. In computing the " deemed dividends " the Income tax Officer did not deduct the interest charged to the company under section 18A (8) from the assessable income along with the income tax and super tax under section 23A(1). The company and the shareholders claimed (1) that para. 12 of the Merged States (Taxation Concessions) Order, 1949, precluded the Income tax Officer from making an order under section 23A of the Act in respect of the profits and gains of the account years ending December 31, 1946, and December 31, 1947, which were previous years ending before August 1, 1949, and (2) that, in any case, interest under section 18A(8) ought to have been deducted along with the income tax before the fictional dividends were computed. A further contention was raised that since the dividends in question would be deemed to have been declared in Bhor State and received there, unless another fiction was engrafted upon the fiction created in section 23A that the dividends must be deemed to have been received in the taxable territories, they could not be taxed in the hands of the shareholders. The shareholders also claimed the benefit of s 14(2)(C) in respect of the entire amount of the balance deemed to be distributed. Held: (1) that the expression "any previous year" in para. 12 of the Merged States (Taxation Concessions) Order, 1949, did not refer to all the previous years prior to and ending before August 1, 1949, but meant only one previous year, which would be a previous year for the purposes of the assessment year 194950, but which, to get the exemption, must end before the first day of August, 1949; (2) that the force of the fiction under section 23A of the Indian Income tax Act, 1922, which makes the dividends which ought to have been distributed to be so distributed, transcends all questions of accrual and receipt, and what is deemed to be distributed must also be deemed to have accrued and received by the person to whom it is deemed to be distributed; (3) that section 14(2)(c) of the Act saves only that portion of the income which is not assessable in the taxable territories by reason of its accrual in the State and does not affect the operation of section 23A on the assessable income of the company which, by reason of the application of the Indian Income tax Act even prior to the extension of the Act to the State after merger, was assessable under the Act 411 (4) that the wording of section 18A(8) of the Act under which interest is recoverable along with the tax, does not show that it is to be treated as tax but retains its character as interest, and since section 23A speaks of deduction only of income tax and supertax, no deduction could be made in respect of the interest under that section.

The respondent was a Government servant in one of the departments of the Bombay Government. He was sent on deputation to another department and after serving there for a long period and getting a number of promotions he was re verted back to his parent department and ordered to be posted at a considerably lower grade, while another Government servant who was below his rank was promoted as Assistant Secretary. Thereupon the respondent filed a petition under article 226 of the Constitution challenging the order of his posting. A preliminary objection was raised by the appellant that the petition was not maintainable. But the High Court held that the respondent was entitled to invoke the jurisdiction of the Court when there is a violation of a statutory rule and on merits it held that the respondent was entitled to the relief claimed. The present appeal was filed on a certificate granted by the High Court under article 133 of the Constitution. Before this Court in view of the decision State of U.P. vs Babu Ram Upadhya. ; it was not disputed that if there was a breach of a statutory rule framed under article 309 or continued under article 313 in relation to the condition of service the aggrieved Government servant could have recourse to the Court. The main contention on behalf of the appellant was that the respondent was not entitled to be appointed to any higher post than as a Senior Assistant or to receive a salary higher than that which had been granted to him by the im pugned order. Held: (i) Assuming that this was a case where the respon ,dent had a lien and his lien had not been suspended it was not possible to interpret Rule 50(b) of the Bombay Civil Service Rules as providing different criteria to cases where a Government servant had a lien and where his lien has been suspended. The Rule and the circular make it abundantly clear that an officer on deputation in another department shall be re stored to the position he would have occupied in his parent department had he not been deputed. (ii) Where promotions are based on seniority cum merit basis an officer on deputation has a legal right to claim pro motion to a higher post in his parent department provided his service in the department to which he is lent is satisfactory. This may not be the case in regard to selection posts.

One B who held a large number of shares in the appellant company, transferred two blocks of 100 shares each to his son and daughter in law. The transferees applied to the company to register the transfers. Purporting to act under article 47B of the Articles of Association of the company the directors of the company resolved not to register the transfers. Against this resolution the transferees preferred appeals to the Central Government under section III(3) of the . The Central Government, without giving any reasons for its decision, set aside the resolution of the directors and directed the company to register the transfers. The company obtained special leave to appeal against the decision of the Central Government under article 136 of the Constitution and appealed to the Supreme Court on the ground that the Central Government acted in excess of its jurisdiction or otherwise acted illegally in directing the company to register the transfers. The respondents raised a preliminary objection that the Central Government exercising appellate powers under section III of the Act (before its amendment in 1960) was not a tribunal exercising judicial functions and was not subject to the appellate jurisdiction of the Supreme Court under article 136. Held, that the appeal was competent to the Supreme Court by special leave against the decision of the Central Government under section III (3) Of the . The Central Government, when exercising powers under section III was a tribunal within the meaning of article 136 and was required to act judicially. A person aggrieved by the refusal to register transfer of shares had two remedies under the Act, viz., (1) to apply to the court for rectification of the register under section 155 or (2) to prefer an appeal under section III. The power of the Court under section 155, which has necessarily to be exercised judicially, and the power of the Central Government under section III have to be exercised subject to the same restrictions. In both cases it has to be 340 decided whether the directors have acted oppressively, capriciously corruptly or malafide. The decision has manifestly to stand those objective tests and has not merely to be founded on the subjective satisfaction of the authority. In an appeal under section III(3) there is a lis or dispute between the contesting parties relating to their civil rights, and the Central Government has to determine the dispute according to law in the light of the evidence and not on grounds of policy or expediency. There was thus a duty imposed on the Central Government to act judicially. The proviso to sub section (8) of section III which provided for the award of reasonable compensation in lieu of the shares in certain circumstances also fortifies that view. Shivji Nathubhai vs The Union of India, ; , Re Bell Brothers Ltd. Ex Parte Hodgson, , The Province of Bombay vs Kusaldas section Advani, [1950] S.C.R. 621, The King vs London County Council, and The Bharat Bank Ltd., Delhi vs Employees of the Bharat Bank Ltd., Delhi, ; , referred to. In an appeal under section 111(3) of the Act the Central Govern ment has to determine whether the exercise of the discretion by the directors refusing to register the transfer is malafide, arbitrary or capricious and whether it is in the interest of the company. The decision of the Central Government is subject to appeal to the Supreme Court under article 136; the Supreme Court cannot effectively exercise its power if the Central Government gives no reasons in support of its order. The mere fact that the proceedings before the Central Government are to be treated as confidential does not dispense with a judicial approach, nor does it obviate the disclosure of sufficient grounds and evidence in support of the order. In the present case no reasons have been given in Support of the orders and the appeals have to be remanded to the Central Government for rehearing. In re Gresham Life Assurance Society, Ex Parte Penney, (1 872) Law Rep. 8 Ch. 446 and In re Smith and Fawcett, Ltd., L. R. , referred to. Per Hidayatullah, J. The appeal to the Supreme Court under article 136 was competent. The Act and the Rules showed that the function of the Central Government under section 11(3) was curial and not executive; there was provision for filing a memorandum of appeal setting out the grounds, for the company making representations against the appeal, for tendering evidence and award of costs. There was provision for a hearing and a decision on evidence. The Central Government acted as a tribunal within the meaning of article 136. Huddart, Parker & Co. Pyoprietar Ltd. vs Moorehead, (108) ; , Shell Company of Australia vs Federal Commissioner of Taxation, , Rex vs Electricity Commissioners, Royal Aquarium and Summer and Winter Garden 341 Society vs Parkinson, , Shivji Nathubai vs The Union of India; , and Province of Bombay vs Kushaldas section Advani, ; , referred to. But special leave should not ordinarily be granted in such cases. The directors were not required to give reasons for their decision and there was a presumption that they had acted properly and in the interest of the company. In the appeal under section 111 of the Act all allegations and counter allegations were confidential and the Central Government could not make them public in its decision. An appeal against such a decision could rarely be effective. In the present case the appeal under section III(3) was confined to the ground that the refusal to register was without giving any reasons; there was no question of confidential allegations and there was no evidence to consider. The Articles of Association gave the directors absolute discretion to refuse to register the transfers without giving any reasons and there was a presumption that the directors had acted honestly. There was thus no reason for the Central Government to reverse the decision of the directors. In re Gresham Life Assurance Society; Ex Parte Penney, (1872) Law Rep. 8 Ch. 446, In re Hannan 's King (Browning) Gold Mining Company Limited, and Moses vs Parkar Ex parte Moses, , referred to.

The appellant was registered under the Bombay Sales Tax Act, 1946. He maintained double sets of account books and knowingly furnished, for the period September 30, 1950 to March 31, 1951, false returns to the Sales Tax Officer and thereby committed an offence under section 24(1)(b) of the Act. Under the Act sanction of the Collector was necessary before cognizance of the offence could be taken by a Court. The I946 Act was repealed by the Bombay Sales Tax Act, 1952, but the 1952 Act was declared ultra vires by the Bombay High Court. Thereupon the Bombay Sales Tax Ordinance 11 Of 1952 was promulgated which provided that the 1946 Act was to be deemed to have been in existence up to November 1, 1952. This was followed by Ordinance 111 of 1952 which further extended the life of the 1946 Act. Thereafter, the Bombay Sales Tax Act, 1953 was passed which repealed both the 1946 Act and Ordinance III of 1952. The 1953 Act made provision for an offence similar to that covered by section 24(1)(b) of the Act, prescribed a similar procedure for prosecuting persons committing the said offence and saved liabilities incurred under the 1946 Act. During the period when Ordinance III of 1952 was in force the State Government issued a notification appointing the Additional Collector to be a Collector under the Ordinance, and the Additional Collector granted sanction for the prosecution of the appellant. The appellant was tried by the Presidency Magistrate before whom he pleaded guilty. The Magistrate accepted the plea, convicted him under section 24(1)(b) of the 1946 Act and sentenced him to a fine of Rs. 200, in default to suffer one month 's rigorous imprisonment. The State preferred a revision to the High Court for enhancement of the sentence. The appellant contended that by the repeal of the 1946 Act the offence was effaced and that the prosecution was defective inasmuch as sanction was given by the Additional Collector and not by the Collector as required by the 1946 Act. The High Court repelled both these contentions and enhanced the sentence to rigorous imprisonment for one month in addition to the fine already imposed 251 Held, that the offence under section 24(1)(b) of the 1946 Act was covered by the saving clause in section 48 of 953 Act and the appellant could be convicted of that offence. The saving by section 48 of the 1953 Act of " any liability incurred " under the 1946 Act saved both civil and criminal liability. Held, that the sanction given by the Additional Collector was a valid sanction for the prosecution of the appellant. The notification issued under Ordinance III of 1952 appointing the Additional Collector as Collector must be deemed to have been made in exercise of the relevant power in respect of the offence saved by the Ordinance. Further, the notification must be deemed to have continued in force under the 1953 Act by reason of section 49(2) of that Act. Sanction pertains to the domain of procedure and the procedure prescribed under the new 1953 Act must be followed even in respect of offences committed under the repealed 1946 Act. Held further, that in the circumstances of the case the High Court was justified in enhancing the sentence. The sentence should depend upon the gravity of the offence and not upon the fact that the accused pleaded guilty or attempted to defend the case. As the appellant had kept double sets of account books, it was eminently a case in which a substantive sentence ought to have been imposed, and the Magistrate improperly exercised his discretion in awarding a sentence of fine only. But the High Court was wrong in awarding rigorous imprisonment as section 24(1)(b) provided only for simple imprisonment.

A suit (No. 1262/53) Challenging the notification under Section 4 of the Land Acquisition Act dated 10 10 1952 issued by the former Government of Bombay and later another notification under Section 6 of the Act dated 14 8 1953 (issued during the pendency of the suit), notifying that the final plots Nos. 41. 42 and 43 were required for public purpose viz. State Transport was dismissed by the Trial Court on 28 1 1959. The first and the second appeals having failed, the respondents came up to this Court. This Court in its decision inter partes, Valji Bhai 's case struck down Section 6 notification on the ground that the acquisition being for the benefit of a Corporation, though for a public purpose was bad beeause no part of the compensation was to come out of the public revenue and the provisions of Part VII of the Act had not been complied with. After the bifurcation of the erstwhile State of Bombay, the land acquisition proceedings came within the cognizance of Gujarat State. The State by its letter dated 22 8 1966 decided to contribute towards compensation a sum of Re. 1/ which was subsequently raised to Rs. 500/ . The Government felt that as long time has elapsed since the earlier report under Section 5A was submitted by the Collector, a fresh enquiry should be made. Accordingly the Additional Special Land Acquisition Officer issued a notice dated 1 8 1966 intimating to the respondents that if they so desired they might submit their further objections on or before 16 8 1966. Complying with this notice, the respondents submitted further objections on 31 8 1966 and they were also given a personal hearing. After examining the enquiry report submitted by the enquiry officer the Government of Gujarat issued a notification under Section 6 on 10 10 1967. The respondents questioned the validity and legality of this notification in the writ petition filed by them on 14 2 1968 on the only ground that it was issued more than 15 years after the date of Section 4 notification. The High Court was of the opinion that if the power to make a declaration under Section 906 6 is exercised after an unreasonable delay from the date on which notification under Section 4 is issued such exercise of power would be invalid and it accordingly struck down the notification under Section 6 of the Act. Hence the two appeals one by the State of Gujarat and the other by the Gujarat State Road Transport Corporation. Allowing the appeals by certificate, the Court ^ HELD: 1. The impugned section 6 notification was issued within the prescribed period introduced by the 1967 Amendment Act and, therefore could not be struck down on the only ground that the power to issue second section 6 notification was exercised after an unreasonable and unexplained delay. Section 6 notification, dated 10th october 1967, therefore is valid and legal.[918G H, 919A] 2. A combined reading of the provisions contained in sub section (2) of Section 4 with the one contained in the proviso to sub section (1) of Section 6 introduced by the Land Acquisition (Amendment and Validation) Act, (Central Act 13 of 1967) with effect from 20 1 1967 would make it clear that the Government would be precluded from making a declaration under section 6 after the expiry of a period of three years from the date of issue of a notification under Section 4 which may be issued after the Amendment Act came into force. And in respect of those section 4 notifications which were issued prior to the commencement of the Ordinance i.e. 20 1 1967, any notification which is required to be issued under section 6 must be made within a period of two years whereafter as a necessary corollary all section 4 notifications issued prior to 20th January 1967 would stand exhausted and would not provide either a source of reservoir for issuing section 6 notification. Consequently the mischief sought to be set at naught by the High Court by reading by necessary implication in the scheme of sections 4, 5A, and 6 the concept of exercise of statutory power within a reasonable time has been statutorily remedied. The apprehensions of the High Court that if not checkmated by implying that such statutory power must be exercised within a reasonable time to curb arbitrary exercise of power to the detriment of a citizen have been taken note of by the legislature and fully met. Absence of any decided case on the subject of which High Court took note could not permit an inference as has been done by the High Court that in the absence of a decided case the legislature would not remedy the possible mischief. Legislature often does take note of a possible abuse of power by the executive and proceed to nip it in the bud by appropriate legislation and that has been done in this case. There is now no more possibility of a gap of more than three years from the date on which section 4 notification is issued, otherwise it would be invalid as being beyond the prescribed period. [916 G H, 917 A D] In the instant case, the notifications under section 4 was prior to the commeneement of the ordinance. Therefore, the provision contained in sub section (2) of section 4 of the 1967 Amendment Act would be directly attracted. The Government could, therefore, make a declaration within a period of two years from 20th January 1967. The Government has in fact issued the impugned notification under section 6 on 10th October 1967 i.e. within the period prescribed by the Statute. [917 E F] 907 3.When a period is prescuibed for exercise of power it manifests the legislative intention that the authority exercising the power within the prescribed time could not at least be accused of inaction or dithering and, therefore, such exercise of power could not be said to be bad or invalid on the only ground that there was unreasonable delay in the exercise of the power. The very prescription of time inheres a belief that the nature and quantum of power and the manner in which it is to be exercised would consume at least that much time which the statute prescribes as reasonable and, therefore, exercise of power within the time could not be negatived on the only ground of unreasonable delay. [917H, 918 A B] Therefore, in this case, there was no unreasonable delay in exercise of power and hence the exercise was neither bad nor invalid. [918B] 4. Once the legislature stepped in and prescribed a sort of limitation within which power to issue notification under section 6 could be exercised, it was not necessary to go in search of a further fetter on the power of the Government by raising the implication. [918F G] In this case, the High Court by implication read a fetter on the power of the Government to issue section 6 notification within a reasonable time after the issue of section 4 notification after observing that there was no express provision that such power ought to be exercised within a reasonable time. In raising this impliccation the High Court took into account the postulate that every statutory power must be exercised reasonably and a reasonable exercise of power implies its exercise within a reasonable time. Coupled with it two other factors were taken into consideration such as the effect of issuing a section 4 notification on the rights and obligations of the owner of the land whose land is proposed to be acquured; the right of the Government to unilaterally cancel section 4 notification in the event of fall in prices; history of legislation; and delayed issue of section 6 notification would deny adequate compensation to the owner. But by the time the High Court examined this matter the legislature had already introduced a provision by which the power to issue section 6 notification was to be exercised within the prescribed period of time. At that stage there hardly arose a question of a search of the fetter on the power of the Government ignoring to some extent the express statutory provision. [918C F] 5. In the case of death of a party to a proceeding who is joined in his capacity as Karta of an undivided Hnndu family, if the undivided Hindu family continues to be in existence the succeeding Karta can be substituted for the deceased Karta of the family and that would be sufficient compliance with Order XXII Rule 4 of C.P.C. [911D E] In the insant case an application made under Order XXII Rules 10 C.P.C. made after the prescribed period of limitation and in order to avoid seeking condonation of delay for setting aside abatement is not correct. [911E] [The Court, however, overruled the objection on this ground since the L.rs. have already been substituted].

The respondent 's appeal against an order of assessment was rejected by the Appellate Assistant Commissioner and he, thereafter appealed to the Appellate Tribunal. The Tribunal, after having granted some adjournments, dismissed the appeal for default in appearance On a day fixed for the hearing, purporting to do so under rule 24 of the Appellate Tribunal Rules, 1946. The High Court directed the Tribunal to refer two questions to itself one relating to the merits and the other to the effect whether rule 24 of the Appellate Tribunal Rules, 1946, in so far as it enables the Tribunal to dismiss an appeal in default in appearance, is ultra vires. A special bench of the High Court took the view that under section 3 3 (4) the Tribunal was bound to dispose of the appeal on the merits, whether the appellant was present or not. On appeal to this Court, HELD : It follows from the language of section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned had failed to appear. [824 C D] The provisions contained in section 66 about making a 'reference on questions of law to the High Court would be rendered nugatory if a power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making an order thereon in accordance with section 33(4). So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed a proper order under section 33(4). [824 E H] Rule 24 clearly comes into conflict with section 33(4) and in the event ,of repugnancy between the substantive provisions of the Act and a rule, it is the rule which must give way to the provisions of the Act. [825 H] Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P. ; Ruvula Subba Rao & Ors. vs Commissioner of Income tax Madras, ; Mangat Ram Kuthiala & Ors. vs Commissioner of Income tax, Punjab, ; Hukumchand Mills Ltd. vs Commissioner of Income tax, Central Bombay, ; Commissioner of Income 819 tax Madras vs Mtt. section Ar. Arunachalam Chettiar, and Commissioner of Income tax, Bombay vs Scindia Stearn Navigation Co. Ltd. ; , referred to.

The respondents, a firm carrying on business in dyes and chemicals under the name and style of Colours Trading Com pany, with their head office at Madurai and thirteen branch offices in different towns, were the chief representatives in South India of the products of the I. C. I., a manufacturing concern. M was employed as the General Manager of the respondents and by virtue of an agreement, he was to be paid remuneration at the rate of Rs. 3,000 per annum and 12 1/2% of the net profits of the company calculated by deducting from the gross profits of the business the salaries, wages and other outgoings. The branch offices were managed by local managers and assistant managers who were paid in addition to monthly salary, annual and special bonus and dearness allowance. The respondents received from the I. C. I. commission at varying rates on the different products sold to them and with effect from April 1, 1944, the I.C.I. allowed a special emergency commission of 5% recommending that 1% out of the commission allowed may be passed on by the respondents to their sub distributors. The respondents claimed to have distributed to their employees commission pursuant to the recommendation of the I.C.I. at rates varying between 2% and 7 1/2% and in some cases at a rate as high as 12%. Though under the service agreement, commission was payable to the employees only if the turnover exceeded Rs. 1,00,000 net in any year, the respondents claimed to have paid them commission at generous rates even when the turnover fell far short of that amount. In the year of account ending April 12, 1945, there was a revision of the scales of salaries of the employees, as a result of which the employees received an amount equal to 2 1/2 times the enhanced basic salary and also commission sometimes exceeding 12 times the basic salary. In computing the total income of the respondents for the years 1943 44 and 1944 45 for purposes of income tax, the income tax Officer disallowed the payment Of 12 1/2% of the net 61 profits to M, and for the years 1945 49 he disallowed the commission paid to the branch managers and other employees on the ground that taking into account all the circumstances the remuneration paid to the employees was adequate and that any additional commission paid was in excess of what was reasonable or necessary. The Appellate Tribunal confirmed the order of the Income tax Officer except in the case of M to whom payment of 5% of the net profits without deduction of Excess Profits Tax or Business Profits Tax, or 12% after deduction of Excess Profits Tax or Business Profits Tax, whichever was higher, was regarded as permissible deduction. The High Court, on reference, took the view, inter alia, that in determining the net profits under the agreement with M, the excess profits tax could not be deducted, that in considering the question whether the bonus or commission paid to the employees in the present case might be permitted as a justifiable deduction, in the light of section 10(2)(X) Of the Income tax Act and r. 12 of Sch. 1 of the Excess Profits Tax Act, the test of reasonableness of the expenditure was to be judged from the point of view of a business man and not by the application of any subjective standard of a taxing officer, and that on an analysis of the materials furnished, there was nothing per se unreasonable in the amounts of commission actually paid by the respondents to the branch managers and assistant managers. Held: (i) that the question whether in the computation of the taxbale income, the commission payable to M under the agreement entered into with him by the respondents should be allowed before deducting the excess profits tax, depended on the true interpretation of the agreement; the expression "outgoing" in the agreement was not restricted to business or commercial outgoings but included the excess profits tax paid by the assessees, and that, consequently, the net profits of which M was to be given a percentage by way of commission should be computed after deducting the excess profits tax paid. Commissioner of Income tax, Delhi vs Delhi Flour Mills Co., Ltd., [1959] SUPP. 1 S.C.R. 28, relied on. (2) that under cl. (12) Of Sch. 1 of the Excess Profits Tax Act, 1940, it was for the Excess Profits Tax Officer, subject to review by the Tribunal, to decide whether the deduction was reasonable and necessary, having regard to the requirements of the business and in case of payments for services, to the actual services rendered by the persons concerned; it was not open to the High Court exercising its jurisdiction on questions referred to it under the Excess Profits Tax Act, to substitute its own view as to what may be regarded as reasonable and necessary and to set aside the decision of the taxing authorities on a re appreciation of the evidence. If the High Court considered that the taxing authorities had committed an error in law by misconceiving the evidence or by applying erroneous tests or 62 otherwise by acting perversely, the proper course for it was in answering the questions submitted, to lay down the true principles applicable to the ascertainment of the permissible deductions and to leave it to the taxing authorities to adjudicate upon the reasonableness and necessity of the expenses in the light of the requirements of the business. (3) that there was ample evidence in support of the conclu sion of the Excess Profits Tax Officer which was confirmed by the Tribunal, and that the question, whether the disallowance by the excess profits tax authorities of the commission paid to branch managers was justified under r. 12 of Sch. 1 of the Excess Profits Tax Act, should have been answered in the affirmative.

On August 19, 1964, officers belonging to the Department of the appellant raided and searched the premises of a company and foreibly removed certain accounts and goods. The respondents challenged the department 's action by writ petitions filed in the High Court under article 226 of the Constitution praying that the articles seized should be returned. It was contended by the petitioners that on a proper construction of section 41 of the Madras General Sales Tax Act, No. 1 of 1959, the officers of the Department had no authority to search the premises and seize any account books or goods found there; that if section 41(4) authorised seizure and confiscation of goods, it was beyond the legislative competence of the State Legislature, for it was not covered by item 54 of List II of the Seventh Schedule to the Constitution relating to "taxes on the sale or purchase of goods"; and that if various provisions in section 41 were capable of being construed as authorising search and seizure, they were violative of article 19(1)(f) and (g) of the Constitution. The High Court allowed the Petitions holding, inter alia, that section 41 (2) did not permit a search being made and only provided for inspection; the power of seizure or confiscation in section 41(4) was beyond the legislative competence of the State Legislature; and that subsections (2), (3) and (4) of section 41 contained unreasonable res trictions and were violative of article 19(1) (f) and (g). The High Court also found with respect to one of the petitions that the search warrant had been issued without the application of Mind by the magistrate and was bad. On appeal to this Court; Held: dismissing the appeal, (i)Anything recovered during the search must be returned to the petitioners for the safeguards provided by section 165 of the Code of Criminal Procedure were not followed and in one case the finding of the High Court that the search warrant issued by the magistrate was bad on various grounds was not challenged; furthermore anything confiscated must also be returned as sub section (4) of section 41 must fall.[163 B D]. Clause (a) of the second proviso to sub section (4) gives power to the officer ordering confiscation to give the person affected an option to pay in lieu of confiscation, in cases where the goods are taxable under the Act, the tax recoverable and an additional amount and thus provides for recovery of tax even before the first sale in 149 the State which is the point of time in a large majority of cases for recovery of tax. As such it was repugnant to the entire scheme of the Act and sub section (4) must therefore be struck down. As Clause (a) compels the officer to give the option and thus compels recovery of tax before the first point of sale, which cannot have occurred in cases of goods seized from the dealer himself, it is clearly intended by the legislature to go together with the main part of the Section and is not therefore severable. [159F 16OD]. (ii) Although generally speaking the power to inspect does not give power to search, where, as in the case of section 41 (2) the power has been given to inspect not merely accounts registers, records, goods, etc., but also to inspect the offices, shops etc. , these two powers together amount to giving the concerned officer the power to enter and search the offices etc. and if he finds any accounts or goods in the offices, shops, etc., to respect them. The High Court was therefore wrong in holding that there was no power of search whatsoever under sub section (2). [154H 155E]. The proviso to sub section (2) in providing that all searches under "this sub section" shall be made in accordance with the provisions of the Code of Criminal Procedure, bears out the construction that the main part of sub section (2) contemplates searches. Similarly it is clear from sub section (3) which gives power to seize accounts etc., in certain circumstances, that sub section (2) must include the power of search for a seizure under sub section (3) is not possible unless there is a search. [156D E. 158B C]. The contention that as the main part of sub section (2) does not provide for search of a purely residential accommodation and therefore the proviso is otiose must be rejected. Although generally a provision is an exception to the main part of the section, it Is recognised that in exceptional cases, as in the present case, the provision may be a substantive provision itself. [156D F]. Bhonda Urban District Council vs Taff Vale Railway Co., L. R. Commissioner of Income tax vs Nandlal Bhandari & Sons , and State of Rajasthan vs Leela Jain. ; , referred to. (ii)Sub sections (2) and (3) of section 41 are not violative of article 19 as they are protected by clauses (5) and (6) of article 19 of the Constitution. [162F G]. The High Court had wrongly assumed that the provisions of the Criminal Procedure Code did not apply to a search under section 41(2). In view of the safeguards provided in section 165 Cr. P.C. and in Chapter VII of that Code, it cannot be said that the power to search provided in sub section (2) is not a reasonable restriction keeping in View the object of the search, namely, prevention of evasion of tax. [161EG]. The mere fact that the Act gives power to Government to em power any officer to conduct the search is no reason to strike down the provision for it cannot be assumed that Government will not empower officers of proper status to make searches. [160 H], To, exercise the power of seizure under sub section (3) the officer concerned has to record his reasons in writing, has to give a receipt for the accounts seized, and can only retain the items seized beyond a period of 30 days with the permission of the next higher officer. These are sufficient safeguards and the restriction, if any, on 150 the right to hold property and the right to carry on trade by sub section (3) must therefore be held to be a reasonable restriction. [162 D G]. While the court held that the Legislature has power to provide for search and seizure in connection with taxation law in order that evasion may be checked, it did not decide the general question whether a power to confiscate goods which are found on search and which are not entered in account books of the dealer is an ancillary power necessary for the purpose of stopping evasion of tax. [159C D]. K.S. Papanna and another vs Deputy Commercial Tax Officer, Gunkakal, (1967) XIX S.T.C. 506; referred to.

90 of 1956. Petition under article 32 of the Constitution of India for enforcement of Fundamental rights. R. V. section Mani, for the petitioner. N.S. Bindra, K. L. Hathi and R. H. Dhebar, for the respondents. January 12. The Judgment of the Court was delivered by MUDHOLKAR, J. This is a petition under article 32 of the Constitution for issuing an appropriate writ to the respondents not to enforce the provisions of s.1144 of the Criminal Procedure Code or an appropriate writ forbidding respondent No. 4 from proceeding further with the prosecution of the petitioner for offences under sections 143 and 188 of the Indian Penal Code read with section 1 17 thereof, for quashing the proceedings against the petitioner before respondent No. 4 and for the issue of a writ of habeas corpus to respondents 1 to 3 directing them to produce or to cause to be produced the petitioner to be dealt with according to law and to set him at liberty. The facts which have led up to the petition are briefly as follows: There are two unions of textile workers in Nagpur, one known as the Rashtriya Mill Majdoor Sangh and the other as Nagpur Mill Majdoor Sangh. The former is a branch of the Indian National Trade Union Congress. The Rashtriya Mill Majdoor Sangh entered into an agreement with the management of the Empress Mills regarding the closure of Empress Mill No. 1 for rebuilding it and regarding the employment of workers who were employed therein in a third shift. This agreement was opposed by the Nagpur Mill Majdoor Sangh. On January 25, 1956, a group of workers belonging to the Nagpur Mill Majdoor Sangh went in a procession to Gujar 's Wada, Mahal, Nagpur, where the office of the Rashtriya Mill Majdoor Sangh is located. 54 426 It is said that a scuffle took place there between some members of the procession and some workers belonging to Rashtriya Mill Majdoor Sangh. Thereupon an offence under section 452 read with section 147 of the Indian Penal Code was registered by the police on January 27, 1956. A large procession consisting of the workers of the Nagpur Mill Majdoor Sangh was taken out. This procession marched through the city of Nagpur shouting slogans which, according to the District Magistrate, were provocative. On the same night a meeting was held at the Kasturchand Park in which it was alleged that the workers belonging to the Nagpur Mill Majdoor Sangh were instigated by the speakers who addressed the meeting to offer satyagraha in front of the Empress Mill No. 1 and also to take out a procession to the office of the Rashtriya Mill Majdoor Sangh. On January 28,1956, the workers belonging to the Nagpur Mill Majdoor Sangh assembled in large numbers in Mahal Chowk and on Mahal road blocking the traffic on the road. It is said that these persons were squatting on the road and as they refused to budge the District Magistrate passed an order at 4 00 a.m. on January 29, 1956, which came into force immediately and was to remain in force for a period of fifteen days prohibiting, among other things, the assembly of five or more persons in certain areas specified in the order. The petitioner entertained the view that the order promulgated by the District Magistrate under section 144 of the Code of Criminal Procedure was an encroachment on the fundamental rights of the citizens to freedom of speech and expression and to assemble peaceably and without arms, guaranteed under article 19(1)(a) and (b) of the Constitution and, therefore, he held a public meeting outside the area covered by the aforesaid order. It is alleged that at that meeting he criticised the District Magistrate and exhorted the workers to contravene his order and take out processions in the area covered by the order. Thereupon he was arrested by the Nagpur police for having committed the offences already referred to and produced before a magistrate, The magistrate remanded him to 427 jail custody till February 15, 1956. The petitioner 's application for bail was rejected on the ground that the accusation against him related to a Don bailable offence. Thereupon the petitioner moved the High Court at Nagpur for his release on bail but his application was rejected on February 22, 1956. The petitioner then presented a petition before the High Court under section 491 of the Code of Criminal Procedure for a writ of habeas corpus. That petition was dismissed by the High Court on May 9, 1956. The petitioner then moved the High Court for granting a certificate under article 132 of the Constitution. The High Court refused to grant the certificate non the ground that in its opinion the case did not involve any substantial question of law regarding the interpretation of the Constitution and was also not otherwise fit for grant of a certificate. On April 23, 1956, the petitioner presented the present petition before this Court. The petitioner also sought an exparte order for the stay of the proceedings before the respondent No. 4 till the decision on the petition to this Court. This Court admitted the petition but rejected the application for stay. On May 6, 1956, the petitioner took out a notice of motion for securing stay of the proceedings before respondent No. 4. On May 28,1956, this Court ordered that the entire prosecution evidence be recorded but the delivery of the judgment be stayed pending the decision of this petition. After the proceedings were stayed by this Court, the petitioner was released on bail by the trying magistrate. On behalf of the petitioner Mr. Mani has raised the following contentions: (1) That section 144 of the Code of Criminal Procedure in so far as it relates to placing of restrictions on freedom of speech and freedom of assembly confers very wide powers on the District Magistrate and certain other magistrates and thus places unreasonable restrictions on the rights guaranteed under article 19(1)(a) and (b) of the Constitution. (2) The District Magistrate constitutes the whole legal machinery and the only check for control on 428 his powers is by way of a petition to him to modify or rescind the order, that thus the District Magistrate becomes " a judge in his own cause" presumably, what learned counsel means is a judge with regard to his own decision and so the remedy afforded by the section is illusory. Further the remedy by way of a revision application before the High Court against the order of the District Magis trate is also illusory and thus in effect there can be no judicial review of his order in the proper sense of that expression. (3 Section 144 adopts "likelihood" or "tendency" as tests for judging criminality ; the test of determining the criminality in advance is unreasonable. (4) Section 144 substitutes suppression of lawful activity or right for the duty of public authorities to maintain order. (5) Even assuming that section 144 of the Code of Criminal Procedure is not ultra vires the Constitution, the order passed by the District Magistrate in this case places restrictions which go far beyond the scope of clauses (2) and (3) of article 19 and thus that order is unconstitutional. Learned counsel also challenged the validity of the order on grounds other than constitutional, but we need not consider them here since it will be open to the petitioner to raise them at the trial. This being a petition under article 32 of the Constitution, the petitioner must restrict himself to those grounds which fall within cl. (1) thereof. We think it desirable to reproduce the whole of section 144. (1)In cases where, in the opinion of a District Magistrate, a Chief Presidency Magistrate, Sub Divisional Magistrate, or of any other Magistrate (not being a Magistrate of the third class) specially empowered by the 'State Government ' or the Chief Presidency Magistrate or the District Magistrate to act under this section there is sufficient ground for proceeding under this section and im mediate prevention or speedy remedy is desirable, such Magistrate may, by a written order stating 429 the material facts of the case and served in manner provided by section 134, direct any person to abstain from a certain act or to take certain order with certain property in his possession or under his management, if such Magistrate considers that such direction is likely to prevent or tends to prevent, obstruction, annoyance or injury, or risk of obstruction, annoyance or injury to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquility or a riot, or an affray. (2) An order under this section may, in cases of emergency or in cases where the circumstances do not admit of the serving in due time of a notice upon the person against whom the order is directed, be passed ex parte. (3) An order under this section may be directed to a particular individual, or to the public generally when frequenting or visiting a particular place. (4) Any Magistrate may, either on his own motion or on the application of any person aggrieved, rescind or alter any order made under this section by himself or any Magistrate subordinate to him, or by his predecessor in office. (5) Where such an application is received, the Magistrate shall afford to the applicant an early opportunity of appearing before him either in person or by pleader and showing cause against the order; and if the Magistrate rejects the application wholly or in part, he shall record in writing his reasons for doing. (6) No order under this section shall remain in force for more than two months from the making thereof; unless, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray, the 'State Government ' by notification in the Official Gazette, otherwise directs. " Sub section (1) confers powers not on the executive but on certain Magistrates. This provision has been amended in some States, as for instance, the former Bombay State where power has been conferred on the Commissioner of Police to pass an order thereunder. But we are not concerned with that matter here 430 because that provision is not contained in the law as applicable to the former State of Madhya Pradesh with which alone we are concerned in the matter before us. Under sub section (1) the Magistrate himself has to form an opinion that there is sufficient ground for proceeding under this section and immediate prevention or speedy remedy is desirable. Again the subsection requires the Magistrate to make an order in writing and state therein the material facts by reason of which he is making the order thereunder. The sub section further enumerates the particular activities with regard to which the Magistrate is entitled to place restraints. Sub section (2) requires the Magistrate ordinarily to serve a notice on the person against whom the order is directed and empowers him to proceed exparte only where the circumstances do not admit of serving such a notice in due time. Sub section (3) does not require any comment. Sub section (4) enables a Magistrate to rescind or alter an order made under this section and thus enables the person affected, if the order is addressed to a specified individual, or any member of the public, if the order is addressed to the public in general, to seek, by making an application, exemption from compliance with the order or to seek a modification of the order and thus gives him an opportunity to satisfy the Magistrate about his grievances. The Magistrate has to deal with applications of this kind judicially because he is required by sub section (5) to state his reasons for rejecting, wholly or in part, the application made to him. Finally the normal maximum duration of the order is two months from the date of its making. The restraints imposed by the order are thus intended to be of a temporary nature. Looking at the section as a whole it would be clear that, broadly speaking, it is intended to be availed of for preventing disorders, obstructions and annoyances and is intended to secure the public weal. The powers are exercisable by responsible magistrates and these magistrates have to act judicially. Moreover, the 431 restraints permissible under the provision are of a temporary nature and can only be imposed in an emergency. Even so, according to the learned counsel these provisions place unreasonable restrictions on certain fundamental rights of citizens. Firstly, according to learned counsel restrictions on the rights guaranteed by cls. (2) and (3) of article 19 of the Constitution can be placed in the interest of id public order " and not in the interest of the " general public ", which expression, according to him is wider in its ambit than public order and that since section 144 enables a magistrate to pass an order in the interest of the general public the restrictions it authorises are beyond those permissible under cls. (2) and (3) of article 19. It is significant to note that section 144 nowhere uses the expression " general public ". Some of the objects for securing which an order thereunder can be passed are, " to prevent obstruction, annoyance, injury. . . etc. No doubt, the prevention of such activities would be in the ,public interest" but it would be no less in the interest of maintenance of " public order. " Secondly, according to learned counsel, section 144 is an amalgam of a number of things to many of which there is no reference even in el. (2) of article 19. In order to enable the State to avail of the provisions of cls. (2) and (3), he contends, a special law has to be passed and a provision like section 144 can serve no purpose. This contention has only to be mentioned to be rejected. Clauses (2) to (6) of article 19 do not require the making of a law solely for the purpose of placing the restrictions mentioned in them. Thirdly, according to learned counsel sub section (1) of a. 144 does not require the magistrate to make an enquiry as to the circumstances which necessitate the making of an order thereunder. It is true that there is no express mention anywhere in section 144 that the order of the magistrate should be preceded by an enquiry. But we must construe the section as a whole. The latter part of sub section (1) of section 144 specifically mentions that the order of the magistrate should sot out the 432 material facts of the case. It would not be possible for the magistrate to set out the facts unless he makes an enquiry or unless he is satisfied about the facts from personal knowledge or on a report made to him which he prima facie accepts as correct. Clearly, therefore, the section does not confer an arbitrary power on the magistrate in the matter of making an order. It is contended that section 144 of the Code of Criminal Procedure confers very wide powers upon certain magistrates and that in exercise of those powers the magistrates can place very severe restrictions upon the rights of citizens to freedom of speech and expression and to assemble peaceably and without arms. It seems to us, however, that wide though the power appears to be, it can be exercised only in an emergency and for the purpose of preventing obstruction, annoyance or injury to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquillity or a riot, or " an affray ". These factors condition the exercise of the power and it would consequently be wrong to regard that power as being unlimited or untrammelled. Further, it should be borne in mind that no one has a right to cause " obstruction, annoyance or injury etc., " to anyone. Since the judgment has to be of a magistrate as to whether in the particular circumstances of a case an order, in exercise of these powers, should be made or not, we are entitled to assume that the powers will be exercised legitimately and honestly. The section cannot be struck down on the ground that the magistrate may possibly abuse his powers. It is also true that initially it is the magistrate con cerned who has to form an opinion as to the necessity of making an order. The question ', therefore, is whether the conferral of such a wide power amounts to an infringement of the rights guaranteed under article 19(1)(a) and (b) of the Constitution. The rights guaranteed by sub cl. (a) are not absolute rights but are subject to limitations specified in cl. (2) of article 19 which runs thus: " Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law,, or prevent the 433 State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. " Similarly the rights to which sub cl. (b) relates are subject to the limitations to be found in cl. (3) of article 19, which runs thus: " Nothing in sub clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of public order, reasonable restrictions on the exercise of the right conferred by the said sub clause. " The Code of Criminal Procedure was an existing law at the commencement of the Constitution and so, in the context of the grounds on which its validity is challenged before us, what we have to ascertain is whether the conferral thereunder of a power on a magistrate to place restrictions on the rights to which sub section (a) and (b) of article 19 relate is reasonable. It must be borne in mind that the provisions of section 144 are attracted only in an emergency. Thereunder, the initial judge of the emergency is, no doubt, the District Magistrate or the Chief Presidency Magistrate or the sub divisional magistrate or any other magistrate specially empowered by the State Government. But then, the maintenance of law and order being the duty and function of the executive department of the State it is inevitable that the q question of formation of the opinion as to whether there is an emergency or not must necessarily rest, in the first instance, with those persons through whom the executive exercises its functions and discharges its duties. It would be impracticable and even impossible to expect the State Government itself to exercise those duties and func tions in each and every case. The provisions of the section therefore which commit the power in this regard to a magistrate belonging to any of the classes referred to therein cannot be regarded as unreasonable. We 55 434 may also point out that the satisfaction of the magistrate as to the necessity of promulgating an order under section 144 of the Code of Criminal Procedure is not made entirely subjective by the section. We may also mention that though in an appropriate case a magistrate is empowered to make an order under this section ex parte the law requires that he should, where possible serve a notice on the person or persons against whom the order is directed before passing that order. Then sub section (4) provides that any magistrate may either on his own motion or on the application of any person aggrieved, rescind or alter any order made under this section. This clearly shows that even where an ex parte order is made the person or persons affected thereby have a right to challenge the order of the magistrate. Sub section (5) provides that where such a challenge is made, the magistrate shall give an early opportunity to the person concerned of appearing before him and showing cause against the order. The decision of the magistrate in such a proceeding would undoubtedly be a judicial one inasmuch as it will have been arrived at after hearing the party affected by the order. Since the proceeding before the magistrate would be a judicial one, he will have to set aside the order unless he comes to the conclusion that the grounds on which it rests are in law sufficient to warrant it. Further, since the propriety of the order is open to challenge it cannot be said that by reason of the wide amplitude of the power which section 144 confers on certain magistrates it places unreasonable restrictions on certain fundamental rights. Learned counsel, however, says that the right conferred on the aggrieved person to challenge the order of the magistrate is illusory as he would be a judge with regard to his own decision. This argument would equally apply to an application for review made in a civil proceeding and we do not think that it is at all a good one. Again, though no appeal has been provided in the Code against the Magistrate 's order under section 144, the High Court has power under section 435 read with section 439 of the Code to entertain an application for the revision of such an order, The powers of the High Court in 435 dealing with a revision application are wide enough to enable it to quash an order which cannot be supported by the materials upon which it is supposed to be based. We may point out that sub section (1) of section 144 requires a magistrate who makes an order thereunder to state therein the material facts upon which it is based and thus the High Court will have before it relevant material and would be in a position to consider for itself whether that material is adequate or not. As an instance of a case where the High Court interfered with an order of this kind, we may refer to a decision in P. T. Chandra, Editor, Tribune vs Emperor(1). There, the learned judges quite correctly pointed out that the propriety of the order as well as its legality can be considered by the High Court in revision, though in examining the propriety of the order the High Court will give due weight to the opinion of the District Magistrate who is the man on the spot and responsible for the maintenance of public peace in the district. In that case the learned judges set aside an order of the District Magistrate upon the ground that there was no connection between the act prohibited and the danger apprehended to prevent which the order was passed. We would also like to point out that the penalty for infringing an order under section 144 is that provided in section 188, Indian Penal Code. When, therefore, a prosecution is launched thereunder, the validity of the order under section 144, Criminal Procedure Code, could be challenged. We are, therefore, unable to accept Mr. Mani 's contention that the remedy of judicial review is illusory. The argument that the test of determining criminality in advance is unreasonable, is apparently founded upon the doctrine adumbrated in Scheneck 's case(2) that previous restraints on the exercise of fundamental rights are permissible only if there be a clear and present danger. It seems to us, however, that the American doctrine cannot be imported under our Constitution because the fundamental rights guaranteed under article 19 (1) of the Constitution are not absolute rights but, as pointed out in State of Madras (1) A.I.R. 1942 Lah. 171. (2) Scheneck vs U. section, ; 436 vs V. G. Row (1) are subject to the restrictions placed in the subsequent clauses of article 19. There is nothing in the American Constitution corresponding to cls. (2) to (6) of article 19 of our Constitution. The Fourteenth Amendment to the U. section Constitution provides, among other things, that " no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; that of the Constitution of the United States. Then again, the Supreme Court of the United States has held that the privileges and immunities conferred by the Constitution are subject to social control by resort to the doctrine of police power. It is in the light of this background that the test laid down in Scheneck 's case (2) has to be understood. The language of section 144 is somewhat different. The test laid down in the section is not merely " likelihood " or " tendency ". The section says that the magistrate must be satisfied that immediate prevention of particular acts is necessary to counteract danger to public safety etc. The power conferred by the section is exercisable not only where present danger exists but is exercisable also when there is an apprehension of danger. Apart from this it is worthy of note that in Scheneck 's case (2) the Supreme Court was concerned with the right of freedom of speech and it observed: "It well may be that the prohibition of law abridging the freedom of speech is not confined to previous restraints, although to prevent them may have been the main purpose We admit that in many places and in ordinary times the defendants, in saying all that was said in the circular, would have been within their constitutional rights. But the character of every act depends upon the circumstances in which it is done The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre, and causing a (1) ; (2) ; 437 panic. It does not even protect a man from an injunction against uttering words that may have all the effect of force. . The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent. It is a question of proximity and degree. " Whatever may be the position in the United States it seems to us clear that anticipatory action of the kind permissible under section 144 is not impermissible under cls. (2) and (3) of article 19. Both in el. (2) (as amended in 1951) and in cl. (3) power is given to the legislature to make laws placing reasonable restrictions on the exercise of the rights conferred by these clauses in the interest, among other things, of public order. Public order has to be maintained in advance in order to ensure it and, therefore, it is competent to a legislature to pass a law permitting an appropriate authority to take anticipatory action or place anticipatory restrictions upon particular kinds of acts in an emergency for the purpose of maintaining public order. We must, therefore, reject the contention. It is no doubt true that since the duty to maintain law and order is cast upon the Magistrate, he must perform that duty and not shirk it by prohibiting or restricting the normal activities of the citizen. But it is difficult to say that an anticipatory action taken by such an authority in an emergency where danger to public order is genuinely apprehended is anything other than an action done in the discharge of the duty to maintain order. In such circumstances that could be the only mode of discharging the duty. We, therefore, reject the contention that section 144 substitutes suppression of lawful activity or right for the duty of public authorities to maintain order. Coming to the order itself we must consider certain objections of Mr. Mani which are, in effect, that there are three features in the order which make it unconstitutional. In the first place, according to him the order is directed against the entire public though the magistrate has stated clearly that it was promulgated 438 because of the serious turn which an industrial dispute had taken. Mr. Mani contends that it is unreasonable to place restrictions on the movements of the public in general when there is nothing to suggest that members of the public were likely to indulge in activities prejudicial to public order. It is true that there is no suggestion that the general public was involved in the industrial dispute. It is also true that by operation of the order the movements of the members of the public would be restricted in particular areas. But it seems to us that it would be extremely difficult for those who are in charge of law and order to differentiate between members of the public and members of the two textile unions and, therefore, the only practical way in which the particular activities referred to in the order could be restrained or restricted would be by making those restrictions applicable to the public generally. The right of citizens to take out processions or to hold public meetings flows from the right in article 19(1)(b) to assemble peaceably and without arms and the right to move anywhere in the territory of India. If, therefore, any members of the public unconnected with the two textile unions wanted to exercise these rights it was open to them to move the District Magistrate and apply for a modification of the order by granting them an exemption from the restrictions placed by the order. Mr. Mani 's contention, and that is his second ground of attack on the Magistrate 's order, is that the only exception made in the order is with respect to funeral processions and religious processions and, therefore, it would not have been possible to secure the District Magistrate 's permission for going out in procession for some other purpose or for assembling for some other purpose in the area to which the order applied. So far as the customary religious or funeral processions are concerned, the exemption has been granted in the order itself that if anyone wanted to take out a pro cession for some other purpose which was lawful it was open to them under section 144, sub section (4), to apply for an alteration of the order and obtain a special exemption. 439 More omission of the District Magistrate to make the exemption clause of the order more comprehensive would not, in our opinion, vitiate the order on the ground that it places unreasonable restrictions on certain fundamental rights of citizens. The third and last ground on which Mr. Mani challenged the constitutionality of the order was that while the order prohibits the shouting of provocative slogans in public places etc., it does not give any definition of what was meant by the expression "provocative slogans ". Therefore, according to Mr. Mani, this order is vague and must be deemed to be placing unreasonable restrictions on the rights of free speech of citizens. It seems to us that the expression " provocative slogans " has necessarily to be understood in the context in which it has been used in the order and, therefore, it cannot be regarded as vague. We have, therefore, reached the conclusion that the order of the District Magistrate is not unconstitutional either because section 144 is itself violative of fundamental rights recognised in article 19 or on the ground that it is vague and places unreasonable restrictions on those fundamental rights. We, therefore, dismiss this petition. Shortly after this petition was made to this Court, the petitioner presented a special leave petition in which he seeks to challenge the judgment of the Nagpur High Court dated April 9, 1956, dismissing his writ petition to that High Court. The points raised in the Special Leave Petition are similar to those raised in this petition. Since we are dismissing this petition, there can be no question of granting the special leave to the petitioner to appeal against the judgment of the Nagpur High Court. Petition dismissed.

The District Magistrate, apprehending a breach of peace as a result of demonstrations and counter demonstrations held by two rival labour unions promulgated an order under section 144 of the Code of Criminal Procedure, which was to remain in force for a period of fifteen days, prohibiting, inter alia, the assembly of five or more persons in certain specified areas. The petitioner took it as an invasion on the fundamental rights of the citizens under article 19(1)(a) and (b) of the Constitution and held a meeting outside the specified areas and exhorted the workers to take out processions in the notified areas in defiance of the said order. He was thereupon prosecuted under sections 143 and 188 read with section 117 of the Indian Penal Code. He moved the High Court under section 491 of the Code of Criminal Procedure, and having failed to get relief there, moved this Court under article 32 of the Constitution challenging the constitutional validity of section 144 of the Code on the ground that it conferred wide and unguided powers on the District Magistrate and thus contravened article 19(i)(a) and (b) of the Constitution. Held, that the attack on the constitutional validity of section 144 of the Code of Criminal Procedure must fail, 424 Read as a whole, the section clearly showed that it was intended to secure the public weal by preventing disorders, obstructions and annoyances. The powers conferred by it were exercisable by responsible Magistrates who were to act judicially and the restraints permitted by it were of a temporary nature and could be imposed only in an emergency. The restrictions which the section authorises are not beyond the limits prescribed by cls. (2) and (3) of article 19 of the Constitution. The prevention of such activities as are contemplated by the section is undoubtedly in public interest and therefore no less in the interest of public order. Clauses (2) to (6) of article 19 of the Constitution do not require a special enactment for the enforcement of the restrictions mentioned in them. The impugned section must be construed as a whole and although the first part of cl. (1) does not expressly mention that the order of the Magistrate must be preceded by an enquiry, the second part clearly indicates that the Magistrate has to satisfy himself either by his own enquiry or from a report made to him as to what the facts are. The section does not, therefore, confer an arbitrary power on the Magistrate in the matter of making the order. The wide power under the section can be exercised only in an emergency and for the purpose of preventing obstruction, annoyance or injury etc. as specified therein and those are the factors that must necessarily condition the exercise of the power and, therefore, it was not correct to say that the power is unlimited or untrammelled. Since the judgment has to be of a Magistrate, it can be assumed that the power will be exercised legitimately and honestly. The section cannot be struck down simply on the ground that the Magistrate might possibly abuse his power. Although the section makes the Magistrate the initial Judge of an emergency that cannot make the restrictions placed by it unreasonable. Since maintenance of law and order rests with the Executive, it is only appropriate that the initial decision must be with the Magistrate. But such decision is not entirely based on his subjective satisfaction. Sub sections (2), (4) and (5) clearly indicate that the Magistrate must act judicially. Moreover, the propriety of his order can be challenged in revision. It was not, therefore, correct to say that the remedy of a person aggrieved by an order under the section was illusory. P. T. Chandra, Editor, Tribune vs Emperor, A.I.R. 1942 Lah. 17r, referred to. The American doctrine that previous restraints on the exer cise of fundamental rights are permissible only if there is a clear and present danger, can have no application in India, since the rights guaranteed by article 19(1) of the Constitution are not absolute but subject to restrictions under cls. (2) to (6) of that 425 Article. Anticipatory action permitted by section 144 is not, therefore, hit by cls. (2) and (3) of article 19. Scheneck vs U. section ; , considered. State of Madras vs V. G. Row ; , relied on.

The respondents brought a suit for a mandatory injunction directing the removal of certain masonry structure on suit site and for a permanent injunction restraining the appellants from encroaching upon the suit property and from causing obstruction to the right of way of the residents of the village. They claimed that the suit property formed part of a public street and the appellants had no right to encroach upon it. The appellants claimed the suit property as absolute owners and as such, they were entitled to use it in any manner they pleased. The trial. Court decreed the suit. On appeal, the learned Subordinate Judge set aside the decree. On challenge of this decree by the respondents in second appeal before the High Court, the learned single Judge passed a decree in their favour. All that the learned Judge stated in his judgment was that "after a careful consideration of all the issues that arise for decision in this second appeal, I am of the opinion that the best form in which a decree could be given to the plaintiffs is in the following terms" and then he proceeded to set out the terms of his decree. On appeal by Special Leave the appellants contended that the method adopted by the learned Judge in disposing of the second appeal before him clearly shows that the judgment delivered by him cannot be sustained. The respondents, raised a preliminary objection that since the appellants did not avail themselves of the remedy available to them under the Letters Patent of the High Court either the special Leave granted by this Court should be revoked, or the appeal should be dismissed. Held: It would not be possible to lay down an unqualified rule that special leave should not be granted if the party has not moved for leave under the Letters Patent and it cannot be so granted, nor is it possible to lay down an inflexible rule that if in such a case special leave has been granted, it must always and necessarily be revoked. Having regard to the wide scope of the powers conferred on this Court under article 136, it is not possible and, indeed, it would not be expedient, to lay down any general rule which would govern all cases. The question as to whether the jurisdiction of this Court under article 136 should be exercised or not, and if yes, on what terms and conditions, is a matter which this Court has to decide on the facts of each case. 50 Raruha Singh vs Achal, A.I.R. 1961, S.C. 1097, referred to. In the present case, the learned Judge passed an order which reads more like an award made by an arbitrator who, by terms of his reference, is not under an obligation to give reasons for his conclusions embodied in the award. When such a course is adopted by the High Court in dealing with second appeals, it must obviously be corrected and the High Court must be asked to deal with the matter in a normal way in accordance with law. Therefore, the decree passed in second appeal, must be set aside on the ground that the judgment delivered by the learned Judge did not satisfy the basic and legitimate requirements of a judgment under the Code of Civil Procedure.

In a public interest application filed under Article 32 of the Constitution for enforcement of fundamental rights under Articles 14 and 21 of the Constitution being denied to the hundreds of juvenile delinquents, all over the country, the Supreme Court had issued directions from time to time. Issuing further directions in the matter, this Court, HELD: For the present the Advisory Board in terms of the provision of the scheme for facilitating the monitoring of the implementation of the Act should be set up at the State level and steps at the District level may be deferred. [35E] Each of the States, including the State of Jammu & Kashmir to which the scheme would apply, by its consent, is directed to set up its Advisory Board in terms of the scheme. The total number of the Advisory Boards should not be below 15 and not above 20. The State Government should indicate as to who would be the Chairman and Secretary respectively of the Board. Such Committee should be set up within six weeks and report of compliance filed with the Registry of this Court within eight weeks. The first meeting of the Board should be within four weeks of its constitution and every such Board should send its first proceeding to the Registry, [35F, H, 36A B]

The employees of the State Bank of India filed a writ petition in the High Court, questioning the right of the management to fix the hours of work and of recess and its right to stagger the period of recess, and for other consequential reliefs. A Single Judge of the High Court allowed the petition, following earlier decisions by the Division Bench of the same High Court, and also granted a certificate of fitness under Article 134A of the Constitution to file an appeal in the Supreme Court, following an earlier order of a Division Bench granting such a certificate in respect of one of those earlier decisions. Revoking the certificate, this Court, HELD: The certificate contemplated under Article 134A of the Constitution can only be a certificate which is referred to in cl. (1) of Article 132 or in cl. (1) of Article 133 or in sub clause (c) of cl. (1) of Article 134 of the Constitution. Article 134A does not constitute an independent provision under which a certificate can be issued. It is ancilliary to Articles 132(1), 133(1) and 134(1)(c). [155E] The High Court can issue a certificate only when it is satisfied that the conditions in Article 132 or Article 133 or Article 134, as the case may be, are satisfied. [156F] The instant case does not fall either under Article 132(1) or under sub clause(c) of Article 134(1) as it neither involves a substantial question of law as to the interpretation of the Constitution nor is it a crimi 154 nal proceeding. It can only fall, if at all, under Article 133(1) and,therefore, the certificate could not have been issued by reason of cl.(3) of Article 133 of the Constitution. [155E F] The fact that in a similar case a certificate had been issued by a Division Bench of the High Court did not empower the Single Judge to issue the certificate under Article 133(1) in a case decided by him. The restriction placed by cl. (3) of Article 133 could not be got over by relying upon the order of the Division Bench. [156G H] The petition of appeal to be treated as Special Leave Petition under Article 136 of the Constitution and posted for preliminary hearing. [157A]

The respondents in Civil Appeal No. 708/78 Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed a civil suit No. 17,0 of 1964 against the Appellant tenant for recovery of possession and arrears of rent under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The suit was decreed. There was an appeal by the tenant. It resulted in a com promise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises. On April 29, 1969, in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr. ; , this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in regard to the "regulation of house accommodation in Cantonment Areas. " The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc. To get over the situation created by the said decision, on December 29, 1969, the Central Government issued a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957 extending the pro visions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other cantonment areas. In June 2, 1972, the Parliament also enacted Act 22 of 1972 amending the Cantonment (Extension of Rent Control laws) Act 1957, purporting to enable the Central Government to make the Rent Control Laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees. In the meanwhile, taking advantage of the decision in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr., the appellant tenant filed Miscellaneous Application No. 597/70 for a declaration that the decree obtained against him was a nullity and incapable of being executed. This application was allowed by the Court on November, 19, 1971. But, after the enactment of Act 22 of 1972, on January 11, 1973 the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour. The appellant tenant raised three objections, namely, (i) subsequent to the compromise decree there was a 225 fresh agreement of lease between the landlords and himself; (ii) the provisions of the amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967; ,(iii) in any case, the decision in Miscellaneous Application No. 597/70 holding the decree to be a nullity operated as res judicata between the parties. The first objection was left open by all the Courts for future adjudication, as the landlord denied the existence of any fresh agreement. The second and third objections alone were considered. In the judgment under appeal, the High Court overruled them and hence this appeal by special leave and two other similar appeals. Dismissing the appeals the Court, ^ HELD: 1. In Indu Bhushan Bose vs Rama Sundari and Anr., [1970 ] 1 S.C.R. 443, the Supreme Court agreed with the view of the Calcutta and Rajasthan High Courts and held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of the List II, but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. But even before this decision Parliament took the view of the Calcutta Rajasthan High, Courts as the correct view and proceeded to enact the Cantonment (Extension of Rent control Laws) Act, 1957, by section 3 of which the Central Government was enabled, by notification in the official Gazette to extend to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated. Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969. Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court regarding the applicability of the Bombay Act to such areas. In view of the Supreme Court decision in Indu Bhushan 's case, it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued. It was accordingly done on December 29, 1969. But it was realised that the entire problem was not thereby solved since all such notifications as the one issued on December 29, 1969 could only be prospective and could not save decrees which had already been passed. Therefore, Amending Act 22 of 1972 was enacted for the express purpose of saving decree which had already been passed. By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950. Original Section 3 was renumbered as subsection 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted." [229 B G & 230 C D] 2. Under section 3 of the unamended Act, 1957, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of notification. As a result of the introduction of sub section 2 of section 3 the notification can be given effect from an anterior date or a future late but it cannot be made effective from a date earlier than the commencement 226 of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957. Sub section 3 is merely consequential to sub section 2, in that it provides that a State Legislation when extended to a Cantonment area with effect from the date of the notification from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force. Sub section 4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled. One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regulation of house accommodation for the time being in force in the State in which such Cantonment is situated. In other words the decree or order must have been made by the wrong application of the State Legislation to the Cantonment area. If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area it shall be deemed, with enact from the date of the notification to have been properly made under the relevant provisions of the State Legislation. 1231 A H, 232 A BI 3. The applicability of sub section 4 cannot be confined to cases where notifications are issued with retrospective effect under sub section 2. Sub section 4 is not so confined. It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not. The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although. strictly speaking, it was not so in force. Subsection 4 is wide enough to save all decrees and orders made by the wrong application of State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to cantonment areas at the time of the passing of the decrees or order. The decree obtained by the respondent is saved by the pro visions of section 3, sub section 4 of the Cantonment (Extension of Rent Control Laws) Act 22 of 1957, as amended by Act 22 of 1972. [232 E F] 4. If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature. [234 A] In the present case, the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas. That defect having been re moved and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata. [234 B D] Mathura Prasad Bajoo Jaiswal and ors. vs Dessibai N. B. Jeejeebhoy, (@) 836: followed.

This petition under Article 32 of the Constitution of India has been filed by an Association of about 2,000 em ployees working in 500 Railway Institutes and Clubs in various parts of the country claiming that they should be treated on the same par as the employees in the Statutory Canteens run by the Railway Administration. In support of their claim the petitioners while enumerating the range of activities handled by them, they have attempted to draw a parallel with the regular employees contending inter alia that not only they receive grants in aid and a number of facilities from the Govt. , the Railway Board has always treated these institutes and clubs as an integral part of the Railways. The Respondents resisted the petition stoutly and con tended that the Institutes and Clubs are managed by a Com mittee representing its membership which engages such staff as is required and meets the cost of their wages and allow ances etc., that the Railways are not the principal employ ers of their staff, that they are not paid directly from the Consolidated Fund of India and whatever facilities are provided to them they are confined to the wholetime staff as a special case and not on account of any obligation under any law. On consideration of respective contentions and documents on record while dismissing the petition, this Court. HELD: There is a material difference between the can teens run in the Railway establishments and the Institutes and Clubs. The Institutes/ Clubs have to run on the member ship fees and fixed grants received from the Staff Benefit Fund. The fund consists of receipts from the forfeited provident fund and bonus, and of fines. The grant is made as pointed out by the Respondents, to each Institute/Club at the rate of 595 Rs. 14 per capita of the non gazetted staff employed at the relevant establishment. Out of this contribution, only Rs.4 per capita are spent on the activities of the education. relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes. There is further no dispute that the wages and allowances of the Staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and non statutory recognised canteens. [600H] 160 [E F & G] On the facts, it cannot be held that there is a rela tionship of employer employee between the Railway Adminis tration and the employees engaged in the Institutes and Clubs. Neither law nor facts spell out such relationship. If the present service conditions of these employees are unsat isfactory, the remedy lies elsewhere. [603B C]

The petitioner, a resident of Pondicherry, was an applicant for a stage carriage permit,. before the State Transport authority pondicherry, alongwith 14 other persons. The Permit was granted to one Perumal Padayatchi taking into account the fact that he was a native of Pondicherry along with other facts. The petitioner, whose application for the permit was rejected, went in appeal to the Appellate Authority who dismissed the appeal . The petitioner filed a writ petition under article 32 in this Court and contended that preference on the ground of place of birth is violative of article 15 of the Constitution. On the dates of the orders sought to be impugned, Pondicherry was not yet part of the territory of India, but when the petition was heard it had become part of the territory of India. It was contended on behalf of the respondent that in view of the observations in the decision in N. Masthan Sahib vs Chief Commissioner, [1962] Supp. 1 section C. R. 981, the writ petition was not maintainable. Held, that in article 12 the words "under the control of the Government of India" qualify the word "authorities" and not the word "territory" and article 12 gives an iaclusive definition of the word "State". Held, further, that if no writ could be issued at the time . when the order was passed for the reason that Pondicherry was not part of India at that time, no such writ could be issued in respect of past acts after Pondicherry had become part of India 657 as that would be giving retrospective operation to the Constitution. Janardan Reddy vs The State, ; referred to. Held, also, that judicial or quasi judicial authorities out side the territory of India but under the administration of the Government of India cannot be said to be 'under the control of the Government of India ' as the expression "control" connotes power to issue directions regarding how a thing may be done by a superior authority to an inferior authority, and in the case of a quasi judicial authority no such directions or orders could be issued. It is only in the case of executive action that a superior authority may direct that a particular thing may be done in a particular way by the subordinate authority. In the very nature of things where rule of law prevails it is not open to a Government, be it the Government of India or the Government of a State, to direct a quasi judicial or judicial authority to decide Any particular matters before it in a particular manner. N. Masthan Sahib vs Chief Commissioner, [1962] Supp. 1 section C. R. 981, referred to. Held, also, that the Chief Commissioner who is the Appellate Authority in the case, fell outside the definition of 'State ', he being a quasi judicial authority not under the control of the Government of India and, therefore, article 15 of the Constitution did not apply to him and no protection under article 15 was available against the Chief Commissioner at the time the impugned order was made.

The validity of the Punjab Security of Land Tenures Act, 1953 (Act 10 of 1953) and of the Mysore Land Reforms Act (Act 10 of 1962) as amended by Act 14 of 1965 was challenged by the petitioners under article 32 of the Constitution. Since these Acts were included in the 9th Schedule to the Constitution by the Constitution (Seventeenth) Amendment Act, 1964, the validity of the said Amendment Act was also challenged. In this connection it was urged that Sankari Prasad 's case in which the validity of the constitution (First) Amendment Act, 1951 had been upheld and Sajjan Singh 's case in which the validity of the Constitution (Seventeenth) Amendment Act, 1964, had been upheld by this Court, had been wrongly decided. It was contended that Parliament had no power to amend fundamental rights in Part III of the Constitution. HELD: Per Subba Rao, C.J., Shah, Sikri, Shelat and Vaidialingam, JJ. (Hidayatullah, J. Concurring) : Fundamental Rights cannot be abridged or taken away by the amending procedure in Ail. 368 of the Constitution. An amendment to the Constitution is 'law ' within the meaning of article 13(2) and is therefore subject to Part III of the Constitution. Sri Sankari Prasad Singh Deo vs Union of India Rajasthan; , , reversed. Per Subba, Rao, C.J., Shah, Sikri, Shelat and Vaidialingam, JJ. (i) Fundamental rights are the primordial rights necessary for the development of human personality. They are the rights which enable a 763 man to chalk out his own life in the manner he likes best. Our Constitution, in addition to the well known fundamental rights, also included the rights of minorities and other backward communities in such rights. [789 E] The fundamental rights are given a transcendental position under our Constitution and are kept beyond the reach of Parliament. At the same time Parts III and IV of the Constitution constituted an integrated scheme forming a self contained code. The scheme is made so elastic that all the Directive Principles of State Policy can reasonably be enforced without taking away or abridging the fundamental rights. While recognisingthe immutability of the fundamental rights, subject to social control the Constitution itself provides for the suspension or the modification of fundamental rights under specific circumstances, as in articles 33, 34 and 35. The non obstante clause with which the last article opens makes it clear that all the other provisions of the Constitution are subject to this provision. Article 32 makes the right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by the said Parts a fundamental right. Even during grave emergencies article 358 only suspends article 19 and all other rights are untouched except those specifically suspended by the President under article 359. [789 H; 790 D] The Constitution has given a place of permanence to the fundamental freedoms. In giving to themselves the Constitution the people have reserved the fundamental freedoms to themselves. article 13 merely in corporates that reservation. The Article is however not the source of the protection of fundamental rights but the expression of the reservation. The importance attached to the fundamental freedoms is so transcendatal that a bill enacted by a unanimous vote of all the members of both Houses is ineffective to derogate from its guaranteed exercise. It is not what Parliament regards at a given moment as conducive to the public benefit but what Part III declarer. protected, which determines the ambit of the freedom. The incapacity of Parliament therefore in exercise of its amending power to modify, restrict, or imposefundamental freedoms in Part III arises from the scheme of theConstitution and the nature of the freedoms. [792 D F] A. K. Gopalan vs State of Madras, [1950] S.C.R.88, State of Madras vs Smt. Champakam Dorairajan, (1951) S.C.R. 525, Pandit M. section M. Sharma vs Shri Sri Krishna Sinha, [1959] Supp. 1 S.C.R. 806 and Ujjam Bai vs State of Uttar Pradesh, [1963] 1 S.C.R. 778, referred to. If it is the duty of Parliament to enforce directive principles it is equally its duty to enforce them without infringing the fundamental rights. The verdict of Parliament on the scope of the law of social control of fundamental rights is not final but justiciable. If it were not so, the whole scheme of the Constitution would break. [815 H; 816 A B] , (ii)Article 368 in terms only prescribes various steps in the matter of amendment. The article assumes the power to amend found else where. The completion of the procedural steps cannot be said to culminate in the power to amend for if that was so the Constitution makers could have stated that in the Constitution. Nor can the power be implied either from article 368 or from the nature of the articles sought to be amended; the doctrine of necessary implication cannot be invoked if there is an express provision. There is no necessity to imply any such power as Parliament has the plenary power to make any law including the law to amend the Constitution subject to the limitations laid down therein [793 E G] (iii)The power of Parliament to amend the Constitution is derived from articles 245, 246 and 248 read with item 97 in List I. The residuary 764 power of Parliament can certainly take in the power to amend the Constitution. [794 A D] Though a law made under article 245 is subject to the provisions of the Constitution it would be wrong to say that every law of amendment made under it would necessarily be inconsistent with the articles sought to be amended. It cannot reasonably be said that a law amending an article is inconsistent with it. The limitation in article 245 is in respect of the power to make a law and not of the content of the law made within the scope of its power. [794 E F] An order by the President under article 392 cannot attract Art 368 as the amendment contemplated by the latter provisions can be initiated only by the introduction of a bill in Parliament. It cannot therefore be said that if the power of amendment is held to be a legislative power the President acting under article 392 can amend the Constitution in terms of article 368. [794 G H] (iv) The Constituent Assembly, it so minded, could certainly have conferred an express legislative power on Parliament to amend the Constitution by ordinary legislative process. There is, therefore, no inherent inconsistency between legislative process and the amending one. Whether in the field of a constitutional law or statutory law amendment can be brought about only by 'law '. [794 C D] Article 13(2), for the purpose of that Article, gives an inclusive definition of 'law '. It does not Prima facie exclude constitutional law. The process under article 368 itself closely resemble the legislative process. Article 368 is not a complete code in respect of the procedure of amendment. The details of procedure in respect of other bills have to be followed so far as possible in respect of a Bill under article 368 also, The rules made by the House of the People providing procedure for amendments lay down a procedure similar to that of other bills with the addition of certain special provisions. If amendment is intended to be Something other than law the constitutional insistence on the said legislative process is unnecessary. The imposition of further conditions is only a safeguard against the hasty action or a protection to the states but does not change the legislative character of the amendment [795 G 796 C] Article 3 of the Constitution permits changes in States and their boundaries by a legislative process under articles 4 and 169 amendments in the Solution are made by 'law ' but by a fiction are deemed not to be amendments for the purpose of article 368. This shows that amendment is law and that but for the fiction it would be an amendment within the meaning of Art, 368. [796 C F] Therefore amendments either under article 368 or under other Articles are only made by Parliament following the legislative process and are 'law ' for the purpose of article 13(2). [798 C] Mccawley vs The king, [1920]A.C., 691 and The Bribery Commissioner vs Pedrick Ransinghe, ; , referred to. (v) One need not cavil at the description of amending power as a sovereign power for it is sovereign only viithin the scope of the power conferred by a particular Constitution which may expressly limit the power of amendment both substantive and procedural. If cannot therefore be said that amending power can have no limitations being a sovere4p power. [804] The argument that the amending process involves political questions and is therefore outside.the scope of judicial re view cannot also be aeCePted It may be. Parliament seeks to amend the Constitution for political reasons but the court in denying that power will not be deciding 765 a political question; it will only be holding that Parliament has no power to armed Particular articles of the Constitution for any purpose whatsoever, be it political or otherwise. [804 E G] (vi) If power to abridge the fundamental rights is denied to Parliament revolution is not a necessary result. The existence of an all comprehensive power cannot prevent revolution if there is chaos in the country brought about by misrule or abuse of power. Such considerations are out of place in construing the provisions of the Constitution by a Court of law. [816 B C] (vii) While ordinarily @ Court will be reluctant to reverse its previous decisions it is its duty in the constitutional field to correct itself as early as possible, for otherwise the future progress of the country and happiness of the people will be at stake. As it was clear that the decision in Sankari Prasad 's case was wrong, it was pre eminently a typical case where this Court should overrule it. The longer it held the field the greater the scope for erosion of fundamental rights. As it contained the seeds of destruction of the cherished rights of the people, the sooner it was overruled the better for the country. [816 G H] The Superintendent and Legal Remembrancer Stale of West Bengal vs The Corporation at Calcutta; , relied on. (viii) The Constitution (Seventeenth Amendment) Act, 1964, inasmuch as it takes away or abridges fundamental rights was beyond 'the amending power of Parliament and void because of contravention of article 13(2). But having regard to the history of this and earlier amendment to the Constitution, their effect on the social and economic affairs of the country and the chaotic situation that may be brought about by the sudden withdrawl at this stage of the amendments from the Constitution it was undesirable to give retroactivity of this decision. The present was therefore a fit case for the application of the doctrine of "prospective. overruling, evolved by the courts in the United States of America. [805 E; 807 E, G; 808 C D] Great Northern Railway vs Sunburst Oil & Ref. Co. ; , Chicot County Drainage vs Baxter State Bank; , , Griffin vs Illionis, ; , Wolf vs Colorado, ; : 193 L. Ed. 872, Mapp vs Ohio, ; : 6 L. Ed. (2nd Edn.) 1081 and Link letter vs Walker; , , referred to. (ix), The doctrine of "prospective overruling" is a modern doctrine suitable for a fast moving society. It does not do away with the doctrine of state decision but confines it to past transactions. While in Strict theory it may be said that the doctrine 'involves the making of law, *hat the court really does is to declare the law but refuse to give retroactivity to it. It is really a pragmatic solution reconciling the two conflicting doctrines, namely, that a court finds the law and that it does make law It finds law but restricts its operation to the future. It enables the court to bring about a smooth transition by correcting, its errors without disturbing the impact of those errors on past transactions. By the application of this doctrine the past may be preserved and the future protected. [913 A C; 814 E F] Our Constitution does not expressly of by necessary implication speak against the doctrine of prospective overruling. Articles 32, 141 and 142 are designedly made comprehensive to enable the Supreme Court to declare law and to give such directions or pass such orders as are necessary to do complete justice. The expression 'declared ' in article 141 is wider than the words 'found or made '. The law declared by the Supreme Court is the law of the land. If so, there is no acceptable reason why 7 66 the Court, in declaring the law in supersession of the law declared by it earlier, could not restrict the operation of the law as declared to the future and save the transactions whether statutory or otherwise that were affected on the basis of the earlier law. [813 F H] As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, it would like to move warily in the beginning and would lay down the following propositions : (1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution; (2) it can be applied only by highest court of the country, ie. the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the Courts as it has India; (3) the scope of the retrospective operation of the law declared by the supreme Court superseding its earlier decisions is left to its discretion to be moulded in accordance with the justice of the cause or matter before it. [814 C D] Applying the doctrine of prospective overruling in the circumstances of the present case the Court declared that this decision would not affect the validity of the Constitution (Seventeenth Amendment) Act 1964, or other amendments to the Constitution taking away or abridge the fundamental rights. It further declared that in future Parliament will have no power to amend Part III of Abe Constitution so as to take away or abridge the fundamental rights. [814 F G] (x) As according to the above decision the Constitution (Seventeenth Amendment) Act held the field the validity of the two impugned Acts, namely the Punjab Security of Land Tennures Act, 10 of 1953 and the Mysore Land Reforms Act, 10 of 1962, as amended by Act 14 of 1965, could, not be questioned on the ground that they offended Art 13, 14 or 31 of the Constitution. [815 E] (xi) On the findings the following, questions did not fall to be considered : (a) Whether in the exercise of the power of amendment the fundamental structure of the Constitution may be changed or even destroyed or whether the power is restricted to making modification within the framework of the original instrument for its better effectuation ? (b) Whether the amendment of fundamental rights is covered by the proviso to article 368 ? (c) To what extent can the provisions of die Constitution other than fundamental rights be amended ? (d) To what extent can Part III be amended otherwise thin by taking away or abridging the fundamental rights ? (e) Whether the impugned Act could be sustained under the provisions of the Constitution without the aid of articles 31A and 31B of the Schedule. Obiter If necessity to abridge the fundamental rights does arise the residuary power of Parliament may be relied upon to call for a constituent bly for making a new Constitution or radically changing it. The recent Act providing for a poll in Goa, Daman and Diu was an instance of analogus exercise of such residuary power by the Parliament, [816 E F] Per Hidayatullah. J. : (i) The scope of the amending power under the COnstitution is not to be determined by taking an apriori view of the 767 omnicompetence of article 368. When there is conflict between that Article and article 13(2) juridical hermeneutics requires the Court to interpret them by combining 'them and not by destroying one with the aid of the other. No part in a Constitution is superior to another part unless the Constitution itself says so and there is no accession of strength to any provision. by calling it a code. It is, the context of the legal provisions that illustrates the meaning of the different parts so that among them and between them there should be correspondence and harmony. [857 H 858C] (ii) It is wrong to think of the Fundamental Rights as within Parliament 's giving or taking. They are secured to the people by articles 12, 13, 32, 136, 141,,144 and 226. The High Courts and finally this Court have been made the Judges of whether any lagislative or executive action on the part of the State, considered as comprehensively as is possible,offends the Fundamental Rights and article 13(2)declares that legislation which so offends is to be deemed to be void. The general words of article 368 cannot be taken to mean that by calling an Act an Amendment of the Constitution Act a majority of total strengths and a 2/3rds majority of the members presnt and voting in each House may remove not only any of the Fundamental Rights but the whole Chapter giving them. [860 A D; 867 FF] (iii) In Britain there is no distinction between constitutional law and ' ordinary law as to the procedure of their enactment. In our Constitution too in spite of the claim that article 368 is a Code articles 4, 11 and 169 show that the amendment of the Constitution can be by the ordinary law making procedure. By this method one of the legislative limbs in a State can be removed or created. This destroys at one stroke the claim that article 368 is a code and. also that any special method of amendment of the Constitution is fundamentally necessary. [861 E G] The only difference between constitutional law and ordinary law can, be said to arise from the fact that constitutional laws are generally amend able under a process which in varying degrees, is more difficult or elaborate. This may give a distinct character to the law of the Constitutionbut it does not serve to distinguish it from the other laws of the land for the purpose of article 13(2). The Article itself does not exclude constitutional law which could have been easily done had the constitution makers. so intended. [862 B; 866 B] An amendment to the Constitution is not made under power derived ' from articles 245 or 248 of the Constitution read with entry 97 of List 1. The power of amendment is sui generis. [900 E] (iv) A narrow view need not be taken of the word amendment '. By an amendment new matter may be added, old matter removed or altered. The power of amending the Constitution is however not intended to be used for experiments or as an escape, from restrictions against undue State action enacted in the Constitution itself. Nor is the power of amendment available for the purpose of remoing express or implied restrictions against the State. [862 F; 863 B C] Coleman vs Milter, ; 307 U.S. 443 , Luther V. Borden,, and Baker vs Carr, 369 U.S. 186 ; , 633), referred to. The State is no doubt supreme but in the supremacy of its powers it may create impediments on its own sovereignty. There is nothing to prevent the State from placing certain matters outside the amending procedure. When this happens the ordinary procedure of amendment ceases to apply. Amendment can then only be by a freshly constituted body. 768 To attempt to do this otherwise is to attempt revolution which is to alter the will of the people in an illegal manner. Courts can interfere to nullify the revolutionary change because there is an infraction of exiting legality. Democracy may be lost if there is no liberty based on law and law based on equality. The protection of the fundamental rights is necessary so that we may not walk in fear of democracy itself. [863 G; 864 A C; 865 A D] (v) In article 13(2) the restriction is against the State. There is a difference between the State and its agencies such as Government, Parliament, the Legislature of the States, and the local and other authorities. The State means more than any of these or all of them put together. By making the State subject to Fundamental Rights it is clearly stated in article 13(2) that any of the agencies acting alone or all the agencies acting together are not above the Fundamental Rights. Therefore when the House of the People or the Council of States introduces a Bill for the abridgement of the Fundamental Rights, it ignores the injunction against it and even if the two Houses pass the Bill the injunction is next operative against the President since the expression Government of India in the General Clauses Act means the President of India. Thus the injunction in article 13(2) is against the whole force of the State acting either in its executive or legislative capacity. [866 E H] (vi) It is wrong to invoke the Directive Principles as if there is some antinomy between them and the Fundamental Rights. The Directive Principles lay down the routes of State action but such action must avoid the restrictions stated in the Fundamental Rights. It cannot be conceived that in following the Directive Principles the Fundamental Rights can be ignored. [867 G, 868 B] (vii) Our Constitution has given a guaranteed right to the persons whose fundamental rights are affected to move the Court. The guarantee is worthless if the rights are capable of being taken away. This makes our Constitution unique and the American or other foreign precedents cannot be of much assistance. [875 H] Hollingsworth vs Virginia, ; , Leser vs Garnett, ; , Dillon vs Gloss, ; and Texas vs White; , , referred to. It is not that Fundamental Rights are not subject to any change or modification. The Constitution permits a curtailment of the exercise of most of the Fundamental Rights by stating the limits of that curtailment. It permits the Fundamental Rights to be controlled but prohibits their erasure. [878 B] (viii) Parliament today is not the constituent body as the constituent 'assembly was but a constituted body which must bear true allegiance to the Constitution as by law established. To change the Fundamental Part of the individuals liberty is a usurpation of the constituent functions because they have been placed outside the scope of the power of the constituted Parliament. [870 B D] Our Constitution like some others has kept certain matters outside the amendatory process so that the their representatives. In article 35 obstante clause. They exclude Article under the proviso. It is therefore a great error to think of article 368 as a code or as omnicompetent. [901 C E; 902 A B] 769 Garnishee case; , , referred to. Article 368 cannot directly be amended by Parliament to confer power on itself over the fundamental rights, It would be against article 13(2). Parliament cannot do indirectly what it cannot do directly. [878 H] (ix) If it is desired to abridge the Fundamental Rights the legal method is that the State must reproduce the power which it has chosen to put under restraint. Parliament must amend article 368 to convoke another constituent assembly, pass a law under item 97 of the List 1 of Schedule 7 to call a constituent assembly, and then that assembly may be able to abridge or take away the fundamental rights. Any other method must be regarded as revolutionary. [878 D E; 879 B] (x) The various amendments that have been made by Parliament in articles 15, 16 and 19 did not abridge fundamental rights and were therefore valid. [879 C, 883 B] (xi) Our Constitution accepted the theory that Right of Property is a fundamental right though perhaps it was an error to do so if socialisation was desired. It treated property rights as inviolable except through law for public good and on payment of compensation. However the various amendments have significantly changed the position. As a result of them, except for land within the prescribed ceiling, all other land can be acquired or rights therein extinguished or modified without compensation and no challenge to the law can be made under articles 14, 19 or 31 of the Constitution. [887 B; 888 B C; 896 F G] As there is apprehension that the erosion of the right to property may be practised against other fundamental rights it is necessary to call a halt. An attempt to abridge or take away Fundamental Rights by a constituted Parliament even through an amendment of the Constitution can I declared void. This Court has the power and the jurisdiction to do so. The opposite view expressed in Sajjan Singh 's case was wrong. [898 B C] (xii) The First, Fourth and Seventh amendments of the Constitution, cannot now be challenged because of long acquiescence. It is good sense and sound policy for the courts to decline to take up an amendment for consideration after a considerable lapse of time when it was not challenged before or was sustained on an earlier occasion after challenge. [893 O, H 1902 D E] Lesser vs Garnett, ; (1922), referred to. (xiii) In the Seventeenth Amendment, the extension of the definition of 'estate ' to include ryotwari and agricultural lands is an inroad into the Fundamental Rights but it cannot be questioned in view, of the existence of article 3 1A(1) (a) whose validity cannot now be challenged. The new definition of estate introduced by the amendment is beyond the reach of the Courts not because it is not law but because it is "law" and fills within that word in article 31(1) (2) (2A) and article 3 1 A(1). [899 C G] The third section of the Act is however invalid. It adds 44 State Acts to the ninth schedule. The Schedule is being used to give advance protection to legislation which is known or apprehended to derogate,from the Fundamental Rights. The power under article 368 was not meant to give protection to State statute , which offend the Constitution. The intent here is to silence the courts and not to amend the Constitution. [900 A D] 770 (xiv) The two impugned Acts namely the Punjab Security of Land Tenures Act, 1953 and the Mysore Land Reforms Act, 1962 as amended are valid under the Constitution not because they are included in Schedule 9 of the Constitution but because they are protected by article 3 1 A and the President 's assent. [902 G H] Per Wanchoo, Bachawat, Ramaswami, Bhargava and Mitter, JJ. (dissenting): Article 368 carries the power to amend all parts of the Constitution including the fundamental rights in Part III of the Constitution. An amendment is not 'law ' for the purpose of article 13(2) and cannot be tested under that Article. Sri Sankari Prasad Singh Deo vs Union of India, ; and Sajjan Singh vs State of Rajasthan, ; , reaffirmed. Per Wanchoo, Bhargava and Mitter, JJ. (i) The Constitution provides a separate part headed 'Amendment of the Constitution ' and article 368 is the only article in that Part. There can therefore, be no doubt that the power to amend the Constitution must be contained in article 368. If there was any doubt in the matter it is resolved by the words, namely, "the Constitution shall stand amended in accordance with the terms of the bill". These words can only mean that the power is there to amend ,the Constitution after the procedure has been followed. [826 A D] (ii) While there is a whole part devoted to the amendment of the Constitution there is no specific mention of the amendment of the Constitution in article 248 or in any entry of List 1. It would in the circumstances 'be more appropriate to read the power in article 368 than in article 248 read with item 97 of List I. [826 H 827 A] The original intention of the Constitution makers was to give residuary power to the States. The mere fact that during the passage of the Constitution by the Constituent Assembly residuary power was finally vested in the Union would not therefore mean that it includes the power to amend the Constitution. Moreover residuary power cannot be used to change the fundamental law of the Constitution because all legislation is under article 245 "subject to the provisions of this Constitution". [827 B, H] Mere accident of similarity of procedure provided in article 368 to that provided for ordinary legislation cannot obliterate the basic difference 'between constitutional law and ordinary law. It is the quality and nature of what is done under article 368 and not its similarity to other procedure that should be stressed. What emerges after the procedure in article 368 has been followed is not ordinary law but fundamental law. [829 D; 830 C D] (iii) The procedure under the proviso to article III cannot apply to a 'bill to amend the Constitution. If the President refused to, give his assent to such a bill , the proposed amendment falls. In this respect at any rate the procedure under article 368 differs from, the ordinary legislative process. [831 B E] (iv) The word 'law ' has been avoided apparently with great care in Art.368. What emerges after the procedure has been followed is not an Act but the Constitution stands amended. After that the courts can only see whether the procedure in article 368 was followed. If it has been followed there is no question of testing the amendment of the Constitution On the avail of fundamental rights or in any other way as in the case of ordinary legislation. [832 A G] 771 (v) To say that 'amendment ' in law only means a change which results in improvement would make amendment impossible for what is improvement is a matter of opinion. [834 B] It may be open to doubt whether the power of amendment contained in article 368 goes to the extent of completely abrogating the present Constitution and substituting I it by an entirely new one. But short of that the power to amend includes the power to add any provision to the Constitution to alter any provision and substitute any other provision in its place or to delete any provision. [834 F G] The seventeenth amendment is merely in exercise of the power of amendment as indicated above and cannot be struck down on the ground that it goes beyond the power conferred by Parliament to amend the Constitution by article 368. [834 H] (vi) There is no express limitation on power of amendment in article 368 and no limitation can or should be implied therein. If the Constitution makers intended certain basic provisions in the Constitution, and Part III in particular, to be not amendable there is no reason why it was not so stated in article 3 68. The acceptance of the principle that them is an implied bar to amendment of basic features of the Constitution would lead to the position that any amendment to any article would be liable to challenge before the courts on the ground that it amounted to amendment of a basic feature. Constituent power like that in Art 368 can only be subject to express limitations so far as the substance of the amendments is concerned. [835 A; 836 D, G] (vii) For interpreting article 369 it is not permissible to read the speeches made in the Constituent Assembly. Historical facts namely what was accepted or what was not accepted or what was avoided in the Constituent Assembly can be looked into; but in connection with article 368 no help can be got from the historical material available. [838 C] Administrator General, of Bengal vs Prem Lal Mullick, (1895) XXII I.A 107, Baxter vs Commissioner of Taxation, (1907) 4 C.I.R. 1087, A. K. Gopalan vs State of Madras [1950] S.C.R. 88 and The Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan, [1963] 1 S.C.R. 491, referred to. (viii) The preamble to the Constitution cannot prohibit or control in any way or impose any implied restrictions or limitations on the power to amend the Constitution contained in Aft. 368. [838 H] In re the Berubari Union and Exchange of Enclaves, , referred to. (ix) The word 'law ' in article 13(1) does not include. any law in the nature of a constitutional.provision for no such law remained in view of article 395 which provided that "the Indian Independence Act, 1947 and the Government of India Act, 1935, together with all enactments amending or supplementing the latter Act, but not including the Abolition of Privy Council Jurisdiction Act, 1949, are hereby repealed. There is no reason why if the word 'law ' in article 13(1) relating to past laws does not include any constitutional provision the word 'law ' in cl. (2) would take in an amount of the Constitution for it would be reasonable to read the word in the same sense in both the clauses. [839 D F] Article 13 (2) when it talks of the State making any law, refers to the law made under the provisions contained in Ch. 1 of Part XI of the Constitution beginning with article 245. It can have no reference to the 772 Constituent power of amendment under article 368. For it is somewhat contradictory that in article 368 power should have been given to amend any provision of the Constitution without any limitations but indirectly that power should be limited by using words of doubtful import in article 13(25.[841 C] The power conferred by the words of article 368 being unfettered, inconsistency between. that power and the provision in article 13(2) must be avoided. Therefore in keeping with the unfettered power in article 368 the word 'law ' in article 13(2) must be read as meaning law passed under the ordinary legislative power and not a constitutional amendment. The words in article 13(2) are not specific and clear enough to be regarded as an express limitation on article 368. [842 G H] (x) Merely because there was some indirect effect on article 226 it was not necessary that the Seventeenth Amendment should have been ratified under the proviso to article 368. article 245 had not also been directly affected by the said Act and no ratification % as required on this ground either. [843 G H; 846 C] (xi) The laws added to the Ninth Schedule by the Seventeenth Amendment Act had already been passed by the State Legislatures and it was their constitutional infirmity, if any, which was being cured by the device adopted in article 31B read with the Ninth Schedule, the amendment being only of the relevant provisions of Part III which were compendiously put in one place in article 31B. Parliament could alone do it under article 368 and there was no necessity for any ratification under the proviso, for amendment of Part HI is not entrenched in the proviso. [847 E] In curing the infirmity of the said laws Parliament was not encroaching on the exclusive legislative powers of the States because only Partiament could card the infirmity. For the same reason the fact that the laws in question were State laws did. not make ratification obligatory. [847 G] A limited meaning cannot be given to Art, 368 because of the possibility of abuse of the power. The check is not in the courts but in the people who plect members of Parliament. [848 F] The power of amendment contained in a written federal constitution is a safety valve which to a large extent provides for stable growth and makes violent revolution more or less unnecessary. The fact that in the last sixteen years a large number of amendments , could be made and have been made is due to the accident that one party has been returned by electors in sufficient strength to be able to command Special majorities which are required in article 368, not only at the Centre but in all the States. But that is no ground for limiting the clear words of article 368. [850 C D, E] (xii)Though the period for which Sankari Prasad 's case has stood unchallenged is not long, the effects which have followed on the passing of State laws on the faith of that decision, are so overwhelming that the decision should not be disturbed otherwise chaos will follow. This is the fittest possible case in which the principle of stare decisis should be applied [851 G] Keshav Mills: Company, Ltd V Commissioner of Income tax; , , referred to. (xii)The doctrine of prospective overruling cannot be accepted in this country. The doctrine accepted here is that courts declare law and that a declaration made by a court is the law of the land and takes effect 773 from the date the law came into force. It would be undesirable to give up that doctrine and supersede it with the doctrine of prospective overruling. [852,D F] Moreover a law contravening article 13(2) is void ab initio as held by this Court in Deep Chand 's case and Mahendra Lal Jaini 's case. In the face of these decisions it is impowible to apply the doctrine of prospective overruling to ordinary laws. If constitutional law is to be treated as ordinary law the same principle applies. If however it is not treated as 'law ' under article 13(2) then there is no necessity of applying the principle of prospective overruling for in that case the amendment under article 368 does not have to be tested under article 13(2). [852 G H; 853 B] Deep Chand vs St ate of Uttar Pradesh, [1959] Supp. 2 S.C.R. 8 and Mahendra, Lal Jaini vs State of Uttar Pradesh, [1963] Supp. 1 S.C.R. 912, referred to. Per Bachawat J. (i) Article 368 not only prescribes the procedure but also gives the power of amendment. It is because the power to amend is given by the article that by following its procedure the Constitution stands amended. The proviso is enacted on the assumption that the several articles mentioned in it are amendable; but for the proviso they would have been amendable under the main part. There is no other provision in the Constitution under which these articles ' can be amended. [904 D] Articles 4, 169, Fifth Schedule Part D and Sixth Schedule Para 21 empower the Parliament to make amendments to certain parts of the Constitution by law, and by, express provision such law is deemed not to be amendment for the purpose of article 368. All other provisions of the Constitution can be amended by recourse to article 368 only. No other article confers the power of amending the Constitution. [904E F] (ii) The power to amend the Constitution cannot be said to reside in article 248 and List 1, item 97 because if amendment could be made by ordinary legislative process article 368 would be meaningless. Under the residual power the Parliament has no competence to make any law with respect to any matter enumerated in Lists II and III of the 7th Schedule, but under article 368 even Lists 11 and III can be amended. Moreover a law passed by residual power is passed by virtue of article 245 and must be subject to the provisions of the Constitution so that it cannot derogate from the Constitution or amend it. Such a law would be void. [905 C P] (iii) Article 368 gives the power of amending 'this Constitution '. This Constitution means every part of the Constitution including Part ITT and article 13(2). Thus article 13(2) is also within the reach of the amending power. Instead of controlling article 368 it is controlled by that Article. [906 C D; H] (iv) The contention that a constitutional amendment under article 368 is a law within the meaning of article 13 must be rejected. The distinction between the Constitution and law is so fundamental that the Constitution is not regarded as a law or a legislative act. The Constitution mean , the Constitution as amended. An amendment made in conformity with article 368 is a part of the Constitution and is likewise not law. Save as expressly provided in articles 4, 169 Fifth Schedule Part D and Sixth Schedule para 21 no law can amend the Constitution and a law which purports to make such an amendment is void. It is for this reason that article 368 avoids all reference to law making by the Parliament. There 3 Sup. CI./67 4 774 are. also material differences between the ordinary law making procedure and the procedure under the Article. [907 B F; 908 D H] If a constitutional amendment creating a new fundamental rights and incorporating it in Part III were a law, it would not be open to the Parliament by a subsequent amendment to abrogate the new fundamental right for such an amendment would be repugnant to Part 111. But the conclusion is absurd for the body which enacted the right can surely take it away by the same process. [909 E] Marbury vs Madison, ; :2 L.Ed. 60 and Riley vs Carter, , referred to. (v) There is no conflict between articles 13(2) and 368. The two articles operate in different fields, the former in the field of law, the latter in that of constitutional amendment. [910 B] (vi) The non obstante clause in article 35 does not show that the article is not amendable. The non obstante clause is to be found also in, articles 258(1). 364, 369, 370 and 371A. No one has suggested that these articles are not amendable. [910 D] (vii) The words 'fundamental ' used in regard to rights in Part III and the word guaranteed in article 32 do not mean that the said rights cannot be amended. The constitution is never at rest; it changes with the progress of time. The scale of values in Parts III and IV is not immortal and these Parts being parts of the Constitution are not immune from amendment under article 368. [910 F G] The impugned amendments to be Constitution were made to meet the situations created by decisions of this Court and to carry out urgent agrarian reforms. If it is held that the rights, conferred by Part III cannot be abridged or taken away by constitutional amendments, all these amendments would be invalid. The Constitution makers could not have intended that the ' rights conferred by Part III could not be altered for ' giving effect to the policy of Part. Nor was it intended that defects in Part III could not be cured or that possible errors in judicial interpretations of Part III could not be rectified by constitutional amendments. [913 D E] (viii) It cannot be said that the people in exercise of their sovereign power have placed the fundamental rights beyond the reach of the amending power. The people acting through the Constituent Assembly reserved for themselves certain rights and liberties and ordained that they shalt not be curtailed by ordinary legislation. But the people by the same Constitution also authorised the Parliament to make amendments to the Constitution. In exercise of the amending power the Parliament has ample authority to, abridge or take away the fundamental rights under Part III [915 B C] Merely because of possibility of abuse, the power cannot be denied. [916 H] Webb vs Outrim, and amalgamated Society of Engineers '. The Adelaide Steamship Company Limited & Ors. ; , referred to. (ix) The main part of article 368 gives the power to amend or make changes in the Constitution. A change is not necessarily an improvement. Normally the change is made with the object of making an improvement but the experiment may fail to achieve the purpose. [916 A] Livermore vs E. G. Waite, L.R.A. 312 and National Prohibition case. ; , referred to. 77 5 (x) The best exposition of the Constitution is that which it has received from contemporaneous judicial decisions and enactments. No one in Parliament doubted the proposition that fundamental rights could be amended, when the First Amendment Act of 1951 was passed. The concept of amendability was upheld in section Krishnan & Ors. vs State of Madras ; decided in 1951, 'in Sankari Prasad decided in 1952 and Sajjan Singh decided in 1964. [918 C D] (xi) There is no provision in the Constitution for calling a convention for its revision or far submission of any proposal for amendment to the referendum. [918 G] (xii) The impugned amendments affected articles 226 and 245 only indirectly and did not require ratification under the proviso to article 168. [919 D H] In validating the impugned laws Parliament was not encroaching on .the State List. It was only validating the said laws and such constitutional validating was within its competence. [920 C E] (xiii) The abolition of Zamindari was a necessary reform. It is the First Constitution Amendment Act that made this reform possible. , No legal argument ' can restore the outmoded feudal Zamindari system. What has been done cannot be undone. The battle for the put is lost. [921 B C] If the First Fourth, Sixteenth & Seventeenth Amendments Acts are void they do not legally exist from their inception. They cannot be, valid from 1951 to 1967 and invalid thereafter. To say that they were valid in the past and Will be invalid in the future is to amend the. Constitution. Such a naked power of amendment is not given to the Judges and therefore the doctrine of prospective overruling cannot be, adopted. [921 D E] It is not possible to say that the First and Fourth Amendments though originally valid have now been validated by acquiescence. If they infringe article 13(2) they were void from their inception. If these ammendments are validated by acquiescence the Seventeenth Amendment is equally validated. B] (xv) The contention that Dr. Ambedkar did not regard the fundamental rights as amendable is not supported by the speeches in the ' Constituent Assembly. [922 C D] Per Ramaswami J.(i) In a written Constitution the amendment of the Constitution is a substantive constituent act which, is made in the exercise of the sovereign power through a predesigned procedure unconnected with ordinary legislation. The amending power in article 368 is hence sui generis and cannot be compared to the law making power of Parliament pursuant to article 246 read with Lists II and Ill. It follows that the expression 'law ' in article 13(2) cannot be construed as including an amendment of the Constitution which is achieved by Parliament in exercise of its sovereign constituent power but must mean law made by Parliament in its legislative capacity under article 246 read 'with I List I and III of the 7th Schedule. It is also clear on the same line of reasoning that law in article 13(2) cannot be construed so as to include "law ' made by Parliament under articles 4, 169, 392, 5th Schedule Part 1 and 6th Schedule para 21. The amending power of Parliament exercised under these Articles stands on the same pedestal as the constitutional amend ment made under article 368 so far as article 13(2) is concerned. [930 H 931 E] (ii) The language of article 368 is perfectly general and empowers Parliament to amend the Constitution without any exception whatsoever. 776 The use of the word 'fundamental ' to describe the rights in Part III and the word 'guaranteed ' in article 32 cannot lift the fundamental rights above the Constitution itself [931 F, H] (iii) It is unreasonable to suggest that what article 368 provides is only the mechanics of the procedure for amendment and not the power to amend. The significant fact that a separate part has been devoted in the Constitution for "amendment of the constitution" and there is only one Article in that Part shows that both the power and the procedure to amend are enacted in article 368. Again the words "the Constitution shall stand amended in accordance with the terms of the Bill" in article 368 clearly contemplate and provide for the power to amend after the requisite procedure has been followed. [932 C E] (iv) The power of constitutional amendment cannot fall within articles 246 and 248 read with item 97 of List I because it is illogical and a contradiction in terms to say that the amending power can be exercised "subject to the provisions of the Constitution" as the power under these articles must be. [933 B] (v) There is no room for an implication in the construction ofArt. If the Constitution makers wanted certain basic features to be unamendable they would have said so. [933 G H] State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and In re The Berubari Union and Exchange of Enclaves , referred to. The concepts of liberty and equality are changing and dynamic and hence the notion of permanency or immutability cannot be attached to any of the fundamental rights. The adjustment between freedom and compulsion, between the rights of individuals and the social interest and welfare must necessarily be a matter for changing needs and conditions. The proper approach is therefore to look upon the fundamental rights of the individual as conditioned by social responsibility, by the necessities of the society, by the balancing of interests and not as pre ordained and untouchable private rights. [934 E 935 C] (vi) It must not be forgotten that neither the rights in article 31 nor those in article 19 are absolute. The purposes for which fundamental rights can be regulated which are specified in cls. (2) to (6) could not have been assumed by the Constitution makers to be static and incapable of expansion. It cannot be assumed that the Constitution makers intended to forge a political strait jacket for generations to come. Today at a time when absolutes are discredited, it must not be too readily assumed that there are basic features of the Constitution which shackle the amending power and which take precedence over the general welfare of nation and the need for agrarian and social reform. [936 B 937 C] (vii) In construing article 368 it is essential to remember the nature and subject matter of that Article and to interpret it subjectae materies. The power of amendment is in point of quality an adjunct of sovereignty. It is in truth the exercise of the highest sovereign power in the State. if the amending power is an adjunct of sovereignty it does not admit of any limitations. [937 D] (viii) If the fundamental rights are unamendable and if article 368 does not include any such power it follows that the amendment of, say, article 31 by insertions of articles 31A and 31B can only be made by a violent revolution. It is doubtful if the proceedings of a new Constituent Assembly that may be called will have any legal validity for if the 777 Constitution provides its own method of amendment, any other method will be unconstitutional and void. [490 A B] George section Hawke vs Harvey C. Smith, ; and Feigenspan vs Bodine, , referred to. (ix) It is not permissible in the first place to assume that in a matter of constitutional amendment there will be abuse of power and then utilise it as a test for finding out the scope of the amending power. In the last analysis political machinery and artificial limitations will not protect the people from themselves. [941 F G] State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and American Federation of Labour vs American Sash & Door Co. ; , referred to. (x) What the impugned Act purports to do is not to make any and legislation but to protect and validate the legislative measure passed by different State legislatures. This was within the legislative competence of Parliament. [942 F] Leser vs Garnett, ; , National Prohibition Cases. ; and United States vs Sprague, ; , referred to. Articles 226 and 245. were not directly affected by the impugned Act and therefore no ratification by the State Legislatures was necessary. [942 D H; 945 D] A. K. Gopalan vs State of Madras, ; , Ram Singh & Ors. vs State of Delhi & Anr. , ; , Express Newspapers (Pvt.) Ltd. vs Union of India, , Atiabari Tea Co. Ltd. vs State of Assam, ; and Naresh Shridhar Mirajkar vs State of Maharashtra ; , referred to. (xi) Even on the assumption that the impugned Act is unconstitutional the principle of stare decisis must be applied to the present case and the plea made by the petitioners for reconsideration of Sankari Prasad 's case and Sajjan Singh 's case must be rejected. [948 D E] On the landings it was not necessary to express an opinion on the doctrine of prospective overruling of legislation.

iminal Appeal No. 78 of 1959. Appeal by special leave from the judgment and order dated November 25, 1958, of the former Bombay High Court in Criminal Revision Application No. 1393 of 1958 arising out of the judgment and order dated September 18, 1958, of the Presidency Magistrate 11 Class, Mazagaon at Bombay in Case No. 1101/P of 1958. R. H. Dhebar, for the appellant. The respondent did not appear. October 18. The Judgment of the Court was delivered by 28 HIDAYATULLAH J. This is an appeal by the State of Bombay, with the special leave of this Court, against the order of acquittal by the High Court of Bombay of the respondent, Vishnu Ramchandra, who was prosecuted under section 142 of the Bombay Police Act and sentenced to six months ' rigorous im prisonment by the Presidency Magistrate, 2nd Court, Mazagaon, Bombay. On November 16, 1949, Vishnu Ramehandra was convicted under section 380 and 114 of the Indian Penal Code, and sentenced to one month 's rigorous imprisonment. On October 15, 1957, the Deputy 'Commissioner of Police, Bombay, acting under section 57(a) of the Bombay Police Act (22 of 1951), passed an order against Vishnu Ramchandra which was to operate for one year, externing him from the limits of Greater Bombay. At that time, a prosecution under section 411 of the Indian Penal Code was pending against Vishnu Ramchandra, and he was not immediately externed, to enable him to attend the case. This prosecution came to an end on July 10, 1958, and resulted in his acquittal. Immediately afterwards, a constable took him outside the limits of Greater Bombay, and left him there. The prosecution case was that he returned to Greater Bombay, and was arrested at Pydhonie on August 24, 1958. He was prosecuted under section 142 of the Bombay Police Act. His plea that he was forcibly brought back to Pydhonie and arrested was not accepted by the Presidency Magistrate, and he was convicted. He filed a revision application, which was heard by a learned single Judge of the High Court of Bombay. Three contentions were raised before the High Court. The first was that the Deputy Commissioner of Police had not applied his mind to the facts of the case before making the order of externment. The second was that section 57 of the Bombay Police Act was prospective, and could not be made applicable, unless the conviction on which the action of externment was based, took place after the coming into force of that Act. The third was that the belief entertained by the Deputy Commissioner that Vishnu Ramchandra was 29 likely to engage himself in the commission of an offence similar to that for which he was prosecuted was based on the prosecution which was then pending, and that that ground disappeared after his acquittal. The High Court did not consider the first and the third grounds, because it held that the second ground was good. Section 57 of the Bombay Police Act reads as follows: " Removal of persons convicted of certain offences If a person has been convicted (a) of an offence under Chapter XII, XVI or XVII of the Indian Penal Code (XLV of 1860), or (b) twice of an offence under section 9 or 23 of the Bombay Beggars Act, 1945 (Bom. XXIII of 1945,) or under the Bombay Prevention of Prostitution Act, 1923 (Bom. XI of 1923), or (c) thrice of an offence within a period of three years under section 4 or 12A of the Bombay Prevention of Gambling Act, 1887 (Bom. IV of 1887), or under the Bombay Prohibition Act, 1949 (Bom. XXV of 1949) the Commissioner, the District Magistrate or the Sub Divisional Magistrate specially empowered by the State Government in this behalf, if he has reason too believe that such person is likely again to engage himself in the commission of an offence similar to that for which he was convicted, may direct such person to remove himself outside the area within the local limits of his jurisdiction, by such route and within such time as the said officer may prescribe and not to enter or return to the area from which he was directed to remove himself ". In reaching his conclusion the learned single Judge observed that the legislature had used the present participle " has been " and not the past participle in the opening portion of the section, and that this indicated that the section was intended to be used only where a person was convicted subsequent to the coming into force of the Act. He further observed that being a penal section, it had to be interpreted prospectively. He repelled an argument of the Assistant 30 Government Pleader that section 57 merely re enacted the provisions of section 27 of the City of Bombay Police Act, 1902, and that a liability incurred under the older Act was preserved by section 167 of the Bombay Police Act of 1951. Observing further that the Deputy Commissioner of Police at the time of the passing of the order could not be said to have entertained a belief about the activities of Vishnu Ramchandra based upon his conviction in the year 1949, he held that the order of externment must be regarded as invalid for that reason and also on the ground that the conviction was not after the coming into force of the Act. At the hearing before us, the respondent was not represented. We have heard Mr. Dhebar in support of the appeal, and, in our opinion, the High Court was not right in the view it had taken of section 57 of the Act. The question whether an enactment is meant to operate prospectively or retrospectively has to be decided in accordance with well settled principles. The cardinal principle is that statutes must always be interpreted prospectively, unless the language of the statutes makes them retrospective, either expressly or by necessary implication. Penal statutes which create new offences are always prospective, but penal statutes which create disabilities, though ordinarily interpreted prospectively, are sometimes interpreted retrospectively when there is a clear intendment that they are to be applied to past events. The reason why penal statutes are so construed was stated by Erle, C. J., in Midland Rly. Co. vs Pye (1) in the following words: "Those whose duty it is to administer the law very properly guard against giving to an Act of Parliament a retrospective operation, unless the intention of the legislature that it should be so construed is expressed in clear, plain and unambiguous language; because it manifestly shocks one 's sense of justice that an act, legal at the time of doing it, should be made unlawful by some new enactment ". This principle has now been recognised by our Constitution and established as a Constitutional restriction on legislative power. (1) ; , 191. 31 There are, however, statutes which create Do new punishment, but authorise some action based on past conduct. To such statutes, if expressed in language showing retrospective operation, the principle is not applied. As Lord Coleridge, C. J., observed during the course of arguments in Rex vs Birthwhistle (1): " Scores of Acts are retrospective, and may without express words be taken to be retrospective, since they are passed to supply a cure to an existing evil." Indeed, in that case which arose under the Married Women (Maintenance in Case of Desertion) Act, 1886, the Act was held retrospective without express words. It was said: " It was intended to cure an existing evil and to afford to married women a remedy for desertion, whether such desertion took place before the passing of the Act or not." Another principle which also applies is that an Act designed to protect the public against acts of a harmful character may be construed retrospectively, if the language admits such an interpretation, even though it may equally have a prospective meaning. In Queen vs Vine (2), which dealt with the disqualification of persons selling spirits by retail if convicted of felony, the Act was applied retrospectively to persons who were convicted before the Act came into operation. Cock burn, C. J., observed: "If one could see some reason for thinking that the intention of this enactment was merely to aggravate the punishment for felony by imposing this disqualification in addition, I should feel the force of Mr. Poland 's argument, founded on the rule which has obtained in putting a construction upon statutes that when they are penal in their nature they are not to be construed retrospectively, if the language is capable of having a prospective effect given to it and ' is not necessarily retrospective. But here the object of the enactment is not to punish offenders, but to protect the public against public houses in which spirits are retailed being kept by persons of doubtful character . On looking at the Act, the words used seem (1) (1889) 58 L.J. (N.S.) M.C. 158. (2) 32 to import the intention to protect the public against persons convicted in the past as well as in future; the words are in effect equivalent to 'every convicted felon '. " In the same case, Archibald, J., expressed himself forcefully when he observed: " I quite agree, if it were simply a penal enactment, that we ought not to give it a retrospective operation ; but it is an enactment with regard to public and social order, and infliction of penalties is merely collateral. " Similarly, in Ex Parte Pratt (1), which dealt with the words " a debtor commits an act of bankruptcy " to enable the Court to make a receiving order, Cotton, L. J., gave the words a retrospective operation, observing: " I think that no reliance can be placed on the words I commits ' as showing that only acts of bankruptcy committed after the Act came into operation are intended. " In the same case, the observations of Bowen, L. J., were: " I think that the more the Act is studied the more it will be found that it is framed in a very peculiar way. I do not mean to say that it is inartistically framed. I think it is framed on the idea that a bankruptcy code is being constructed, and when the present tense is used, it is used, not in relation to time, but as the present tense of logic. " Fry, L. J., added : " I entirely agree with Bowen, L. J., as to the meaning of the present tense in the section ; it is used, I think, to express a hypothesis, without regard to time." In Bourke vs Nutt (2), Lord Esher, M. R., speaking of these observations of Bowen and Fry, LL. J., observed : " . the case seems to show that when the present tense is used in this statute (section 32 of the Bankruptcy Act, 1883) the time to be considered is the time at (1) (2) [1894] I Q.B. 725. 33 which the Court has to act, and not the time at which the condition of things on which it has to act came into existence. " Applying the above principles, Lord Esher, M. R., held that the section was not retrospective but prospective, because the important time was that at which it had to be considered whether the person was disqualified and it related to a time after the passing of the Act. He, however, added that " even if it could be said that it is retrospective its enactments are solely for the public benefit, and the rule that restricts the operation of a penal retrospective statute does not apply, because this statute is not penal." These principles, though not unanimously expressed, have been accepted in later cases both in England and in India. In Ganesan vs A. K. Joscelyne (1), Chakravarti, C. J., observed, Sarkar, J. (as he then was), concurring: " I may state, however, that in spite of the ordinary and I might almost say cardinal rule of construction that statutes, particularly statutes creating liabilities, ought not to be so construed as to given them a retrospective operation unless there is a clear provision to that effect or a necessary intendment implied in the provisions, there is another principle on which Courts have sometimes acted. It has been held that where the object of an Act is not to inflict punishment on anyone but to protect the public from undesirable persons, bearing the stigma of a conviction or misconduct on their character, the ordinary rule of construction need not be strictly applied. " In Taher Saifuddin vs Tyebbhai Moosaji (2), the same principles were applied by Chagla, C. J. and Bhagwati, J. (as he then was), and reference was made also to The Queen vs Inhabitants of St. Mary Whitechapel (3) where Lord Denman, C. J., in his judgment observed: " . it was said that the operation of the statute was confined to persons who had become widows after (1) A.1 R. ,38. (2) A.I.R. 1953 Bom. 183, z86, 187. (3) [1848) ; 12 Q.B. 120 (B): 34 the Act passed, and that the presumption against a retrospective statute being intended supported this construction; but we have before shown that the statute is in its direct operation prospective, as it relates to future removals only, and that it is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing." Now section 57 of the Bombay Police Act, 1951, does not create a new offence nor makes punishable that which was not an offence. It is designed to protect the public from the activities of undesirable persons who have been convicted of offences of a particular kind. The section only enables the authorities to take note of their convictions and to put them outside the area of their activities, so that the public may be protected against a repetition of such activities. As observed by Phillimore, J., in Rex vs Austin (1), "No man has such a vested right in his past crimes and their consequences as would entitle him to insist that in no future legislation shall any regard whatever be had to his previous history. " An offender who has been punished may be restrained in his acts and conduct by some legislation, which takes note of his antecedents; but so long as the action taken against him is after the Act comes into force, the statute cannot be said to be applied retrospectively. The Act in question was thus not applied retrospectively but prospectively. It remains only to consider if the language of the section bars an action based on past actions before the Act was passed. The verb "has been" is in the present perfect tense, and may mean either " shall have been " or " shall be ". Looking, however, to the scheme of the enactment as a whole and particularly the other portions of it, it is manifest that the former meaning is intended. The verb " has been " describes past actions, and, to borrow the language of Fry, L.J., in Ex Parte Pratt (2), " is used to express a hypothesis, without regard to time ". An externment order, however, to satisfy the (1) , 556. (2) [1884] 12 Q.B 334 35 requirements of section 57 of the Bombay Police Act, must be made bona fide, taking into account a conviction which is sufficiently proximate in time. Since no absolute rule can be laid down, each case must depend on its own facts. In the result, we set aside the acquittal, and remit the case to the High Court for disposal on the other points urged before it and in the light of observations made here by us. Appeal allowed.

On November 16, 1949, the respondent was convicted under sections 38o and II4 of the Indian Penal Code. On October 5, 1957, the Deputy Commissioner of Police, Bombay, acting under section 57(1) of the Bombay Police Act passed an order externing him from the limits of Greater Bombay. Later he was prosecuted and convicted under section 142 of the Bombay Police Act by the Presidency Magistrate for returning to the area from which he was externed. On an application for revision the High Court acquitted the respondent upholding his contention that section 57 of the Bombay Police Act was not retrospective and was not applicable unless the conviction on which the externment was based took place after the Act came into force. On appeal by the appellant with the special leave of this Court it was 27 Held, that though statutes must ordinarily be interpreted prospectively unless the language makes them retrospective, either expressly or by necessary implication, and penal statutes creating new offences are always prospective, penal statutes creating disabilities though ordinarily interpreted prospectively are sometimes interpreted retrospectively when the intention is not to punish but to protect the public from undesirable persons whose past conduct is made the basis of future action. Midland Ry. Co. vs Pye, IO C.B. (N.S.) 179, Rex vs Birth whistle, (1889) 58 L.J. (N.S.) M.C. 158, Queen vs Vine, [1875] IO Q.B. 195, Ex Parte Pratt, , Bourke vs Nutt, [1898] I Q.B. 725, Ganesan vs A.K. Joscelyne, A.I.R. 1957 Cal. 33, Taher Saifuddin vs Tyebbhai Moosaji, A.I.R. 1953 Bom. 183, The Queen vs Inhabitants of St. Mary Whitechapel, ; : ; and Rex vs Austin, , considered and applied. Section 57 of the Bombay Police Act did not create a new offence but was designed to protect the public from the activities of undesirable persons convicted of particular offences and enabled the authorities to take note of their activities in order to put them outside the areas of their activities for preventing any repetition of such activities in the future. The verb " has been " as used in section 57 meant " shall have been Legislation which takes note of a convicted offender 's antecedents for restraining him from his acts cannot be said to be applied retrospectively as long as the action taken against him is after the Act comes into force. The Act in question was thus not applied retrospectively but prospectively. An externment order must be bona fide and must relate to a conviction which is sufficiently proximate in time.

The respondents in Civil Appeal No. 708/78 Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed a civil suit No. 17,0 of 1964 against the Appellant tenant for recovery of possession and arrears of rent under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The suit was decreed. There was an appeal by the tenant. It resulted in a com promise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises. On April 29, 1969, in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr. ; , this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in regard to the "regulation of house accommodation in Cantonment Areas. " The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc. To get over the situation created by the said decision, on December 29, 1969, the Central Government issued a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957 extending the pro visions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other cantonment areas. In June 2, 1972, the Parliament also enacted Act 22 of 1972 amending the Cantonment (Extension of Rent Control laws) Act 1957, purporting to enable the Central Government to make the Rent Control Laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees. In the meanwhile, taking advantage of the decision in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr., the appellant tenant filed Miscellaneous Application No. 597/70 for a declaration that the decree obtained against him was a nullity and incapable of being executed. This application was allowed by the Court on November, 19, 1971. But, after the enactment of Act 22 of 1972, on January 11, 1973 the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour. The appellant tenant raised three objections, namely, (i) subsequent to the compromise decree there was a 225 fresh agreement of lease between the landlords and himself; (ii) the provisions of the amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967; ,(iii) in any case, the decision in Miscellaneous Application No. 597/70 holding the decree to be a nullity operated as res judicata between the parties. The first objection was left open by all the Courts for future adjudication, as the landlord denied the existence of any fresh agreement. The second and third objections alone were considered. In the judgment under appeal, the High Court overruled them and hence this appeal by special leave and two other similar appeals. Dismissing the appeals the Court, ^ HELD: 1. In Indu Bhushan Bose vs Rama Sundari and Anr., [1970 ] 1 S.C.R. 443, the Supreme Court agreed with the view of the Calcutta and Rajasthan High Courts and held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of the List II, but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. But even before this decision Parliament took the view of the Calcutta Rajasthan High, Courts as the correct view and proceeded to enact the Cantonment (Extension of Rent control Laws) Act, 1957, by section 3 of which the Central Government was enabled, by notification in the official Gazette to extend to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated. Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969. Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court regarding the applicability of the Bombay Act to such areas. In view of the Supreme Court decision in Indu Bhushan 's case, it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued. It was accordingly done on December 29, 1969. But it was realised that the entire problem was not thereby solved since all such notifications as the one issued on December 29, 1969 could only be prospective and could not save decrees which had already been passed. Therefore, Amending Act 22 of 1972 was enacted for the express purpose of saving decree which had already been passed. By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950. Original Section 3 was renumbered as subsection 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted." [229 B G & 230 C D] 2. Under section 3 of the unamended Act, 1957, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of notification. As a result of the introduction of sub section 2 of section 3 the notification can be given effect from an anterior date or a future late but it cannot be made effective from a date earlier than the commencement 226 of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957. Sub section 3 is merely consequential to sub section 2, in that it provides that a State Legislation when extended to a Cantonment area with effect from the date of the notification from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force. Sub section 4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled. One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regulation of house accommodation for the time being in force in the State in which such Cantonment is situated. In other words the decree or order must have been made by the wrong application of the State Legislation to the Cantonment area. If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area it shall be deemed, with enact from the date of the notification to have been properly made under the relevant provisions of the State Legislation. 1231 A H, 232 A BI 3. The applicability of sub section 4 cannot be confined to cases where notifications are issued with retrospective effect under sub section 2. Sub section 4 is not so confined. It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not. The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although. strictly speaking, it was not so in force. Subsection 4 is wide enough to save all decrees and orders made by the wrong application of State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to cantonment areas at the time of the passing of the decrees or order. The decree obtained by the respondent is saved by the pro visions of section 3, sub section 4 of the Cantonment (Extension of Rent Control Laws) Act 22 of 1957, as amended by Act 22 of 1972. [232 E F] 4. If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature. [234 A] In the present case, the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas. That defect having been re moved and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata. [234 B D] Mathura Prasad Bajoo Jaiswal and ors. vs Dessibai N. B. Jeejeebhoy, (@) 836: followed.

The respondent landlord filed a suit for ejectment in the year 1971 and obtained a decree for ejectment against the appellant tenant. By virtue of the provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, the case was transferred to the court of the Judge, Small Causes, who tried the case and passed a decree in favour of the respondent. No appeal or revision was filed against the said judgment. Thereafter, the decree holders filed an execution petition. The appellant, raised a jurisdictional objection on the basis of the judgment of the Allahabad High Court, (K.K. Saksena vs S.N. Misra to the effect that the transfer of the suit before conferment of the jurisdiction to the Judge, Small Causes Court was not competent and therefore, the decree was not executable. The respondent 's counsel contended that the suit would have to be tried all over again and the Court held that the decree was without jurisdiction. Tho decree remained inexecutable, but by virtue of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) (Amendment) Act, 1976 section 9 of the 1972 Act was made applicable with retrospective effect to remove The injustice and remedy the mischief which had been caused to the decree holders. As a result of the amendment, the aforesaid judgment of the Allahabad High Court stood over ruled and effaced. In view of the aforesaid amendment, the respondents filed an application before the Executing Court for revival of the suit and the decree, which was accepted by the Court, and a Civil Revision filed against the said order was dismissed by the High Court. 744 In the appeal to this Court, it was contended on behalf of the appellant, that in view of the Allahabad High Court decision and the 1972 Act, the decree stood set aside and could not be received or made executable even by the 1976 Amendment Act. Dismissing the appeal, ^ HELD: 1. The courts below have rightly decided that after the 1976 Amendment Act the decree became legally executable. [747A] 2. By virtue of the 1972 Act the decree could not have been set aside or invalidated and the only consequence which would ensue is that the decree would be lying dormant and could not be executed. Once the bar placed by the 1972 Act is removed, by virtue of the doctrine of eclipse the decree will revive and become at once operative and executable. [750H; 751A] 3 Even if the 1972 Act were to apply, the utmost consequence would be that the decree would remain inexecutable but could not be struck off from the records of the case. This is clear case where the doctrine of eclipse would apply, and in view of the 1976 Amendment Act, the decree will revive and become executable. This principle has been applied by this Court in several cases and flows from the well known doctrine of eclipse which has been enunciated not only in India but in other countries also. [747G H] Bhikaji Narain Dhakras & Ors. vs Stats of Madhya Pradesh & Anr; ; , Deep Chand vs State of U.P of Uttar Pradesh & Ors; [1963] 1 Supp. SCR 912, section Anbalagan vs B. Devarajan; , Kailash Sonkar vs Smt. Maya Devi; , referred to.

In an appeal preferred by respondent No. 1 against orders reverting him from the post of Section Officer to a lower post and dismissing him from service, the State Gov ernment found that he had not been afforded a reasonable opportunity to defend himself at the inquiry, and set aside the order of dismissal directing the State Public Service Commission to reinstate him in the lower post and hold a fresh inquiry. The Commission having declined to comply with the order of the State Government, respondent No. 1 filed a writ petition, and the High Court directed the Commission to comply with the said order. In this petition for special leave to appeal, the Com mission contended (1) that since it was a Constitutional Authority being not subordinate to the State Government, the latter could not have heard the appeal filed against its order passed in a disciplinary proceeding; and (2) that in any event, the appeal should have been disposed of by the Governor himself and not by the Governor in accordance with the advice of the State Government. Dismissing the petition, HELD: The Commission may be a constitutional authority not subordinate to any other authority. But the orders passed by the Commission in disciplinary proceedings held against the members of its staff are subject to the appeal to the State Government under r. 69 of the Civil Service (Classification, Control and Appeal) Rules, 1930, read with Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 as amended in 1978. There is 834 no ground for thinking that the independence ,of the Commis sion would be affected by the State Government exercising the appellate power in disciplinary matters as provided by Regulation 20. [837H; 838A B] Hargovind Pant vs Dr. Raghukul Tilak & Ors., ; , referred to. Rule 69 of the Civil Service (Classification, Control and Appeal) Rules, 1930 is to the effect that the .State Government may, of its own motion or otherwise, call for the record of any case decided by an authority subordinate to it in the exercise of any power conferred on such authority by these rules, and inter alia, confirm, modify or reverse the order passed by such authority, or direct that a further enquiry be held in the case. Rule 69 A sets out the proce dure to be followed in filing a petition under rule 69. Rules 69 and 69 A are substantially applicable to the mem bers of the staff of the Commission by virtue of Regulation 28 of the Uttar Pradesh Public Service Staff Regulations, 1942, even though the Commission may not be an authority subordinate to the State Government because while applying r. 69 to the staff of the Commission the rule should be read with the necessary modification by substituting in the place of the words 'an authority subordinate to it ' the words 'the Uttar Pradesh Public Service Commission '. In any event by virtue of the amendment made to Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 in 1978 appeals against the orders of the Commission passed in respect of the gazetted ministerial officers other than the Under Secretary and the Assistant Secretary lie to the Governor. Respondent No.1 being a gazetted officer holding the post of a Section Officer was entitled to prefer an appeal under Regulation 20 to the Governor. [837C G] 2. It is no doubt true that Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 provides that appeals against the orders of the Commission shall be made to the Governor. But while exercising his powers under that Regulation the Governor has to act on the advice given by the State Government by virtue of article 163(1) of the Constitution. The function of hearing an appeal against an order passed by the Commission in a disciplinary proceeding held against any member of its staff is an executive function and not one of those functions which the Governor is required to exercise in its discretion under any of the provisions of the Constitution. The Gover nor has, therefore, to act on the advice of the State Gov ernment. [838C F] 835 Shamsher Sing vs State of Punjab, ; , referred to.

The appellant was a protected lessee or tenant of the agricultural land in dispute, under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The respond ent became the landlady of the land on June 29, 1959 when her father effected a partition of his ancestral lands between himself, on the one hand, and his wife and his two minor daughters, including the respondent, on the other. This was the third partition effected by the respondent 's father, who had earlier also twice partitioned the same lands. Sometime in 1962, the respondent initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default. The Tehsildar dismissed the application holding that the respondent was not a landlady since the partition in question was illegal. The Deputy Collector in appeal confirmed this decision, and the Maha rashtra Revenue Tribunal rejected the respondent 's revision. In the Writ Petition filed before the High Court under Article 227 of the Constitution against the above decision of the three authorities below, the High Court remanded the matter to the Tehsildar for investigation into the validity of the partition. On remand, the Tehsildar held that the partition effected on June 29, 1959 was bogus. Thereafter, in a different proceeding the Maharashtra Revenue Tribunal had held that the said partition was bind ing. Therefore, in the appeal against the decision of the Tehsildar, the Deputy Collector following the said decision of the Revenue Tribunal, held the partition valid and al lowed the respondent 's application for eviction. The Revenue Tribunal, in revision, confirmed this order of the Deputy Collector. 67 The appellant preferred a writ petition before the High Court. It was, inter alia, contended before the High Court that: (1) the partition was contrary to the provisions of Hindu Law; and (2)even assuming that the partition deed of June 29, 1959 was a valid document, the same had to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of section 38(7) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The High Court however dis missed the petition holding that what was produced before the courts below was a family settlement. Allowing the appeal, this Court, HELD: (1) A partition of the property can only be among the parties who have a pre existing right to the property. Under the Hindu Law, a female, major or minor has no share in the ancestral property. A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparce nary property after the property is partitioned. There cannot, therefore, be a partition and hence a family settle ment with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter. [70C D] (2) The position that obtain under section 38(7) after the Amending Act of 1963, is that any transfer of land effected after 1st August 1953 whether by way of partition or otherwise, has no effect of conferring on the transferee a right to terminate the tenancy of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition. This amendment is admittedly retrospective in operation. [71G H; 72A] (3) The appellant was tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961. Hence he became a statutory owner under section 46 of the Act on and from April 1, 1961. Any proceedings for evicting him on the ground that he was a tenant and, there fore, had fallen in arrears of rent could not have, there fore, been adopted in 1962. [72C D]

The appellant was enrolled as a Constable in the BSF and was serving as such since 1966. He was confirmed in the said post. In 1971, he was granted leave from October :25, 1971 to October 30, 1971 on account of the death of his father. As the Shrad ceremony could not be performed within the aforesaid time, and he was suffering from serious illness he made an application requesting for extension of leave sup ported by a medical certificate. On December 12, 1971, the appellant received a communication from the Commandant stating that as he was absent without leave from October 31, 1971, that because of such absence without leave for a long period his further retention in service was undesirable, and that it was proposed to dismiss him from service. He was asked to submit his explanation against the imposition of this penalty. The appellant sent a telegram on December 21, 1971, but without any redress. On January 5, 1972 he re ceived an order of the Commandant informing him that he had been dismissed from service. On January 10, 1972, the appel lant again sent an application requesting that he may be permitted to join his service, but he was not allowed to do so. The appellant preferred an appeal to the Inspector General, BSF on February 1, 1972 but no relief was granted. The appellant after serving a notice under section 80 of the Code of Civil Procedure filed a civil suit for a decla ration that the order of dismissal from service was illegal and he was still in service. The respondent contested the suit and pleaded that the appellant was absent from duty from October 31, 1971 without any leave at a critical time when India was at war with Pakistan, and that the Commandant by his notice dated 15 December 1971 intimated: that his retention in service was undesirable because of his absence for a long period, that he was given an opportunity to urge his defence which he did not avail of by sending 272 any reply, and that the Commandant had therefore dismissed him from service by his order dated January 5, 1972. The Munsiff held that the appellant had been given a reasonable opportunity before the Commandant dismissed him from serv ice, and dismissed the civil suit. The appeal filed by the appellant was allowed by the Additional District Judge and the suit was decreed. It was held that the order of dismissal from service was illegal and bad, as the same was not made by the Security Force Court and no such court had been constituted. The Order passed by the Commandant under section 11(2) of the Border Security Force Act and read with rule 177 of the Rules could not therefore be upheld. It was further held that the order was bad as it was contrary to the constitutional mandate embodied in Article 311 of the Constitution, as no opportu nity of hearing was given, and the procedural safeguards contained in Chapters VII to XI of the Border Security Rules were not followed. The High Court decreed the second appeal preferred by the respondents, reversed the judgment and decree of the lower appellate court, and dismissed the suit. It was held that the order of dismissal of the appellant from service had been made in accordance with the powers conferred on the Commandant, BSF under the provisions of section 11(2) and (4) of the read with rule 177 of the Border Security Forces Rules, 1969. It was fur ther held that this was an independent power conferred upon the Commandant apart from the power conferred upon the Security Force Court under section 28 for imposition of the punishment for dismissal from service in respect of offences specified in section 19 of the Act. In the appellant 's appeal to this Court, it was contend ed that unless and until the offence of absence without leave or overstaying leave granted to a member of the serv ice, without sufficient cause is tried by the Security Force Court and punishment is awarded therefor as provided in sections 48 and 50 of the Act, the order of dismissal from service by the Commandant is illegal and as such it is liable to be quashed and set aside. Dismissing the appeal, it was, HELD: 1. The Prescribed Authority i.e. the Commandant is competent to exercise the power under section 11(2) of the BSF Act and to dismiss any person under his command as prescribed under Rule 177 of the BSF Rules. [281E F] 273 2. The has been enacted with a view to provide for the constitution and regulation of an armed force of the Union for ensuring the security of the borders of India and for matters connected therewith. The services of the enrolled persons under the Act are governed by the provisions of the Act as well as the Rules framed thereunder. [276D E] 3. All the offences mentioned under sections 14 and 19 of the Act are to be tried by the Security Force Court, which will punish the offenders with sentences as provided in the Act. A procedure has been provided by the BSF Rules for trial of the offences by the Security Force Court and for awarding of punishment. [279E; 280B] 4. The power under Section 11(2) empowering the Comman dant who is the Prescribed Authority to dismiss or remove from service any person under his command other than an officer or a subordinate officer read with rule 177 of the Rules is an independent power which can be validly exercised by the Commandant as a Prescribed Officer, and it has noth ing to do with the power of the Security Force Court for dealing with the offences, such as absence from duty without leave or overstaying leave granted to a member of the Force without sufficient cause and to award punishment for the same. [281B D] 5. Rule 6 of the Rules has specifically provided that in regard to matters not specifically provided in the Rules it shall be lawful for the Competent Authority to do such thing or take such action as may be just and proper in the circum stances of the case. [281F] In the instant case, though any procedure has not been prescribed by the Rules, still the Commandant duly gave an opportunity to the appellant to submit his explanation against the proposed punishment for dismissal from service for his absence from duty without any leave and overstaying leave without sufficient cause. The appellant did not avail of this opportunity and he did not file any show cause to the said notice. Thus the principle of natural justice was not violated as has been rightly held by the High Court. [281G H]

Respondent was arrested by a police constable on the ground that he was smelling of liquor. The doctor who examined him gave evidence at the trial that though the respondent had consumed alcoholic substance he was not under the influence of liquor. In cross examination the doctor stated that consumption of Neem would produce a blood concentration of 0. 146%. The respondent in examination under section 342 of the Code of Criminal Procedure stated that he had not consumed prohibited alcohol but that he had consumed six ounces of Neem. He was acquitted by the Magistrate. The appellant appealed to the High Court. The main ground of appeal was that the mere statement of the respondent that he had consumed 6 ozs. of Neem was not sufficient to rebut the presumption under sub section (2) of section 66 of the Bombay prohibition Act, 1949, as amended by the Bombay Prohibition (Extension and amendment) Act, 1959. The High Court dismissed the appeal in limine. Thereupon the appellant appealed to the Supreme Court by way of Special Leave on the same ground as was raised before the High Court. Held, that the statement of the accused recorded under section 342 of the Code of Criminal Procedure can be taken into consideration in judging the innocence or guilt of a person. If the explanation given by the accused in his statement is acceptable to the court it must be held that the accused has discharged the burden under section 66 (2) of the Bombay Prohibi tion Act. O. section D. Swamy vs State, 1, distinguished.

Held, per MAHAJAN, MUKHERJEA, DAs and CHANDRASEKHARA AIYAR, JJ. (PATANJALI SASTRI C.J. dissenting). Section 12 of the Bombay Public Safety Measures Act, 1947, in so far, at any rate, as it authorises the Government to direct particular "cases" to be tried by a Special Judge appointed under the Act does not purport to proceed on any classifica tion and therefore contravenes article 14 of the Constitution and is void under article 13 on the principles laid down in the cases of State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284) and Kathi Raning Rawat vs Tht State of Saurash tra ([1952] S.C.R. 435). The appellants who were accused of having committed murder and other serious offences were directed by the Government of Bombay by an order made on the 6th August, 1949, to be tried under the Bombay Public Safety Measures Act by a Special Judge appointed under the Act, charges were framed against them on the 13th January, 1950, and they were convicted in March, 1950. On appeal it was contended before the High Court that the trial and conviction were illegal as the Bombay Public Safety Measures Act was void under article 13 read with article 14of the Constitution which came into force on the 26th January, 1950, but the High Court held that as the proceedings against the accused had commenced before the Constitution, the provisions of articles 13 and 14 did not apply and the conviction was not illegal. Held,by a majority, that although substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable, it cannot be held that after that date, those rights or liabilities must be en forced under the particular procedure that was in force before that date, although it has since that date been repealed or come into conflict with the fundamental right to equal protection of the laws guaranteed by the 711 Constitution, as there is no vested right in procedure. The fact of reference of "cases" to the Special Judge before the Constitution came into force has no reasonable relation to the objects sought to be achieved by the Act, the discrimi nation therefore continued after the Constitution came into force and such continuation of the application of the dis criminatory procedure to the cases of the appellants after the date of the Constitution constituted a breach of the fundamental right guaranteed by article 14, and the appellants were therefore entitled to be tried under the ordinary procedure after the date of the Constitution. PATANJALI SASTRI C.J. (contra). Granting that section 12 of the Bombay Act must, in view of the decision in Anwar Ali Sarkar 's case, be held to be discriminatory and void in so far as it empowers the State Government to refer individual cases to a Special Judge for trial, the trial of the appel lants which had validly started before the Special Judge who had been empowered to try the case cannot be vitiated by the Constitution subsequently coming into force. The provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force. The jurisdiction of the Special Judges validly created and exercised before the Constitution and their competence to try the cases referred to them cannot be affected by the special procedure becoming discriminatory. The correct view is that article 14 does not affect pending trials even in matters of procedure. Moreover the appellants against whom proceedings had been commenced before the Special Judge, were not in the same situation as others and there was nothing discriminatory in a law which permits them to be tried under the special procedure which was applicable to them when the proceedings were started against them.

Appeal No. 252 of 1956. Appeal from the judgment and decree dated September 29, 1953, of the Rajasthan High Court (Jaipur Bench) in Civil Writ Application No. 28 of 1951. Gopal Singh and T. M. Sen, for the appellants. section N. Andley, J. B. Dadachanji and P. L. Vohra,for the respondent. January 19. The Judgment of the Court was delivered by SINHA, C. J. This appeal on a certificate granted by the Jaipur Bench of the High Court of Judicature for Rajasthan that " the case involves a substantial question of law as to the interpretation of articles 277, 278, 294 and 295 of the Constitution of India and the case is a fit one for appeal to the Supreme Court under article 132(1) and also under article 133(1)(c) of the Constitution of India" is directed against the judgment dated September 29, 1953, of the High Court of Judicature for Rajasthan at Jaipur to the effect that the appellant, the Union of India, was not entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, from the respondent, the Maharaja Krishnagarh Mills Ltd. The facts of this case, which have not been in dispute at any stage of the proceedings, may shortly be stated as follows. The respondent is a cloth mill located in Krishnagarh in District Jaipur in the State of Rajasthan. It had a stock of manufactured cloth on April 1, 1949, and also manufactured cloth during the period, April 1, 1949, and March 31,1950. In respect of such cloth an excise duty became payable under the Rajasthan Excise Duties Ordinance, 1949 (XXV of 1949), at rates set forth in the schedule to the Ordinance. The sum of Rs. 1,56,291 odd became payable on that account out of which only a sum of Rs. 19,739 odd was paid to the Government of Rajasthan, thus leaving the sum of Rs. 1,36,551 odd outstanding against the respondent. After the Indian Constitution came into effect the Central Excise and 526 Salt Act, 1944, and the rules framed thereunder were extended to the State of Rajasthan by section 11 of the Finance Act of 1950. Hence, the duty became payable in respect of the cloth manufactured on and from April 1, 1950, under the provisions of that Act. The appellant claimed that as a result of the agreement between the Government of India and the State of Rajasthan, to be noticed hereinafter in detail, and of the Constitution, the Union of India became entitled to realise the arrears of the excise duty in respect of the cloth manufactured by the respondent before April 1, 1950. In enforcement of that claim the Superintendent of Central Excise, Jaipur, served a notice dated February 16, 1951, on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 odd. The respondent thereupon filed a writ petition in the High Court of Rajasthan, Jaipur, under article 226 of the Constitution against (1) the Union of India, (2) the Central Board of Revenue, Delhi, (3) the Collector of Central Excise for Rajasthan, Delhi, and (4) the Superintendent of Central Excise, Jaipur, who are the appellants before us, praying for a writ of prohibition against them prohibiting them from imposing, levying or collecting any tax or duty by way of excise as also for any appropriate direction, order or writ. The writ petition was founded on the contentions that the notice of demand served upon the respondent as aforesaid was illegal and unauthorised on the ground (1) that the Central Government had no jurisdiction to levy any tax before January 26, 1950, (2) that the Central Excise and 'Salt Act was not in force in Rajasthan before April 1, 1950, and (3) that without the application of the rules framed by the Central Government under section 37 of the Central Excise and Salt Act, 1944, to Rajasthan no duty could be imposed, levied or collected and those rules were made applicable to Rajasthan only on December 16, 1950. On behalf of the appellants, who were the respondents in the High Court, it was contended that it was got correct to say that the rules framed under s, 37 527 of the Central Excise and Salt Act, 1944, were made applicable to the State of Rajasthan by virtue of the notification dated December 16, 1950, and it was asserted that those rules became applicable to the State of Rajasthan with effect from April 1, 1950, as a result of section 11 of the Finance Act, 1950. It was also contended that by virtue of section 3 of Rajasthan Excise Duties Ordinance (XXV of 1949) promulgated by His Highness the Rajpramukh of Rajasthan on September 5, 1949, excise duty was levied on cloth and other articles produced and manufactured in Rajasthan on and after April 1, 1949, at the rates set forth in the first schedule of the said Ordinance. It was also contended that in pursuance of articles 278 and 295 of the Constitution the President of India had entered into an agreement with the Rajpramukh of Rajasthan on February 25, 1950, whereby the parties agreed to accept the recommendations of the Indian States Finance Enquiry Committee, 1948 49, contained in part I of its report, read with chapters 1, 11 and III of part II of its report, in so far as they applied to the State of Rajasthan together with the recommendations contained in Chapter VIII of part 11 of the said report. By virtue of the said agreement the Union of India became entitled to claim and recover all excise duties, whether assessed or un assessed, which the State of Rajasthan was entitled to recover from the respondent as from April 1, 1949, before the Central Excise and Salt Act, 1944, was extended to the State of Rajasthan, as aforesaid. The matter was first heard by a Bench consisting of Ranawat and Sharma, JJ., which, in view of the importance of the points involved in the case, referred the following two points for decision by a larger Bench by its judgment dated November 5, 1951: " 1. Whether by virtue of Articles 278, 279 and 295 of the Constitution of India and the agreement entered into between the President of India and the Rajpramukh of Rajasthan on the 25th of February, 1950, the Union of India is entitled to levy and recover arrears of excise duty on cloth held in stock or manufactured before the 1st of April, 1950, 68 528 in case excise duty thereon was payable to the State of Rajasthan under the provisions of the Rajasthan Excise Duties Ordinance No. 25 of 1949 ? 2. Whether the publication of the Government notification by which the Jaipur Excise Rules were adopted under the provisions of the Rajasthan Excise Ordinance was sufficient publication within the meaning of section 28 of the Rajasthan Excise Duties Ordinance No. 25 of 1949, and whether the publication of the aforesaid notification should be deemed to have been properly authenticated by authentication of the publication of the Ordinance. If not, whether want of authentication would have the effect of invalidating the said Excise Rules ? " The case was then heard by a Full Bench consisting of Wanchoo, C.J., Ranawat and Dave, JJ. The judgment of the Court was delivered by the learned Chief Justice on November 24, 1952, in substance upholding the contentions raised on behalf of the petitioner before the High Court, now respondent. The High Court came to the conclusion that article 277 of the Constitution was a complete answer to the claim of the Government of India to collect the dues in question for any period anterior to April 1, 1950. This conclusion was based on the reasoning that the agreement aforesaid between the Government of India and the Government of Rajasthan was in effect overridden by article 277 and that the agreement contemplated by article 278 was in respect of a duty which was leviable by the Government of India. By virtue of article 277 of the Constitution cotton excise duty was actually leviable by the State of Rajasthan up to March 31, 1950, because Parliament made the contrary provision only from April 1, 1950. Therefore, it was further observed by the High Court that the effect of article 277 on Art 278 of the Constitution was that cotton excise duty could not be said to be leviable by the Government of India so far as the State of Rajasthan was concerned up to March 31, 1950. In view of that conclusion it was further held that the right to collect the arrears of excise duty in question could not be held to have been transferred to the Union of India 529 by virtue of the agreement aforesaid of February 25, 1950. The first question referred to the Full Bench was thus answered in favour of the petitioner in the High Court. The second question relating to the publication and authentication of the Excise Rules was also answered in favour of the petitioner, now respondent. The High Court held that the Hindi Gazette relied upon on behalf of the Government did not contain any authentication of the Rules and did not show by whose authority they had been published. This conclusion was based on the ground that the contention raised on behalf of the Government that the publication in the Gazette and the authentication therein did not only apply to the Ordinance but covered the Rules also, was not correct. The answers given by the Full Bench to the questions referred to it by the Division Bench were returned to the Bench concerned and the Bench, in pursuance of the opinion of the Full Bench, ordered by its judgment dated September 29, 1953, that "a direction be issued against the opposite party not to recover from the petitioner the amount of Rs. 1,36,551 12 as per their notice of demand of the 16th of February, 1950. The petitioner shall get costs of this petition from the respondents. " The Union of India applied for and obtained the necessary certificate, as quoted above, from the High Court of Rajasthan. That is how the matter is before this Court. It is manifest that if the opinion of the Full Bench on the second question referred to as to the publication and authentication of the Rules is correct, then no other question will arise for determination by this Court. It ' the Rules under the Rajasthan Excise Duties Ordinance, XXV of 1949, had not been properly promulgated and authenticated, then the Ordinance by itself could not be sufficient for the levy and collection of the tax sought to be imposed. It is, therefore, necessary for us first to determine that controversy. At the outset, it may be mentioned that the writ petition filed by the respondent in the High Court under article 226 of the Constitution did not allege any facts bearing on this part of the controversy. 530 Thus, there was no foundation laid in the pleadings for a contention that the Rules aforesaid had not been promulgated on a proper authentication. As already indicated, the petition was founded only on the lack of power in the Union Government to levy and collect the excise duty with reference to the provisions of the Central Excise and Salt Act of 1944 and the Rules framed thereunder. There is no reference to the provisions of Ordinance XXV of 1949 promulgated by the Rajasthan Government. It was only in the reply to the writ petition made by the respondent in the High Court that reliance was placed upon the said Ordinance and the Rules framed thereunder. We do not find any pleadings, or any petition by way of amendment of the pleadings, in the record of this case raising the contention that the Rules framed under the Ordinance aforesaid had not been promulgated on a proper authentication. The High Court, therefore, on the face of the pleadings, was not justified in permitting the petitioner before it to raise this contention, but our decision need not be rested on the lack of pleadings only. We have examined the Rajasthan Gazette, the Hindi version of which is entitled Rajasthan Raj Patra published by authority of the Rajasthan Government dated Margashirsa Krishna 7, Saturday, Samvat 2006, containing the notification dated Jaipur, September 15, 1949, the preamble of which states that Shriman Rajpramukh had made and promulgated the following Ordinance which was being published for the information of the public and it purports to have been authenticated by the Law Secretary, Sanyukta Rajasthan Sarkar. Under that authentication follows the Ordinance, XXV of 1949, dated September 5, 1949. The Ordinance goes to the end of page 169 and from the next page 170 ending with page 172 appear the Rules. They begin with the declaration which may be translated as follows: " In exercise of the powers conferred under sections 5 and 26 of the Rajasthan Excise Duties Ordinance of 1949 the Rajasthan Government orders that till new Rules are framed under the said Ordinance, the Rules framed under the Jaipur Excise Duties Act 531 of 1945 known as the Jaipur Excise Duty Rules of 1945 will be in force throughout the whole of Rajasthan with necessary modifications and for this purpose will be treated as made under the Rajasthan Ordinance. " It would thus appear that the authentication by the Law Secretary appearing on the first page of the Gazette as aforesaid was intended to govern not only the Ordinance in question but also the Rules which had been promulgated thereunder. Apparently, section 28 of the Ordinance which ran " All rules made and notifications issued under this Ordinance shall be made and issued by publication in the Rajasthan Gazette. All such rules and notifications shall thereupon have effect as if enacted in this Ordinance " was understood to authorise such a mode of promulgation and authentication. The authority that promulgated the rule having intended the signature of the Law Secretary appearing at the beginning of the publication as an authentication of the rules, we are of opinion that the formal requirements of section 8 (2) of the Ordinance V of 1949 were satisfied. Whether the authentication appears in the beginning of the notification or at the end of it is not material so long as it is clear on a reference to the publication in the Gazette that the matter is substantially covered by the authentication, whether appearing at the beginning or the end of the notification. The High Court, therefore, was in error in coming to the conclusion that the authentication covered the Ordinance proper without the Rules framed thereunder. The correct conclusion from the record as it stands is that the authentication covers the entire notification including both the Ordinance proper and the Rules framed thereunder which became parts of the Statute. In view of this conclusion it becomes necessary now to examine the ratio of the decision of the High Court on the first question referred to it, namely, the authority of the Union of India to realise the arrears of the duty in question. It is clear in view of our conclusion 532 that the Ordinance and the Rules framed thereunder have been properly promulgated in the Official Gazette, that the Government of Rajasthan was entitled to levy and collect the duty of excise in respect of. cotton cloth from the respondent. As a matter of fact, the respondent appears to have paid about Rs. 19,739 odd out of the duty payable by it to that Government. The remaining amount for which the notice of demand had been issued by the official of the Government of India was certainly payable to the Government of Rajasthan. We have, therefore, to consider whether the Government of India by any process of law stepped into the shoes of the Rajasthan Government in respect of the arrears aforesaid. In this connection reliance was placed on the agreement between the President of India and the Rajpramukh of Rajasthan dated February 25, 1950. The relevant provisions of the agreement are these: " Whereas provision is made by Articles 278, 291, 295 and 306 of the Constitution of India for certain matters to be governed by agreements between the Government of India and the Government of a State specified in Part B of the First Schedule to the Constitution. . Now, therefore, the President of India and the Rajpramukh of Rajasthan have entered into the following agreement, namely: The recommendations of the Indian States Finance Enquiry Committee, 1948 49 (hereafter referred to as the Committee) contained in Part I of its Report read with Chapters 1, 11 and III of Part 11 of its Report in so far as they apply to the State of Rajasthan (hereafter referred to as the State) together with the recommendations contained in Chapter VIII of Part 11 of the Report, are accepted by the Parties hereto, subject to the following modifications, namely. . The modifications are not material to this case. The agreement thus incorporates as terms of the agreement the report of the Committee, the relevant portion of which is in these terms: 533 " With effect from the prescribed date, the Centre will take over all 'federal ' sources of Revenue and all 'federal ' items of expenditure in State together with the administration of the Departments concerned. The Centre must also take over all current out standings (including pending assessments, refunds, and arrears), liabilities, claims, etc., and all productive and unproductive capital assets connected with these Departments. " It is common ground that "federal sources of revenue" include the duty of excise in question. It is also clear that all outstanding dues from assessees including pending assessments and arrears have been by the terms of the agreement made over to the Centre. This agreement, as the preamble itself indicates, has been made in accordance with the provisions of articles 278 and 295 of the Constitution. The relevant portions of article 278 are as under: " 278. (1) Notwithstanding anything in this Constitution, the Government of India may, subject to the provisions of clause (2), enter into an agreement with the Government of a State specified in Part B of the First Schedule with respect to (a) the levy and collection of any tax or duty leviable by the Government of India in such State and for the distribution of the proceeds thereof otherwise than in accordance with the provisions of this Chapter;. and, when an agreement is so entered into, the provisions of this Chapter shall in relation to such State have effect subject to the terms of such agreement. " It is noteworthy that the provisions of article 278 override pro tanto other provisions of the Constitution including article 277 and the terms of the agreement override the provisions of the Chapter, namely, Chapter I of Part XII. In this Chapter are contained articles 264 to 291. Thus, on a construction of the pro. visions of articles 277 and 278, it is clear that in the absence of any agreement between the Government of India and the Government of a State specified in Part B, duties of customs which immediately before 534 the commencement of the Constitution were being lawfully levied by the Government of such a State continue to be levied by that State until provision to the contrary is made by Parliament by law, notwithstanding that such a duty is mentioned in the Union List. Article 277, therefore, is in the nature of a saving provision permitting the States to levy a tax or a duty which, after the Constitution, could be levied only by the Centre. But article 277 must yield to any agreement made between the Government of India and the Government of a State in Part B in respect of such taxes or duties, etc. The pro. vision to the contrary contemplated by article 277 was made by the Finance Act, XXV of 1950, section 11, which extended the Central Excise and Salt Act, 1944, along with other Acts to the whole of India except the State of Jammu and Kashmir. But that section has effect only from April 1, 1950, and therefore does not apply to the arrears of duty of excise now in controversy. The agreement envisaged by article 278 was entered into as aforesaid on February 25, 1950. That agreement conceded to the Centre the right to levy and collect the arrears of the duty in question. The reasons given by the High Court for the conclusion that in spite of article 278 read with the agreement aforesaid, the Union Government was not entitled to realise the arrears are (1) that the agreement does not contain any specific provision about levy and collection of cotton excise duty in Rajasthan, (2) that the mere approval in the agreement of the principles set out in the report is not enough in view of article 277 which made a distinctly different provision from that contemplated in the report and (3) that the agreement could be only with respect to a duty which was leviable by the Government of India. In our opinion, none of these reasons aforesaid can stand in the way of the Union of India. Though the agreement does not in terms refer to levy and collection of cotton excise duty in Rajasthan, it is clear that the agreement has to be read with the relevant portions of the report quoted above. So read, there cannot be the least doubt that cotton excise duty in Rajasthan, as a " federal 535 source of revenue," is also covered by the agreement. Nor is it correct to say that the agreement read with the report is not enough to override the provisions of article 277. The agreement read with article 278, as already indicated, in terms, overrides the provisions of article 277. The only other reason which weighed with the High Court in getting over the terms of article 278 cannot also hold good. That a duty of the kind now in controversy on the date of the agreement after coming into force of the Constitution is leviable only by the Government of India even in respect of the State of Rajasthan is clear beyond all doubt. The Union List only, namely, entry 84 in the Seventh Schedule, authorises the levy and collection of the duty in question. Neither the State List, List II, nor the Concurrent List, List III, contains any such authorisation. It is true that article 277 has saved, for the time being, until Parliament made a provision to the contrary, the power of the State of Rajasthan to levy such a duty, but that is only a saving provision, in terms subject to the provisions of article 278. Thus, the combined operation of articles 277 and 278 read with the agreement vests the power of levy and collection of the duty in the Union of India. It is only in the absence of an agreement like the one we have in this case that the Rajasthan Government could continue to levy and collect the duty in question. The agreement between the two Governments completely displaced the operation of article 277 in regard inter alia to the levy of this duty so far as the State of Rajasthan is concerned. It is clear, therefore, that the High Court was in error in holding that Art,. 277 was any answer to the claim of the Government of India and should override the provisions of article 278 read with the agreement. On a proper construction of these provisions, in our opinion, the result is just to the contrary. In this view of the matter, it is not necessary to consider the other arguments advanced on behalf of the appellants, whether article 295 should prevail over article 277. For the reasons aforesaid, this appeal is allowed and the decision of the High Court set aside. The result 69 536 is that the writ petition filed by the respondent in the High Court stands dismissed with costs here and in the High Court. Appeal allowed.

The question for determination in the appeal was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise Duties Ordinance, 1949. After the coming into force of the Indian Constitution and the extension of the Central Excise and Salt Act, 1944, and the rules framed thereunder to the State of Rajasthan by section II of the Finance Act of 1950, the duty in respect of cloth manufactured on and from April 1, 1950, became payable under that Act. The appellant Union, however, claimed that as a result of the agreement entered into on February 25, 1950, by the President of India with the Rajpramukh of Rajasthan under article 278 and article 295 of the Constitution, the Union of India became entitled as from April 1, 1950, to claim and recover all arrears of excise duties which the State of Rajasthan was entitled to recover from the respondent before the Central Excise and Salt Act, 1944, was extended to Rajasthan. Notice having been accordingly served on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 12 as payable by it, it moved the High Court under article 226 of the Constitution. On a reference by the Division Bench which heard the matter in the first instance, the Full Bench finding in favour of the respondent held that article 277 was a complete refutation of the said claim by the Union and article 278 and the said agreement were overridden by it. Held, that the provisions of articles 277 and 278 of the Con stitution, properly construed, leave no manner of doubt that article 277 was in the nature of a saving provision, subject in terms to the provisions of article 278, permitting the States to levy a tax or duty which, after the Constitution could be levied only by the centre. But article 277 had to yield place to any agreement in respect of such taxes and duties made between the Union Government and the Government of a Part B State under article 278. Since there could not be the least doubt in the instant case that the agreement between the President and the Rajpramukh of Rajasthan conceded to the Union the right to levy and collect the arrears of the cotton excise duty in Rajasthan, the High Court was wrong in taking a contrary view of the matter.

The appellants who are merchants carrying on business as dealers in jute in Calcutta, submitted returns of turnover for purposes of sales tax due under the Assam Sales Tax Act, 1947, but as they did not comply with the requisition of the Superintendent of Taxes to produce their books, the latter made a "best judgment assessment" under section 17(4) of the Act. Their appeals to the Assistant Commissioner of Taxes and revision petitions to the Commissioner of Taxes, Assam were dismissed. The appellants then moved the High Court of Assam by petitions under article 226 and contended that Explanation to section 2(12) of the Act was ultra vires the Assam Legislature and that the tax could not be levied on sales irrespective of the place where the contracts were made. They also contended that the finding of the Commissioner that the goods were actually in the State of Assam at the time when the contract was made was based on mere speculation. The writ petitions were dismissed by the High Court and the appellants appealed to the Supreme Court with certificate under article 132(1) of the Constitution. Before the Supreme Court the appellants applied for leave under article 132(3) of the Constitution to challenge the correctness of the decision of the High Court that the goods were actually within the State of Assam when the contracts were made. Held:(i) Leave under article 132(3) be refused and the appeal must be restricted to the question of law as to the interpretation of the Constitution, certified by the High Court. If these questions were desired to be raised the appellants ought to have moved the Commissioner to refer the case to the High Court under section 32 of the Act. They could have moved the High Court if the Commissioner refused to refer the case to the High Court. The Act provided machinery for obtaining relief and the same had to be resorted to and could not be allowed to be by passed. Ordinarily, the High Court does not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. The High Court does not generally enter upon questions which demand an elaborate examination of evidence to establish the rights to enforce which the writ is claimed. The High Court does not in exercise of its jurisdiction under article 226 act as a court of appeal against the decision of a court or Tribunal correct errors of fact. 656 The scheme of the Assam Sales Tax Act is that all questions of fact are to be decided by the taxing authorities. The opinion of the High Court can be obtained on questions of law arising out of the decisions of the taxing authorities. The High Court has under the Act no power to decide questions of fact which are exclusively within the competence of the taxing authorities. (ii)Explanation to section 2(12) of the Act is not ultra vires the Legislature.

% The Deputy Assessor and Collector of the Assessment and Collection Department of the Municipal Corporation of Delhi, issued an order to the petitioners, demanding payment of Rs.14,07,328 as composite arrears of the property tax, fire tax, water tax, scavenging tax and education tax. The petitioners moved this Court under Article 32 of the Constitution for the issuance of a writ of certiorari, quashing the demand order. Disposing of the Writ Petition, without expressing any opinion on the merits of the case, and allowing liberty to the petitioners to file, if so advised, a writ petition before the High Court under Article 226 of the F. Constitution, the Court, ^ HELD: The scope of the powers of the High Courts under Article 226 of the Constitution is wider than the scope of the powers of this Court under Article 32 of the Constitution. The relief prayed for in the petition is one which may be granted by the High Court. Any party aggrieved by the decision of the High Court can appeal to this Court. That some case involving the same point of law is pending in this Court, is no ground for this Court to entertain a petition, by passing the High Court. If the parties get relief in the High Court, they need not come to this Court, and, to that extent, the burden on this Court is reduced. This Court has no time today even to dispose of cases which have to be decided by it alone. A large number of cases have been pending in this Court for ten to fifteen years. If no fresh cases are filed in this Court thereafter, this Court, with its present strength of Judges, may take more than 15 years to dispose of all the pending cases. If the cases, which can be filed in the High Courts, are filed there and not in this Court, the work of this Court in its original Jurisdiction, which is a time consuming process, can be avoided, and the time saved by this 733 Court by not entertaining the case which may be filed in the High Courts, can be utilized to dispose of the old matters, [734E H; 735A E] This Court will also have the benefit of the decisions of the High Courts when it deals with an appeal against such a decision. The High Courts have judges of eminence, who have initiative, skill and enthusiasm. Their capacity should be harnessed to deal with every type of cases, arising from their respective areas, which they are competent to dispose of. If the cases, which may be filed in the High Courts are filed in this Court, this will affect the initiative of the High Courts. The dignity, majesty and efficiency of the High Courts should be preserved. The taking over by this Court of the work which the High Courts can handle, may undermine the capacity and efficiency of the High Courts, which should be avoided. [735E F] The hearing of a case at the level of a High Court is also more convenient from several angles and will be cheaper to the parties. That saves a lot of time too. It is easier for the clients to give instructions to the lawyers. There are eminent lawyers practising in the High Courts, with wide experience in handling different kinds of cases. The lawyers there are fully aware of every legislation in their States. [734G]

The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act, 1950, was ultra vires, void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer, pending the hearing of the suit. More than a year thereafter, the State made an application under 0. 39, r. 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court. Before that application could, however, be heard, the State of Bihar, on May 19, 1952 issued a notification under section 3(1) of the Act, authenticated by the Additional Secretary to the Government, declaring that, amongst others, the respondent 's estate had vested in the State of Bihar under the provisions of the Act. Thereupon the respondent moved the trial Court for taking action against the State under 0. 39, r. 2(3) of the Code. The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court. The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant 's property to the value of Rs. 5,000 and the High Court on appeal affirmed that decision. Held, that the courts below took the correct view of the matter and that the appeal must be dismissed. The procedure laid down by 0. 39, r. 2(3) of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0. 39, r. 2(1) and is available against the State although the provision for detention may not apply to it. It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation. District Board of Bhagalpur vs Province of Bihar, A.I.R. 1954 729 Pat. 529 and Tarafatullah vs section N. Maitra, A.I.R. 1952 Cal. gig, distinguished. There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0. 39, r. 2(3). The word 'person ' used by it, properly construed, includes the defendant against whom the order of injunction is primarily issued as also the defendant 's agents, servants and workmen. Since the court 's power to issue an order of temporary injunction against the State under 0. 39, r. 2(1) cannot be in doubt, disobedience of such an order when issued necessarily attracts 0. 39, r. 2(3) of the Code. Director of Rationing & Distribution vs Corporation of Calcutta, ; , held inapplicable. Held, further, that when once an order is passed which the Court has jurisdiction to pass, it is the duty of the State no less than any private party to obey it so long as it stands, and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0. 39, r. 2(3) was made and persisted in till the end must be disapproved.

The appellant was a firm in Madhya Pradesh and was registered as a dealer ' under the Central Provinces and Berar Sales Tax Act, 1947 as amended by the Madhya Pradesh Sales Tax (Amendment) Act, 1953. During 1951 and 1955 the firm imported tobacco from the State of Bombay on the declaration that it would be used as raw material in the manufacture of goods for sale by actual delivery in Madhya Pradesh for consumption in that State. Tobacco was mentioned as one of the raw materials in the firm 's registration certificate issued under section 8 of the Act. However the goods manufactured by the firm were utilised for a different purposes i.e. for export outside the State. Under section 4(6) of the Act when goods were used for a different purpose other than the one declared and mentioned in the registration certificate the price paid by the dealer for such goods would be included in his taxable turnover. However in a writ petition before the High Court the appellant firm contended that the goods exempt as interstate sales were exempted from levy of sales ,,tax under section 27A of the Act which incorporated the bans in article 286 of ,the Constitution. The writ petition was allowed in September 1955. However in '1956 the Sales tax Validation Ordinance and thereafter the Sales Tax Laws Validation Act were passed. Accordingly the Sales Tax ,Authorities issued notices to the appellant firm proposing to levy purchase ,tax on the tobacco purchased by it from non resident dealers during the period November 7, 1953 to September 5, 1955. The appellant thereupon filed another writ petition before the High Court challenging the levy but it was dismissed. With certificate the appellant came to this "court. It was urged on behalf of the appellant that (i) before advantage could be taken of the Sales Tax Laws Validation Act. 1956 there had to be in existence a State Act imposing tax on inter State.sales and section 27A of the Act imposed no such tax, (ii) section 4(6) had no application because tobacco was not specified in the certificate of registration granted to the appellant as intended for use by it as raw material in the manufacture of any goods for sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State. " HELD : (i) Read with the third explanation to section 2(g)of the Act section 27 A had a positive and not merely a negative content. It gave power to the State of Madhya Pradesh, to impose a tax on a transaction falling 'Within its purview. It was therefore a pre existing law validated by the Sales Tax Laws Validation Act, 1956 and the appellant could be taxed under it in respect,of inter State sales only during the relevant period. [95 H; 96 G H] 89 M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh, ; , relied on. (ii)The declaration made by the appellant to the Bombay dealers was for the purpose of obtaining exemption from purchase tax. The same was the purpose of the mention of tobacco in the registration certificate under section 8. If the language of the certificate were construed in the context of the section 8. of the Act (as amended) and along with the declaration of the appellant, it was manifest that the appellant was liable to pay tax on tobacco imported from Bombay dealers and that the requirements of a. 4(6) were satisfied. The technical omission of the Sales Tax Officer to make a specific entry in the certificate would not confer any benefit on the appellant when there was other incontrovertible evidence to show that the appellant did purchase the goods specified in the certificate as raw materials in the manufacture of any goods for the purpose of sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State. [98 F H; 99 A] Modi Spinning & Weaving Mills Co. Ltd. vs Commissioner of Sales Tax, Punjab & Anr. 16 S.T.C. 310, relied on.

Jodhpur was a sovereign State till April 6, 1949. The said Jodhpur State merged with the other sovereign States to form the United State of Rajasthan on April 7, 1949. On April 7, 1949, Ordinance No. 1 of 1949 was promulgated which provided for the continuance of the laws of the covenenting States (which included the Jodhpur State) in the United State of Rajasthan, by virtue of section 3 which provided, inter alia, that all laws in force in the aforesaid cove nanting States immediately before the commencement of the Ordinance shall continue to be in force. On September 13, 1946, some two and a half years prior to the merger of the then State of Jodhpur with the United States of Rajasthan, the then Ruler of Jodhpur passed an order CB/7114 (exhibit 1) granting an annual allowance of Rs.30,000 per annum to each of the four Maharajkumars from the dates of their birth and for the period of their minori ty. The amounts claimed by the sons by filing our different suits in 1955 were decreed by the Trial Court. The appeals preferred by the State were allowed by the High Court hold ing that the order dated 13.9.49 granting the annual allow ance was not a 'law ' within the meaning of section 3 of the Ordinance. Hence the appeals by certificate granted under Article 133(1)(a) of the Constitution. Dismissing the appeal, the Court, HELD: 1.1 In substance the amount directed to be paid as per Order exhibit I was nothing else but "a gift" by the then Ruler to his.sons, unrelated to any legal rights of the said sons (appellants). It did not create any legal obligation enforceable against the State of Rajasthan inasmuch as the order in question was not a 'law ' obtaining in the then State of Jodhpur. And accordingly it cannot be held that the said order 210 continued to prevail as a 'law ' in the State of Rajasthan under the 1949 ordinance or any other law. The order cannot therefore be enforced against the State of Rajasthan treat ing it as a 'law ' creating a legally enforceable obligation. [216C D, H 217B] 1.2 Having regard to the language of the order itself, it appeared to be an executive order conferring a grant (or a gift) on the appellantsplaintiff. It did not have the characteristics of a legislative measure and did not consti tute a law inasmuch as it failed to pass the tests laid down by the Supreme Court. [215C D] State of Gujarat vs Vora Fiddali, ; = ; ; Narsingh Pratap Singh Deo vs Sate of Orissa, AIR = ; ; State of Madhya Pradesh vs Bhargavendra Singh, ; = ; ; and State of Madhya Pradesh vs Lal Rampal, AIR 1966 SC 821 = ; , referred to. 1.3 In so far as it relates to the period anterior to the passing of the order (stretching from 8 to 21 years) the order cannot be said to be an order passed in connection with his maintenance of the junior members of the Ruler 's family for they had already been maintained at the expense of the State exchequer as revealed by the evidence, includ ing the budget estimates. [217D] 1.4 "Jagir" has been associated with the grant in re spect of land revenue. In Thakur Amar Singhji 's case, the Supreme Court construed the term "jagir" in that sense only. Though the expression "Jagir" would also be applicable to maintenance grants in favour of persons who were not culti vators, such as the members of the Ruling family, the grant has been construed in relation to rights in respect of land revenue recoverable from the actual tillers by intermedi aries known as Jagirdars. Testing the grunt said to have been made under the order in question by the Ruler of Jodh pur in favour of the appellants, it cannot be said that it is a grunt of a 'Jagir ' in this sense, for, no question of alienation of land revenue in favour of the appellants is involved. All that the Ruler has done is to order that a particular amount of money be paid in respect of a specified period anterior to the date of the order at the specified rate. Further the order in question providing for payment of annual allowance for the past years during which the appel lants had already been maintained by the State exchequer lacks in the essential ingredients which would justify characterising the order as a rule or a regulation. To put it somewhat crudely, divesting of refinement, the 211 order merely directs payment of a specified sum to the appellants which payment has no nexus with any services rendered by them or any customary right enjoyed by them by virtue of their status as junior members of the family, but merely by reason of the fact that the appellants were the sons of the Ruler on whom the Ruler intended to confer cash benefit. [217F G, 218B D, 219H 220B] Thakur Amarsinghji vs State of Rajasthan, [1955] 2 SCR p. 303; and Madhaorao Phalke vs The State of Madhya Bharat, [1961] 1 SCR p. 957. distinguished.

The husband of the respondent died in October 1944. For the assessment year 1945 46, his estate was assessed to income tax on a total income of Rs. 22,160. In January 1946, the respondent encashed 584 high denomination notes of the value of Rs. 5,84,000. There were proceedings for re assessment of the total income of the assessee, wherein it was stated before the Income tax Officer, on behalf of the respondent, that during the previous 30 years, her husband was giving gifts to the respondent and was also setting apart money exclusively for her and their children and, that the fund so accumulated amounting to Rs. 5,84,000 remained in a cupboard and was found after his death, and therefore, the amount was not liable to tax as the income of her husband in the previous year. The Income tax Officer disbelieved her explanation and brought the amount of Rs. 5,84,000 to tax as tre income of the respondents ' husband from an undisclosed source in the year of account 1944 45. The order was con firmed by the Appellate Assistant Commissioner who also referred to the respondent 's declaration under the High Denomination Bank Notes (Demonetisation) Ordinance that the amount was made over by the de,ceased, some time before his death, to her for her benefit and that of her 8 minor sons. The Appellate Tribunal also upheld the order of the Income tax Officer. The respondent then filed an application under section 66 (1) to state a case to the High Court. In that application she asserted that 494 out of the 584 notes were received from a Bank in Calcutta in realisation of a cheque drawn for Rs. 4,94,000 in September 1945 by her eldest son. The Tribunal rejected the application. The High Court, under section 66(2) directed the Tribunal to state a case on the question6n: Whether the Tribunal erred in law by basing its decision on a part of the evidence ignoring the 'statement made as regards the withdrawal of Rs. 4,94,000 by 494 pieces of Rs. 1,000 notes from the bank. The Tribunal, while submitting the statement of case, pointed out that the statement in the petition under section 66(1) was materially different from that made before the Income tax Officer and that the Tribunal was not invited to consider, at the hearing of the appeal, the truth of that statement. The High Court, thereafter, heard the reference and decided in favour of the assessee, holding that: (1) the Tribunal ignored a part of the declaration made by the respondent that 494 high denomination notes were received from the bank in Calcutta in September 1945; (2) no opportunity was given by the Tribunal to the respondent to clear up the discrepancies in her statements made at the time of the disclosure of the high denomination notes and before the Income tax Officer; and (3) it was not open to the Court hearing a reference under section 66(2) to hold, contrary to the decision recorded at the time when the Tribunal was directed to state the case on a question, that the question did not arise out of the order of the Tribunal. 467 In appeal to this Court, HELD : (1) In the question which was directed to be referred it was assumed that the Tribunal had before it the statement about the receipt of 494 currency notes from the bank at Calcutta. But that evidence was not before the Tribunal. No such statement was made either before the Income tax Officer, or before the Appellate Assistant Commissioner or in the appeal before the Tribunal. The statement was made for the first time in the petition under section 66(1). Even in the application it was not suggested that the finding of the Tribunal was vitiated because some relevant evidence was ignored. The order of the Tribunal was not therefore open to the objection that the appeal before it was decided on a partial review of the evidence. [471 B, D F] (2) The plea of want of opportunity was not raised before the Tribunal, and therefore, the validity of the conclusion of the Tribunal on the evidence could not be assailed before the High Court on the ground that the departmental authorities had violated the basic rules of natural justice, without raising that question before the Tribunal. [472 H] (3) The High Court was in error in holding that at the hearing of a reference pursuant to an order calling upon the Tribunal to state a case, the High Court must proceed to answer the question without considering whether it arises out of the order of the Tribunal or whether it is a question of law, or whether it is academic, unnecessary or irrelevant especially when by an erroneous order the High Court directed the Tribunal to state a case on a question which did not arise out of the order of the Tribunal. [472 D E] Observations contra in Chainrup Sampatram vs Commissioner of Income tax, West Bengal, overruled. (4) When the Tribunal was not invited to state a case on a question of law alleged to arise out of its order, the High Court could not direct the Tribunal to state it on that question. [471 G H] Commissioner of Income tax vs Scindia Steam Navigation Co. Ltd., followed. (5) The irregularities in the judgment of the High Court could not be cured by reframing the question referred to the High Court and calling for a supplementary statement from the Tribunal The power to reframe a question may be exercised only to clarify some obscurity in the question referred or to pinpoint the real issue between the tax payer and the department or for similar other reasons. It cannot be exercised for reopening an enquiry on questions of fact, which was closed by the order of the Tribunal. Similarly, a supplementary statement could be ordered only on a question arising out of the order of the Tribunal if the court is satisfied that the original statement is not sufficient to enable it to determine the question raised thereby, and, when directed the supplementary statement may be only on such material and evidence as may already 1 on record, but not included in the statement initially made. [473 B D] Keshav Mills Ltd. vs Commissioner of Income tax, Bombay North, Ahmedabad, and Narain Swadeshi Weaving Mills Y. Commissioner of Excess Profits Tax, , referred to. (6) The Tribunal was not in error in failing to raise and state a case on the question whether the amount of Rs. 5,84,000 was taxable in the accounting year 1944 45. That question was considered by the Incometax Officer and by the Appellate Assistant Commissioner and the explana 468 tion of the respondent was rejected by them, and no argument was raised before the tribunal that the amount, though taxable, was not the income of the year of account 1944 45. Further, when the High Court did not direct the Tribunal to state a case on the question, it must be deemed to have, rejected the application to refer that question, and the order of rejection having become final, this Court cannot set it aside without an appeal by the respondent. [474 B, E, H; 475 A]

% The question which arose for determination in this case was whether a Letters Patent Appeal would lie to a Division Bench of the High Court of Gujarat from an interlocutory order of a Single Judge of that High Court in the course of the trial of an election petition filed under the Representation of the People Act, 1951. The appellant and respondents Nos. 1 to 6 were candidates at an election held to fill a seat in the Legislative Assembly of the Gujarat State. The appellant was declared elected. Thereupon, the 1st respondent filed an election petition in the High Court, challenging the validity of the election of the appellant on a number of allegations, and in order to establish his case, he filed an application before the Single Judge who was trying the election petition, to direct the Returning Officer to produce all the records of the election, mentioned in the application, and prayed for permission to inspect the same. The appellant opposed the prayers made by the 1st respondent. The Single Judge declined to grant the application made by the Ist respondent. Against the order of the Single Judge, the Ist respondent preferred an appeal under clause 15 of the Letters Patent of the Gujarat High Court. The Division Bench of the High Court allowed the appeal to the extent indicated in its judgment, overruling the contention of the appellant that the appeal was not maintainable as there was no provision in the Act, permitting an appeal to the Division Bench of the High Court against an interlocutory order of a Single Judge hearing an election petition filed under the Act. Aggrieved by the decision of the Division Bench, the appellant moved this Court for relief by special leave. Allowing the appeal, setting aside the judgment of the Division 1044 Bench of the High Court and dismissing the Letters Patent Appeal while expressing no opinion on the merits of the case, the Court, ^ HELD: The only point urged in this appeal by the appellant was that the appeal filed under clause 15 of the Letters Patent of the High Court against the interlocutory order passed by the Single Judge was not maintainable and, therefore, the judgment of the Division Bench was liable to be set aside. [1048C D] Under the provisions of the Act as amended and the provisions of the Constitution of India, no Court exercising power under any ordinary law other than the Judge of a High Court who had been assigned the work of trying an election petition under sub section (2) of section 80 A of the Act and the Supreme Court which was empowered to hear an appeal against any order passed by the judge of the High Court under section 98 or section 99 of the Act, could decide any question arising out of an election petition. The power of the Supreme Court under the provisions of the Constitution was, however, unaffected by any of the provisions of the Act. It meant that when an election petition was pending in the High Court, only the judge who was asked to try the election petition could deal with the questions arising in it and no other judge or judges of the High Court could deal with them. When an order was passed under section 98 or section 99 of the Act by a judge of the High Court in an election petition, it was subject to the appellate jurisdiction of the Supreme Court under section 116 A of the Act, Article 136 of the Constitution being excluded in view of the express provisions of section 116 A of the Act, and being resorted to by any party aggrieved by any order passed by the judge trying an election petition not falling under section 98 or section 99 of the Act. It followed that the Division Bench of the High Court, which was entitled to hear an appeal against any order of a Single Judge under clause 15 of the Letters Patent of the High Court, which was an ordinary law, could not hear an appeal against any interlocutory order passed in the course of the trial of an election petition by the Judge trying the election petition, since the Division Bench was not specified in the Act as an appellate authority which could deal with questions arising out of an election petition filed under the Act. [1053G H; 1054A D] Under clause 15 of the Letters Patent, an appeal no doubt lay from an order of a Single Judge of the High Court exercising Original Jurisdiction to the High Court itself irrespective of the fact that the judgment was preliminary or final or that it was one passed at an interlocutory stage, provided it satisfied certain conditions, but the said 1045 provision could not be extended to an election petition filed under the Act. Conferment of the power to try an election petition under the Act did not amount to enlargement of the existing jurisdiction of the High Court. The jurisdiction exercisable by the Single Judge under the Act was a special jurisdiction conferred on the High Court by virtue of Article 329(b) of the Constitution. In view of the limited nature of the appeal expressly provided in section 116 A of the Act, it should be held that any other right of appeal (excluding that under the Constitution) was taken away by necessary implication. Therefore, it was difficult to subscribe to the view that when once the jurisdiction to try an election petition was conferred on the High Court, all other powers incidental to the ordinary original jurisdiction exercised by a single Judge of a High Court would become applicable to an election petition under the Act. If the Parliament had intended that the Division Bench of the High Court should exercise its appellate jurisdiction under clause 15 of the Letters Patent of the High Court, probably, it would not have enacted sub section (7) of section 86 of the Act, having regard to the well known tendency of one or the other party to an election petition preferring appeals against the interlocutory orders to the Division Bench. If such appeals against the interlocutory orders to the High Court, were permitted, perhaps, no election dispute would be finally settled till the next election became due. As regards the jurisdiction to try an election petition and the right of appeal of the parties to an election petition, the provisions of the Act (apart from the provisions in the Constitution) constituted a complete code and no Judge or Judges other than the Single Judge of the High Court, who was asked to try an election petition, and the Supreme Court, exercising the appellate powers under section 116 A of the Act in respect of orders passed under section 98 or section 99 of the Act or under Article 136 of the Constitution in respect of other orders, could have any jurisdiction to deal with any matter arising out of an election petition filed under the Act. The Court disagreed with the view expressed on this question by the Gujarat High Court in Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta & Ors., (12 Gujarat Law Reporter 850), and overruled that decision of the High Court. The Court also overruled the decision of the Madras High Court in Kadiravan alias Shamsudeen vs B. Thirumalaikumar, ILR (1970) 2 Mad. 183 and the decision of the Madhya Pradesh High Court in Laxmi Narayan Nayak vs Ramratan Chaturvedi & Ors, AIR 1986 Madhya Pradesh 165 which had taken the same view as in Dr. Chotalal Jivabhai Patel 's Case (supra). The Court agreed with the view expressed by the Allahabad High Court in Siaram vs Nathuram & Ors., [1968] ALL. L.J. 576 and by the Rajasthan High Court in Ramdhar vs Shanwar Lal, AIR which held that by necessary 1046 implication an appeal to the High Court from an interlocutory order of the Single Judge of the High Court in the course of trial of an election petition filed under the Act, was excluded. [1054G H; 1055A H; 1056A H] The Division Bench of the High Court of Gujarat had no jurisdiction to hear the appeal filed by the Ist respondent against the interlocutory order passed by the Single Judge who was trying the election petition. Judgment of the Division Bench of the High Court set aside, Letters Patent Appeal dismissed. [1057B] Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta Shamsudeen vs B. Thirumalai Kumar, ILR ; and Laxmi Narayan Nayak vs Ramratan Chaturvedi and Ors., A.I.R. 1986 Madhya Pradesh 165, overruled. Siaram vs Nathuram and Ors., [1968] All. L.J. 576 and Ramdhan vs Bhanwarlal, A.I.R. approved. N.P. Ponnuswami vs Returning Officer, Namekkal Constitutency and others; , ; Shah Babulal Khimji vs Jayaban D. Kania & Anr., ; and National Telephone Company Ltd. vs Post Master General, [1913] A.C.546, referred to.

iminal Appeal No. 65 of 1958. Appeal by special leave from the judgment and order dated April 11, 1956, of the Calcutta High Court in Criminal Revision No. 1584 of 1955. N. C. Chatterjee, Arun Kumar Dutta and D. N. Mukherjee, for the appellant. K.B. Bagchi and S.N. Mukherjee, for the respondents. January 16. The Judgment of the Court was delivered by SINHA, C.J. This appeal by special leave is directed against the judgment and order of the High Court of Judicature at Calcutta, dated April 11, 1956, whereby the appellant 's claim of absolute privilege as a member of the Bengal Legislative Assembly was rejected and the prosecution launched against him under section 500, Indian Penal Code, was allowed to proceed. The facts of this case are not in doubt or dispute and may shortly be stated as follows. The appellant is a citizen of India and an elected member of the West Bengal Legislative Assembly. He is also a medical practitioner at Ghatal in the Midnapore District of West Bengal. In January, 1954, the appellant gave notice of his intention to ask certain questions in the Assembly. Those questions were disallowed in accordance with the rules of procedure for the conduct of business of the Assembly. In February, 1954, the appellant was informed that the questions proposed by him had been disallowed. The appellant published 488 the questions that had been disallowed in a local journal called Janamat, in its issue of February 28, 1955. In July, 1955, the first respondent, whose conduct formed the subject matter of the questions and who was then functioning as a Sub divisional Magistrate, filed a complaint against the appellant and two others, the editor, and the printer and publisher respectively of the journal aforesaid. The petition of complaint alleged that the appellant had made and published scandalous imputations against him intending them to be read by members of the public, that those imputations were false and unfounded and had been made with the definite intention of harming or with the knowledge or having reason to believe that they would harm the reputation of the complainant and that the complainant felt greatly aggrieved and harmed in mind and reputation. He also alleged that being a Government servant, the, complainant had to obtain the necessary permission from the Government for instituting legal proceedings for the vindication of his character as a public servant and that accounted for the delay in filing the petition of complaint. The petition of complaint charged the appellant with an offence under section 500 of the Indian Penal Code and the second and third accused, who have been cited as respondents 2 and 3 in this Court, under section 501 of the Indian Penal Code. After several adjournments, the petitioner raised, by way of preliminary objection to the .criminal prosecution, the question of his absolute privilege and immunity from prosecution under the provision of the Constitution. The learned Magistrate by his order dated October II,, 1955, overruled the objection and held that the privilege claimed by the accused was not an unqualified one. He relied on a judgment of the Calcutta High Court in the case of Dr. Suresh Chandra Banerjee vs Punit Goala (1) in support of his conclusion that the first accused before him, now appellant, was not entitled to the privilege and immunity claimed by him. Thereafter, the appellant moved the High Court under article 228 of the Constitution for having the case withdrawn to the (1) High Court for determination of the constitutional question raised by him by way of defence, but that, application was dismissed by a Bench of the High ' Court on November 9, 1955, presumably on the ground that the. case did not involve any substantial question of law as; to the interpretation of the Constitution. Not daunted by the adverse order aforesaid of the Bench of the High Court, the petitioner again moved the High Court and obtained a rule on several grounds including the question of the proceedings being barred by the provisions of article 194 of the Constitution. The learned Single Judge, who dealt with the case on this occasion, noticed the position that strictly speaking the constitutional question could not be allowed to be reagitated in view of the Bench decision aforesaid. But the learned Judge all the same dealt with the points raised by the appellant including the question arising under article 194 of the Cotistitution. The learned Judge dismissed the application holding that a member of the Legislative Assembly had no absolute privilege in respect of the questions sought to be asked by him, which had been disallowed but he had published them all the same. It was also pointed out that the questions had never been asked in the House and that, therefore, could not be said to form part of the proceedings of the House. He further held that the publication in the journal at the instance of the appellant could by no means be said to have been under the authority of the House. The appellant moved the learned Judge for a certificate under article 132(1) of the Constitution, but that application was also refused on the ground that the case did not involve any substantial question of law as respects the interpretation of the Constitution. The appellant then moved this Court and obtained special leave to appeal from the judgment of the High Court refusing the claim of privilege. He also obtained stay of fur. ther proceedings in the Court of the Magistrate. The hearing of the appeal was ordered to be expedited That order was passed on October 1, 1956, but notwithstanding the order of expedition, the case came to be heard only four years later, 490 In this Court, it has been contended on behalf of the appellant that the learned Judge below had erred in his interpretation of the provisions of article 194 of the Constitution and that on a proper construction ' of; those provisions it should have been held (1) that questions sought to be asked by a member of a Legislative Assembly, even though disallowed by the Speaker, formed part of the proceedings of the House, and, as such, their publication would not attract the provisions of the Indian Penal Code; (2) the provisions of article 194 should be liberally construed in favour of persons like elected members of the Assembly who are rendering public service not only by making speeches and asking questions in the Assembly, but also by publishing them in the public press with a view to apprising the country and, particularly the constituency of what had been happening in the House. In other words, it Was claimed that there was an absolute privilege in favour of a member and that, therefore, he could not be prosecuted for having published the questions he sought to put, but had been disallowed by the Speaker. Do the provisions of article 194 of the Constitution lend any support to the contentions aforesaid raised on behalf of the appellant? The first clause of article 194 does not call for any comment in, this case because no question as regards freedom of speech in the Legislature of a State has been raised. Clause (2) of the Article has, firstly, laid down a bar against any proceedings, civil or criminal against any" member of a Legislature of a State in respect of anything said or any vote given by him in the Legislature or any Com mittee thereof; and secondly, that no person shall be liable in a civil or criminal proceeding in respect of the publication of any report, paper, votes or proceedings under the authority of a House of such a Legislature. It is not contended that the publication complained against in this case was under the authority of the Legislative Assembly of West Bengal. So the second part of the second clause of; article 194 cannot be pressed in aid of the appellants contention. As regards the first part of the second clause, can it be said that the publication, which forms the subject matter of the 491 prosecution in,, this case, can come within the purview of ', anything said or any vote given " by a member of. the Legislative Assembly? The answer must be in the ' negative. It is, therefore, manifest that el. (2) of article 194 is equally of no assistance to the appellant. Naturally, therefore, reliance was placed in the course of arguments in this Court on the provisions of cl. (3) of article 194. Does the publication of a disallowed question by a member of an Assembly come within the powers, privileges and immunities of the members of the House ? The answer to this question depends upon finding out what are the powers, privileges. and immunities of the members of the House of Commons of the Parliament of the United Kingdom at the commencement of the Constitution. This Court in the case of M. section M. Sharma vs Shri Sri Krishna Sinha (1) has considered in great detail those immunities with respect to the publication of a portion of a speech which was directed by the Speaker to be expunged from the proceedings of the House. This Court has held that the publication of such a portion of the proceedings is not within the privilege attaching to the publication of a faithful report of the proceedings of a House of the State Legislature. That case was not concerned with the penal law of the country. In that case the Court was concerned with ascertaining the powers of the Assembly to punish for contempt of the House with reference to the privileges and immunities of a House of the Legislature of a State. Hence, that decision does not assist us in determining the present controversy. If we turn to the legal position in England with reference to the House of Commons, it is clear that the immunity of a member of the House of Commons is in respect of the speeches made by him in Parliament, but it does not extend to the publication of the debate outside Parliament. If a member of a House of Commons ' _publishes his speech made in the House separately from the rest of the proceedings in the House, he will be liable for defamation if his speech contains matters defamatory of any person. In the celebrated case of R. vs Lord Abingdon (2),,Lord Kenyon had decided that a speech which had been made in (1) [1959] Suppl. 1 S.C.R. 806, (2) ; 170 E.R.337, 492 the House of Lords was not privileged if published separately from the rest of the debate. In May Parliamentary Practice, 16th Edition, by Lord Campion, occur the following statements in respect of the two well known cases of Abingdon (1) and Creevey, Journal of the House of Commons (1912 13) 704: "Abingdon 's case, (1). An information was filed against Lord Abingdon for a libel. He had accused his attorney of improper professional conduct,, in a: speech delivered in the House of Lords, which he afterwards published in several newspapers at his own expense. Lord Abingdon pleaded his own case in the Court of King 's Bench, and contended that he had a right to print what he had, by the Law of Parliament, a right to speak; but Lord Kenyon said that a member of Parliament had certainly a, right to publish his speech, but that speech should not be made a vehicle of slander against any individual; if it was, it was a libel. The Court gave judgment that his lordship should be imprisoned for three months, pay a fine of pound 100, and find, security for his good behaviour. Creevey 's case (2), 1813. Creevey, a member of the House of Commons, had made a charge against an individual in the House, and incorrect reports of his speech having appeared in several newspapers, Mr. Creevey sent a correct report to the editor of a newspaper, with a request that he would publish it. Upon an information filed against him, the jury found the defendant guilty of libel, and the King 's Bench refused an application for a new, trial (See Lord Ellenborough 's judgment in Rex vs Creevey (2)). Mr. Creevey, who had been fined pound 100, complained to the House of the proceedings of the King 's Bench; but the House refused to admit that they were a breach of privilege. " It is clear on a reference to the law in England in respect of the privileges and immunities of the House of Commons that there is no absolute privilege attaching to the publication of extracts from proceedings in the House of Commons. So far as a member of the House of Commons is concerned, he has an absolute privilege (1) (1794) Esp. 226; M, &section 2 73; 493 in respect of what he has spoken within the four walls of the House, but there is only a qualified privilege in his favour even in respect of what he has himself said, in the House, if he causes the same to be published in the public press. The case of publication of proceedings of Parliament, not under the authority of the House, stands on the same footing as the publication of proceedings in courts of justice. That was made clear by Cockburn, C.J. in the case of Wason vs Walter (1). Explaining why the publication of a single speech in the proceedings in the House would not be absolutely privileged, the learned Chief Justice observed: " It is to be observed that the analogy between the case of reports of proceedings of courts of justice and those of proceedings in Parliament being complete, all the limitations placed on the one to prevent injustice to individuals will necessarily attach on the other; a garbled or partial report, or of detached parts of proceedings, published with intent to injure individuals, will equally be disentitled to protection. So long as Parliament does not crystallise the legal position by its own legislation, the privileges, powers and immunities of a House of a State Legislature or Parliament or of its members are the same as those of the House of Commons, as stated above. In the present case the appellant sought to put certain questions bearing upon the conduct of the complainant, the first respondent, in this case. According to r. 27 of the Assembly Procedural Rules, certain conditions have to be fulfilled in order that a question may be admissible. Amongst other requirements of the rule, one of the conditions is that it must not contain any imputation or imply a charge of a personal character. Rule 29 of those rules authorises the Speaker to decide on the admissibility of a question with reference to the provisions of the rules and lays down that the Speaker " shall disallow any question when, in his opinion, it is an abuse of the right of questioning, or is in contravention of those provisions. " In view of the conclusion we have already reached, namely, that there is no absolute privilege, even in favour of a member of the Legislature, in respect of a publication not of the entire 63 (1) , 94. proceedings, but of extracts from them, it is not necessary for us to decide the question whether disallowed questions can be said to form part of the proceedings of a House of Legislature. In this connection, it is also relevant to note that we are concerned in this case with a criminal prosecution for defamation. The law of defamation has been dealt with in sections 499 and 500 of the Indian Penal Code. Section 499 contains a number of exceptions. Those specified exceptions lay down what is not defamation. The fourth exception says that it is not defamation to publish a substantially true report of the proceedings of a court of justice, but does not make any such concession in respect of proceedings of a House of Legislature or Parliament. The question naturally arises how far the rule in Wason 's case (1) can be applied to criminal prosecutions in India, but as this aspect of the controversy was not canvassed at the Bar, we need not say anything about it, as it is not necessary for the decision of this case. The legal position is undisputed that unless the appellant can make out an absolute privilege, in his own favour, in respect of the publication which is the subject matter of the charge in this case, the prosecution against him cannot be quashed. As we have held, that he has no such absolute privilege, in agreement with the High Court, he must take his trial and enter upon his defence, such as he may have. As the evidence pro and con has not been recorded in full, the arguments at the Bar had naturally to be confined to the purely legal question of the absolute privilege claimed. It need hardly be added that we do not express any opinion on the merits of the controversy which will now be gone into by the learned Magistrate before whom the case has been pending all these years. For the reasons given above, it must be held that there is no merit in this appeal. It is accordingly dismissed. The pending prosecution, which has been held up for so long, it is expected,, will now be proceeded with without any avoidable delay. Appeal dismissed.

The appellant, who was an elected member of the West Bengal Legislative Assembly, gave notice of his intention to put certain questions in the Assembly and on those questions being disallowed by the Speaker published them in a journal called Janamat of Ghatal, his own constituency. The first respondent who was then the Sub Divisional Magistrate of Ghatal and whose conduct was the subject matter of some of those questions, filed a complaint against the appellant and two others, the editor and the printer and publisher of the janamat, under sections 500 and 501 of the Indian Penal Code. The appellant pleaded privilege and immunity under article 194 of the Constitution as a bar to criminal prosecution. The trial Magistrate as also the High Court found against him. On appeal by special leave it was claimed on his behalf that he had an absolute privilege under article 194 of the Constitution to publish the disallowed questions and could not be prosecuted therefor. Held, that the claim of immunity under article 194 of the Constitution must be negatived. Clause (1) of article 194 had no application since the matter was clearly outside the scope of that clause. Clause (2) of that Article was also inapplicable since it was not the case of the appellant that the publication was under the authority of the Legislative Assembly and it could not also be said that it came within the expression " anything said or any vote given " in that clause. The publication of a disallowed question by a member of the Assembly does not come within the powers, privileges and immunities enjoyed by a member of the House of Commons and, consequently, cl. (3) of article 194 also cannot be of any help to the appellant. The immunity enjoyed by a member of the House of Commons is clearly confined to speeches made in Parliament and does not extend to the publication of the debate outside. If he publishes his speech, made in the House, separately from the rest of the proceedings of the House, he is liable for defamation, in case.it is defamatory. Abingdon 's case, Espinasse 's Reports, Nisi Prius 1793 1810, 228 and Creevey 's case, I Maule and Selwyn 's Reports, King 's Bench, 1813 1817, 273, referred to. 487 There is no absolute privilege attaching to the publication of extracts from the proceedings in the House of Commons and a member, who has absolute privilege in respect of his speech in) the House itself, can claim only a qualified privilege in respect of it if he causes the same to be published in the public press. Quaere: Whether publication of parliamentary proceedings, not authorised by the House, stands on the same footing as the publication of proceedings in a court of law. Wason vs Walter, (1868 69) L.R. 4 Q.B. 73, referred to. M. section M. Sharma vs Sri Krishna Sinha, [1959] SUPP. 1 S.C.R. 806, distinguished. Dr. Suresh Chandra Banerjee vs Punit Goala, , referred to.

Pursuant to telegraphic information dated 5 August 1975 received from the Advocate General, Madhya Pradesh, communi cating the directions of the Jabalpur Bench of the, High Court of Madhya Pradesh dated 1 August 1975, for the produc tion of a detenu held under section 3(1)(a) of the MISA 1971 in the court on 8 August 1975; the appellant, a district Magistrate, instructed the Superintendent, Central Jail, Raipur, to send the detenu to Jabalpur under strong guard for his production before the High Court on 8 August 1975. The detenu was duly produced in court on 8 August 1975. While seeking a clarification from the Home Secretary, on the order passed by the State Government under section 268, Criminal Procedure Code, which was gazetted on 1 August 1975, as to whether the detenu, under the MISA is to be produced before the High Court in connection with the habeas corpus petition, the appellant also spoke to the Government advocate and the Advocate General about the notification. Since they desired the copy of the notification, the appel lant despatched a wireless message to Advocate General as follows "In the light of the above notification, he was requested to request the court not to insist on the production of VBT as there is strong. possibility of disturbance of public order if VBT is taken out from jail. Kindly inform the Government regarding the action taken. " A copy of the wireless message was endorsed to the respond ent by 'way of abundant caution. Viewing this as amounting to an expression by the appellant of his inability to obey the order of the. court on account of the notification issued by the State, Government published in the official gazette on 1 August 1975, the High Court, in exercise of the powers of the court under article 215 of the Constitution read with section 10 of the Contempt of Court Act (Act No. 70 of 1971) ordered the appellant to show cause why he should not be committed for contempt, for which the appellant submitted his reply in the form of an affidavit pleading for the discharge of rule nisi on the ground that no contempt of court was committed and that the wireless message to the Advocate General did not constitute a contempt of court. The High Court found the appellant guilty for contempt by holding that the appellant had sent the wireless message dated 6 August 1975 without waiting for the reply from the State Government regarding the clarification of its notifi cation, and convicted the appellant and sentenced him to. suffer imprisonment till the rising of the court under section 4 of the Contempt of Court Act 1971 and to pay a fine of Rs. 100/ . The High Court, however, accepted the apology of the appellant for the purpose of remitting the punishment under the proviso to section 12(1) of the Act and remitted the sentence and ordered the appellant to. pay the paper book costs and to bear his own costs. Hence the appeal under section 19(1)(b) of the Act. Accepting the appeal to this Court, HELD: The order of the High Court cannot be sustained in view of the tender of apology by the appellant as well as the production of the detenu.[102 D] All these features, namely, referring to the Home Secre tary for clarification of the notification dated 1 August 1975, sending a copy of the said notification 99 to the Advocate General, directing the Superintendent, Central Jail, to produce the detenu before the court and the detenu, in fact, having been produced before the High Court indicate that the appellant throughout acted in a careful and responsible manner and took all steps in good faith. [101 B CF] HELD FURTHER: In the instant case, the appellant from the. beginning gave directions for production of the detenu. wireless message was not addressed to the court, but to the Advocate General, only to apprise him of the notifica tion sent by the State Government so that a request may be made to the court not to insist on the production of the detenu in the interest of public order. The copy thereof to the Registrar is for information only. The absence. of reference to the. telephonic talk in the affidavit does net mean that no such talk in fact took place. The appellant tendered apology with grace and not as a coward. The appel lant at no stage interfered with any order of the High Court. The appellant never showed any disobedience. On the contrary, the appellant acted in obedience to the order of the High Court. [101 F, G H, 1012 A D]

The appellants were charged before the Presidency Magistrate for offences under the Madras Prohibition Act, 1937 and when the cases were taken up for trial they raised the contentions that SS. 4(2) and 28 to 32 of the Act are void under section 107(I) of the Government of India Act, 1935, because they are repugnant to the provisions of the , and the Code of Criminal Procedure, 1898, and also because they are repugnant to article 14 Of the Constitution of India. On their application, the Magistrate referred the questions for the opinion of the High Court under section 432 ' of the Code of Criminal Procedure. The High Court having answered the questions against the appellants they preferred the present appeal under article 136. Held, that the Madras Prohibition Act, 1937, is both in form and in substance a law relating to intoxicating liquors and that the presumptions in section 4(2) and the provisions relating to search, seizure and arrest in SS. 28 to 32 of the Act have no operation apart from offences created by the Act and are wholly ancillary to the exercise of the legislative power under Entry 31 in List II, Sch. 7 of the Government of India Act, 1935. Accordingly the Act is in its entirety a law within the exclusive competence of the Provincial Legislature and the question of repugnancy under section 107(1) of the Government of India Act, 1935, does not arise. When a law is impugned on the ground that it is ultra vires the powers of the legislature which enacted it, what has to be ascertained is the true character of the legislation. To do that, one must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the legislature, then it must be held to be valid in its entirety, even though it might incidentally trench on matters which are beyond its competence. It would be quite an erroneous approach to the question to view such a statute not as an organic whole, but as a mere collection of sections, then disintegrate it into parts, examine under what heads of legislation those parts 52 400 would severally fall, and by that process determine what portions thereof are intra vires, and what are not. Subrahmanyan Chettiar vs Muthuswami Goundain, (1940) F.C.R. 188, Pyafulla Kumar Mukherjee vs The Bank of Commerce Ltd. (1940) L.R. 74 I.A. 23 and Lakhi Narayan Das vs The Province of Bihar , relied on. Held further, that the presumptions in section 4(2) Of the Act do not off end the requirements as to equality before law or the equal protection of laws under article 14, as they have to be raised against all persons against whom the facts mentioned therein are established. Even assuming that the law in America that a presumption of guilt would offend the requirement of the equal protection of laws unless there is a rational connection between the act proved and the ultimate fact presumed, could have application to the Indian Constitution, on a proper reading of the sections there is a reasonable relation between the presumption raised in section 4(2) and the offences under section 4(1). William N. McFarland vs American Sugar Refining Company, ; 24I U.S. 79; , Albert 1. Adams vs People of the State of New York, ; and Robert Hawes vs State of Georiya, 258 U.S. I ; , referred to.

Civil Appeal No. 563 of 1975 filed in the Court was directed against the Judgment of the High Court in an Income tax Reference. The respondent (assessee) was a registered co operative Society, carrying on business of manufacture and sale of sugar. The respondent had established a fund called "Loss Equalisation and Capital Redemption Reserve Fund" to which it added, during the relevant accounting year, a sum of Rs.5,15,863 by deduction from the price payable by the respondent to its members for the supply of sugarcane received from the members. The deductions were made under bye law 50 of the Byelaws of the society, which was amended later. The Income tax Officer in assessing the respondent for the relevant assessment year held that the sum above mentioned represented a revenue receipt and was liable to be included in the taxable income of the assessee. On appeal, the Assistant Commissioner affirmed the view of the Income tax Officer, holding that the case had to be decided on the basis of the bye law as it stood during the relevant accounting year. The respondent assessee appealed to the Income tax Appellate Tribunal, which held that the amended bye law was operative even during the relevant previous year in view of the retrospective amendment thereof and that in view of the said amended bye law 50 the deposits made by the members by way of deductions from the price as contemplated in the bye law 50 were in the nature of permanent liabilities and hence they were capital receipts and not liable to be included in the taxable income of the assessee. The Tribunal directed that the said amount of Rs. 5,15,863 be deducted 1035 from the taxable income of the assessee. At the instance of the appellant, a reference was made to the High Court for the determination of the question whether the Income tax Appellate Tribunal was right in holding that the amount of Rs.5,15,863 was not a revenue receipt liable to tax. The High Court answered the question in the affirmative and in favour of the assessee. The Commissioner of Income tax moved this Court by this appeal against the decision of the High Court. The appellant contended that the amendment of the bye law 50, which was purported to be made with retrospective effect, could have no retrospective effect in law. There was no delegation of power to the respondent society to make bye laws with retrospective effect. Allowing the appeal, the Court, ^ HELD:The respondent society had no authority in law to amend its bye law 50 with retrospective effect. The amendment of bye law 50 could not have any retrospective effect and the amounts deducted from the amounts payable to members for the supply of sugarcane, would have to be dealt with as if they were deducted under the provisions of bye law 50 as it stood in the relevant accounting period. If the provisions of the unamended bye law were applied, it was clear that the amounts deducted by the respondent from the price payable to its members on account of supply of sugarcane were deducted in the course of the trading operations of the respondent and these deductions were a part of its trading operations. The receipts by way of these deductions must be regarded as revenue receipts and were liable to be included in the taxable income of the respondent. Those receipts could not be regarded as deposits. The receipts constituted by the deductions were really trading receipts of the assessee society and were liable to be included in its taxable income. The High Court was in error and the question referred must be answered in favour of the revenue. [1042A, G H;1044D E] Civil Appeal No. 564 of 1975 was filed against the judgment of the High Court in an income tax reference in which the question referred for determination was whether a sum credited during the year of account to the loss equalisation and capital redemption reserve fund by deposits received from producer members of the society under clause 50 of its bye laws was in the nature of a revenue receipt assessable to tax. Allowing the appeal, the Court, 1036 HELD:In view of its decision in Civil Appeal No. 563 of 1975, the Court answered the question referred in the affirmative and in favour of the revenue. [1045A] Income tax Officer, Alleppey vs M.C. Poonnoose and Ors., ; ; Hukam Chand etc. vs Union of India & others; , ; Co operative Central Bank Ltd. & Ors. vs Additional Industrial Tribunal, Andhra Pradesh & Ors., ; Dr. Indramani Pyarelal Gupta vs W.R. Nathu and others; , ; Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal, and Punjab Distilling Industries Ltd. vs Commissioner of Income tax Simla, , referred to.

The appellant accepted a sum of Rs. 10,000 from a con tractor. He was chalanned before a Magistrate at Dhanbad; but on an application by the appellant the High Court trans ferred the case to the Munsif Magistrate, Patna. Subsequently, the Criminal Law Amendment Act, 1952, came into force which made every offence under section 161 Indian Penal Code and section 5(2) Prevention of Corruption Act triable only by a Special judge for the area within which it was committed. The case of the appellant was forwarded to the Special judge at Patna who convicted him both under section 161 and section 5(2). The appellant contended: (1) that the Special judge at Patna had no jurisdiction to try the appellant as the offence was committed within the area of the Special judge at Dhanbad and (2) that the provisions regarding the presumption contained in section 4 of the Prevention of Corruption Act, 1947, offended article 21 of the Constitution. Held, that the order of conviction could not be quashed on the ground that the Special judge at Patna had no territorial jurisdiction to try the case as no failure of justice had been occasioned. Section 531 Code of Criminal Procedure was applicable to trials by Special judges. The High Court had also the power under section 526 of the Code to transfer a case from one Special judge to another, and the omission of a formal order transferring the case to the Special Judge at Patna had not prejudiced the appellant. Held, further that the procedure laid down by section 4 of the Prevention of Corruption Act, which was enacted by Parlia ment, laid down a procedure established by law. The question that section 4 offended article 21 of the Constitution was not a substantial question as to the interpretation of the Constitution within the meaning of article 145(3) and it was not necessary to refer it to a Bench of five judges. A. K. Gopalan vs The State of Madras, ; , followed.

The petitioner, the Editor of the Searchlight, an English daily newspaper published from Patna, was called upon to show cause before the Committee of Privileges of the Bihar Legislative Assembly why he should not be proceeded against for the breach of privilege of the Speaker and the Assembly for publishing an inaccurate account of the proceedings of the Legislative Assembly. He moved this Court under article 32 of the Constitution for quashing the said proceeding and the question for decision in substance was whether the said privilege conferred by article 194(3) of the Constitution was subject to the fundamental 97 rights of a citizen under article 19(1)(a) of the Constitution. This Court by a majority found against the petitioner. Thereafter the Assembly was prorogued several times, the Committee of Privileges reconstituted and a fresh notice was issued to the petitioner. By the present petition the petitioner in substance sought to reopen the decision, raise the same controversy once again and contend that the majority decision was wrong. The question was whether he could be allowed to do so. Held, that the general principles of res judicata applied and the judgment of this Court could not be allowed to be reopened and must bind the petitioner and the Legislative Assembly of Bihar and the reconstitution of the Committee of Privileges in the meantime could make no difference. Raj Lakshmi Dasi vs Banamali Sen, ; , applied. Since this Court had held that the Legislature bad the power to control the publication of its proceedings and punish any breach of its privilege, there could be no doubt that it had complete jurisdiction to carry on its proceedings in accordance with its rules of business and a mere non compliance with rules of procedure could be no ground for interference by this Court under article 32 of the Constitution. Janardan Reddy vs The State of Hyderabad, ; , referred to. Prorogation of the Assembly does not mean its dissolution and the only effect it has is to interrupt its proceedings which can be revived on a fresh motion to carry on or renew them. It was, therefore, not correct to contend that since the Assembly was prorogued several times since after the alleged breach of privilege, the proceeding must be deemed to be dead.

The appellant was an erstwhile member of the Indian Administrative Service in the cadre of the State of orissa. At the relevant time in the year 1967, he was serving as Commissioner of Land Reforms, orissa. According to the appellant he had disputes, differences and animosity with respondent No. 1, the Chief Secretary to the Government of orissa and respondent No. 2 who was at the relevant time Director of Vigilance and Additional Secretary to the Government of orissa. The First Information Report was lodged against the appellant under section S(2) of the Prevention of Corruption Act, 1947, on 24 11 1967. The appellant 's house was searched on 27 11 1967. An order of suspension was made against the appellant by the Government of orissa on 28 11 1967 under rule 7(3) of the All India Services (Discipline and Appeal) Rules, 1955. The Writ Petition filed by the appellant against his order of suspension and investigation was dismissed by the High Court in limine. This Court allowed an appeal filed by special leave by the appellant against the High Court judgment and directed the High Court to admit and dispose of the petition in accordance with law. The State Government approached the Central Government to accord sanction for prosecution of the appellant. In spite of reminders, the Central Government neither accorded the sanction nor refused it. Appellant was compulsorily retired by the Government in 1971. Thereafter, charge sheet was submitted against him in the Court of the Special Judge, Sambalpur. The trial concluded but because of the stay order passed by this Court judgment could not be delivered. Against the order of the compulsory retirement, the appellant filed a writ petition in the Delhi High Court which was dismissed by a learned single Judge and against which a Letters Patent appeal is pending. The orissa High Court dismissed the writ petition of the appellant on the ground of it having become infructuous since the appellant was no longer in suspension since he was compulsorily retired. The High Court also did not think it necessary to examine the legality of the investigation against the appellant as chargesheet had already been submitted. In an appeal by special leave the appellant contended: The suspension order may be quashed on the following grounds: (1) It was passed without following the various Governmental instructions on the point. (2) The order was in violation of rule 7(3). (3) The order was malafide. ^ HELD: (1) It is true that all the instructions contained in the circulars issued by the Central Government do not seem to have been strictly followed. That would, however, not invalidate or nullify the order of suspension made under rule 7(3). In dealing with the cases of high officers of the Administrative Service care ought to have been taken to follow the instructions as far as possible. On the facts of the present case. however. failure to follow the instructions fully, does not render the order of suspension per se invalid. [353GH] (2) Under rule 7(3) a member of the Service in respect of or against whom an investigation, enquiry or trial relating to a criminal charge is ponding, may at the discretion of the Government be Placed under suspension. The 351 expression investigation, enquiry and trial are well known in the realm of the A criminal law under the Criminal Procedure Code. In the present case, the First Information Report was lodged and the search warrants were issued before the suspension orders were passed. Most of the allegations against the appellant were in relation to his alleged acts of corruption and misuse of his official position. Whether the allegations are true or false is irrelevant. Order under rule 7(3) was, therefore, legal and valid. [354A E] (3) The suspension order came to an end by the compulsory retirement of the appellant. After retirement from service he could no longer be deemed to be under suspension. Since we are remitting the case back to the High Court we permit the appellant to raise the question of his salary and emoluments during the suspension period to be raised in the High Court. The counsel for the appellant, however, assured this Court that if the appellant would be exonerated of the charges levelled against him and acquitted in the criminal proceedings the State Government would pay him his full pay and allowances for the period of suspension. [354G H, 355B C] (4) We do not think it advisable to decide the point of malafide in the absence of the judgment in the criminal cases. Since the two matters are so interwoven and interconnected that it would be expedient for the High Court to decide this issue after the judgment is delivered in the criminal trial. [3 55D E]

The appellant filed a suit on the Original Side of the Calcutta High Court against the respondent for the recovery of a certain amount representing the price of coal supplied to the respondent. The appellant 's case was that if the contract under which the coal was supplied was illegal by, reason of it being in contravention of section 175 (3) of the Government of India Act, 1935, the respondent was liable to pay compensation under section 70 of the Indian Contract Act, since the Coal was not supplied gratuitously and the respondent had enjoyed the benefit thereof. The respondent 's case was that the contract was illegal and section 70 of the Indian Contract Act was not attracted. It was further alleged that the respondent had issued and sent bills to cover the amount and intimation cards in accordance with the usual practice and ordinary course of dealings. The respondent, it was allowed paid the amount by a cheque to a person authorised by the appellant and on presentation of proper receipts. It was therefore alternatively pleaded that the appellant 's claim having been satisfied, he had no cause of action. It was established in the course of the trial that the appellant had not in fact authorised any person to issue the receipts but a certain person not connected with the appellant 860 firm, without the consent or knowledge of the appellant got hold of the intimation cards and bills addressed to the appellant forged the documents and fraudulently received the cheque from the respondent and appropriated the amount for himself. The respondent had not pleaded in its written statement that it was due to the negligence of the appellant that the third person was able to get hold of the intimation card and perpetrate the fraud. Neither was it proved in the case that the appellant was in fact negligent. The Trial Judge found that the respondent was bound to pay compensation under section 70 of the Indian Contract Act and rejected the alleged payment of the bills and in the result decreed the amount prayed for by the appellant. The respondent thereupon appealed to a Division Bench. Both the judges agreed that the appeal should be allowed. Regarding the invalidity of the agreement and the inapplicability of section 70 of the Contract Act both the Judges agreed in favour of the present respondent. But while one of the Judges was not prepared to consider the plea of negligence which was raised by the present respondent for the first time in the appeal the other judge held that there was negligence on the part of the present appellant. The present appeal was filed on a certificate granted by the High Court. In this Court, apart from the questions of the invalidity of the contract under section 175 (3) of the Government of India Act and the applicability of s: 70 of the Contract Act, it was argued on behalf of the appellant that a plea of negligence should have been raised by the respondent in its pleadings and that the appellate court was in error in allowing such a plea to be raised for the first time in appeal. It Was contended further that in support of the plea of negligence it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea and that the negligence must not be merely or indirectly connected with the misleading effect but must be the proximate cause of the result. Held that the contract is illegal and void. If in pursuance of the void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, section 70 of the Contract Act would justify the claim made by the appellant against the respondent. State of West Bengal v, B. K . Mondal, [1962] Supp 1, section C. R. 876, referred to. 861 Since a plea of negligence was not raised by the respondent in the trial court the appellant is entitled to contend that it had no opportunity to meet this plea and dealing with it in appeal has, therefore, been unfair to it. Before invoking a plea of estoppel on the ground of negligence, some duty must be shown to exist between the parties and negligence must be proved in relation to such duty. The Arnold v, The Cheque Bank, , referred to. The negligence alleged must be proved to be the proximate or the immediate cause of the loss. Bexendale vs Bennett, , referred to. The broad proposition "that whenever one of two innocent persons must suffer by the acts of a third, he who enables such third person to occasion the loss, must sustain it" laid down by Ashhurst, J., in Lickbarrow vs Mason, 2 T. R. 63, on which one of the,Judges of the Division Bench has based his decision cannot be sustained as valid in law. Commonwealth Trust Ltd. vs Akotey, , Mercantile Bank of India Ltd. vs Central Bank of India Ltd. (1937) L. R. 65 I. A. 75, R. E. Jones Ltd. vs Waring & Gillow Ltd., and Farquharson Bros. & Co. vs King & Co., , referred to. The appellant cannot be charged with negligence. which, in turn, can be held to be the proximate cause of the loss caused to the respondent. The appellant is entitled to be compensated under section 70 of the Contract Act.

Appeal No. 443 of 1957. Appeal by special leave from the judgment and order dated April 25, 1955, of the Allahabad High Court in Civil Misc. Case No. 26/1951. C. B. Aggarwala, C. P. Lal for G. Ar. Dikshit, for the appellant. section K. Kapur and Mohan Behari Lal, for the respondent. October 31. The Judgment of Hidayatullah, Das Gupta and Shah, JJ., was delivered by Shah, J., and the judgment of Das and Ayyangar, JJ., was delivered by Ayyangar, J. SHAH J. Judge (Revisions) exercising authority under section 11 of the United Provinces Sales Tax Act XV of 1948 drew up a statement of case and referred to 191 the High Court of Judicature at Allahabad the follow question : " Whether the assessee, who is a manufacturer and a dealer of non edible oils and who elected the previous year as the basis of his assessment in the assessment year 1948 49, is liable to be assessed at the flat rate of 3 pies per rupee on the whole of the turnover of the previous year, or whether he is liable to be assessed at the rates of 3 pies per rupee and 6 pies per rupee on the turnover of the previous year in proportion to the two periods from 1st April to 8th June, 1948, and from 9th June, 1948 to the 31st March, 1949 ?" The High Court answered the question as follows: " The applicant company is liable to pay tax for the assessment year 1948 49 on the turnover of the previous year in respect of sales of non edible oils at the flat rate of 3 pies per rupee. " Against the order of the High Court recording its answer, this appeal with special leave is preferred. The facts which give rise to the appeal are briefly these : The Modi Food Products Co., Ltd. hereinafter referred to as " the assessee ", manufactures oils edible and non edible in its factory at Modinagar, District Meerut, State of Uttar Pradesh. The assessee is registered as a "dealer" under the United Provinces Sales Tax Act XV of 1948. The assessee 's year of account commences on June 1, and ends on May 31, next year. For the year of account 1946 47, the assessee 's sales of edible and non edible oils amounted to Rs. 63,02,849 7 7. The U. P. Legislature enacted with effect from April 1, 1948, the United Provinces Sales Tax Act XV of 1948 providing for the levy of a tax on sales of certain commodities. This act was amended by Act XXV of 1948 with retrospective operation from April 1, 1948. By the Act, " assessment year " was defined as meaning the twelve months ending on March 31 and " previous year " was defined as meaning the twelve months ending on the 31st March next preceding the assessment year, or, if the accounts of the dealer had been 192 made up to a date within the said twelve months in respect of a year ending on any date other than the said 31st March then, at the option of the dealer, the year ending on the day to which his accounts had so been made up. ,Turnover " was defined as meaning the aggregate of the proceeds of sale by a dealer. By section 3, a tax at the rate of 3 pies per rupee of turnover was, subject to certain exceptions, made payable by every dealer in each assessment year whose turn. over in the previous year exceeded Rs. 12,000 or such larger amount as may be prescribed; the Provincial Government was however authorised to reduce the rate of tax on any dealer or class of dealers on the turnover in respect of any goods or class of goods. By section 3 A, the Government of U. P. was authorised to introduce instead of the multiple point scheme of taxation provided by section 3 a single point system of taxation and by notification to declare that the proceeds of sale of any goods or class of goods shall not be included in the turnover of any dealer except to such single point in the series of sales by successive dealers as may be prescribed; and if the Government made such a declaration, the turnover of the dealer in whose turnover the sale of such goods was included was in respect of such sale to be taxed at such rate as may be specified not exceeding one anna per rupee. By section 7, every dealer whose turnover in the previous year was Rs. 12,000 or more was directed to submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed. By the proviso, the Government was authorised to prescribe that any dealer or class of dealers may submit in lieu of the return or returns specified in that section, a return or returns of his turnover of the assessment year at such intervals as may be prescribed. Provision was made by the Act for appeals against the order of assessment and revision against the order of the appellate authority. By section 11, the High Court of Judicature at Allahabad was authorised to decide questions of law raised in any case in the course of assessment and 193 referred to it on a statement of the case drawn up by the Revising Authority. By section 24. the Provincial, Government was invested with power to make rules to carry out the purposes of the Act and in particular in respect of certain specified matters. In exercise of the powers conferred by section 24 of the Act, the Government of U. P. framed rules. Rule 39 of the U. P. Sales Tax Rules gave to every dealer an option to submit his return of the turnover of the assessment year in lieu of the return of the turnover of the previous year. A dealer who did not carry on business during the whole of the previous year had no option, but was bound to submit his return of the turnover of the assessment year. By r. 40, it was provided that every dealer who elected to submit a return of the turnover of his previous year shall within sixty days of the commencement of the assessment year, submit to the Sales Tax Officer a return showing his turnover of the previous year. By r. 41, it was provided that every dealer whose estimated turnover during the assessment year was not less than Rs. 15,000 and who elected to submit his return of such year shall before the last day of July, October, January and April submit to the Sales Tax Officer, a return of his gross turnover for the quarters ending June 30, September 30, December 31 and March 31. In exercise of the authority conferred by section 3 A which was incorporated in the Act by Act XXV of 1948, the Government of U. P. issed the following notification : " In exercise of the powers conferred by section 3 A of the United Provinces Sales Tax Act, 1941, as amended by the United Provinces Sales Tax (Amendment) Act, 1948, the Governor is hereby pleased to declare that with effect from June 9, 1948, the proceeds of sale of goods entered in column 2 of the schedule hereto shall not be included in the turnover of any dealer except at the point in the series of sales by successive dealers mentioned in column 4 thereof under the circumstances shown in column 3 thereof. (2) The Governor is further pleased to order that 25 194 as from June 9, 1948, the rate of tax in respect of the column 5 of the schedule hereto. (3) Every dealer by or on whose behalf goods mentioned in the schedule aforesaid are held at the close of the 8th day of June, 1948, shall submit a statement showing the quantity and price of such stock and of the stock of such goods held on the 24th day of May, 1948, to the appropriate assessing authority by the 30th day of June, 1948. " To this notification was appended a schedule which set out the descriptions of diverse commodities, the "circumstances under Which the turnover was to be calculated " the point of tax and the rate of tax. Item 14 of the schedule was " oils of all kinds excluding edible oils but including Vanaspati " and sales thereof by manufacturers in the U. P. were liable to tax at the rate of 6 pies per rupee. By virtue of this notification, non edible oils became liable to a single point tax as from June 9, 1948, at the time of sale by an importer or manufacturer in the United Provinces. The assessee submitted its return for the assessment year 1948 49 on its taxable turnover of the previous year ending on May 31, 1947, to the Sales Tax Officer, Meerut Range. On the assessee 's return, the Sales Tax Officer assessed the tax at Rs. 1,16,238 12 0, holding that sales of non edible oils for the first 69 days out of the year of the turnover were to be taxed at the rate of 3 pies, and sales for the remaining 296 days were to be taxed at the rate of 6 pies per rupee. Against the order passed by the Sales Tax Officer, Meerut Range, an appeal was preferred to the Judge (Appeals), Sales Tax, under section 9 of the Act. The appellate authority modified the order and directed the assessee to pay tax on non edible oils on the turnover of the previous year at the flat rate of 3 pies per rupee and reduced the tax liability to Rs. 1,08,477 0 3. This order of the Judge (Appeals) was set aside by the revising authority and the order of the Sales Tax Officer was restored. On, a direction made by the High Court, the revising authority drew up a statement of the case and submitted for opinion a question 195 which in his opinion arose out of the assessment. The High Court re framed the question as set out hereinbefore, and answered it in favour of the assessee. By section 3 and section 3 A, which are the charging sections, the liability to pay sales tax in each assessment year is charged on the total turnover of a dealer. By section 7, read with r. 39, the assessee has the option to adopt the turnover of the previous year as the taxable turnover for the year of assessment: and if he does so, he has to submit within sixty days of the commencement of the assessment year returns showing his turnover for that previous year. If, however, the assessee adopts the turnover in the year of assessment as his taxable turnover, he has to submit returns before the last day of July, October, January and April his gross turnover for each of the four quarters ending 30th June, 30th September, 31st December and 31st March. The tax is evidently levied in respect of the year of assessment : it is not levied in respect of the business carried on in the previous year. Again, the rate applicable in assessing the tax is the rate in force in the year of assessment. That is clear from the terms of sections 3 and 3 A. But the taxable turnover for the year of assessment may, except in certain cases not material for the purpose of this appeal, at the option of the tax payer be either the turnover of the previous year or of the year of assessment. If the assessee adopts the turnover of the previous year, by the provisions contained in section 3 and section 7 and rr. 39 and 40, the liability to pay tax arises on the 1st of April and the rate applicable is the rate in force on that date. The liability of the assessee adopting the turnover of the year of assessment arises by virtue of sections 3 and 7 and r. 41 at the end of each quarter. When the taxable turnover is based on the turnover of the previous year, the tax is assessed on an artificial turnover not related to the actual sales of the year of assessment: whereas the levy of tax on a return made on the turnover of the year of assessment is made on actual sales of that year. The tax paid on the turnover of the previous year is not related to the actual sales 196 provision for making adjustments in the liability to tax on ascertainment of the actual turnover at the end of the year of assessment. The Government of the United Provinces had by notification dated June 8,1948, altered the rate of tax in the matter of various commodities including nonedible oils with effect from June 9, 1948. The Sales Tax Officer was right in his view that the levy of tax at the altered rate was not to operate on sales effected before June 9, 1948. Initially, when the liability of the assessee to pay tax on edible oils for the assessment year arose, the rate was undoubtedly 3 pies per rupee on the turnover, and the question which falls to be determined is whether by reason of the alteration of the rate and its incidence in the course of the year, the assessee became liable to pay tax at the higher rate on a part of the turnover of the previous year and if so, on what basis. A tax payer who adopted the previous year 's turnover bad under section 7 and r. 40 to submit his return within sixty days of the commencement of the assessment year, and no provision for submission of any supplementary returns in the case of alteration of rates in the course of the year was made in the Act or the Rules: nor was any method provided for retrospective modification of an assessment once made. There were under the Act and the Rules two distinct and clear cut schemes to assess sales tax, (1) where the tax payer elected to submit his return based on the turnover of the previous year and (2) where he elected to or was bound by law to submit his return on the turnover of the year of assessment. Under these two schemes the points of time at which liability arose and the turnover on which liability was to be assessed were in their nature not identical. The tax payers paying tax under the first scheme paid it on the turnover of the previous year and at the rate in force after the end of the period and applicable to it. The tax payer paying tax under the second scheme paid tax in quarterly installments based on the previous quarter 's actual turnover and at the rate or rates prevalent in the quarter or applicable to it. Was it intended, when alteration was made in the rate of tax 197 or its incidence during the course of the year, to assimilate these two schemes of taxation so as to, permit of a departure from the one to the other ? There is no express provision in the Act or in the Rules in that behalf. Nor does the notification suggest that it was so intended. In the case of a dealer who adopts the turnover of the year of assessment for purposes of taxation, the application of the notification altering the rate of tax and the incidence of tax does not present any difficulty. The notification enjoins levy of the tax at the altered rate only in respect of sales taking place after the fixed date, and all sales which preceded that date are to be taxed at the original rate. In the face of the language employed sales anterior to the date specified could not be affected. The question next arises: Is any machinery provided in the Act or the Rules for projecting this division of the year of assessment, into the previous year, and for apportioning the turnover of that year ? Express provision in that behalf there is none : and it is difficult to imply such a provision in the Act. The dates of commencement and closure of the previous year of a tax payer may vary according to the system of accounting adopted by the assessee. The year may commence from any day of any recognised calendar year, and the year may not consist of 365 days. The method of antedating by one year the date on which the alteration is made in the rate or incidence will be manifestly inappropriate. The method of division of the turnover proportionate to the period of the assessment year before the alteration of the rate and after such alteration though prospective, must be deemed to have been made retrospectively in the previous year, and on a day which is removed from the commencement of the year of account by the number of days by which the date of alteration of rate is removed from the commencement of the year of assessment. But the adoption of the turnover of the previous year as the taxable turnover for the year of assessment is itself based on a fiction and, in the absence of any express provision either in the Act or the Rules or even in the notification setting out machinery for such 198 a division of the year, we are unable to hold that this scheme of a fictional division may be projected into the previous year to make an artificial division of the turnover for imprinting thereon the altered rate of assessment as from the date of the division. Counsel for the State of Uttar Pradesh submitted several hypothetical cases suggesting that by refusing to adopt this method of division of the previous year of assessment for the application of the altered rate, several anomalies may arise in working out the liability to tax. He submitted that a person who was not a manufacturer or an importer of goods included in the schedule to the notification under section 3 A may, if he has adopted the turnover of the previous year as his taxable turnover be liable even though it was the intention of the Government to absolve him from liability to pay tax. But a tax payer adopting the turnover of the previous year for payment of tax makes his choice 'voluntarily and subject to the advantages and disadvantages which that step involves. The fact that he may have to pay tax from which persons choosing the alternative method of submitting of return may partially be exempted, because of an exemption granted in the course of the year, may not, in our judgment, be a ground for not giving full effect to the provisions of the Act as they stand. In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions '. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed it Cannot imply anything which is not expressed it cannot import provisions in the statutes so as to supply any assumed deficiency. Section 18 el. (c) of the Act which provides for proportionate reduction of tax when in the case of a change or discontinuance taking place in the course of the assessment year of a firm which has been assessed for such year on the turnover of the previous year does not support the contention that an artificial divisions of the turnover of the previous year is intended 199 in cases of alteration of circumstances during the course of the assessment year. It may be noticed that, the provision is limited to changes in or discontinuance of the business of a firm, in terms it does not apply to individuals. It is not for us to consider why the Legislature has not chosen to make a similar provision in respect of individuals. But the fact that the Legislature has made an express provision dealing with changes or discontinuance of business of firms in the course of the assessment year enabling a reduction proportionately to the tax already paid would be a ground indicating that in cases not governed by that provision, no alteration in the liability was permissible when the taxable turnover was based on the previous year 's turnover. It is not provided that in giving effect to the alteration of the rate during the course of the year of assessment an artificial division of the turnover of the previous year should, in applying the altered rate be made. The Legislature having failed to provide machinery for working out the liability, the attempted projection becomes unworkable. A legal fiction must be limited to the purposes for which it has been created and cannot be extended beyond its legitimate field. The turnover of the previous year is fictionally made the turnover of the year of assessment: it is not the actual or the real turnover of the year of assessment. By the imposition of a different tariff in the course of the year, the incidence of tax liability may competently be altered by the Legislature, but for effectuating that alteration, the Legislature must devise machinery for enforcing it against the tax payer and if the Legislature has failed to do so, the court cannot resort to a fiction which is not prescribed by the Legislature and seek to effectuate that alteration by devising machinery not found in the statute. We are therefore of the view that the conclusion of the High Court is correct. The appeal therefore fails and is dismissed with costs. AYYANGAR J. We regret we are unable to agree with the judgment just now pronounced. The facts giving rise to this appeal are briefly 200 these:A company called The Modi Food Products Ltd. ' (amalgamated with the respondent) which will be referred to hereinafter as the assessee, was during the years 1946 & 1947 a manufacturer of and dealer in vegetable oils both edible and non edible. During that year there was no legislation imposing any tax on sales. The U. P. legislature enacted the U. P. Sales Tax Act in 1948 and the statute received the assent of the Governor and was published in the official Gazette on June 5, 1948. Section 1 (2) of the Act enacted that it shall be deemed to have come into force on April 1, 1948. The appeal is concerned with the liability to sales tax under the Act of the assessee company in respect of the sale of oil effected by the assessee during the period June 1, 1946 to May 31, 1947, which was the account year of the assessee previous to the first assessment year under the Act1948 49. Section 3 of the Act, to quote only the relevant words, as it stood at the material time, enacted : " Section 3. Liability to tax under the Act. Subject to the provisions of this Act, every dealer shall pay on turnover in each assessment year a tax at the rate of 3 pies a rupee Provided that (i) the Provincial Government may, by notification in the official Gazette, reduce the rate of tax on the turnover of any dealer or class of dealers or on the turnover in respect of any goods or class of goods; (ii) a dealer whose turnover in the previous year is less than Rs. 12,000 or such larger amount as may be prescribed shall not be liable to pay the tax under this Act for the assessment year. " By the U. P. Sales Tax Amendment Act, 1948 (Act XXV of 1948) this proviso was slightly modified and section 3(A) was inserted in the Act reading as follows: " Section 3 A. Single point taxation. (1) Notwithstanding anything contained in Section 3, the Provincial Government may, by notification in the official Gazette, declare that the proceeds of sale of any goods or class of goods shall not be included in the turnover of any dealer except at such single point 201 in the series of sales by successive dealers as may be prescribed. (2)If the Provincial Government makes a declaration under sub section (1) of this Section, it may further declare that the turnover of the dealer, in whose turnover the sale of such goods is included, shall, in respect of such sale, be taxed at such rate as ' may be specified not exceeding one anna per rupee if the sale relates to goods specified below. (A list of goods was then set out) and nine pies per rupee if it relates to any other goods. " Non edible oil which is the commodity with the sale of which the assessment in the present appeal is concerned is not in the list of goods set out in section 3(A) and would therefore be covered by the residuary clause of the section. The U. P. Government issued the following notification dated June 8, 1948, under section 3(A) of the Act: " In exercise of the powers conferred by Section 3 A of the United Provinces Sales Tax Act, 1948, as amended by the United Provinces Sales Tax (Amendment) Act, 1948, the Governor is hereby pleased to declare that with effect from June 9, 1948, the proceeds of sale of goods entered in column 2 of the Schedule hereto shall not be included in the turnover of any dealer except at the point in the series of sales by successive dealers mentioned in column 4 thereof under the circumstances shown in column 3 thereof. 2. The Governor is further pleased to order that as from June 9, 1948, the rate of tax in respect of the turnover of the aforesaid goods shall be as entered in column 3 of the Schedule hereto. Every dealer, by or on whose behalf goods mentioned in the schedule aforesaid are held at the close of the 8th day of June, 1948, shall submit a statement showing the quantity and price of such stock and of the stock of such goods held on the 24th day of May, 1948, to the appropriate assessing authority by the 30th day of June, 1948 ". In the Schedule annexed to this notification, nonedible oil of the type dealt with by the assessee was 202 subject to a tax @ 6 pies per rupee if the same was manufactured in U. P. Section 7 of the Act, as it stood at the date relevant to this appeal, enacted : " Section 7. Determination of turnover and assessment of tax. (1) Subject to the provisions of Section 18, every dealer whose turnover in the previous year is Rs. 12,000 or more in a year shall submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed: Provided that the Provincial Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment year at such intervals, in such form and verified in such manner as may be prescribed, and thereupon all the provisions of this Act shall apply as if such return or returns had been duly submitted under this section. Provided further that the assessing authority may in his discretion extend the date for the submission of the return by any person or class of persons ". Rules were framed by Government inter alia under the power conferred by the 1st proviso just now set out and by rule 39 of the said rules an option was given to dealers to submit returns of their turnover of the assessment year in lieu of the turnover of the previous year. The assessee exercised the option of being assessed on the basis of the turnover of the previous year under section 7(1) of the Act and in respect of first assessment year after the Act came to force assessment year 1948 49, it filed a return in respect of the turnover of its previous year June 1, 1946 to May 31, 1947. The total turnover of the assessee during this period was Rs. 63,02,849 7 7. The Sales Tax Officer by his order dated March 12, 1949, assessed the turnover in respect of edible oil at 3 pies per rupee. As regards the sale of non edible oil, the sales tax officer hold that since the notification set out above under 203 section 3(A) had come into force as and from June 9 of the assessment year, the assessee was liable to be assessed @ 3 pies per rupee on the turnover during the first 69 days of the year and @ 6 pies per rupee in respect of the remaining days of the year and he computed the ' tax accordingly. The assessee preferred an appeal to the Judge (Appeals), Meerut Range, Meerut, against the order of the Sales Tax Officer. This officer allowed the appeal of the assessee and held that the entire turnover was liable to be taxed only at a flat rate of 3 pies per rupee under section 3(1) of the Act on all oil sold by the assessee edible or non edible. The reason assigned for the order was that on the terms of the notification the new rate of tax could not be applied to sales effected in the previous year which had been opted for the purposes of assessment by the assessee and that so to apply it would be tantamount to giving retrospective effect to the notification which was contraindicated by the terms of the notification itself. The department thereupon moved the Judge (Revision) who accepted its contention and restored the order of the Sales tax Officer applying the provisions of the notification to the turnover of the assessee. There. after the assessee made an application to the Judge (Revision) to state a case for the opinion of the High Court under section 11 of the Act as to whether the rate of tax fixed by the notification could be applied to the sales of the commodity which factually took place on or before June 8, 1948. This petition having been dismissed, an application was filed before the High Court for directing the reference and on this being ordered the following question (as reframed by the High Court) was referred to it for determination : " Whether the assessee who is a manufacturer and a dealer of non edible oils and who elected the previous year as the basis of his assessment in the assessment year 1948 49 is liable to be assessed at the flat rate of 3 pies per rupee on the whole of the turnover of the previous year or whether he is liable to be assessed at the rates of 3 pies per rupee and 6 pies per rupee on the turnover of the previous year in proportion to the two periods from April 1 to June 8, 1948 and from to March 31 1949. " 204 The learned Judges answered the question in favour of the assessee and held that the notification under section 3(A) could not apply to determine the rate of tax payable by the assessee on his turnover of the previous year. The present appeal is against this answer by the High Court. As the arguments before us proceeded on practically the same lines as before the High Court, it will be convenient if we set out the reasoning by which the learned Judges upheld the asssessee 's contention that the notification under section 3(A) was inapplicable to determine the rate of tax payable by it. The grounds were mainly five: (1) The assessee could not be charged at the rates prescribed by the notification unless the new rates operated retrospectively; (2) that section 3(A) which was introduced into the parent Act (Act XV of 1948) by the Amending Act XXV of 1948 was not enacted with retrospective effect. Though the charge imposed by section 3(1) of the Act read with section 7(1) imposed tax retrospectively as and from April 1, 1948, section 3(A) did not on its terms so operate as and from that date. Hence the liability of the assessee which had become fixed under Act XV of 1948, as it originally stood, could not be and 'Was not varied by section 3(A) and would not therefore be affected by any notification issued under the last mentioned provision ; (3) that a notification under section 3(A) could not have retrospective effect since section 3(A) itself did not operate of its own force and merely empowered the Government, 'by a notification, to effect changes in the law and hence such changes when notified could not operate as from any date prior to the date of the notification ; (4) Section 3(A) which used the words " in respect of such sales " contemplated particular sales taking place after the notification issued under it and hence the notification issued under that section could not alter the rate of levy in respect of sales anterior to the date of the notification ; (5) that the terms of the notification carried out the general scheme of the Act and negatived retrospective operation and that as on its langu age it applied only to sales which took place on or 205 admittedly effected long prior thereto in the previous year the same could not be affected by the enhanced rate of duty. Before proceeding further it must be pointed out that the learned Judges of the High Court were not right in thinking that section 3(A) was not enacted to operate retrospectively from the commencement of the ' parent Act. Section 1(2) of the Sales tax Amending Act XXV of 1948 which introduced section 3(A) enacted: " It (this Act) shall be deemed to have come into force on the 1st April, 1948." and as section 3(A) was one of the sections of this enactment, it would have effect from the earlier date. This inadvertent error, however, would not affect the central point of the reasoning of the learned Judges. Besides elaborating the other points in the judgment of the High Court, learned Counsel for the respondent further pressed upon us that there was no specific provision in the Act for refund or reassessment which would have been present if the levy of a rate with retrospective effect were contemplated by the Act as applicable to the assessees who bad opted for the " previous year turnover " basis of assessment. He pointed out that in the case of those assessees who opted for their being assessed in respect of their turn. over during the assessment year, quarterly returns were submitted along with the payment provisionally of the tax due on the basis of that return, the final assessment being completed only after the close of the year when the amount due for the year was ascertained and a demand made for the balance due after adjustment of the amounts already paid during the course of the year (Rule 41). Obviously in their case no difficulty could arise by reason of any change in the law either in the rate or basis of taxation effected during the year, as these would automatically be given effect to in the final assessment. If, however, changes made in the rate of tax payable during the year were held applicable to those assessees who had opted for the previous year turnover basis, necessary adjustments could not be made in their assessment for lack of specific machinery to achieve the same. From this 206 he argued that the scheme of the Act was that in the case of the previous year turnover assessees, to use a convenient phrase, the tax liability had to be determined on the state of the law as it prevailed on the 1st day of the assessment year and that it got fixed and crystallised on that date and remained unaffected by any changes in the law effected during the course of the assessment year. In view of these additional submissions, we consider that it would be convenient to examine the entire argument of learned Counsel for the respondent under three heads into which they naturally fall: (1) Does the Act, read in conjunction with the Rules framed to give effect to its provisions, contemplate any difference being drawn between the basis of the tax liability (as distinct from the quantum of the turnover) of those assessees who have opted for the previous year turnover and " the assessment year turnover " assessees. (2) Is there any sound basis for the contention that the tax liability of the "previous year turnover" assessees gets crystallised on the 1st of April of the assessment year, with the result that such assessees are unaffected by any changes of the law which operate from beyond that date. (3) If the above two questions are answered in the affirmative the construction of the notification dated June 8, 1948, would not fall for consideration, for even if on its language it can apply to the turnover of a period anterior to its issue, the notification cannot be given such effect since the same would be against the basic scheme of the Act. If, however, the answer to the above two questions were in the negative, a further point would arise as to whether on the terms of the notification now under consideration the same could on its language apply so as to affect the tax liability of the " previous year turnover assessees. We shall now proceed to examine these submissions. On the scheme of U. P. Sales tax Act, as of every other sales tax legislation in the other Indian States, the total tax liability of an assessee is the resultant 207 product of two factors: (1) the total of the proceeds of sales effected during a given period, universally a year, from which are deducted the turnover of the sales of commodities which are exempt from tax; for instance under section 4 of the Act whose provisions will be referred to later; (2) multiplied by the rate of tax applicable either to the entire turnover or where ' different rates are prescribed on sales of different articles, such rates in respect of such turnover. The best way to appreciate the scheme underlying the Act would be to ascertain the position at the time the Act was enacted. It received the assent of the Governor and was published in the Gazette on June 5, 1948. Section 1(2) of the Act further enacted that " It shall be deemed to have come into force on April 1, 1948 ". Except to that limited extent, the Act is prospective. The tax is on the " turnover ", i.e., on the total of the sales proceeds of taxable sales and therefore unless there were a taxable sale, its proceeds would not enter the pool which goes by the name of " turnover ". As the Act is not retrospective, the taxable turnover would normally be the total of the sales effected after the enactment became operative, i. e., from and after April 1, 1948, but for the sake of convenience of assessment, it enacts by section 7(1), we have extracted earlier, a provision providing an option to dealers who have been in business in the year previous to the taxing enactment, to be assessed either on the turnover of the previous year, when owing to the absence of the Act their sales were not subject to tax or on the turnover of the current year. But whichever be the turnover adopted, the rate of tax or the determination of the particular sale proceeds whose total constitutes the taxable turnover, i.e., after the exclusion of the sale proceeds of the commodities listed in section 4, does not vary. In other words, though the figure of turnover might vary between those who have opted for the one or the other mode of assessment due to the volume of the sales, no difference is maintained in the Act as regards the incidence of the tax, i.e., either in the principle underlying the computation of the total turnover or in 208 the rate or rates applicable to the sales of particular goods or on the total turnover. This can only be on the premise or implicit assumption that the sales of the previous year are treated by the Act for the purpose of computing tax liability as the sales of the current year a projection forward in point of time. In other words, the entire basis underlying the charging provision section 3(1) read with the option provided by section 7(1) is that the sales of the previous year are fictionally treated as the sales of the current year for the purpose of the computation of the tax liability. It has to be remembered that in cases like the present, during the time when the sales were effected, the Act was not in operation and hence the sales were not taxable. But for the purpose of the imposition of the tax liability, it is assumed that the sales are taxable and the goods whose sales become taxable are determined on the basis of the provisions of the Act. Thus, if in the current year commodities A, B and C are exempt from tax, they are not to be included in the turnover of the dealer in respect of the previous year in the case of those who have opted for the " previous year turnover " under section 7(1), and the turnover thus computed is charged at the same rate of tax applicable to transactions of the current year. So far, therefore, as the express provisions of the Act go, no difference is made between the basis of the tax liability of the " previous year turnover " and the " assessment year turnover " assessees; and though by reason of the terms of section 7(1) the quantum of the turnover varies no other variation in the law applicable to the two types of assessees is contemplated. We must therefore start from the premise that the Act does not contemplate any difference in the incidence of the tax and the quantum of tax liability flowing from the choice of either the " previous year " or the " assessment year " as the basis of the determination of the turnover. We should add that learned Counsel for the respondent has not been able to point out any provision in the Act or in the Rules pointing to any such differentiation. It was, however, submitted that though the statute 209 might not say so in express terms, still by reason of the provisions of the Act and the Rules under, which the " previous year turnover " assessee had to ' or could submit his return within sixty days from the commencement of the assessment year and have his assessment completed immediately thereafter as compared to the " assessment year assessee " whose assessment was completed after the end of the year, coupled with the absence of any machinery for re assessment or refunds in the event of any change in the law effected after the commencement of the financial year, it had necessarily to be held that the liability of the " previous year turnover " assessee got crystallised as on the 1st of April of the assessment year and that the Act did not contemplate this being disturbed by any subsequent changes in the substantive law relating to assessment during the assessment year. It was said that the tax liability of the dealer who had opted for the " previous year " basis had to be determined on foot of two factors and only two: (1) the turnover of the sales of the previous year which is a definite and known figure by the 31st of March of the previous year and (2) the rate of tax on the turnover as it prevailed on the 1st of April of the assessment year when it was said that there was a "crystallisation" of the liability to tax. It was pointed out that it was possible for an assessee to submit his return on the basis of the " previous year turnover " even on the 1st of April of the assessment year and there being no legal impediment in the way of the figures returned by the dealer being accepted the assessment might conceivably be completed and the tax due demanded and even paid on the 1st of April, it sell If this were done, it was urged, there being no machinery for reassessment or refunds such completed assessment would become final for the year and could not be disturbed thereafter. If this were possible or were actually done in the case of one dealer who had so opted, it was urged that it would obviously be anomalous if another dealer who happened to submit his return later and whose assessment was in 27 210 consequence delayed, should be subjected to a different law or a different rate of levy. In our opinion, this argument breaks on critical examination. Learned Counsel for the respondent, to start with, asserted that the crystallisation of the tax liability as on the 1st of April of the assessment year was with reference to the law as it factually was on that date and that changes made subsequently even if with retrospective effect to date from the commencement of the year, would not affect that liability. This was obviously an untenable contention because if the later enactment or rule was retrospective it must be deemed in the eye of the law to have been in existence and in operation on the earlier date. Though learned Counsel withdrew this extreme argument, still the concession that changes effected with retrospective effect to date from the commencement of the assessment year would apply to determine the tax liability even of the " previous year turnover " assessee serves to emphasize that little importance could be attached to the two bases on which " the crystallisation " argument was rested, viz. : (1) the obligation or freedom of the previous year turnover assessee to submit his return and have his assessment completed within sixty days of the commencement of the assessment year and (2) the absence of a specific provision for reassessment and refund. Under the proviso (1) to section 3 which reads: " the Provincial Government may, by notification in the official Gazette, reduce the rate of tax on the turnover of any dealer or class of dealers or on the turnover in respect of any goods or class of goods." the State Government could reduce the rate of tax on the turnover of dealers from the standard rate of 3 pies in the rupee under the main part of section 3. It is also not denied that there is nothing in the terms of the proviso to confine the power to effect reductions only prospectively as distinguished from reductions having retrospective effect. If a reduction were effected say in January or February of the year, having effect as and from the 1st April preceding, on the very argument advanced, Counsel for the respondent would 211 have to concede, that the reduced rate would govern the liability of even those dealers who were assessed on the basis of their turnover of the previous year. Let us first take a case where such a reduction in the rate is notified to be effective before an assessee submits his return. In such a case, the benefit in the reduction of the rate could not be withheld from the previous year turnover dealers even on the theory of " crystallisation " just now referred to. Let us next take the case of a dealer who has submitted his return of the turnover of the previous year on a date anterior to the notification regarding the alteration of the rate. It might be mentioned that in the return submitted by dealers which has to be in Form IV of Appendix F to the rules, only the total of the sale proceeds of the sales of the classified items of goods have to beset out, but the return does not concern itself with the rate of the tax levied. This latter is a matter with which the assessing authority is concerned when determining the amount of tax payable. If the rates are altered subsequent to the submission of the return but before the assessment is completed, on the terms of the charging section which draws no distinction in the incidence of the tax as between the " previous year turnover " group and the " assessment year turnover " dealers, the Sales Tax Officer would have to afford every assessee, whatever be the basis of this turnover the benefit of the tax reduction. The position reached therefore is that if the change in the rate (we have assumed it to be by way of reduction, but the argument would equally apply to variation in any kind), were effected before the actual assessment, it should be given effect to in the case of every assessee for not merely is there no procedural complication in the shape of a need for refund but it would be in accordance with the, law and in fact one might go further and say that any other mode of proceeding would not be countenanced by the Act, because the statute homologises the basis of the tax whether the turnover is computed on the previous year 's or the current year 's sales. Next in regard to cases where the change in the law 212 is effected after the completion of the assessment we consider that the submission regarding the absence of machinery for reassessment and refund is not well founded. It is true that there are no provisions specially so designated to meet this contingency here referred to, but that is not the same thing as saying that there is a complete absence of machinery. In the first place, section 22 of the Act empowers authorities including the assessing officer to rectify any mistake apparent on the face of the record and by such rectification even to enhance the tax liability. If on the premises assumed, the variation in the rate of tax would on a proper construction of the Act be applicable to the turnover of the dealer who has opted for the " previous year rule " but the assessment order does not give effect to it, it would certainly be a case of an error apparent on the face of the record, which would bring the case within the power of rectification. On the analogy of the cases under section 35 of the Income Tax Act, 1922, the assessment officer could order rectification in such cases. Even apart from this, under a. 10(2) of the Act the dealer or the department as the case may be may apply to the Revising authority for revision of the assessment on the ground that the same is not legal, proper or regular. This section enacts: " The Revising Authority may in its discretion at any time suo motu or on being moved by the Commissioner of Sales Tax or on the application of any person aggrieved, call for and examine the record of any order or proceedings recorded by any appellate or assessing authority under this Act for the purpose of satisfying itself as to the legality or propriety, of such order or as to the regularity of such proceedings and may pass such order as he thinks fit." The orders which the Revising Authority could pass might either be by way of enhancement or reduction, and the subsequent sub sections provide: . "10 (4). The Revising Authority shall not pass any order under sub section (3) adversely affecting any person unless an opportunity has been given to such person to be heard. 213 (5) If the amount of assessment is reduced by the Revising Authority under sub section (3) it shall order the excess amount of tax if already realised to be refunded. " It is, therefore, not correct to say that there is no machinery for rectifying errors and for making consequential orders for payment of further tax, or for directing refunds, and this argument cannot therefore justify the construction contended for by the respondent. In the entire discussion up to now we have proceeded on the assumption that the turnover of " the previous year " of the dealer was a fixed quantity which was finally determined once and for ever on the 31st March of that year and that the problem was merely to find the rate of tax to be applied to this predetermined factor. It will be seen from an examination of the Act that even the factor of the turnover is subject to variation. For instance, the first part of section 4 enacts: " The provisions of section 3 of this Act shall not apply to (1) the sale of water, salt, foodgrains, milk, gur, electrical energy for industrial purposes, books, magazines, newspapers and motor spirit as defined in the United Provinces Sales of Motor Spirit Act, 1939, and any other goods which the Provincial Government may, by a notification in the official Gazette exempt from time to time. " Under this power besides the specified goods, the State Government might from time to time exempt other goods from among those whose sale proceeds have to be included in the turnover. If an exemption of that type were granted say in 1948 49, it cannot be contended that the turnover of the dealer who had opted for the " previous year " has to include these sales in the return which he submits in Form IV, If by the date of the submission of the return, the exemption has been notified, and has effect for the entire year of course he need not include these sale proceeds in his return. The computation, therefore, of the quantum of turnover of the previous year on which tax has to be levied is one which is subject to the law 214 in relation to it in the assessment year, and any change in that law presents the same problems, as the variation in the rate of tax. Up to now the discussion has proceeded on the basis that a change in the law made in the assessment year whether as regards the computation of the turnover or as to the rate of levy, is effective throughout that year, i.e., from the 1st April to the 31st March, and it is found that the fact that the returns of the previous year turnover dealers are required to or are submitted within the early part of the year, or the contention based on the absence of specific machinery for reassessment or refund are an insufficient basis for holding that a change in the law affecting the basis of tax liability would not affect the previous year turnover assessees and that the machinery provided by sections 10 and 22 are adequate to meet the contingencies arising out of the changes being retrospectively effected after the assessments were completed. We shall next proceed to consider whether the change in the law either as regards the computation of the taxable turnover or as regards the rate of tax becoming operative sometime after the year has commenced makes any difference. In the case of the "assessment year turnover " dealers, there is no problem because the sales effected during the course of the year would be governed by the law applicable from time to time. The entire basis or theory of the tax being levied on foot of the previous year 's turnover is that notwithstanding that factually the sales took place in the previous year they are to be deemed by fiction to have taken place in the year of assessment. If that theory be discarded there could be no legal foundation for the tax being levied by the Act even as originally enacted on a sale which factually took place before it was operative. The only question therefore is the precise scope of that fiction and its logical implication. If the sale in the previous year is treated by the Act as a sale in the present year, then no principle is contravened, if it were held that sales during a portion of the previous year are held to be sales during a corresponding portion of the current 215 year. If we reject the argument that it is only the law as prevailed on the 1st April of a year that forms,, the basis for the computation of the turnover and for the ascertainment of the tax liability as not flowing from the provisions of the Act, and indeed as contrary to the very scheme underlying the enactment, the changes in the law effected during the course of the assessment year must operate even in respect of the turnover of the previous year, which are deemed to be the turnover of the assessment year. It now remains to deal with the question as to whether the language employed in the notification by which only sales effected after a date specified in the assessment year are to be governed by the new levy, precludes the application of the notified change to those dealers whose sales were actually effected in the previous year, but who had opted for the " previous year turnover " basis of assessment. The argument of learned Counsel, which found favour with the learned Judges of the High Court was briefly this. The notification expressly states that only sales effected from and after June 9, 1948, were to be charged with the new rates. In terms therefore, the change in the law is wholly prospective. If so, one cannot by any line of reasoning reach the conclusion that the new rates of levy applied to sales, as by the present respondent, more than a year earlier. So stated the reasoning appears impressive and it is true that a taxing enactment cannot be construed as levying a charge unless the words clearly do so. But the words have always to be understood and more than that applied with reference to the underlying basis of the scheme of taxation. So applied, it does not appear to us to support the contention of the respondent. The change in the rate of tax, was no doubt prospective. The phraseology employed merely means that in the case of the " assessment year turnover " dealers only the sale proceeds of sales effected after the specified date would be governed by the new rates. In the case of the " previous year turnover " dealers, the change operates to determine the amount of tax during their assessment year just in the same manner as 216 the original charge under the Act, of a flat rate of three pies determined the tax payable notwithstanding that none of the sales whose proceeds were included in their turnover were effected during the assessment year. We have already pointed out that the basic idea underlying the provision contained in section 7(1) of the Act 'is that it projects the turnover of the previous year into the assessment year. Admittedly the Act itself is not retrospective, or designed to levy the charge under section 3(1), on sales effected before April 1, 1948. If sales of the previous year are brought within the taxing provision, it is not because the sales when they took place were subject to tax, but because either (a) the previous year 's sales are deemed in law when the assessee so opts as the sales of the current year or (b) the previous year 's turnover being opted, the provisions of the charging sections operate on that turnover. Whichever of these be the more accurate method of expressing the result, the fact is that there is no element of retrospectivity at all involved in the application of the tax law which prevails in the year of assessment to the turnover of the previous year when due to the choice of the assessee of being assessed under section 7(1), the previous years ' turnover basis is rendered applicable. Possibly the matter may be tested in this manner. Section 3(1) of the Act the charging section imposes in effect a tax of three pies per rupee on all sales effected after the commencement of the Act, i.e., after April 1, 1948. pose that section itself, had by a proviso imposed a tax @ six pies per rupee on all sales of edible oil effected on and after June 9, 1948. Could it then be open to argument, that in respect of the previous year 's sales, only a three pies tax was payable and that the result of the charging provision could be ignored. If, therefore, we are right so far, the respondent derives no advantage from the notification specifying the dates of sales effected from and after which they would be subject to the varied rate. The notification had necessarily to be worded as it was, in order to fulfil its primary purpose of effecting a change in the rate during the assessment year. The date 217 mentioned in the notification as the date from and after which sales would be charged at the new rates would therefore not militate against the new rates being applied to the turnover of the previous year, since the turnover of the previous year has to be assessed on the rates prevailing in the assessment year. The next question is how on the terms of the notification which came into operation after the commencement of the assessment year and during the course of it, the proportion of the turnover on the basis of which the tax liability of a previous year 's turnover dealer could be computed. Learned Counsel for the respondent urged that no intelligible basis could be suggested for distinguishing the two periods in the previous year when the original rates and the altered notified rates would operate. Learned Counsel urged that it would be impossible to distinguish these two periods either on any theory of retrospectivity of the notification or on any theory regarding the sales of the previous year being attributed to the corresponding dates of the current year. There is no doubt that this mode of computing the proportion, viz., to treat the sales which were effected on various dates of the previous year, as if they were sales on the corresponding dates of the current year and thus to compute the two totals of turnover which would be subject to different rates of duty would not be proper. The impropriety would arise from the fact that the fiction enacted by section 7(1) is not that each day 's sale in the previous year is deemed to be a sale on the corresponding date in the current year, but only that the total taxable turnover of the previous year is deemed to be that of the current year. The method to which objection is taken is however not the manner in which the Sales tax Officer computed the proportion which was affirmed by the Judge (Revision). If the total of the sale proceeds of the previous year is deemed to be the total of the current year, there is no illogicality or impropriety in dividing that total in accordance with the number of days in the year in which the different rates prevailed and that is precisely what the Sales tax Officer did. 28 218 If as we hold both the computation of the turnover of the previous year, as well as the incidence of the tax leviable on it, are to be determined not merely by the law as it stood on the first day of the assessment year, but by the law applicable to assessments during the entire assessment year, the method by which the tax liability of the respondent was computed by the Sales tax Officer is not open to any objection. In connection with the interpretation of the notification a minor point was suggested to which brief reference might be made. It was submitted that as the notification in effect levied a tax, if it was ambiguous, it should be resolved in favour of the subject the tax payer. We see no ambiguity in the notification to justify an appeal to this rule. Besides the notification in effect frees dealers other than importers and manufacturers of all tax liability in respect of the sale turnover of oil, though in the case of two specified classes of dealers. a single point tax at an enhanced rate is levied. In such a situation, the rule of construction invoked could hardly be applied, even if the condition as to ambiguity were present. We, therefore, hold that the assessment to sales tax of the respondent company by applying to its turnover of the year 1947 48, the rate of tax specified in the notification of June 8, 1948, as determined by the Sales tax Officer was in accordance with the law. We would accordingly allow the appeal, set aside the decree of the High Court and restore the assessment order of the Sales tax Officer with costs here and in the High Court. BY COURT. In accordance with the opinion of the majority, the appeal is dismissed with costs.

The respondent company was a manufacturer of edible and non edible oils and was registered as a " dealer " under the United Provinces Sales Tax Act, 1948. Its year of account commenced on June 1, and ended on May 31 of the next year. Under section 7(1) of the Act read. with rule 39 of the rules framed thereunder the respondent exercised the option of being assessed on the turnover of the previous year and submitted its return for the assessment year 1948 49 on its taxable turnover of the previous year ending May 31, 1947. The Sales Tax Officer assessed the turnover in respect of edible oil at 3 pies per rupee under section 3, but in respect of non edible oil he held that since a notification dated June 8, 1948, issued under section 3(A) had come into force from June 9, of the assessment year providing for the levy of tax at 6 pies per rupee, the assessee was liable to be assessed at 3 pies per rupee on the turnover during the first 69 days of the year and at 6 pies per rupee for the remaining days of the year. On appeal by the assessee the appellate authority modified the order and directed that the tax be levied at a flat rate of 3 Pies on both edible and non edible oils. This order was set aside by the revising authority and the order of the Sales Tax Officer was restored. On a direction made by the High Court the revising authority submitted a question for opinion. The High Court held that the assessee was liable to pay the tax at a flat rate of 3 pies per rupee. On appeal by the Commissioner of Sales Tax by special leave, Held (per Hidayatullah, Das Gupta and Sliah, jj.), affirming the view of the High Court, that the assessee who elected to submit his return on the turnover of the previous year, is liable to be assessed to sales tax at the rate in force on the first day of the year of assessment because the liability arises on that date, and any subsequent enhancement of the rate by virtue of a notification under section 3(A) does not alter that liability. A taxing statute must be interpreted in the light of what 190 is clearly expressed therein and nothing can be implied nor can provisions be imported into them so as to supply an assumed deficiency. Per section K. Das and Ayyangar, JJ. The rate of tax as applied by the sales tax officer was in accordance with law. Having regard to the scheme underlying the option to elect for a previous year turnover conferred by section 7(1) of the Act the change in the law and in the rate of tax effected during the assessment year must apply to the turnover of the previous year which is deemed to be the turnover of the assessment year and sales effected during that period have to be assessed at the rate prevailing in that year. Although the notification was prospective and was made with the object of changing the rate of taxation during the assessment year, the date mentioned therein did not prevent the application of the assessment year rate to the opted previous year turnover. It is not correct to say that there is absence of machinery for reassessment and refund of tax to justify the conclusion that the basis of the tax liablity for an assessment year is that which prevailed on the first day of that year since there are provisions in the Act such as for instance sections 10 and 22 which provide for reductions, refunds and rectification of errors regarding taxation and even for enhancement of the tax already levied. There was no ambiguity in the notification and the principle of resolving ambiguities in favour of the assessee could not be applied in this case.

The Assistant Commissioner (Judicial) Sales Tax, Bareil ly, disposed of the respondents ' appeal made against an order of the Sales Tax Officer. A copy of the order was served on the respondent, but he lost it. Later, he ob tained another copy and filed a revision petition under sectiOn 10 of the U.P. Sales Tax Act. The same was opposed as being time barred, but the Judge (Revision) accepted the respondent 's contention that under section 12(2) of the , he was entitled to exclude the time spent in obtaining the second copy of the order, while computing the limitation period. The question whether such exclusion was permissible, was referred to the High Court which an swered in the affirmative. The appellant contended that the U.P. Sales Tax Act itself provided for a specific period of limitation; and therefore the was not applicable, and also that, a copy of the order was not required to be filed with the revision petition, and so the time spent in obtaining a second copy could not be excluded in computation of limita tion. Dismissing the appeal the Court, HELD: (1 ) Where the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revi sion petition, the time spent in obtaining that copy would necessarily have to be excluded under Section 12(2) of the . State of Uttar Pradesh vs Maharaj Narain & Ors. ; followed. [688 B C] (2) The provisions of Section 12(2) of the would apply even though the copy mentioned in that Sub section is not required to be filed alongwith the Memorandum of appeal. The same position should hold good in case of revision petitions ever since of 1963 came into force. 1686 B, D 687 FI J.N. Surty vs T.S. Chettyar (55 IA 161), The Punjab Co.operative Bank Ltd., Lahore vs The Official Liquidators, the Punjab Cotton Press Co. Ltd. Lahore Series 191, MT. Lalitkuari vs Mahaprasad N. Singh Panta Series 157, Additional Collector of Customs, Calcutta & Anr. vs M/s. Best & Co. (AIR S.A. Gaffoor vs Ayesha Beghum & Ors. (C.A. 2406/1969 decided on 18 8 1970 Unreported Judgment of Supreme Court, 1970 Vol. 2, page 784) followed. (3) For the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in Section 12(2), inter alia. shall apply in so far as, and to the extent to which they are not expressly excluded by such special or local law, and there is nothing in the U.P. Sales Tax Act expressly excluding the application of Section 12(2) of the . [685 H, 686 A]

The respondent was a limited company incorporated in the State of Indore where it had a textile mill. During the years from 1941 to 1946, it effected sales in British India through canvassing by its own representatives,. through brokers or through the purchasers ' brokers or representatives visiting Indore. The sales in British India in all categories were made F.O.R, Indore; the Railway Receipts were made out in the name of 'self ' and were endorsed in favour of the customer concerned and handed over to the Bank for delivery to the customer against payment of the sale price which was received at Indore through the Bank 's local branch. In the course of its assessment to Indian Income tax for some of the years during the period 1942 43 to 1947 48, the Income tax Officer, apart from taxing the income actually received in India, also held that the profits apportionable to all the other sales made in British India accrued or arose in the taxable territories and were therefore liable to Indian Income tax. He accordingly taxed the same on accrual basis. The Appellate Assistant Commissioner in appeal held that taking into account the fact of the case, it would be fair. on the analogy of Rule 33 of the Indian Income tax Rules 1922 to attribute 331 per cent of the profits to the activities in British India and to assess them to Indian Income Tax. The Tribunal confirmed this order but the High Court, on a reference under section 66 of the Indian Income tax Act, held in favour of the respondent. In the appeal to Supreme Court it was contended on behalf of the appellant that on the procedure adopted for the sales, the property in the goods passed in British India in all the categories of sales and that the fact that the goods were sold F.O.R. at Indore did not make any difference to that position. The High Court had therefore wrongly taken the view that the sales were not taxable in India. HELD: Allowing the appeal: the income accrued within British India and a proportionate part of it was assessable to Indian Incometax. [52G H] Pushanlal Mansingka (P) Ltd. The Commissioner of Income Tax, Delhi, Civil Appeal Nos. 557 558 of 1966, decided on May 5, 1967; followed. Commissioner of Income tax, Delhi vs P.M. Rathod & Co. , 150: Commissioner of Income tax vs Bhopal Textiles Ltd., , referred to. 48

By an order dated August 20, 1943, the Appellate Tribunal directed that certain deductions claimed by the assessee should be allowed. The matter came back to the Income tax Officer and he made an order on September 26, 1945, but did not issue any fresh notice of demand. The assessee appealed to the Appellate Assistant Commissioner complaining that in his order of September 26, the Income tax Officer had wrongly included a sum of Rs. 13,000 60 464 as unassessed foreign income of earlier years. The Appellate Assistant Commissioner held that the order of September 26 was not appealable. The assessee, therefore, made a miscellaneous application to the Appellate Tribunal, which held that the Incometax Officer acted wrongly in including the sum of Rs. 13,000 at that stage and directed the Income tax Officer to revise his computation accordingly. The Commissioner of Income tax, being of opinion that the Appellate Tribunal had no jurisdiction to entertain or make such order on a miscellaneous application applied for a reference to the High Court under section 66 (1) of the Income tax Act. The Tribunal referred certain questions and the High Court directed the Tribunal to refer certain other questions also but when the references came on for bearing the High Court held that the references were incompetent. The Commissioner of Incometax appealed to the Supreme Court with the leave of the High Court : Held, (i) that in carrying out the directions of the Tribunal and in passing the order of September 26, 1945, the Income tax Officer cannot be regarded as having acted under section 23 or section 27 of the Act and no appeal lay from his order under section 30 (1). The order made by the Appellate Assistant Commissioner was not therefore an order under a. 31 (3) and no further appeal lay to the Appellate Tribunal under section 33 (1) so as to enable the Tribunal to make an order under section 33 (4) and us there was no order under a. 33 (4), no question of law can be said to arise out of an order under section 33 (4) and there can be no valid reference under section 66 (1) or section 66 (2); (ii) even assuming that the order of the Income tax Officer dated September 26, 1945, was an order under a. 23 or section 27 and as such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under any of the sub sections of a. 31 and no appeal lay therefrom to the Appellate Tribunal under section 33 (1) and there could be no order of the Appellate Tribunal under section 34 (1). The order of the Appellate Tribunal correcting the order of the Income tax Officer and directing that the sum of Rs. 13,541 should not be included cannot be regarded in any event as an order under section 33 (4) so as to attract the operation of section 66 (1) or (2).

Against the judgment of the Single judge of the Punjab High Court dated January 5, 1953, in which he followed the decision of a Division Bench holding that section 7A of the Delhi and Ajmer Rent Control Act, 1947, was unconstitutional and void, the appellants preferred an appeal under the Letters Patent. Meanwhile the judgment or the Division Bench was brought up by way of appeal to the Supreme Court, and as the appeal was getting ready to be heard, the appellants made an application on January 5, 1959, for special leave to appeal to the Supreme Court against the judgment of the Single judge. No notice was given to the respondent to the application, and special leave was granted ex parte. The Letters Patents appeal was thereafter withdrawn by the appellants. When the appeal came on for hearing in due course, the respondent raised an objection to the hearing of the appeal on the grounds that the application for special leave was barred by limitation, that there were no sufficient reasons for condoning the long. delay of four years, and that the special leave granted ex parte should be revoked. 243 Held, that, in the peculiar circumstances of the case, leave should not be revoked. Expect in very rare cases, if not invariable, the Supreme Court should adopt as a settle rule that the delay in making an application for special leave should not condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant of the leave. Desirability of the Rules of the Supreme Court being amended suitably pointed out.

The constituent members of the appellant Association, who carried on business in iron and steel articles were assessed to sales tax for the years 1953 54 and 1954 55 under a notification dated October 24, 1953, issued by the State of Madhya Bharat under section 5(2) of the Madhya Bharat Sales Tax Act, Samvat 2007, (Act No. 30 of 1950). The appellant moved the High Court under article 226 of the Constitution challenging the validity of the assessment on the ground that the said articles were covered by the declaration made by Parliament by section 2 of the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952, that iron and steel were essential commodities within the meaning of article 286(3) of the Constitution which was operative from August 9, 1952. The High Court found against the appellant. Held, that even assuming that the words "iron and steel" in Entry 14 of the Schedule to the Act were comprehensive enough to include articles made of iron and steel, that would not necessarily render the notification invalid under article 286(3) of the Constitution. Article 286(3), as it stood before the Constitution (Sixth Amendment) Act, 1956, could be successfully invoked only if three conditions were satisfied, (1) that the impugned legisla. tion was one by the Legislature of a State, constituted under the Constitution, (2) that it was subsequent to the declaration made by the Parliament as to the essential character of the commodity and (3) that it could be, but was not, reserved for the President 's consideration and assent. It was obvious, therefore, that a subsequent Parliamentary 925 declaration could not affect the validity of an enactment retrospectively. Sardar Soma Singh vs The State of Pepsu and Union of India, ; and Firm of A. 'Gowrishankar vs Sales Tax Officer, Secunderabad, A. I. R. , referred to. Although the Art, tinder which the impugned notification was made, satisfied the first condition, it did not satisfy the second or the third and, consequently, its validity could not be questioned under article 286(3) of the Constitution. Held, further, that it was apparent from section 3 of the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952, that if a law had been passed prior to the commencement of the Act authorising the imposition of a tax its validity could not be challenged on the ground that the said commodity was subsequently declared by the Act to be essential for the life of the community. The impugned notification and the State Act under which it was made were, therefore, outside the purview of section 3 of the Act.

In respect of the assessment years 1959 60 and 1960 61, fresh assessments were made under section 12A of the Mysore General Sales Tax Act 1957 by the , Commercial Tax Offi cer. By his order dated June 8, 1966, certain amounts which had escaped assessment under the original assessment orders dated March 21, 1963 were included in the turnover of the respondent, but the deductions in respect of shop rent and tree tax were, however, allowed as in the initial orders. The appellant, in exercise of the powers under section 21(2) of the Act, by his orders dated June 28, 1967 revised the orders dated June 8, 1966 disallowing the deductions in respect of the shop rent, following the decision of this Court in Shinde Brother etc. vs Deputy Commissioner Raichur Two rectification applications and the two appeals therefrom on the ground that the revisions of assessment were barred by limitation under section 21(3) of the Act and, as such, there was a mistake apparent on the record were rejected as not maintainable. However, the writ petitions filed were allowed by the High Court holding that the orders dated June 28, 1967 were without jurisdic tion since they had been made beyond the period of four years from the date of the initial assessment orders dated March 21, 1963. On appeals by special leave to this Court, HELD: The contention advanced on behalf of the appel lants that the period of four years mentioned in section 21(3) of the Act should be computed from the orders dated June 8, 1966 made under S 12A of the Act and not from the ini tial orders of assessment dated March 21, 1963 is well founded. [595 C D] Once an assessment is reopened the initial order for as sessment ceases to be operative. The effect of reopening the assessment is to vacate or set aside the initial order for assessment and to substitute in its place the order made on reassessment. The initial order for reassessment cannot be said to survive even partially although the justification for dessessment arises because of turnover escaping assess ment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. [596 D E] In the present case the assessment orders made under section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier and the only orders which could be the subject matter of revision by the appellant were the orders made under section 12A of the Act and not the initial assessment orders. [596 E F] J. Jaganmohan Rao & Ors. vs Commissioner of Income tax and Excess Profits Tax, Andhra Pradesh [1970] 1 S.C.R. 726=75 ITR 373; Commissioner of Sales Tax, Madhya Pradesh vs H.M. Esufali H.M. Abdulali ITR 271, followed. International Cotton Corporation (P) Ltd. vs Commercial Tax Officer, HubIi & Ors. [1975] 2 S.C.R. 345, applied.

The appellants who were manufacturers of cigarettes and tobacco in the State of Bihar contested the levy of sales tax on sales effected by them during the financial years 1949 5o and 1950 51 on the ground that as a direct result of every sale effected by them the goods concerned were delivered outside the State of Bihar and were, therefore, exempted from tax liability under article 286(i)(a) of the Constitution. Both the Superintendent of sales tax and the Deputy Commissioner of sales tax, Bihar, overruled the objection of the appellants, and following a previous ruling of the Board of Revenue of Bengal in a case known as the Bengal Timber Case (61 of 1952) held the appellants liable to pay the tax. The appellants paid the tax demanded but filed an application in revision to the Board of Revenue, claiming a constitutional exemption from tax on every sale effected by them as a result of which goods were delivered outside the State of Bihar whether the delivery was for consumption in the State of first delivery or not. The Board passed the following order on the revision petition. " As regards the admitted despatches of the goods outside the State after the 26th January, 1950, when the Constitution came into force, the learned lower court has been guided by the decision of the Board in the Bengal Timber Case (No. 61 of 1952). But this ruling of the Board stands superseded by the subsequent decision of the Supreme Court in the United Motors Case According to the decision of the Supreme Court, no tax could be levied on despatches to the places outside the state after the 26th January, 1950, and on this point the petitions are allowed, and the sales tax officer directed to recalculate the amount of tax payable by the assessee ". The appellants taking the above order to be in their favour claimed refund of the tax already paid by them and the sales tax authorities contested the position and claimed that they were bound to refund the tax only on those sales wherein the goods were delivered outside the State for consumption in the State of first delivery. The department thereafter sought clarification of the above order. The Board refused to clarify or explain its order and passed an order saying that " no further clarification was really required in view of the specific reference to the judgment of the Supreme Court in the United Motors Case ". Thereafter as the authorities still refused to refund the balance of the tax the appellants filed two applications in the High Court for the issue of a writ of mandamus to compel the refund. The High Court held that the Board 's decision that sales in which the goods were delivered outside the State for consumption, not in the State of first delivery but in other States were also exempted from tax, was wrong and that the appellants were not entitled to a writ of mandamus for enforcing a wrong order. On appeal by special leave, Held, that the proper construction of the Board 's orders was that the sales tax officer was directed to decide the relief that 108 should be given to the assessee on the officers ' interpretation of the decision of this Court in the United Motors Case. The Board did not determine the effect of that judgment and did not decide that every sale in which the goods were delivered outside the State of Bihar was exempted from liability to tax. The principle that a subordinate tribunal should not refuse to carry out the directions of a superior tribunal was therefore not applicable to the instant case. Bhopal Sugar Mills vs Commissioner of Income tax, [1961] 1 S.C.R. 474, held inapplicable. The United Motors Case merely decided that sales in which goods were delivered outside the State for consumption in the State of first delivery would fall under the Explanation to article 286(1) of the Constitution and would therefore be exempted from tax liability, but it did not deal with other sales in which the goods thus delivered were for consumption, not in the State of first delivery but in other states. Such sales would on the order of the Board of Revenue which was binding on the appellant be liable to tax in accordance with the previous decision of the Board of Revenue in the Bengal Timber Case. State of Bombay vs United Motors (India) Ltd. and Ors., ; , explained and applied. Board of Revenue of the State in the Bengal Timber Case, 61 of 1952, referred to.

Appeal No. 716 of 1957. Appeal from the judgment and decree dated July 29, 1955, of the former Bombay High Court in Appeal No. 50 of 1953 under the Letters Patent against the judgment and decree dated September 3, 1953, of the said High Court in First Appeal No. 547 of 1952. H. N. Sanyal, Additional Solicitor General of India, T. V. R. Tatachari and M. section K. Sastri, for the appellants. Purshottam Trikamdas, H. R. Gokhale and R. Gopalakrishnan, for the respondent. October 28. The Judgment of Jafer Imam and Raghubar Dayal, JJ., was delivered by Jafer Imam, J. A. K. Sarkar, J., delivered a separate judgment. IMAM J. This is an appeal against the judgment of a Division Bench of the Bombay High Court in Letters Patent Appeal No. 50 of 1953, reversing the decision of Shah, J. and restoring the order passed by the executing court which had been set aside by him. Two Questions arise for decision in this appeal (1) whether the Wada (house) ordered to be attached by the executing court is Watan property, and if so, can 165 it be attached in execution of a decree ? (2) If the Wada is not Watan property, is it exempted from attachment by virtue of the provisions of section 60 of the Code of Civil Procedure ? It is necessary now to state a few facts. One Rao Ba. Vithalrao Laxmanrao Thube, hereinafter referred to as Laxmanrao, brought Civil Suit No. 313 of 1943 against Tuljaramarao Narainrao Desai, hereinafter referred to as Tuljaramarao, to recover Rs. 80,000 which had been borrowed by him from the plaintiff. Laxmanrao 's suit was decreed on December 20, 1943. Tuljaramarao having died his legal representatives, the present appellants, were brought on the record on September 21, 1944. In April, 1949, Laxmanrao filed an application for the execution of the decree. He sought the attachment, with a view to their subsequent sale, of certain properties including the Wada which is the subject matter of this appeal. The appellants objected to the proposed attachment on various grounds. The executing court on December 17, 1951, issued a warrant of attachment only against the Wada in question. The appellants appealed to the Bombay High Court. Their appeal was heard by Shah, J., who by his order dated September 23, 1953, set aside the order of attachment relying on the decision of Chagla, J., in second Appeal No. 760 of 1942. He, however, gave no decision on the question whether section 60 of the Code of Civil Procedure gave protection to the Wada from attachment. Against the decision of Shah, J., there was an appeal under the Letters Patent of the High Court which was heard by a Division Bench. The Division Bench, as already stated, reversed the decision of Shah, J. and restored the order made by the executing court. Subsequently, the High Court gave a certificate that the case was a fit one for appeal to this Court. It is undisputed that the whole of village Nandi had been granted as inam to the ancestor of Tuljaramarao and his descendants as per Sanad, Ext. 54, and the Inam Patrak, Ext. In that Sanad there is no mention of any Wada existing on the Inam land. According to the executing court the Wada 166 appears to have been built after the grant. It appears that the opinion of the Division Bench of the High Court was also to the same effect. There is no finding of Shah, J., to the contrary. We must, therefore, proceed on the basis that the Wada in question was not the subject of the original grant. This Wada came to be constructed on the land in the inam village of Nandi sometime subsequent to the grant. "What has to be decided is, do the attributes of Watan Property " accrue to the Wada which was constructed after the grant on land which was admittedly " Watan Property " as defined by the Bombay Hereditary Offices Act, 1874 (Bombay Act No. III of 1874), hereinafter referred to as the Act. In appeal No. 760 of 1942, Chagla, J., took the view that the house in that case was an accession to the site on which it stood. Accordingly, it must partake of the character of the land on which it stood. The learned Judge stated that the question which he had to determine was whether the house was immovable property held for the performance of the duty appertaining to an hereditary office within the meaning of section 4 of the Act. Having regard to the definition of " immoveable property " in the Bombay General Clauses Act he was of the opinion that the house certainly formed part of the immoveable property which was held for the performance of the duty appertaining to the hereditary office of the Watan and that the only answer to the question " what is the immoveable property which is held for the performance of the duty under section 4?" can be both the land and the house. If the house forms part of the immoveable property it is not possible to sever the two and to say that it is only the land which is Watan property and not the house which is permanently fastened to it. Shah, J., relied upon the decision of Chagla, J., and held that the land on which the Wada in the present case stood, being Watan property, the Wada must also be deemed to have acquired that character. The Division Bench which heard the appeal against the decision of Shah, J., was of the opinion that although a house 167 built on land must be regarded as immoveable property it did not follow that like the land on which it was built the house became Watan property. The fact that a house subsequently built became immoveable property would have no material bearing on the question whether it was Watan property or not. In order that the house may be regarded as Watan property it must satisfy the test laid down by the definition of the word " Watan Property " in section 4 of the Act and that if the word " held " was construed in the way in which the learned Judges of the Division Bench thought it should be, it would be difficult to accept the view that a house subsequently built by a watandar on a part of the Watan land could be said to be held by him for the performance of his duties of a hereditary office. The learned Judges of the Division Bench accordingly were of the opinion that Shah, J., erred in so holding. " Watan Property " has been defined in the Act to mean: " The moveable or immoveable property held, acquired, or assigned for providing remuneration for the performance of the duty appertaining to an hereditary office. It includes a right to levy customary fees or perquisites, in money or in kind, whether at fixed times or otherwise. It includes cash payments in addition to the original watan property made voluntarily by the State Government and subject periodically to modification or withdrawal. " The inam lands of Nandi were undoubtedly held as remuneration for the performance of the duty appertaining to an hereditary office and therefore were Watan properties. On the findings of the courts below the Wada in question was not the subject of the grant. In our opinion, therefore, at no time was it held for providing remuneration for the performance of the duty appertaining to a hereditary office. Nor could it be said to have been acquired for performance of any such duty. It had been constructed some time subsequent to the grant either by the grantee or his descendants and there is no indication on the record 168 that it was constructed for the purpose of providing remuneration for the performance of the duty appertaining to a hereditary office. To that extent at least it appears to be clear that the Wada in question does not come within the definition of Watan property as defined in the Act. The only question is whether having been constructed on land which is Watan property and being immovable property within the meaning of the Bombay General Clauses Act, does it partake of the character of the land on which it stood ? On behalf of the appellants it was argued that the Wada is an accession to the Watan property, namely, the land of village Nandi. It seems to us, however, that construction of a Wada on land which is Watan property is not an accession to it, as accession to the land would suggest that over a course of years imperceptible accretion to the land has taken place and it was impossible to distinguish the original land from the accreted land. In such a case the accreted land may possibly partake of the character of the original land. Adjacent lands to the original land which have been acquired and can be distinguished cannot partake of the character of the original land. On behalf of the appellants it was argued that the right, title and interest of the grantor had to be looked at first in construing a grant and if it appeared from the terms thereof that it did not contain any reservation or exception then all the rights, title and interest of the grantor which he was capable of granting would pass to the grantee. The grantor in this case was the Government which could have built a construction on the land granted or dug tube wells on it. The grantee, therefore, could also build a house or any other structure on the land. On the other hand, it was contended on behalf of the respondent that the position of a watandar was not that of an absolute owner of the land. He held the land on certain conditions. The land was liable to forfeiture if he was guilty of certain acts mentioned in section 60 and Schedule 11 of the Act. We will assume, there being nothing to the contrary in the Sanad, that the grantee was not restricted from constructing a building on the land. From that, 169 however, it does not necessarily follow that the building so constructed became Watan property within the meaning of the Act. If the Government could have built a construction on the land it could also have dismantled it and removed the material with which it was made. Similarly, the grantee could do so, there being no restriction in that regard in the terms of the Sanad. It seems to us that on a proper construction of the Sanad there was no impediment in the way of the grantee from dismantling the house which he had built and removing the materials with which it had been constructed and selling the same. Indeed, unless it is held that a house constructed on the land partakes of the character of the land, it is difficult to see how the grantee is prevented from selling or mortgaging it but not the land on which it stood. It seems to us, therefore, that the Wada in the present case although immovable property did not partake of the character of the land on which it was constructed because it was severable from the land and was capable of being dismantled and the materials of which could be removed and sold without violating any of the provisions of the Act. In our opinion, the decision of the Division Bench of the High Court that the Wada was not Watan property appears to be correct. The next question for consideration is whether the Wada is one belonging to an agriculturist and occupied by him within the meaning of cl. (c) of the proviso to section 60(1) of the Code of Civil Procedure. If it is, then it is exempted from attachment by the provisions of the proviso. It was urged that as the word " agriculturist " has not been defined in the Code, the word must be construed according to its ordinary meaning. According to Shorter Oxford English Dictionary this word can also mean a farmer. Neither the extent of the land farmed by him nor the amount of income derived by him from cultivating the land was a relevant consideration in construing the word ".agriculturist "Nor would it be right to restrict the meaning of the word " agriculturist " to mean that an agriculturist must be a person who himself or by the aid 170 of the members of his family tills the land and not with the aid of employed labour. On behalf of the respondent, however, it was contended that the word "agriculturist " in el. (c) of the proviso must bear the same meaning as the word " agriculturist " in cl. (b) of the proviso. It was necessary, therefore, to construe the provisions of cl. (b) as well in order to under. stand what the Code intended the word " agriculturist " to mean in cl. On a proper construction of el. (b) not only an agriculturist must be the tiller of the land but he must also be a small agriculturist. Clause (b) was not intended to refer to a person who cultivated a large area of land and derived from it a large income. It was pointed out that in the present case the appellant Appasaheb was cultivating a very large area of land with the aid of employed labour and derived an income somewhere between Rs. 30,000 to 35,000 a year. Section 60(1) of the Code states in detail what property of a judgment debtor is liable to attachment and sale in the execution of a decree. It was urged that but for the proviso all the properties of Tuljaramarao other than Watan property were liable to attachment and sale in execution of Laxmanrao 's decree. The proviso no doubt exempted from attachment and sale certain properties mentioned therein but cl. (b) of the proviso clearly indicated that the object of the Code was to save in the case of a judgment debtor his tools as an artisan and, where he was an agriculturist, his implements of husbandry and such cattle and seed grains as may, in the opinion of the court, be necessary to earn his livelihood. It did not even exempt his agricultural produce unless there was a notification under section 61 of the Code specifying by a general or special order how much of the agricultural produce was, in the opinion of the State Government, necessary for the purpose of providing, until the next harvest, for due cultivation and the support of the judgment debtor and his family. It was suggested, therefore, that the Code intended to exempt from attachment and sale, in the case of an agriculturist, only that much which was necessary to enable him to earn his livelihood as such. 171 interpreted by various High Courts in India. Reference to only some of these cases need be made. In the case of Hanmantrao Annarao vs Dhruvaraj Pandurangrao (1) it was held by the Bombay High Court that the word " agriculturist " in cls. (b) and (c) of the proviso to section 60(1) of the Code of Civil Procedure denotes persons who are personally engaged in tilling and cultivating the land and whose livelihood depends upon the proceeds of such tillage and cultivation of the soil. It does not include large landed proprietors even though they may be tilling the land and cultivating it through their servants. In the case of Parvataneni Lakshmayya vs The Official Receiver of Kistna (2) a Full Bench of the Madras High Court arrived at the following conclusion after considering various decisions of some of the High Courts in India: " We think that, having regard to the scheme of the section exempting from attachment, as it does, tools of artisans, and, where the judgment debtor is an " agriculturist " his implements of husbandry and such cattle and seed grain as may in the opinion of the Court be necessary to enable him to earn his livelihood, and his houses and other buildings occupied by him, protection is intended to be given to those who are real tillers of the land, and that an " agricul turist " in the section is a person who is really dependent for his living on tilling the soil and unable to maintain himself otherwise. Main, chief, or principal sources of income are not, in our view, the proper tests. A man 's main source of income may be from tilling the soil but his other source or sources of income may be more than sufficient to maintain him. The fact that a man 's income from tilling the soil may be larger than his income from his ownership of land or other sources does not seem to us to make him an " agriculturist" within the meaning of the section. At the same time we see no reason for depriving an " agriculturist " of the exemption under the section because he may have invested money in a business or businesses as alleged in the present case and may (1) (1946) 49 B.L.R.867. (2) I.L.R. 172 derive some income therefrom or do coolie work and add to his earnings in bad times. The test of sole source of income if applied would deprive him of the benefit of the section and we prefer the tests which we have already laid down, viz., that he must be a tiller of the Boil really dependent for his living on tilling the soil and unable to maintain himself otherwise. " in the case of Tirloki Prasad vs Kunj Behari Lal (1) the Allahabad High Court held that the test to be applied in deciding whether a person is an agriculturist is whether his main source of income is derived from cultivation or not. In the case of Dwarka Prasad vs Municipal Board, Meerut (2) the same High Court held that there was no reason for holding that cl. (b) of the proviso to section 60(1) applied only to the case of very small farmers and not to the case of large farmers. Clause (b) aimed at protecting the implements of every farmer so as to enable him to continue to earn his livelihood in the same way as he had been doing previously. There was nothing to indicate that the clause was limited to small farmers. In the case of Gowardhandas vs Mohanlal (3) the conclusions of the Nagpur High Court were: "(i) Whether a person is an agriculturist or not is not a question turning on source of income but on nature of occupation. (ii) A person may have many occupations. If one of them is agriculture and for that purpose a house or building is occupied, protection can be claimed. (iii) A person who owns land and lets it reserving either money or produce is not an agriculturist but a landlord. (iv) A person who cultivates the land as a labourer, though neither a landowner nor a tenant, is an agriculturist. (v) If a man cultivates the land with his own hands or by means of labourers whose activities he directs he is an agriculturist whether he operates on a large or a small scale. If he has no connection with (1) A.I.R. 1935 All. 448. (2) A.I.R. 1958 All. (3) I.L.R. 173 the land except that he owns it and people work for him, he may or may not be an agriculturist according to circumstances. " In the case of Nihal Singh vs Siri Ram (1) the Lahore High Court held that the word "agriculturist " means a person who personally engages in the occupation of tilling the soil and derives his livelihood from that occupation and cannot (or does not) maintain himself from other sources. On the facts of the case that Court held that a man who merely received rent from tenants or the income of the produce derived by the employment of servants or partners could not be said to depend for his livelihood upon the proceeds derived from so engaging himself in the tillage of the soil. In the case of Anantalal vs Bibhuti (2) the Patna High Court held that an agriculturist was one who tilled the soil and thereby earned his livelihood and was expected to have implements of husbandry, cattle and seed grain. This, however, did not mean that he must till the land with his own hands or that he must necessarily have his own implements of husbandry. In any event, cultivation must be his main source of income though this would not be the sole test. The question whether a person was an agriculturist or not would have to be decided with reference to the facts of each particular case. In the present case the evidence of the appellant 's own witness, Balaji, shows that Tuljaramarao had reserved some lands for a home farm about 8 years before his death. The area reserved was about 35 acres and that he maintained about 12 bullocks and 8 servants. He was getting an income of Rs. 20,000 to Rs. 25,000 a year from these lands. He used to keep his cattle in the Wada where his servants also stayed and his agricultural implements were kept. The pro duce of the lands was also stored in the Wada. Tuljaramarao used to supervise the agricultural operations and his servants. After his death his son appellant Appasaheb became the owner. Appasaheb increased the acreage of the cultivation of the home farm to about 60 acres. He has 14 bullocks and 10 (1) Lah.23. (2) Pat. 348. 174 or 12 servants and the income is Rs. 30,000 to Rs. 35,000 a year. The cattle and the produce are kept in the Wada where he also resides. This witness also stated that the appellant Appasaheb had inams in 4 villages. Furthermore, in 10 or 12 villages he owns lands and he gets about Rs. 35,000 to Rs. 40,000 from his lands. The said Appasabeb and his brother sometimes worked personally in the fields. It is clear, from this evidence, that Appasaheb is by no means entirely dependent for his livelihood upon the income from the home farm. Apart from the income of the home farm he has a substantial income from other lands and there is nothing to show that this income derived from his other lands is the result of cultivation by him. It was contended on behalf of the appellants that the Bombay High Court had taken an extreme view in the case of Hanmantrao Annarao vs Dhruvaraj Pandurangrao (1). Reliance was placed on the decision of the Allahabad High Court in Dwarka Prasad vs Meerut Municipality (2) where it was held that a tractor was an implement of husbandry and it was not subject to attachment although it was used for cultivating an area of about 1,200 bighas of a farm. The decisions of the Madras High Court in the case of Parvataneni Lakshmayya vs The Official Receiver of Kistna (3), of the Lahore High Court in the case of Nihar Singh vs Siri Ram and Others (4) and of the Nagpur High Court in the case of Gowardhandas vs Mohanlal (5) were also relied upon on behalf of the appellants in order to show that to be an agriculturist a person did not have to personally cultivate the land and that it was immaterial whether the area cultivated or the income derived therefrom was large or small. The real test was, was the cultivation his main source of livelihood ? It was submitted, on the facts of the present case, that the appellant Appasaheb depended for his livelihood on the income derived from the land cultivated by him and that the Wada (1) (2) A.I.R. 1958 All. 561 (3) I.L.R. (4) Lah. (5) I.L.R. 175 on the land was occupied by him as an agriculturist for the purpose of his cultivation. Such being the position the Wada was occupied by him as an agriculturist and was therefore exempted from attachment under cl. (c) of the proviso to section 60(1) of the Code of Civil Procedure. Sub section (1) of section 60 of the Code of Civil Procedure makes all saleable property, movable and immovable, belonging to the judgment debtor and over which he has a disposing power liable to attachment and sale in execution of a decree against him. In this subjection unless the terms of the proviso came to the rescue of the judgment debtor, all lands and houses or other buildings, goods and money, amongst other things, belonging to him would be liable to be attached. The Legislature, however, recognized that it would not be expedient to leave the matter at that. Hence the proviso. The relevant clauses in order to determine what the word " agriculturist " means are clauses (b) and (c) of the proviso. Under cl. (b) the tools of an artisan are exempted from attachment. According to the Shorter Oxford English Dictionary the word " artisan " means a mechanic, handicraftsman or an artificer. The object of the Legislature in exempting from attachment tools of an artisan was obviously to leave him his tools in order to enable him to make a living. Without his tools the artisan would be destitute, a situation which the Legislature intended to avoid. In the case of a judgment debtor who was an agriculturist, the Legislature intended that his implements of husbandry and such cattle and seed grain as, in the opinion of the court, were necessary to enable him to earn his livelihood as an agriculturist should be exempted from attachment. Here again, the intention of the Legislature was to leave in the hands of an agriculturist sufficient means whereby he could earn his livelihood as an agriculturist. According to Shorter Oxford Dictionary one of the meanings of the word " husbandry " is the business of husbandry, that is to say, a person who tills and cultivates the soil or a farmer. The same dictionary states that one of the meanings of the word 176 " livelihood " is means of living maintenance. It can also mean income, revenue, stipend. In the case of an agriculturist his implements of husbandry must therefore mean implements with which he tills the soil. These are saved from attachment. So far as his cattle and seed grain are concerned, only that much is exempted which, in the opinion of the court, would be necessary to enable him to earn his livelihood and by which he could earn his maintenance. It is to be noticed that under cl. (b) the land which an agriculturist tills is not exempted from attachment. The agricultural produce of the land is exempted to the extent as notified in the Official Gazette issued under section 61 of the Code. On a fair reading of the provisions of cl. (b), that which is saved to an agriculturist are his implements with which he tills the soil and such cattle and seed grain which, in the opinion of the court, are necessary for him to use in order to enable him to maintain himself. The provisions of cl. (b) in the case of an agriculturist, therefore, suggest a person who tills the soil in order to maintain himself. Under cl. (c) houses and other buildings (with the materials and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to an agriculturist and occupied by him are exempted from attachment. The word " agriculturist " in this clause must carry the same meaning as the word " agriculturist " in cl. (b) and the house must be occupied by him as such. The object of the exemption in el. (c) apparently is that an agriculturist should not be left without a roof over his head. In other words, the Legislature intended by cls. (b) and (c) to prevent an agriculturist becoming destitute and homeless. It was, however, argued on behalf of the appellants that there are no restrictive words in cl. So long as it was a house belonging to an agriculturist and occupied by him, it was exempted from attachment no matter what other income than agriculture was earned by him. The Wada in question was clearly occupied by the appellants for the purpose of tilling the land of the home farm and for storing the produce thereof, the implements of 177 husbandry and tethering of cattle employed in cultivating the land. It seems to us, on the evidence of the appellants ' own witness, that they do not themselves till the land of the home farm which is done by a large number of labourers employed by them. ' Tuljaramarao did not himself cultivate the land. He merely supervised the work of cultivation by the labourers. The witness, however, did state that sometimes Appasaheb and his brother worked personally in the fields. This is a vague statement which does not necessarily mean that they did any act of cultiva tion themselves. The Wada in question is a big structure where the appellants reside but if they are not agriculturists within the meaning of that word in section 60, the Wada cannot be exempted from attachment. It seems to us that even if it is not necessary that a person must till the land with his own hands to come within the meaning of the word " agriculturist " he must at least show that he was really dependent for his living on tilling the soil and was unable to maintain himself otherwise. In the present case it is quite obvious that even if the appellants can be described as agriculturists in the widest sense of that term, they are not agriculturists who are really dependent for their maintenance on tilling the soil and that they are unable to maintain themselves otherwise. The evidence shows that Tuljaramarao was getting an income of nearly 20,000 to 25,000 rupees from lands cultivated in the home farm and that the appellant Appasaheb by extending the acreage of that farm was receiving an income of Rs. 30,000 to Rs. 35,000. In addition he had lands in 10 or 12 other villages and his income from the lands was Rs. 35,000 to Rs. 40,000. Assuming that these figures include the income from the lands of the home farm, they would show that in addition to that income he had an additional income of at least Rs. 5,000 from lands in villages other than Nandi. Furthermore, the appellant Appasaheb is receiving a cash allowance of Rs. 700 to Rs. 800 per annum and Rs. 4,000 to Rs. 5,000 from the village, officers of the four inam villages. In these circumstances, it can hardly be said that the appellant 23 178 Appasaheb is really dependent for his maintenance by tilling the soil and unable to maintain himself other. From this point of view it seems to us that he cannot be regarded as an agriculturist within the meaning of that word in section 60 of the Code. In our opinion, the decision of the High Court that the Wada in question was not Watan property and that it was not exempted from attachment by virtue of the provisions of section 60(1) of the Code is correct. The appeal is accordingly dismissed with costs. SARKAP. The appellants are the legal representatives of one Tuljaram Desai. Tuljaram was the owner of certain watan properties. On his death, his son the appellant Appasaheb became entitled to them. The other appellants are the widow and younger son of Tuljaram. Sometime in 1943 one Vithalrao Thube obtained a decree for Rs. 80,000 against Tuljaram. By 1949 both Tuljaram and Vithalrao had died. The respondent is the successor in interest of Vithalrao. The present appeal arises out of the proceedings for the execution of the decree started by the respondent against the appellants. In this appeal we are concerned only with a wada (building) belonging to the appellant Appasaheb, standing on watan land which the respondent seeks to have attached and sold in execution. It is not now in dispute that watan properties are not saleable properties and cannot therefore be attached and sold in execution. The wada stands on watan land and the respondent seeks to proceed against the structure apart from the land. The appellant Appasaheb contends that he is an agriculturist and that wada belonging to and occupied by him is protected from attachment and sale by cl. (c) of the proviso to sub section (1) of section 60 of the Code of Civil Procedure. He also contends that the wada itself is watan property and is not in view of sub section (1) of section 60 liable to attachment and sale as it is not a saleable property. Now sub section (1) of section 60 makes all saleable property ,liable to attachment and sale in execution. The proviso to it so far as material runs thus : "Provided that the following particulars shall not be liable to such attachment or sale, namely: (b) tools of artisans and where the judgmentdebtor is an agriculturist, his implements of husbandry and such cattle and seed grain as may, in the opinion of the court be necessary to enable him to earn his livelihood as such. (c) houses and other buildings (with materials and the sites thereof and land immediately appurtenant thereto and necessary for their enjoyment) belonging to an agriculturist and occupied by him. " I propose now to consider the question whether the wada is saved from execution under el. (c) of the proviso to sub section (1) of section 60. In order that the clause may apply two conditions have to be fulfilled. First, the person claiming benefit under it must be an agriculturist and secondly the wada must belong to and be occupied by him. First, then, was the appellant Appasaheb an agriculturist within the meaning of the clause ? Now the plain meaning of the word " agriculturist " in the present context, is a person who occupies himself with agriculture, that is, cultivation of land for raising crops. Anybody who is engaged in cultivating land for raising crops would be an agriculturist. So far there is no difficulty. It appears however from the reported decisions that the High Courts have expressed sharply divergent opinions on the question as to who is an agriculturist within the meaning of the clause. The difference however is not on the point that an agriculturist must be one who cultivates but as to whether the agriculturist contemplated in cls. (b) and (c) is one who cultivates with his own hands and whether all persons who carry on agricultural operations are agriculturists within the clauses. These differences have arisen not because any difficulty was felt as to the meaning of the word " agriculturist ", but from the intention of the legislature to be gathered from the other words used in the clauses. In this appeal these authorities have been relied on by the 180 parties as it suited the contention of each. It is necessary therefore to consider the views expressed in these cases and decide whether the word " agriculturist " is to be given its plain meaning or has to be qualified in some way. It is of some significance to state that by and large, the view of one High Court has been discarded by another. One view is that an agriculturist is a person whose main source of livelihood is agriculture: see Tirloki Prasad vs Kunj Behari Lal (1). It is said that this is the right view for an agriculturist must be one who is so by profession. Now the main source of livelihood of a person may vary from time to time: therefore at one period of time a person might be ail agriculturist but not at another. It is not reasonable to hold that such a result was intended. Again it would often be difficult to decide which is the main source of livelihood of a person. Indeed it is not quite clear as to what is meant by main source of livelihood unless it means the livelihood producing the largest income. I find nothing in the clauses to warrant this view: they do not say anything about agriculture being a person 's main source of livelihood in any sense of the word " main ". Furthermore if this view is accepted, a rich farmer who has income from other sources, which income is smaller than his income from agriculture, would be protected by these clauses while a poor peasant who makes a slightly bigger income, say as a day labourer, than he does from agriculture, would be deprived of the protection. I am unable to accept a view which produces such a result. I find no reason why a person who has a profession besides agriculture, should be protected if agriculture is his main profession and not otherwise, particularly when what is protected is agricultural implements, cattle, seed grain and house used for agricultural purposes. Another view taken is that the agriculturist must be one whose sole means of livelihood is cultivation of land but excluding persons carrying on farming in a large way: Muthuvenkatarama Reddiar vs The Official 181 Receiver of South Arcot (1). This view has been discarded in a later full bench decision of the same High Court in Parvataneni Lakshmayya vs The Official Receiver of Kistna (2) to which reference will be made later. For myself, I find nothing in the clauses to justify this view. Take the case of a small cultivator who, in order to maintain himself, takes up the other work and so supplements his income. There is nothing in the clauses to indicate that such a cultivator should be deprived of the protection. It is well known that agricultural operations do not occupy a person for the whole year and as the income from agriculture is for quite a large number not enough to meet their needs, many small cultivators have to supplement their in. come by other work when they are not engaged in the fields. There is nothing in the clauses to lead to the view that these persons were not intended to get the protection. It seems to me manifest that there is no reason to deprive these persons of the benefit of the protection. Neither do I find any words in the clauses to support the view that big farmers are not intended to get the protection. This aspect of the matter will be discussed further later. The view taken in Muthuvenkatarama Reddiar 's case (1) does not therefore appear to me to be well founded. In Nihal Singh vs Siri Ram (3 ) a full bench of the Lahore High Court held that an agriculturist must be one who personally tills and not through servants and does not maintain himself from other sources of income. The reason given to support this view appears to be as follows: The word agriculturist must mean the same thing in cls. (b) and (c). In cl. (b) it is in juxtaposition with the word artisan. An artisan is one who himself practices a handicraft and furthermore he must practice the handicraft not as a hobby but as a living. So in cl. (b) an agriculturist must be one who personally tills and not through servants and maintains himself by agriculture alone. I am not convinced by this reasoning. If the word agriculturist means one who must till with his own (1) Mad. (2) I.L.R. (3) Lah. 182 hands, then it is wholly unnecessary to rely on the juxtaposition of the words artisan and agriculturist in cl. (b) for reaching the conclusion that the Lahore High Court did. It is only if the word " agriculturist " as ordinarily understood includes one who carries on agricultural operations through persons employed by him that it becomes necessary to rely on the reasoning based on the juxtaposition of the two words in the clause. But I am wholly unable to appreciate the logic of this reasoning. Assume that an artisan must be one who works with his own hands. It does not follow that an agriculturist if it does not mean exclusively one who tills with his own hands, must be one who tills only with his own hands when that word is used in juxtaposition with the word artisan. Such juxtaposition would afford no reason for departing from the normal meaning of the word agriculturist. In Hanmantrao vs Dhruvraj (1) also it was said that an agriculturist within the meaning of the clauses is one who tills with his own hands. The reason there put is that since in el. (b) reference is made to implements of husbandry, cattle and seed grain necessary for earning a livelihood as a cultivator, therefore primafacie, only an agriculturist who cultivates with his own hands is meant. Again I am unable to follow the reasoning for a person who lives on cultivation carried on by hired labour would also require implements of husbandry, cattle and seed grain. An agriculturist, as I have said, is one who carries on cultivation. Now one may carry on cultivation himself or through hired labour. In the latter case also he would be an agriculturist within the plain meaning of that word. Then it seems to me that if we exclude from the clause an agriculturist who does not till with his own hands, a most unreasonable situation would ensue. Old and incapacitated small farmers and most women would have to be denied the protection of the clauses. Again, it may so happen that a person carrying on agricultural operations himself becomes unable to do so through ill health for two or three years when he gets the cultivation done (1) I.L.R. 183 by employing labour and resumes cultivation when he regains his health. If the view now under discussion is correct, then such a person would cease to be an agriculturist during the period of ill health though before and after that period he would be an agriculturist. It does not seem to me that such results could have been intended. I come now to the view taken in Parvataneni Lakshmayya vs The Official Receiver of Kistna (1) earlier referred to. It was there said, "We think that, having regard to the scheme of the section exempting from attachment, as it does, tools of artisans, and, where the judgment debtor is an " agriculturist ", his implements of husbandry and such cattle and seedgrain as may in the opinion of the court be neces sary to enable him to earn his livelihood and his houses and other buildings occupied by him, protection is intended to be given to those who are real tillers of the land, and that an " agriculturist " in the section is a person who is really dependent for his living on tilling the soil and unable to maintain him otherwise. " I am unable to agree with this view. It leads to obvious anomalies. Take the case of a person whose sole means of living is agriculture. Suppose he carries on agriculture on a large scale and makes a big income out of it. He would still be dependent on agriculture for his living and unable to maintain himself otherwise. He would be an agriculturist for the purpose of the clauses within the meaning of Parvataneni 's case (1), for that case does not say that a large scale farmer is not an agriculturist. Such a person would be entitled to protection under the clauses even though his income from agriculture is, say Rs. 25,000 a year. Now take the case of a small farmer whose income from agriculture is Rs. 1,000 a year but who also makes Rs. 1,500 from other sources and is able to maintain himself from the latter income. According to Parvataneni 's case (1) such a person would not be an agriculturist for the purpose of the clauses and would not be entitled to any protection under them. I find (1) I.L.R. 184 it impossible that the legislature could have intended such a result. Then again I find nothing in the language of the clauses clearly leading to the view accepted in Parvataneni 's 'case (1) however. The only reference to a living is in cl. (b) and it is to be found in the words " such cattle and seed grain as may. be necessary to enable him to earn his living as such ", that is, as an agriculturist. I do not think that these words lead to the conclusion that the agriculturist contemplated must depend for his living on agriculture. They are intended to define the limit of the protection which an agriculturist is entitled to for his cattle and seed grain. These words must therefore mean such cattle and seed grain as are necessary for the agriculturist to earn his livelihood from agriculture if that was his sole means of livelihood. If that were not so we would have to hold that this part of the clause contemplated an agriculturist whose livelihood depended on agriculture alone and who had no other source of income. Obviously where a person earned his livelihood from agriculture and another source, it could not be decided what cattle and seed grain he would require to earn his living as an agriculturist for the simple reason that he did not earn his living as an agriculturist only. Parvataneni 's case (1) however accepts the view that a person may be an agriculturist within the meaning of the clauses though he may have besides agriculture another source of income. And with that view, for the reasons earlier stated, I entirely agree. There seems to me to be other reasons also why the view taken in Parvataneni 's case (1) is not the correct one. So far as the tools of an artisan are concerned, cl. (b) does not limit the protection to such of them as are necessary to enable him to earn his living as an artisan. Therefore, there is no reason to think that an artisan is one who must be dependent for his living on the handicraft practised by him. Likewise all implements of husbandry of an agriculturist are exempt from attachment and sale. The word " such " occurring before the words I cattle and seed grain in cl. (b) (1) I.L.R. 185 shows that these are protected only to the extent indicated and that there is no limit to the protection afforded to the implements of husbandry of an agriculturist. If this is the correct reading of the clause, as I think it is, then it seems to me impossible to say that an agriculturist whose implements of husbandry are intended to be protected must be one who could not maintain himself apart from agriculture. Likewise, there is nothing in cl. (c) to indicate that the agriculturist there mentioned must be one who depends for his living on agriculture: There remains one other view to consider. It has been said that the agriculturist must be a very small farmer; Muthuvenkatarama Reddiar vs The Official Receiver of South Arcot (1). For this qualification for an agriculturist again, I find no warrant in the clauses or indeed anywhere else in section 60. The various clauses in the proviso to section 60, sub sec. (1) exempting diverse things from attachment and sale are no doubt based on public policy, but the consideration of public policy in each case appears to me to be different. I find it impossible to say that the central idea was to protect the poor or to prevent a person being left destitute. Thus el. (a) protects the necessary wearing apparel, cooking vessels beds and bedding of the judgment. debtor. Even a very rich judgment debtor is entitled to protection under this clause. Clause (d) protects books of account. Here again it is not a poor man alone that is contemplated nor would deprivation of books of account leave one destitute in all cases. Clause (g) protects political pensions which may be and often are of substantial amounts. Clause (h) protects wages of labourers and domestic servants. This clause of course deals with a poor man and is intended to relieve against poverty. Since however, there is no one specific central idea running through all the clauses, each clause has to be construed by itself. Coming then to cls. (b) and (c), I find no justification for the view that they deal only with poor people or are intended to protect against destitution. Thus there (1) Mad. 227. 24 186 is nothing in el. (b) to indicate that the tools of only poor artisans are to be protected. The same thing can be said of an agriculturist. The fact that his cattle and seed grain are protected to the extent necessary to enable him to earn his livelihood does not lead to the view that he must be a poor agriculturist. On the contrary, the clause contemplates an agriculturist who has more cattle and seed grain than he needs for his livelihood. It clearly contemplates a rich and large scale agriculturist. Therefore it seems to me that there is no warrant for imposing any qualification on the plain meaning of the word I agriculturist ' in cls. (b) and (c). In my view, an agriculturist contemplated by the clauses is any person who occupies himself with agriculture. This is the view taken in Gowardhandas vs Mohan Lal (1) and with it I agree. A person occupying himself with agriculture would be an agriculturist though he does not cultivate with his own hands and carries on agriculture in a very large scale. He would still be an agriculturist though he has other means of livelihood besides agriculture. I come now to the facts of this case. The question is, is Appasaheb such an agriculturist as I have indicated ? The evidence clearly shows that he is. It can be said to have been established beyond doubt and not questioned in the Courts below, that Appasaheb was carrying on agricultural operations under his supervision through labour employed by him and with his own cattle and agricultural implements on fifty to sixty acres of land. The evidence also establishes that Appasaheb 's income from agriculture came to Rs. 30,000 to Rs. 35,000 per year. It appears that he was in receipt of cash allowances of Rs. 700 to Rs. 800 per year in respect of the watan and Rs. 4,000 to Rs. 5,000 per year from village officers of the watan villages, neither of which was income from agriculture. These facts in my view make Appasaheb an agriculturist for the purpose of cls. (b) and (c) though it may be that he was not dependent for his living upon agriculture and was a large scale farmer who did not 187 till with his own hands. I wish however to state that there is uncontradicted testimony that Appasaheb personally took part in the agricultural operations. Now cl. (c) protects from attachment and sale houses and other buildings with the sites thereof and land immediately appurtenant thereto and necessary for their enjoyment, belonging to an agriculturist and occupied by him. I think it is a fair reading of this clause to say that the houses, buildings and lands must be occupied by the agriculturist for the purpose of agriculture for the object of these clauses is to protect an agriculturist only so far as is necessary for his agricultural operations. If an agriculturist occupied a house, say as a holiday resort, there would be no reason to protect that house from attachment and sale. The question then arises whether Appasaheb occupied the wada for the purposes of his agricultural operations. I think the evidence makes it perfectly clear that he did so. It shows that the larger part of the wada was used for storing crops, keeping agricultural implements, residence of the farm servants and tethering cattle used for agriculture. Appasaheb and his family lived in a part of the wada but that also was clearly occupation for purposes of agriculture, for it is from there that he supervised the agricultural operations. I have therefore come to the conclusion that the wada is saved from attachment and sale in execution by cl. (c) of the proviso to sub section (1) of section 60 of the Code of Civil Procedure. The other contention of the appellants does not seem to me to be sustainable. It is said that the maxim accession credit principali applies and the wada standing on watan land has acquired the character of watan as an accession to it. It is not in dispute now that the wada was not in existence when the watan was first created but had been built subsequently by one of the watandars. It is also said that the grant of the watan carried full right of ownership in the subject of the grant ; that the grantee had the right to make such use of the land granted as any owner of it could have 188 done. So it was said that the wada had been put up rightfully by the watandar and became part of the watan as an accession to it. There is no doubt that the wada was rightfully constructed. It may be that it became on such construction a part of the land on which it stands and assumed the character of immovable property. But I am unable to agree that it thereupon assumed the inalienable character of watan property and was therefore hot liable to attachment and sale in execution. I do not think that the maxim accessio cedit principali applies in giving the wada put up on watan the character of a watan. Watan is a creation by government grant. It is inalienable under a special Act. The inalienable character attaches under the Act only to the property granted by the government. This peculiar character cannot be extended to other property by the application of the maxim. Therefore it seems to me that the wada is not inalienable though it stands on land which is inalienable as a government grant under a special Act. I would for this reason reject this contention of the appellant. As however in my view, the wada is protected from attachment and sale in execution under cl. (c) to the proviso to sub section (1) of section 60 of the Code of Civil Procedure, I would allow the appeal. BY COURT: In view of the majority Judgment, the appeal is dismissed with costs. Appeal dismissed.

In respect of a decree passed against T, who was the owner of certain watan properties, a building standing on watan land comprised in the said properties, was sought to be attached and sold in execution of the decree. The appellant, who was the legal representative of T, claimed that the building:was not liable for attachment and sale because (1) the building, being part of watan property within the meaning of section 4 of the Bombay Hereditary Offices Act, 1874, was not saleable property under sub section (1) of section 60 of the Code of Civil Procedure, 1908, and (2) in any case, he was an agriculturist and the building belonging to and occupied by him was protected from attachment and sale by cl. (c) of the proviso to sub section (i) of section 60 of the Code. The facts showed that the building was not in existence when the watan was first created but had been built subsequently by one of the watandars and there was no indication on the record that the building was constructed for the purpose of providing remuneration for the performance of the duty appertaining to a hereditary office. The evidence also showed that the appellant was not entirely dependent for his livelihood upon the income from the home farm, that he had substantial income from other lands and that there was nothing to show that this income derived from his other lands was the result of cultivation by him. Held, that the building in question was not an accession to the land so as to partake of the character of the land on which it was constructed and did not come within the definition of watan property in section 4 of ' the Bombay Hereditary Offices Act, 1874. Held, further (per jafer Imam and Raghubar Dayal, jj. Sarkar, J., dissenting), that the word " agriculturist " in cl. (c) of the proviso to sub section (1) of section 60 of the Code of Civil Procedure, 1908, must carry the same meaning as the word in cl. (b) and that in order that a person might come within the meaning of the word in those clauses it must be shown that, he was really dependent for his living on tilling the soil and was unable to 164 maintain himself otherwise, though it was not necessary that he must till the land with his own hands. That on the facts the appellant was not an agriculturist within the meaning of the word in section 60 of the Code. Case law reviewed. Per Sarkar, J. (1) On the plain meaning of the word agriculturist " in cls. (b) and (c) of the proviso to sub section (1) of section 60 of the Code an agriculturist is any person who occupies himself with agriculture. There is nothing in cl. (c) to indicate that the agriculturist there mentioned must be one who depends for his living on agriculture. A person occupying himself with agriculture would be an agriculturist though he did not cultivate with his own hands and carried on, agriculture in a very large scale. He would still be an agriculturist even if he had other means of livelihood besides agriculture. (2) Under cl. (c) in order that houses and buildings belonging to an agriculturist might be protected from attachment and sale they must be occupied by him for the purpose of agriculture.

% As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982. The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal. On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application. The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent. The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties. A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent. The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge. Allowing the Appeal by the State this Court, ^ HELD: l. The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing. The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of. [823G H] 2. The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter. [824A B] 3. The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed. [824B c] 4. The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives. It could not be said that the appeal is disposed of as observed by the High Court. It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law. [824C D]

On September 6, 1952, the appellant, who was being tried by an Assistant Sessions Judge and a jury, was caught while giving a bribe to one of the jurors. By a notification dated November 27, 1952, the Government of West Bengal, acting under section 4(2) Of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, entrusted the case against the appellant under section 161/116 Indian Penal Code to the Special judge, Burdwan, for trial. Before this date as a result of the introduction of section 165A in the Indian Penal Code by the Criminal Law Amendment Act, 1952, providing for punishment for abetment of offences under sections 161 and 165, abetment of section 161 had ceased to be an offence under section 161/116 though it was an offence specified in the Schedule to the West Bengal Act. The records were received by the Special judge on December 23, 1952, and he took cognizance of the case. On February 10, 1954, a charge under section 165 A Indian Penal Code was framed by the Special judge and on July 7, 1954, the appellant was convicted under section 165 A and sentenced to rigorous imprisonment for six months. An appeal to the High Court of Calcutta was dismissed. The appellant obtained special leave and appealed. Held, that the special judge had no jurisdiction to try and convict the appellant for the offence under section 165A Indian Penal Code as when the case was distributed to the Special judge section 165A was not one of the offences specified in the Schedule of the West Bengal Act. The case which was distributed to the Special judge was one under section 161/116 Indian Penal Code, an offence which was non existent at that time. Section 165A cannot be deemed to have been specified in the Schedule merely because abetment of the offences under sections 161, 162 163 and 165 Indian Penal Code was specifically mentioned in the Schedule. The offence under section 165A is a distinct offence. It is not merely a restatement of the offence of abetment under section 116 ; it comprises also abetment under section 109 and provides for in enhanced penalty. This defect of jurisdiction could not be cured by section 529(e) of the Code of Criminal Procedure. Section 529(e) applied to 1277 Magistrates and would not apply to Special judges whose jurisdiction arose not on their taking cognizance under section 190 of the Code but on the case for offences specified in the Schedule being distributed to them by the State Government by a proper notification.

The appellant who was an employee of the State Government in the Horticulture department, was on deputation with the Central Government. In May, 1952 he was selected by the State Public Service Commission as Landscape Architect on a temporary basis. From time to time he sought extension of time for joining the post and it was granted. Eventually when he reported for duty in June, 1953 he was informed that the offer made to him stood cancelled as he did not join in time and that the post had been filled by appointing someone else. He therefore rejoined the Government of India. In 1954 the State Service Commission again advertised the post stating that it was a temporary post but was likely to continue. The appellant was selected for the post and joined it on November 6, 1954. His period of probation was extended but he was not confirmed in the post. Eventually the State Government decided to abolish the post of Landscape Architect with immediate effect and the appellant reverted to his substantive post in the State service on November 4, 1958. The High Court dismissed the appellant 's writ petition. In appeal to this Court it was contended on his behalf that (i) the order of premature abolition of the post was male fide in that it was the result of inordinate hostility of higher officers towards him; (ii) the discontinuance of the post was due to personal reasons because the higher officers were displeased with him for pointing out irregularities in incurring expenditure and (iii) the order abolishing the post was illegal because it denied the benefit of three months notice for termination of his appointment. Dismissing the appeal, ^ HELD: (1) (a) Although the appellant has based his case almost entirely on mala fides, he has not succeeded in proving the allegation. [1102G] (b) He did not furnish the necessary particulars for the allegation. What he had to prove was not malice in its legal sense but males animus indicating that the State Government was actuated either by spite or ill will against him, 1090 or by indirect or improper motives. It was also not shown that his reversion was ordered for a collateral purpose and not for the ostensible purpose of abolishing an unnecessary post, or by proving that the ostensible purpose of abolishing the post was so unconvincing and absurd as to lack bona fides. Both direct and circumstantial evidence were admissible to establish lack of bona fides or bad faith, but the appellant has not succeeded in proving the allegation. [1102 H 1103 B] (c) It is for the person seeking to invalidate an order to establish the charge of bad faith. Such a charge may be made easily or without any sense of responsibility. That is why courts examine it with care and attention. [1103 C] section Pratap Singh vs The State of Punjab, ; at 741; referred to. (2) It cannot be said that the post was abolished without reason or justification, but with the intention of getting rid of the appellant somehow. The post was a temporary one all through. The question of continuation of the post was referred to a special committee presided over by the Minister and that committee came to the conclusion that the post was no longer necessary and should therefore be abolished. The Cadre Committee to which also a reference was made, made a similar recommendation. The reason for abolishing the post was that almost all the plans which were needed for the project had been prepared and the Chief Engineer 's Organization would have no difficulty in carrying on the outstanding work. [1097 H, 1097 E G] State of Haryana vs Des Raj Sengar, ; ; held not applicable. (3) There is nothing on record to show that the appellant 's alleged exposure of irregularities in the expenditure led to an adverse decision against him. While the controversy regarding the alleged unauthorised expenditure was raised in December, 1954, the decision to revert him was taken four years later. [1098 F] (4) There was no term in the order of appointment given to the appellant that he would be entitled to a three months ' notice for termination of his appointment. The State Public Service Commission specified in the impugned notification that the post was temporary upto February, 1955 but was likely to continue thereafter. If the appellant knew that the term of the post was to expire in November, 1958, he could not possibly claim that he should have been given three months ' notice. He was fully aware of his precarious tenure from month to month. [1099 F H] (5) The earlier order of the Chief Minister dated February 13, 1958 in the appellant 's favour could not give rise to any right as it was not expressed in the name of the Governor as required by article 166 of the Constitution and was not communicated to the appellant. It was only a provisional order which was open to reconsideration by the Chief Minister and did not bind anyone. Nothing could, therefore, turn on the Chief Minister 's order dated February 13, 1958, when it was specifically rescinded by his subsequent order dated October 29, 1958. There could be no question of appellant 's confirmation as Landscape Architect as it was a temporary post all through until it was allowed to lapse on November 4, 1958. [1101 G 1102 B] 1091 Bachittar Singh vs State of Punjab, [1962] Suppl. 3 SCR 713; referred to. (6) This was not really a case of abolition of the post of Landscape Architect, for the post was sanctioned upto November 4, 1958 and was allowed to lapse thereafter.

The name of the respondent auction purchaser was entered as raiyat in respect of certain lands on the basis of auction sales dated 6.11.1954 and 3 12 1954 in execution of the decree for arrears of rent in respect thereof. In 1970 the Assistant Settlement Officer initiated proceedings under section 44(2a) of the West Bengal Estate Acquisition Act, 1953 for revision of the record of rights in respect of the lands, taking the view that the rent execution sales being effected after 1.6.1954 were invalid under section 5B of the Act. Accordingly, he ordered correction of the record of rights by substituting the names of the original raiyats for the auction purchaser. The respondent filed appeals which were allowed by the appellate authority holding that section 5B of the Act had no application to raiyati interests. The State filed writ petition under Article 227 of the Constitution before the 344 High Court. The Special Bench of the High Court, confirming the decision of the appellate authority, held that the effective date in section 5B of the Act in respect of sale of raiyati and under raiyati holdings under the relevant statutes mentioned therein was 1.6.1954; that section 5B did not operate as a bar to execution of decree for arrears of rent as a money decree against raiyati or under raiyati interests, and section 168A (1) of the Bengal Tenancy Act, 1885 was impliedly repealed by the vesting of the interests of the intermediary including raiyats and under raiyats in the State; and that the initiation of the proceedings unders. 44(2a)of the Act was without jurisdiction. The State filled the appeals by special leave. The State challenged the judgment of the High Court on the ground that the High Court was not right in holding thats. 5B of the Act would not operate as a bar against the sale of raiyati or under raiyati interests if the execution of the rent decree is treated as an execution of money decree under the Code of Civil Procedure; and that the sale made pursuant to the execution of the money decree under the Code even though for rent, and of the raiyati or under raiyati interest holder, would not he a sale under the statutes men tioned in section 5B including the Tenancy Act. Allowing the appeals, this Court, HELD:1.1 The proceedings initiated by the Assistant Settlement Officer to revise the entries in the record of rights made in favour of the respondent auction purchaser and the orders passed by him recording the names of the former raiyats as raiyats with possession of the lands and deleting the name of the auction purchaser, were valid as the raiyati interests were sold after 1.6. 1954 in execution of the decree for arrears of rent in respect of the lands in question. (360 C E) 1.2By virtue of the notification issued under section 49, section 52 makes the provisions of sections 4, 5, 5A and 5B, among others, of Chapter 11 of the Act applicable to the raiyati and the under raiyati interests on the issuance of such notification. (351 H) 1.3In the instant case the Notification No. 680 dated 9.4.1956 issued under section 49 was brought into force with effect from 10.4.1956. It was not given retrospective effect from 15.4.1955. The effect of this notification was that by 345 virtue of section 4 the intermediary interests stood vested in the State at the latest from 15.4.1955 while the raiyati and under raiyati interests stood vested in the State with effect from 10.4.1956. The restriction on transfer of the said interests, however, came into effect retrospectively on or from 1.6.1954 by virtue of section 5B, since that date is mentioned in the section itself. (352 AB) 1.4. In view of section 5B of the Act, no estate, tenure or under tenure including raiyati and under raiyati interests could be sold under the statutes mentioned in s 5B including the Tenancy Act on and after 1.6.1954 and a sale after that date under any of those statutes would he void and have no effect under that section. (352 C) 1.5 The present auction sales being of raiyati interests and effected on 6.11.1954and 3.12.1954 in execution of the decrees for the arrears of rent under the Tenancy Act were obviously invalid. (352 D) 2.1 The decree pursuant to the suit under the Tenancy Act cannot he executed except under the provisions of that Act. There cannot, therefore, be sale of the property in question pursuant to such decree under the provisions of the Code of Civil Procedure. (358 B) 2.2 The intention of the legislature in enacting section 5B was to prevent sales of the intermediary interests after 1.6.1954. In view of the provisions of the Tenancy Act, the said interests could be sold only under and in accordance with the provisions of that Act. The sale of such interests in the land pursuant to a decree for arrears of rent in respect of that land could not therefore, he made under the Code of Civil Procedure. (360 D) 2.3 The Bengal Tenancy Act, 1885 is a self contained code governing the relations between the landlord and the tenant and for resolution of their disputes. The Act incorporates certain provisions of the Code of Civil Procedure in toto while others with modification. The Tenancy Act by implication prevents any suit between landlord and tenant to be filed otherwise than under its provisions. All proceedings in the suit filed under the Bengal Tenancy Act from its inception to the satisfaction of the decree are to be governed by its provisions and the provisions of the Code are applicable to such proceedings only to the extent and subject to the conditions stated therein. The Code as such is not applicable to the proceedings or to any part of it and hence no part of the proceedings can be prosecuted under the Code. Even if simple money decree is obtained for the arrears of rent, no interest of 346 the tenant can he brought to sale in execution of such decree except under Abe provisions of the Tenancy Act. In other words, no such interest can be sold under the Code and independently of the Tenancy Act. (357 H, 358 A C) 2.4 Besides, Section 168A of the Tenancy Act removes the doubt, if any, and provides the procedure for attachment and sale of tenure or holding for arrears of rent due thereon, and liability of purchasers thereof. The nonobstante clause of the Section excludes all other provisions of the Tenancy Act itself as well as of any other law and the provisions of any contract as well. Clause (a) of the Section states that a decree for arrears of rent whether having the effect of a rent decree or a money decree or even a certificate for such arrears under the Bengal public Demands Recovery Act, 1930 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates. That provision will not apply only if the term of the tenure has expired before an application is made for the execution of such decree or certificate. When the entire tenure or holding is purchased in execution of a decree for arrears of rent in respect thereof, clause (b) of section 168A (1) provides that the purchaser shall pay to the decree holder the deficiency, if any, between the purchase price and the amount due under the decree together with the cost incurred for the auction sale and also the rent which may have become due between the date of the institution of the suit and the date of confirmation of the sale. This provision in inconsistent with the provisions of the Code. (358 C F) 2.5 The High Court was not right in holding that the sales can be treated as being pursuant to a money decree and, therefore, under the Code and independently of the Tenancy Act. The High Court unfortunately missed the vital fact that whether it is a money decree or rent decree, the entire raiyati interests of the judgement debtor in the land in question had to be sold under Section 168A of the Tenant Act but could not be sold in view of the bar imposed by Section 5B of the Act. The bar cannot be over come by treating the sale under the Code to circumvent the provisions of the Tenancy Act and in particular of Section 168A of that Act. (359 H, 360 A B) 2.6 After the intermediary interests vest in the State, they cannot be brought to sale and the remedy of the decree holder is to proceed against other property of the judgment debtor if any. In that event, Section 168A would not come in the picture. (358 G H)

% The question which arose for determination in this case was whether a Letters Patent Appeal would lie to a Division Bench of the High Court of Gujarat from an interlocutory order of a Single Judge of that High Court in the course of the trial of an election petition filed under the Representation of the People Act, 1951. The appellant and respondents Nos. 1 to 6 were candidates at an election held to fill a seat in the Legislative Assembly of the Gujarat State. The appellant was declared elected. Thereupon, the 1st respondent filed an election petition in the High Court, challenging the validity of the election of the appellant on a number of allegations, and in order to establish his case, he filed an application before the Single Judge who was trying the election petition, to direct the Returning Officer to produce all the records of the election, mentioned in the application, and prayed for permission to inspect the same. The appellant opposed the prayers made by the 1st respondent. The Single Judge declined to grant the application made by the Ist respondent. Against the order of the Single Judge, the Ist respondent preferred an appeal under clause 15 of the Letters Patent of the Gujarat High Court. The Division Bench of the High Court allowed the appeal to the extent indicated in its judgment, overruling the contention of the appellant that the appeal was not maintainable as there was no provision in the Act, permitting an appeal to the Division Bench of the High Court against an interlocutory order of a Single Judge hearing an election petition filed under the Act. Aggrieved by the decision of the Division Bench, the appellant moved this Court for relief by special leave. Allowing the appeal, setting aside the judgment of the Division 1044 Bench of the High Court and dismissing the Letters Patent Appeal while expressing no opinion on the merits of the case, the Court, ^ HELD: The only point urged in this appeal by the appellant was that the appeal filed under clause 15 of the Letters Patent of the High Court against the interlocutory order passed by the Single Judge was not maintainable and, therefore, the judgment of the Division Bench was liable to be set aside. [1048C D] Under the provisions of the Act as amended and the provisions of the Constitution of India, no Court exercising power under any ordinary law other than the Judge of a High Court who had been assigned the work of trying an election petition under sub section (2) of section 80 A of the Act and the Supreme Court which was empowered to hear an appeal against any order passed by the judge of the High Court under section 98 or section 99 of the Act, could decide any question arising out of an election petition. The power of the Supreme Court under the provisions of the Constitution was, however, unaffected by any of the provisions of the Act. It meant that when an election petition was pending in the High Court, only the judge who was asked to try the election petition could deal with the questions arising in it and no other judge or judges of the High Court could deal with them. When an order was passed under section 98 or section 99 of the Act by a judge of the High Court in an election petition, it was subject to the appellate jurisdiction of the Supreme Court under section 116 A of the Act, Article 136 of the Constitution being excluded in view of the express provisions of section 116 A of the Act, and being resorted to by any party aggrieved by any order passed by the judge trying an election petition not falling under section 98 or section 99 of the Act. It followed that the Division Bench of the High Court, which was entitled to hear an appeal against any order of a Single Judge under clause 15 of the Letters Patent of the High Court, which was an ordinary law, could not hear an appeal against any interlocutory order passed in the course of the trial of an election petition by the Judge trying the election petition, since the Division Bench was not specified in the Act as an appellate authority which could deal with questions arising out of an election petition filed under the Act. [1053G H; 1054A D] Under clause 15 of the Letters Patent, an appeal no doubt lay from an order of a Single Judge of the High Court exercising Original Jurisdiction to the High Court itself irrespective of the fact that the judgment was preliminary or final or that it was one passed at an interlocutory stage, provided it satisfied certain conditions, but the said 1045 provision could not be extended to an election petition filed under the Act. Conferment of the power to try an election petition under the Act did not amount to enlargement of the existing jurisdiction of the High Court. The jurisdiction exercisable by the Single Judge under the Act was a special jurisdiction conferred on the High Court by virtue of Article 329(b) of the Constitution. In view of the limited nature of the appeal expressly provided in section 116 A of the Act, it should be held that any other right of appeal (excluding that under the Constitution) was taken away by necessary implication. Therefore, it was difficult to subscribe to the view that when once the jurisdiction to try an election petition was conferred on the High Court, all other powers incidental to the ordinary original jurisdiction exercised by a single Judge of a High Court would become applicable to an election petition under the Act. If the Parliament had intended that the Division Bench of the High Court should exercise its appellate jurisdiction under clause 15 of the Letters Patent of the High Court, probably, it would not have enacted sub section (7) of section 86 of the Act, having regard to the well known tendency of one or the other party to an election petition preferring appeals against the interlocutory orders to the Division Bench. If such appeals against the interlocutory orders to the High Court, were permitted, perhaps, no election dispute would be finally settled till the next election became due. As regards the jurisdiction to try an election petition and the right of appeal of the parties to an election petition, the provisions of the Act (apart from the provisions in the Constitution) constituted a complete code and no Judge or Judges other than the Single Judge of the High Court, who was asked to try an election petition, and the Supreme Court, exercising the appellate powers under section 116 A of the Act in respect of orders passed under section 98 or section 99 of the Act or under Article 136 of the Constitution in respect of other orders, could have any jurisdiction to deal with any matter arising out of an election petition filed under the Act. The Court disagreed with the view expressed on this question by the Gujarat High Court in Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta & Ors., (12 Gujarat Law Reporter 850), and overruled that decision of the High Court. The Court also overruled the decision of the Madras High Court in Kadiravan alias Shamsudeen vs B. Thirumalaikumar, ILR (1970) 2 Mad. 183 and the decision of the Madhya Pradesh High Court in Laxmi Narayan Nayak vs Ramratan Chaturvedi & Ors, AIR 1986 Madhya Pradesh 165 which had taken the same view as in Dr. Chotalal Jivabhai Patel 's Case (supra). The Court agreed with the view expressed by the Allahabad High Court in Siaram vs Nathuram & Ors., [1968] ALL. L.J. 576 and by the Rajasthan High Court in Ramdhar vs Shanwar Lal, AIR which held that by necessary 1046 implication an appeal to the High Court from an interlocutory order of the Single Judge of the High Court in the course of trial of an election petition filed under the Act, was excluded. [1054G H; 1055A H; 1056A H] The Division Bench of the High Court of Gujarat had no jurisdiction to hear the appeal filed by the Ist respondent against the interlocutory order passed by the Single Judge who was trying the election petition. Judgment of the Division Bench of the High Court set aside, Letters Patent Appeal dismissed. [1057B] Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta Shamsudeen vs B. Thirumalai Kumar, ILR ; and Laxmi Narayan Nayak vs Ramratan Chaturvedi and Ors., A.I.R. 1986 Madhya Pradesh 165, overruled. Siaram vs Nathuram and Ors., [1968] All. L.J. 576 and Ramdhan vs Bhanwarlal, A.I.R. approved. N.P. Ponnuswami vs Returning Officer, Namekkal Constitutency and others; , ; Shah Babulal Khimji vs Jayaban D. Kania & Anr., ; and National Telephone Company Ltd. vs Post Master General, [1913] A.C.546, referred to.

The plaintiff respondent No. 1 instituted a suit for recovery of the amount lent to the defendant with interest upto the date of the suit. His claim was decreed in a sum of Rs. 13,033 6 6 with future interest from the date of suit till realisation at 4 % per annum on a sum of Rs.10,120. Against this decree the defendant appealed to the High Court and valued the appeal at Rs. 13,033 6 6 and paid the requisite court fee on that amount. All his grounds of appeal related to the merits of the plaintiff 's claims and did not deal with the correctness of the trial court awarding future pendente lite interest on the rate at which it was to be calculated. The Taxing Officer directed the defendant to pay the deficit court fee of Rs. 70 on the memorandum of appeal as he was of the opinion that the appeal was against the whole decree and that the amount of value of the subject matter in dispute for purpose of court fee was Rs. 14,036.80nP. as the amount of interest from the date of the suit till the date of the decree on Rs. 10,120 came to Rs. 1,033.40nP. 231 The defendant challenged this order in revision before the High Court under section 5(2) of the Bombay Court fees Act, 1959. The High Court set aside the order of the Taxing Officer and the learned Judge expressed the view: "The subjectmatter in appeal is the real matter in dispute between the parties and not something which must stand or fall with the decision on it. In other words, it must mean the right which is in dispute between the parties". In this Court the appellant State challenged the correctness of the said view of the High Court and relied mainly on the construction put by courts on expression " value or subject matter in dispute," in the relevant provisions relating to the High Court 's giving leave to appeal to the Privy Council. Held:(i) That the expression 'amount or value of the subjectmatter in dispute ' in article 1 of Schedule 1 of the Bombay Court fees Act, cannot be construed in the light of the construction placed on a similar expression for the purposes of considering whether the case had come within the rule allowing the High Courts to give leave for appeal to the Privy Council. The Act is a taxing statute and its provisions have to be construed strictly, in favour of the subject litigant. Gooroopersad Khoond vs Juggutchunder, 8 M.I.A. 166 and Doorga Doss Chowdry vs Ramanauth Chowdry, 8 M.I.A. 262, held in applicable. (ii)Claims not based on any asserted right but dependent on the decision of the disputed right and reliefs in regard to which are in the discretion of the court do not come within the purview of the expression 'subject matter in dispute in plaint or memo of appeal '. (iii)The amount of pendente lite interest decreed is not to be included in the 'amount or value of the subject matter in dispute in appeal ' for the purposes of article 1 of Sch. 1 of the Act unless the appellant specifically challenges the correctness of the decree for the amount of interest pendente lite independently of the claim to set aside that decree. In the present case, the decree in that respect was not specifically challenged and therefore the view of the High Court must be held to be correct. Mitthu Lal vs Chameli, 57 All. 7 1, Keolapati Mst. vs B.N. Varma, I.L.R. 12 Luck. 466 and Ashutosh vs Satindra Kumar, 54 C.W.N.380, referred to.

The appellant, who was the decree holder, applied for the execution of the decree. The Sub Divisional Officer, Military Engineering Service, was in possession of some movable property of the judgment debtor. The Court ordered attachment under 0. XXI, r. 46(1), Civil Procedure Code by prohibiting the Sub divisional Officer from handing over the property to the judgment debtor. Thereafter, in stead of following the proper price(lure which was to sell the property under O.XXI, r. 64 and then pass an order for its delivery under O.XXI, r. 79(2), the Court ordered the Sub divisional Officer to produce the property, and, when it was not produced, proceeded under section 145 of the Code treating the Union of India as the principal judgment debtor. HELD: Section 145 of the Code was not applicable to the cage. That section only applies when a person becomes liable as a surety and the execution Court was wrong in holding that the Sub divisional Officer became a surety simply because attachment had been made by the prohibitory order under O.XXI, r. 46(1). [209 H, 210 B C]

Appeals Nos. 303 to 307 of 1960. Appeals by special leave from the judgment and order dated May 14, 1957, of the Madras High Court, in Case Referred No. 1 1 1 of 1953. R. Ganapathy Iyer and G. Gopalakrishnan for the appellant. K. N. Rajagopal Sastri and D. Gupta, for the respondent. January 18. The Judgment of the Court was delivered by KAPUR, J. These appeals are brought by special leave against the judgment and order of the High Court of Madras in an Income tax reference under section 66(1) of the Indian Income tax Act, hereinafter termed the " Act". The question referred was : " Whether the income tax assessment of the business of I Spade Clover Beedies ' belonging to the estate of the deceased and carried on during the previous years 1943 to 1946 as an association of persons for the assessment years 1944 45 to 1947 48 is valid? " And this question was decided in the affirmative and therefore against the appellants. The facts leading to the appeals are that one Khan Sahib Mohamed Oomer Sahib, who was carrying on the business of manufacture and sale of Spade Clover brand Beedies, died on December 17, 1942, leaving a minor son Mohamed Noorullah (the appellant) by his pre deceased wife, a widow, Luthfunnissa Begum, and four children by her who were all minors at the date of the death of Oomer Sahib. Noorullah through his next friend applied to sue in forma pauperis and during the pendency of those proceedings two Advocates of the Madras High Court were appointed joint receivers of the properties of the deceased on March 17, 1943. This appointment was by consent of parties. On 517 May 10, 1943, the widow, Luthfunnissa, filed a suit for partition and also applied for the continuance of the joint receivers. Noorullah opposed this application but by an order dated May 25,1943, the receivers were ordered to be continued and they carried on the business as before. In due course a preliminary decree for partition was passed. The High Court has observed that none of the parties wanted to break the continuity of the business after the death of the father. In the beginning Luthfunnissa and Dawood carried on the business and from the date of their appointment, i.e., May 17, 1943, the joint receivers continued the business till November 25, 1946, when during the course of the proceedings the business was put tip for sale by auction between the co heirs and was purchased by Noorullah. The years of assessment are 1944 45 to 47 48, the relevant accounting years for which were the calendar years 1943 to 1946. The profits of the business were assessed to tax in the hands of the receivers as the income of an association of persons and the contention of the appellant that the share of the profits of each of the co heirs should have been separately taxed, was rejected by the Income tax authorities as well as by the Income tax Appellate Tribunal. The only question which was raised both before the department as well as before the Tribunal was the assessment to tax of the income of the business. There was no dispute in regard to the income of the properties which was taxed under section 9(3) of the Act. The business was inherited by the heirs of Oomer Sahib and was carried on without break during the accounting years first by the widow and Dawood and then jointly by the receivers. The nature of the business was such that it could not be divided up and had to be carried on as one whole with a unity of control and all the parties desired to preserve and did preserve this unity. The opposition by the appellant to the application for receivership filed on behalf of Luthfunnissa, the widow, was only on the ground that the appellant wanted different persons to be appointed and not to the continuance of the business or to the unity 518 of control. The Income tax Appellate Tribunal in its order stated : " In fact, there was no change in the continuity of the business and from the date of death of Md. Oomer Sahib up to 24th March, 1943, the business was carried on by mutual agreement and consent by Luthfunnissa Begum acting on her own behalf and on behalf of her minor children and her minor step son Md. Noorullah. There can, therefore, be no gain saying the fact that immediately after the death of Md. Oomer his estate was inherited and run by combination of individuals who had pooled their resources for the common purpose of earning income. " And the High Court has observed The opposition was apparently to the persons to be appointed receivers and not to the continuance of the business or to the unity of control that was necessary. Noorullah himself had realised that when he applied earlier for the appointment of receivers to conduct the business among other things. Despite Noorullah 's opposition when Luthfunnissa asked for the continuance of receivers in her application No. 1162 of 1943, the existence of the desire of all the co sharers including Noorullah for the continuance of the business with proper persons to take charge of the business under the orders of court was clear. That intention was material on which the departmental authorities and the Tribunal which agreed with them could find that the co sharers did constitute an 'association of persons '. " From the finding of the Tribunal it is obvious that the business was such that it was not capable of division, it being the manufacture and sale of " Beedies " of a particular brand and the finding of the Tribunal was that the business was carried on with the consent of the parties. On this finding it has to be decided whether the business was the business of an " association of persons. " and its profits are assessable as such ? The contention of counsel for the appellant was (1) that on the death of Md. Oomer his estate including the business devolved upon his heirs in specific 519 shares; and (2) there was no consensus of opinion between the heirs which is shown by the fact that the appellant filed an application to sue in forma pauperis and before that application could be decided the widow sued for partition and even though receivers were appointed objection was taken by the appellant to the ' appointment of receivers. But these facts do not assist the case of the appellant. As has been said above, the business was in the first instance carried on by the widow and Dawood on behalf of the heirs of Oomer and subsequently when the suits were brought none of the parties wanted to break the unity of control of the business nor its continuity and it was of such a nature that it could not be carried on without such consensus and therefore the receivers carried on the business. On these findings the High Court has rightly come to the conclusion that the business was a business of an association of persons. This Court in Commissioner of Income tax, Bombay vs Indira Balkrishna (1) considered the question as to what an association of persons means. The test laid down in three cases: In re B. N. Elias & Others (2); Commissioner of Income tax vs Laxmidas Devidas and Another (3) and In re Dwarkanath Harischandra Pitale (4) was accepted by this Court as correctly laying down the crucial test for determining what is an association of persons and that in each case the conclusion has to be drawn from the circumstances. In the first case the test was laid down as applying to combinations of individuals who were engaged together in some joint enterprise but not constituting a partnership. Such a combination of persons formed for the promotion of a joint enterprise banded together as if they were " coadventurers " it was held would constitute an asssociation of individuals. In the second case, that is, Commissioner of Income tax vs Laxmidas Devidas and Another (3) Beaumont, C. J., at p. 589 laid down the test as follows: " In my opinion, the only limit to be imposed on the words 'other association of individuals ' is (1) ; (2) 67 (3) (4) , 520 such as naturally follows from the fact that the words appear in an Act imposing a tax on income, profits and gains, so that the association must be one which produces income, profits or gains. It seems to me that an association of two or more persons for acquisition of property which is to be managed for the purpose of producing income, profits or gains falls within the words 'other association of individuals ' in section 3; and under section 9 of the Act, the Association of individuals is the owner of the property and as such is assessable." In that case it was also held that the fact that one of the assessees was a minor during the year of the assessment did not affect the question. In In re Dwarkanath Harischandra Pitale (1) the assessees were two brothers who became entitled to certain house properties as tenants in common and held and managed the properties as such and derived profit therefrom. It was held that though the assessees in the first instance did not constitute an association of individuals, they became so when they elected to retain the property and managae it as a joint venture producing income. The test there laid down was that as soon as there was election to retain the property and manage it as a joint venture the persons so electing became an association of individuals. The Rangoon High Court in The Commissioner of Income tax, Burma vs M. A. Baporia and Others (2) also laid down the same interpretation of the words " association of individuals ". That was a case,, of Mohammedan co heirs and it was held that by merely inheriting a share of property no person can become a member of an association of individuals unless there is some forbearance or act upon his part to show that his intention and will accompanied the new status, that is, an association of individuals. One of the co heirs in that case was appointed an agent to realise the income from the properties left to the co heirs by their father and mother under Mohammedan Law and that was held to be sufficient to constitute them an association of individuals. (1) (2) 521 It is unnecessary to refer to other cases. Taking the test as laid down by this Court in Indira Balkrishna 's case (1) it appears to us that the appellant and other co heirs were rightly assessed as an association of persons. No doubt a suit for partition had been filed which was preceded by an application made by the appellant to sue in forma pauperis, but the suit in reality was for ensuring the proper conduct of the business and not its discontinuance. During the period that the suit was pending and even before that, i.e., after the death of the father the business was carried on by the consent of all parties as one unit as indeed it had to be, because it had to be carried on as one unit with unity of control and therefore the co heirs did form an association of persons within the meaning of section 3 of the Act. Counsel for the appellant relied on section C. Mazumdar,Receiver, Trigunait Brothers ' Estate vs Commissioner of Income tax (2). That was a case of persons who formed a joint family being governed by the Mitakshara School of Hindu Law. A suit for partition was filed and the court appointed a receiver and a preliminary decree was passed but the receiver was continued in regard to certain portion of the property and the income was assessed by the taxing authorities as the income of an association of persons. It was held that the income from property could not be taxed as such because the shares of the parties were definite and ascertainable. The amount paid by the lessees could not be taxed in a lump sum as being the profits of a business carried on by an association of persons and the assessment was, therefore, made in accordance with the provisions of section 9(3). It was also held that the assessees were not carrying on a trade or business themselves and there was no association of persons as contemplated by the Act. But that case can be of no assistance in the decision of the matter now before us. The income to be assessed there was not income of any business carried on by or on behalf of the assessees and it was held that letting out property was not a trade or business. With regard to the income received by the receiver (1) ; (2) 522 who employed contractors to carry on the business of coal cutting and raising it on the pit bead, it was held that that was not the income of an association of persons on the ground (1) that the receiver was in possession and he employed contractors for coalcutting and raising of coal; (2) that the assessees had no hand in the business which produced royalty and (3) that the assessees had disassociated themselves from each other because of this partition suit. In our opinion the case so far as it relates to the carrying on of the business and in so far as it is contrary to the opinion expressed by this Court in Indira Balkrishna 's case (1), is not correctly decided. Another case relied upon by the counsel for the appellant was Buldana District Main Cloth Importers ' Group, Khamgaon vs Commissioner of Income tax, Nagpur (2). In that case a certain group of persons were directed to import cloth in the district and had to work a scheme for the distribution and sale of cloth which had been evolved by the District authorities. That was held not to be an association of persons. It appears that although they were appointed as a group of importers, all of them did not participate in that scheme during the entire period. There were changes in the personnel of the group from time to time and there was no compulsion to work the scheme. On these facts it was held that the group did not agree to carry on the business or share the profits. That case must be taken to have been decided on its own facts and does not in any way affect the meaning of the phrase " association of persons. " Counsel also relied on Khan Bahadur M. Habibur Rahman vs Commissioner of Income tax, Bihar & Orissa (3 ) in which a waqf deed was executed by which the assessee dedicated the income with ultimate benefit to the poor and constituted himself the sole mutwali of the trust. The deed provided that the beneficiaries should be benefited concurrently and in the same proportion. It was held that section 41(1) was inapplicable and the assessee should, therefore, be taxed on the basis of profits falling to the share of (1) ; (2) (3) 523 each beneficiary and not on the footing that all the beneficiaries constituted an association of persons. Fazl Ali C. J. (as he then was) there observed at p. 194: " It seems to me therefore that the finding of the Tribunal that there were only 24 persons who were entitled to share the profits in the accounting year and that they were entitled to equal shares therein must be accepted. As it does not seem to have been contended that the assessee had any other relations than those enumerated by the Tribunal who would be entitled to share the profits, it is academic to discuss whether the various categories of persons referred to by the Appellate Assistant Commissioner of Income tax were included in the term 'family ' or not." On this ground the income was not assessed as the income of an association of persons and that case " as also decided on its own facts. The question in the present case is as to what income was to be taxed. The income was the income of a business which was carried on as a single business by the consent of all the parties. The mere fact that a suit was pending at the time for the administration of the estate of the deceased or for the separation of the shares of the co heirs does not affect the incidence of taxation in this case, because the business was carried on, as said above, as one business with unitary control and by the consent of the parties. The High Court was right in holding that the income was assessable as an income of an association of persons. The appeals must, therefore, be dismissed with costs. One hearing fee. Appeals dismissed.

The business of manufacture and sale of a particular brand of beedies was carried on by 0, a Mohamedan, who died in 1942 leaving a minor son, the appellant, by his pre deceased wife, his widow L, and four children by her. Proceedings were taken first by the appellant and later on by L in connection with the partition of the properties left by 0, including the business, and during the pendency of the proceedings the business was carried on by receivers who had been appointed by the court by consent of parties on May 17, 1943. The receivers continued the business till November 25, 1946, when during the course of the proceedings the business was put up for sale by auction between the co heirs and was purchased by the appellant. For the years of assessment, 1944 45 to 1947 48, for which the accounting years were 1943 to 1946, the profits of the business were assessed to income tax in the hands of the receivers as the income of an association of persons, and the claim of the appellant that the shares of the profits of each of the co heirs should have been separately taxed was rejected by the income tax authorities. The facts showed that the business was inherited by the heirs of 0 and was carried on without break during the accounting years first by L and another and then by the receivers, that the nature of the business was such that it could not be divided up and that all the parties desired that the business should be carried on as one whole with a unity of control. Held, that on the finding that the business was carried on by the consent of all parties as one unit with unity of control, the co heirs did form an association of persons within the meaning of section 3 of the Indian Income tax Act, 1922, and that the income of the business was assessable as the income of an association of persons ; and the mere fact that a suit was pending at the time for the administration of the estate of the deceased or for the separation of the shares of the co heirs did not affect the incidence of taxation in the case. Commissioner of Income tax, Bombay vs Indira Balkrishna, ; , followed. 516 section C. Mazumdar, Receiver, Trigunait Brothers ' Estate vs Commissioner of Income tax, , disapproved in so far as it was contrary to the above decision of the Supreme Court.

The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short). On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act. The Assistant Collector dismissed the application. The respondents appealed to the Additional Commissioner. The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal. The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries. The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal. Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land. The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits. On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession. This application and the subsequent appeals were rejected by the authorities. Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities. Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act. The Assistant Collector decreed the suit. The Additional Commissioner allowed the appeal filed by the respondents. The Board of Revenue dismissed the appellants ' second appeal. The appellants filed a writ petition in the High Court. A single Judge of the High Court dismissed the writ petition. A Division Bench of the High Court dismissed the special appeal filed by the appellants. Hence this appeal. The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act. Dismissing the appeal, ^ HELD. 1. The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2. The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '. So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '. The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding. The proceeding may as well fail for some other defect. Not all such defects can be said to be analogous to defect of jurisdiction. Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '. Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits. Such defect could be said to be of the like nature ' as defect of jurisdiction. Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14. [300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to. In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered. In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree. [298C D; E] 4. In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied. It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence. But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding. The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue. The cause of action was the reversal of the order of the Additional Commissioner. When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act. It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession. It had nothing to do with the order of the Additional Commissioner. Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution. [301B; 299A; 298G H; 299A] 5. Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act. [301G] 6. In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49. [302A B] 7. The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force. Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land. Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act. The respondents did move such an application which ultimately was accepted by the Additional Commissioner. Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants. [294H; 296D G] 290

Ram Charan obtained a money decree against the Union of India. An appeal was filed against that decree in the High Court. Ram Charan respondent died on july 21, 1957. On March 18, 1958, an application was filed in the High Court under 0.22, R .4 read with section 151 of the Code by Civil Procedure stating that the respondent had died on July 21, 1957 and the Divisional Engineer, Telegraphs, learnt of his death on February 3, 1958 and the deceased had left his widow and an adopted son as his legal representatives. A prayer was made to bring the legal respresentatives of the deceased on record. The High Court dismissed the application on the ground that the appellant had failed to show sufficient cause for not bringing the legal representatives of the deceased on record within time. The appeal was also dismissed. In the appeal before this Court, it was contended on behalf of the appellant that the mere ignorance of death of the respondent was sufficient cause for the appellant 's inability to apply for the impleading of legal representatives within time unless the appellant was guilty of some negligence or some act or omission which led to delay in his making the application, that once the respondent was served no duty was cast on the appellant to make further enquiries about the state of health of the respondent, that expresssion sufficient cause ' should be liberally construed in order to advance the cause of justice, that the Court itself had inherent power to add legal representatives to do justice to the party and that the High Court misapplied the decision of the Full Bench 468 in Firm Dittu Ram Eyedan vs Om Press Co. Ltd. to the facts of the present case. Held that limitation for an application to set aside the abatement of an appeal starts on the death of the respondent and not from the date of the appellant 's knowledge thereof. Held also that the Court is not to invoke its inherent powers under section 151 C.P.C. for the purpose of impleading legal representatives of a deceased respondent, if the suit had abated on account of the appellant not taking appropriate steps within time to bring legal representatives of the deceased on the record and when its application for setting aside abatement was not allowed on account of its failure to satisfy the court that there was sufficient cause for not impleading the legal representatives of the deceased in time and for not applying for setting aside of the abatement within time. Held also that the expression sufficient cause ' is not to be liberally construed either because the party in default was the Government or because the question arose in connection with the impleading of the legal representatives of the deceased respondent. The Court should not readily accept whatever is alleged to explain away the default. The delay in making the application should not be for reasons which indicate the negligence of the party making the application in not taking certain steps which he could have and should have taken The court has to be satisfied that there were certain valid reasons for the applicant not knowing the death within a reasonable time. The bare statement of the applicant is not enough. Firm Dittu Ram Eyedan vs Om Press Co. Ltd. (1960) 1 I.L.R Punjab. 935 (F.B.), State of Punjab vs Nathu Ram ; and Jhanda Singh vs Gurmukh Singh C. A. No. 344 of 1936 dated 10.4.62, referred to.

The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods. The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax. Interest was also demanded on the tax amount. The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State. The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest. The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act. But the Tribunal rejected application for reference. Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal. On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue. On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State. Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State. Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act. It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase. Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State. And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap. The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture. That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1. [352H; 353A E; 354B] 1.2. Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises. Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State. [353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied. State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to. Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax. Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand. [354G H] 349

% As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982. The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal. On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application. The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent. The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties. A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent. The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge. Allowing the Appeal by the State this Court, ^ HELD: l. The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing. The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of. [823G H] 2. The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter. [824A B] 3. The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed. [824B c] 4. The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives. It could not be said that the appeal is disposed of as observed by the High Court. It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law. [824C D]

The first respondent was the founder and Managing Director of a company, the second respondent in the appeal, which was incorporated in the State of Mysore and conducted a Prize Competition called the R. M. D. C. Cross words through a weekly newspaper printed and published at Bangalore. This paper had a wide circulation in the State of Bombay, where the respondents set up collection depots to receive entry forms and fees, appointed local collectors and invited the people by advertisements in the paper to participate in the competitions. On November 20, 1952, the Bombay Legislature passed the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act of 1952, and widened the scope of the definition of 'prize competition ' contained in section 2(1) (d) of the Bombay Lotteries and Prize Competition Control and Tax Act of 1948, so as to include prize competitions carried on through newspapers printed and published outside the State and inserted a new section, section 12A, levying a tax on the promoters of such competitions for sums collected from the State. Thereupon, on December 18, 1952, the respondents moved the High Court of Bombay under article 226 of the Constitution and contended that the Act as amended and the Rules framed thereunder in so far as they applied to such prize competitions were ultra vires the State Legislature and violated their fundamental rights under article 19(1) (g) and freedom of inter State trade under article 301 of the Constitution. The Single Judge who heard the matter in the first instance as also the court of appeal found in favour of the respondents, though on somewhat different grounds, and the State of Bombay preferred the appeal. The principal question canvassed in this Court related to the validity. or otherwise of the impugned Act. It was contended on behalf of the appellant that the impugned Act was a law relating to betting and gambling and as such was covered 875 by Entries 34 and 62 of List II in the Seventh Schedule to the Constitution, whereas the contention of the respondents was that the Act was with respect to trade and commerce and came under Entries 26 and 60 of that List. Held, that in testing the validity of an Act it was necessary, in the first place, to decide whether it was with respect to a topic assigned to the legislature and, secondly, where it was so and the legislature was a State Legislature and the Act purported to operate beyond the State, whether there was sufficient territorial nexus to validate such operation and, lastly, whether the powers of the legislature were in any other way fettered by the Constitution. So judged, the impugned Act was a perfectly valid legislation and its constitutionality was beyond question. Regard being had to the purpose and scope of the Act read as a whole there could be no doubt that all the categories of prize competitions included in the definition contained in section 2(1) (d) of the Act were of a gambling nature. The qualifying ' clause appearing at the end of cl. (1) must apply to each of the five kinds enumerated therein, and the word 'or ' appearing after the word I promoters ' and before the word 'for ' in the clause must be read as 'and '. Similarly, cl. (ii), properly construed, could not include any prize competitions other than those of a gambling nature. Elderton vs Totalisator Co. Ltd., , held inapplicable. The impugned Act was, therefore, a legislation with respect to betting and gambling and fell under Entry 34 of List II of the Seventh Schedule to the Constitution and was within the competence of the State Legislature. Taxes on gambling are a well recognised group of indirect taxes and section 12A of the Act in seeking to tax the gross collections in the hands of the promoters, and not their profits, was only following an easy and convenient way of getting at the gambler 's money in their hands and this made no difference in the character of the tax, essentially one on betting and gambling and not on any trade, and, consequently, the section fell within Entry 62 and not Entry 6o of List II of the Seventh Schedule to the Constitution. A prize competition that did not to a substantial degree depend upon the exercise of skill for its solution would be of a gambling nature and a scrutiny of the prize competitions offered by the respondents clearly showed that there was an element of chance to start with, and, consequently, they must be of a gambling nature and fell within the mischief of the Act. The doctrine of territorial nexus was a well established doctrine and could apply only when (1) the territorial connection between the persons sought to be taxed and the legislating State was real and not illusory and (2) the liability sought to be imposed was pertinent to that connection. The existence of sufficient 876 territorial nexus in a particular case was essentially a question of fact. There could hardly be any doubt in the instant case that the impugned Act satisfied all these tests and, consequently, it was unassailable on the ground of extra territoriality. Gambling activities were in their very nature and essence extra commercium although they might appear in the trappings of trade. They were considered to be a sinful and pernicious vice by the ancient seers and law givers of India and have been deprecated by the laws of England, Scotland, United States of America and Australia. The Constitution makers of India, out to create a welfare State, could never have intended to raise betting and gambling to the status of trade, business, commerce or intercourse. The petitioners, therefore, had no fundamental right under article 19(1) (g) or freedom under article 301 Of the Constitution in respect of their prize competitions that could be violated and the validity of the impugned Act, in pith and substance an Act relating to gambling, did not fall to be tested by articles 19(6) and 304 Of the Constitution. judicial decisions on article 1, section 8, sub section (3) Of the Constitution of the United States and section 92 of the Australian Constitution should be used with caution and circumspection in construing articles 19(1) (g) and 301 of the Indian Constitution. State of Travancore Cochin vs The Bombay Co. Ltd. ; and P. P. Kutti Keya vs The State of Madras, A.I.R. (1954) Mad. 621, referred to. The King vs Connare, ; , The King vs Martin; , , Commonwealth of Australia vs Bank of New South Wales, L.R. (195o) A.C. 235, Mansell vs Beck, Australian Law journal Vol. 3o, NO. , Champion vs Ames, ; , Hipolite Egg Co. vs United States, ; , Hoke vs United States, ; , United States vs Kahriger, ; and Lewis vs United States, 99 L.Ed.475, discussed.

The assessee challenged the jurisdiction of the Income tax Officer, Special Survey Circle, Bangalore, to assess income tax and super tax on his income accruing prior to April 1, 1950, in the State of Mysore, on the ground that the proviso to section 13 of the Indian Finance Act, 1950, by virtue of which he was exercising his power was ultra vires and void as the Parliament had no pow or to make a law authorising any officer appointed under the Indian Income tax Act to levy tax under the Mysore law prior to the Constitution. It was contended (i) that on general constitutional principles the Union Parliament had no power to make a law having retrospective effect with reference to pre Constitution period, (ii) that the Parliament was also prohibited by article 277 from making a law authorising such officers as in the present case to mot in the State of Mysore: Held, (repelling the contentions) (i) that the Parliament had such power vide the judgment delivered in Case No. 296 of 1951, (ii) that while article 277 authorises the continued levy of taxes lawfully levied by the Government of the State before the commencement of the Constitution and their application to the same purposes as before, even after the Constitution came into force, there is nothing in the article to warrant any implication that such taxes should continue to be levied, assessed and collected by the same State authorities as before the Constitution and there is nothing in article 277 to preclude Parliament making a law providing for the levy and collection of income tax and super tax under the Mysore Act 'through authorities appointed under the Indian Income tax Act.

The respondent was a firm carrying on business in different lines. It was assessed to income tax under section 23(4) of the Income tax Act, 1922 for the assessment year 1949 50 on the ground that notices issued under section 22(2) and (4) had not been complied with. Later on, that assessment 412 was cancelled. However, before the cancellation, it was found that an interest income of Rs. 88,737 in the shape of U.P. Encumbered Estates Act Bonds received by the respondent from third parties had escaped assessment as the assessee failed to disclose the same. The Income tax Officer issued a notice for the assessment year 1949 50 on the ground that a sum of Rs. 88,737 had escaped assessment in the said assessment year. After the cancellation of the assessment made under section 23(4), the Income tax officer, ignoring the notice issued by him under section 34(1)(a), included that amount in the fresh assessment made by him for the year 1949 50.The respondent appealed to the Appellate Assistant Commissioner who ordered the deletion of the sum of Rs. 88,737 from the assessment for the year 1949 50 and directed the same to be included in the assesment for the year ending 1948 49. Pursuant to the direction given, the Income tax Officer served a notice on the respondent under section 34(1). Against that notice the assessee filed a writ petition in the High Court for quashing the above mentioned proceeding on the ground that these were initiated beyond the time prescribed by a. 34. The High Court accepted the petition and quashed the notice on the ground that it was issued by the appellant beyond the ordinary period of limitation It also overruled the contention of the appellant that no period of limitation governed the notice in as much as the second proviso to section 34(3) was attracted to the facts of the case. The only direction which the Appellate Assistant Commissioner could give was one which was covered by section 31 of the Act and as the appeal before him was confined to a particular assessment year, the direction must necessarily be limited to a matter falling within that year. if the direction be treated as based on a finding recorded by Appellate Assistant Commissioner, that finding would have to be disregarded when applying the proviso. The appellant came to this Court by special leave. Held: (per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.). The proviso to sub section (3) of section 34 of the Indian Incometax Act, 1922 does not save the time limit prescribed under sub section (1) of section 34 in respect of an escaped assessment of a year other than that which is the subject matter of appeal or revision as the case may be and hence the notice under section 34(1)(a) issued in the present case was clearly barred by time. The jurisdiction of the High Court or the Supreme Court under section 66 or section 66(b) is a limited one and is confined only to the questions referred to them. Moreover, the questions referred by Tribunal cannot exceed its jurisdiction. Therefore the assessment or reassessment made under the said sections or Pursuant to the orders or directions made thereunder must necessarily relate to the assessment of the year under review, revision or appeal as the case may be. 'Me proviso to sub section (3) of section 34 does not confer any fresh power upon the Income tax Officer to make assessment in respect of the escaped incomes without any time limit. It only lifts the ban of limitation in respect of certain assessments made under certain provisions of the Act and the lifting of the ban cannot be so construed as to increase the jurisdiction of the tribunal Under the 413 relevant sections. The lifting of the ban was only to give effect to the orders that may be made by the appellate, revisional or reviewing Tribunal within the scope of its jurisdiction. If the intention was to remove the period of limitation in respect of any assessment against any person, the proviso would not have been added as proviso to sub section (3) which deals with completion of an assessment but would have been added to sub section (1) of section 34. The word 'finding ' covers only the material questions which arise in a particular case for decision by the authority hearing the. case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing. The expression 'direction ' refers to a direction which the appellate or revisional authority is empowered to give under the law. The expression "any person" must be confined to a person intimately connected with the assessment of the year under appeal or revision. Held: per Raghubar Dayal and J. R. Mudholkar JJ. (dissenting): That the notice was not in contravention of the provisions of section 34 and hence could not be quashed on that ground. When an appeal is before an appellate authority, the whole matter is at large before it and there fore when a specific case is put before it by an assessee, it has both the power as well as the duty to give its finding thereon. The ground given by an assessee for claiming a reduction or annulment of assessment may be that the income upon which he had been assessed was not earned in the accounting period of the year to which the assessment pertained but in respect of a specified earlier or later year. The appellate authority is entitled to go into the whole question and come to a finding one way or the other. The finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding, it is not necessary that it should be the final and ultimate conclusion. The contention of respondent that the second proviso to a. 34(3) enabling a notice to issue only to assessee in respect of escaped income without limit of time on the ground that the appellate authority has made a finding or direction in the proceeding before it makes a discrimination against such assessee because it does not lift the bar of limitation with regard to other assessees similarly situated but with regard to whom no finding has been made or direction given by appellate authority, was rejected. It was held that prima facie, there was a reasonable basis for the classification. The ground on which classification was made had a rational relationship with the object which was intended to be achieved by law, ie., to detect and bring to assessment the escaped income. Commissioner of Income tax vs section M. Chitnavis, (1932) L.R. 59 I.A. 290, Sir Kikabhai Premchand vs Commissioner of Income tax (Central), Bombay, pt. Hazart Lal vs Income tax Officer, Kanpur. Lakshman Prakash vs Commissioner of Income 414 tax, U.P., , A. section Khader Ismail vs Income tax Officer, Salem, (1963)48 I.T.R. 16, Simrathmul vs Additional Income tax Officer, Ootachamund, (1959)36 I.T.R. 41, Brindaban Chandra Basak vs Incometax Officer, , K. C. Thomas, First Income tax Officer. Bombay vs Vasant Hira Lal Shah , Prashar & Anr. V. Sasantsen Dwarkadas 49 I.T.R. (S.C.) 1, Kamlapat Hotilal vs Income tax Officer, , Hiralal Amrit Lal Shah vs K. C. Thomas, Income tax Officer, Bombay, , General Construction and Supply Co. vs Income tax Officer (8th) C Ward, Bombay, , Suraj Mal Mohata & Co. vs A. V. Visvanatha Sastri ; , A. Thangal Kunju Mudaliar vs M. Venkatachalam Potti & Anr. ; and Palaji vs Income tax Officer, Special Investigation Circle ; , referred to.

iminal Appeal No. 16 of 1959. Appeal from the judgment and order dated November 18, 1958, of the Allahabad High Court in Criminal Reference No. 452 of 1956. B. V. section Mani, for the appellants. G. C. Mathur and C. P. Lal, for the respondent. January 20. The Judgment of the Court was delivered by AYYANGAR, J. Having heard the learned Counsel for the appellants in full we did not consider it necessary to call on the respondent since, we were clearly 565 of the opinion that the contentions raised in the appeal possessed no merit. The legality of a prosecution for contravention of the notification fixing the maximum prices at which certain categories of iron & steel could be sold is the subject matter of this appeal. The appellants are two in number, related to each other as husband and wife. The second appellant Sushila Devi is " a Registered Stockholder " and is stated to be the proprietor of the firm " Balwanta Devi Sushila Devi " situated in Sultanpur in Uttar Pradesh and the first appellant Bhagwati Saran, her husband, the manager of the said firm. There has been some previous history before the present prosecution was initiated but it is sufficient for the purposes of this appeal to start with the report to the Judicial Magistrate, Amathi, by the officer incharge of the Police station, Sultanpur, dated August 20,1955. It was headed " Offence Section II B Iron &Steel Control Order, 1941" and set out the following facts: " Bhagwati Saran used to work as a Karinda in the firm of Balwanta Devi Sushila Devi and had all along been doing sales and purchases at the shop, and also issued receipts under his signatures. Shrimati Sushila Devi is the wife of accused Bhagwati Saran and she was the proprietor. Balwanta Devi has died. Hence she alone is the proprietor. In the course of investigation it was also revealed that Bhagwati Saran had from time to time sold some iron bark; on behalf of this firm after receiving price more than the control rate, which he had all along been getting printed, and ' had been getting some other receipts checked fictitiously under the Control Act from the office of the Supply Officer. An information relating to it was given to Shri P. N. Kapoor, the then D. M., Sultanpur by his munim Kalapnath and on it a case was registered at this police station and the investigation was made. . . . On the report of the P.P. the S.P. ordered another charge sheet to be submitted under section 8 of Essential Commodities Ordinance of 1955. Hence this charge sheet under section 11 B 566 (III) Iron and Steel Control of Production and Distribution Order, 1941, read with s ' 8 of Essential Commodities Ordinance of 1955 is sent against both the accused. The accused persons after being arrested were released on bail. It is, therefore, prayed. that the accused persons after being summoned may be punished. " The report further stated that 4 volumes of cash memos, and 5 volumes of register of Permits were deposited in the Malkhana and would be produced in evidence and followed it with a list of 13 prosecution witnesses. The Judicial Magistrate registered the case and issued summons to the accused on September 16, 1955, the case being directed to be called on September 30, 1955. The accused were thereafter examined before the Magistrate under section 364 of the Criminal Procedure Code on March 23, 1956, and on the next day the Magistrate framed a charge against them which read as follows: " That you between 10th January 1952 and 27th February 1952 in Sultanpur sold 11 Cwt. 12 lb. iron bars on 11th January 1952 %ad 3 Cwt. iron bars on 18 2 52 and Cwt. iron bars on 26th February 1952 at the rate of Rs. 21 13 9 per Cwt. though the controlled rate as notified in Government of India Gazette dated 1st July 1952 for the commodity was Rs. 21 2 4 per Cwt. and thus you charged Rs. 1 15 0, Rs. 2 2 3 and Rs. 4 4 6 respectively excess and more than the controlled price and thereby committed an offence punishable under section 7 E. section Temp. P. Act 1946 read with section 1 1 B (iii) of Iron and Steel Control of Production and Distribution Order of 1941 and I hereby direct that you be tried by the said Court on the said charge. " The two appellants thereupon moved the. Court of the Sessions Judge, Sultanpur, to revise the order of the Magistrate dated March 24, 1956, framing charges against them under section 7 of the Essential Supplies (Temporary Powers) Act, 1946 Act XXIV of 1946 (referred to hereafter as the Act). The points urged at that stage were mainly two: (1) That the notification by the Controller under 567 cl. 11 B(1) fixing the maximum prices which were stated to have been contravened not having been filed before the Court, the Magistrate erred in framing a charge, and (2) that the report of the police was not in conformity with the provisions of section 11 of the Act. The learned Sessions Judge upheld the second of the above contentions which was, that the report made by the police officer did not set out " the facts constituting the offence" as required by section II of the Act. He rejected the other point put forward by the appel lants but in view of his conclusion that there was a defect in the report which went to the root of the jurisdiction of the Magistrate to take cognizance of the case, he made a reference to the High Court with a recommendation that the charge framed against the appellants be quashed. This reference was heard by a Single Judge of the High Court, who disagreed with the learned Sessions Judge in his view that the report did not satisfy the requirements of section 11 of the Act. Before the learned Judge, however, a further point was urged, that section 11 B of the Iron & Steel Control of Production and Distribution Order, 1941 (which will be referred to hereafter as the Control Order) was itself ultra vires. This further objection was referred to a Division Bench for decision. The point urged before the learned Judges of the Division Bench was that the power to fix prices vested in the Steel Controller by cl. 11 B of the Control Order was unconstitutional, as violative of the right to carry on business guaranteed by article 19(1) (g) of the Constitution. The learned Judges answered this point against the appellants and the case thereafter came back before the learned Single Judge for final disposal of the reference by the Sessions Judge. The learned Counsel for the appellants once again made a submission to the learned Judge regarding the report of the police officer dated August 20, 1955, not satisfying the requirements of section 11 of the Act and pressed before him the view which found favour with the learned Sessions Judge. In a more detailed judgment, the learned Judge again rejected this contention and dismissed the reference and directed the prosecution to continue. It is this 73 568 order of the High Court. of Allahabad that is the subject matter of appeal now before us. on a certificate granted by that Court. It would be seen that the only two points in controversy before the High Court were: (1) whether the report of the police officer dated August 20, 1955, contained " the facts constituting the offence " with which the appellants were charged, as to satisfy the requirements of section 11 of the Act, and (2) whether el. 11 B of the Control Order, violated the fundamental right to carry on business guaranteed by article 19(1)(g). In the grounds of appeal to this Court and in the statement of case, however, the appellants have raised various other grounds and have also filed a petition for leave to urge these additional grounds, We desire to make it clear that grounds additional to those urged before the High Court would not be permitted to be raised before this Court as a matter of course and that petitions for such purpose would not be granted save in exceptional cases. It has to be noticed that in hearing and dealing with such additional grounds the Court is handicapped in not having the advantage of the opinions of the High Court on the points urged. It is the correctness of the decisions of High Courts that are sought to be challenged in appeals and it is but proper that the correctness of these judgments should, save in exceptional cases like for instance subsequent legislation or questions of fundamental and general importance etc., be assailed only on grounds urged before such Courts. Besides, when among the grounds thus urged as in this case is includ ed a violation of article 14, the handicap is accentuated, since the material facts on which the classification might rest could not be properly, investigated or evaluated on the basis of the affidavits filed in this Court without a careful sifting of the facts which a consideration by the High Court would afford. If in the appeal now before us, we have departed from this rule, and permitted the appellants to urge the additional grounds it was because of the circumstance that the prosecution was pending and learned Counsel submitted that he would seek to sustain his contention 569 regarding the violation of fundamental rights on the materials already on record. The ground regarding the constitutionality of el. 11 B of the Control Order has been the subject of elaborate consideration by this Court in Union of India vs Messrs. Bhana Mal Oulzari Mal (1) and is, therefore, no longer open to argument. Learned Counsel for the appellant therefore did not challenge the correctness of the judgment of the High Court upon this point. Besides the ground based on a non compliance with section 11 of the Act which we shall consider later, learned Counsel urged before us two points with reference to the notification issued by the Steel Controller fixing the maximum prices at which the several categories of iron and steel could be sold by producers and stockholders. These were: (1) that the notification of the Controller dated July 1, 1952, for the contravention of which the appellants were being prosecuted, was ultra vires the rule making power conferred upon him by el. 11 B(1) of the Control Order, (2) if, however, the notification was held to be within his power, the same was unconstitutional in that it was discriminatory and violated article 14 of the Constitution. As we have indicated earlier, these grounds of challenge to the validity of the notification were not made in any of the Courts below including the High Court, but for the reasons indicated we permitted learned Counsel to argue them before us. In order to appreciate the contention presented in the two forms, it is necessary to set out the terms of el. 11 B(1) which conferred power upon the Controller to fix the maximum base prices at which the several varieties of iron and steel could be sold. Clause 11 B(1) runs: " 11 B. Power to fix prices. (1) The Controller may from time to time by notification in the Gazette of India fix the maximum prices at which any iron or steel may be sold (a) by a Producer, (b) by stockholder including a Controlled Stockholder and (c) by any other person or class of persons. Such price or prices may differ for iron and steel obtainable from (1) ; 570 different sources and may include allowances for contribution to and payment from any equalization fund established by the Controller for equalising freight, the concession rates payable to each producer or class of producers under agreements entered into by the Controller with the producers from time to time, and any other disadvantages. " Clause (2) of the Control Order defines " producer as " a person carrying on the business of manufacturing iron or steel ", and " registered producer " as " a producer who is registered as such by the Controller ". The same clause defines " stockholder " as " a person holding stocks of iron or steel for sale who is registered as a stockholder by Controller " and " Controlled stockholder " as " a stockholder appointed by the Con. troller to hold stocks of iron or steel under such terms and conditions as he may prescribe from time to time ". The notification of the Controller dated July 1, 1952, impugned in these proceedings runs in these terms, quoting only the material words: " Under Ministry of Commerce and Industry Notification. . the prices of all items of steel under columns 1, 11 and III in the schedule of Base Prices of the attached price circular No. 1 of 1951 have been increased by Rs. 50/ per ton with effect from 1st July, 1952, except item 19(b), i.e., Billets which has been increased by Rs. 45/ per ton. . The other General and Special Conditions of sale mentioned in the attached Price circular remain the 571 The price circular dated July 1, 1951, referred to here consisted of eight columns which ran thus: (Price in rupees per ton) Maximum Base Prices at Calcutta, Bombay and Madras Base Materials Column I Column II Column III Price Item For sales by For sales by For sales by Registered controlled all persons No. Producers. stockholders. other than Registered Producers and controlled stockholders. Untested Untested Untested Untested Untested Te sted Rs. Rs. Rs. Rs. Rs. Rs. A Bars, Structural and plates etc. Bars and Rods 303 333 328 363 348 383 (Rounds and squares below 3" and flats up to and including 5" wide) 2 to 42. . . . . . . This was followed by General Conditions and Special Conditions which inter alia made provision for the purpose of rounding off inequalities in freight caused by places being situated at varying distances from the place of production etc. It was the operation of some of these conditions that was urged as giving rise to the discrimination complained of, but it will, however, be convenient to deal with them later, after disposing of the argument regarding the notification not being within the powers of the Controller under cl. 11 B (1). The 'ground urged in support of the contention that the notification by the Controller was not in conformity 572 with cl. 1 1 B (1) was this: Whereas under cl. 1 1 B (1) the Controller was directed to fix the maximum prices which could be charged by three different classes, viz., (a) Producers, (b) Stockholders including Controlled stockholders, and (c) Other persons, the impugned ,notification departed from this scheme in two respects: (1) The clause contemplated that the notification should apply to all " producers " whereas " producers " other than " Registered producers " were wholly left out by the Controller with the result that no limitation was placed upon the price they could charge, (2) Whereas the clause directed the Controller to include both the types of stockholders" Registered " as well as " Controlled " within the same class and make the same limit of prices applicable to both, the notification had included only " Controlled stockholders " as the second category of dealers and " registered stockholders " had not been specified eo nomine by him. This meant either that "Registered stockholders " were wholly outside the class of dealers governed by the notification or that they were intended to be included in the residuary class in column III. On these premises learned Counsel urged that if " registered stockholders " like the second appellant were not within the notification, the prosecution must fail because the maximum prices chargeable by her had not been fixed. If on the other hand such dealers had been separated from " Controlled stockholders " and included in the residual category, such a classification was not countenanced by cl. 11 B(1) and was therefore ultra vires. We consider that these submissions are wholly without any substance. Before the argument that " producers " other than " registered producers " had not been included in the notification can be accepted, it has to be established that there is any such producer. There is a list of " registered producers " appended to the notification and learned Counsel admitted that he could not say that there were any besides these, who were "Producers" of iron and steel within the meaning of the Control Order. If therefore, every " producer " was registered, there is no scope for the argument that 573 any persons had been left out and permitted to sell at prices of their choice. The other part of learned Counsel 's argument that registered stockholders " were not governed by the notification because they were not included in column II thereof and that dealings by them were not subjected to the maxima of prices fixed by it, has only to be stated to be rejected. The heading of the last column shows that all categories of dealers other than "registered producers.," and " controlled stockholders " were included in the residuary category. The related contention that the Controller acted outside his powers in differentiating between " controlled stockholders " and " registered stockholders " and in fixing different maxima of prices that could be charged by the two categories of dealers, does not deserve serious consideration either. If we understand the classification aright, it is like one between wholesale dealers and retailers and it is on this basis that the maximum price that could be charged by the " Registered Stockholders " who fall under column III is fixed at Rs. 20/ per ton above that permissible to " Controlled Stockholders " in respect of the category of steel which we have extracted earlier. The classification which gives persons in the category of the appellants this advantage is certainly not one regarding which a complaint could be made. Even when this advantage conferred on registered stock holders by the classification by the Controller was pointed out to learned Counsel for the appellant he persisted in his argument that "registered stock. holders". should have been put in column II along with " controlled stockholders " and should have been permitted to sell only at the same maximum prices. This is sufficient to show that the argument regarding the classification was frivolous and could not have been urged with any seriousness. This apart, we consider that even on the terms of cl. 11 B (1), the Controller is not prevented from drawing a distinction within the three classes which are specified in it. The purpose and policy of the enactment is to ensure that an essential commodity like iron and steel is made available, to 574 the consumer at reasonable prices and in the achievement of this objective classification of producers or of other stockholders based upon rational grounds would obviously be within the power of the Controller. Taking for instance the last class (c) " any other person or class of persons," it cannot be that this group could not be sub classified, if there was any reason or necessity to do so. If head (c) is susceptible of this interpretation, as it obviously must, we see no reason why head (b) should not be similarly construed. We have therefore no hesitation in rejecting the contention of learned Counsel, that the notification of the Controller fixing maximum prices is beyond his power, as not warranted by the terms of el. 11 B (1) of the Control Order. The argument next advanced in challenge of the validity of the notification was, that some of the General Conditions appended to the notification were discriminatory of the class of "registered stockholders" as compared with the " controlled stockholders " invoking for this purpose article 14 of the Constitution. Learned Counsel did not challenge the legality of the creation of the equalisation fund by the allowances for what is termed as " place extra ". Learned Counsel, however, urged two matters wherein facilities had been afforded or price increases permitted, to " controlled stockholders" which were denied to " registered stockholders " and that these had been done without any rational basis. These were: (1) The 3rd of the special conditions for sale by " controlled stockholders " read: "The question of credit facilities will be a matter for negotiation between the customers and the controlled stockholders. " (2) Similarly, Condition 5 also relating to " controlled stockholders" read: ,The base prices are. for sizes and length available in Size. Customers requiring material cut to length or size not available in stock will be required to pay cutting and wastage charges agreed between the customers and the stockholders. " Coming now to the special conditions for sale " by persons other than producers and controlled stock holders, " i.e., the conditions which governed sales like those by the second appellant, special condition 1 575 read: " The base rates given in column III above are ex site and apply to sales by all persons other than Producers and Controlled Stockholders. . and are not subject to additional charges for cutting or for credit facilities. " Neither of these points cutting charges or credit facilities could be held to be discriminatory without a full investigation of the facts and circumstances which led to the imposition of these special conditions. Differentiation could never per se be discrimination, nor is there any presumption that the adoption of different rules for groups differently situated is unequal treatment violative of article 14. On the other hand, the presumption is the other way and the party that alleges unjustifiable discrimination should establish it to the satisfaction of the Court. We consider that there is no material on the basis of which an argument could be sustained that the special conditions to which learned Counsel adverted contained any element of unfair or irrational discrimination to attract article 14. There was a slight and subsidiary point raised in regard to the allowance of credit facilities and cutting charges. It was said that these charges were indeterminate and that the Controller having been directed by cl. 11 B (1) to fix definite maximum prices had departed therefrom by permitting increases of undefined amounts. This argument again has no substance. The base price for the commodity having been fixed, there are incidentals which by their very nature were incapable of definite quantification, since they were dependent on each individual case. This contention also we therefore reject. In passing, we might observe that the matter before this Court in Union of India vs Messrs. Bhana Mal Gulzari Mal (1) related to a prosecution for a contravention of a notification of an earlier date, but in terms identical with the present, except as to the prices, wherein the dealers in the commodity were classified in the same manner as has been done in the notification now before us and with the same general and special conditions. The respondent then before this Court was " a registered (1) ; 74 576 stockholder " who was being prosecuted for effecting sales in excess of the maximum prices fixed. The fact that on that occasion no contention was urged challenging the validity of the notification as beyond the powers of the Controller, on the grounds now put forward clearly indicates, that the matters now urged never appeared then, as a possible source of grievance to a party situated similarly as the second appellant. We hold that the notification fixing the prices together with the conditions appended thereto are valid and enforceable. The last point that remains to be dealt with, is the contention that the initiation of the prosecution against the appellants was invalid for non compliance with the requirements of section 11 of the Act. This Section runs : " 11. Cognizance of offences. No Court shall take cognizance of any offence punishable under this Act except on report in writing of the facts constituting such offence made by a person who is a public servant as defined in section 21 of the Indian Penal Code (XLV of 1860). " Learned Counsel for the appellants urged that though two of the conditions specified by the statute, viz., (1) a report in writing, (2) by a public servant were satisfied, the third requisite, viz., that the report should set out the " facts constituting such offence " was lacking and that by reason of this defect the Magistrate could not lawfully take cognizance of the case against the appellants. In elaboration of this point learned Counsel pointed out that the report did not specify: (a) the date when the alleged sales took place, (b) the quantity sold, (c) the person in question who was the buyer and who paid the excess over the controlled price, (d) the class or category of iron and steel which was the subject of the sale by the appellants, (e) the precise maximum price which had been fixed for such variety, (f) the amount which the appellants were alleged to have received in excess. The learned Judge of the High Court rejected this contention and, in our opinion, correctly. In the report which we have already extracted the provision 577 of the law which the appellants were stated to have contravened was set out, and it was there stated that being " registered stockholders " they had sold the goods above the price notified and that they had further, in order to conceal their crime, fabricated evidence. It is to be noticed that the report is required to contain only " a statement of facts constituting the offence " and its function is not to serve as a chargesheet against the accused. The function or purpose of the second of the above three requirements of section 11 is to eliminate private individuals such as rival traders or the general public from initiating a prosecution and for this purpose before cognizance is taken the complaint is required to emanate from " a public servant ". The two further requirements, viz., that the report should be in writing and regarding the contents of the report, are to ensure that there shall be a record that the public servant is satisfied that a contravention of the law has taken place. If the contravention in question is sufficiently designated in the report, and in the present case that cannot be disputed, since besides a reference to the notification stated to have been contravened, the report states that the accused had effected sales above the maximum prices specified in the notification, the requirements of the section are satisfied. The details which would be necessary to be proved to bring home the guilt to the accused and which comprised the several matters enumerated by learned Counsel which we have set out, will be details which would emerge at a later stage, when after notice to the accused a charge is framed against them, and of course at the stage of the trial. They would all be matters of evidence and section 11 does not require the report to be or to contain either the charge sheet or the evidence in support of the charge, its function being merely to afford a basis for enabling the magistrate to take cognizance of the case. In support of his submission regarding the construction of section 11 reliance was placed on two decisions: Dr. N. G. Chatterji vs Emperor (1) and Rachpal Singh vs (1) 578 Rex (1). Both these were cited before the learned Judge and we agree with the manner in which he has dealt with and distinguished them. No doubt, in both these cases it was held that the requirement of r. 130 (1) of the Defence of India Rules (whose language was similar to is. 11 of the Act) as to the Statement of " facts constituting the contravention " was not complied with, but the " reports " dealt with in them, bear no resemblance to the report in the case before us. In the first of these decisions, the recital in the report was that the accused was guilty of a " prejudicial act to the interest of the public " and " had prejudiced the success of financial measures with a view to the efficient prosecution of the war ". These words were held to be absolutely vague, even the particular rule or provision of law which was said to have been contravened, not even being mentioned in the report. The other decision in 50 Criminal Law Journal does not bear any analogy to the present case either. The report there in question ran: "On the statement of the informant an offence under section 81(2), Defence of India Rules, has been committed for which the charge sheet is being submitted." On this it was held that the facts alleged to constitute the contravention were not set out in the report and that the Magistrate had therefore no jurisdiction to take cognizance of the case. Obviously this case could not assist the learned Counsel to sustain a contention that the report in the present case was defective. We consider that the report on which the prosecution was launched satisfied the requirements of section 11 of the Act. In the result the appeal fails and is dismissed. Appeal dismissed.

A police officer made a report under section 11 of the Essential Supplies (Temporary Powers) Act, 1946, regarding a contravention of cl. 11 B(III), Iron and Steel (Control of Production and Distribution) Order, 1941, read with section 8 of the Essential Commodities Ordinance, 1955, to the Magistrate against the appellants who were registered stockholders that they had sold iron bars at prices higher than the controlled rate. After enquiry the Magistrate framed a charge against the appellant under section 7, Essential Supplies (Temporary Powers) Act, 1946, read with cl. 11 B(III) of the Control Order. The appellants contended that the charge ought to be quashed on the grounds, (i) that the notification of the Controller fixing the maximum sale price of the several categories of iron and steel was ultra vires the rule making power in cl. 11 B(i) of the Control Order, (ii) that the notification was discriminatory and violated article 14, and (iii) that the complaint could not be taken cognisance of by the Magistrate because the report of the police officer did not set out the facts constituting the offence as required by section II of the Act. The first two grounds were raised for the first time before the Supreme Court. Held, that the notification fixing the rates was intra vires cl. 11 B(i) of the Control Order. The notification did not omit any class mentioned in cl. 11 B(1) from its purview; it included 564 "registered producers" and it was not shown that there were any "producers " other than " registered producers " enumerated in the notification. The notification governed " registered stockholders " also as they were included in the residuary category of persons other than " registered producers " and " controlled stockholders ". The notification was not discriminatory and did not offend article 14 of the Constitution. The notification no doubt permitted the grant of credit facilities and the right to charge for cutting and wastage in sales to " controlled stockholders " but not to " registered stockholders " in regard to sales by them. Differentiation was not per se discrimination. There was no material to show that there was any unfair or irrational discrimination which could attract article 14. Held, further, that the police report on which the prosecu tion was launched satisfied the requirements of section II of the Act. The purpose of section II was to eliminate private persons from initiating prosecutions and to confine it to public servants. The requirement of the section that the report should be in writing and should set out the facts constituting the offence was to ensure that there was a record that the public servant was satisfied that a contravention of the law had taken place. If the contravention was sufficiently designated in the report the requirements of the section were satisfied. Section II did not require the mention in the report of details which would be necessary to be proved to bring home the guilt to the accused. Dr. N. G. Chatterji vs Emperor and Rachpal Singh vs Rex , not applicable. Additional grounds, other than those urged before the High Court, would not be permitted to be raised before the Supreme Court as a matter of course, but only, in exceptional circumstances like cases of subsequent legislation or where questions of fundamental and general importance were raised.

The respondent, a sub inspector of police, was charged with acceptance of Rs. 100 as a bribe from two persons, B and P, for dropping a case which he had instituted against B under the Essential Supplies (Temporary Powers) Act, 1946. The prosecution case was that when the demand for the bribe made by the respondent could not be avoided, B and P approached the Anticorrosive Department, and it was arranged that the respondent should be paid at the police station the bribe money in the shape of currency notes produced by B and P and initialled by M, who was in charge of the Anti Corruption Department, and that M, along with a Deputy Superintendent of the Department and a first class Magistrate, should be at the police station at the time of payment, dressed as ordinary villagers ; that as soon as the amounts in notes were received by the respondent the officers disclosed their identity, that thereupon the respondent tried to throw away the currency notes but that as a result of the officers catching hold of his hands the notes were found in his hand except one which was missing and that as a result of a search made in the presence of two search witnesses later the missing note was also found. The respondent was tried by the Special judge who accepted the prosecution evidence and found him guilty of the offence under section 161 of the Indian Penal Code. On appeal to the High Court the learned single judge who disposed of the appeal held that the respondent could not be convicted because (1) there was no independent witness to support the testimony of the " raiding party " consisting of the two bribegivers and the three officers, (2) the search witnesses did not prove the transaction nor were they present at the time of the occur rence, and (3) the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , had laid down an invariable rule that in cases of this nature the testimony of those witnesses who form what is called " the raiding party " must be discarded, unless that testimony is corroborated by independent witnesses. The State appealed by special leave : Held, (1) that the evidence of the two search witnesses provided independent corroboration in a material particular to 196 the testimony of the raiding party, because the missing currency note, one of the series testified to by the raiding party, could be found where it was actually found only if the testimony of the raiding party was true. (2)that corroboration need not be by direct evidence that the accused committed the crime; it is sufficient even though it is merely by circumstantial evidence of his connection with the crime. Rameshwar vs The State of Rajasthan, ; , followed. (3)that the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , has not laid down any inflexible rule that the evidence of the witnesses of the raiding party must be discarded in all cases in the absence of any independent corroboration. The correct rule is that if any of the witnesses are accom plices, their evidence is admissible in law but the judge must warn the jury of the danger of convicting the accused on the uncorroborated testimony of an accomplice ; if the case is tried without the aid of a jury, the judge should indicate in his judgment that he had this rule of caution in mind and give reasons for considering it unnecessary to require corroboration; if, however, the witnesses are not accomplices but are merely partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested in the same way as any other interested evidence is tested, and in a proper case, the Court may look for independent corroboration before convicting the accused person. If a Magistrate puts himself in the position of a partisan or interested witness, he cannot claim any higher status and must be treated as any other interested witness.

By Notification No. ST 11 333/X 1012 1971 dated 15 November 1971, entry 2(a) copper, tin, nickel, zinc or any other alloy containing any of these metals only were made exigible at a reduced rate of sales tax of I The Judge (Revisions) Sales Tax, U.P., Lucknow held that phosphorous bronze falls within this notification. The Single Judge of the Allahabad High Court took a contrary view and held that it was taxable as an unclassified commodity at 3.5%. Before this court it was contended that phosphorous bronze is made of tin and copper only; that a small quantity of phosphorous is used to deoxidize the metal and that it is not an essential substance of the phosphorous bronze. It was, however, admitted that without the use of phosphorous, phosphorous bronze cannot he produced, and a certain quantity remains in the phosphorous bronze. Dismissing the appeal, this Court, HELD: (1) The emphasis in the entry is that it must contain, even if an alloy, "only" copper, tin, nickel or zinc. The expression "only" is very material for understanding the meaning of the entry. Since the alloy in dispute contains phosphorous, may he in a very small quantity, it cannot fall within entry 2(a) of the notification. (721 G) Commissioner of Sales Tax vs Hindustan Metal Works (1964) 15 STC 97 720 referred to.

An agreement was entered into by Dharangadhara Chemical Works Ltd. (Chemical Company) for the sale of all its products to the respondent (Trading Company). The agreement contained general terms; and the actual quantity sold, the sale price, the booking station and the destination stations were to be determined in the actual contracts for sale in respect of definite or specified quantities. The mode in which sales were effected was that the respondent Trading Company used to obtain orders from out of State buyers, and enter into agreements of purchase with the Chemical Company for these specified quantities. All the goods sold under these contracts of sale were booked at a particular railway station in the State to the various places outside the State, where buyers from the respondent Trading Company required the goods and then the railway receipts and invoices concerned were endorsed and handed over to the respondent Trading Company. In the assessment order for the assessment year 1980 81 the assessing authority treated the sales effected by the Chemical Company to the respondent Trading Company as intra State sales and those by the respondent Trading Company to the out of State buyers as inter State sales falling under section 3 of the . The assessees, namely, the Chemical Company and the respondent Trading Company filed appeals before the Appellate Assistant Commissioner contending that sales by the Chemical Company to the respondent Trading Company were also inter State sales as these sales were completed by the delivery of railway receipts and invoices only after the inter State journey of the goods had commenced. The Appellate Assistant Commissioner dismissed the appeals. Both the assessees filed appeals to the Tribunal. After considering 806 the manner in which the sales were effected and despatches made by the Chemical Company and examining some specimen orders placed by respondent Trading Company with the Chemical Company, the Tribunal came to the conclusion that delivery was effected by the Chemical Company to the respondent Trading Company by delivery of documents of title, namely, the receipts of invoices and the railway receipts and allowed the appeals. The High Court upheld the views of the Tribunal and dismissed the revision petitions filed by the State. In the appeals by the State it was contended that the first set of sales by the Chemical Company to the respondent Company were local or intra State sales, because under the agreement the delivery was to be effected at the booking stations. Dismissing the appeal, ^ HELD: The orders were placed for booking specified goods to out of State buyers and the Chemical Company never gave physical delivery of the goods to the respondent Trading Company but booked the goods to the destinations as required by the out of State buyers and merely handed over documents of title to the respondent Trading Company. The movement of the goods from the State to the outside State was occasioned by the terms of the contract themselves and the sales were inter State sales falling under sub section (a) of section 3 of the . Alternatively, since the deliveries of goods sold were effected by the transfer of documents after the movement of the goods from the State to the other States had commenced, the sales could be regarded as covered under sub section (b) of section 3 of the Act. [809GH; 810A B] The agreement entered into by the Chemical Company with the respondent Trading Company is merely a general agreement. The actual terms of the contracts of sales as well as the instructions of the out of State buyers have to be taken into account in determining the nature of the sales in question. [810E F] The conclusion arrived at by the Tribunal as well as the High Court that the sales by the Chemical Company to the respondent Trading Company were inter State sales cannot therefore be faulted. [810F] Union of India & Anr. vs K.G. Khosla & Co. (P) Ltd. & Ors., [1979] 3 S.C.R. 453 at p. 460, relied on. 807

The respondents assessees were engaged in the manufacture of mild steel rods, bars or rounds. They claimed that as the articles manufactured by them fell under item 1 of the list set out in the Fifth Schedule, they were entitled to a higher rate of development rebate specified in section 33(1) (b) (B) (i) (a) and to relief under section 80 1 of the Income Tax Act, 1961. The Income Tax Officer rejected the claim of the assessees, whereas the Appellate As sistant Commissioner, the Tribunal and High Court accepted their claim. Hence the Revenue filed appeals before this Court. The contentions of the appellant Revenue were that iron and steel ceased to be a metal when it came out of the furnace in the primary steel mills in the form of ingots. In the next stage the ingots became semi finished products in the shape of billets, blooms and slabs. It was said to be the stage where the raw materi als were converted into. In different form or shape; that the expression "iron and steel (metal)" meant the iron and steel as it emerged in the form of billets, blooms and slabs from the steel mill and that all subse quent products whether in the form of rails, rods (including wire rods), bars, angles, channels, tees, sees, pipes, tubes, sheets, strips, plates and coils would constitute articles made of iron and steel, and that rolling mills making bars and rods were not covered by item 1 of the Fifth Schedule. 188 On the other hand, the respondents asses sees contended that in the steel industry the manufacture of ingots, billets, blooms, etc. represented only an intermediate stage at which the iron and steel metal became semi finished steel. When the semi finished steel was converted into plates, bars or rods, they became finished steel. The bars, rods and rounds, which were continued to be iron and steel in a finished form, were used to manu facture the products of iron and steel by various processes, such as, rolling, cutting, shearing, forging, hammering, etc. and that the products of iron and steel were different from that of iron and steel (metal). Dismissing the appeals filed by the Revenue, this court, HELD: 1. In interpreting the provisions in S.33(1)(b)(B)(i)(a), S.80 I of the Income Tax Act, 1961, the Court would do well to keep in mind the background in which concessions to certain basic industries were introduced in the Income Tax Act. The historical background reflects the intention of the legislature to grant progressively certain exemptions, re liefs and concessions for certain types of industries, which were considered important for national development. The industry in iron and steel and other metals figured in all the lists. [199 C, 200 B] 2. The incentive concession or relief granted under the provisions has to be con strued in a broad and comprehensive manner so as to cover all manufacturing activities legitimately pertaining to the specified core industry with no limitation save what may be called for by the wording of a particular entry. So far as items 1 and 2 are concerned, the wording points to a distinction between the metal which is used as the base and other articles manufactured therefrom. Pig iron and iron scrap are fed into furnaces to produce ingots, billets and blooms. But both are iron and steel in different forms, the latter being referred to as "semi finished steel". Like wise, the bars, rods, rounds, wire rods and the like constitute the second stage in which one gets only "finished" forms of iron and steel. Having regard to the nature and weight of the metal, it has to be "finished" to assume these forms before manufacturers of iron and steel articles can take over and proceed to manufacture articles from them by drawing wires or converting them into rails or shaping them into tees, zees, pipes, tubes and the like. [200 C E] 3. Whether the article produced is the raw material 01, an article made of iron and steel has to be decided on the basis of the 189 nature of the article and not the kind of mill which turns it out. It is significant that these items do not draw distinction between basic steel mills, integrated steel mills and the various other types of mills that are used in the industry. [200 G] 4. The departmental instructions that machinery and plant in "rolling mills" will not be eligible for the higher development rebate would not seem to be justified if it intends to draw a distinction between the same machinery and plant when used in rolling mills and when used in other mills in the industry. If machinery and plant installed in steel mills where the process includes not merely the production of ingots, billets and the like but also the production of bars and rods are eligible for the higher development rebate, it is difficult to see why the same, plant and machinery, when installed in rolling mills which proceed, from the stage of ingots or billets, to manufacture bars and rods should not be eligible for the higher rate of devel opment rebate. [200 G 201 B] 5. In considering the issue, the court should not be carried away be classifications of stages of manufacture that may be relevant for other purposes. What the court should examine is not the nature of the mill which yields the article but the nature of the article or thing that is manufactured and ask the question whether such articles or things can be considered as raw material for manufac ture of other articles made of the metal or is it itself an article made of the metal. [201 B C] 6. The goods in the present case fail in the former category. The mild steel rods, bars or rounds which are manufactured by the asses sees are only finished forms of the metal and not articles made of iron and steel. They only constitute raw material for putting up arti cles of iron and steel such as grills or windows by applying to them processes, such as cutting or turning. The rod or the wire rods are likewise not products of iron and steel but only certain finished or refined forms of the metal itself. [201 C D] 7. Forging and castings are not covered by item 1 being articles made of iron and steel but that since the legislature definite ly intended to give relief even in respect of such articles, item 11 and also item 21 were introduced. Even if MS steel rods, bars and rounds cannot be taken as iron and steel (metal), they would fail under the category of "forgings and castings" referred to in item 11. [201 G H] 190 8. The conclusion drawn by the High Court that the assessee was entitled to the higher development rebate, though, it produced arti cles only from iron scrap, does not call for any interference. [202 C, D] C.I. T. vs Mittal Steel Re tolling and Allied Industries (P) Ltd., ; CI. West India Steel Co. Ltd., (Kerala); Addl. Commissioner of Income Tax vs Trichy Steel Rolling Mills Ltd., ; C.I.T.v. Krishna Copper Steel Roll ing Mills, & Har yana); CI.T.v. Ludhiana Steel Rolling Mills, & Haryana) and Singh Engineering Works Pvt. Ltd. vs CI.T., , approved. Indian Steel and Wire Products Lid vs Commissioner of Income tax, and Commissioner of Income Tax vs Kay Charan Pvt. Ltd., ; over ruled. State of Madhya Bharat vs Hira Lal, (1966) 17 STC 313 (S.C.) Devi Dass Gopal Krishnan vs State of Punjab, (1967) 20 STC 430 (SC); Hindustan A1uminium Corporation Ltd. vs State of (U.P., (1981) 48 STC 411 (S.C.) State of Tamil Nadu vs Pyarelal Malhotra, (1976) 37 STC 319 (SC); C.I.T.v. Rashtriya Metal Industries Co. Ltd., ; Indian A1uminium Co. Ltd vs C.I.T, Cal. and Cal; Jeewanlal vs CI.T., ; C.I.T vs Fitwell Caps P. Ltd., ; Hindustan Wire Products vs CI.T 1 ; Indian Steel and Wire Products Lid vs C.I.T. ; C.I.T.v. Tensile Steel Lid, and CI. Ludhiana Steel Rolling Mills, & H) referred to. Speci 'fication and Glossary By Expert Products Sectional Committee of Bureau of India Standards, New Encyclopedia Brittanica Macropaedia, 15th Edn. Vol.21; Websters, Third New International Dictionary; Encyclopaedia of Chemical Technology By Kirk Othmer, 3rd. Vol.21;// Book on Small Scale Steel Making By R.D.Walker, The Budget Speech of the Finance Minister, (1968) 48 ITR [Statutes] 34; (1965) 55 ITR [Statutes] 57 and 122 referred to.

The Assistant Commissioner (Judicial) Sales Tax, Bareil ly, disposed of the respondents ' appeal made against an order of the Sales Tax Officer. A copy of the order was served on the respondent, but he lost it. Later, he ob tained another copy and filed a revision petition under sectiOn 10 of the U.P. Sales Tax Act. The same was opposed as being time barred, but the Judge (Revision) accepted the respondent 's contention that under section 12(2) of the , he was entitled to exclude the time spent in obtaining the second copy of the order, while computing the limitation period. The question whether such exclusion was permissible, was referred to the High Court which an swered in the affirmative. The appellant contended that the U.P. Sales Tax Act itself provided for a specific period of limitation; and therefore the was not applicable, and also that, a copy of the order was not required to be filed with the revision petition, and so the time spent in obtaining a second copy could not be excluded in computation of limita tion. Dismissing the appeal the Court, HELD: (1 ) Where the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revi sion petition, the time spent in obtaining that copy would necessarily have to be excluded under Section 12(2) of the . State of Uttar Pradesh vs Maharaj Narain & Ors. ; followed. [688 B C] (2) The provisions of Section 12(2) of the would apply even though the copy mentioned in that Sub section is not required to be filed alongwith the Memorandum of appeal. The same position should hold good in case of revision petitions ever since of 1963 came into force. 1686 B, D 687 FI J.N. Surty vs T.S. Chettyar (55 IA 161), The Punjab Co.operative Bank Ltd., Lahore vs The Official Liquidators, the Punjab Cotton Press Co. Ltd. Lahore Series 191, MT. Lalitkuari vs Mahaprasad N. Singh Panta Series 157, Additional Collector of Customs, Calcutta & Anr. vs M/s. Best & Co. (AIR S.A. Gaffoor vs Ayesha Beghum & Ors. (C.A. 2406/1969 decided on 18 8 1970 Unreported Judgment of Supreme Court, 1970 Vol. 2, page 784) followed. (3) For the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in Section 12(2), inter alia. shall apply in so far as, and to the extent to which they are not expressly excluded by such special or local law, and there is nothing in the U.P. Sales Tax Act expressly excluding the application of Section 12(2) of the . [685 H, 686 A]

The appellant was tried and convicted for the murder of one B. The evidence against him was circumstantial and consisted of (1) a motive to kill B which he had in common with his father, (II) the recovery at his instance of an axe, shirt and dhoti stained with human blood and (III) his statements made to a Sub Inspector of Police before the recovery that the axe was one with which he had killed B and that the shirt and Dhoti belonged to him. No independent evidence was led to prove that the axe, shirt and dhoti belonged to the appellant. Held, that the statements made by the appellant were inadmissible and the remaining evidence was ' not sufficient to bring home the guilt to the appellant. The statements were incriminating ones made to a police officer and were bit by sections 25 and 26 of the Evidence Act. Statements were not admissible under section 27 as they did not lead to any discovery within the meaning of that section. Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I. A. 65, relied on. State of U. P. vs Deoman Upadhya, ; , distinguished.

The question for determination in this appeal, arising out of a suit filed by the appellant under section 5(3) of the Charitable and Religious Trusts, Act, 1920, was whether the ancient temple of Shri Balaji Venkatesh at Nasik and its Sansthan constituted a charitable and religious trust within the meaning of the Act. The deity was Swayambhu and revealed itself in a dream to one Ganapati Maharaj who, at its behest, brought the deity from the river Tambraparni and installed it in his house. Ganapati 's son Timmaya, who removed the deity to Nasik, took the idol to the courts of Rulers and acquired the properties in suit consisting of lands and cash. Timmaya 's eldest son obtained an extensive plot of land as a gift from the Peshwa and thereon built a vast temple with a Sabha Mandap which could accommodate no less than 600 persons and installed the deity in the first floor with a staircase leading straight to it. The Hindu public has been worshipping at the temple for more than 200 years and there was no evidence to show that they had ever been excluded from it and any gift had ever been refused. The ceremonies performed in the temple were appropriate to a public deity. It was admitted by the sons of Timmaya in Tahanama, executed by them in 1774, that the Inam villages were granted for the worship of the deity and the temple belonged to the Sansthan, none of them having any share in it. In the Tharav Yadi of 1800, the maintenance allowance provided by the said Tahanama for the different branches of the family was described as 'Vetan '. The Inam Commissioner, functioning under Act 11 of 1852, recorded the Inam villages as permanently held Debasthan inams at the instance of the then Sthanic and on the basis of original sanads filed by him, reversing the decision of the Assistant Inam Commissioner who had recorded them as personal inams. Those sanads were not filed in the suit. In 1931 the appellant published a history of the Sansthan wherein it was clearly stated that the Sansthan was not a private or family property but was the property of the deity, the members of the family being merely the managers. The deity was not made a party to the suit although representatives of the Hindu public were joined as 98 774 parties under section 1, r. 8 of the Code of Civil Procedure. The High Court, while it concurred with the trial judge in holding that the deity was a public deity and that its Sansthan constituted a public trust, was, however, inclined to hold that some of the properties might be personal properties of the appellant but refused to grant any such declaration on the ground that no effective decree could be passed against the deity in its absence, It was contended on behalf of the appellant in this court that the courts below had misconstrued the document and were wrong in drawing the inferences they did and that the burden of proof had been wrongly placed on the appellant to prove by positive evidence that the deity was a family deity and the properties his private properties. Held, that the courts below were right in coming to the conclusion they reached, and the appeal must fail. A mistaken inference drawn from documents is no less a finding of fact, if there is no misconstruction of the documents and no misconstruction of documents having been proved, the appellant could not succeed. An admission is the best evidence that an opposing party can rely upon, and, although it is not conclusive, is often decisive of the matter unless it can be successfully withdrawn or proved to be erroneous. The expression " burden of proof " means one of two things (1) that a party has to prove an allegation before it is entitled to a judgment in its favour, or (2) that the one or the other of the two contending parties has to introduce evidence on a contested issue. The question of onus is material only where the party on which it is placed would eventually lose if it failed to discharge the same. Where issues are, however, joined, evidence is led and such evidence can be weighed in order to determine the issues, the question of burden becomes academic. In the present case, if the onus lay on any party, it was clearly on the appellant to prove by cogent evidence that the admissions made by his predecessors in title and by him were either erroneous or unavailable and this he had failed to do. The earlier sanads, admittedly in his possession, not having been produced and those produced not being in any way inconsistent with the said admissions or the revenue records, no question of any misconstruction of documents could arise. Babu Bhagwan Din vs Gir Nar Saroon, (1939) L.R. 67 I.A. 1, held inapplicable. Srinivasa Chariar vs Evalappa Mudaliar, (1922) L.R. 49 I.A. 237, applied. The entries made in the Inam Register prepared under Act 11 of 1852, were entitled to great weight and although they could not displace actual and authentic evidence in an individual case, it was well settled that, in absence of such evidence, they must prevail, 775 Arunachalam Chetty vs Venkatachalapathi Guru Swamigal, (1919) L.R. 46 I.A. 204, referred to. Held, further, that the vastness of the temple, the mode of its construction, the long user by the public as of right, grant of land and cash by the Rulers, taken along with other relevant factors were consistent only with the public nature of the endowment. Narayanan vs Hindu Religious Endowments Board, A.I.R. 1938 Mad. 209, relied on. The absence of a dome or Kalas on the temple was not by itself a decisive factor as to its public character, nor was consecration imperative of a deity that was Swayambhu. Nor is the temporary movement of the idol from place to place inconsistent with its public character. Ram Soondur Thakoor vs Taruk Chunder Turkoruttum, (1873) 19 Weekly Reporter 28; Hari Raghunath vs Apantii Bhikajii, Bom. 466; Prematha Nath Mullick vs Pradyumna Kumar Mullick, (1925) L.R. 52 I.A. 245 and Venkatachala vs Sambasiva, A.I.R. (1927) Mad. 465; 52 M.L.J. 288, considered. The defect in the frame of such a suit resulting from the omission of the deity as a party to it, cannot be remedied by the subsequent addition of the representatives of the Hindu Public as parties to it, and no effective decree could be passed against the deity in such a suit.

Appeal No. 18 of 1952. Appeal from the Judgment and Order dated December 12, 1949, of the High Court of Judicature at Bombay (Weston and Shah JJ.) in First Appeal No. 456 of 1949, arising out of Judg ment and Decree dated January 24, 1949, of the 186 Bombay City Civil Court in Civil Suit No. 106 of 1948. M.C. Setalvad, Attorney General for India, (S.B.Jatharwith him) for the appellant. N. P. Engineer (E. H. Bhaba with him) for the respondent. November 5. The Judgment of the Court was delivered by DAS J. This is an appeal filed with the special leave of this Court. It is directed against the judgment and decree passed December 2, 1949, by a Division Bench (Weston and Shah JJ.) of the Bombay High Court reversing, the ground of absence of jurisdiction, the judgment and decree for possession passed January 24, 1949, by the Bombay City Civil Court and directing the return of the plaint for presentation to the proper Court. There is no dispute as to the facts material for the purposes of this appeal. or about April 15, 1908, the Board of Trustees for the Improvement of the City of Bombay put up to auction plots Nos. 16, 17 and 18 of new survey Nos. 8234, 8235 and 8244 situate the Princess Street Estate of the Board containing an area of 2235 square yards for being let certain conditions. One Sitaram Luxman was the highest bidder and was declared the tenant at an annual rent per square yard to be calculated at the rate of 41/2 per cent of Rs. 29 per square yard and he signed the memorandum of agreement incorporating the conditions upon which the auction was held and by which he agreed to be bound. He deposited the moneys in terms of clause 3 of the conditions, and upon such payment entered into possession of the plots. By clause 7 Sitaram Luxman agreed, within the time specified therein, to build and complete at a cost of not less than Rs. 50,000 a building consisting of 5 floors with suitable offices, drains etc. according to plans and specifications to be made by an approved architect and approvedby the Board By clause 17 187 he agreed, so soon as the main building should be roofed in, to insure in the joint names of the Board and of himself and, until the granting of the lease thereinafter provided, keep insured the buildings and works the plots for the full value thereof. Clause 18 of the conditions was as follows: "18. The lease. Immediately after the completion within the time limited by condition 7 of the said buildings and works to the satisfaction of the Trust Engineer testified by his certificate the Trustees will if the contract has not previously been determined grant to the tenant or his approved nominee who shall accept the same a lease of the said plot with buildings thereon for the term of 999 years from the date of the auction at the yearly rent calculated in accordance with the accepted bidding for the plot. " Clause 25 gave power to the Board, if the buildings were not completely finished within the stipulated time and certain other contingencies, to forfeit the deposit and to enter upon and retain possession of the plots and all buildings and works then standing thereon. Pursuant to this agreement the said Sitaram Luxman erected those plots a building which has since come to be known as the New Sitaram Building. the completion of the building, by an Indenture of lease made April 19, 1916, between, the Trustees for the Improvement of the City of Bombay and one Rustomji Dhunjibhoy Sethna the receiver of the estate of Sitaram Luxman appointed by the High Court in Suit No. 720 of 1913, the Trustees, pursuant to the said agreement and in consideration of the monies which had been expended in the erection of the buildings and of the rent and the covenants thereinafter reserved and contained, demised unto the lessee all that piece of land situate their Princess Street estate together with the buildings erected thereon to hold the same for 999 years from April 15, 1908, paying therefor up to January, 15, 1909, the rent of Re. I and during the remainder of 188 the term the yearly rent of Rs. 2,916 by equal quarterly payments. By the said Indenture the lessee covenanted to pay all rates and taxes, not to use or to permit to be used, without the lessor 's consent, the portion of land not built upon except as open space, not to pull down, add to or alter the buildings without such consent, to keep in repair all drains sewers etc., to repair, pave, cleanse and paint and amend all the buildings, walls etc., to permit the lessors and their employees to enter upon the premises to inspect the conditions thereof 48 hours ' notice, to use the demised premises for residential purposes or as offices and schools only and not as a public house or liquor shop or for any business or trade, throughout the term to keep the buildings insured against fire in the joint names of the lessor and the lessee and to rebuild or reinstate and repair the building if destroyed or damaged by fire or otherwise. There was a proviso for re entry for nonpayment of rent for 30 days or for breach of any of the lessee 's covenants. In 1925 all the properties of the Trustees for the Improvement of the City of Bombay vested in the Bombay Municipality under and by virtue of Bombay Act XVI of 1925. By a deed of assignment made April 26, 1948, Shri Bhatia Co operative Housing Society Limited, a society registered under the Bombay Co operative Societies Act, VII of 1921, the appellant before us, acquired the lessee 's interest in the demised premises. June 29, 1948, the appellant served a notice the respondent before us who was a monthly tenant in occupation of Block No. B/2 the ground floor of the New Sitaram Building at a monthly rental of Rs. 52 5 9 to quit and vacate the same July 31, 1948. By his advocate 's reply the respondent maintained that he had been paying the rent regularly and otherwise performing the terms of his tenancy and claimed the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act LVII of 1947); 189 The respondent not having vacated the block under his occupation the expiry of the notice to quit, the appellant filed summary Suit No. 106 of 1948 against the respondent in the City Civil Court at Bombay for vacant possession of the said Block No. B/2 the ground floor of the said New Sitaram Buildings and mesne profits from August 1, 1948, until delivery of possession. After stating the material facts, the appellant submitted that the Bombay Act LVII of 1947 did not apply to the demised premises. The respondent filed his written statement maintaining that under section 28 of the Bombay Act the CityCivil Court had no jurisdiction to entertain the suit. He averred that he had performed and observed all the conditions of his tenancy and was ready and willing to do so, that the New Sitaram Building had been constructed at the expense of the appellant 's predecessor in title and that the premises belonged to the appellant and not to the Government or a local authority and that the respondent was entitled to the protection of the Bombay Act LVII of 1947. Leaving out the issue as to whether the appellant was entitled to any compensation, there were 4 issues raising in effect two points, namely, (1) whether the Court had jurisdiction and (2) whether the Bombay Act LVII of 1947 applied to the premises in suit. The learned City Civil Court Judge in a well considered and careful judgment answered the issues in favour of the appellant and decreed the suit. The respondent appealed to the High Court. The High Court reversed the decision of the trial Judge and holding that the Bombay Act LVII of 1947 did apply to the premises and consequently that the City Civil Court, by virtue of section 28 of that Act, had no jurisdiction to entertain the suit, directed that the plaint, be returned to the appellant for being filed in the proper Court. The High Court having declined to grant leave to the appellant to appeal to this Court, the appellant applied for and obtained special leave 190 of this Court to prefer this appeal and filed this appeal pursuant to such leave. Learned counsel for the respondent took a preli minary objection, founded the provisions of section 28 of the Bombay Act, that the City Civil Court had no jurisdiction to entertain the suit, for that section clearly states that in Greater Bombay the Court of Small Causes alone shall have jurisdiction to entertain and try any suit between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of that Part of the Act applied and to decide any application made under the Act and to deal with any claim or question arising out of the Act and no other Court should have jurisdiction to entertain any suit or proceeding or to deal with such claim or question. If, as contended for by the appellant, the Act does not apply to the premises, then section 28 which is an integral part of the Act and takes away the jurisdiction of all Courts other than the Small Causes Court in Greater Bombay cannot obviously be invoked by the respondent. The crucial point, therefore, in order to determine the question of the jurisdiction of the City Civil Court to entertain the suit, is to ascertain whether, in view of section 4 of the Act, the Act applies to the premises at all. If it does, the City Civil Court has no jurisdiction but if it does not, then it has such jurisdiction. The question at once arises as to who is to decide this point in controversy. It is well settled that a Civil Court has inherent power to decide the question of its own jurisdiction, although, as a result of its enquiry, it may turn out that it has no jurisdiction over the suit. Accordingly we think, in agreement with the High Court, that this preliminary objection is not well founded in principle or authority and should be rejected. The main controversy between the parties is as to whether the Act applies to the demised premises. The solution of that controversy depends upon a true construction of section 4 (1) of the Bombay Act LVII of 1947, Which runs as follows: 191 "4. (1) This Act shall not apply to any promises belonging to the Government or a local authority or apply as against the Government to any tenancy or other like relationship created by a grant from the$ Government in respect of premises,taken lease or requisitioned by the Government; but it shall apply in respect of premises let to the Government or a local authority. " It is clear that the above sub section has three parts, namely (1) This Act shall not apply to premises belonging to the Government or a local authority, (2) This Act shall not apply as against the Government to any tenancy or other like relationship created by grant from the Government in respect of premises taken lease or requisitioned by the Government, (3) This Act shall apply in respect of premises lot out to the Government or a local authority. The contention of the appellant Society is that the demised premises belonged to the Trustees for the improvement of the City of Bombay and now belong to the Bombay Municipality both of which bodies are local authorities and, therefore, the Act does not apply to the demised premises. Learned counsel for the respondent, however, urges that the object of the Act, as recited in the preamble, is inter alia, to control rent. It follows, therefore, that the object of the legislation was that the provisions of the Act would be applicable only as between the landlord and tenant. Section 4 (1) provides for an exemption from or exception to that general object. The purpose of the; first two parts of section 4 (1) is to exempt two cases of relationship of landlord and tenant from the operation of the Act, namely, (1) where the Government or a local authority lets out premises belonging to it, and (2) where the Government lets out premises taken on lease or requisitioned by it. It will be observed that the second part of section 4 (1) quite clearly exempts "any tenancy or other like relationship" created by the Government but the first part makes no 192 reference to Any tenancy or other like relationship at all but exempts the premises belonging to the Government or a local authority. If the intention of the first #part were as formulated in item (1), then the first part of section 4 (1), like the second part, would have run thus: This Act shall not apply to any tenancy or other like relationship created by Government or local authority in respect of premises belonging to it. The Legislature was familiar with this form of expression, for it adopted it in the second part and yet it did not use that form in the first. The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer the premises belonging to Government an immunity from the operation of the Act. Learned counsel for the respondent next contends that the immunity given by the first part should be held to be available only to the Government or a local authority to which the premises belong. If that were the intention then the Legislature would have used phraseology similar to what it did in the second part, namely, it would have expressly made the Act inapplicable "as against the Government or a local authority". This it did not do and the only inference that can be drawn from this circumstance is that this departure was made deliberately with a view to exempt the premises itself. It is said that if the first part of the section is so construed as to exempt the premises from the operation of the Act, not only as between the Government or a local authority the one hand and its lessee the other, but also as between that lessee and his subtenant, then the whole purpose of the Act will be frustrated, for it is well known that most of the lands in Greater Bombay belong to the Government or one or other local authority, e.g., Bombay Port Trust and Bombay Municipality and the greater number of tenants will not be able to avail themselves of the benefit and protection of the Act. In the first place, the 193 preamble to the Act clearly shows that the object of the Act was to consolidate the law relating to the control of rents and repairs of certain premises and not of all premises. The Legislature may well have thought that an immunity given to premises belonging to the Government or a local authority will facilitate the speedy development of its lands by inducing lessees to take up building leases terms advantageous to the Government or a local authority. Further, as pointed out by Romer L. J. in Clark vs Downes(1), which case was approved by Lord Goddard C.J. in Rudler vs Franks(1) such immunity will increase the value of the right of reversion belonging to the Government or a local authority. The fact that the Government or a local authority may be trusted to act fairly and reasonably may have induced the Legislature all the more readily to give such immunity to premises belonging to the Government or a local authority but it cannot be overlooked that the primary object of giving this immunity was to protect the interests of the Government or a local authority. This protection requires that the immunity should be held to attach to the premises itself and the benefit of it should be available not only to the Government or a local authority but also to the lessee deriving title from it. If the benefit of the immunity was given only to the Government or a local authority and not to its lessee as suggested by learned counsel for the respondent and the Act applied to the premises as against the lessee, then it must follow that under section 15 of the Act it will not be lawful for the lessee to sublet the premises or any part of it. If such were the consequences, nobody will take a building lease from the Government or a local authority and the immunity given to the Government or a local authority will, for all practical purposes and in so far at any rate as the building leases are concerned, be wholly illusory and worthless and the underlying purpose for bestowing such immunity will be rendered wholly ineffective. In our opinion, therefore, the consideration of the (I) (2) 194 protection of the interests of the sub tenants in premises belonging to the Government or a local authority cannot override the plain meaning of the preamble or the first part of section 4 (1) and frustrate the real purpose of protecting and furthering the interests of the Government or a local authority by conf erring its property an immunity from the operation of the Act. Finally, learned counsel for the respondent urges that the words "belonging to" have not been used in a technical sense and should be read in their popular sense. It is pointed out that it was the lessee who erected the building at his own cost, he is to hold it for 999 years, he has the right of subletting the building in whole or in part rent and terms to be fixed by him, of ejecting sub tenants, and of assigning the lease. Therefore, it may fairly be said that the premises or, at any rate, the building belongs to the lessee and the rights reserved by the lease to the lessor are only by way of security for the preservation of the building which, the expiry or sooner determination of the lease, will vest in the lessor. This line of reasoning has found favour with the High Court which has held that although in form the building belongs to the Bombay Municipality who are the successors in interest of the lessors, in substance the building belongs to the appellant, the assignee of the lessee, and not to the Bombay Municipality. We are unable to accept this reasoning, for we see no reason to hold, in the circumstances of this case, that the substance does not follow the form. By the opera tive part of the lease the demise is not only of the land but also of the building standing thereon. This demise is 'certainly an act of ownership exercised by the lessor over the land as well as the buildings. Under section 105 of the Transfer of Property Act a lease is a transfer only of a right to enjoy the demised, premises, but there is no transfer of ownership or interest in the demised promises to the lessee such as there is in a sale (section 54) or a mortgage (section 58). In the present case, the lessee cannot, his 195 own covenant, use the buildings in any way he likes. He has to use the game only as offices or schools or for residential purposes and cannot, without the lessor 's consent, use them for purposes of any trade or, business. He cannot pull down the buildings or make any additions or alterations without the lessor 's consent. He cannot build upon the open space. He must, if the premises are destroyed by fire or otherwise, reinstate it. The lessor has the right to enter upon and inspect the premises at any time giving 48 hours ' notice. All these covenants clearly indicate that the lessor ha$ the dominant voice and the real ownership. What are called attributes of ownership of the lessee are only the rights of enjoyment which are common to all lessees under well drawn leases, but the ownership, in the land and in the building is in the lessor. It is true that the lessee erected the building a this own cost but he did so for the lessor and the lessor 's land agreed terms. The fact that the lessee incurred expenses in putting up the building is precisely the consideration for the lessor granting him a lease for 999 years not only of the building but of the land as well at what may, for all we know, be a cheap rent which the lessor may not have otherwise agreed to do. By the agreement the building became the property of the lessor and the lessor demised the land and the building which, in the circumstances, in law and in fact belonged to the lessor. The law of fixtures under section 108 of the Transfer of Property Act may be different from the English law, but section 108 is subject to any agreement that the parties may choose to make. Here, by the agreement the building became part of the land and the property of the lessor and the lessee took a lease that footing. The lessee or a person claiming title through him cannot now be heard to say that the building does not belong to the lessor. Forfeiture does not, for the first time, give title to the lessor. forfeiture he re enters upon what has all along been his own property. Said Lord Macnaghten in Heritable Reversionary Company vs Mullar(1): (I) (1892] A.C. 598 at 021, 196 "The words 'Property ' and 'belonging to ' are not technical words in the law of Scotland. They are to be understood, I think, in their ordinary signification. They are infact convertible terms; you can hardly explain the one except by using the other. A man 's property is that which is his own, that which belongs to him. What belongs to him is his pro perty. " In our opinion the interest of the lessor in the demised premises cannot possibly be described as a contingent interest which will become vested the expiry or sooner determination of the lease, for then the lessor could not have demised the premises including the building as he did or before the determination, of the lease exercise any act of ownership or any control over it as he obviously has the right to do under the covenants referred to above. The truth is that the lessor, after the building was erected, became the owner of it and all the time thereafter the demised premises which include the building have belonged to him subject to the right of enjoyment of the lessee in terms of the lease. If it were to be held that the building belonged to the lessee by reason of his having put it up at his own cost and by reason of the attributes of ownership relied by learned counsel, then as between the local authority (the lessor) and the lessee also the building must for the same reason founded what,have been called the attributes of ownership be held to belong to the lessee and the Act will apply. Surely that could not possibly be the case, for it would mean that the Government or a local authority will always be bound by the Act in respect of the building put up by the lessee under building leases granted by it in respect of land belonging to it. In that case the immunity given to the Government or a local authority will be wholly illusory and worthless. In ' our view in the case before us the demised premises including the building belong to a local authority and are outside the operation of the Act. This Act being out of the way, the appellants were well within their 197 rights to file the suit in ejectment in the City Civil Court and that Court had jurisdiction to entertain the suit and to pass the decree that it did. I The result, therefore, is that we allow this appeal, set aside the judgment and decree of the High Court and restore the decree passed by the City Civil Court. The appellant will be entitled to costs throughout in all Courts. Appeal allowed.

Section 4 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which provides that the Act shall not apply to premises belonging to the Government or a local authority applies not only to suits between the Government or a local authority as a landlord against the lessee, but also to suits by a lessee of the Government or a local authority against his sublessee. The indemnity conferred is in respect of premises belonging to the Government or a local authority. A building site was auctioned to a person by the City Im provement Trust of Bombay with a condition that the bidder Was to put up a building of a certain description at a cost of not less than Rs. 50,000 and after the Completion of the building, the site and the building were to be leased to the bidder for a period of 999 years at a fixed yearly rent. Held, a construction of the lease deed that the building put up by the bidder belonged to the Trust and not to the bidder and a suit by the lessee against his sub lessee was not governed by the Bombay Rents, Hotels and. Lodging House Rates Control Act, 1947, as the premises belonged to a local authority within the meaning of section 4 (1) of the Act, and the suit could accordingly be instituted in the City Civil Court of Bombay. A civil Court has inherent jurisdiction to decide the question of its own jurisdiction and to entertain a suit although as a result of the inquiry it may turn out that it has no jurisdiction.

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

The appellant plaintiff purchased a plot of land. The respondent defendant accepted the plaintiff as owner on a rent of Rs. 1325 per annum for a period of five years, under a registered rent note. It was further stipulated therein that the tenant was to pay the municipal tax in respect of the rented land to the plaintiff, that on the expiry of the period of five years the tenant shall remove the constructions thereon at his own expense, and hand over the premises in the condition it was let out and that the premises shall not be let out to anyone else. The plaintiff called upon the defendant to remove the construction erected on the land, and the vacate the premises and hand over possession. As the defendant failed, a suit for eviction was filed, on a number of grounds one of which was that the premises had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable caused and, therefore the defendant was liable to eviction under section 13(1) (k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947. The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove bona fide requirement, and that as defendant No. 2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff, the plaintiff was not entitled to recover possession on the ground of illegal sub letting. The plaintiff took up the matter in appeal and the Assistant Judge allowed the appeal partly, holding that the notice of termination was a valid one, that the plaintiff did not 718 require the suit premises reasonably and bona fide for occupation for himself and that the suit premises had not been w ed by the defendant continuously for a period of six months immediately preceding the date of suit without any reasonable cause. The respondent tenant took up the matter in revision before the High Court, which reversed the finding of the Ist appellate court on the question of user by the defendant, holding that the construction of the super structure on the land itself was a user and, therefore, the courts below had committed a manifest error in holding that the land in question had not been w ed for more than six months prior to the institution of the suit. In the appeal to this Court, it was contended on behalf of the appellant landlord that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause, and that the tenant would be liable for eviction even if he did not use the premises and kept it locked. On behalf of the respondent tenant it was contended, that the purpose of letting cannot be assumed, and that it has got to be alleged and proved. The landlord plaintiff could seek eviction under 8. 13()(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been w ed for the purpose for which it was let out. It was further contended that if the landlord had specifically taken the plea of non user of the premises for the purpose for which it was let out, he would have been able to prove the reasonable caw e for not doing 80 but in the absence of such a plea the defendant tenant had been seriously prejudiced, and that sec. 12 and 13 of the Act are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted . Allowing the Appeal, ^ HELD : 1. The judgment of the High Court is set aside and the plaintiff 's suit stands decreed. The High Court has gone wrong in holding that the construction of super structure on the land in dispute was itself a user. The super structures had already been built before the defendant took the land from the plaintiff under rent note, exhibit 61. As regards sub tenancy, it has 719 been found by the Courts below to have been created long before A the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 came into force. There was therefore no question of the eviction of the subtenant as the sub tenancy was not illegal. [726 B; 725 G 726 A] 2. The scheme of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it appears from the preamble is to consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions. The control had to be brought in because of the scarcity of accommodation in the cities. If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of a reasonable cause. The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together. [724 H 725 B] 3. Neither the purpose of letting is indicated in the rent note (Ex.61) nor has it been proved by evidence. A perusal of the rent note indicates that, there is no specific mention of the purpose for which the premises was rented out to the defendant. The defendant had taken the premises from the predecessor in interest of the plaintiff and had made certain super structures on the land in question. There is, however, material on the record to show that the premises had been let out to the defendant for the purpose of business. Indeed, the premises had been taken in the name of a firm carrying on tobacco business. The defendant admitted in his deposition that he had shifted his business to Baroda. He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same. In the reply given by the counsel for the defendant to the notice, of termination given by the plaintiff, it is admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the registered firm Vora Manilal Chaganlal & Co., carrying in business in Nadiad. In this situation it cannot be argued that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant. [723 E H] 4. The stipulation in the rent deed to the effect that; 'even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above ' only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closed. This, however, does not 720 mean that the defendant can keep the premises closed without using lt for years together before the suit. This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns. If the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without incurring the liability of eviction, as it sought to be contended for the respondent, it would amount to allowing the parties contracting out of law. [724 D E] In the instant case, on the own showing of the defendant respondent, the premises had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda. Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out. [725 F]

Jurisdiction to try suits and proceedings between landlords and tenants under the Bombay Rents, Hotel and Lodging House Rates Control Act 57 of 1947 was by virtue of section 28 of the Act given to Small Cause Courts. Under section 49 of the Act the State Government was authorised to make rules for the purpose of giving effect to the provisions of the Act and in particular to make rules among other subjects, for the procedure to be followed in trying or hearing suits and proceedings including proceedings for execution of decrees and distress warrants. For these purposes the Government of Bombay under r. 5 framed by it provided that the procedure under the would be followed. By the enactment of the Bombay Reorganization Act 11 of 1960 a separate State of Gujarat was constituted out of the territory which formed the State of Bombay, and the area within the city limits of Ahmedabad formed part of the State of Gujarat. The Legislature of the State of Gujarat enacted the Ahmedabad City Courts Act 19 of 1961 which by 17 extended the (15 of 1882) as well as the Bombay Rents Hotel and Lodging House Rates Control Act 57 of 1947 to the City of Ahmedabad with suitable modifications and amendments. Jurisdiction to try suits under the Bombay Act was by amendment of section 28 thereof given to the Court of Small Causes Ahmedabad. The appellants were tenants of a house owned by the respondent in Ahmedabad. Apart 'from the rent the appellants had also agreed to pay municipal taxes and electricity charges. In 1963 the appellants filed a suit in the Court of Small Causes Ahmedabad for an order inter alia determining the standard rent of the premises in exercise of the power under section 11 of Bombay Act 57 of 1947. The said court on an application filed by the appellants fixed the contractual rent as the 'interim standard rent ' and directed the appellants to pay rent and municipal taxes, which the appellants accordingly deposited in Court. The Court permitted the respondent to withdraw the rent so deposited but not the municipal taxes. The respondent then obtained an order for the issues of a distress warrant under section 53 of the Presidency Small Cause Court , Act 15 of 1882 read with r. 5 of the Rules framed under Bombay Act 57 of 1947 for recovery of the amount due as municipal taxes. Distress was levied and the order was confirmed. A revision application in the High Court of Gujarat was rejected. In their appeal against the High Court 's order the appellants urged : (i) that r. 5 of the Rules 'framed under section 49 of the Bombay Act 57 of 1947 was ultra vires the State Government; (ii) that the Court of Small Causes Ahmedabad had no jurisdiction to pass an order issuing a distress warrant in a proceeding under Bombay Act 57 of 1947 especially 81 when an application under section 11 was pending; (iii) that the municipal taxes and electricity charges did not constitute rent which could be recovered by the issue of a distress warrant. HELD: (i) Rule 5 was framed under Bombay Act 57 of 1947 in exercise of the authority conferred by section 49(2)(iii). After the enactment of the Ahmedabad City Courts Act, 1961, r. 5 as originally 'framed by the Government continued in force by virtue of section 87 of the Bombay Reorganization Act 11 of 1960, and applied to the Ahmedabad Small Causes Court. When r. 5 was framed under Bombay Act 57 of 1947 it was not ultra vires and it was not shown to have become ultra vires after the enactment of the Ahmedabad City Courts Act in its application to the City of Ahmedabad. [85 F G] (ii) The distress warrant issued by the Court of Small Causes Ahmedabad against the appellant was within its powers. By the enactment of the Ahmedabad City Courts Act, 1961, the proceedings before the Court of Small Causes at Ahmedabad were governed by that Act and by virtue of the amendment made in section 28 of Bombay Act 57 of 1947 it became a court of exclusive jurisdiction to try suits, proceedings, claims and questions arising under that Act. Being a court governed by the Presidency Small Causes Courts Act, the Ahmedabad Court of Small Causes was competent to exercise, subject to the Ahmedabad City Courts Act, all the powers which a Presidency Small Cause Court could exercise. Power to issue a distress warrant being expressly conferred by section 53 of the upon the Courts governed by it, the Court of Small Causes Ahmedabad, was competent to exercise that power. [85 D E] Section 28 does not make the Court of Small Causes trying suit under the Bombay Act a special Court : it is a court which is comptent to exercise all the powers conferred on it under the statute which governs it. Its power to issue distress warrant could therefore be exercised even in respect of suits and proceedings which were exclusively triable by it by virtue of the Bombay Act 57 of 1947. [85 H] Pendency of an application for fixation of standard rent does not suspend the court 's power to issue distress warrant, for until standard rent is determined or an interim order is made, rent at the contractual rate is payable and process for recovery by distress warrant may always be adopted. In the present case the amount of municipal taxes was due and it was payable by the appellants. Though deposited in Court it could not be withdrawn by the respondent. The municipal taxes were therefore ill arrears and a distress warrant could be applied for under section 53 of the Presidency Small Cause Court by the respondent. It was not necessary for the respondent to approach a higher court against the erroneous order of the Small Cause Court preventing him from recovering the amount of municipal taxes. [86 B G] (iii) By the express terms of the tenancy the appellants had undertaken to pay the municipal taxes and electricity charges as part of the rent : it was not open to them to contend that these taxes and charger were not rent recoverable by the issue of a distress warrant. [83 H 84 A]

The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure. The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence. The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings. While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation. " Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner. It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a). It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case. (b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc. and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case. (c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending. " Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court. The High Court found the appellants guilty and convicted them for contempt of Court. Hence this appeal. Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed. It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court. There can be no comparison between the present case and a trial conducted by a newspaper. The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice. The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so. They had taken care not to comment on any proceedings pending in I court or the issues arising out of them. Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation. With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire. They permitted councillors and others to attend the enquiry which was in no sense confidential. It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice. Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to. It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court. Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice. Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter. The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.

This was an appeal by the defendants in a suit for possession on redemption of certain mortgages instituted in the Court of the Special judge exercising jurisdiction under the Sangli State Agriculturists Protection Act (1 of 1936). Their case was that the mortgaged properties had been sold at auction and purchased by their father who had sold most of them to other persons more than 12 years before the institution of the suit and as such the suit was barred by limitation. The trial Court dismissed the suit. On appeal the High Court of Sangli permitted the plaintiff to amend the plaint originally filed so as to include the relief for redemption and remanded the suit. The trial court, thereafter, decreed the suit in part, holding that the claim in respect of portions only of the mortgaged properties was barred by limitation. Both the parties appealed to the High Court of Bombay and the appeals were heard together. The High Court dismissed the defendant 's appeal and allowed the plaintiff 's appeal holding that article 148 and not article I34 Of the Limitation Act applied. In the result, the plaintiff 's suit was decreed in its entirety. Held, that the preliminary objection that the Special judge had no jurisdiction under the Sangli State Agriculturists Protection Act to entertain the suit must be overruled. The fixing of ,915 as the date line by the Act had reference to such reliefs as could be had only by way of reopening of closed transactions and could not, therefore, preclude the Special Judge from granting other reliefs in respect of transactions entered into prior to 1915. Nor could it be contended in bar that the plaintiff was bound in the first instance to set aside an auction sale of the mortgaged properties in execution of a money decree in which she was not substituted in place of her deceased father as his true heir and legal representative nor made a party and no controversy was raised by the parties nor decided by the Court as to who was the true legal representative. The plaintiff was entitled to ignore the sale and the suit was not barred under article 12 of the Limi tation Act. 480 Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa, (1900) L.R. 27 I.A. 216, doubted and distinguished. In order that article I34 of the Limitation Act might be attracted to a suit for possession on redemption, it was necessary for the defendant to prove affirmatively that the mortgagee or his succesor in interest had transferred a larger interest than was justified by the mortgage. Where, as in the present case, this was not done, article 134 could not apply and the only other article which could apply was article 148 Of the Limitation Act. Under the Mitakshara School of Hindu Law partition may be either (1) a severance of the joint status of the coparcenary by mere defining of shares but without specific allotments or (2) partition by allotment of specific properties by metes and bounds according to shares. The latter, if reduced to writing becomes compulsorily registrable under section I7(1)(b) of the Indian Registration Act but the former does not. Consequently, in the present case such unregistered docu ments as were adduced by the plaintiff for the limited purpose of proving partition in the former sense did not fall within the mischief Of section 49 of the Indian Registration Act and were admissible in evidence.

In pursuance of a Housing Scheme the Tamil Nadu Housing Board, Madras had allotted residential plots over the land acquired under the Land Acquisition Act, to different groups of applicants including the low income group on terms and conditions stipulated in the lease deed Exh. B 3 sometime in the year 1963. After a lapse of more than a decade of the allotment, fresh demands were made from the allottees in 1975. Objecting to the same, the respondent herein filed a suit for self and on behalf of all the allottees of low income group settled in the Colony named Ashok Nagar, pray ing for a permanent injunction restraining the Board from enforcing the demand. The defendant Board questioned the very maintainability of the suit in a representative capacity and also pleaded that it was entitled to finally determine the correct prices for the plots after taking into account the final award of the compensation for acquired land and until then the prices were tentative. The trial court negatived the objection to the maintainability of the suit but dismissed it on merits. The first appellate court confirmed the decree. On second appeal, the High Court reversed the finding on merits. The High Court held that it was open to the Board to determine within a reasonable time what portion of the demand included the excess on account of compensation awarded by the courts for acquisition of the land and realize the same after serving fresh demand notices. But since the impugned demand included both the excess amount of compensation as also the additional developmental charges injunction was granted in regard to the entire demand as the two amounts were not separately mentioned. Dismissing the appeal of the Board, this Court, HELD: The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation. The condition necessary for application of the provisions is that the 273 persons on whose behalf the suit is being brought must have the same interest. In other words either the interest must be common or they must have a common grievance which they seek to get redressed. [276C D] The Court, while considering whether leave under the Rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule. [276E] Persons who may be represented in a suit under Order I, Rule 8 need not have the same cause of action. [277F]

The assessee (respondent) owner of an estate known as "Tekari Rai" executed an indenture of trust dated January 20, 1941 whereby the "Tekari Rai" and certain Zamindari properties owned by her were conveyed to certain named trustees to be held in trust, subject to conditions specified therein. This deed was created with a view to liquidate the debts of the Tekari Raj. The beneficiaries under the deed were the settlor, her husband and her five sons. This original deed was modified by a deed of rectification dated December 22, 1941. It was provided in the original cl. 43 of the deed of trust dated January 20, 1941, that the settlor may at any time during her life re voke or vary either wholly or partly the trust or any provi sions of the deed but not before the payment and discharge of certain debts and liabilities. Clause 43 of the original deed was subsequently modified by the 45th clause which was added by the deed of amendment dated January 12, 1942. By cl. 45 of the deed of amendment the right of revocation was not exercisable till the Thica leases in favour of the Maharajadhiraj of Darbhanga and Capt. Maharaj Kumar Gopal Saran Narain Singh remained good and effective. It was the common ground that the lease in favour of the Maharajadhiraj of Darbhanga was to enure till 1965 and the lease in favour of Capt. Maharaj Kumar Gopal Saran Narain Singh till 1954. In assessing the assessee to income tax for the year 1947 48, the Income tax Officer included in her total income the income of the trust. The matter went up to the High Court and the High Court set aside the assessment order passed by the Income tax Officer. The High Court held that a,, the trust was not revocable for a period of six years, the income received by the beneficiaries (other than the assessee) was not liable to be taxed as the assessee 's income till the power to revoke arose in her favour. The appellant obtained special leave against the order passed by the High Court. Hence the appeal. The principal question for consideration before this Court was whether the income received by the beneficiaries other than the assessee could be included in the total income of the assessee under section 16(l)(c) of the Act. Held:(i) In terms the third proviso to section 16 (l)(c) of the Income tax Act excludes from the operation of the principal clause that part of the income alone which arises to any person under a, deed of settlement: it does not remove from its protection the entire deed of trust, if part of the income is not covered by the conditions prescribed or if the settlor has in a part of the income interest direct or indirect. The third proviso does not operate to exclude the income which the settlor receives as a beneficiary from liability to tax. 921 (ii)The third proviso to section 16 (l)(c) of the Act does ope rate in respect of settlements, dispositions, or transfers which are by the first proviso revocable for the purpose of that clause. (iii) Two conditions are necessary for the application of the 3rd proviso to section 16 (l)(c) of the Income tax Act: (i) that the trust should not be revocable for a period exceeding 6 years or during the life time of the beneficiary and (ii) the settlor or disponer should have no direct or indirect benefit from the income given to the beneficiary. The effect of the two conditions is that, that part of the income which arises to any person by virtue of the settlement which is not revocable for a period of six years or which is not revocable during the life time of the beneficiary will not be included in the settlor 's income, provided that from the income of such person the settlor derives no benefit direct or indirect. On the construction of the deed of trust it was held that the deed was not revocable within six years provided by section 16 (1)(c) of the Act. Ramji Keshavji vs Commissioner of Income tax, Bombay, , relied on. (iv)On the facts of this case it was held that by virtue of the third proviso to section 16 (l) (c) of the Act the income re ceived by the beneficiaries under the deed of trust other than the assessee could not until the power of revocation arose to the assessee, be deemed to be the income of the assessee for the purpose of assessment to income tax.

Appeal No. 84 of 1958. Appeal by special leave from the judgment and order dated December 22/23, 1955, of the Calcutta High Court in I.T.R. No. 24 of 1953. N. C. Chatterjee, D. P. Pal and D. N. Mukherjee for the appellant. Hardayal Hardy and D. Gupta, for the respondent. January 17. The Judgment of the Court was delivered by SHAH, J. Messrs. National Cement Mines Industries Ltd. hereinafter referred to as the appellants are a public limited company incorporated to " carry on the 65 504 business of cement and lime manufacture and also of limestone supply and for the purposes of such businesses to acquire rights and concessions pertaining to limestone, coal and surface lands from the Dewar khand Karanpura Mines and Industries Ltd." and also to " work mines or quarries and to find, win, get, work, etc. or otherwise deal with clay and bauxite." Dewarkhand Karanpura Mines and Industries Ltd. hereinafter called the " Karanpura Company " had obtained three leases on November 29, 1930, first for mining limestone from Maharaja Pratap Narain Udai Nath Shah Deo from limestone beds in certain villages in Dewarkhand, second from Maharaj Kumar Nand Kishore Nath Shah Deo of the surface rights neces. sary to exercise the powers and privileges in respect of the first lease and the third from Maharaj Kumar Raj Kishore Nath Shah Deo of surface rights in respect of Hoyer village. The period in each of the three leases was thirty years. On March 17, 1932, the Karanpura Company conveyed the rights and options under the three leases to the appellants. On September 30, 1934, the appellants acquired the limestone and surface rights in respect of limestone beds in village Umedanda for 95 years from Maharaja Pratap Narain Uday Nath Shah Deo and Maharaj Kumar Raj Kishore Nath Shah Deo. On the same date, the appellants entered into two agreements, one with Maharaja Pratap Narain Uday Nath Shah Deo which is called the ,bauxite option agreement " thereby acquiring the first option to take a lease or leases of any area or areas of bauxite deposits in certain villages, and another from the said Maharaja for the first option to take a lease or leases of limestone beds in the Tori District. By a fourth agreement also dated September 30,1934, between the Karanpura Company, Maharaja Pratap Narain Udai Nath Shah Deo acting with the consent of Maharaj Kumars Raj Kishore Nath Shah Deo and Nand Kishore Nath Shah Deo, the royalties reserved under the original deeds dated November 29, 1930, were reduced and the periods of the leases were extended to 99 years from the date of the original leases, 505 By deed dated May 7,1935, the appellants conveyed to Dewarkhand Cement Company Ltd. (which later came to be known as Associated Cement Ltd. and will be referred to hereinafter by that name) the benefits of the four leases and the two agreements for the unexpired periods. By this deed, for a present consideration of Rs. 25,000 " for trouble and expenses in obtaining the leases and agreements " and for further payment under several covenants which will be presently set out, the appellants conveyed the rights vested in them subject to certain reservations. In the year of account June 1, 1944, to May 31, 1945, the appellants received from the Associated Cement Ltd. under the first covenant of the deed, Rs. 77,820 being the amount computed at the rate of 0 13 As. per ton of cement manufactured from limestone won from the lands and sold by the company. The Income tax Officer, Companies District 1, Calcutta, included this amount in the total assessable income of the appellants in the assessment year 1946 47. This order was confirmed in appeal by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal. At the instance of the appellants, the Tribunal referred the following question with another not material for this appeal to the High Court of Judicature at Calcutta: " Whether on a proper construction of the Deed of Assignment dated 7th of May, 1935, and on the facts and in the circumstances of this case, the Tribunal was right in holding that, the sum of Rs. 77,820 represented a receipt of a revenue nature in the hands of the Applicant and assessable as such The following facts were held proved by the Tribunal. The principal objects of incorporation of the appellants were to carry on the business of manufacturing cement and lime and sale of limestone and the appellants were formed with the object of acquiring the rights and concessions of the Karanpura Company. By their Memorandum of Association, the appellants were authorised to sell or dispose of the undertakings or any part thereof as they thought fit, 506 and to sell, lease, mortgage, dispose of, turn to account or otherwise deal with all or any part of their property and rights and in pursuance of these objects the rights and concessions of the Karanpura Company were acquired and extension of leases and concessions were obtained and were transferred to the Associated Cement Ltd. The appellants were therefore carrying on in the year of account 1944 45 the business for which they were incorporated. After reciting the prefatory clauses, it was stated in the deed: "WHEREAS it was agreed inter alia that the Purchaser should pay to the Vendor the sum of Rupees twenty five thousand for trouble and expenses in obtaining the leases and agreements dated the thirtieth day of September one thousand nine hundred and thirty four hereinbefore recited and hereinafter expressed to be hereby transferred and Whereas the Purchaser hath paid to the Vendor the said sum of rupees twenty five thousand as the Vendor doth hereby acknowledge NOW THIS INDENTURE WITNESSETH that in con. sideration of the covenants on the part of the Purchaser hereinafter contained the Vendor hereby grants assigns and transfers unto the Purchaser and the Karanpura Company at the request and by the direction of the Vendor hereby grants assigns transfers and confirms unto the Purchaser:". The deed then proceeds to set out the description of the various leases and concessions and agreements and the covenants which the Associated Cement Ltd. undertook in favour of the appellants. These covenants are: (1) That it will pay to the Vendor a sum equal to thirteen annas in respect of every ton of cement sold by it which shall have been manufactured from the limestone won by it from the lands hereby transferred and comprised in the hereinbefore recited leases and agreements. (2) That it will not sell any Fluxstone won by it from the said lands to the Tata Iron and Steel Company Ltd., at a price less than Rupees one and annas 507 fourteen per ton F. O. R. the siding nearest to the quarry or place from which it shall be won without the consent of the Vendor. (3) That it shall pay to the Vendor one half the profit( if any) which it shall make by selling Fluxstone to the Tata Iron & Steel Company Ltd.,or to any other person such profits to be ascertained after deduction from the price received all costs, charges and expenses including the royalty payable to the Maharaja in respect thereof but before educting overhead charges. Such accounts to be closed and adjusted on the thirtieth day of June and the thirty first day of December in each and every year. (4) That it will not grant to the Tata Iron & Steel Company Ltd., the right to quarry and remove Fluxstone from the lands hereby transferred at a royalty of less than ten annas per ton, and will pay to the Vendor one half of any royalty so charged and received. (5) That in the event of the payments made under clauses one, three and four above in any one year not amounting to the minimum hereinafter set out the Purchaser shall pay in lieu and in full discharge there for the following minimum: (a) During the first year to be computed from the first day of January one thousand nine hundred and thirty five, rupees ten thousand. (b) During the second year rupees thirty thousand. (c) During every subsequent year rupees fifty thousand. Out of the above minimum payment of rupees fifty thousand per year for the purposes of account, the sum of rupees twenty thousand shall be deemed to have been paid in respect of payment under clause three above. (6) That the Purchaser or the persons deriving title under the Purchaser will at all times from the date hereof duly pay all rents, royalties and payments becoming due under the (four) hereinbefore recited Indenture of Lease (,subject as regards the Limestone lease to the modifications effected by the agreement for 508 reduction of royalty dated the thirtieth day of September one thousand nine hundred and thirty four hereinabove recited) in respect of the premises agreements options rights or benefits hereby assigned and transferred and observe and perform the covenants agreements stipulations and conditions therein contained and henceforth on the part of the Lessee or grantee to be observed and performed in respect of the aforesaid premises or under the said Bauxite agreement or under the said Tori Option agreement or under the said agreement for reduction of royalty And also will at all times from the date hereof save harmless and keep indemnified the Vendor its successors and assigns from and against all proceedings costs claims and expenses on account of any omission to pay the said rent, royalty or payments or any breach of any of the said covenants agreements stipulations and conditions. (7) That the Purchaser will not work raise remove or use stone or clay in the properties comprised in the leases and agreements hereby transferred to it for making lime. (8) That the Purchaser shall not by any of its actions or omissions cause leases and agreements, mentioned above and in respect of properties hereby transferred, to be determined, or the rights thereunder, including the right of renewal, to be prejudiced. (9) That in areas comprised in the leases and agree. ments hereinabove expressed to be hereby assigned and not containing limestone the Vendor 's rights under leases and agreements from the Maharaja of Chotanagpur or Maharaj Kumar Nand Kishore Nath Shah ' Deo other than the leases and agreements above referred to shall not be jeopardised or affected by this Indenture. (10) That the clay and shales lying within areas, which do not contain Limestone, can be removed and utilised by the Vendor for all purposes except that of cement manufacture. The deed then proceeded after setting out certain other covenants: 509 " AND IT IS HEREBY EXPRESSLY AGREED AND DECLARED that if the Limestone within the areas comprised in the Leases hereby transferred available for manufacturing cement is exhausted the Purchaser will be entitled to determine this Indenture on giving to the Vendor six months ' notice in writing in which case the Purchaser, if so required, will retransfer the leases and agreements aforesaid. " By clauses (1), (3) and (4), the Associated Cement Ltd. undertook to make certain payments to the appellants. By cl. (1) they agreed to pay 0 13 As. for every ton of cement manufactured from the limestone won from the lands and sold; by el. (3), the Associated Cement Ltd. agreed to pay half the profits which they made by selling Fluxstone to the Tata Iron & Steel Co., or to any other person; and by el. (4), they agreed to pay half the royalty received from the Tata Iron & Steel Company for the right to quarry and remove fluxstone from the lands. By clause (5), provision was made for minimum payment in the event of the aggregate under cis. (1), (3) and (4) not reaching the sums specified therein. Clauses (2), (4), (7), (8) and (9) were in the nature of restrictive covenants. By cl. (2), the Associated Cement Ltd. were prohibited from selling any fluxstone won from the lands to the Tata Iron & Steel Company for less than Re. 1 14 As. per ton F. O. R. By cl. (4), an obligation not to convey the right to quarry and remove fluxstone for royalty less than 0 10 As. per ton was imposed. By el. (7) the Associated Cement Ltd. undertook not to remove or use or allow any one to raise work, remove or use stone or clay in the lands. By cl. (8), the Associated Cement Ltd. undertook not to do any acts or omissions causing the leases and agreements to be determined or the rights thereunder to be prejudiced. By cl. (9), rights of other persons under leases and agreements in lands not containing limestone were not to be affected. By el. (10), the right of the appellants to utilise clay and shale lying within the areas not containing limestone except for the purpose of manufacturing cement was retained, There were certain exceptions 510 to this and the ninth clause whereby the Associated Cement Ltd. were entitled to excavate, use or remove all kinds of clays in and from the areas within the boundary lines marked in the plan and they were also authorised to make permanent structures and use certain strips of lands. By el. (6) the Associated Cement Ltd. agreed to pay rent stipulated under the original leases and agreements and also undertook to keep indemnified the appellants from and against all proceedings, costs, claims and expenses on account of any omission to pay the rent royalty or payments or any breach of any of the covenants agreements and the leases. There was also the covenant authorising the Associated Cement Ltd. to terminate the deed in the event of limestone in the land comprised in the leases being exhausted. The appellants undoubtedly did not part with all their rights in favour of the Associated Cement Ltd. by this deed dated May 7, 1935. The consideration under the deed consisted of a fixed component and annual payments fluctuating with the business activity of the Associated Cement Ltd. A fixed amount of Rs. 25,000 was paid " for trouble and expenses in obtaining the leases and agreements " and additional payments were to be made under cls. (1), (3) and (4) subject to the minimum prescribed by el. It is difficult to categorise a transaction of this character. It is not a conveyance of all the rights of the appellants nor can it be regarded as a sale even of the rights which were conveyed. Numerous restrictions were imposed by the deed upon the rights of the transferee which were inconsistent in their very nature with the character of a sale, and the covenant authorising termination of the deed in the event of the limestone being exhausted removes all doubt in that behalf. Nor is it a lease : it is not a transfer of a right to enjoy property for a certain time in consideration of periodical payments. It also does not evidence a transaction in the nature of a joint venture between the appellants and the Associated Cement Ltd. Cement was to be manufactured by the Associated Cement Ltd, out of limestone to be won from the lands 511 and in consideration of the rights conveyed, payments at specified rates were agreed to be made out of the price to be obtained by sale of cement, fluxstone and limestone. The appellants had no control over the production of limestone and manufacture of cement, or on the sale of fluxstone and limestone. But in assessing the true character of the receipt for the purpose of the Income tax Act, inability to ascribe to the transaction a definite category is of little consequence. It is not the nature of the receipt under the general law but in commerce that is material. It is often difficult to distinguish whether an agreement is for payment of a debt by instalments or for making annual payments in the nature of income. The court has, on an appraisal of all the facts, to assess whether a transaction is commercial in character yielding income or is one in consideration of parting with property for repayment of capital in instalments. No single test of universal application can be discovered for solution of the problem. The name which the parties may give to the transaction which is the source of the receipt and the characterization of the receipt by them are of little moment, and the true nature and character of the transaction have to be ascertained from the covenants of the contract in the light of the surrounding circumstances. The decision of the question is however not left to the application of any arbitrary standards. There are certain broad principles which guide the determination of the character of the receipt. The distinction between a capital receipt and revenue receipt though fine is real. The dividing line may be thin, and often at first sight imperceptible. Where capital is repaid in instalments, it is not liable to income tax; for instance when a person sells his property and agrees to receive the price stipulated in instalments, by whatever name such instalments are called, they are not liable to income tax see Foley vs Fletcher (1), Secretary of State in Council of India vs Andrew Scoble (2), Oswald vs Kirkcaldy Magistrates and Commissioners of Inland Revenue vs Ramsay (4). (1) ; (2) ; (3) (4) 66 512 But where property is conveyed in consideration of what in truth is annuity payable for a definite or a definable period, the annuity is not payment on capital account and is taxable see State of Bihar vs Sir Kameshwar Singh (1), Captain Maharajkumar Gopal Saran vs Commissioner of Income tax, Bihar and Orissa (2), Chadwick vs Pearl Life Assurance Co. (3). Again, if property is conveyed in consideration of periodical payments, the payment being a share of profits of a business or profession (William John) Jones vs Commissioners of Inland Revenue(4), or a mineral royalty depending upon the quantity of minerals raised Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Commissioner of Income tax, Bihar and Orissa (5), or computed on sales of manufactured articles Commissioners of Inland Revenue vs 36149 Holdings, Ltd. (6), or a percentage of gross profits made in the exploitation of a secret process Delage vs Nugget Polish Co., Ltd. (7), is income and taxable. Counsel for the appellants submitted that the receipt under clause (1) of the terms of the deed dated May 7, 1935, was in the nature of capital payment and relied upon certain decisions in support of that submission. In Minister of National Revenue vs Catherine Spooner(8), decided by the Judicial Committee of the Privy Council in an appeal from the Supreme Court of Canada, the respondent Catherine Spooner had sold her rights, title and interest in land owned by her in freehold to a company in consideration of a certain sum in cash, besides shares of the company, and an agreement to deliver 10% of oil produced from the land on which the company covenanted to carry out drilling and, if oil was found, pumping operations. These were described as royalties. Oil was struck in the lands and the respondent was paid 10 of the gross proceeds of the oil produced in lieu of oil. The (1) (5) (1943) L.R. 70 I.A. 180. (2) (6) (3) (7) (1906) 2r Times Law Reports 454. (4) 10 (8) , 513 Supreme Court of Canada held that the sum so received was not an annual profit or gain within the meaning of section 3 of the Income War Tax Act, but a receipt of a capital nature and therefore not chargeable to tax. According to the Judicial Committee, there was between the respondent and the company no relation of lessor or lessee: the transaction was one of sale and purchase, and the transaction had taken the form which it did because of the uncertainty whether oil would be found by the purchaser. As the value of the land depended on this contingency, the price, not unnaturally was made to depend in part on the event of oil being struck. The judgment lays down no new principle; it proceeded merely upon interpretation of the document in the light of the circumstances. In Trustees of Earl Haig vs Commissioners of Inland Revenue (1), the question which fell to be determined was whether a share of the royalties received in consideration of allowing the use of the diaries of the late Earl Haig for writing his biography were, in the hands of the trustees under the will of Earl Haig, capital receipts. That was undoubtedly a case in which payments received by the trustees were dependent upon the professional activities of the author and the proceeds derived from the sales of the biography he wrote. By the agreement, the author was authorised to extract and publish from the diaries what he thought fit. The diaries were undoubtedly an asset, and after they were used by the author for publication of the biography, their value as an asset was, if not wholly, largely exhausted and their future value was negligible. The agreement was therefore regarded as conveying an asset in its entirety to the author in consideration of a share in the royalties and the receipt of this share was regarded as receipt of capital. That decision proceeded upon the special character of the agreement and the nature of the asset transferred and did not seek to lay down any general principle. In Nethersole vs Withers (2), N who had acquired under an agreement the exclusive right to dramatise (1) (2) 514 a novel of Rudyard Kipling received under an agreement with the widow of the author, a third share of a lump sum for which the sound and film rights were granted exclusively to a film company for a period of ten years. The film right of a comprehensive character having been granted by the legal representative of the author against payment of the sum stipulated, the question arose whether the payment received by N was taxable under the Income Tax Act under Case II of Schedule D or under case VI of Schedule D. It was held that N having ceased to be the owner of the portion of the copyright she had assigned, the proceeds were not annual profits or gains within the meaning of Schedule D, Case VI. That was a case in which N had wholly sold and disposed of a part of the property and the amount received by her was the price paid in lump and was not in the nature of income. That case also proceeded upon the special character of the transaction. The case of The Commissioners of Inland Revenue vs The Marine Steam Turbine Co., Ltd. (1) on which reliance was sought to be placed by counsel for the appellants needs no detailed consideration. In that case, a company which was on the facts found not carrying on a trade or business was held not assessable to Excess Profits Duty, because the condition of liability was the carrying on of trade or business. The appellants had however not sold the entirety of the rights acquired by them from the Karanpura Company. The conveyance was subject to several restrictions and the appellants retained in part rights in the land conveyed. The transaction was substantially a commercial transaction for sharing the profits of the commercial activities of the Associated Cement Ltd. The High Court was therefore right in holding that the transaction dated May 7, 1935, was a commercial transaction and the payment under cl. (1) thereof at the rate of 0 13 as. 'per ton of cement sold was of the nature of income and not capital. In that view of the case, the appeal fails and is dismissed with costs. Appeal dismissed. (1) ; [1920] I K.B. 193.

The appellants were carrying on the business of cement and lime manufacture and supply thereof. By a deed dated May 7 ' 1935, the appellants conveyed to the Associated Cement Ltd. the rights which had vested in them under an earlier conveyance made in their favour by a company known as Karanpura Cod Under the deed the appellants reserved to themselves the right to receive from the Associated Cement Company a sum equal to thirteen annas in respect of every ton of cement sold by it which shall have been manufactured from the limestone won by it from the lands transferred and comprised in the leases and agreements. Pursuant to this stipulation in the year of account, the appellants I received from the Associated Cement Ltd. Rs. 77,820. The Income tax Officer included this amount in the total assessable income of the appellants in the assesment year and his order was confirmed by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal. The contention of the appellants before the High Court in a reference under section 66 of the Indian Income tax Act that on a proper construction of the deed and on the facts and circumstances of the case the sum of Rs ' 77,820 did not represent receipt of a revenue nature in the hands of the appellants and was not assessable as such, was negatived. Held, that the deed did not incorporate a transaction of either sale or lease. The conveyance was subject to several restrictions and the appellants retained in part, rights in the land conveyed. The transaction was substantially a transaction for sharing the profits of the commercial activities of the Associated Cement Ltd. and the receipt under cl. 1 of the deed was of the nature of income and not capital and as such assessable to tax. 503 Foley vs Fletcher, ; , Secretary of State in Council of India vs Andrew Scoble, ; , Oswald vs Kirkcaldy Magistrates, , Commissioners of Inland Revenue vs N Ramsay, (1935) 20 T.C. 79, State of Bihar vs Sir Kameshwar Singh, [1952] 21 I.T.R. 382, Captain Maharajkumar Gopal Saran vs Commissioner of Income tax, Bihar & Orissa, and Chadwick vs Pearl Life Assurance CO., , considered and applied. In assessing the true character of the receipt for the purpose of the Income tax Act, inability to ascribe to the transaction a definite category is of little consequence. It is not the nature of the receipt under the general law but in commerce that is material. It is often difficult to distinguish whether an agreement is for payment of a debt by instalments or for making annual payments in the nature of income. The court has, on an appraisal of all the facts, to assess whether a transaction is commercial in character yielding income or is one in consideration of parting with property for repayment of capital in instalments. No single test of universal application can be discovered for solution of the problem. The name which the parties may give to the transaction which is the source of the receipt and the characterization of the receipt by them are of little moment, and the true nature and character of the transaction have to be ascertained from the covenants of the contract in the light of the surrounding circumstances. The decision of the question is however not left to the application of any arbitrary standards. There are certain broad principles which guide the determination of the character of the receipt. The distinction between a capital receipt and revenue receipt though fine is real. The dividing line may be thin, and often at first sight imperceptible.

In the execution proceedings to satisfy a decree dated 14 10 1958 for title and recovery of possession of certain "ganju Bhogra lands" obtained by the appellant against the State, the Notified Area Council. Rourkela claimed the suit lands by an application u/o XXI Rule 58 r/w sections 37 and 38 Code of Civil Procedure. The said application was rejected. A revision against it was also dismissed with the observation that the council was free to file a regular suit for adjudication of its rights. When the appellant took out a fresh application for execution u/s 47 of the Code` of Civil Procedure, the Council which never filed any suit, and the respondent State which never appealed against the original decree, opposed the execution application on the ground that the decree became infructuous by virtue of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The Executing court upheld the objection and dismissed the execution petitition. On appeal the Additional District Judge, by his order dated 2 5 1970, held that the decree was executable resulting in a second appeal to the High court by the respondent State. The High Court allowed the appeal by its order dated 4 11 1974 holding that as the decree holder was not in actual physical possession of the land, the tenure has vested in the State free from all encumbrances u/s 3 of the Act and the decree was rendered "non est". Dismissing the appeal by special leave, the Court, ^ HELD: (1) As a result of the abolition of the village office under section 3 of the OMTA, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land" stood extinguished by virtue of the provision of clause (b) of section 3, and ail settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant, stood cancelled under section 3(c). The right of the appellant to receive emoluments was also deemed to have been terminated under Cl. (d) and by virtue of Cl. (f), his bhogra land stood resumed and "vested absolutely" in the State free from all encumbrances. Section 3 of the Act, in fact, expressly provided that this would be the result, notwithstanding anything in law, usage, settlement, grant, sanad, order or "in any judgment, decree or order of a court. " All these consequences ensued with effect from April 1, 1966 the date of coming into force of the orissa Merged territories (Village offices Abolition) Act, 1963. From that date, the appellant suffered from these and other disabilities enumerated in section 3 of the Act, the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession was, therefore, lost to him as it vested "absolutely" in the State Government free from all encumbrances. The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act and there is nothing wrong in holding that the decree was rendered incapable of execution by operation of law. [77 D H] (2) Under sec. 5 of orissa Merged Territoies ((Village offices Abolition) Act, 1963, once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled" with rights of occupancy thereunder. The settlement of the land contemplated by sec. S had to be with the holder of the village office and the other persons who were enjoying it (or part of it) and as his co sharers, as tenants under him or his co sharers, but that was to be so on the condition 76 that "each such person, namely, the holder of the village office and his cosharers or the tenants under the holder of the office or his co sharers was in separate and actual cultivating possession" of the land immediately before April, 1966. The words "each such person" occurring in sub section I of Sec. 5 include the holder of the village office so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and cultivating possession of the "bhogra land" immediately before April 1, 1966. There is nothing in sub section I of Sec. 5 to justify the argument that the interpretation of the words "each such person" should be such as to exclude the holder of v the village office from its purview. [78 E, F H] State of orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974) decided on 27 6 1975 (orissa High Court) over ruled; Meharabansingh and Ors. vs Nareshaingh and ors. (held not applicable). (3) The provisions of sec. 9 do not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land. stood resumed and vested absolutely in the State Government free from all encumbrances. [80 E] (4) The normal consequences arising out of the rejection of the application under o. XXI, r. 58, Civil Procedure Code and the failure to institute the suit thereafter, were rendered nugatory by the express provisions of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The question of executability of the decree did not arise. [81 A B] [The Court left open to the authorities concerned to examine the question of settlement of the land under section 5(1) of the orissa Merged Territories (Village Dr offices Abolition) Act, 1963, with liberty to the village officer to rely upon such matters as may be available according to law.]

The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure. The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence. The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings. While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation. " Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner. It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a). It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case. (b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc. and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case. (c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending. " Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court. The High Court found the appellants guilty and convicted them for contempt of Court. Hence this appeal. Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed. It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court. There can be no comparison between the present case and a trial conducted by a newspaper. The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice. The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so. They had taken care not to comment on any proceedings pending in I court or the issues arising out of them. Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation. With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire. They permitted councillors and others to attend the enquiry which was in no sense confidential. It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice. Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to. It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court. Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice. Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter. The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.

The Government of India notified its decision that certain deductions in the minimum cane price, on the basis of recovery of sugar from sugarcane will be allowed to sugarcane factories in U.P. on the cane supplied to them on and after May 1, 1955 but that the deductions will be allowed only on "unbonded cane" crushed by each factory and not on "bonded cane", the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season. In exercise of the powers delegated to him under section 3 of the , the Cane Commissioner U.P. issued a Notification on June, 1, 1955, whereunder "the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1, 1955. The appellant firm taking advantage of this Notification granting concession in the minimum price, made payment to Laskar Co operative Cane Development Union Ltd; after making deductions in respect of 2 lac maunds of sugarcane supplied to it, under an agreement entered into pursuant to the offer made to it on March 22, 1955. However, on December 21, 1955 the Cane Commissioner issued a Recovery Certificate under Sections 17 and 18 of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 against the appellant firm for a sum of Rs. 53,879.10 being the amount deducted by the appellant firm while making payments to Laskar Co operative Union. On a challenge to legality of the Recovery Certificate, the dispute was referred to the sole arbitrator, the District Cane Officer under Rule 108 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954. The arbitrator found that the supply of sugarcane was "bonded cane" and therefore gave an award that the appellant was not entitled to the concession and was liable to pay the minimum price therefor. An appeal to the Divisional Commissioner having been dismissed, the appellant firm filed a Writ Petition in the Allahabad High Court which also was rejected. A further special appeal also proving unsuccessful the appellant firm appealed to the Supreme Court after obtaining a certificate of fitness. Dismissing the appeal, the Court, ^ HELD: 1. Neither the expression "bonded sugarcane" nor "unbonded sugar cane" has been defined either in the Statute or in the U.P. Sugarcane Supply and Purchase Order, 1954. Having regard to the ordinary dictionary 779 meaning of the said expressions, the expression "bonded sugarcane" must mean Sugar Cane secured by a bond or deed. [783 G H, 784 A] 2. Under the Notification of the Cane Commissioner dated June 1, 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the "unbonded sugarcane" crushed on or after May 1, 1955. In other words, the concession is granted in respect of the supply of 'unbonded sugarcane in contradistinction with supply of 'bonded sugarcane. There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the U.P. Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of bonded sugarcane ' would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession. On a plain reading of the Notification in question, therefore, it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No. 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4, 1955 the said supply will have to be regarded as supply of "bonded sugarcane" and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No. 4, Laskar Co operative Cane Development Union. [784 B E] 3. On a fair reading of the sub cls. (2) and (3) of cl. 3 of the Order two or there things become at once clear. In the first place sub cl. (2) uses the expression 'may ' and provides that a cane grower or cane growers ' cooperative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory. That the period of 14 days mentioned in this subclause is not imperative or mandatory is also clear from sub cl. (4) which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area. Secondly, sub cl. (3) uses the expression 'shall ' indicating that an imperative obligation is cast upon the factory to accept the offer within 14 days from the receipt of the offer. Reading the two sub clauses together, it becomes clear that if a cane grower or cane growers ' Co operative Society makes an offer within 14 days mentioned in sub cl. (2) it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer; this only means that if the offer is made by cane grower or cane growers ' Co operative Society beyond the period specified in sub cl. (2) or the extended time under sub cl. (4) it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be bonded sugarcane ', more so when the agreement is entered into in the prescribed form. Merely because the offer from the cane grower or cane growers ' Co operative Society emanates after the expiry of the period mentioned in sub cl. (2) it does not mean that the parties are preventive from entering in to an agreement in the prescribed form and if they do, as was the case here, the sugar cane supplied there under would be 'bonded sugarcane '. Therefore, considering the question in the context of sub cl. (2) and sub cl. (3) of the U.P. sugarcane supply and Purchase Order 1954, also the appellant firm was not entitled to the benefit of the Cane Commissioner 's Notification dated June 1, 780 4. The contention that sugarcane supplied by the cane growers or cane growers ' Co operative Society could be regarded as "bonded sugarcane" only if offer of the Canegrower or the Canegrowers Co operative Society emanates within the period prescribed by sub clause (2) and the same is accepted by the occupier within the period prescribed by sub cl. (3) is not correct. [786 D F] 5. The true effect of sub clauses (2) and (3) read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers ' Co operative Society within the time prescribed by sub cl. (2) or the extended time under sub cl. (4) but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence, and the sugarcane supplied thereunder becomes "bonded sugarcane". [786 E M]. In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl. (2) but the same was accepted by the appellant firm and a binding agreement came into existence and what is more a binding agreement was executed by the parties in the prescribed Form 'C '. Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator 's award under the relevant Rules clearly shows that the parties, particularly the appellant firm, treated the agreement dated May 4, 1955 as one under the Act and the U.P. Sugarcane Supply and Purchase Order, 1954. [786 F H]

In the course of consolidation proceedings under the U.P. Consolidation of Holdings Act, 1953, questions arose amongst the members of a family regarding the title to certain properties. Respondent No. 1 filed objections to the original entries in respect of lands in Khata No. 72 and 73 on the basis that he was the son of Chhota, one Of the sons of Teja, the common ancestor. Similarly, respondents Nos. 2 and 3 filed objections claiming shares in the lands in Khata No. 73 on the ground that the said holding was jointly acquired but was recorded in the name of Nanha in a repre sentative character. The appellant contested the claims of respondents Nos. 1, 2 and 3. The objections were considered by the Consolidation Officer, who held that respondent No. 1 was the son of Heera alias Chhota, brother of Nanha, and granted him his share in certain plots of the Khata No. 73. The appellant as well as respondents Nos. 2 and 3 fried appeals against the said order of the Consolidation Officer. The Assistant Settlement Officer (Consolidation) allowed the appeal of the appellant and directed that lands in Khata No. 73 will be continued in the name of the appellant alone. The respondents went in revision against the order of the Assistant Settlement Officer. The Deputy Director of Consolidation allowed the revision of respondent No. 1 in full in respect of share in Khata No. 72. As regards plots in Khata No. 73 the Deputy Director held that the name of Nanha was entered only in a representative capacity. The appellant filed a writ petition in the High Court to challenge the decision of the Deputy Director of Consolida tion which was dismissed in limine. 185 The appellant, thereafter, 'filed the civil suit for a declaration that the order of the Deputy Director of Consol idation was without jurisdiction. Contesting the suit, respondent No. 1 raised a preliminary objection that the suit was barred by section 49 of the Act. The Munsiff decid ed the preliminary objection in favour of respondent No. 1. The Additional District and Sessions Judge in appeal, af firmed the order of the Munsiff. The second appeal filed by the appellant was dismissed by the High Court in limine. Before this Court, it was contended on behalf of the appellant that the bar of section 49 of the Act was not applicable to the suit of the appellant because the orders passed by the consolidation authorities were without juris diction inasmuch as the consolidation authorities could not decide questions as to title to the lands as well as the question relating to the parentage of respondent No. 1 which the civil courts alone could decide. Dismissing the appeal, this Court, HELD: (1) The language used in section 49 of the U.P. Consolidation of Holdings Act, 1953 is wide and comprehen sive. Declaration and adjudication of rights of tenure holders in respect of land lying in the area covered by the notification under section 4(2) of the Act and adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under the Act, would cover adjudication of ques tions as to title in respect of the said lands. Accordingly, the jurisdiction of the civil or revenue courts to entertain any suit or proceeding with respect to rights in such land or with respect to any other matter for which a proceeding could or ought to have been taken under the Act has been taken away. [189D E; C] Suba Singh vs Mahendra Singh and Others, ; Gorakh Nath Dube vs Hari Narain Singh, , referred to. (2) In the instant case, respondent No. 1 was claiming an interest in the land lying in the area covered by the notification issued under section 4(2) on the basis that he was the son of Chhota, brother of Nanha, and that the lands were recorded in the name of Nanha in a representative capacity on behalf of himself and his other brothers. This claim which fell within the ambit of section 5(2) had to be adjudicated by the consolidation authorities under the Act, and the jurisdiction of the Civil Court to entertain the suit in respect of the said 186 matter was expressly barred by section 49 of the Act and the suit of the appellant was rightly dismissed on that ground. [194C D]

The appellant filed a suit on the Original Side of the Calcutta High Court against the respondent for the recovery of a certain amount representing the price of coal supplied to the respondent. The appellant 's case was that if the contract under which the coal was supplied was illegal by, reason of it being in contravention of section 175 (3) of the Government of India Act, 1935, the respondent was liable to pay compensation under section 70 of the Indian Contract Act, since the Coal was not supplied gratuitously and the respondent had enjoyed the benefit thereof. The respondent 's case was that the contract was illegal and section 70 of the Indian Contract Act was not attracted. It was further alleged that the respondent had issued and sent bills to cover the amount and intimation cards in accordance with the usual practice and ordinary course of dealings. The respondent, it was allowed paid the amount by a cheque to a person authorised by the appellant and on presentation of proper receipts. It was therefore alternatively pleaded that the appellant 's claim having been satisfied, he had no cause of action. It was established in the course of the trial that the appellant had not in fact authorised any person to issue the receipts but a certain person not connected with the appellant 860 firm, without the consent or knowledge of the appellant got hold of the intimation cards and bills addressed to the appellant forged the documents and fraudulently received the cheque from the respondent and appropriated the amount for himself. The respondent had not pleaded in its written statement that it was due to the negligence of the appellant that the third person was able to get hold of the intimation card and perpetrate the fraud. Neither was it proved in the case that the appellant was in fact negligent. The Trial Judge found that the respondent was bound to pay compensation under section 70 of the Indian Contract Act and rejected the alleged payment of the bills and in the result decreed the amount prayed for by the appellant. The respondent thereupon appealed to a Division Bench. Both the judges agreed that the appeal should be allowed. Regarding the invalidity of the agreement and the inapplicability of section 70 of the Contract Act both the Judges agreed in favour of the present respondent. But while one of the Judges was not prepared to consider the plea of negligence which was raised by the present respondent for the first time in the appeal the other judge held that there was negligence on the part of the present appellant. The present appeal was filed on a certificate granted by the High Court. In this Court, apart from the questions of the invalidity of the contract under section 175 (3) of the Government of India Act and the applicability of s: 70 of the Contract Act, it was argued on behalf of the appellant that a plea of negligence should have been raised by the respondent in its pleadings and that the appellate court was in error in allowing such a plea to be raised for the first time in appeal. It Was contended further that in support of the plea of negligence it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea and that the negligence must not be merely or indirectly connected with the misleading effect but must be the proximate cause of the result. Held that the contract is illegal and void. If in pursuance of the void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, section 70 of the Contract Act would justify the claim made by the appellant against the respondent. State of West Bengal v, B. K . Mondal, [1962] Supp 1, section C. R. 876, referred to. 861 Since a plea of negligence was not raised by the respondent in the trial court the appellant is entitled to contend that it had no opportunity to meet this plea and dealing with it in appeal has, therefore, been unfair to it. Before invoking a plea of estoppel on the ground of negligence, some duty must be shown to exist between the parties and negligence must be proved in relation to such duty. The Arnold v, The Cheque Bank, , referred to. The negligence alleged must be proved to be the proximate or the immediate cause of the loss. Bexendale vs Bennett, , referred to. The broad proposition "that whenever one of two innocent persons must suffer by the acts of a third, he who enables such third person to occasion the loss, must sustain it" laid down by Ashhurst, J., in Lickbarrow vs Mason, 2 T. R. 63, on which one of the,Judges of the Division Bench has based his decision cannot be sustained as valid in law. Commonwealth Trust Ltd. vs Akotey, , Mercantile Bank of India Ltd. vs Central Bank of India Ltd. (1937) L. R. 65 I. A. 75, R. E. Jones Ltd. vs Waring & Gillow Ltd., and Farquharson Bros. & Co. vs King & Co., , referred to. The appellant cannot be charged with negligence. which, in turn, can be held to be the proximate cause of the loss caused to the respondent. The appellant is entitled to be compensated under section 70 of the Contract Act.

(14 of 1947) section 18 Applicability of. The appellant company had its establishments in a number of States in the country. In its establishment at Kanpur there were two unions, one of which, the Shramik Sangh, was affiliated to the Federal Union comprising of some of the trade unions in the various establishments while the other, the Karamachari Union, was not. A demand relating to revision of dearness allowance among others, was raised by both the Unions at Kanpur. The Shramik Sangh and the appellant entered into a settlement. Karamchari Union which was not a party to the settlement, made an application to the State Government to constitute a conciliation board for reference of the dispute. The Board was constituted. In the meantime, however, to bring the settlement within the purview of the U.P. the Shramik Sangh applied for the constitutation of a conciliation board. A conciliation board was constituted and the memorandum of settlement arrived at between the parties was registered even though the dispute on the same point raised by the Karamchari Union was pending before the Conciliation Board all the while. The dispute raised by the Karamchari Union was, therefore, referred to a Tribunal under s 4K of the Act. The Tribunal rejected the appellant 's contention that it had no jurisdiction to adjudicate on the dispute. On appeal to this Court it was contended that it was implicit in the various provisions of the U.P. Act that a settlement arrived at before a Conciliation Board by a Union of the majority of workmen was binding on all the workmen and that in the absence of a provision like section 18 of the it was not permissible for the Karamchari Union to contend that the settlement would bind only the members of the Shramik Sangh and in any event reference of the dispute to a Tribunal was without jurisdiction. Dismissing the appeal, ^ HELD: 1. The State Government rightly took the view that the controversy raised by the Karamchari Union was an industrial dispute. [922 G H] 2. A reading of the relevant provisions of the U.P. , clearly shows that there is nothing in the Act to require that the dispute 912 or difference should be raised by all the workmen of the industry, or by everyone of them, or even by a majority of them. It is enough if the controversy is between the employer on the one side and workmen on the other. There is also nothing in the Act to require that the workmen raising the controversy should form a majority of the employees, the reason being that where it is found that the controversy affects, or will affect, the interests of workmen as a class, the law envisages that, in the interest of industrial peace, it should be examined and decided in one of the modes provided by it. [917 D F] 3. An individual dispute cannot, however, be said to be an industrial dispute unless the other workmen associate themselves with it. No hard and fast rule can be laid down to decide when and by how many workmen an industrial dispute could be raised within the meaning of the Act, or whether a minority union or even an unrecognised union, could raise an industrial dispute. It is enough if there is a potential cause of disharmony which is likely to endanger industrial peace, and a substantial number of workmen raise a dispute about it, for then it is permissible to view it as an industrial dispute within the meaning of clause (1) of section 2 of the Act, and to refer it for adjudication to a tribunal. [917 F H] 4. The settlement arrived at with the Federal Union did not bind the Karamchari Union as it was not a party to it and was not affiliated to the Federal Union. Section 18 of the Central Act provides that a settlement arrived at by agreement between the parties otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement. [918 E] 5. Moreover, the settlement arrived at with the Shramik Sangh was under the provisions of the U.P. Act and, therefore, section 18 of the Central Act had no application. There is no provision similar to it in the U.P. Act. [918 G] 6. There was no occasion for invoking section 7 of the U.P. Act. That section is mainly intended to serve the purposes contemplated by section 3 of the Act, namely, securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment etc. It cannot therefore be said that the settlement arrived at by the Sangh became binding on all workmen including the Karamchari Union which was not a party to it nor is there any other provision in the Act or the Rules making the settlement binding on the Karamchari Union. Nor again can it be said that section 3(d) of the U.P. Act justifies the argument that merely because a union, consisting of a majority of workers, can represent all the workmen, the settlement arrived at before a conciliation board would bind those who are not parties to it. [919 B, C, F G] 7. In the absence of any prohibitory provision in the Act it cannot be said that the State Government had no jurisdiction to make a general reference under section 4K of the U.P. Act merely because the settlement was made by a majority union and was binding on the Shramik Sangh. The Tribunal has found it as a fact that the Karamchari Union represented a substantial number of the workmen of the company at Kanpur, and there is no reason why they should be debarred from raising a dispute for the benefit of all the workmen as a class. It is well recognised, that "collective bargaining" can take place between the employer and a bona fide labour union and there is nothing on the record to show that the Karamchari Union was not a bona fide union. [920 A C] 913 In the instant case the Shramik Sangh entered into the settlement in collusion with the company and the Conciliation Board finalised the settlement even though the Karamchari Union 's dispute was still pending. No effort was made to make it a party to the proceedings. Although, to begin with, a both the Shramik Sangh and the Karamchari Union were opposed to the settlement earlier arrived at by the Federal Union the Shramik Sangh changed its stand and endorsed the settlement of the Federal Union when it was placed on the notice board. The Tribunal also found as a fact that the settlement was not even put on the notice board of the company. In these circumstances if the State Government had decided to make a reference of the dispute to the Tribunal it could not be said that it did not apply its mind to the controversy or committed an illegality in doing so. [920 H 921 C] 8. Even assuming that the earlier settlements were in the nature of a package deal arrived at between the company and the Federal Union it cannot be said that there was any legal bar to the reference of the dispute regarding one particular item of the package deal for adjudication by the tribunal so as to vitiate the reference. The company brought this aspect of the matter specifically to the notice of the State Government. The point does not, however, relate to the jurisdiction or the maintainability of the reference under section 4K for it is essentially a matter for the Tribunal 's examination with due regard to the evidence before it. [921 F G] Herbertsons Ltd. vs Workmen of Herbertsons Ltd. & Ors. ; and New Standard Engg. Co. Ltd. vs M. L. Abhyankar & Ors., ; held inapplicable.

The appellant, a company, set up a fertilizer factory at Kota in Rajasthan. The factory manufactures urea for which the main raw material is Naptha, which has to be transported from the Koyali Refinery of the Indian oil Corporation. Before the actual setting up of the factory, the appellant requested the Railway Board by letter for a concessional frieght rate for the carriage of Naptha to the factory. The Railway Board by its letter EX 5 dated November 5, 1966, quoted station to station rate equal to 85 B (special) as against the rate equivalent to classification 62.5 B requested for by the appellant, and also stated that as the special rate was being quoted ahead of the actual setting up of the factory, the frieght rate would be reviewed when the traffic actually began to move. When the factory was almost ready for operation, the appellant again requested the Railway Board by letter for charging the rate under classification 62 5 B instead of 85 B (special) quoted by it. The Railway Board refused to oblige. The appellant wrote another letter to the Board, requesting it to permit charging the rate equivalent to 85 B (special) pending its final decision, as the movement of naptha was to commence from June/July, 1968. The Railway Board refused to grant that request also, saying that it could reconsider the question if on the basis of the facts and figures of the cost of production vis a vis the sale price of the fertilizers, it could be established that the production of the fertilisers at Kota was uneconomical unless freight concession on the movement of naptha was granted. The appellant filed a complaint under section 41(1)(a) and (b) of the Railways Act, 1890, before the Railway Rates Tribunal. The Tri 384 bunal decided against the appellant. Aggrieved, the appellant appealed to this Court by special leave for relief against the order and judgment of the Tribunal. Dismissing the appeal, the Court ^ HELD: Three questions arise for consideration of the Court: (1) whether the Railway Board was bound to allow the concessional rate offered to the appellant, that is, 85 B (special) quoted in its letter exhibit C 5 dt. November 5, 1966, to the appellant, (2) whether the rate charged for the carriage of the naptha between the stations concerned was unreasonable, and (3) whether the Railways were showing undue preference or advantage in respect of other traffic in contravention of the provisions of section 28 of the Railways Act. [389E F ] Dealing with the third question first, which relates to the contravention of section 28 of the Railways Act, the scope of the section was considered by this Court in Rajgarh Jute Mills Ltd vs Eastern Railway and another; , at 241, and the Railway Rates Tribunal, considering the material on record in the light of the decision of the Court in case, held that there was no evidence produced by the appellant to justify any grievance under section 28. This conclusions is perfectly justified. [390E; 391C] The second question above said relates to the rate charged by the Railway Administration being per se unreasonable. Even assuming, as argued by appellant 's counsel, that the Railways are earning some surplus income, that by itself is no ground to hold that the frieght charged is per se unreasonable. In the case of commodities of national needs such as foodgrains, crude oil etc., it may be necessary for the Railways to charge below the operation cost, and to offset the loss, the Railways may charge higher freight for some other classified commodities. The cost of operation cannot by itself be the basis for judging the reasonableness of the rate charged. Counsel for the appellant also argued that crude oil and naptha were comparable commodities for the purpose of carriage but there was disparity in the rates charged in respect of the two, naptha being charged at a much higher rate. The Tribunal rejected the demand of the appellant for parity in frieghts, and the Court cannot interfere with the finding to the Tribunal in this appeal under Article 136 of the Constitution. On merits also, there is no justification to demand that neptha should take the same freight rate as that of the crude oil. [391D, F H; 392B. D E] 385 Lastly, the first question: It relates to the correctness of the view taken by the Tribunal on doctrine of promissory estoppel consequent upon the letter exhibit 5 of the Railway Board. The Tribunal rejected this claim of the appellant. Considering the conclusion of the Tribunal on this question, it appears the Tribunal has not correctly understood the doctrine of promissory estoppel: The party asserting the estoppel must have relied and acted upon the assurance given to him. It means the party has changed or altered the position by relying on the assurance or representation. The alteration of position by the party is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. "A promise intended to be binding, intended to be acted upon, and in fact acted upon, is binding", said Lord Denning, sitting as a trial judge in Central London Properties Ltd vs High trees House Ltd., If the promisee has acted upon the promise, the promisor is precluded from receding from his promise. The concept of detriment as it is understood now is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to resile from his assurance or representation, having regard to what the promisee has done or refrained from doing in reliance on the assurance or representation. It is, however quite fundamental that the doctrine of promissory estoppel cannot be used to compel the public bodies or The Government to carry out the representation or promise which is contrary to law or which is outside their authority or power. Secondly, the estoppel stems from equitable doctrine. it requires that he who seeks equity must do equity. The doctrine, therefore, cannot also be invoked if it is found to be inequitable or unjust in its enforcement. or the purpose of invoking the doctrine, it is not necessary for the appellant to show that the insurance contained in exhibit (I S was mainly responsible for the establishing of the factory at Kota. There may be several representation to one party from different authorities in regard to different matters. Or there may be several representations from the same party in regard to different matters; In the instant case, there was one representation by the Rajasthan government to supply power to the appellant 's factory at concessional rate. There is another representation from the same government to exempt the appellant from payment of tax for a certain period. If those representations have been relied upon by the appellant, the Court would compel the authorities to adhere to their representations. What is required is the fact that the appellant was induced to act on the representations. The assurance given by the Railway Board in the letter exhibit S was not clear and unqualified. it was subject to review to be undertaken 386 when the appellant started moving the raw material. Accordingly, A appellant was put to notice that it has to approach the Railway administration again when it would review the whole matter. From the tenor of exhibit 5, the railways are entitled to say that they have reviewed the matter and found no justification for a concessional frieght rate for naptha; that does not amount to resiling from the earlier assurance. No question of estoppel arises in favour of the appellant in the case out of the representation made in Ex 5. The Court agreed with the conclusion of the Tribunal but not for all the reasons stated. Rajgarh Jute Mills Ltd vs Eastern Railway & Anr, at 241; Central London Properties Ltd vs High Trees House Ltd, ; Central Newbury Car Auctions Ltd vs Unity Finance Ltd, at 909; Article "Recent Development in the Doctrine of Consideration" Modern Law Review, Vol. , Grundt vs The Great Boulder Ptv Gold, Mines Ltd, ; ; Mohlal Padampet Sugar Mills Co Ltd vs State of UP and ors; , at 695= ; ; Union of India and ors vs Godfrey Philips Ltd, ; [1985] Supp. 3 SCR 123 and Halsbury 's Laws of England 4th Edn., Vol. , para 1595, referred to.

Appeal No. 204/1956. Appeal from the judgment and decree dated February 23, 1951, of the Madras High Court in O. section Appeal No. 13/1948. R. Keshva Aiyangar and M. section K. Aiyangar, for the appellant. A. V. Viswanatha Sastri and Naunit Lal, for .respondent No. 1. B. K. B. Naidu, for respondent No. 6. 1961. January 27. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal arises out of a suit filed by the respondent M. Raghava Mudaliar who claims to be the reversioner of Madhava Ramanuja Mudaliar. In his suit the respondent alleges that after the death of Madhava Ramanuja Mudaliar which took place on March 22, 1893, his property came into the possession of his widow Manickammal. Sub sequently the said Manickammal and Rengammal, the widowed mother of the deceased Madhava Ramanuja Mudaliar alienated the properties without any legal necessity. According to the respondent the said alienation was not binding on him and so he was entitled to recover possession of the said property free of any encumbrance or charge. Manickammal died on October 18, 1941, whereas Rengammal died in June, 1921. On the death of the widow Manickammal reversion fell open and that has given a cause of action to the respondent for his present suit. Madhava Ramanuja Mudaliar died issueless and was survived by his widow, his widowed mother, his sister Andalammal and the respondent and his sister Apurupammal who are the children of Ammakannu Ammal the second sister of Madhava Ramanuja Mudaliar, and Ethirajammal the daughter of the third sister of Madhava Ramanuja Mudaliar. To his suit the respondent impleaded the appellant Andalammal, Krishnasami Mudaliar, son of the said Apurupammal (defendant 1) and Susila Bai Ammal daughter of 626 Ethirajammal as defendants 2 to 4. The Udayavar Temple by the sole trustee Bysani Krishnaiah Chetty was joined as defendant 5. After her husband 's death Manickammal obtained letters of administration to his estate from the High Court at Madras. It appears that the relations of the widow with her mother in law were embittered, and that led to disputes between them. These disputes were settled by the two widows in pursuance of the advice of certain arbitrators who mediated between them. The settlement thus reached was recorded in writing on May 27, 1893 (exhibit D 2). It would be relevent to refer to the main terms of the settlement at this stage. This settlement set out the properties covered by it as Serial Nos. 1 to 5. Item No. 1 which was a house in three blocks was divided between the respondent and his sister Apurupammal who were to take one share; Ethirajammal who was to take another share; and Andalammal who was to take the third share. House No. 62, which, was Serial No. 2, and houses and shops Nos. 126 and 127 which were shown as Serial No. 3 were agreed to be sold, and it was settled that out of the sale proceeds the debts of the deceased Madhava Ramanuja Mudaliar and his father should be discharged; expenses incurred in obtaining the letters of administration should then be deducted along with the expenses of sale, and the balance should be divided equally between the two widows subject to a payment of Rs. 1,000/ to the mother in law in lieu of her jewels. The two cawnies of lands which were Serial No. 4 were agreed to be given to the maternal uncle of the deceases Madhava Ramanuja Mudaliar, whereas the moveables which were shown as Serial No. 5 had to be divided half and half between the two widows. This document con tained a clause which provided that " in case any one of us contravenes the terms the other party shall not only cancel this agreement but his title to the estate of Madhava Ramanuja Mudaliar prior to the agreement shall in no way be affected subject to. which this agreement has been entered into. " The document thus executed was attested by four attesting witnesses. 627 It appears that soon after this agreement was finalised, Krishnasamy Mudaliar, defendant 3, objected to its validity and disputed the right of the widows to deal with the property in the manner specified in it. He was, however, persuaded to abandon his objections. ' and a sale deed was executed by him conveying his reversionary rights to the two widows for consideration ' on September 10, 1894. By this document defendant 3 purported to recognise and grant an absolute title to the two widows in regard to the estate of the deceased (exhibit D 3). Subsequent to this document the two widows began to enjoy the properties as agreed between them. On February 4, 1895 the two widows sold item No. 1 in Schedule 11 attached to the plaint, i.e., Nos. 126 and 127, Anna Pillai Street and Audiappa Naick Street respectively to Thatha Venkata Raghava Subbu Chetty. The appellant is the successor in title of the said division in respect of the said item No. 1 in Schedule II. In the present appeal we are concerned only with this item. On May 27, 1895, a composite deed of partition and administration of property of the deceased was executed by and between the two widows (exhibit D 5). By this document the three blocks in the house shown as Serial No. 1 in exhibit D 2 were delivered into the possession of the respective donees. The maternal uncle of the deceased was given two cawnies of lands as therein stipulated and the debts of the deceased were discharged and expenses incurred in respect of the letters of administration were met. It is under these circumstances that the respondent filed his present Suit No. 56 of 1946 on the Original Side of the Madras High Court;. and he claimed that the alienations made by the two widows were not binding on him and he was entitled to the possession of the property left by the deceased Madhava Ramanuja. The schedule attached to the plaint referred to four items of property, and as we have already pointed out it is only with item No. 1 out of these four items with which we are concerned in the present appeal. 628 In regard to the said item the appellant urged that the agreement between the two widows (exhibit D 2) and the subsequent composite deed executed in pursuance of it (exhibit D 5) were in the nature of a family arrangement, and as such they were binding on the respondent. In was also alleged by the appellant that the respondent had received benefit under the said arrangement and by his conduct had ratified it. The appellant further pleaded that the transfer in favour of his predecessor was supported by legal necessity. Incidentally a plea of surrender was also raised by the appellant. Mr. Justice Kunhiraman, who tried the suit, held that there was a family arrangement which bound the respondent. He also observed that the respondent had received benefit under the said arrangement and was therefore precluded from challenging its validity. The learned Judge incidentally made some observations which showed that he was inclined to uphold the plea of surrender raised by the appellant. In the result the respondent 's suit was dismissed. The respondent then took the matter in appeal and succeeded. The appeal court held that the impugned arrangement cannot be said to be a bona fide family settlement which would bind the respondent. Before the appeal court it was conceded that the plea of surrender raised by the appellant could not be sustained, and that the contention that the respondent was bound by the family arrangement could not also be sustained. It was, however, urged on behalf of the appellant that the respondent 's conduct precluded him from disputing the validity of the arrangement but this argument was rejected by the appeal court; likewise, the contentions that the transfer in favour of the appellant 's predecessor was justified by legal necessity also failed. As a result of these findings the respondent 's appeal was allowed, the decree passed by the trial court was set aside, and the claim for possession made by the respondent was decreed. The respondent 's suit was accordingly directed to go before the Official Referee for ascertainment of mesne profits 629 claimed by him. It is against this decree that the appellant has come to this Court in appeal. The principal point which has been urged before us by Mt% R. Keshav Aiyangar on behalf of the appellant is that in substance the respondent has ratified the impugned transaction, has received benefit under it, and by his conduct has affirmed it, and so it is not open to him to challenge its validity and binding character. In support of this argument he has canvassed for our acceptance the proposition that if a person with full knowledge of his rights assents to a transaction which may otherwise be voidable at his instance and takes benefit under it, he is subsequently precluded from disputing its validity. In support of this argument he has relied on a decision of this Court in Sahu Madho Das vs Pandit Mukand Ram (1). In that case this Court has held that it is settled law that an alienation by a widow in exercise of her powers is not altogether void but only voidable by the reversioners who may either singly or as a body be precluded from exercising their right to avoid it either by express ratification or by acts which treat it as valid or binding. This Court also observed that it is a principle of general application underlying many branches of the law that a person who with full knowledge of his rights has once elected to assent to a transaction voidable at his instance and has thus elected not to exercise his right to avoid it, cannot go back on that election and avoid it at a later stage ; having made his election he is bound by it. The argument is that though the respondent may not be a party to the impugned transaction, if by his conduct it can be said that he has elected to uphold it and has received benefit under it he cannot be allowed to go back upon the election. There is of course no doubt about the correctness of the principle thus enunciated, but the difficulty in the way of the appellant arises when the applicability of the said principle is tested in the light of the relevant material findings in that case. That is why it is necessary to refer very briefly to the findings of fact on which the decision in Sahu (1) ; , 630 Madho Das 's case (1) rests. In that case this Court considered the question as to whether the plaintiff Mukand Ram had assented to the impugned family arrangement, and observed that as he was not a party to the arrangement his assent to the arrangement itself and not to something else must be clearly established, and also his knowledge of the facts. Then, having thus posed the question the material evidence was examined, and it. was held that the cumulative effect of the said evidence led to the reasonable inference that the plaintiff 's assent was to the very arrangement itself, and his conduct as well as the conduct of his brother Kanhaiya Lal was consistent only with that hypothesis; in other words, the examination of the material evidence justified the inference that Mukand Ram had in fact elected to assent to the transaction and had received benefit under it, and so the doctrine of election or ratification precluded him from disputing the validity of the said transaction. It is, however, significant that dealing with the case of the minor sons, who were not parties either personally or through their guardians, and who did not claim title either through Pato or her daughters, this Court expressly observed that so far as they were concerned what they received were gifts pure and simple and the only assent that could be inferred from the mere acceptance of the gifts and nothing more would be assent to that particular gift and not assent to the gifts similarly made to others. This observation brings out in bold relief by contrast the relevant findings in the light of which the plaintiff was held precluded from disputing the validity of the impugned transaction. The appellant has also relied on another decision of this Court in Dhiyan Singh vs Jugal Kishore (2). In that case it was held that even if the impugned award was invalid the plaintiff who disputed its validity was barred from making that claim by reason of estoppel. Brijlal against whom the plea of estoppel was effectively raised appeared to have made a claim to the estate in question in 1884 when the impugned (1) [1955] a S.C.R. 22. (2) [1952] S.C.R. 478. 631 transaction took place,, and it was as a result of this claim that settlement was reached and the impugned transaction effected. This Court held that even if the award which was challenged was invalid Brijlal by his conduct had precluded himself from raising the contention against the validity of the award. In , coming to this conclusion this Court observed that, the case before it was very similar to the one which the Privy Council had decided in Kanhai Lal vs Brij Lal (1). When we turn to the Privy Council decision itself we find that Kanhai Lal, who was held by the Privy Council to be precluded from challenging the arrangement to which he was a party, had set up a title in himself on the strength of an alleged adoption, and when, having regard to the said title, a settlement was reached and a compromise arrangement was made, it was held by the Privy Council that the doctrine of estoppel came into play. Kanhai Lal, who subsequently became a reversioner according to the Privy Council, was bound by the previous arrangement and " cannot now claim as a reversioner. " These two decisions also emphasise, the fact that if a person having full knowledge of his rights as a possible reversioner enters into a transaction which settlers his claim as well as the claim of his opponents at the relevant time, he cannot be permitted to go back on that arrangement when reversion actually falls open. There are two other decisions of the Privy Council to which reference may be made. In Rangaswami Gounden vs Nachiappa Gounden (2) the Privy Council had to deal mainly with the question of surrender, its theory and its essential features. Incidentally it had also to deal with the case of reversioner who had taken from an alienee from a Hindu widow a mortgage of a property which included a part of the property alienated, and the question raised was whether by reason of the fact that the reversioner had a mortgage of the said property he was precluded from challenging the validity of the said alienation; and the Privy Council held that he was not so precluded. In dealing with this aspect of the question the Privy Council (1) (1919) L.R. 45 I.A. 118. (2) (1918) L.R. 40 I.A. 72. 632 observed that it is well settled that though he who may be termed a presumptive reversionary heir has a title to challenge an alienation at its inception, he need not do so, but is entitled to wait till the death of the widow has affirmed his character, a character which up to that date might be defeated by birth or by adoption The Privy Council then examined the nature of the mortgage, the properties included in it, and observed that the said mortgage consisted of 2/14ths of the mitta which had come to the mortgagors in right of their own succession, and the remaining share had come to them through the impugned deed of gift. Then it was observed that at the time of the mortgage the mortgagee did not know whether he would ever be such a reversioner in fact as would give him a practical interest to quarrel with the deed of gift; and the Privy Council asked "why should he not take all that the mortgagers could give or propose to give. " " To hold that by doing so ", observed the Privy Council, " he barred himself from asserting his own title to a part of what was mortgaged seems to their Lordships a quite unwarrantable proposition." This decision shows that the principle of election or estoppel or ratification must be applied with due circumspection and the mere fact that the reversioner has received some benefit under the transaction or has not challenged the validity of the transaction when it took place cannot bar his rights as a reversioner when reversion in his favour falls open. The last case on which reliance has been placed by the appellant is the decision of the Privy Council in Ramgouda Annagouda vs Bhausaheb (1). In this case the widow of the last male holder had alienated nearly the whole of the property of her husband by three deeds executed and registered on the same day. One of the deeds was in favour of a presumptive reversioner. The Privy Council held that the three deeds had to be regarded as forming one transaction entered into by all the persons interested in the properties, and that after the reversion fell open, the reversioners who were parties to the said transactions (1) (1927) L.R. 54 I.A. 396. 633 were precluded from disputing the two alienations by reason of their conduct. According to the Privy Council the three deeds in question were inseparably connected together and in that view Annagouda, the reversioner, who challenged two of the three transactions, not only consented to the sale to Shivgouda and the gift to Basappa which were the two transactions impeached but these dispositions formed part of the same transaction by which he himself acquired a part of the estate. Thus it may be taken to be well settled that if a presumptive reversioner is a party to an arrangement which may properly be called a family arrangement and takes benefit under it, he would be precluded from disputing the validity of the said arrangement when reversion falls open and he becomes the actual reversioner. The doctrine of ratification may also be invoked against a presumptive reversioner who, though not a party to the transaction, subsequently ratifies it with full knowledge of his rights by assenting to it and taking benefit under it. It is, however, clear that mere receipt of benefit under an arrangement by which a Hindu widow alienates the property of her deceased husband would not preclude a presumptive reversioner from disputing the validity of the said alienation when he becomes the actual reversioner. It must always be a question of fact as to whether the conduct of the said reversioner on which the plea of ratification is based does in law amount to ratification properly so called. It is in the light of these principles that we must now consider the relevant facts in the present appeal. There can be no doubt that the transaction which took place on May 27, 1893, as a result of the dispute between the two widows and with the intervention of the well wishers of the family is not a family arrangement as understood under Hindu Law. This position was conceded before the High Court and is not disputed before us (exhibit D 2). Similarly, the sale deed which was executed by defendant 3 in favour of the two widows is of no assistance because it was obviously a sale by defendant 3 of his reversionary rights which were then no better than spes suwessionis and as 634 such this transaction (exhibit D 3) cannot help to validate the earlier arrangement between the two widows. The composite document (exhibit D 5) of May 27, 1895, is in substance no more than an alienation no doubt executed for the purpose of carrying out the original arrangement between the two widows. Thus in dealing with the question as to whether the respondent is precluded from challenging the validity of the impugned transaction it is necessary to bear in mind that the original transaction is not a transaction in the nature of a family arrangement. Besides, he was then a minor and admittedly he was not a party to any of the said transactions. It is, however, urged that the respondent obtained a certificate or a patta from the Collector in regard to the property conveyed to him under exhibit D 5, and the argument is that he has deliberately withheld the said patta because he apprehended that if produced the patta would go against him. The explanation given by the respondent for not producing the patta is attacked as unsatisfactory, and it is urged that the said explanation cannot possibly conceal his intention to keep back the document from the Court. In his cross examination the respondent stated that the Collector 's certificate which had been given to him by his grandmother had been filed by him in Suit No. 495 of 1916 in the City Civil Court, and he added that his advocate in the said suit had not returned the document to him. We may assume that the respondent has not produced the document though it was in his possession; but we have on the record two documents which were issued to the other donees, and all that the appellant is entitled to assume is that a similar document had been issued in favour of the respondent. In our opinion, the two documents on the record do not assist the appellant 's argument that any representation had been made by the respondent to the Collector before he obtained a patta in his favour. In fact the issue of the patta is a routine matter which would necessarily follow on the execution of the registered sale deed (exhibit D 5). On the registration of the said document persons who got certain immoveable properties 635 under it were given the certificates by the Collector in ordinary course, and so no argument can be built up against the respondent that the acceptance of the patta amounts to the ratification of the original transaction of sale. It is then urged that in Civil Suit No. 495 of 1916 filed in the City Civil Court at Madras by Apurupammal against tile respondent and another, the respondent filed the written statement in which he admitted the validity of the impugned transaction. It appears that the plaintiff in that suit had based her claim on the said impugned transaction, and in respect of the said claim the respondent had alleged in paragraph 2 of his written statement that he admitted that in consequence of certain disputes which arose between the mother and the widow of the deceased Govinda Mudaliar a compromise settlement was arrived at in pursuance of which some transfers were effected. This, it is said, amounts to an admission of the validity of the said transaction (exhibit D 15). This argument, however, fails to take notice of the fact that while referring to the said compromise settlement the respondent had expressly added that the said compromise settlement was obviously to take effect only during the life tenancy of the widow of the deceased Govinda Mudaliar (exhibit P 3). In other words, taking the statement as a whole, as we must, the respondent looked upon the said compromise settlement as an alienation made by the widow and as intended to take effect during her lifetime and no more. In other words, far from supporting a plea of ratification against the respondent this statement strengthens his case that he took the benefit with the knowledge and under the belief that the arrangement under which the said benefit flowed was intended to be operative during the ,Lifetime of the widow, and as such he had no occasion to challenge its, validity whilst the widow was alive. A somewhat similar argument is based on the conduct of the respondent in relation to Civil Suit No. 1117 of 1921 filed by Masilamani Mudaly, the sister 's son, and the deceased Govinda Mudaliar in the Madras High Court (exhibit P.16). To this suit the 636 respondent was impleaded as defendant 7. In this suit the said plaintiff had challenged the validity of the arrangement, and asked for appropriate injunctions against defendant 6 to the suit, Thuggi Kondiah Chetty, Trustee of Udayavar Koil, and other defendants from dealing with the property to the prejudice of the reversionary right of the plaintiff. It is unnecessary to refer to the pleadings in the said suit or to specify in detail the reliefs claimed. The only point which is relevant to consider is that the reversioner had challenged the arrangement in question. The respondent by his written statement had purported to support the plea made by the plaintiff, and had added that he was not personally aware of any attempt on the part of defendants 2 to 4 to alienate the properties in respect of their possession and enjoyment. This suit, however, did not proceed to a trial as it was dismissed for want of prosecution, and the argument is that since the respondent had supported the plaintiff in the said suit it was necessary that he should have got himself transposed as a plaintiff, when he found that the original plaintiff was allowing the suit to be dismissed for non prosecution. In our opinion, this argument is far fetched and cannot possibly sustain the plea of ratification against the respondent. If the respondent took possession of the property under the arrangement with the distinct understanding that the arrangement was to last only during the lifetime of the widow, we see no justification for the assumption that he should have carried on Civil Suit No. 11 17 of 1921 or should in fact have challenged the said arrangement at all. The last argument urged in support of the plea of ratification is based on the oral evidence given by the respondent in the present case. The respondent was asked about the quarrels between the mother and the widow of the deceased Mudaliar, and he said that they were living together and that there were quarrels between them. Then he was asked as to whether he got the property under the impugned arrangement, and he said that his grandmother gave him the house with the Collector 's certificate and told him that she 637 was going to die soon and so he may take the house. The respondent also admitted that since the house was thus delivered to him and to his sister they were in possession of it and in enjoyment of its income. The respondent then stated that he was not aware of the document of 1895 until 1916, and that he came to know about the division between the two widows( only in 1910. It is urged that this statement should not be believed, and that the reluctance of the respondent to disclose the truth should lead to the inference that he knew all about the impugned transaction and its effect, and that when he took possession of the property allotted to him under the said transaction he knew fully well about his rights and he accepted the benefits with the object of reifying the whole transaction. In our opinion there is no ,substance in this argument. In this connection it is relevant to remember that until Act II of 1929 was passed a sister 's son, like the respondent, would have had very few chances of becoming an actual reversioner; he would have come in the list of bandhus; and so it would be difficult to assume that at the time when the respondent accepted the gift of the house he knew about his rights as a possible reversioner. Besides, the benefit which he obtained under the impugned transaction could also in substance have been claimed by him under an earlier arrangement entered into between Govinda Mudaliar and Madhava Ramanuja Mudaliar on February 7, 1887 (exhibit D 1). Having regard to the arrangement disclosed by the said document the benefit given to the respondent and the other children of the sisters of the deceased Mudaliar may as well have been based on the said arrangement, and all that the transactions of 1893 and 1895 did was to give effect to it (Exs. D 2 and D 5). Besides, as we have already pointed out, in 1893 the respondent was a minor, and when subsequent to 1895 he took possession of the property it does not appear on evidence that he knew that the intention of the widows was to treat the property as absolute owners and to convey absolute titles to the respective donees and transferee under 638 the said transaction. He also could not have known about his rights as a possible reversioner. Therefore, in our opinion, the High Court was right in holding that the appellant had failed to establish his plea of ,ratification against the respondent. Indeed, to hold otherwise would be in the words of the Privy Council a quite unwarrantable proposition " (1) (p. 87). That leaves the question of legal necessity to be considered. The High Court has held that the impugned transfer cannot be said to have been justified by legal necessity; and, in our opinion, the finding of the High Court on this point is obviously right. In dealing with this question it may be relevant to recall that the widow of the deceased Mudaliar had obtained letters of administration to the estate of the deceased on April 26, 1893, and, as usual, in issuing the letters limitation had been imposed upon the widow that she could not deal with or transfer the property in question without the requisite sanction. There is some force in the argument urged before us by Mr. Sastri on behalf of the respondent that it was with a view to avoid the necessity to obtain the requisite sanction that the widow of the deceased Mudaliar was persuaded by her mother in law to enter into the impugned transaction under the guise of a family arrangement. The document itself (exhibit D 5) does not purport to be justified by legal necessity. In terms it purports to give effect to the original arrangement of 1893 (exhibit D 2); and if the said arrangement is not valid as a family arrangement the subsequent transfer would also be invalid. Besides, out of a total consideration of about Rs. 10,000/ the amount of Rs. 776/ can be taken to represent the debts due by the deceased Mudaliar; the rest of the items of consideration cannot be treated as constituting a legal necessity at all. The amount of Rs. 558/ was the expense incurred for executing the document; similarly the amount of Rs. 409/representing the funeral expense of the deceased Mudaliar, had apparently been spent by the widow who wanted to reimburse herself and that cannot be a legal necessity. The other items of consideration do (1) (1918) L.R. 46 I.A. 72. 639 not even purport to be for legal necessity. Therefore, in our opinion, the conclusion is inescapable that the impugned transfer is not justified by legal necessity. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

M, a Hindu, died leaving his mother, widow, sisters and sisters ' son and daughters. There were disputes between the mother and the widow which were settled at the instance of certain arbitrators. Under this settlement a portion of one of the houses was given to a sister of M, another portion to R son of another sister and his sister and a third portion to the daughter of the third sister. Certain properties , which had been agreed to be sold under the settlement were sold to the appellant by the mother and the widow. After the death of the mother and the widow R filed a suit as the next reversioner of M for recovery of the properties sold on the ground that the alienation was without necessity and was not binding on him. The appellant contended (i) that R was precluded from disputing the settlement between the mother and the widow as he had received a benefit under it and had ratified it by his conduct and (ii) that the transfer was for legal necessity. Held, that the transfer was not binding on R and he was entitled to avoid it. The settlement between the mother and the widow was also not binding on R. If a person having full knowledge of his rights as a possible reversioner enters into a transaction which settles his claim as well as the claim of the opponents at the relevant time, he cannot be permitted to go back on that arrangement when reversion actually falls open. But the mere fact that the reversioner has received some benefit under the transaction or has not challenged its validity when it took place cannot bar his rights as a reversioner. It will always be a question of fact as to whether the conduct of the reversioner on which the plea of ratification is based does in law amount to ratification properly so called. In the present case the settlement was not in the nature of a family arrangement; at that time R was a minor and was not a party to any of the said transactions. There was no conduct of R which could amount to ratification of the settlement or of the alienation. At the time when he accepted the gift he could not know about his rights as a possible reversioner. Further, there was no legal necessity for the transfer. Sahu Madho Das vs Pandit Mukand Ram ; , Dhiyan Singh vs Jugal Kishore, [1952] S.C.R. 478, Kanhai Lal vs Brij Lal (1918) L.R. 45 I.A. 118. Rangasami Gounden vs Nachiappa Gounden (1918) L.R. 46 I.A. 72 and Ramgouda Annagouda vs Bhausakeb (1927) L.R. 54 I.A. 396, referred to 625

The plaintiffs appellants filed a suit against the defendants respondents claiming their title on an unregistered document to the suit property and premises purchased by the latter through a sale by the Receiver under the orders of the Court, on the ground that they were co owners thereof by virtue of the said document. The trial court decreed the suit but the High Court, on appeal, accepted the appeal and dismissed the suit. Allowing the appeal by certificate, the Court ^ HELD: 1. A pure question of law on the facts and circumstances of a case can be taken for the first time in the Supreme Court. [351 B C] (a) In the instant case, the plea that "as the title has vested in the respondent by virtue of the confirmation of sale and the registered conveyance, the plaintiffs appellants cannot rely on an unregistered document" is a pure question of law not involving any investigation of the facts. [351C E] Yaswant Deorao Deshmukh vs Walchand Ramchand Kothari; , @ 861; Raja Sri Sailendra Narayan Bhanja Rao vs State of orissa ; ; Seth Badri Prasad and ors v Seth Nagarmal and ors. , [1959] Suppl. 1 S.C.R. 769 @ 773; State of U.P and Anr v Anand Swarup ; ; T. A A Appanda Mudaliar vs State of Madras ; ; applied. In a suit against the purchaser on the ground that the purchase was made on behalf of plaintiff or on behalf of some one through whom the plaintiff claims, the plaintiff cannot succeed in displacing the title of the defendant on the basis of the unregistered agreement,[352 C] on the pleadings, in the instant case, the question of law raised cannot result in the suit being dismissed as not maintainable. The claim of the appellant as a real owner was not based on the unregistered agreement alone. 341 The suit was based on the plea that the suit property and the premises were purchased in ownership (i.e.) on the claim that the appellants plaintiffs were the real owners of the property.[352 C D] G. H. C. Ariff vs Jadunath Mazumdar Bahadur, A.I.R. , Meritime Electric Co. Ltd. vs Genral Dairies Ltd., A.I.R. 1937 PC 114; referred to. Section 66 of the Civil Procedure Code prohibits any person claiming that a purchase certified by the Court in such manner as may be prescribed in favour of a person was made on behalf of the plaintiff. In order to invoke the prohibition it is necessary to establish that the person against whom the suit cannot be maintained is a person claiming title under a purchase certified by the Court in such manner as may be prescribed. A certificate by the Court for the purchase in the manner prescribed is, therefor, essential. [353 B C] The word "prescribed" is defined under section 2(16) of the Civil Procedure Code, as meaning prescribed by Rules. The provision as to grant of a certificate by a court under a purchase is prescribed in Order 21. Order 21, Rules 64 to 73 prescribe the procedure relating to sale generally while Rules 82 to 103 prescribe the procedure relating to sale of immovable property. When the Court makes an order confirming the sale under Order 21, Rule 92, the sale becomes absolute. After the sale becomes absolute under Rule 94 the Court shall grant a certificate specifying the properties sold and the name of the person who at the time of the sale is declared to be the purchaser. Such certificate is required to bear the day and the date on which the sale became absolute. [353 C E] The certificate by the Court referred to in Section 66 C.P.C. is a certificate under Order 21, Rule 94. The procedure envisaged for sale generally and sale of immovable property under Order 21 is sale by a public auction. Sale by a Court through the Receiver appointed by Court is not contemplated under these provisions. In a sale by a Receiver a certificate to the purchaser under Order 21, Rule 94, is not given by the Court. Therefore, the prohibition under Sec. 66 cannot be invoked in the case of a sale by the Receiver. A Receiver is appointed under Order 40 Rule 1, and a property can be sold by the Receiver on the directions of the Court even by private negotiations. The requirement of Sec. 66 of the C.P.C., is a certificate by the Court as prescribed. Since Section 66 is not applicable to sales by Receiver it is not necessary to go into the question whether a sale by the Receiver under the Rules of the Calcutta High Court would come within the purview of section 66. Section 66 refers to execution of sales only and has no application to a sale held by a Receiver. In this case, the conveyance exhibit 5 was in accordance with the original side Rule of the High Court. [353 E G]

One Ranendra died unmarried on November 16, 1952 leaving the alleged will (Exhibit 1) executed on November, 8, 1952. Ranendra left behind him three brothers Jitendra Chandra Bose, Gopendra and Manindra plaintiff No. 1. Manindra and Jogendra (Plaintiff No. 2) had been appointed executors of the will. By the will Ranendra bequeathed one half of his properties to his nephew, Bhabesh, who was the son of his younger brother, Phanindra, who had predeceased him, and the remaining half to his younger brother Manindra for life, and after Manindra 's death to Bhabesh absolutely. The executors of the will as aforesaid filed an application before the Subordinate Judge. Alipore, for probate of a will executed by Ranendra. Jitendra entered caveat and filed a written statement and contested application for probate. During the pendency of the suit, Jitendra died and his heirs who were substituted, contested the suit. The contentions were that Ranendra was not in a physical or mental condition to execute a will; he was in a semi conscious state of mind and had not the testamentary capacity to execute the alleged will and that the alleged will was brought into existence at the instance, and under the influence of the propounder Manindra; that the signatures of Ranendra on the will were not genuine. The trial court found that the signatures of the testator and the attesting witnesses were genuine and that the provisions of the will was neither unfair nor unnatural. But the trial court dismissed the suit and refused to grant probate of the will on the ground that there were certain "doubts and suspicions about the condition of the testator 's mind on 8 11 1952". In appeal before the High Court, the decree of the trial court was set aside and the propounder was granted probate of the will. Dismissing the appeal by certificate granted by the Calcutta High Court under Article 133(1)(b) of the Constitution, the Court, ^ HELD: 1.1. The mode of proving a will does not ordinarily differ from that of proving any other document except to the special requirement of attestation prescribed in the case of a will by section 63 of the Successions Act. [1191 D] 1:2. The onus of proving the will is on the propounder and in the absence of suspicious circumstances surrounding the execution of the will, proof of test a 1189 mentary capacity and the signature of the testator as required by law is sufficient to discharge the onus. Where, however, there are suspicious circumstances, the onus is on the propounder to explain them to the satisfaction of the court before the court accepts the will as genuine. Even where circumstances give rise to doubts, it is for the propounder to satisfy the conscience of the court. The suspicious circumstances may be as to the genuineness of the signatures of the testator, the condition of the testator 's mind, the dispositions made in the will being unnatural, improbable or unfair in the light of relevant circumstances, or there might be other indications in the will to show that the testator 's mind was not free. In such a case the court would naturally expect that all legitimate suspicions should be completely removed before the document is accepted as the last will of the testator. If the propounder himself takes the prominent part in the execution of the will which confers a substantial benefit on him, that is also a circumstance to be taken into account, and the propounder is required to remove the doubts by clear and satisfactory evidence. If the propounder succeeds in removing the suspicious circumstances the court would grant probate, even if the will might be unnatural and might cut off wholly or in part near relations. [1191 D H 1192 A] Shashi Kumar Banerjee & Ors.v. Subodh Kumar Banerjee & Ors, A.I.R. 1964 S.C. 529; H. Venkatachala Iyengar vs B.N. Thimmajamma & Ors., [1959] Supp. 1 S.C.R. 426; Rani Purnima Devi and Another vs Kumar Khagendra Narayan Dev and Another, followed. A circumstance would be "suspicious" when it is not normal or is not normally expected in a normal situation or is not expected of a normal person. [1192 A B] 1:4. A careful perusal of the eleven circumstance shows that they are by no means suspicious circumstances and stand self explained. On the contrary the following circumstances lend strong support to the plaintiffs ' case of genuineness and valid execution of the will: (i) Gopendra one of the brothers, who has not been given anything under the will had filed a written statement stating that the "has no objection to the grant of probate inasmuch as the will is executed and attested according to law"; (ii) the disposition under the will is quite fair and there are no suspicious circumstances in it at all; (iii) as there were litigations between the two groups of the brothers, the will was the natural outcome to avoid further future litigation. B C] Harmes and Anr vs Hinkson, , referred to.

The appellant, a Hindu reversioner, brought the suit out of which the appeal arose for recovery of certain properties alienated by two widows having widow 's estates under the will of their husband. The respondents resisted the suit mainly on the grounds that the appellant, who was an undischarged insolvent at the time the succession opened, could not maintain the suit even after his absolute discharge as the properties must be taken to have vested in the official receiver and that under the will of their husband the widows got not a widow 's estate but an absolute estate and had the right to alienate the properties which they did. The trial court found in favour of the appellant and directed delivery of possession of the properties to him. On appeal the High Court took the contrary view on both the points and dismissed the suit. The appellant came up to this Court on the certificate granted by the High Court. Held that the High Court was in error in holding that the appellant could not maintain the suit. There is nothing in the Provincial Insolvency Act that takes away the right of the insolvent to sue in courts after he is granted a discharge for he then becomes a free man. Though there is no specific provision in the Act with respect to the property that may remain undisposed of by the court or by the receiver, the provisions in section 67 by necessary implication read in the light of the general scheme of the Act provides an answer to this and all such property must be treated as surplus to which an insolvent is entitled, after an absolute order of discharge is made in his favour, subject always to the condition that if any debts provable under the Act have not been discharged before such order, 521 the property will remain liable for such discharge as also the expenses of all proceedings under the Act till they are fully met. Cohen vs Mitchel, (I 890) ; Sayad Daud Sayed Mahomed vs Mulna Mahomed Sayad, (1926) 28 Bom. L. R. 334; Yellavajjhula Suraya vs Tummalapali Mangayya, A.I.R. , Rup Narain Singh vs Har Gopal Tewari, 'I. L. R. (1933), 53 All. 503; Diwan Chand vs Manak Chand, A.I.R. (1934) Lah. 809; Arjun Das Kundu vs Marchhiya Tolinee, I.L.R. ; Kanshi Ram vs Hari Ram, A. I .R. and Parsu vs Balaji, I.L.R. (I , discussed. In order to determine the true intention of a testator, the clauses of the will should be read as a whole in the light of the surrounding circumstances as also in contrast to the other clauses and where the testator, as in the instant case, having used the word owner ' in the previous clause, follows up by using the words "during her lifetime enjoy as owner the income in any manner she likes" the latter words clearly limit the bequest and indicate that what is given is no more than a life estate. Where the interests of the various defendants in possession of various properties are independent, the appeal cannot abate as a whole by reason of the heirs of a deceased defendant in possession of a property not having been brought on the record within the prescribed time.

The grandfather and great grand father of the respondents and the father of the appellant were brothers. By a registered deed (Ext. 39) the elder brother purportedly gave the younger brother (appellant 's father) some lands for separate living and maintenance of himself, and his male lineal descendants for ever. The lands in dispute were a part of the lands covered by the deed. In their suit, the plaintiffs alleged that the suit lands were part of Desgat Watan estate which, by virtue of an immemorial family and territorial custom, was impartible and the junior members were given lands only for their maintenance, and that till his death, the appellant 's father continued, to be an undivided member of the joint family consisting of himself and the plaintiffs, and that on the death of the appellant 's father the lands should go to them. The trial court held: (1) that the impartibility of the estate and the rule of primogeniture had not been proved; (2) that there was severance of the joint family in 1902 since when the brothers were living separately; (3) that on the abolition of Watans by Bombay Act 60 of 1950, the suit lands which originally were Watan lands, were re granted in favour of the appellant 's father and that the plaintiffs tacitly assented to the regrant of the lands exclusively in his favour. On appeal, the High Court affirmed the view of the trial court that the estate was not impartible and that the onus of proving partition was on the defendant (appellant herein). It was held that Ext. 39 did not establish that the brothers were divided in 1902 and that the suit lands were allotted to the appellant 's father; that on the erroneous but honest belief that Desgat lands were impartible, the elder brother granted the lands to his brother and his descendants in the male line in lieu of their maintenance and that the younger brother having died without male issue, the tenure came to an end whereupon the plaintiffs who were the surviving male members of the family, were entitled to resume the lands. The High Court remitted the matter to the trial court with certain directions. In appeal to this Court, the appellant contended: (i) that her father prior to the execution of Ext. 39, had clearly intimated to his brother his intention to divide the estate and to live separately after division, resulted in a severance of the joint family status, and that such severance was evident from the recitals in Ext. 39 and the subsequent conduct of the members of the erstwhile family. 162 Since the appellant 's father after such division was holding, the suit lands as his separate property, the same were inherited by the appellant to the exclusion of the plaintiffs. (ii) Since the regrant of the suit lands to the appellant 's father created new rights exclusively in his favour, the regrant did not enure for the benefit of the plaintiffs. Allowing the appeal and dismissing the plaintiff 's suit ^ HELD: 1. Unity of ownership and commonsality of enjoyment are the essential attributes of an undivided Hindu family of Mitakshra concept. So long as the family remains undivided no member can predicate a definite share to himself. Cesser of this unity and commonsality means cesser or severance of the joint family status, which in Hindu Law amounts to partition, irrespective of whether it is accompanied or followed by a division of the properties by metes and bounds. Disruption of joint status covers both division of right and division of property. Division of joint status may be brought about by any adult member of the joint family by intimating the others his intention to separate and enjoy his share in the family property in severalty. Such intimation may be an explicit declaration (written or oral) or manifested by conduct of the members of the family. [170A B] (i) In the instant case, Ext. 39 speaks of a division of the joint family status and separation of interests. The trial judge translated the term "Vibhaktarahave" in Marathi, as connoting division of status. But the High Court did not agree with the translation made by the trial judge, and preferred to rely on the translation by the High Court translator. Except for the English translation of the word "Vibhaktarahave" there is no substantial difference between the two translations. [171 A B] The word "Vibhaktarahave" is a compound of two words viz., "Vibhakta" and "Rahave". "Vibhakta" appears to have its roots in the Sanskrit word "Vibhaga". "In the Mitakshra, Vijnanesvara, defines the word 'Vibhaga ', which is usually rendered into English by the word 'partition ' as the adjustment of diverse rights regarding the whole by distributing them in particular portions of the aggregate". "Rahave" means "living". Understood in its etymological sense the word "Vibhaktarahave" means living separately after division.[172H] (ii) None of the four features which, according to the High Court, militate against the literal interpretation of the word "Vibhaktarahave", viz., that the deed was one for maintenance, that it was executed by the elder brother, that the lands were given to the appellant 's father and his descendants in the male line and that the appellant 's father would not have remained contended with only a small portion instead of claiming entire half share detracts from the conclusion that in substance and reality the document evidence a division of joint family status as a result of an intimation by the appellant 's father to his brother of his intention to live separately after division. [173D] 2. Section 92 of the Evidence Act prohibits only the varying of terms of a document, not the memorandum or recitals of facts, bereft of dispositive terms, particularly when the correctness of the whole or any part of the recital is in question. [174E] 163 In the instant case the preliminary recital does not fall under the dispositive or operative portion of the document. The bar under section 92 against the admissibility of extrinsic evidence for the purposes of showing that the insertion of the words 'for your maintenance ' in the recital is wrong, is not attracted. [174G] 3. (a) When there is a dispute in regard to the true character of a writing evidence de hors the document can be led to show that the writing was not the real nature of the transaction but was only illusory which cloaked something else and that the apparent state of affairs was not the real state of affairs. [174H] Chandi Prasad Singh vs Piari Bidi, CA No. 75 of 1964, decided on 16 3 1966, Bhagwan Dayal vs Reoti Devi, ; ; referred to. (b) The preliminary recital in Ext. 39 raises an inference that sometime prior to the date of the deed the younger brother had clearly intimated to his coparcener of his intention to sever the joint family status and to enjoy the joint family property in severalty. Disruption of the joint family status ensued. From that date onwards the brothers ceased to be coparceners. That is, at the time of the execution of the deed, joint family status did not exist. There is no evidence that after the severance of the joint family status there was a re union. [175 E F] (c) It cannot be said that the preliminary recital furnished little or no evidence that the younger brother intimated in clear terms his intention to sever the joint family status. The document had been let in evidence more than 70 years after its execution. All those who might have given evidence were dead. In such a situation it is permissible to draw reasonable inferences to fill the gap of details obliterated by time. [175H; 176A] Chintamanibhatla Vankat Reddy vs Rani of Wadhawan; 47 I.A. 6 at p. 10; Sree Sree Iswar Gopal Jien Thakur vs Pratapmal Begaria, ; referred to. (d) Once it is found that the division of joint status preceded the execution of the deed, the elder brother had no power to impose a condition that the land was being given to his younger brother and male lineal descendants for their maintenance. [176 E F] (e) The expression 'Potgi ' (maintenance) or 'Nirwahkrit ' used in the deed could not be construed as conferring an estate with restricted rights of ownership to the younger brother and his descendants. The deed evidences a permanent transfer of land to be enjoyed from generation to generation. Moreover the younger brother remained in full ownership of the land till his death. After the abolition of Watans he alone applied for re grant of this land in his favour. The plaintiffs were aware of this position. [177A B]

The land in question was granted to one A by the Government of Kashmir and as per the practice prevailing there, he was shown as Wasidar in respect of the said land. On his death, his son inherited the leasehold rights. On the death of the son, his widow inherited the same. The appellants are the heirs and legal representatives of the widow. A 's son, during his lifetime, had granted a sub lease of the said land to the Respondent 's father. The widow of A 's son instituted a suit for recovery of possession of the said land on the grounds that there was unlawful sub letting by the sub lessee, the land was required for occupation by her and her family, and that the period of sub lease had expired. The Respondent contended that the sub lease was void ab initio. The Sub Judge held that the sub lease was valid and the grounds of bona fide requirement of the appellants ' mother as well as unlawful sub letting by the sub lessee had been established. On these findings the suit was decreed. on appeal, the Additional District Judge upheld the decision. In the second appeal before the High Court, it was contended that the transfer made was of a mere interest in the lease hold and did not amount to a transfer of the land leased, as contemplated under Rule 35 of the Wasidar Rules. Rejecting the contention, but without considering as to what would be the effect of the sub lease being void, the High Court came to the conclusion that in view of the sub lease being void, the suit filed by the appellant must be dismissed. This appeal, by special leave, is against the aforesaid decision. on behalf of the appellants, the contentions urged in the Courts below, were reiterated before this Court. The Respondent relied on Section 12 A of the Jammu Kashmir Land Grants Act, 1960 as amended in 1969 and contended that the sub lease was admittedly 557 granted without the permission of the Government and so the lease granted by the Government had come to an end: the title of the appellants to the said land had extinguished and they were not entitled to sue for recovery of possession of the said land. Allowing the appeal, ^ HELD: 1. Even assuming that the sub lease granted was void, the result would be that the Respondent his father would be persons without any legal interest in the said land. The appellants being the lessees of the said land were suing on their own title and not relying on the sub lease hence they were entitled to evict the Respondent who had no title or interest in the said l . If a view is taken that the sub lease was valid, in that event, as held by both the Courts below, as grounds for eviction set out in Section 11 of the Jammu & Kashmir Houses and Shops Rent Control Act have been made out, the Respondent ceased to be entitled to the protection of the said Act and was liable to be evicted as the term of his sub lease had expired. [559E G] 2. It was not contended by the Respondent in any of the Courts below that the title of the Appellants and his predecessors in title to the said land under the lease granted by the Govermnent had come to an end. Had the plea been taken earlier, it is possible that the Appellants might have pleaded facts to show that their lease had not come to an end or that it had been renewed after the sub lease was granted. Hence, allowing such a plea at this stage might cause prejudice to the Appellants. [560D E] 3. As regards the sub letting by the Respondent and his father and the bona fide requirement of appellants ' mother, these are both essentially issues of fact and have been decided in favour of the Appellants ' mother and their predecessors in title. Those findings do not appear to have been seriously challenged before the High Court at all and hence there is no reason to go into the question as to whether those findings are correct, in this appeal. [561B]

The appellants, who are the followers of the Swaminarayan sect and known at Satsangis, filed a representative suit: (i) for a declaration that the relevant provisions of the Bombay Harijan Temple Entry Act, 1947, as amended by Act 77 of 1948, did not apply to their temples, because, the religion of the Swaminarayan sect was distinct and different from Hindu religion and because, the relevant provisions of the Act, were ultra vires, and (ii) for an injunction restraining the 1st respondent and other non Satsangi Harijans from entering the Swaminarayan temple. The Trial Court decreed the suit. Pending the 1st respondent 's appeal in the High Court, the Bombay Hindu Places of Public Worship (Entry Authorisation) Act, 1956, was passed, and since the 1947 Act gave place to the 1956 Act, it became necessary to consider whether the 1956 Act was intra vires. The High Court allowed the appeal and dismissed the suit holding that the followers of the Swaminarayan sect professed Hindu religion and that the Act of 1956 was constitutionally valid. In appeal to this Court it was contended that : (i) the High Court erred in treating the 1st respondent 's appeal as competent when the vakalatnama filed on his behalf was invalid (ii) section 3 of the 1956 Act was ultra vires as it contravened article 26(b) of the Constitution; and (iii) the religion of the Swaminarayan sect was distinct and separate from Hindu religion and that therefore the temples belonging to that sect did not fall within the ambit of the 1956 Act. HELD: (i) The appeal to the High Court was properly presented. Technically the memorandum of appeal presented by the Assistant Government Pleader on behalf of the 1st respondent suffered from an infirmity, because, the 1st respondent signed the vakalatnama in favour of the Government Pleader. But, since the Registry had not returned the appeal for correcting the irregularity, and since r. 95 of the Appellate Side Rules of the High Court authorises an advocate to appear even without initially filing a vakalatnama, the High Court was right in allowing the Government Pleader to sign the memorandum of appeal and the vakalatnarna, in order to remove the irregularity. [251 E G; 252 A C] (ii) There is no substance in the contention that section 3 contravenes article 26(b) of the Constitution and is therefore ultra vires. 243 The right to enter temples which has been vouchsafed to the Harijans by the impugned Act substance symbolises the right of Harijans to enjoys all social amenities and rights, for, social justice is the main foundation of the democratic way of life enshrined in the provisions of the Indian Constitution. After the Constitution came into force, the whole social and religious outlook of the Hindu community has undergone a fundamental change as a result of the message of social equality and justice proclaimed by the Constitution; and the solemn promise in article 17, abolishing untouchability has been gradually, but irresistibly enforced by the process of law assisted by enlightened public conscience. All that section 3 of the 1956 Act purports to do is to give the Harijans the same right to enter the temple for darshan of the deity as can be claimed by the other Hindus. The act of actual worship of the diety is allowed to be performed only by the authorised poojaris of the temple and by no other devotee entering the temple for darshan. Therefore, it was nont intended to invade the tradition and conventional manner of performing the actual worship of the idol. (iii) The High Court was right in coming to the conclusion that the religion of the Swaminarayan sect is not, distinct and separate from Hindu religion, and consequently, the temples belonging to the sect did fall within the ambit of section 2 of the Act. The Indian mind has consistently through the ages, been exercised, over the problem of the nature of godhead, the problem that faces the spirit at the end of life, and the interrelation between the individual and the universal soul. According to Hindu religion the ultimate goal of humanity is release and freedom from the unceasing cycle of births and rebirths and a state of absorption and assimilation of the individual soul with the infinite. On the means to attain this and there is a great divergence of views; some emphasise the importance of Gyana, while others extol the virtue of Bhakti or devotion, and yet others insist upon the paramount importance of the performance of duties with a heart full of devotion and in mind inspired by knowledge. Naturally it was realised by Hindu religion from the very beginning of its career that truth was many sided and different views contained different aspects of truth which no one could fully express. This knowledge inevitably bred a spirit of tolerance and willingness to understand and appreciate the opponent 's point of view. Because of this broad sweep of Hindu philosophic concept under Hindu philosophy, there is no scope for excommunicating any notion or principle as heretical and rejecting it as such. The development of Hindu religion and philosophy shows that from time to time saints and religious reformers attempted to remove from Hindu thought and practices, elements of corruption and superstition, and revolted against the dominance of rituals and the power of the priestly class with which it came to be associated; and that led to the formation of different sects. in the teaching of these saintns and religious reformers is noticeable a certain amount of divergence in their respective views; but underneath that divergence lie certain broad concepts which can be treated as basic, and there is a kind of subtle indescribable unity which keeps them within the sweep of broad and progressive Hindu religion. The first among these basic concepts is the acceptance of the Vedas as the highest authority in religious and philosophic matters. This concept necessarily implies that all the systems claim to have drawn their principles from a common, reservoir of thought enshrined in the Vedas. Unlike other religions in the world, the Hindu religion does not claim any one prophet; it does no( worship any one God; it does not subscribe to any one dogma;it does 244 not believe in any one philosophic concept; it does not follow any one set of religious rites or performances; in fact, it does not satisfy the traditional features of a religion or creed. It is a way of life and nothing more. The Constitution makers were fully conscious, of the broad and comprehensive character of Hindu religion; and while guaranteeing the fundamental right to freedom of religion made it clear that reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion. Philosophically, Swaminarayan was a follower of Ramanuja and the essence of his teachings is acceptance of the Vedas with reverence, recognition of the fact that the path of Bhakti or devotion leads to Maksha, insistence or devotion to Loard Krishna and a determination to remove corrupt practices and restore Hindu Religion to its original glory and purity. This shows unambiguously and unequivocally that Swaminarayan was a Hindu saint. Further, the facts that initiation is necessary to become a Satsangi, that persons of other religions could join the sect by initiation without any process of proselytising on such occasions, and that Swaminarayan himself is treated as a God, are not inconsistent with the basic Hindu religious and philosophic theory.

On partition being effected through a suit, a Hindu joint family who has only an interest in the entire joint family property acfamily. The preliminary decree passed by the Court determined 10/16 as the share of the appellant family and 6/16 as that of the other branch. Those assets of the erstwhile larger joint family which could not be physically divided were auctioned between the two branches and in this manner a sugar mill was purchased for 34 lacs by the appellant family. In Income tax proceedings depreciation under section 10(2) (vi) of the Indian Income tax Act, 1922 was claimed on the above valuation of 34 lacs. The claim was rejected by the Income tax Officer as well as the Appellate Assistant Commissioner, on the ground that the value for the purpose of depreciation was not the price determined at the family auction, but the original cost to erstwhile larger joint family. The Tribunal held that the 6/16 share of the other branch was purchased at the auction and its value had to be taken as the basis of the price determined at the auction, but the appellant family 's own share of 10/16 was not purchased at the auction and therefore had to be valued at the original cost to the larger joint family. In reference, the High Court held that the distinction made by the Tribunal was wrong and that the shares of both branches had to be valued on the basis of the original cost to the larger family. Appeal was filed before this Court with certificate. HELD: Per Subba Rao and Sikri, JJ. It may be that in strict legal theory partition may not involve a transfer, but the substance of the transaction is that an erstwhile member of a joint Hindu family who has only an interest in the entire joint family property acquires an absolute title to a specific property. The cost of the property to the member at the date of partition would be the value given to it for the purpose of allotment. provided it was real, or the price at which he purchased it in auction, or the value of it ascertained otherwise. [647A C] In the case of assessees acquiring a property by purchase, gift, bequest, or succession, courts have held that the cost of the property to the assessee was not the original cost of it to his predecessor but its actual cost to him at the time of the purchase, gift, bequest or succession. In substance there is no difference in the matter of ascertaining the cost of an asset to an assessee whether he is a donee, purchaser, legatee, successor, or a divided member e.f a joint Hindu family. [646D; 647A] 642 Commissioner of Income tax, Madras vs The Buckingham & Carnatic Company, Ltd., Madras (1935)3 I.T.R. 384(P.C.), Jagata Coal Co. Ltd. vs Commissioner of Income tax, West Bengal , Indian Iron & Steel Co. Ltd. vs Commissioner of Income tax, Bengal, (1943) 11 I.T.R. 328 (P.C.), Francis Vallabaravar vs Commissioner of Income tax, Madras and Commissioner of Income tax, Bombay vs Solomon & Sons , referred to. Commissioner of Income tax, U.P. & C.P.v. Seth Mathuradas Mohta, (1939)7 I.T.R. 160, disapproved. In the present case the valuation given to the property was not notional but a real one; indeed the property was sold in the open auction between the members of the larger joint family and the value fetched thereunder entered into the scheme of partition. [647 C D] Therefore, even in respect of the appellant 's own share of 10/16, the valuation for the purposes of section 10(2)(vi) had to be on the basis the price which the appellant bid at the auction. Per Shah, J. (dissenting). By the preliminary decree the appellant family became entitled to a 10/16th share in every item of the property of the larger joint family; the other branch became entitle to the remaining i.e. 6/16th share in each item. The appellant being already owner of 10/16th share could not purchase the same at the auction. In substance the appellant purchased, by being declared the highest bidder, the remaining 6/16th share belonging to the other branch. [650 C E] The asset in question, viz, the sugar factory, at all material times remained a business asset. Acquisition of the interest of the other branch by the appellant did not alter the character or use of the asset; nor did it make any fundamental alteration in its value to the appellant so as wholly to displace its original value even in respect of its share which it continued to own. [654 B D] The Tribunal therefore, had rightly held that in respect of the 6/16th share of the other branch, depreciation had to be allowed to the appellant on the basis of the auction price. The High Court wrongly interfered with this finding the Revenue not having appealed against it. On the appellant 's 10/16th share, which the appellant could not be said to have purchased, depreciation had to be calculated on the basis of original cost to the larger family. [654 E G] Case law discussed.

: Criminal Appeal No. 100 of 1958. Appeal from the judgment and order dated April 24, 1958, of the Calcutta High Court in Criminal Misc Case No. 38 of 1958. G. section Pathak and D. N. Mukherjee, for the appellants. L. K. Jha and R. C. Datta, for respondent No. 1. K. B. Bagchi and P. K. Bose, for respondent No. 2. 1961. January 13. The Judgment of Imam and Raghubar Dayal, JJ. was delivered by Imam, J., Subba Rao, J. delivered a separate judgment. IMAM, J. The appellants were convicted for contempt of court and each of them was sentenced to pay a find of Rs., 500 by, the Calcutta High Court. They applied to the High Court for a certificate that 463 the case was a fit one for appeal to this Court which was granted. Hence the present appeal. On March 19, 1955, one Bimala Kanta Roy Choudhury filed a complaint before the Sub Divisional Magistrate, Alipore, against the respondent B. K. Sen under section 497 of the Indian Penal Code. The Magistrate after examining numerous witnesses declined to frame a charge and discharged the accused under section 253(1) of the Code of Criminal Procedure by his order dated July 13, 1957. Against the order of discharge Bimala Kanta Roy Choudhury filed a revisional application before the Sessions Judge of 24 Parganas, who by his order dated November 22, 1957, directed further enquiry. On January 3, 1958, the Magistrate while holding further enquiry, as directed, allowed the prosecution to tender further evidence. On February 3, 1958, the accused B. K. Sen filed a revision petition in the Calcutta High Court against the order of the Sessions Judge directing further enquiry as well as the order of the Magistrate permitting the prosecution to lead further evidence. The High Court thereupon issued a Rule and stayed further proceedings. The respondent B. K. Sen held the office of Commissioner of the Calcutta Corporation at the time he filed his petition in the Calcutta High Court for proceedings against the appellants for contempt of court. According to that petition, at a special meeting of the Calcutta Corporation held on January 16, 1958, the Mayor suggested the formation of a committee for discussion of necessary and appropriate steps to be taken with 'a view to eradicate alleged malpractices prevailing in different departments of the Corporation. At this meeting Satyananda Bhattacharjee made certain wild allegations against B. K. Sen. Two resolutions were passed at the meeting, one of which, authorised the Mayor to constitute a Special. Committee to give effect to the suggestions and objectives indicated by the Mayor in his statement dated January 10, 1958. On February 14, 1958, at an ordinary meeting of the Calcutta Corporation. the aforesaid Bhattacharjee repeated his allegations made at the previous meeting of January 16. At the meeting 464 it was resolved that a Special Committee be set up and the appellants were elected as members of the committee. The Special Committee was to enquire into certain allegations made against certain officials of the Corporation who are said to have taken advantage of their office in carrying on business in their own names. The resolution was in the following terms: "That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the Corporation who are alleged to have been taking advantage of their high offices in carrying on business in their own names. The Committee will take up only those matters that relate to the Corporation. " The record of the contempt proceedings in the High Court shows that at a meeting of the Calcutta, Corporation, on March 26, 1958, Bhattacharjee informed the Mayor that on February 14, 1958, he had mentioned on the floor of the House certain charges against some high officials of the Corporation and that the Mayor had asked him to submit his papers to the Special Committee. Bhattacharjee further informed the Mayor that the day before, at a sitting of the Special Committee, he wanted to hand over to the Special Committee some papers that were with him, but the Special Committee would not take them and had stated that they would enquire into "open case only ". Bhattacharjee then asked the Mayor to request the Special Committee to enquire into all the allegations made by him. On this, the Mayor asked Bhattacharjee to hand over the papers to him. Then the Mayor stated that if that was not written in the proceedings he would take it that day that all the papers would he sent to the Special Committee. According to B. K. Sen, on April 11, 1958, Bimala Kanta Roy was examined by the Committee and he admitted Chat his case against B. K. Sen under section 497 of the Indian Penal Code was at that time pending consideration before the High Court. Bimala Kanta Roy Choudhury then alleged that either the witnesses 465 themselves or their near relations got appointments in the Corporation of Calcutta. Bimala Kanta Roy Choudhury had specifically mentioned one Tarak Nath Dey. The entire purpose of the statement of Bimala Kanta Roy Choudhury was to prove the truth of his allegations that B. K. Sen had abused his official position and had created a situation which made it impossible for him to produce relevant witnesses to prove his case. The Special Committee then caused the production of Tarak Nath Dey and confronted him with Bimala Kanta Roy Choudhury. Tarak Nath Dey was then examined but denied that he was the agent of the wife of Bimala Kanta Roy Choudhury or the Tadbirkar of B. K. Sen. The Special Committee went out of their way to traverse the grounds and take evidence on matters which were directly and substantially in issue and were pending in the Calcutta High Court. B. K. Sen further alleged in his petition, that the appellants had set up a parallel court of enquiry for ascertaining the truth or otherwise of the allegations made by Bimala Kanta Roy Choudhury. That the action of the Special Committee was calculated to create an atmosphere of prejudice against him and amounted to unwarranted inter ference with the free flow of justice. The action of the Special Committee had a tendency to prejudice the trial and/or to influence the decision of the case by the trial Court or by the High Court. The Special Committee thereafter issued to him a questionnaire. The relevant portions of the questionnaire are in the following terms : " III (a). It is alleged that between 4th January, 1956, and 20th September, 1957; i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) Jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar who were cited as witnesses in the case. 59 466 (b)It is alleged that about the same time you gave appointments to Tarak Nath Dey, Hardhan Dey, Pradip Bhaduri, Ardhangsu Mondal etc. and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case. (c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghosh against whom a demolition case was pending. " The case of B. K. Sen before the High Court was that the action of the appellants as members of the Special Committee amounted to gross contempt of the High Court as well as of the Court of trial. Accordingly, B. K. Sen filed on April 16, 1958, his petition in the High Court for proceedings against the appellants for contempt of court. Notice was issued to the appellants by the High Court returnable the same day to show cause why they should not be proceeded against for contempt of court. On April 17, 1958, the appellants showed cause. The ' High Court, however, issued a Rule returnable by April 23. After hearing the parties the High Court on April 24, convicted the appellants as already stated. The only question for determination is whether the conduct of the appellants as members of the Special Committee amounted to contempt of court. On behalf of the appellants it was urged that the enquiry held by the Special Committee was not to determine the guilt or the innocence of B. K. Sen in the case under section 497 pending against him. It was impossible to characterise the enquiry by the Committee as a parallel enquiry. The Special Committee had been constituted specially for the purpose of determining whether the employees of the Calcutta Corporation had abused their position in the discharge of the powers vested in them. The Special Committee was not constituted to enquire into the conduct of B. K. Sen only. Even the questionnaire sent to him referred to three incidents which have nothing to do with the case under a. 497 against him pending in the 467 Magistrate 's court. The first incident was concerned with an agreement with some lady to build a house for Rs. 40,000, and to sell it to her for Rs. 50,000 and that thereby he had engaged in a business for profit which was contrary to his conditions of service. The second incident related to the reduction of the valuation of certain premises, belonging to some persons described as the Guptas who were either his relations or friends, long after their appeal had been disposed of and without recording any adequate reasons for such reduction. The third incident related to I the assessment of his own house when he had reduced its letting value to Rs. 90 per month and on that basis had been paying the Corporation tax whereas he actually received as house rent for the same at Rs. 250 per month. The opinion expressed by the Land Acquisition Collector was that the proper letting value of the premises would be Rs. 281 per month. The entire purpose of the enquiry was to ascertain whether B. K. Sen, as Commissioner of the Corporation, had been abusing his position as such. Even the questionnaire under III(a), (b) and (c) does not state that B. K. Sen had so acted with a view to suborning prosecution witnesses in the case against him under section 497 or that he had acted in a manner so as to suppress the evidence which might be led against him. It was pointed out that the questionnaire throughout stated " it is alleged " and there was no assertion therein that B. K. Sen had actually acted in an improper manner. The letter which accompanied the questionnaire expressly requested B. K. Sen to give the Committee some time between 10 a.m. and 1 1 a. m. on April 16 so that they could get the facts from him. In other words, the Special Committee had not accepted the allega tions against B. K. Sen but had merely pointed out to him the nature of the allegations and desired to get from him the actual facts. This conduct of the appellants as members of the Special Committee could not in any way amount to their converting themselves into a tribunal holding a parallel enquiry to the real matter in issue in ' the case under section 497 against B. K. Sen. 468 It was further urged that if the question at all arose in the enquiry that B. K. Sen had acted with the ulterior motives in the matters stated in questionnaire 111(a), (b) and (c) that would be merely incidental to the main purpose of the enquiry whether he, as Commissioner of the Calcutta Corporation, had abused his position. Before the conduct of the appellants could be characterised as contempt of court it had to be established that their conduct tended to prejudice mankind against B. K. Sen or it tended or was calculated to interfere with the due course of justice. It was further argued that before a person can be convicted for contempt of court it must be found that his act amounted to real contempt and was of a kind that necessitated action being taken by the court against him. In the present case, the incidental question whether B. K. Sen had acted in, an improper way ,in making the appointments under questionnaire 111(a), (b) and (c) with a view to suit his own end,% was something too remote for a court to hold that it tended to or was calculated to interfere with the course of justice and that it amounted to such contempt which required the taking of proceedings for contempt against the appellants. Reliance was also placed on section 99(1) of the Calcutta Municipal Act, 1951, which states that "Every Special Committee shall conform to any instructions that may from time to time be given to it by the Corporation. " The appellants as members of the Special Committee had merely performed their public duty in obeying the instructions of the Corporation when at the meeting of the Corporation on March 26, 1958, the papers presented by Bhattacharjee were sent to the Special Committee. If the action of the appellants at &II amounted in law to contempt of court it was so slight that it did not call for proceedings for contempt being instituted against them. The respondents in this appeal are B. K. Sen and the State of West Bengal. On behalf of the State of West Bengal no submissions were made. On behalf of B. K. Sen, however, it wait contended that the facts asserted in his petition for contempt filed in the High 460 Court had not been controverted by the appellants. All that the appellants had stated in their affidavit was that they did not admit the assertions of fact in the petition for contempt other than those stated in their affidavit. It was strongly urged on behalf of B. K. Sen that he protested at the meeting of the Corporation on February 14, 1958, that Bhattacharjee 's allegations ought not to be entertained as the subject matter of his allegations was at the time sub judice in the Calcutta High Court. Several members of the Corporation had also raised a similar objection. Apparently, from Bhattacharjee 's statement at the meeting of the Corporation on March 26, 1958, the Committee had refused to take the papers submitted by him and the Committee had stated that they would enquire into " open case only ". In spite of the knowledge which the appellants had about the matter being sub judice in the Calcutta, High Court they bad none the less at the meeting of the Special Committee on the 11th of April, 1958, examined Bimala Kanta Roy Choudhury, the complainant in the case under a. 497, Indian Penal Code, against B. K. Sen. Furthermore, they had also examined Tarak Nath Dey with reference to the allegations made by Bhattacharjee. The appellants had thus entered into a parallel enquiry into a matter which was at that time in issue in the proceedings in the Calcutta High Court. That Court had before it a petition of B. K. Sen questioning the validity of the order of the Sessions Judge directing further enquiry in the case under section 497, Indian Penal Code. An important question to be decided in that proceeding was whether it was correct that B. K. Sen had suborned the prosecution witnesses in the case under section 497, Indian Penal Code, against him or had prevented witnesses for the prosecution from appearing against him. It was clear from paragraphs 7 and 15 of Annex. C, the charges made by Bhattacharjee against B. K. Sen, that his case was that B. K. Sen had been tampering with prosecution witnesses of Garia with the aid of Dhiren Mondal. Some of the sets of alleged adultery are said to have been committed at Garia. B. K. Sen had also won over a 470 prosecution witness Kamakshya Chatterjee by procuring an appointment for him in the Central Bank of India Ltd., Calcutta. The action of the appellants in thus holding a parallel enquiry tended to interfere with the course of justice as well as to prejudice mankind against B. K. Sen. The action of the appellants could not be regarded as slight because it had been a deliberate action. It was not enough to say that the appellants had merely sent a questionnaire to B. K. Sen and had not made any comment on the allegations made before them by Bhattacharjee and Bimala Kanta Roy Choudhury. It was the act of holding an enquiry into a matter which was directly in issue and which was pending for determination in the Calcutta High Court which amounted to contempt of court, Mr. Jha, on behalf of B. K. Sen, further contended that the provisions of section 99(1) of the Calcutta Municipal Act could not be pleaded in defence to a charge of contempt if the action of the appellants amounted to contempt of court. Furthermore, as the direction given to the appellants was by the Mayor and not the Calcutta Corporation section 99(1) did not apply. We would now consider whether the action of the appellants amounts in law to real contempt of the Calcutta High Court and the Magistrate before whom the proceedings under section 497 were pending at the time the High Court passed its order convicting the appellants for contempt. There is a controversy between the appellants and B. K. Sen whether Bimala Kanta Roy Choudhury and Tarak Nath Dey were examined by the appellants. There is no clear statement on behalf of the appellants in denial. Their mere assertion that " save and except what was stated in their affidavit nothing else was admitted " would not be enough to controvert this assertion of B. K. Sen. Even if it be assumed that these two persons were examined by the appellants what is stated in paragraph 10 of B. K. Sen 's affidavit in the High Court is that Bimala Kanta Roy Choudhury had mentioned names of the prosecution witnesses and had alleged that either the witnesses themselves or their near 471 relations had received appointments in the Corporation of Calcutta. He had also alleged that Tarak Nath Dey was the agent of the wife of Bimala Kanta Roy Choudhury and Tadbirkar of B. K. Sen. Tarak Nath Dey when examined denied this. He was certainly an employee of the Corporation. Paragraph 10 further stated that the only purpose for which Bimala Kanta Roy Choudhury was examined was to prove the truth of the allegations made by him that B. K. Sen had abused his official position and had created a situation which had made it impossible for Bimala Kanta Roy Choudhury to produce relevant witnesses in proof of his case. Concerning the examination of Tarak Nath Dey, in paragraph 11,B. K. Sen stated that the idea behind the examination of this individual was to prove B. K. Sen 's connection and association with the wife of B. K. Roy Choudhury, and to show that he had appointed Tarak Nath Dey due to services rendered in connection with the case under section 497, Indian Penal Code, against him. It is clear, however, from the questionnaire III (a), (b) and (c) that the appellants in framing the same did not assert that B. K. Sen 's conduct in making the appointments mentioned therein was with a view to suborning prosecution evidence in the case under section 497, Indian Penal Code, against him or to make it impossible for Bimala Kanta Roy Choudhury to produce relevant witnesses in proof of his case. The combined effect of the letter written by the appellants to B. K. Sen in sending the questionnaire and the manner in which the questionnaire III (a), (b) and (c) were framed would indicate that the appellants did not accept all the allegations made by Bimala Kanta Roy Choudhury or Bhattacharjee. The record does not establish that at any time the appellants had made comments on the case under section 497, Indian Penal Code, pending against B. K. Son or in respect of any matter pending in connection with that case in the Calcutta High Court. It was, however, said that in taking the papers filed by Bhattacharjee and thereupon examining Bimala Kanta Roy Choudhury and Tarak Nath Dey the 472 appellants had embarked upon a parallel enquiry on matters which were pending investigation in a court of law. The Special Committee consisting of the appellants was constituted by the Corporation to conduct an enquiry into the conduct of the servants of the Corporation in matters relating to affairs of the Corporation. The Special Committee was enquiring into not only the conduct of the Commissioner of the Corporation (B. K. Sen) but also into the conduct of other servants of the Corporation. The questionnaire sent to B. K. Sen refers to his conduct in relation to matters in questionnaires 1 and 11. These were matters which had no connection whatsoever with the case under section 497, Indian Penal Code, against B. K Sen. Regarding questionnaire III (a), (b), and (c) the principal matter which the Special Committee were to enquire into was whether (1) B. K. Sen had made the appointments in question and (2) those appointments were of persons who were either related to the prosecution witnesses in the section 497 case or were helping B. K. Sen in conducting his defence in that case. The questionnaire nowhere suggested that B. K. Sen had made these appointments in order to suborn prosecution witnesses in that case or that he had made the appointments with a view to preventing Bimala Kanta Roy Choudhury from producing witnesses to prove his case against B. K. Sen. Appointment of persons who were relations of witnesses for the prosecution in the section 497 case or of those who were helping B. K. Sen in his defence in that case would certainly be a relevant matter in ultimately deciding whether B. K. Sen had taken advantage of his position as Commissioner of the Calcutta Corporation in making undeserving appointments. On the other hand, even if it were established that the appointments were made of relations of prosecution witnesses and of those who were helping him in his defence, the Special Committee may have, at the conclusion of their enquiry, found that the appointments in question were, in fact, of suitable and qualified persons and that B. K. Sen had not in making the appointments abused his position as a servant of the, Corporation, 473 The circumstances do not establish that the Special Committee had constituted itself as a court of parallel enquiry to look into matters in issue in the section 497 case against B. K. Sen or which were in issue in the pending proceedings in the High Court. What exactly is meant by a court of parallel enquiry is not clear. No doubt it would be mischievous for a newspaper to systematically conduct an independent investigation into a crime for which a man has been arrested and to publish the results of that investigation. This is because trial by newspapers, when a trial by one of the regular tribunals of the country is going on, must be prevented. The basis for this view is that such action on the part of a newspaper tends to interfere with the course of justice whether the investigation tends to prejudice the accused or the prosecution. There is no comparison between a trial by a newspaper and what has happened in this case. The Special Committee had embarked upon an enquiry on the directions of the Corporation in order to discover malpractice on the part of the Corporation 's servants. Malpractices on the part of a servant of the Corporation would presumably include making unworthy appointments. The ascertainment of the motive for the appointments would be merely incidental to the main purpose of the enquiry. It would be difficult to conclude therefrom that the Special Committee were holding a parallel enquiry on matters pending decision by a court of law and that thereby their action tended to interfere with the course of justice. It was not asserted in the affidavit of B. K. Sen that the Special Committee had knowledge that one of the questions to be decided in the proceedings before the High Court was whether B. K. Son had suborned the prosecution witnesses in the case under section 497 against him. There is no finding of the High Court in this respect either. If the conduct of a particular party amounts to contempt of court usually lack of knowledge of pending proceedings may not be available to him by way of defence. We have looked into the record of this case and have no hesitation in saying that the appellants at no 60 474 time intended to interfere with the course of justice ' and their conduct did not tend to interfere with the course of justice. The appellants had been careful in making no comments on any proceedings pending in a court of law or the issues arising out of them. In these circumstances,, we are of the opinion that the offence of contempt of court by the appellants has not been established. The appeal is accordingly allowed and the conviction of the appellants for contempt of court is set aside. The fines, if paid, must be refunded. SUBBA RAO, J. I have had the advantage of perusing the judgment prepared by my learned brother, Imam, J. I regret my inability to agree with him. In my view, this is one of the typical cases wherein a group of enlightened men constituting a committee did a purposive act which had a clear tendency to obstruct or interfere with the due process of justice. On the facts, the following questions fall to be considered: (1) What was the nature of the criminal proceedings pending in the Court of the Sub Divisional Magistrate, Alipore, and in the High Court at Calcutta and what were the questions that were to be decided therein? (2) What was the nature of the inquiry initiated by the appellants and what was the subjectmatter of the said inquiry? (3) Whether the acts attributed to the appellants constituted contempt of court. (4) If the appellants were guilty of contempt of court, was this an appropriate case for taking contempt proceedings against them ? (5) Whether the punishment imposed on the appellants was excessive. The learned Judges of the High Court were in a position to ascertain the scope of the criminal proceedings taken against the appellants,. for they had before them the entire record pertaining to the criminal revision case. The judgment of the High Court discloses that the learned Judges had freely drawn from the said record the facts necessary to elucidate the question raised before them; but, unfortunately,, none of the parties thought fit to get the relevant portions of the criminal proceedings printed and placed before, us, 475 I would, therefore, proceed on the basis of the allegations made by the respondents in their petition filed before the High Court in so far as they were not specifically controverted by the appellants and on the facts given by the learned Judges in their judgment. On March 19, 1955, one Bimala Kanta Roy Choudhury filed a complaint before the Sub Divisional Magistrate, Alipore, alleging that the first respondent, B. K. Sen, the then Commissioner of the Corporation of Calcutta, committed acts of adultery with his wife, Tripti Roy Choudhury and thereby committed an offence under section 497 of the Indian Penal Code. After protracted trial and on an examination of many witnesses, the Sub Divisional Magistrate, by his order dated July 13, 1957, discharged the first respondent under section 253 (1) of the Code of Criminal Procedure. Before the Sub Divisional Magistrate, it was contended that the case of the complainant was true but he was prevented from proving it by reason of the respondent 's interference with the prosecution witnesses. The Sub Divisional Magistrate in discharging the respondent also found that some prosecution witnesses were won over by the said respondent. Against the said order of discharge, Bimala Kanta Roy Choudhury filed a revision petition in the Court of the Sessions Judge, 24 Parganas, under section 436 of the Code of Criminal Procedure. The learned Sessions Judge accepted the contention of Bimala Kanta Roy Choudhury that by the influence of respondent No. 1 many prosecution witnesses were withheld from the court, and by an order dated November 22, 1957, he set aside the order of the Sub Divisional Magistrate and directed further enquiry by Sri C. L. Choudhury, a Magistrate with 1st Class powers at Alipore. On January 3, 1958, the said Magistrate passed an order enlarging the scope of the further enquiry and directed examination of new witnesses; in the result the prosecution was allowed to tender further evidence and the entire case was reopened and it was, awaiting the decision of that court. On February 3,1958, respondent No. 1 filed a criminal revision, being Criminal Revision Case No. 149 of 1959, 476 in the High Court at Calcutta against the order of the Magistrate dated January 3,1958, directing the examination of new witnesses. A division bench of the High Court issued a rule and stayed further proceedings in the Magistrate 's court. It would be seen that one of the questions that fell to be decided by the High Court was whether there was any truth in the allegation that the respondent suborned the prosecution witnesses, with the result that some important witnesses did not attend the court and others perjured themselves to support the respondent. If the criminal revision was dismissed and the trial before the Magistrate proceeded, a similar question would arise before the Magistrate, namely, whether the prosecution witnesses were kept back from the witness box because they were tampered with by respondent No. 1 and whether the prosecution witnesses examined, or some of them, had been influenced by the respondent. This question would have an important bearing not only on the disposal of the criminal revision petition but also on the appreciation of the evidence before the Magistrate. It may be recalled that on February 3, 1958, a division bench of the High Court issued a rule and stayed further proceedings in the Magistrate 's court. On January 16, 1958, at a special meeting of the Corporation of Calcutta the Mayor suggested the formation of a committee for discussion of necessary and appropriate steps to be taken with a view to eradicate alleged malpractices prevailing in different departments of the Corporation. The Mayor suggested that the Commissioner of the Corporation should place his suggestions on the subject before the Committee. Satyananda Bhattacharjee, one of the councillors, made certain allegations against the Commissioner. The meeting passed two resolutions, one of which authorized the Mayor to constitute a Special Committee. On February 14, 1958, another meeting of the Corporation was held. In that meeting Satyananda Bhattacharjee reiterated his allegations against the Commissioner and particularly referred to the criminal case pending in. the High Court. The respondent protested against 477 reference to matters which constituted the subjectmatter of a pending case in court. After some debate the Corporation passed the following resolution appointing a Special Committee consisting of appellants 1, 2 and 3: Resolved:That a Special Committee consisting of Councillors Sri section K. Gupta, Sri. R. N. Majumdar and Sri S.K. Roy be set up to enquire into the allegations levelled against certain officials of the Corporation who are alleged to have been taking advantage of their high offices in carrying on business in their own names. The Committee will take up only those matters that relate to the Corporation. " It will be seen from the resolution that the said Committee was only authorized to enquire against officials of the Corporation who were carrying on business in their own names. It was further elucidated that the Committee would take up only those matters that related to the Corporation. Neither expressly nor by necessary implication this resolution authorized the Committee to make an inquiry against the Commissioner of the Corporation in regard to any appointments made by him in the Corporation with a view to.suborn witnesses in the aforesaid criminal case. Indeed, the last sentence of the resolution expressly prohibited the Committee from embarking upon any such inquiry in regard to matters that did not relate to the Corporation. On March 29, 1958, a motion was tabled in the meeting of the Corporation for the removal of the Commissioner from his office under section 19(3) of the Calcutta Municipal Act, 1951. Out of the 86 councillors only 38 supported the motion and, as the requisite number of votes was not obtained, the motion was dropped. It appears that Satyananda Bhattacharjee intended to hand over to the Special Committee certain papers relevant to the allegations made against the Commissioner, but in view of the limited terms of the reference they could not be received by the Committee. There. after, on March 26, 1958, Satyananda Bhattacharjee made a complaint of the same in his speech in the meeting of the Corporation and the Mayor took over the 478 papers from him and promised to send them to the Special Committee and he accordingly handed them over to the Special Committee. Two of the documents handed over by the Mayor to the Special Committee were annexed to the affidavit filed by each of the appellants and marked "C". The first document contained various charges made by the said Satyananda Bhattacharjee against the respondent, and the second document purported to be a copy of the petition filed by Bimala Kanta Roy Choudhury in the Court of the Sub Divisional Magistrate, Alipore, on May 31, 1955. In the first document Satyananda Bhattacharjee gave, inter alia, the names of various prosecution witnesses and the names of persons related to them to whom the Commissioner had given appointments. He had also given the name of another prosecution witness and alleged that the Commissioner procured an appointment for him in the Central Bank Ltd., Calcutta, through the good offices of another officer of the Bank by promising the latter to drop a case in respect of his premises. This document, therefore, contained in unambiguous terms specific allegations against the first respondent in the matter of suborning the prosecution witnesses in the criminal proceeding pending in the Magistrate 's court and in the High Court. In the second document also specific allegations were made that the respondent was attempting to influence the Witnesses through the Corporation employees. On the basis of the allegations made by Satyananda Bhattacharjee and Bimala Kanta Roy Choudhury, an inquiry was started by the Committee against the first respondent in respect of charges, among others, pertaining to criminal proceedings pending against him in the court. It was disclosed in the affidavit filed in rejoinder by the respondent that the Special Committee held its deliberations in the lady councillors ' room and that from March 25, 1958, on a black board bung up outside that room it was written in chalk "Allegations Special Committee"; that the first sitting of the Special Committee was held _on March 251, 1958; that a Secretary and a steno grapher attended the meeting; that the notes of the 479 proceedings taken by the stenographer were typed and that Satyananda Bhattacharjee, Bimala Kanta Roy Choudhury and other Councillors attended the meetings: (see the affidavit in rejoinder filed by the first respondent in the High Court). On April 11, 1958, Bimala Kanta Roy Choudhury was examined. It was stated in the affidavit filed by the first respondent in the High Court that the said person admitted before the Committee that he had filed a complaint against the first respondent under section 497 of the Indian Penal Code and that was pending in the High Court and that he also gave the names of the witnesses whom he had cited in proof of his case and that either the witnesses themselves or their near relations got appointments in the Corporation of Calcutta. He also mentioned that one Tarak Nath Dey was the agent of the wife of Bimala Kanta Roy Choudhury and Tadbirkar of the respondent. The Committee thereafter examined Tarak Nath Dey and Bimala Kanta Roy Choudhury identified him as the person referred to by him in his statement. Tarak Nath Dey in his examination denied the said allegations made against him. Presumably on the basis of the allegations made by Satyananda Bhattacharjee and the evidence given before the Com. mittee by Bimala Kanta, Roy Choudhury, the Committee issued the following notice dated April 15,1958, to the first respondent: " As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and a few; other matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall be glad if you kindly give us some time between 10 a.m. and 11 a m. tomorrow (the 16th instant) so that we can get the facts from you. " The synopsis of the cases served upon the first respondent consisted of three questions. We are concerned only with the third question in this case and it reads: " III (a). It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the, 480 time when the case under section 497, I. P. C., was being tried, you gave appointments to the following persons: 1. Anil Koyal. Jogendra Nath Mondal. Ahi Kanta Choudhury. Govinda Banerjee. Narendra Nath Naskar. (b) It is alleged that about the time you gave appointments to Tarak Nath Dey, Haradhan Dey, Pradip Bhaduri, Ardhangsu Mondal etc., and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case. (c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghosh against whom a demolition case was pending. " Thereafter, on April 16, 1958, the respondent filed a petition in the High Court at Calcutta for contempt of court and the High Court by an order of the same date issued notice to show cause why the rule prayed for should not be issued. The following crucial facts emerge from the fore. going narration that led to the filing of the contempt petition: The resolution appointing the Special Committee did not authorize it either expressly or by necessary implication to make an inquiry in respect of the activities of the Commissioner in connection with the criminal case pending in the Magistrate 's Court as well as in the High Court. The members of the Committee were the councillors of the Corporation, and one of them, namely, Saibal Kumar Gupta, belonged to the Indian Civil Service, another, it was represented, was a practising barrister and the third was also an educated person. Being members of the Corporation, they must have known what all happened at the meeting of the Corporation and particularly the objections raised by the respondent and others that no inquiry should be made in respect of matters that were sub judice in courts, They must 481 have also known that in view of the said objections the resolution was precisely drawn to avoid any encroachment on the matters that were sub judice. No further resolution was passed by the Corporation enlarging the scope of the enquiry. Section 91 of the Calcutta Municipal Act, 1951, does not authorize the Mayor to enlarge its scope. The members of the Committee who must be deemed to have had knowledge of the scope of its powers obviously initiated the inquiry which was beyond the scope of the resolution. With the knowledge that criminal proceedings were pending, they examined witnesses, served questionnaire on the respondent, invited or at any rate permitted, apart from the staff which was assisting the committee in the discharge of its duties, councillors and others to attend the meeting. The inquiry could not in any sense of the term be called confidential and was conducted in a manner that it would be known to everybody who was interested in it. The inquiry against the Commissioner of the Corporation in the Corporation building in respect of a, criminal case for the offence of adultery alleged to have been committed by him must have been a sensational news item; at any rate, it must have attracted the attention of the vast staff of the Corporation and its innumerable visitors. With this background I shall briefly consider the law of contempt relevant to the facts of this case. The Contempt of Courts Act, 1926, has not defined the phrase " contempt of court ". The judgment of Lord Hardwicke, L. C., in Re Read & Huggonson (1), which has always been regarded as the locus classics on the subject, declared " Nothing is more incumbent upon courts of justice, than to preserve their proceedings from being misrepresented : nor is there anything of more pernicious consequence, than to prejudice the minds of the public against persons concerned as parties in causes before the cause is finally heard." The learned Lord Chancellor characterized contempt as of three kinds, namely, scandalizing the court, abusing par ties in, court, prejudicing mankind against (1) ; 61 482 parties and the court before the cause is heard. Adverting to the third category, which is germane to the present case, the Lord Chancellor proceeded to state at p. 471 thus: " There may also be a contempt of this court, in prejudicing mankind against persons before the cause is heard. There cannot be anything of greater consequence, than to keep the streams of justice clear and pure, that parties may proceed with safety both to themselves and their characters. " But to constitute contempt of court, in the words of Lord Russel, C. J., " the applicant must show that something has been published which either is clearly intended, or at least is calculated, to prejudice a trial which is pending " (See The Queen vs Payne (1)). In The Queen vs Gray (2), the phrase " contempt of court " is defined as, inter alia, " something done calculated to obstruct or interfere with the due course of justice or the lawful process of the courts. " Lord Goddard, C.J., in R. vs Odham 's Press Ltd. (3), after considering the relevant authority on the subject, laid down the following test to ascertain whether there is contempt of court in a given case, at p. 497: " The test is whether the matter complained of is calculated to interfere with the course of justice Words much to the same effect were used by Parker, C.J., in a recent decision in R. vs Duffy & Others (4) when he stated at p. 894 that: ". . . the question in every case is whether. the article was intended or calculated to prejudice the fair hearing of the proceedings. " In Halsbury 's Laws of England, 3rd edition, Vol. 8, it is stated at p. 8, " It is sufficient if it is clear that the comment tends to prejudice the trial of the action. " Adverting to the third category of contempt described by Lord Hardwicke, L. C., the learned author says at p. 8 thus: " The effect of such misrepresentations may be not only to deter persons from coming forward to (1) , 580. (2) (3) (4) 483 give evidence on one side, but to induce witnesses to give evidence on the other side alone, to prejudice the minds of jurors, or to cause the parties to discontinue or compromise, or to deter other persons with good causes of action from coming to the court. " The said view has been accepted and followed also in India: see State vs Biswanath Mohapatra (1) and Ganesh Shankar Vidyarthi 's case (2). Learned counsel contends that every such act is not contempt of court, but it is a condition of the exercise of the jurisdiction to commit a person for contempt that it must seriously prejudice the course of justice. It is not necessary to go into the question whether, even though an act constitutes a contempt of court, the seriousness of the offence is a condition of the exercise of the jurisdiction or is only an element that a judge has to take into consideration in exercising his discretion whether to take action for contempt of court or not, for in this case, on the facts, I am satisfied that the act of the appellants had a clear tendency to prejudice the fair hearing of the criminal proceedings pending against the first respondent. In a criminal case, it is more strictly the duty of a court to prevent any interference with the course of justice than in civil cases. On the said authorities it is settled law that a person will be guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice. How can it be said that the inquiry initiated by the Committee to ascertain whether the witnesses cited or examined for the prosecution in the pending criminal case were suborned by the Commissioner by devious methods alleged to have been adopted by him could not have any serious repercussions on the proceedings pending in the Magistrate 's court as well as in the High Court? Assume for a moment that the High Court dismissed the revision and, as a result, the Magistrate took over the criminal case before him for trial, and the prosecution examined its witnesses with the knowledge that (1) I.L.R. [1955] Cuttack 305. (2) A.I.R. 1929 All. 484 an inquiry would be held by a responsible committee in respect of conduct or credibility of witnesses to be examined in the criminal case. Would it be possible to predicate that the witnesses could be in a position to depose truthfully in the witness box? A truthful witness, who would otherwise speak in favour of the accused, might be tempted to lie in the witness box either to avoid an ignominy that he perjured in the witness box as a relative of his was appointed in the Corporation or to protect the interests of his relation, though as a matter of fact the said relation had been appointed on his own merit& So too, an untruthful witness may perjure himself in the witness box with a view to harm the Commissioner in the inquiry before the Committee. Some honest witnesses might be afraid to come into the witness box, for in the inquiry made by the Committee they might be attributed motives. Though a strong willed Magistrate might exclude from his mind the fact that a high power committee is making an inquiry in respect of the witnesses that are being examined before him, the factum of the inquiry might unconsciously operate on a weaker mind. The inquiry would, therefore, have an obvious tendency to obstruct the even course of justice. Assume again that the High Court had not stayed the proceedings before the Committee and the Committee completed the proceedings and exonerated the Commissioner by holding that the witnesses were not suborned by him, even that finding would have an effect on witnesses and the Magistrate, for with the background of such a finding untruthful witnesses would depose to a false case with greater confidence than otherwise they would. This finding might also affect the result of the case. Assume once again that the Committee completed its inquiry but held that the witnesses were suborned; the effect of such finding would certainly have a far reaching impact on the credibility of witnesses and also would deflect the witnesses from ,speaking the truth. From whatever angle it is looked at, the tendency to prejudice the course of justice is apparent. Now taking the High Court, it may be said that, a Judge of a High Court can be relied upon not 485 to be influenced by what the Committee might or might not say. But that would not prevent the public and the affected parties from reasonably apprehending that the inquiry initiated by a high power committee or the findings given therein would affect the fair hearing of the revision petition. From the aforesaid facts it is manifest that the contempt in the instant case is not merely a technical but a serious one which is calculated to interfere with or obstruct the due course of justice. In my view, therefore, this was preeminently a fit case for the court to take action. The last question is whether the learned Judges were right in imposing a fine on the appellants. The judgment of the High Court shows that the learned Judges were very considerate to the appellants. They bad given them every opportunity to apologize for their conduct. 'The following passage appears in the judgment : "It may be observed at this stage that during, arguments each of the respondents was asked if be wished to apologize for any contempt that might be found against him. Each of the respondents expressed his inability to apologize. At the conclusion of the arguments we made known to the respondents that in our view they were guilty of contempt and asked if they or any of them desired to tender any apology to Court. Respondent No. 4, Bimala Kanta Roy Choudhury, tendered an apology to the Court, but the other respondents refused to do so. " In the circumstances the learned Judges, in my view, rightly convicted each of the appellants for contempt of court and sentenced each of them to pay a fine of Rs. 500/ . In the result, the appeal fails and is dismissed. BY THE COURT: In accordance with the opinion of the majority the appeal is allowed and the conviction of the appellants for contempt of Court is set aside. The fine, if paid, must be refunded. Appeal allowed.

The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure. The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence. The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings. While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation. " Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner. It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a). It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case. (b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc. and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case. (c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending. " Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court. The High Court found the appellants guilty and convicted them for contempt of Court. Hence this appeal. Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed. It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court. There can be no comparison between the present case and a trial conducted by a newspaper. The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice. The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so. They had taken care not to comment on any proceedings pending in I court or the issues arising out of them. Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation. With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire. They permitted councillors and others to attend the enquiry which was in no sense confidential. It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice. Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to. It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court. Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice. Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter. The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.

The appellant, a partnership firm, was assessed by the Sales Tax Officer, who estimated the turnover for the Calendar year 1971, and for the first six months of the year 1972 and made two orders of assessment dated 26 March 1973 under section 33 of the Bombay Sales Tax Act, 1959 levying Sales Tax and penalty. Against the assessment and penalty orders for the two periods, the appellant appealed under clause (a) of sub section (1) of section 55 of the Act to the Assistant Commissioner. By a common order dated 29th September, 1973 the Assistant Commissioner reduced the quantum of the turnover and, consequently, the tax liability for each of the periods. Not fully satisfied by the relief granted, the appellant proceeded in second appeal to the Sales Tax Tribunal on 8th December, 1973. During the pendency of the appeals before the Tribunal, the Deputy Commissioner, issued two notices to the appellant on 24th April, 1974 requiring it to show cause why the appellate orders dated 29th September, 1973 passed by the Assistant Commissioner should not be revised under section 57 of the Act. The appellant objected to the exercise of revisional power by the Deputy Commissioner during the pendency of the appeals before the Tribunal. On 12th September 1975 the Deputy Commissioner rejected the objection. Against the order of rejection the appellant filed two appeals before the Tribunal, and by its order dated 27th October, 1977 the Tribunal dismissed the appeals. The Tribunal took the view that its deciding those appeals would result in nullifying the revisional power vested in the Deputy Commissioner. The two second appeals filed by the appellant against the appellate orders dated 19th September, 1973 passed by the Assistant Commissioner were adjourned. The appellant filed a writ petition in the High Court against the order of the Deputy Commissioner dated 12th September, 1975 rejecting its preliminary objection and also against the order passed by the Tribunal on 27th October, 1977 dismissing his appeals as well as the notices issued by the Deputy Commissioner on 24th April, 1974 in the purported exercise of his revisional power, contending that the Commissioner of Sales Tax could not exercise his revisional power against the appellate order of the Assistant Commissioner when a second appeal against that order was pending before the Tribunal. 98 The High Court rejected the appellant 's contention observing that as the statute did not provide any other forum or jurisdiction for protecting the interests of the Revenue, it was always open to the Commissioner to interfere in revision with an order prejudicial to the Revenue notwithstanding that such order may be already under appeal before the Tribunal. Allowing the appeal to this Court, ^ HELD: 1. It is not open to the Commissioner to invoke his power under clause (a) of sub section (1) of section 57 and summon the record of an order over which the Tribunal has already assumed appellate jurisdiction. The subordinate status of the Commissioner precludes that. [102 G] 2. An assessment order under the Bombay Sales Tax Act is appealable under section 55 of the Act. When the order is made by the Sales Tax Officer an appeal goes to the Assistant Commissioner. If the order is made by the Assistant Commissioner an appeal goes to the Commissioner and if it has been made by the Commissioner or Deputy Commissioner or Additional Commissioner an appeal lies before the Tribunal. Sub section (2) of section 55 provides for a second appeal against the appellate order of the Assistant Commissioner. The second appeal lies at the option of the appellant to the Commissioner or the Tribunal. The Tribunal exercises appellate jurisdiction by way of second appeal in respect of an assessment order made by the Sales Tax Officer. It also exercises by way of first appeal, appellate jurisdiction over an assessment order made by the Commissioner. It is at the apex of the appellate hierarchy, the Sales Tax Officer, the Assistant Commissioner and the Commissioner all of them being, subordinate to it. [101 C E] 3. While the Commissioner exercises revisional jurisdiction over an order passed by any officer or person subordinate to him, the Tribunal is the revisional authority over an order of the Commissioner. The Act constitutes the Tribunal an appellate as well as a revisional authority over the Commissioner. In quasi judicial matters the Commissioner is therefore subordinate to the Tribunal. [102 D] 4. The Tribunal is the supreme appellate and revisional authority under the statute. It cannot be divested of its jurisdiction to decide on the correctness of an order, it cannot be frustrated in the exercise of that jurisdiction, merely, because a subordinate authority, the Commissioner, has also been vested with jurisdiction over that order. Unless the statute plainly provides to the contrary that appears to be incontrovertible. [102 F] 5. The High Court was in error in concluding that the power to enhance an assessment can be discovered only in the revisional jurisdiction of the Commissioner and nowhere else. [104 H 105 A] 6. In a second appeal under sub section (2) of section 55 of the Bombay Sales Tax Act, the Tribunal has power to enhance the assessment. That being so, it is open to the Revenue to invoke that power in a pending second appeal filed by the dealer before the Tribunal. [104 G] 7. The Commissioner being a subordinate authority to the Tribunal cannot interfere with an order pending in appeal before the Tribunal, especially when 99 the interest of the Revenue is protected by the power of enhancement vested in the Tribunal while disposing of a second appeal filed by a dealer. [105 G] Commissioner of Sales Tax vs Motor and Machinery Manufacturers Ltd., (1976) 38 STC 78 over ruled. Commissioner of Income Tax vs Amritlal Bhogilal distinguished. Ramlal Onkarmal vs Commissioner of Income Tax, Assam , Kelpunj Enterprises vs Commissioner of Income Tax Kerala. , Russell Properties (P.) Ltd. vs A. Chowdhury, inapplicable.

Based on the audit report dated January 5, 1973 revealing an embezzlement having been committed by the Respondent on 22.8.1972, a challan was presented against him on the 13th October, 1976 under Sec. 406 Penal Code for misappropriating the amounts deposited with him as a Cashier of the Tanda Badha Co operative Society, district Patiala. The Trial Court convicted the respondent under section 406 Penal Code and sentenced him to rigorous imprisonment for one year and to pay a fine of Rupees one thousand. The respondents ' appeal to the High Court was allowed accepting the plea of bar of limitation under section 468 of the Criminal Procedure Code. Hence the State appeal after obtaining special leave of the Court. Dismissing the appeal, the Court, ^ HELD: (1) Taking any of these dates, namely, 22nd August 1972, (Commission of embezzlement), and 5th January 1973 (date of detection of embezzlement) the prosecution was barred by limitation under sections 468(2) (a) and 469(b) of the Code of Criminal Procedure. Therefore, the conviction and the sentence of the respondent as also the entire proceedings culminating in his conviction became non est. G] (ii) The object of the Criminal Procedure Code in putting a bar of limitation on prosecution was clearly to prevent the parties from filing cases after a long time, as a result of which material evidence may disappear and also to prevent abuse of the process of the court by filing vexatious and belated prosecutions long after the date of the offence. The object which the statute seeks to subserve is clearly in consonance with the concept of fairness of trial as enshrined in article 21 of the Constitution of India. It is, therefore, of the utmost importance that any prosecution, whether by the State or a private party must abide by the letter of law or take the risk of the prosecution failing on the ground of limitation. [351 E F] 350

The appellant was convicted under Section 5(2) of the Prevention of Corruption Act and was sentenced to two years rigorous imprisonment and a fine of Rs. 200. He filed an appeal under Section 374 of the Criminal Procedure Code before the Allahabad High Court which was dismissed for default of the appearance of the appellant and his counsel. An application for restoration of the appeal made thereafter was also dismissed. In appeal to this Court it was contended on behalf of the appellant that the appeal could not have been dismissed for default on the ground of absence of the appellant or his counsel to appear and press the appeal. Allowing the appeal and setting aside the orders of the High Court, this Court, HELD: 1. The High Court was not right in dismissing the appeal on the ground of non appearance of the appellant or his counsel and it should have allowed the prayer of restoration of the criminal appeal under its inherent power. [310 C] 2. Under Section 384 of the Criminal Procedure Code it is the duty of the appellant court to examine the petition of appeal and the judgment under challenge and to consider the merits of the case before dismissing the appeal summarily. The said duty is not dependent on the appellant or his counsel appearing before the Court to press the appeal. As soon as a petition of appeal is presented under Section 382 or 383 it becomes the duty of the appellate court to consider the same on merits, even in the absence of the appellant and his counsel before dismissing the same summarily. Therefore, the High Court should have either examined the appellant 's petition of appeal and the judgment under challenge, itself or appointed a counsel to assist the Court, but could not have proceeded to dismiss the same on the ground that the advocate for the appellant was not present.[308 H; 309 A, C] 3. The position of a criminal appeal is not be same as that of a civil appeal. A comparison of the provisions of Section 384 of Criminal Procedure Code with those of Order 41, Rules 11 and 17 of the Civil Procedure Code clearly brings out the difference. Rule 17, Order 41 of Civil Procedure Code in express terms provides that an appeal may be dismissed on the ground of absence of the appellant when the appeal is called out, and Rule 19 provides for its restoration on the appellant offering sufficient cause for his non appearance. However, in the case of a criminal appeal the corresponding provisions are not to be found in the Code of Criminal Procedure. On the other hand the Code in express terms requires the matter to be considered on merits. Thus a criminal appeal cannot be dismissed for non prosecution. [309 D, E] Ram Naresh Yadav & Ors vs State of Bihar, A.I.R. 1987 S.C. 1500, dissented form. Shyam Deo Pandey & Ors. vs state of Bihar, [1971 Suppl. S.C.R. 133, relied on. Emperor vs Balumal Hotchand and Ors., and Ramesh Nanu vs State of Gujarat, 17 Gujarat Law Reporter 350, referred to.

The respondent was prosecuted for an offence under section 8 of the Suppression of Immoral Traffic in Women and Girls Act, 1956, and a charge sheet was presented before a First Class Magistrate in Delhi by a sub inspector, who, as the officer in charge of the Police Station, had investigated the case. On an objection raised by the respondent, the Magistrate quashed the charge sheet on the ground that only the special police officer appointed under the Act was competent to investigate the offences under the Act. Held, (Mudholkar, J., dissenting), that since the Suppression of Immoral Traffic in Women and Girls Act, 1956, created new offences and prescribed the procedure for dealing with them, it was a complete code in itself and to that extent the provisions of the Act must prevail over those of the Code of Criminal Procedure, 1898; that as the Act provided for the appointment of a special police officer for dealing with offences under the Act in the area within his jurisdiction, he and his assistant police officers were the only persons who could investigate offences under the Act committed within that area, and that police officers not specially appointed as special police officers could not 695 investigate the offences under the Act even though they were cognizable offences. per Mudholkar, J. A special police officer appointed under the Suppression of Immoral Traffic in Women and Girls Act, 1956, and empowered to deal with offences under the Act under section 13(1) derives the power to investigate into such offences not from that section but only under section 551. of the Code of Criminal Procedure. Even assuming that the words "deal with offences". in section 13(1) confer upon a special police officer the power to investigate into an offence under the Act and present a charge sheet, the powers of an officer in charge of a station house within whose jurisdiction an offence under the Act has been committed are not excluded by any of the provisions of the Act.

In a writ petition filed under article 226 of the Constitu tion impugning his dismissal from service, the respondent contended that since he had not been given a reasonable opportunity of meeting the allegations against him, his dismissal was void. writ petition was dismissed. Thereupon, the respondent flied a suit in a civil court challenging his dismissal on the ground, among others, that since he had been appointed by the Inspector General of Po lice, his dismissal by the Deputy Inspector General of Police was wrong. The State took the plea that the suit was barred by res judicata. Dismissing the suit, the trial court held that it was not barred by res judicata. The first appellate court dismissed the respondent 's appeal. Purporting to follow a line of decisions of this Court, the High Court held that only that issue between the parties would be res judicata which was raised in the earlier writ petition and was decided by the High Court after contest and since in this case the respondent did not raise in the earlier writ petition the plea of competence of the Deputy Inspector General of Police to dismiss him. the parties were never at issue on it and that the High Court never consid ered and decided this issue in the writ petition. On the question of invoking the principle of constructive res judicata by a party to the subsequent suit on the ground that the matter might or ought to have been raised in the earlier proceedings, the High Court held that this question was left open by the Supreme Court in Gulabchand Chhotalal Parikh vs State of Bombay ; , and allowed the respondent 's appeal. Allowing the States appeal to this Court. HELD: The High Court was wrong in its view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in Devi Lal Modi vs Sales Tax Officer Ratlam and Others ; it was not necessary to reiterate it in Gulabchand 's case as it did not arise for consideration in that case. The clarificatory observation in Gulabchand 's case was misunderstood by the High Court in observing that the matter had been left open by this Court. The doctrine of res judicata is based on two theo ries: (i) the finality and conclusiveness of judicial deci sions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be pro tected from multiplication of litigation. [430 D] 2. (a) In certain cases, the same set of facts may give rise to two or more causes of action. In such cases res judicata is not confined to the issues which the Court is actually asked to decide but covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them. This rule has sometimes been referred to as constructive res judicata which is an aspect or amplification of the general principle. [431 A] (b) Section 11 of the Code of Civil Procedure, with its six explanations, covers almost the whole field, but the section has, in terms, no application to a petition for the issue of a high prerogative writ. [431 D] (c) Although in the Amalgamated Coalfields Ltd. and others vs Janapada Sabha, ; this Court held that constructive res judicata being a special and artifi cial form of res judicata should not generally be applied to writ petitions, in Devilat Modi 's this Court held that if the doctrine of constructive 429 res judicata was not applied to writ proceedings, it would be open to a party to take one proceeding after another and urge new grounds every time, which was plainly inconsistent with considerations of public policy. The principle of constructive res judicata was, therefore, held applicable to writ petitions as well. [433 G & 434 D] 3. The High Court missed the significance of these deci sions and relied upon L. Jankirama lyer and 'Others vs P.M. Nilakanta lyer and Others [1962] Supp. 1 S.C.R. 206 which had no bearing on the controversy. In Gulabchand 's case, this Court observed that it did not consider it necessary to examine whether the principle of constructive res judicata could be invoked by a party to the subsequent suit oft the ground that a matter which might or ought to have been raised in the earlier proceeding but was not so raised therein could be raised again relying on which the High COurt concluded that the question was left open by this Court. This in turn led the High Court to hold that the principle of resjudicata could not be made applicable to a writ petition. [435 E F] In the instant case, the respondent did not raise the plea that he could not be dismissed by the Deputy Inspector General of Police. This was an important plea which was within his knowledge and could well have been taken in the writ petition. Instead he raised the plea that he was not afforded a reasonable opportunity of meeting the case in the departmental inquiry. It was therefore not permissible for him to take in the subsequent suit the plea that he had been dismissed by an authority subordinate to that by which he was appointed. That was clearly barred by the principle of constructive res judicata and the High Court erred in taking a contrary view. [436 A B]

The Assistant Commissioner (Judicial) Sales Tax, Bareil ly, disposed of the respondents ' appeal made against an order of the Sales Tax Officer. A copy of the order was served on the respondent, but he lost it. Later, he ob tained another copy and filed a revision petition under sectiOn 10 of the U.P. Sales Tax Act. The same was opposed as being time barred, but the Judge (Revision) accepted the respondent 's contention that under section 12(2) of the , he was entitled to exclude the time spent in obtaining the second copy of the order, while computing the limitation period. The question whether such exclusion was permissible, was referred to the High Court which an swered in the affirmative. The appellant contended that the U.P. Sales Tax Act itself provided for a specific period of limitation; and therefore the was not applicable, and also that, a copy of the order was not required to be filed with the revision petition, and so the time spent in obtaining a second copy could not be excluded in computation of limita tion. Dismissing the appeal the Court, HELD: (1 ) Where the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revi sion petition, the time spent in obtaining that copy would necessarily have to be excluded under Section 12(2) of the . State of Uttar Pradesh vs Maharaj Narain & Ors. ; followed. [688 B C] (2) The provisions of Section 12(2) of the would apply even though the copy mentioned in that Sub section is not required to be filed alongwith the Memorandum of appeal. The same position should hold good in case of revision petitions ever since of 1963 came into force. 1686 B, D 687 FI J.N. Surty vs T.S. Chettyar (55 IA 161), The Punjab Co.operative Bank Ltd., Lahore vs The Official Liquidators, the Punjab Cotton Press Co. Ltd. Lahore Series 191, MT. Lalitkuari vs Mahaprasad N. Singh Panta Series 157, Additional Collector of Customs, Calcutta & Anr. vs M/s. Best & Co. (AIR S.A. Gaffoor vs Ayesha Beghum & Ors. (C.A. 2406/1969 decided on 18 8 1970 Unreported Judgment of Supreme Court, 1970 Vol. 2, page 784) followed. (3) For the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in Section 12(2), inter alia. shall apply in so far as, and to the extent to which they are not expressly excluded by such special or local law, and there is nothing in the U.P. Sales Tax Act expressly excluding the application of Section 12(2) of the . [685 H, 686 A]

On an application made by the appellant, the Calcutta High Court granted a certificate on May 18, 1956, enabling him to appeal to the Supreme Court against the judgment and decree of the High Court. Under 0. 45, r. 7(1)(a), of the Code of Civil Procedure, 1908, the appellant had to deposit the security amount for costs of the respondent within ninety days or such further period, not exceeding sixty days, as the court may upon cause shown allow, from the date of the decree complained of, or within six weeks from the date of the grant of the certificate, whichever was the later date. Being unable to deposit 644 the amount on the due date, the appellant filed an application on July 4, 1956, before the High Court praying that the amount tendered by him be accepted after condoning the delay, but the High Court rejected it on the ground that according to the uniform current of decisions of that Court it had no jurisdiction to extend the time for depositing the amount. Held, that reading 0. 45" r. 7, of the Code of Civil Procedure, 1908, along with the other relevant provisions Of the said Order, a High Court has jurisdiction to extend time for furnishing security under the rule, and that the decisions of the Calcutta High Court to the contrary are erroneous. Order XII, r. 3, of the Supreme Court Rules, 1950, expressly recognises and gives jurisdiction to the High Courts to extend the time for furnishing the security in a proper case. Raja Kumar Govind Narayan Singh and others vs Shamlal Singh and others, 1 and Akimuddin Chowdhury vs Fateh Chand Mahesri & others, , disap proved. Roy Jyotindranath Chowdhury & Ors. vs Rai Prasanna Kumar Banerjee Bahadur, (1906) 11 C.W.N. I 104, Harendra Lal Choudhry vs Sm. Hari Dasi Debei, , Nilkanth Balwant Natu & Ors. vs Shri Satchidanand Vidya Narsinha Bharati & Ors., Bom. 430, Bishnath Singh & Ors. vs Balwant Rao Naik Kalia & Ors., I.L.R. [1939] All 549, Ismail Piperdi vs Momin BiBi & Ors, , Lachmeshway Prasad Shukul vs Girdhari Lal Choudhuri, Pat. 123, Ghulam Rasul vs Ghulam Qutabud din, (1942) I.L.R.23 Lah.447, Gulam Hussain vs Mansurbeg & Ors., I.L.R. and Thota Pitchaiah Andhra 55, approved.

Appeal No. 205 of 1956. Appeal from the judgment and decree dated May 26, 1954, of the Calcutta High Court in Appeal from Original Decree No. 127 of 1950. 580 D. N. Mukherjee, for the appellants. N. C. Chatterjee and R. B. Biswas, for respondents Nos. 1(a) and 2. 1961. January 25. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and decree of the High Court of Judicature at Calcutta. The appellant was the defendant in the suit out of which this appeal has arisen and respondent No. 1 was the plaintiff, and the second respondent was a proforma defendant. The facts of this case are these: On February 4, 1941, the respondent sold the property in dispute to the appellant for a sum of Rs. 10,000. On February 10, 1941, there was an agreement for reconveyance within a period up to February 10, 1943, for a sum of Rs. 10,001. The relevant clause of this agreement was the third clause which was as follows : " Clause 3. The purchase shall be completed by the purchasers within two years, i.e., to say on or before the 10th day of February, 1943, time being the essence of the contract. If the purchasers shall on or before the 10th day of February, 1943, pay to the vendor a sum of Rs. 10,001 the vendor shall at the cost of the purchasers execute such conveyance as may be necessary for conveying and transferring its right, title and interest in the said property free from encumbrances, if any, created by it. " On November 26, 1942, the solicitor for respondent No. 1 wrote a letter to the appellant stating that that respondent was ready and willing to have the purchase completed as early as possible on payment of Rs. 10,001. Along with that letter a draft conveyance was sent for approval but all this was subject to the result of a search as to the encumbrances, if any, created by the appellant. On November 30, 1942, the solicitors for the appellant company wrote back saying that immediate arrangements should be made for giving inspection of the agreement of sale on which the respondents were relying as the appellant was unable to trace the copy of the said agreement from its record. 581 Again on December 11, 1942, the respondent 's solicitor sent a letter stating : " My client is very eager to complete the purchase and the full consideration money therefore is lying idle in his hands awaiting, the return of the relative draft conveyance as approved by you on your clients ' behalf. " To this the reply of the appellant 's solicitors dated December 18, 1942, was: " Our clients deny that there was any concluded or valid agreement for sale with your client or with any other person in respect of the above premises." On June 10, 1943, respondent No. 1 filed a suit for specific performance and in the alternative for redemption on the footing that the transaction was in reality a mortgage. The trial court dismissed the suit oil May 16, 1950, holding that the transaction on the basis of which the suit was brought was not a mortgage but was out and out sale with an agreement for repurchase and as the vendor had not paid the money " punctually according to the terms of the contract, the right to repurchase was lost and could not be specifically enforced ", and the court had no power 'to afford any relief against forfeiture of this breach. The plaintiff respondent took an appeal to the High Court and it was there held that the failure on the part of the respondents to actually tender the amount of the consideration does riot bar a suit for specific performance because after the repudiation of the contract by the appellant, the tender would have been a useless formality. The appeal was therefore allowed and the suit for specific performance decreed. It is against this judgment and decree that the appellant has come in appeal to this Court. The correspondence which has been proved in this case shows that when the respondent 's solicitor called upon the appellant to reconvey the property in dispute to the respondent and also sent a draft conveyance, the appellant denied that there was any concluded or valid agreement for sale in respect of the property in dispute. This was a complete repudiation of the contract to reconvey which the 582 appellant had agreed to by cl. 3 of the agreement which has been set out above. As the appellant had repudiated the contract and had thus failed to carry out his part of the contract it was open to the respondent to sue for its enforcement. But it was argued on behalf of the appellant that the respondent did not tender the price, i.e., Rs. 10,001 nor was he in a position to do so and in that view of the matter the respondent is not entitled to get a decree for specific performance. In cases of this kind no question of formal tender of the amount to be paid arises and the question to be decided is not whether any money was within the power of the respondent but whether the appellant definitely and unequivocally, refused to carry out his part of the contract and intimated that money will be refused if tendered. The principle laid down in Hunter vs Daniel (1) is applicable to cases of this kind. In that case Wigram, V. C., stated the position as follows: " The practice of the Courts is not to require a party to make a formal tender where from the facts stated in the Bill or from the evidence it appears the tender would have been a mere form and that the party to whom it was made would have refused to accept the money. " Lord Buckmaster in Chalikani Venkatarayanim vs Zamindar of Tuni (2) accepted this statement of the law and observed: " Their Lordships think that that is a true and accurate expression of the law, and the question therefore is whether the answer that was sent on behalf of the mortgagee amounted to a clear refusal to accept the money. " This principle applies to the facts of the present case also and the question is whether the answer sent on behalf of the appellant amounted to an unequivocal refusal to carry out its part of the contract which in our opinion it was. It was next contended that the offer made by a solicitor is not a proper offer in law and therefore when (1) ; ; (2) (1922) 50 I.A. 41, 47. 583 the solicitor for the respondent called upon the appellant to execute the documents they were not bound to do so. We are unable to accord our assent to this proposition. The case upon which the Counsel for the appellant relied, i.e., Ismail Bhai Rahim vs Adam Osman (1), in our opinion has no application to the facts and circumstances of this case. It was held in that case that the offer made by a promiser through a solicitor to pay a debt with interest thereon at the date of the offer does not of itself afford a reasonable opportunity to the promisee of ascertaining that the promisor is able and willing to perform his promise. Unless there is something peculiar in the circumstances of that case that case does not lay down good law. It is difficult to see why a tender made through a solicitor who is for that purpose an agent, is not a proper tender. In our opinion the High Court rightly held that the respondents were entitled to a decree for specific per formance and we therefore dismiss this appeal with costs. Appeal dismissed.

The appellant purchased the property in dispute from the respondent but soon thereafter there was an agreement for reconveyance of the property to the respondent within a period of two years for almost the same value for which it was 'sold. The relevant clause of this agreement was as follows: " Clause 3 The purchase shall be completed by the purchasers within two years, i.e., to say on or before the 10th day of February, 1943, time being the essence of the contract. If the purchasers shall on or before the 10th day of February, 1943, pay to the vendor a sum of Rs. 10,001 the vendor shall at the cost of the purchasers execute such conveyance as may be necessary for conveying and transferring its right, title and interest in the said property free from encumbrances, if any, created by it. " Before the expiry of the stipulated period the respondent entered into correspondence with the appellant asking for the completion of the agreed reconveyance and intimating that the purchase money was ready to be paid, but after some correspondence the appellant 's solicitors totally repudiated the agreement for reconveyance. The respondent did not then tender the price agreed to be paid and filed a suit for specific performance which was dismissed by the trial court on the ground that the respondent had not paid the money. The High Court decreed the suit. Held, that as the appellant had totally repudiated the con tract for reconveyance and had failed to perform his part of the contract it was open to the respondent to sue for its enforcement and the High Court was right in holding that the respondent was entitled to a decree for specific performance. In a case of total repudiation of the agreement for sale it was useless to make a formal tender of the purchase money. Hunter vs Daniel ; , and Chalikani vs Zamindar of Tuni and Others (1922) L.R. 50 I.A. 41. followed. Ismail Bhai Rahim vs Adam Osman I.L.R. , distinguished.

The appellant company owns several estates wherein tea is grown and it was assessed to sales tax by the Sales Tax Officer in respect of the tea sold by it during the years 1954 55 and 1955 56. An appeal filed by the appellant was rejected by the, Appellate Assistant commissioner on the ground that the tea when sold was admittedly in godowns in the State of Travancore Cochin and that consequently the sales must be deemed to have taken place within the State of Travancore Cochin and hence liable to be included in the taxable turn over. When a further appeal was taken to the Sales Tax Appellate Tribunal, it was held that the property in the goods sold passed at Fort Cochin in Madras State on the fall of the hammer at the auction and hence the same was not taxable. The State filed a revision petition to the High Court. While the High Court accepted the finding of the Tribunal that the property in the goods sold passed at Fort. Cochin on the fall of the hammer at the auction, it differed from the Tribunal as regards the effect of the circumstance that the tea sold was, at the point of sale, physically in godowns situated in the State of Travancore Cochin and held the sales to be taxable. The appellant came to this Court after obtaining a certificate of fitness from the High Court. The only question argued before this court was whether a sale of tea effected by the appellant by auction at Fort Cochin in Madras State was a sale outside the State of Travancore Cochin orinside it and whether the same was taxable or not. Accepting.the appeal. HELD: No sales tax was to be levied in this case as the sales took place outside the State of Travancore Cochin. The test for determining whether a sale is inside or outside a State is where the property in the goods passed and in the present case the property in the goods passed in Fort Cochin in Madras State on the fall of the hammer at the auction. The point about the property not having passed in the Madras State was not argued before the High Court and was also not urged in the statement of case filed by respondent and hence the same was not allowed to be argued in the Supreme Court. Per Shah. The property in the goods passed at Fort Cochin in Madras State and as the goods were delivered not for the purpose of consumption in any particular State, the sales were not inside Travancore Cochin but were outside the 392 State and were as held by this Court in A. V. Thomas & Co. vs Deputy Commissioner of Agricultural Income tax and Sales Tax Trivandrum, 14 S.T.C. 363, not liable to be taxed under the Travancore Cochin General Sales Tax Act, 1950. The doctrine of territorial nexus had full play in sales tax legislation under the Government of India, Act, 1935 and was not abrogated by the enactment of Art, 286 of the Constitution. It continued to be in operation in the interregnum between the promulgation of the Constitution and the amendment of article 286 by the Constitution (Sixth Amendment) Act, 1956. It also applies now subject to certain modifications. Parliament has been given the power to formulate principles for determining when a sale or purchase of goods takes place outside the State or in the course of the import of the goods into or export of the goods out of the territory of India. Exercising the power under cl. (2) Parliament has enacted the and by section 4(2) the doctrine of territorial nexus has been given legislative recognition though in somewhat limited form. Deputy Commissioner of Agricultural Income tax and Salestax, Trivandrum vs A.V. Thomas & Co., I.L.R. 1960 Kerala 1395; India Copper Corporation Limited vs State of Bihar, ; ; A. V. Thomas & Co. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum 1953 Supp. 2 S.C.R. 608 363; Poppat Lal Shah vs The State of Madras, ; ; and the Tata Iron & Steel Company Ltd. vs The State of Bihar , referred to.

The respondent who was a bidder at the annual excise auction offered the highest bid for two groups of country liquor shops, and which were knocked down in his favour. He affixed his signature to the respective bid sheets in token of his acceptance and also in the register of Settlement Record. He, however, did not deposit l/6th of the bid amounts on conclusion of the sales as required under the Excise Rules but took time for deposit. In spite of repeated reminders he did not pay the advance deposits. The Excise Authorities resold the excise privileges in respect of the two groups of shops and in the re auction the shops fetched a lesser amount than what the respondent had offered. The State Government, appellant directed the respondent to make good the loss. Since he failed, a suit for recovery was instituted by the appellant. The suit was contested, the respondent pleading (1) that there were no completed contracts between the State Government and himself and consequently there could be no breach of contracts; (2) that the entire auction proceedings, having been against the rules and instructions of the Government were illegal and void; (3) the contracts, if any, were unenforceable as they did not satisfy the conditions mentioned in Article 299 of the Constitution; and (4) that the State Government having accepted his prayer to be relieved from the bids made by him and subsequently re auctioning the groups of shops to others was estopped from fixing any civil liability on him. The trial court decreed the suit. On appeal, the High Court dismissed the suit on the view that there was no valid contract which could be enforced by the appellant as the requirements of Article 299(1) of the Constitution had not been complied with. It, however, held that the failure to deposit 1/6 of the bid amount did not make the proposal incomplete and that the absence of the approval of the Excise Commissioner which was in the nature of a power vested in him to reverse the acceptance of a bid made by the officer holding the auction did not in any way exonerate the respondent from the liability if he was otherwise liable. In the appeal to this Court on the question whether the respondent would not be liable to make good the loss even though no contract in writing had been executed in accordance with Article 299 of the Constitution. 725 ^ HELD :[Per Gupta and Tulzapurkar, JJ.] 1. The suit must be dismissed as there was no concluded contract between the parties, nor was there any statutory rule permitting recovery of the deficiency on re sale from the respondent. [728 B] 2. The last part of 5th clause to Rule 357 providing that in case of default, if the price fetched at the re sale was less tan the bid at the first sale the defaulter had not been published. [729 C] 3. Assuming that different clauses of Rule 357 barring the last part of the 5th clause embody the condition of sale, it is clear from the 2nd clause that in the absence of the final sanction of the Excise Commissioner the bid cannot be said to have been finally accepted. In the instant case it is not claimed that the bid offered by the respondent was sanctioned by the Excise Commissioner. [729 E] There was thus no concluded contract between the parties to make the respondent liable for the alleged loss. [729 E] Union of India and others vs M/s. Bhimsen Walaiti Ram ; referred to. (Per Venkataramiah J. dissenting) 1. The respondent should be made liable for the sum claimed in the suit and the decree made by the trial court should be restored. [745 G] 2. The respondent was liable for the sum claimed made by the State Government even though no contracts were formally entered into between the respondent and the State Government,[745 B] In the instant case on the pleading and evidence it has to be assumed that the respondent knew that he was under an obligation to deposit with the officer holding the auction 1/6th of the bid amount and that if he committed any default in doing so, the excise licences in question were to be resold and that he would be liable to pay any loss suffered by the Sate Government on such re sale. [733 E] 3. Condition No. 5 in the sale proclamation which provides that if the price at the re sale be less than that at the first sale, the difference will be recovered from the defaulter negatives the contention of the respondent that in the absence of the approval of the Excise Commissioner, he would bot be liable to make good the loss. [73 H, F] 4. There was no disapproval of the Excise Commissioner of the bids offered by the respondent. On the other hand, the excise authorities requested the respondent to perform his part of the obligation under the sale proclamation. [734 E] 5. In Union of India & Ors. vs M/s. Bhimsen Walaiti Ram, ; , this Court proceeded on the basis that the liability of the bidder could arise only as a consequence of the breach of a completed contract. No attention appears to have been given in the case to the question whether the act of the offering of the highest bid which was accepted by the officer holding the auction and which resulted in the closure of the auction could by itself become a source of liability when the highest bidder failed to comply with the conditions stipulated in the sale proclamation. In section 39, the words "all excise revenue, including all amounts due to the Government by any person on account of any contract relating to the excise revenue, may be recovered from the persons primarily liable to pay the same" by him on account of any contract relating to the excise revenue. The words "on account relating to the excise revenue" include within their scope not merely any compensation which a person may be liable to pay on account of the breach of contract committed by him after the contract is completed but also any other amount that may become due on account of a contract which would come into existence if all the formalities are completed, having regard to the scheme and manner in which the excise privilege is disposed of by the excise authorities. [735 E F] 7. A reading of clauses 1 and 2 of Rule 357 of the Excise Manula show that the officer holding the sale was empowered to accept the bid and that his acceptance was only subject to the sanction of the Excise Commissioner. They mean that the power which had been reserved to the Excise Commissioner, only enabled him to set aside the acceptance already made by the officer conducting the sale. If it was not set aside by him, the acceptance of the officer conducting the sale would be effective. [737 B] In the instant case the Excise Commissioner had not refused to sanction the acceptance of the highest bids offered by the respondent. The liability of the highest bidder to deposit a sum equivalent to 1/6th of the bid offered by him arises as a consequence of his offering the highest bed with the knowledge of the conditions of the auction, immediately on the conclusion of the sale for the day in his favour and if he does not make such deposit, the officer holding the same is entitled to put the excise privilege for re sale either immediately of on a subsequent day with liberty to recover from the defaulter any loss that may be occasioned to the Government by such re sale. [737 C D] 8. The completion of the contract or the execution of a contract in accordance with Article 299 of the Constitution arises only after the highest bidder has deposited 1/6th of the bid offered by him on the conclusion of the sale which is a condition precedent for the completion of the contract or for execution of a formal document in accordance with Article 299 of the Constitution. It is not, therefore, correct to determine the liability of a defaulting bidder on the basis of a completed contract or a formal document to be executed under Article 299. [737 E F] 9. In the interest of public revenuer, excise privileges, privileges of cutting and removing timber from Government forests, occupancy right over Government lands and building sites etc. are disposed of in public auction by the Central Government, State Governments, statutory boards and local authorities and in almost every such auction, there is invariably boards a condition that the acceptance of the highest bid at the auction is subject to the sanction of some superior officer or statutory or the appropriate Government. If the liability of such a bidder is to be funded only on the basis of a completed contract them in then in the case of auctions held by or on behalf of the Central or State Governments, no liability can arise even it such sanction is accorded, unless it is followed up by a formal document executed under Article 299 of the Constitution which alone amounts to a completed contract where Government is a party. [737 H 738 A, 738 D] 727 In the instant case the respondent by his own conduct in not depositing 1/6th A of the bids offered by him made it impossible for the excise authorities to conclude the contract. 'the question may have been different if the respondent had done all that he had to do under the condition of the auction but the excise authorities had not intimated him that he could exploit the excise privileges in accordance with law. [744 E] 10. The liability of the respondent arises under the statute and it also arises as the result of a civil wrong or a tort committed by him, in offering the highest bid with open eyes and in not fulfilling the obligations arising therefrom. The latter source of liability may appear to be novel but if justice requires, the Court should not hesitate to impose it on the person who has committed the wrong to secure justice for the innocent injured party. [745 Cl A. Damodaran & Anr. vs State of Kerala & ors. ; ; Candlar vs Crane Christmas & Co. [1951] 2 K.B. 164 at p. 178 referred to. K. P. Chowdhary vs Stare of Madhya Pradesh & Ors. ; distinguished.

The vendors sold the suit land,to the appellants (vendees) by a registered deed of sale for Rs. 43,000/ . The ' respondents filed the suit for possession by pre emption of the land in payment of Rs. 30,000/ on the allegations that the respondents were on the date of sale tenants of the land under the vendors. I They also alleged that the sale took place for Rs. 30,000/ only and the re maining amount was fictitiously mentioned in the deed of sale. The suit was ' dismissed on the ground that one suit on behalf of the four plaintiffs who were tenants of different parts of the land, was not maintainable. On appeal the suit was remanded for re trial. At the trial on remand, two plaintiffs withdrew from the suit. The trial court directed the remaining two plaintiffs respondents Sohan Lal and Nathi to deposit Rs. 6,300/_ and Rs. 5.670/ respectively on or before 1 April, 1969 less 1/5th of the pre emption amount already deposited by them. The Trial Court gave the respondent Sohan Lal a decree for possession by pre emption in respect of Killa Nos. 14/1 . 17 and 18/1 of Rectangle 37. The plaintiffs respondents, aggrieved by the order filed an appeal alleging that the decree should have been Passed for the whole of the land because the respondent Sohan Lal was also a tenant of Killa , No. 24 of Rectangle 37 under the vendors. On 29 July 1969. the Additional District Judge passed a decree for possession by pre emption in favour of respondent Sohan Lal of Killa No. 24 of Rectangle 37 on payment of Rs. 9,100/ and he was also directed to deposit this amount on or before 20 August, 1969. The decree in favour of Nathi was maintained without charge. The appellants filed an appeal before the High Court and it was contended before the High Court that respondents did not deposit the decretal amount by l April, 1969 as directed by the Trial Court and, therefore, the suit was liable to be dismissed under order 20 Rule 14 of the Code of Civil Procedure. The High Court accepted the appeal of the appellants against the plaintiff Nathi and dismissed the appeal against the plaintiff respondent Sohan Lal. The High Court said that since the lower appellate court granted Sohan Lal decree for one more Killa and directed that the amount would be Rs. 9,100/ . the respondent was to comply with the appellate decree and not the decree of the Trial Court. Allowing the appeal by special leave, ^ HELD: (1) The directions given by the Trial Court are mandatory under the provisions contained in order 20 Rule 14 of the Code of Civil Procedure. A decree in terms of order 20 Rule 14, imposes obligations on both sides and they are so conditioned that performance by one is conditional on performance bt the other. [600E F, G]. Naguba Appa vs Namdey reported in A.I.R. l 954 S.C. 50 and Dattaraya S/o Keshav Tawalay vs Shaikh Ali and Anr.[1969] 2 S.C.R. 514 relied on. (ii) It is only if the plaintiffs respondents had obtained another order from the lower appellate Court granting any order of stay that the lower appellate court might have considered the passing of appropriate order in favour of pre emptors. The High Court should have allowed the appellants ' appeal and not made any distinction in dismissing plaintiffs respondent Nathi 's suit and allowing Plaintiff respondent Sohan Lal any extension of time to make the payment. [601F G] 599

The appellant brought a suit for the recovery of his moiety share of the joint family properties against his father and alienees from the latter and his case was that the alienations made by the father were not binding on his share of the properties. The trial court dismissed the suit but the High Court on appeal reversed the decision of the trial court in respect of some of the properties, passed a preliminary decree for partition of those properties and confirmed the rest of the decree of the trial court. The appellant applied for a certificate under article 133(1) Of the Constitution but the High Court rejected the same holding that the decree was one of affirmance and involved no substantial 453 question of law, following a decision of the Full Bench of that Court in Chittam Subba Rao vs Vela Mankanni Chellamayya. The case admittedly satisfied the test of valuation prescribed by article 133(1)(a). Held, that in construing the relevant clause of article 133(1) of the Constitution, which gives a constitutional right to the litigant to appeal to this Court, it would be inappropriate to adopt a technical or pendantic approach and the clause must be read as a whole and its material words given their plain grammatical meaning. So construed, the correct test to determine whether an appellate decree affirmed the decision of the court below would be to compare the appellate decree, taken in its entirety, with the decision of the trial court taken as a whole. If on such comparison it was found to do so, it was a decree of affirmance; but if it made a variation, whether for or against the appellant, it would be a decree of variation, the extent of the variation being wholly immaterial. Chittam Subba Rao vs Vela Mankanni Chelamayya, I.L.R. [1953] Mad. i, disapproved. The words "appealed from" in the last part of article 133(1) are not words of limitation, and they do not refer to a part of the decree, that may be under appeal, but simply describe the decree viewed as a whole. So also the word "decision" therein means the decision of the trial court as a whole and not the decision on any point falling for determination. Rajah Tasadduq Rasul Khan vs Manik Chand, (1902) L.R. 30 I.A. 35, referred to. Dhirendra Nath Sarkar vs Nischintapore Company, , held inapplicable. The test in respect of value laid down by article 133(1)(a) is an independent condition that cannot control the meaning of the word 'decree ' in the last part of article 133(1), which provides for another additional and independent condition. Raja Sree Nath Roy Bahadur vs The Secretary of State for India in Council, , Annapurnabai vs Ruprao (1924) L.R. 51 I.A. 319 and Narendra Lal Das Chaudhury vs Gopendya Lal Das Chaudhury, A.I.R. 1927 Cal. 543, considered. Case law reviewed. While any variation of the order as to costs, which is in the discretion of the Court under section 35 of the Code of Civil Procedure, cannot change the character of the appellate decree which is otherwise one of affirmance, variation of the order as to interest under section 34 of the Code must affect its character. Any variation by concession or consent of parties or withdrawal of part of the subject matter of the decree cannot, however, affect its character. 58 454

The appellant purchased the suit property by a regis tered sale deed dated 27th December, 1950 for a considera tion of Rs.7,000. On 1st January, 1951, the respondent executed a rent agreement in favour of the appellant ac knowledging her as landlady at Rs.80 per month. The mother of the appellant died in 1963. In 1974, the respondent filed a suit against the appellant for conveyance of the suit property in his favour on the basis of a 'ya dast ', alleged to have been written by the mother of the appellant on 24th December, 1950 in his favour providing for conveyance of the property in his favour after .paying the sale price of Rs.7,000 and Rs.1,000 for registration ex penses. This 'yadast ' was however neither stamped, regis tered, nor attested. It was marked as exhibit A 11. The Trial Court decreed the respondent 's suit relying on the 'yadast '. On appeal the Additional District Judge after detailed examination of all the facts involved in the case and the evidence of the parties, came to the finding that the appel lant acquired title to the property on the basis of the sale deed which was a registered document in her favour and that the suit property was leased out to the respondent under a rent agreement, and that as the mother of the appellant was not a party to the sale deed she had no right to agree o convey the property or to ask her daughter to convey the same in favour of the respondent. He also came to the con clusion that the Yadast was not a genuine document but a forged one which was just got up for the purposes of the suit. He accordingly allowed the appeal, and held that the suit for specific performance was further barred as it was filed more than 20 years after the alleged 'Yadast '. 834 The High Court in Second Appeal, however interfered with the findings of fact arrived at by the lower Appellate Court solely on the basis that the evidence of the scribe of the 'Yadast ' was not discussed by the lower appellate Court, and accordingly allowed the Second Appeal. In the Special Leave Petition to this Court, it was contended on behalf of the appellant that the suit for specific performance of the contract could only be decreed against the executant of the contract provided the executant had a right to dispose of the property about which the suit was filed, and that there was no question of law on the basis of which the High Court exercised jurisdiction under Section 100 C .P.C. and interfered with the findings of fact. Allowing the appeal, this Court HELD: 1. Section 100 C.P.C. clearly indicates that the High Court had the jurisdiction to interfere only when a substantial question of law is involved and even then it is expected that such a question shall be so framed although the court is not bound by that question as the proviso indicates. There may be some other substantial questions of law which may need decision and which can be so decided. [838G H] In the instant case, the Single Judge of the High Court has chosen to interfere with the findings of fact solely on the basis of one ground, that the evidence of the scribe of the 'Yadast ' PW 2 was not discussed by the lower appellate court, and its failure has affected the validity of the finding rendered by it. This was no substantial question of law, much less a question of law on which the High Court could interfere with the findings of fact. At best the questions on which the High Court chose to interfere could be said to be questions of appreciation of evidence. [837H; 839F] 2. The suit for specific performance of the contract could only be decreed against the executant of the contract provided the executant had a right to dispose of the proper ty about which the suit is filed. [836H; 837A] In the instant case, admittedly the mother of the appel lant who, was alleged to have executed the 'Yadast ' was not the owner of the property. Both the parties to the 'Yadast ' were strangers to the sale deed, and the sale deed does not refer to any one of them nor there is anything in the sale deed to indicate that it was not an out and out sale. [837D] 835

The appellant was a contractual tenant of certain premises in the town of Calcutta of which the respondents were the owners. The respondents called upon the appellant to vacate and deliver possession of the premises on the expiration of the period of tenancy but possession was not delivered and the respondents were unable to obtain possession in view of the protection afforded to the tenants by the successive rent control Acts passed by the State. In the meantime the 814 appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent and the respondent accepted the same. The question arising for decision was whether the acceptance of the amounts by the respondents conferred upon the appellant the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act. Held, that where a contractual tenancy to which the rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy. Kai Khushroo vs Bai Jerbai , followed. Acceptance by the landlord from the tenant of amounts equivalent to rent after the contractual tenancy had expired or amounts which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116 of the Transfer of Property Act. Occupation of the appellant after the determination of tenancy was not in pursuance of any contract express or implied but was by virtue of protection granted by the successive statutes and such occupation was not required to be determined in the manner prescribed by section 106 of the Transfer of Property Act.

In a suit filed in the High Court for a declaration and relief in respect of several properties, the Official Receiver of the High Court was appointed Receiver. On the request of the parties, the official Receiver, decided to sell one of the properties with the permission of the Court. The price of the property was fixed at Rs. 3.5 lakhs. The appellant offered a sum of Rs. 4 lakhs for purchase of the property, and by his advocate 's letter enclosed a draft for Rs. 1 lakh, being 1/4 of the amount. A meeting was held in the presence of the plaintiff and their counsel, and at the meeting the offer received from the appellant was considered and it was decided that the offer of Rs. 4 lakh by bank draft. The Official Receiver accepted the offer of the appellant, communicated the acceptance and requested the appellant to deposit the balance amount. The Official Receiver, thereafter moved the High Court for directions to remove respondents 1 to 4 on the ground that they had trespassed into the property a few months earlier. Respondents 1 to 4 moved an application for being impleaded in the suit and contended that they were residing with their families under a licence since 1975 and had constructed pucca huts thereon and that with the knowledge of this continuous possession, the parties to the suit have filed the suit among themselves without impleading them (respondents 1 to 4). 583 The Single Judge rejected the aforesaid contentions of respondents 1 to 4 and held that though they were prepared to offer the sum of Rs. 1 lakh more than the appellant the property could not be sold to them. The Division Bench, however allowed their appeal, directed respondents 1 to 4 to pay to the Official Receiver a sum of Rs. 1.25 lakhs immediately and the balance of Rs. 3.75 lakhs thereafter and on such payment ordered sale of the disputed property to respondents 1 to 4 and their 34 nominees on the ground that the Court should do social justice and in doing such justice no technicality of law would stand in its way. Dismissing the Appeal to this Court, ^ HELD: [Per Fazal Ali & Sabyasachi Mukharji, JJ Majority] In administering justice social or legal jurisprudence has shifted away from finespun technicalities and abstract rules to recognition of human beings as human beings. The Division Bench of the High Court had adopted the above approach, and no law is breached by the view taken by it. It is improper for this Court in exercise of the discretion vested under article 136 of the Constitution to interfere with that decision. [595 FG; 622A B] [Per Fazal Ali, J.] 1. In our opinion, there appears to be some misapprehension about what actually social justice is. There is no ritualistic formula or any magical charm in the concept of social justice. All that it means is that as between two parties if a deal is made with one party without serious detriment to the other, then the Court would lean in favour of the weaker section of the society. Social justice is the recognition of greater good to larger number without deprivation of accrued legal rights of anybody. If such a thing can be done then indeed social justice must prevail over any technical rule. It is in response to the felt necessities of time and situation in order to do greater good to a larger number even though it might detract from some technical rule in favour of a party. Living accommodation is a human problem for vast millions in our country.[595B D] 2. Call it social justice or solving a socioeconomic problem or give it any other name or nomenclature, the fact of the matter is that this was the best course in the circumstances that could have been adopted by the court. Justice social, economic and political is preamble to our Constitution. Administration of justice can no longer be merely protector of legal rights but must whenever possible be dispenser of social justice. [595H 596A] 4. The Division Bench of the High Court has done substantial justice by throwing aboard the technicalities particularly for the reason that courts frown over a champartous litigation or agreement even though the same may be valid. The Division Bench by its decision got more 584 money for the owners on the one hand and one the other sought to rehabilitate the 38 families of the respondent who had already built permanent structures. [597G H] In the instant case, the Division Bench was perfectly justified in accepting the offer of the respondents because: (a) the respondents were prepared to pay Rs. 1 lakh more than the appellant and the appellant did not pay the balance of Rs. 3 lakhs, (b) possession being 9/10th of title, the respondents being in actual possession would have no difficulty in becoming the owners, (c) respondents were prepared to purchase the property notwithstanding litigation, because if they became owners no one could challenge their title or possession. The Single Judge completely ignored two material aspects: (a) that a bulk of the consideration money viz. Rs. 3 lakhs out of Rs. 4 lakhs was not paid by the appellant, and (b) that an owner also has right to impose certain conditions, and in exercise of that, the condition that the purchase would have to buy the land subject to the pending litigation was imposed [579C F; 5 6A D] (Per Varadarajan, J. dissenting) 1. The Division Bench had no right or justification to alter or modify the earlier order made for the sale of the property which had become final, or to hold that a subsequent offer made by respondents 1 to 4 to purchase the property for Rs. 5 lakhs should be accepted merely because it appears to be advantageous to the owners of the property in the name of social justice. [612F] 2. The benefit claimed on behalf of respondents 1 to 4 which cannot called a right, for there is no corresponding obligation cannot be equated with or even brought anywhere near the social justice mentioned in the preamble of the Constitution. [612G] 3. Respondents 1 to 4 are trespassers in respect of the property which is in custodia legis and they are in contempt of the Court. They cannot be allowed to continue to be in contempt and urge it as a ground for obtaining the benefit of the sale of the property in their favour. If the appellant has not complied with any condition it may be ground for the owners and the Official Receiver not to accept his offer and refuse to sell the property to him and not for respondents 1 to 4 to raise any objection. The offer has been accepted rightly or wrongly more than once and there fore the appellant may have a right to sue for specific performance of the contract on the basis of that acceptance by the official Receiver given with the approval of the parties. The same is the position in regard to the delay of about a month in paying the balance of Rs.3 lakhs by the appellant. [611D F] In the instant case, the property has been agreed to be sold by private treaty and the Official Receiver has been authorised to sell the property either by public auction or by private treaty. The Court does not come into the picture in such a case and there is no need for the Court to approve 585 or confirm such sale. The parties who are sui juris must be deemed to have known their interest best when they chose to approve the sale of the property for Rs. 4 lakhs in favour of the appellant notwithstanding the fact that respondents 1 to 4 had offered to purchase the property for Rs.5 lakhs. The appeal has therefore to be allowed. [612E; 613B] Everest Coal Company (P) Ltd vs State of Bihar & Others, [1974] 1 SCR P. 571 at P. 573, Kayjay Industries (P) Ltd. vs Asnew Drums (P) Ltd & Others, [1974] 3 SCR P. 678, Jibon Krishna Mukherjee vs New Bhee bhum Coal Co. Ltd. & Apr., [1960] 2 SCR P. 198. Tarinikamal Pandit & Others vs Prafulla Kumar Chatterjee, [1979] 3 SCR P. 340, referred to. (Per Sabyasachi Mukherji, J) 1. The pendency of the proceedings under Section 145 of the Code of Criminal procedure and order, if any, passed thereon does not in any way affect the title of the parties to the disputed premises though it reflects the factum of possession. [616D] Bhinka and Others vs Charan Singh, [1959] Supp. 2 S.C.R. P.798 referred to. When the property is in custody of a receiver appointed by the court, the property is in the custody of the court and interference with such possession should not be encouraged and no party can acquire any title or right by coming in or over the property which is in the possession of the receiver or sanction of the court[618F] Halsbury 's Laws of England, 4th Edn., Vol, 39 pages 451,452 paragraph 890,891: Kerr On Receivers 16th Edn. pages 121 referred to. The concept to social justice is not foreign to legal justice or social well being or benefit to the community rooted in the concept of justice in the 20th century. The challenge of social justice is primarily a challenge to the society at large more than to the court immediately. Social justice is one of the aspirations of our Constitution. But the courts, are pledged to administer justice as by law established.[620F] In the instant case, in formulating the concept of justice, however, the inarticulate factor that large number of human beings should not be dislodged from their possession if it is otherwise possible to do so cannot but be a factor which must and should influence the minds of judges. It is true that the persons who were alleged to be in possession are with unclean hands, but they came for shelter and built in hutments. They do not want to be rehabilitated at competitive bargain price. In the circumstances they should not be denied rehabilitation on the ground of their original illegitimacy. The felt necessities of time and in this case the convenience of the situation and the need for adjusting the rights of a larger number of 586 people without deprivation of any accrued right of anybody would be justice according to law. Before social justice as something alien to legal justice, is rejected, it should be remembered that a meaningful definition of the rule of law must be based on the realities of contemporary societies and the realities and the realities of the contemporary societies are men are in acute shortage of living accommodation and if they are prepared to bargain and rehabilitate themselves on competitive terms, they should be encouraged and no technical rules should stand in their way. That would be justice by highways ' and not infiltration 'by bye lanes '. [621H 622B]

Appeal No. 234/60. Appeal from the judgment and order dated November 18, 1958, of the Bombay High Court at Nagpur in Special Civil Application No. 201 of 1958. N. C. Chatterjee, M. N. Phadke, section A. Sonhi and Ganpat Rai, for the appellants. A. V. Viswanatha Sastri, B. R. Mandekar and A. G. Ratnaparkhi, for respondent No. 1. G. C. Mathur and R. H. Dhebar, for respondent No. 2. 1961. January 27. , J. This is an appeal against the jugdment and order of the High Court of Judicature of Bombay at Nagpur dismissing a petition under articles 226 & 227 of the Constitution challenging the legality of the imposition of the octroi tax under section 66(1)(e) of the C. P. & Berar Municipal Act (Act II of 1922) hereinafter termed the Act. The appellants who were the petitioners in the High Court are some of the rate payers of the town of Akola in the erstwhile State of Bombay and respondent No. 1 is the Municipal Committee, Akola. On November 11, 1957, respondent No. 1 passed a resolution to impose an octroi tax on animals and goods brought within the limits of the Akola Municipality. This resolution and the draft Rules of Assessment and Collection were later on forwarded by the Akola Municipality to the State Government for publication. A notification dated January 3, 1958, was published in the Bombay Government Gazette on January 16, 1958. This Gazette Notification contained the draft rules, the schedule of goods liable to octroi duty and the rates to be charged. This was in accordance with the requirements of section 67(2) of the Act. Respondent 620 No. 1, the Municipal Committee, affixed on the Notice Board of the Committee and published in the local newspapers the proposed rules for the imposition of the tax, but the objection of the appellants is that they did not publish along with them the draft of the " System of Assessment ". It is true that a pamphlet in Marathi language was distributed in the town of Akola and the proposals were also published in the local newspaper Jan Sewak. Objections to the proposals were filed by some of the rate payers of the town of Akola and all of them were considered and a resolution was passed by the Municipal Committee on March 3, 1958, and that is the resolution which was challenged in the petition filed in the High Court by a petition dated April 14, 1958, p raying for the quashing of the resolution and for the issuing of a prohibitory order against the State Government against sanctioning the proposal sent by the Municipal Committee. On April 18, 1958, a rule was issued by the High Court to the opposite parties calling upon them to show cause why the, order as prayed should not be made. This notice was served on the Special Government Pleader on May 9, 1958, and the Special Government Pleader put in his appearance on June 17, 1958. On June 23, 1958, an interim injunction was issued, but previous to that on June 19, 1958, a final notification was issued by the Government approving of the proposal to impose the octroi tax. As a consequence of this the petition was allowed to be amended, but ultimately the High Court dismissed the petition and this appeal has been brought on a certificate of the High Court. The sole question which has been debated before us is the legality of the imposition. The ground on which the legality is challenged is that there was no full compliance with the mandatory requirements of section 67(2) of the Act. It is, therefore, necessary to deal with the relevant provisions of the Act. Chapter IX of the Act deals with Imposition, Assessment and Collection of taxes. Section 66 provides for the taxes which can be imposed and section 67 deals with the mode of the imposition of the tax. By section 71, the State 621 Government is empowered to make rules regulating the assessment of taxes and for preventing evasion of assessment. Section 76 empowers the State Government to make rules regulating the collection of taxes and preventing evasion of payment. Section 85 em Con powers the State Government to make rules regulating the refund of taxes. But it was argued on behalf of the appellants that as the mandatory provisions of section 67 as to publication of the " System of Assessment " in accordance with the rules was not complied with, the imposition of the tax was illegal. Reliance was placed on certain judgments, but it is not necessary to discuss those cases because in the circumstances of this case they are of little assistance. The respondents, on the other hand, submitted that what was published was all that the section required and that the word assessment there did not mean anything more. As section 67(2) has been mainly relied upon, it may be quoted. It provides: " 67(2) When such a resolution has been passed, the committee shall publish in accordance with rules made under this Act, a 'notice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be adopted. " The scheme of section 67 appears to be this: that when a Municipal Committee wishes to impose a tax it has to pass a resolution at a special meeting and then it has to publish its resolution for imposition of that tax so that the rate payers may be able to place their objections against the imposition. This publication must appear in the Government Gazette and also locally as required by the rules. The Municipal Committee has then to consider the objections, if any, of the rate payers and if the Committee does not consider it necessary to alter its original proposals, it has to send its proposals with the objections received and its decision thereon and any modifications of the original proposals to the State Government which, after considering the matter, may sanction them or refuse to sanction or sanction them with modifications, 622 The real objection of the appellants was that the system of assessment had not seen published as required. The Rule relating to publication under section 67 is as follows : " 1. A notice under section 67(2) of the intention of the municipal committee to impose a tax, or under section 68(3) of the proposal of the committee to increase the amount of rate of any tax, shall be forwarded to the State Government through the Deputy Commissioner for publication in the " Madhya Pradesh Gazette. " The notice under section 67(2)shall be accompanied by draft rules for the assessment and collection of the tax. After its publication in the Gazette the, notice shall be published by affixing copies thereof to a notice board at the municipal office and at conspicuous places in the town, and shall also be published in the local papers, if any. As an alternative to its publication in local papers, the committee may circulate the notice in print in vernacular within the municipal limits. Proclamation shall also be made by beat of drum throughout the municipality notifying the intention of the committee and calling the attention of the inhabitants to the notice in question and to the term of thirty days laid down in the law as that within which objections to the proposed imposition or increase must be submitted to the committee. " According to this rule the notice under section 67(2) has to be accompanied by draft rules for the assessment and collection of the tax and after its publication in the Gazette the notice has to be published by affixing copies thereof to a notice board at the Municipal Office and at conspicuous places in the town and has to be published in the local papers, if any, or it may circulate the notice in print within the municipal limits. It is admitted that in the Gazette dated January 16, 1958, the draft rules were published which contained the articles to be taxed, the rate or rates at which they were to be taxed and what articles were not to be taxed. It also contained a brief statement of objects. and reasons for the imposition of the tax. This was 623 followed by draft rules as to how taxation was to be done. In short what was published in the Gazette was admitted to conform to all the requirements of section 67(2). But the contention raised is that in the Jan Sewak, a local Marathi newspaper, the rules which were published contained the articles to be taxed, the rate or rates at which they were to be taxed, but the draft rules in regard to " System of Assessment " were not published along with it. The High Court has pointed out that what was done was a sufficient compliance with the provisions of section 67(2) and that the words " System of Assessment " meant only the stage of the imposition of the tax and not other stages as a whole. Sections 71, 76 and 85, as has been said above, deal with rules for assessment and for preventing evasion of taxes, rules for collection of taxes and rules for refund respectively. Read together these provisions of the Act support the decision of the High Court that the words " System of Assessment " do not necessarily mean the whole procedure of taxation, i.e., imposition, collection and procedure in regard to collection and refunds. The rule also shows that what is to be affixed on the notice board and at conspicuous places of the town is the notice and not the draft rules relating to assessment and collection. In our opinion there has been a compliance with the provision of section 67(2) and that the publication of the rules relating to the rates at which the tax had been imposed was sufficient to comply with the provisions of the Act and the rules made thereunder. It is unnecessary to deal with the efficacy of sub sections (7) and (8) of section 67. In our opinion the judgment of the High Court was right and the appeal is therefore dismissed with costs. Appeal dismissed.

The Municipal Committee, Akola, passed a resolution to impose an octroi tax and forwarded it along with the draft rules of assessment and collection to the State Government. The State Government published a notification in the Gazette which contained the articles to be taxed, the rate or rates at which they were to be taxed and a brief statement of objects and reasons for the imposition of the tax. This was followed by draft rules as to how taxation was to be done. Thereafter the Municipal Committee affixed on its notice board and also published in the local newspapers the said proposed rules but the draft rules in regard to the " system of assessment " were not published along with other particulars. It was alleged by the appellants that the Municipality by not publishing the draft rules of the " system of assessment ", failed to comply in full with the mandatory requirements of section 67(2) of the Act rendering the imposition of tax illegal. Held, that the words " system of assessment " did not neces sarily mean the whole procedure of taxation, i.e. imposition, collection and procedure in regard to collection and refund. The notice and not the draft rules relating to assessment and collection were required under the Rules to be affixed on the notice 619 board of the Municipality and at other conspicuous places of the town. In the instant case the publication of the Rules relating to the rates at which the tax had been imposed was sufficient compliance with the provisions of Section 67(2) of the C. P. S Berar Municipal Act, 1922, and the rules made thereunder.

This appeal raised a short question as to the interpretation of sub section (4)(a) of section 4 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 ("the Bombay Rent Act"). The appellants were the sub tenants of the respondent No. 1 Firm in respect of the premises called Gala No. 4 in a godown. Respondent No. 1 Firm were the tenants of the said godown, having taken a lease of the building from the Bombay Port Trust. The appellants were in occupation of the said Gala under written agreements executed from time to time for one year each. The last such agreement expired on 19th October, 1971. The respondent No. 1 Firm served a notice on the appellants on 13th January, 1972 to hand over possession of the said gala on the ground that the period of lease had expired. By notice dated February 3, 1972, the respondent No. 1 Firm terminated the tenancy of appellants and then filed a suit in the City Civil Court against the appellants to recover possession of the premises in dispute inter alia on the ground that the period of lease had expired. The appellants took up the contention that they were not liable to be evicted as they were entitled to protection under the provisions of the Bombay Rent Act. The City Civil Court decreed the suit. On appeal by the appellants, the High Court (Single Judge,) holding that the notice of termination of tenancy dated 3rd February, 1972, was a valid notice and the provisions of the Bombay Rent Act did not apply to the premises in question, upheld the decree of eviction passed by the City Civil Court. Letters Patent appeal against this judgment was dismissed by a Division Bench of the High Court. The appellants then moved this Court for relief by special leave. Dismissing the appeal, the Court, 907 ^ HELD: The only submission made by the appellants before the Court was that the said premises, viz, Gala No. 4, were entitled to the protection of the provisions of the Bombay Rent Act and the respondent No. 1 Firm was not entitled to a decree for eviction as no grounds for eviction under the Act had been made out. [910G] The question raised was whether the protection of the sub section (4)(a) of section 4 of the Bombay Rent Act was available to the sub lessee in a building leased by the lessee from the Government or a local authority or put up by a lessee of the land belonging to the Government or a local authority but not under any building lease or pursuant to any obligation imposed on the lessee to put up a building. In this case, the entire building in which the premises in question, namely, Gala No. 4 were situated, belonged to the Bombay Port Trust. It was nowhere contended at any stage by the appellants that the building in which the said premises were situated was put up by the respondent No. 1 Firm. The Court was, therefore, not directly concerned with the position of a sub lessee in a building put up by a lessee of the land taken from the Government or a local authority without being under any obligation to do so. [913D F] A plain reading of sub section (1) of section 4 of the Bombay Rent Act makes it clear that the provisions of the Bombay Rent Act are not applicable to premises belonging to the Government or a local authority. Sub section (4)(a) only takes out from the scope of the exemption conferred by section 4(1) "a building erected on any land held by any person from the Government or a local authority under an agreement, lease, licence or other grant, although having regard to the provisions of such agreement, lease, licence or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be". If this provision were to be as including any building put up or erected on land held by any person from the Government or a local authority, the result would be that such protection would be available even against the Government or a local authority and the provision of sub section (1) of section 4 may be rendered largely nugatory. The provisions of sub section (4)(a) were never intended to take away the immunity conferred upon the premises belonging to the Government or a local authority, and if the provisions of section 4(4)(a) were to be construed as urged by the appellants, this immunity would be rendered practically nugatory. A plain reading of the provisions of sub section (4)(a) in the context clearly shows that there is no intention therein to take a building put up by the Government or a local authority from the scope of the exemption conferred by sub section (1) of section 908 4. The language of sub section (4)(a) and sub section (1) of section 4 of the Bombay Rent Act, read together, suggests that it was only in respect of a building put up by the lessee on the Government land or the land belonging to a local authority under a building agreement that the sub lessees were taken out of the exemption contained in sub section (1) of section 4 and allowed the benefit of the provisions of the Bombay Rent Act. It was significant that the exemption granted under the earlier part of sub section (1) of section 4 is in respect of the premises and not in respect of the relationship. In order to confer the protection of the provisions of the Bombay Rent Act on the sub lessees occupying the premises in any building erected on the government land or the land belonging to a local authority irrespective of the question who has put up the building as against the lessees of the land but without affecting the immunity conferred on the government or local authorities as contemplated by sub section (1) of section 4 of the Bombay Rent Act, the Court would have to practically rewrite the provisions of section 4, and it was not open to the Court to do that. The argument of the appellants, therefore, could not be accepted. The learned Judge of the High Court was right in coming to the conclusion that the premises in question were not entitled to the benefit of the provisions of the Bombay Rent Act. [914A H;915A] The decision of this Court in Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461 cited by the appellants was of no assistance to the case before the Court, and the decision of this Court in Maneklal and Sons vs Trustees of Port of Bombay and Others, cited by the appellants, far from supporting the submission of the appellants, militated against it. [916D] There was no merit in the appeal and it must fail. Taking the facts and circumstances of the case into consideration, the Court directed that the appellants would not be evicted from the premises in question until December 31, 1988. [916E] The Court observed that if the intention of the legislature was that the protection should be given to the sub lessee against the lessee in a building taken on lease by the lessee from the government or a local authority, it was for the legislature concerned to make appropriate amendments in the Bombay Rent Act and it was not open for the Court to re write the provisions of sub section (4)(a) of section 4 of the Bombay Rent Act on the ground of any such intention as suggested by Dr. Chitale counsel for the appellants. [916F] 909 Bhatia Co operative Housing Society Ltd. vs D.C. Patel, ; Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461; Maneklal and Sons vs Trustees of Port of Bombay and Others, and Ram Bhagwandas vs Municipal Corporation of the City of Bombay, , referred to.

The Bombay Provincial Municipal Corporations Act, 1949 came into operation in the city of Poona on 15th of February, 1950. Section 127(2) thereof authorised the Corporation to impose octroi and other taxes, while section 149 prescribed the procedure to be allowed in levying taxes. In the year 1957, the Corporation in order to boost industrial development and to encourage the industrialists to establish industries in the city, decided to give certain concession in the nature of exemption from octroi duty. Pursuant to this objective the Corporation made rule 62 B in Chapter VIII to the Schedule of the said Act in 1957, which envisaged the creation of an "Industrial Estate or Area", by which was meant the area which the Corporation may from time to demarcate as the area in which industries can be suitably located in the interest of industrialisation of the city. Under this rule no levy of octroi was to be made for a period of twelve years. Later on, the Corporation framed extensive new octroi Rules under their resolution dated 7th of August, 1962. Rule 5(8) of the new Rules provided for exemption in respect of levy of octroi. The Corporation had been levying octroi on the materials received by the appellants. The appellants sought exemption under rule S(8). The Corporation rejected their claim for exemption of octroi on the ground that exemption can only be granted if the area within which the concern was situated was declared as industrial area and demarcated for the purpose. Being aggrieved, the appellants filed petitions under Article 226 of tho Constitution in the High Court for the issue of a writ of Mandamus requiring the respondent Corporation to define and demarcate the area where their factories were situated as industrial area, within the meaning of rule 5(8), and to exempt them from payment of octroi. During the pendency of these petitions rule 5(8) was repealed. The appellants amended the writ petitions and further contended that (1) that the repeal of rule 5(8) was illegal and/or ultra vires and, therefore, rule S(8) still continues to be effective and (2) that in any event they were entitled to get the benefit of rule 62 B which had not been repealed. The High Court repelled both the contentions and held that old rule 62B and the new rule 730 5(8) were repealed and that there was no legal flaw. It however took the view that despite the repeal of Rule S(8) the appellant could still get the relief under rule 5(8) because if the proviso attached to the repealing rule the area in question was not demarcated as industrial estate or area for the purpose of rule S(8) and that it was solely in the discretion of the Corporation to demarcate an area as industrial estate. It consequently dismissed the writ petitions. In the appeals to this Court it was contended on behalf of the appellants (I) that the disputed area had been included in the development plan under the Bombay Town Planning Act, 1954 before the promulgation of rule S(8) and had thus automatically become an industrial estate or area for the purposes of that rule. (2) The Corporation had refused to grant exemption to the appellants on the arbitrary ground that the concern of the appellants was not a new one. (3) There had been violation of Article 14 of the Constitution in as much as some industries in similar situations have been granted exemption while the appellants have been deprived of the benefit of rule S(8) and (4) While denying the benefit of rule S(8) the Corporation had taken into consideration extraneous or irrelevant considerations. Dismissing the appeals ^ HELD: 1 (i) No area had been declared as industrial area under the Development plan before 1957 and in fact it was only after the enforcement of the development plan on 15th of August, 1966 that the disputed area became an industrial area under the Bombay Town Planning Act. [735 C D] (ii) A bare perusal of rule 5(8) makes it apparent that for the purpose of the exemption from octroi, an industrial estate or area means the area which the Corporation may from time to time demarcate for the purpose of the rule as the area in which industries can be suitably located for the interest of industrialisation of the City. Therefore, the demarcation made under the Town Planning Act will not be a demarcation for the purpose of rule S(8) and unless there is a demarcation as contemplated by rule S(8) the appellants cannot claim exemption from octroi. The view taken by the High Court is fully warranted by rule S(8) of the octroi Rules. [735 E G] 2. The purpose of the Town Planning Act is to plan the town and to keep industrial areas away from the residential or commercial areas and that no industries could be set up in an area other than the industrial area declared in pursuance of the Act. The purpose of demarcation as industrial estate or area under rule S(8) is for the giving of incentive and impetus to industries in a particular area. [736 B C] 3. An analysis of the preamble to the new octroi Rules makes it clear that rule 62 B relating to octroi was repealed by implication. It is noteworthy that chapter VIII does not contain any rule relating to octroi, except rule 62 B which did not find a place in the preamble. All rules relating to octroi and enacted under the 1901 and the 1925 Acts were also repealed without exemption. Another pointer is available in the fact that octroi was made the subject matter of a new and comprehensive set of rules which not only dealt with the matters 731 covered by the rules contained in chapter VIII and specifically mentioned in the A preamble but also the one covered by rule 62 B, namely the matter of exemption of goods from octroi in areas considered suitable for industrialisation. The promulgation of rule 5(8) as a part of an exhaustive set of new rules, has the effect of a repeal of rule 62 B by necessary implication, although not in express terms. [737 D G] 4. The considerations which have weighed with the Corporation for denying the benefit of exemption from octroi to the appellants cannot be said to be either irrelevant or extraneous. These are within the ambit of rule S(8) of the octroi Rules. [739 B]

For the assessment years 1956 57 and 1957 58, the appellant was, assessed to sales tax in respect of Vanaspati and oil under the U.P. Sales Tax Act, 1948. By a notification issued on March 31, 1956 under section 3 A(2), the rate of tax on Vanaspati was fixed at one anna per rupee at the point of sale by the manufacturer. The appellant and section P. Bhasin, a shareholder of the company, filed a writ petition in the High Court challenging the validity of the U.P. Sales Tax Validation Act, 1958 and also prayed for the quashing of the assessment order dated October 15, 1960 and the order dated February 1, 1961, of the Sales Tax Judge (Appeals), Meerut, in connection with the assessment of tax on the sale of Vanaspati and other articles both on the ground that the sale tax was assessed at a higher rate than was permissible under a valid law and that the tax had been assessed at the rate of one anna and not at 6 Naya Paisa per rupee. The writ petition was dismissed by a single Judge of the High Court and the Letters Patent Appeal was also dismissed by High Court. The appellant came to this Court by special leave. The only point urged before this Court was that the tax should have been calculated at the rate of 6 Naya Paisa per rupee and not at the rate of one anna per rupee as laid down in the relevant provisions of the U.P. Sales Tax Act and the notice issued under its provisions. Dismissing the appeal, Held (per P, B. Gajendragadkar, C.J., M. Hidayatullah, K. C. Das Gupta and Raghubar Dayal, JJ.): The High Court was right in construing the provisions of sub section (3) of section 14 of Indian to mean that references to values in any enactment, notification, rule or order under any enactment or in any contract, deed or instrument, expressed in old coins should be construed to be references to values expressed in new coins by converting the old values at the rate of16 annas, 64 pice and 192 pies to 100 Naya Paisa. The values expressed in new coins must be absolutely equivalent to the value of the, old coins. Per Shah, J. The liability for sales tax after the amendment of the will be at the rate of 6 new coins for every rupee of sale price and not one anna. By the notification issued on March 31, 1956, the liability for payment of sales tax was to be computed at the rate of one anna in a rupee of the turnover. By virtue of section 14(3), for an anna mentioned in the notification, 6 1/4 new coins are to be substituted. As the substituted rate involves a fraction, by the process of rounding off at the rate specified in section 14(2), the fraction of new coins has to be omitted and the nearest new coins, i.e., 6 new coins are to be deemed to be substituted in the statute. J. K. Jute Mills Co. Ltd. vs State of Uttar Pradesh, ; , Ram Kishan Sunder Lal vs State of Uttar Pradesh, 13 S.T.C. 923, 315 M/s. Mangalore Ganesh Beedi Works vs State of Mysore, [1963] Supp. 1 S.C.R. 275, referred to.

The respondent firm was assessed to income tax for the assessment years 1947 48, 1948 49 and 1949 50 under section 23(3). The Income tax Officer renewed the registration of the firm under section 26A of the Income tax Act and passed an order under section 23(6) allocating the shares of the various partners. The respondent preferred appeals against the orders of assessment to the Appellate Assistant Commissioner. Oil November 4, 1950, the Appellate Assistant Commissioner partly accepted the appeals in respect of the assessment years 1947 48 and 1948 49 but the appeal in respect of the assessment year 1949 50 was still pending. Meanwhile after issuing notice to the parties and hearing them the Commissioner, acting under section 33B(1), passed an order on June 5, 1952, cancelling the registration granted under section 26A on the ground that one of the partners of the firm was a minor, and directed the Income tax Officer to make fresh assessments for the three years. The respondent preferred appeals to the Appellate Tribunal which were allowed. On the application of the appellant the Tribunal referred, under section 66(1) of the Act, three questions to the High Court of Bombay. In regard to the assessment years 1947 48 and 1948 49 the High Court held that the orders of the Income tax Officer granting registration had merged in the appellate orders of the Assistant Appellate Commissioner and the revisional power of the Commissioner under section 33B(1) could not be exercised in respect of them. With regard to the renewal of registration for the year 1949 50 the High Court held that the Commissioner could not exercise his revisional power as the propriety of this order was open to consideration by the Appellate Assistant Commissioner in the respondent 's appeal pending before him. The appellant obtained special leave and appealed: Held, that the Commissioner had the authority under section 33B(1) to set aside the orders of registration made by the Income tax Officer. An order of the Income tax Officer granting registration was not appealable before the Appellate Assistant Commissioner. Such an order could be cancelled by the Commissioner in exercise of his revisional powers under section 33B(1) ; but it could not be cancelled by the Appellate Assistant Commissioner even in the exercise of his appellate jurisdiction when dealing with an appeal by an assessee. The theory that the order of a tribunal merges in the order of the appellate authority did not apply to the order of registration passed by the Incometax Officer. Commissioner of Income tax, Bombay North vs Tejaji Farasram Kharawala, , referred to. Durgabati and Narmadabala Gupta vs Commissioner of Income tax, , disapproved. But the Commissioner has no power while exercising his revisional jurisdiction under section 33B(1) of the Act to set aside the assessment orders. The Commissioner, in the present case, did 715 not really intend to set aside the assessment orders but merely to direct the Income tax Officer to make suitable consequential amendments in regard to the machinery or procedure. to be adopted to recover the tax payable by the respondent. The registration or non registration of a firm does not at all affect the computation of taxable income; it merely governs the procedure to be adopted in recovering the tax found due. Shapurji Pallonji vs Commissioner of Income tax, Bombay, , referred to.

On suo motu enquiry conducted against the appellant with regard to the nature of the properties in question, the Deputy Charity Commissioner held that the properties were of a public trust. The appellant 's appeal before the Charity CommissiOner was dismissed. An application filed under section 72 of the Bombay Public Trust Act, 1950 was also dismissed by the City Civil Court. The First Appeal filed in the High Court was dismissed by a Single Judge. In the Letters Patent Appeal on behalf of the appellant it was contended: that section 72(1) speaks only of an applica tion to the Court to set aside the decision of the Charity Commissioner, and it does not speak of an appeal; that while section 70 and 71 use the word "appeal" and that the proceedings under section 72 were not in the nature of an appeal and that, therefore. when the District Court exercised its jurisdic tion it did not exercise an appellate jurisdiction but a special jurisdiction under 'the section. The High Court dismissed the appeal holding that it was not maintainable since the requisite certificate under clause 15 of Letters Patent Appeal was not obtained by the appellant, that though the well known word "appeal" was not used in section 72, the absence of that word cannot be regarded as determinative of the nature of the proceedings, and that the jurisdiction that the District Court is exercising under section 72 was appellate jurisdiction. Dismissing the appeal. 1084 HELD:1.1 The power of the District Court in exercising jurisdiction under section 72 of the Bombay Public Trust Act, 1950, is a plenary power. It is true that the Commissioner is not subordinate to the District Court but the District Court has powers to correct, modify, review or set aside the order passed by the Commissioner. All the characteristics of an appeal and all the powers of an appellate Court are available to the District Court while deciding an applica tion under section 72. [1089D E] 1.2 The proceedings before the District Court under section 72(1) are in the nature of an appeal and that District Court exercises appellate jurisdiction while disposing of a matter under section 72(1). [1089E F ] 1.3 The absence of the word "appeal" in section 72(1) does not make any difference. [1089C] Hiragar Dayagar vs Ratanlal, ; and [1986] 58 Bombay Law Reporter 894 approved and AIR 1974, Bombay 40, disapproved. Consequently, the Single judge of tile High Court while deciding the appeal from the order of the District Court deals with a matter made by the District Judge in the exercise of a appellate jurisdiction by a Court subject to the superintendence of the High Court and hence clause 15 of the Letters Patent Appeal is directly attracted. [1089F G]

Section 14 of the Code of Criminal Procedure, as amended by Bombay Act 23 of 1951, empowered the State Government to appoint a qualified person as a special Magistrate and to confer upon him powers conferrable upon a judicial Magistrate in respect of a particular case or a particular class or classes of cases or in regard to cases generally in any local area. By a notification dated December 29, 1961, the Government appointed Mr. G to be a Special Judicial Magistrate for the area comprising Greater Bombay and Ratnagiri District and conferred upon him all the powers of a Presidency Magistrate in respect of the trial of the Deogad Gold Seizure case. The petitioners, who are accused in the case, moved the Supreme Court for a writ of certiorari for quashing the notification on the ground that the notification and the amended s.14 infringed article 14 of ' the Constitution. Held, that the amended section 14 does not offend article 14 and is valid. There is substantially no difference between the powers conferrable by the unmended and by the amended section 14. M. K. Gopalan vs State of Madhya Pradesh, [1955] 1 S.C.R. 168, relied on. Held, further that the notification constituting a Special Magistrate for the trial of the petitioners was not discriminatory. Amended section 14 contemplates both a case which is pending and one which may be instituted after the date of the constitution of the Special Magistrate. The constitution of a Special Magistrate does not amount directly or indirectly to a transfer of any 574 case. The fact that Mr. G may hold the trial at Bombay and not at Deogad while other similarly situated would be tried at Deogod may result in inconvenience to the petitioners but this could not sustain the plea of discrimination. The charge against the petitioners is in respect of conspiracy at Bombay, Deogad and other places and the petitioners could have been lawfully tried at Bombay. The notification constituted a Special Magistrate and conferred jurisdiction on him both over the place where the petitioners are alleged to have conspired and the place where the offences are alleged to have been actually committed. It did not amount to discrimination that from the judgment of the Special Magistrate an appeal would lie to the High Court while if the petitioners were tried by a Magistrate at Deogad, an appeal would lie to the Sessions judge and then a revision would lie to the High Court. The difference of the venue results from the nature of the jurisdiction exercised by the Magistrate trying the case and not from any unequal dealing by the notification.

The petitioner was convicted for the offence u/s 302 I.P.C. and sentenced to life imprisonment by the Sessions Judge. The appeal preferred by him was dismissed by the High Court of Bombay in limine. Hence the appeal by Special leave. Allowing the petition and directing the High Court to admit the appeal and deal with it according to law, the court ^ HELD: An appellate Court has the undoubted power to dismiss an appeal in limine, as provided under section 384 of the Code of Criminal Procedure. But, it is a power which must be exercised sparingly and with great circumspection, more so in a case where the conviction is for murder and the sentence is one of imprisonment for life, which are serious enough matters for the High Court to warrant admission of the appeal and fair and independent consideration of the evidence by the High Court. Summary rejection of the appeal with the laconic expression, "dismissed" is a drastic step in such cases.[653 C E] To so reject an appeal is to practically deny the right of appeal. Except in certain cases when an accused person has pleaded guilty and in petty cases every person convicted of an offence has a right of appeal under the Code; an appeal may be both against conviction and on facts and law. A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion. Therefore, it is necessary to make a speaking order, while dismissing a criminal appeal. [653 E F] Mustaq Hussain vs State of Bombay, [ ; ; Ramayya vs State of Bombay, ; ; Vishwanath Shankar Beldar vs State of Maharashtra, ; Siddanna Appa Rao vs State of Maharashtra A.I.R. 1970 S C. 977; Narayan Nathu Naik vs State of Maharashtra, A.l. R. ; Govinda Kadutji Kadam vs State of Maharashtra, ; Shaik Mohamed Ali vs State of Maharastra, A.I.R. 1973 S.C. 43; 652 K.K. Jain vs State of Maharashtra, A.l. R. ; Jeewan Prakash vs State of Maharashtra, A.I.R. 1973 S.C. 278; Mustaq Ahmed vs State of Maharashtra, A.I.R. 1973 S.C. 1122; Krishna Vithu Suroshe vs State of Maharashtra, A.I.R. ; Sampata Tatyada Shinde vs State of Maharashtra, A.I.R. 1974 S.C. 791; and Dagadu vs State of Maharashtra, ; reiterated.

minal Appeal No. 120 of 1960. Appeal by special leave from the judgment and order dated February 28, 1958, of the Madhya Pradesh High Court (Gwalior Bench), in Criminal Appeal No. 3 of 1957. I. N. Shroff, for the appellant. The respondent did not appear. January 25. The Judgment of the Court was delivered by AYYANGAR, J. This is an appeal by special leave by the State of Madhya Pradesh against the dismissal of an appeal preferred by it to the High Court of Madhya Pradesh (Gwalior Bench) which declined to reverse the order of acquittal passed by the Sessions Judge holding the respondent not guilty of an offence under section 302 of the Indian Penal Code. The ground of acquittal by the Sessions Judge, which was concurred in by the High Court was that the respondent was of unsound mind at the time of the commission of the crime and so was entitled to an acquittal under section 84 of the Indian Penal Code. There is very little dispute about the facts or even about the construction of section 84 of the Code because both the learned Sessions Judge as well as the learned Judges of the High Court on appeal have held that the crucial point of time at which the unsoundness of 585 mind, as defined in that section, has to be established is when the act was committed. It is the application of this principle to the facts established by the evidence that is the ground of complaint by the appellant State before us. Section 84 of the Indian Penal Code which was invoked by the respondent successfully in the Courts below runs in these terms: " Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law. " It is not in dispute that the burden of proof that the mental condition of the accused was, at the crucial point of time, such as is described by this section lies on the accused who claims the benefit of this exemption (vide section 105, Indian Evidence Act, Illustration (a)). In order to appreciate the point raised for our decision it is necessary to refer to the findings of the Sessions Judge which were in terms approved by the learned Judges of the High Court. Before we do so, however, we shall narrate a few facts regarding which there is no dispute: The deceased Bismilla was related to the accused respondent as the mother of his wife Jinnat whom he had divorced. The accused nurtured a grievance against his mother in law for matters it is unnecessary to set out. Bismilla went to bed in her own house on the night of September 28, 1954. On the morning of the next day the body of Bismilla was found by her husband lying in a pool of blood on the cot on which she was sleeping with the head missing. The First Information Report was immediately lodged by the son of the deceased. The police were informed that the respondent bad borne ill will towards Bismilla and thereafter the Sub Inspector who was in charge of the investigation sent for the respondent. The respondent admitted having committed the murder and stated that be had put the head of Bismila and the knife with which it had been severed from the body in a cloth bag which he had hid in an underground cell in the furniture shop 586 of his father. The respondent was taken to that shop where he took out the articles in the presence of Panch witnesses. He also took out a torch from the cash box of the shop and handed it over to the police with the statement that the torch had been used by him on the occasion of the murder to locate the deceased in the darkness. The accused further stated the manner in which he managed to scale over the wall of the house of the deceased, how he gained entrance into the room, how he found her asleep on a cot and how he severed the head from the trunk and carried the former away and hid it at the place from which he took it out. The respondent was produced before the District Magistrate before whom he made a confessional statement reciting all the above facts. He was thereafter committed to stand his trial before the Court of Sessions Judge, Gwalior, for the offence under section 302 of the Indian Penal Code. We have only to add that the confession which was substantially corroborated by other evidence was never withdrawn though in his answers to the questions put to him by the committing magistrate and by the Sessions Judge under section 342 of the Criminal Procedure Code he professed ignorance of everything. On behalf of the defence, in support of the plea of unsoundness of mind three witnesses were examined, two of them being medical men. The first witness Mahavir Singh was the District Civil Surgeon and Superintendent of the Mental Hospital. He spoke of having treated the accused in August 1952 as a private patient. His deposition was to the effect that the accused had an epileptic type of insanity, the last time that he saw him being in August 1952, i.e., over two years before the date of the occurrence. His evidence therefore cannot be very material not to say decisive on the question as to whether at the moment when the offence was committed the accused was insane as defined by section 84 of tile Code or not. The other medical witness examined for the defence was the Superintendent of the Mental Hospital who had examined the accused on and after November 18, 1954, i. e., nearly two months after the occurrence. His 587 deposition also was to the effect that the accused was suffering from epileptic insanity. The witness testified, that at the first stage of the attack of a fit the patient becomes spastic, that in the second stage the patient would have convulsions of hands and feet and in the tertiary stage becomes unconscious and at the last stage the patient might do acts like sleep walking. Obviously this was expert evidence about the nature of the disease which the doctor stated the accused was suffering from, and not any evidence relating to the mental condition of the accused at the time of the act. The other witness who spoke about the mental condition of the accused was his father. In his evidence he stated : " The accused was in a disturbed state of mind in the evening of September 28, 1954. He bad not taken food for two days. When I went to the shop on the morning of September 29, 1954, at 7 30 or 7 45 I found the accused was unconscious and that his hands and feet were stiffened. Just then the police came there and took away the accused. " On the basis of this evidence the learned Sessions Judge after correctly stating the law that under section 84 of the Indian Penal Code the crucial point of time at which unsoundness of mind should be established, is the time when the act constituting the offence is committed and that the burden of proving that an accused is entitled to the benefit of this exemption is upon him, summarised the evidence which had been led in the case in these terms: " The next thing therefore to consider is whether the accused was incapable of knowing the nature of the act. The fact that the accused went at night to the house of his mother in law, deliberately cut her head and brought it to his house is too obvious to show that the accused was capable of knowing the nature of the act. To put it differently, the accused while killing Bismilla was not under the impression that he was breaking an earthen jar. Even the learned counsel for the defence laid no stress on this aspect of insanity. He, however, contended that the accused was incapable of knowing that what he was doing was either wrong or contrary to law. " 588 The learned Judge, however, rested his decision to acquit the accused on the following reasoning: "There is the circumstance that soon after the crime the accused was admitted to the mental hospital and the Superintendent of the Hospital at least confirms that the accused suffers from epileptic fits. Now epilepsy is a kind of disease which may cause insanity. This is called epileptic insanity. In this insanity the patient commits brutal murders without knowing what he was doing. The accused who suffered from epilepsy has committed a brutal murder. There is thus ground to believe that he may have committed this murder in a fit of epileptic insanity. . . These. things give rise to the inference that the accused may have committed the crime in a fit of insanity and without knowing that what he was doing was either wrong or contrary to law. 1, therefore, find that the accused Ahmedullah did kill Bismilla by severing her head from the body with a knife but that by reason of unsoundness of mind he was incapable of knowing that what he was doing was wrong or contrary to law and that he is, therefore, Dot guilty of the offence of murder with which he is charged under section 302, Indian Penal Code and I direct that the said accused be acquitted. " The learned Judge had definitely found that the accused knew the nature of the act he was doing, finding which as we shall presently point out, was concurred in by the learned Judges of the High Court. In the face of it we find it rather difficult to sustain the reasoning upon which the last conclusion is rested on the facts of this case. From this order of acquittal by the learned Sessions Judge the State filed an appeal to the High Court. The learned Judges of the High Court also correctly appreciated the legal position that to invoke the benefit of the exemption provided by section 84 of the Indian Penal Code it would be necessary to establish that the accused was, at the moment of the act insane. The learned Judges, on this aspect of the case, said : " About the mental condition immediately before and after the crucial moment, we have the 589 circumstances, the conduct of the respondent on the morning of the 29th and his confession given on that afternoon. By themselves they do not support the theory of mental unsoundness necessary for Section 84, though they are explicable, consistently with epileptic insanity. The murder itself has been committed with extraordinary cunning, and attention to the most minute detail It is certain the respondent knew at that time the physical nature of what he was doing; he did not believe that he was breaking a pot or cutting a cabbage, but was taking the life of a human being which he says within 16 hours, he did for vindicating his honour. In fact, the condition at the time of the confession is one of elation rather than of depression or a black out . . . The learned Sessions Judge has held that the respondent was in a fit of epileptic insanity on the 28th night, when he killed his mother in law; it is not clearly recorded, but it also seems to be his finding that this fit of epileptic insanity continued at least till the time of his confession. This finding is not one without any evidence to support it, or one that can be called perverse; still, it is one that could properly be arrived at, only if it is consistent with the observation made on the respondent immediately after the 29th September, 1954. " They proceeded to point out that there was no observation by medical experts soon after the act to enable an inference to be drawn as to the mental condition of the accused just prior thereto. After detailing the arguments on either side the learned Judges concluded: " Thus we have no evidence pointing to that kind and degree of mental unsoundness at the time of the act as required by section 84 of the I.P.C. ; but on the defective material adduced, it would have been in my opinion, an unsatisfactory conclusion either way In a case like this when the proved facts would otherwise support a conviction for murder it was for the defence to adduce evidence and it should, in principle, reap the consequence of any omissions in this regard," 590 From these observations it would appear as if the learned Judges of the High Court were differing from the learned Sessions Judge in his conclusion as regards the application of section 84 to the facts of the present case. They however, continued: " The Sessions Judge was satisfied that the defence has discharged the onus of proving that at the time of the commission of the offence the accused was mentally so unsound as not to know that the act was wrong and contrary to law. Now it is for the State to establish in appeal that the finding is perverse and that there are compelling reasons why that decision should be reversed." and it is on this ground that the learned Judges dismissed the appeal by the State. We find ourselves wholly unable to concur with this conclusion or with the reasoning on which it is rested. The learned Judges failed to appreciate that the error in the judgment of the Sessions Judge lay not so much in the implicit acceptance of the testimony of the father of the accused because he was obviously an interested witness, and of this the appellant State could certainly and justifiably complain but in proceeding on a basis wherein inferences and probabilities resting on assumptions were permitted to do duty for proved facts, which the statute required to be established before the exemption under the section could be claimed. Refusal to interfere with an acquital in such circumstances could hardly be justified under any rule as to " impelling reasons " for interference even assuming the existence of such a rule. The error in the judgment of the High Court consisted in ignoring the fact that there was nothing on the record on the basis of which it could be said that at the moment of the act, the accused was incapable of knowing that what he was doing was wrong or contrary to law. In this connection we might refer to the decision of the Court of Criminal Appeal in En, gland in Henry Perry(1) where also the defence was that the accused had been prone to have fits of epileptic insanity. During the course of the argument Reading, C.J., observed : (z) 14 Cr. Appeal Rep. 48. 591 " The crux of the whole question is whether this man was suffering from epilepsy at the time he committed the crime. Otherwise it would be a most dangerous doctrine if a man could say, 'I once had an epileptic fit, and everything that happens hereafter must be put down to that '. " In dismissing the appeal the learned Chief Justice said: " Every man is presumed to be sane and to possess a sufficient degree of reason to be responsible for his acts unless the contrary is proved. To establish insanity it must be clearly proved that at the time of committing the act the party is labouring under such defect of reason as not to know the nature and quality of the act which he is committing that is, the physical nature and quality as distinguished from the moral or, if he does know the nature and quality of the act he is committing, that he does not know that he is doing wrong. There is, however, evidence of a medical character before the jury, and there are statements made by the prisoner himself, that he has suffered from epileptic fits. The Court has had further evidence, especially in the prison records, of his having had attacks of epilepsy. But to establish that is only one step; it must be shown that the man was suffering from an epileptic seizure at the time when he committed the murders; and that has not been proved. " We consider that the situation in the present case is very similar and the observations extracted apply with appositeness. We consider that there was no basis in the evidence before the Court for the finding by the Sessions Judge that at the crucial moment when the accused out the throat of his mother in law and severed her head, he was from unsoundness of mind incapable of knowing that what he was doing was wrong. Even the evidence of the father does not support such a finding. In this connection the Courts below have failed to take into account the circumstances in which the killing was compassed. The accused bore illwill to Bismilla and the act was committed at dead of night when he would not be seen, the accused 76 592 taking a torch with him, access to the house of the deceased being obtained by stealth by scaling over a wall. Then again, there was the mood of exaltation which the accused exhibited after he had put her out of her life. It was a crime committed not in a sudden mood of insanity but one that was preceded by careful planning and exhibiting cool calculation in execution and directed against a person who was considered to he the enemy. The appeal is therefore allowed, the order of acquittal passed against the respondent set as de and in its place will be substituted a finding that the respondent is guilty of murder under section 302 of the Indian Penal Code. In the normal course the proper punishment for the heinous and premeditated crime committed with inhuman brutality would have been a sentence of death. But taking into account the fact that the accused has been acquitted by the Sessions Judgean order which has been affirmed by the High Court we consider that the ends of justice would be met if we sentence the accused to rigorous imprisonment for life. It is needless to add that the State Government will take steps to have the accused treated in an asylum until he is cured of his illness, if this still continues. Appeal allowed.

The High Court affirmed an order of acquittal of the respondent on a charge of murder under section 302 of the Indian Penal Code passed by the Sessions judge on the ground that the accused was of unsound mind. The prosecution case was that the accused committed the murder of his mother in law against whom he had borne ill will, by severing her head from her body while she was asleep at dead of night. He made a confession of the crime but a plea of insanity was taken at the trial. On appeal with special leave by the State : Held, that the crucial point of time at which unsoundness of mind should be established is the time when the crime is actually (1) I.L.R. [1938]2 Cal, 337. 75 584 committed, the burden of proving which lies on the accused in order to entitle him to the exemption provided under section 84 of the Indian Penal Code. It is not sufficient only to prove that the accused suffered from an "epileptic type of insanity" before or after the commission of the crime. Henry Perry, 14 Cr. Appeal Rep. 48, followed. There was nothing on the record of the instant case to show that at the moment when the crime was committed the accused was capable of knowing that what he was doing was wrong or contrary to law and as such he was not entitled to an acquittal under section 84 of the Indian Penal Code. Refusal by the High Court to interfere with an acquittal in the proved circumstances of the case could not be justified under any rule as to " impelling reasons ".

The appellant, R.S. Nayak, filed a complaint against the respondent, A.R. Antualy, a public servant being the Chief Minister of Maharashtra State under sections 161, 165 I.P.C. and section 5 of the Prevention of Corruption Act, 1947 (1947 Act) alleging abuse of office of Chief Minister. The complaint was rejected on account of absence of necessary sanction of the Governor of Maharashtra State under section 6 of the 1947 Act to prosecute the respondent. After the Governor issued necessary sanction, the appellant filed a fresh complaint in the Court of Special Judge against the respondent on the same grounds. However, on the date of filing fresh complaint the respondent had already resigned as Chief Minister. The respondent contended that the Special Judge had no jurisdiction to try him under section 7 of the Criminal Law Amendment Act, 1952 and that no cognizance could be taken on private complaint. The Special Judge rejected both the contentions. In the meantime the State Government issued a notification under section 7(2) of the Criminal Law Amendment Act, 1752 under which the case was transferred to another Special Judge. In a criminal revision application filed by the respondent against the order of earlier 496 Special Judge, a Division Bench of the High Court held that the Social Judge had jurisdiction to try the respondent and that the private complaint was maintainable. When the latter Special Judge proceeded with the case the respondent filed an application for his discharge on the grounds that the charge against him was baseless and that he being a Member of legislative Assembly (M.L.A) requisite sanction under section 6 of the 1947 Act was necessary. The Special Judge discharged the respondent holding that the respondent being M.L.A was a public servant within section 21 (12)(a) of I.P.C. and hl the absence of the sanction of the Legislative Assembly he could not take cognizance of offence. The Special Judge also held that. the material date for deciding the applicability of section 6 of the 1947 Act was the date on which the Court was asked to take cognizance of the offence. The appellant challenged the order of the Special Judge in this Appeal. The questions which arose for consideration were: (a) That is the relevant date with reference to which a valid sanction is a pre requisite for the prosecution of a public servant for offences enumerated in section 6 of the 1947 Act ? (b) If the accuse holds several offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged, or is it implicit in section 6 of the 1947 Act that sanction of that competent authority alone is necessary which is entitled to remove the public servant from the office which is alleged to have been abused or misused for corrupt motives ? (c) Is M.L.A. a public. servant within the meaning of the expression in clauses 12(a), 3 and 7 of section 21 I.P.C. ? (d) Is sanction as contemplated by section 6 of the 1947 Act necessary for prosecution of M.L.A. and if so, which is the sanctioning authority competent to remove M.L.A. from the office of Member or the Legislative Assembly ? Allowing the appeal. ^ HELD: The provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it. If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provisions. In the event of an ambiguity of the plain meaning of the words used in the statute being self defeating, the court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute. Whenever a question of construction arises upon ambiguity or where two views are possible of a Provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act. [521 A C] The basic purpose underlying all canons of construction is the ascertainment 497 with reasonable certainty of the intention of Parliament in enacting the legislation. A For this purpose why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation. Such denial would deprive the court of a substantial and illuminating aid to construction. Therefore, departing from the earlier English decisions, the reports of the committee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee report of a commission set up for collecting information leading to the enactment are permissible external aids to construction. [527 A; D E] In construing a statute more especially the ancient statute, the court may look at the surrounding circumstances when the statute was enacted. The construction of ancient statutes may be eludicated by what in the language of the courts is called contemporanea expositio, that is, by seeing how they were understood at the time when they were passed. [528F G] Standard dictionaries as a rule give in respect of each word as many meanings in which the word has either been used or it is likely to be used in different contexts and connections. While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in common parlance, the well known cannon of construction should not even for a minute be overlooked that the meaning to the words and expressions used in a statute ordinarily take their colour from the context in which they appear. [539F G] Deputy Chief Controller of Imports & Exports New Delhi vs K.T. Kosalram Ors., ; at 517; and State Bank of India vs N. Sundara Money, ; , referred to. Section 6 of the Prevention of Corruption Act, 1947 bars the courts from taking cognizance of the offences therein enumerated alleged to have been committed by a public servant except with the previous sanction of the competent authority empowered to grant the requisite sanction. Therefore, when the court is called upon to take cognizance of such offences, it. must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been committed by him as public servant. Undoubtedly the accused must be a public servant when he is alleged to have committed the offence of which he is accused because sections 161, 164, 165 I.P.C. and section 5(2) of. the 1947 Act clearly spell out that the offences there in defined can be committed by a public servant. A trial without a valid sanction where one is necessary under section 6 would be a trial without jurisdiction by the court. It is well settled that the relevant date with reference to valid which a valid sanction is sine qua non for taking cognizance of an offence committed by a public servant as required by section 6 is the date when the court is called upon to take cognizance of the offence of which he is accused. If, therefore, when the offence is alleged to have been committed, the accused was a public servant but by the time the court is called upon to take cognizance of the offence committed by him as public servant, he has cased to be a public servant, section 6 will not be attracted and no sanction would be necessary for taking cognizance of the offence against him. This approach is in accord with the policy underlying s.6 in that a public servant is not to be exposed to harassment of a frivolous or speculative prosecution. If he has ceased to be a public 498 servant in the meantime, this vital consideration ceases to exist. [512D; H; 513 A E]. C.R. Bansi vs State of Maharashtra, [1971] 3 S.C.R. 236; R.R. Chari vs State of U.P., ; ; S.N. Bose vs State of Bihar, [1968] 3 S.C.R. Venkataraman vs The State. ; at 1052; K.S. Dharmaatan vs Central Government & Ors., ; , referred to. In the instant case, long before the date on which the cognizance was taken by the Special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant in his capacity as Chief Minister. A fortiori no sanction as contemplated by section 6 was necessary before cognizance of the offence could be taken against the accused for offences alleged to have been committed in his former capacity as public servant. [514 D E] The submission that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, under section 6 sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the competent authorities fails or declines to grant sanction, the court is precluded or prohibited from taking cognizance of the offence with which the public servant is charged is not acceptable. Such an interpretation of s.6 would render it as a shield to an unscrupulous public servant. Someone interested in protecting may shift him from one office of public servant to another and there by defeat the process of law. Such an interpretation is contrary to all cannons of construction and leads to an absurd end product which of necessity must be avoided. [520G; 518F C] The State (S.P.E. Hyderabad) vs Anr Commodore Kailash Chand, ; , referred to and partly dissented from. The expression 'office ' in the three sub clauses of s 6(1) clearly denotes that office which the public servant misused or abused for corrupt motives for which he is to be prosecuted and in respect of which a sanction lo prosecute him is necessary by the competent authority entitled to remove him from that office which he has abused. The sanction to prosecute a public servant can be given by an authority competent to remove him from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and not some rank outsider. The authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction. A grant of sanction is not an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly complied with before any prosecution could be launched against public servants. Therefore, it is implicit in s.6 that sanction of that competent authority alone would be necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motive and for which a prosecution is intended to be launched against him. [516H; 517A D] Mohd. Iqbal Ahmed vs State of A. P., [1979] 2 S.C.R. 1007, referred to. 499 The finding of the Special Judge that the respondent being M.L.A. was a public servant within clauses (12)(a) (3) and (7) of s.21 I.P.C. and sanction of the Legislative Assembly to prosecute him was necessary, is not correct. A person would be a public servant under clause (12)(a) of section 21 I.P.C. if he falls under any of the following three categories: (i) if he is in the service of the Government; or (ii) if he is hl the pay of the Government; or (iii) if he is remunerated by fees or commission for the performance of any public duty, by the Government. Looking into the history and evolution of s.21 I.P.C. as traced and adopted as an external aid to construction, it is clear that M.L.A. was not and is not a 'public servant ' within the meaning of expression in any of the clauses of section 21 I.P.C. Assuming that it would not be legally sound or correct according to well accepted cannon of construction of a statue of construe section 21(12)(a) by mere historical evolution of the section, the constitutionally valid approach would be to look at the language employed in the section to ascertain whether M.L.A. is a public servant within the meaning of the expression in that section. Depending upon the context, 'or '. The use of the expression 'or ' in the context in which it is used in cl.(12) (a) does appear to be a disjunctive. Therefore, those would be a public servant. The question is whether M.L.A. falls in under any of the above three categories? It was concerned that M.L.A. is not the service of the Government but it was contended that M.L.A. is in the pay of the Government. Undoubtedly, M.L.A. receives a salary and allowances his capacity as M.L.A. under the relevant statute. But does it make him a person 'in the pay of the Government '? The word 'pay ' standing by itself is open to various shades of meaning and when the word is used in a phrase in the pay of ' it is more likely to have a different connotation than when standing by itself. The phrase "in the pay of ' would ordinarily import the element of employment or paid employment or employed and paid by the employer. The phrase does not import of necessity a master servant relationship between the person receiving the pay and the Government as payer. Next what does the expression 'Government ' in cl. (12)(a) of section 21 I.P.C. connote ? Section 17 I.P.C. provides that the word "Government ' denotes the Central Government or the Government of a State. 71 I.P.C. provides that 'every expression which is explained in any part of the Code, is used in every part of the Code in conformity with the explanation '. Let it be noted that unlike the modern statute s.7 does not provide unless the context otherwise indicate ', a phrase that prefaces the dictionary clauses of a modern statute. Therefore, the expression "Government ' in section 21(12)(a) must either mean the Central Government or the Government of a State. The Central Government being out of considering the question is whether M.L.A. is the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State. Even though M.L.A. receives pay and allowances, he is not in the pay of he state Government because legislature of a State cannot be comprehended in the expression 'State Government '. This conclusion would govern also the third part of c. (12)(a) i.e. 'remunerated by fees for performance of any public duty by the Government. Therefore, if M.L.A. is not in the pay of the Government in the sense of executive government or is not remunerated by fees for performance of any public duty by the exe 500 cutive government, certainly, he would not be comprehended in the expression 'public servant ' within the meaning sf the expression in cl. (12)(a). He is thus not a public servant within the meaning of the expression in cl. (12)(a). This conclusion rein forces the earlier conclusion reached after examining the historical evolution of cl. (12)(a): [537 A B; 536G; E; H; 537 H;E; 539 E; 541 A; D F; 543 E; 551 A B] Evolution of Parliamentary Privileges by section K. Nag ; Legislative Bodies Corrupt Practices Act, 1925; Prevention of Corruption Act 1947 by Sethi and Anand P.60; Santhanam Committee Report dt. 31 3 1964; Lok Sabha Debates (Third Series Vol. 35, Cls. 729 and 731; The Anti Corruption Laws (Amendment) Bill, 1964 (enacted as Act 40 of 1964); G.A. Monerop vs The State of Ajmer, ; The State of Ajmer vs Shivji Lal [1959] supp. 2 S.C.R. 739; Prabhashanker Dwivedi and Anr. vs The State of Gujarat, AIR 1970 Gujart, AIR 1970 Gujarat 97; State of Gujart vs Manshanker Prabhashanker Dwivedi, ; Green vs Premier Glynrohonwy State Co. Ltd, at 568; Babi Manmohan Das Shah & Ors. vs Bishnu Das, ; at 839; Kamta Prasad Aggarwal etc. Executive Engineer, Ballabgarh & Anr., ; ; M. Karunanidhi vs Union of India, ; ; Costituent Assembly debates, Vol. VII p. 984; Rai Shib Ram jawaya Kapur & Ors. vs The State of Punjab [1975] 1 S.C.R. 225 at p. 236; Shamsher Singh & Anr. vs State of Punjab, ; Sardari Lalv. Union of India & Ors. ; ; His Majesty the King vs Boston 7 Ors., [1923 24] 33 Commonwealth Law Report 386. .82; Earskine May Parhamentary Practice 20 edition, p. 149, referred to The Submission that the accused would be a public servant within the meaning of the expression any person empowered by law to discharge any adjudicatory functions, in cl. (3) of s.21 I.P.C. must be rejected. Participation in a debate on a motion of breach of privilege or for taking action for contempt of the House and voting thereon in a constitutional function discharged by the members and therefore, it cannot be said that such adjudicatory functions if it can be so styled, constitutes adjudicatory function undertaken by M.L.A. as empowered by law. [554 E F] Special Ref. No. 1 of 1966; , at pages 490, 491 and 472; I.C. Golaknath vs State of Punajab, ; Sripadangalavaru vs State of Kerala and Anr.; [1973] Supp. S.C.R 1 referred to. The submission that M.L.A. would be a public servant within cl. (7) of s.21 I.P.C. must be rejected. (7) takes within its ambit 'every person who holds any office by virtue of which he is empowered to place or keep any person in confinement. Broadly stated the expression comprehends police and prison authorities or those under an obligation by law or by virtue of office to take into custody and keep in confinement any person. To say that M.L.A. by virtue of his office is performing 'policing or prison officers ' duties would be apart from doing violence to language lowering him in status. Additionally cl.(7) does not speak of any adjudicatory function. lt appears to comprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a Person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in confinement. [554G, 555 F H] In view of the finding that M.L.A. is not a public servant under clauses (12)(a), (3) and (7) of s.21 I.P.C. and no sanction under s.6 of the Prevention of Corruption is necessary to prosecute him. it is not necessary to ascertain which would be the authority competent to sanction prosecution of M.L.A. [557 C] In the instant case, the allegations in the complaint are all to the effect that the accused misused or abused his office as Chief Minister for corrupt motives. By the time the Court was called upon to take cognizance of those offences, the accused had ceased to hold the office of Chief Minister. The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect is irrelevant for concluding that no sanction was necessary to prosecute him under s.6 on the offences alleged to have been committed by the accused. Assuming that as M.L.A. the accused would be a public servant under s.21, in the absence of any allegation that he misused or abused his office as M.L.A. that aspect becomes immaterial. Further s.6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under section 161, 164, 165 I.P.C. and s.5 of the 1947 Act, if they are alleged to have been committed by a public servant. In view of the finding that M.L.A. is not a public servant within the meaning of the expression in s.21 I.P.C., no sanction under s.6 is necessary to prosecute him for the offences alleged to have been committed by him. [556 G; 557 A B]

The appellant was convicted by the Sessions judge of the offence of murder of K and sentenced to death, and the con viction and sentence were confirmed by the High Court. The committal proceedings disclosed that the Magistrate committed the accused to the Court of Session without recording the evidence of the witnesses to the actual commission of the offence. Held that under section 207A of the Code of Criminal Pro cedure, 1898, as amended by Act 26 of 1955, a Magistrate., has 993 been given a discretion in the matter of examination of witnesses not produced by the prosecutor. The prosecutor is expected ordinarily to examine in the court of the committing Magistrate all witnesses to the actual commission of the offence, but if without adequate reasons he fails to do so, the Magistrate is justified and, in enquiries on charges of serious offences like murder, is under a duty to call witnesses who would throw light upon the prosecution case. A Magistrate failing to examine witnesses to the actual commission of the offence because they are not produced, without considering whether it is not necessary in the interests of justice to examine such witnesses, fails in the discharge of his duties. The Magistrate must apply his mind to the documents referred to in section 173 of the code and the testimony of witnesses, if any, produced by the prosecutor and examined, and consider whether in the interests of justice it is necessary to record the evidence of other witnesses. A Magistrate in committing a person accused of an offence for trial has to perform a judicial function which has a vital importance in the ultimate trial, and a slipshod or mechanical dealing with the proceeding must be deprecated. Shriram Daya Ram vs The State of Bombay, [1961] 2 S.C.R. 890, considered.

Section 14 of the Code of Criminal Procedure, as amended by Bombay Act 23 of 1951, empowered the State Government to appoint a qualified person as a special Magistrate and to confer upon him powers conferrable upon a judicial Magistrate in respect of a particular case or a particular class or classes of cases or in regard to cases generally in any local area. By a notification dated December 29, 1961, the Government appointed Mr. G to be a Special Judicial Magistrate for the area comprising Greater Bombay and Ratnagiri District and conferred upon him all the powers of a Presidency Magistrate in respect of the trial of the Deogad Gold Seizure case. The petitioners, who are accused in the case, moved the Supreme Court for a writ of certiorari for quashing the notification on the ground that the notification and the amended s.14 infringed article 14 of ' the Constitution. Held, that the amended section 14 does not offend article 14 and is valid. There is substantially no difference between the powers conferrable by the unmended and by the amended section 14. M. K. Gopalan vs State of Madhya Pradesh, [1955] 1 S.C.R. 168, relied on. Held, further that the notification constituting a Special Magistrate for the trial of the petitioners was not discriminatory. Amended section 14 contemplates both a case which is pending and one which may be instituted after the date of the constitution of the Special Magistrate. The constitution of a Special Magistrate does not amount directly or indirectly to a transfer of any 574 case. The fact that Mr. G may hold the trial at Bombay and not at Deogad while other similarly situated would be tried at Deogod may result in inconvenience to the petitioners but this could not sustain the plea of discrimination. The charge against the petitioners is in respect of conspiracy at Bombay, Deogad and other places and the petitioners could have been lawfully tried at Bombay. The notification constituted a Special Magistrate and conferred jurisdiction on him both over the place where the petitioners are alleged to have conspired and the place where the offences are alleged to have been actually committed. It did not amount to discrimination that from the judgment of the Special Magistrate an appeal would lie to the High Court while if the petitioners were tried by a Magistrate at Deogad, an appeal would lie to the Sessions judge and then a revision would lie to the High Court. The difference of the venue results from the nature of the jurisdiction exercised by the Magistrate trying the case and not from any unequal dealing by the notification.

The petitioner was a Deputy Inspector of Schools and a member of the Education department of the respondent State. On September 2, 1953, the Director of Public Instruction passed an order directing a censure to be recorded in the character roll of the petitioner. On March 5, 1960, he was reverted to the Lower Division of the Subordinate Educational Service, as a result of an inquiry into certain charges. He filed a suit challenging the two orders. On August 5, 1961, the Munsiff passed an order restraining the respondent from enforcing the order dated March 5, 1960. On April 3, 1962, the temporary injunction was vacated by the Subordinate Judge. On April 11, 1963, the suit was decreed and the respondent was prohibited from enforcing the order dated March 5, 1960. This decree was set aside in appeal by the Subordinate Judge on June 24, 1964, and the petitioner 's second appeal was dismissed by the High Court on February 11, 1965. On August 5, 1966, the Director of Public Instruction passed an order that the petitioner 'having not been on his duties for more than five years since March 1, 1960 has ceased to be in Government employ since March 2, 1965 under r. 76 of the Bihar Service Code. ' The petitioner having completed 58 years of age addressed a letter to the Director of Public Instruction on July 18, 1967 requesting him to arrange for the payment of her. pension, and on June 12, 1968 the Director of Public Instruction passed orders stating that under r. 46 of the Bihar Pension Rules he was not entitled to any pension. The petitioner filed the present writ petition under article 32 challenging the various orders. HELD: (1) No relief could be granted in respect of the orders dated September 2, 1953 and March 5, 1960, as, (a) they were already covered by the decision of the High Court in second appeal. (b) no relief could be granted with respect to an order passed as early as 1953; and (c) the orders did not infringe any fundamental rights of the petitioner. [652G H 653A B] (2) The order dated August 5, 1966, declaring, under r. 76 of the Service Code that the petitioner had ceased to be in Government service should be set aside. [653 A B] (a) The essential requirement for taking action under the said rule is that the government servant should have been continuously absent from duty for over five years. Under this rule it is immaterial whether absence from duty by the government servant was with or without leave so long as it is established that he was absent from duty for a continuous period for over five years. Admittedly the petitioner, in the present case, was on duty till March 10, 1960 and he ceased to attend to his duty only from March 635 11, 1960. Therefore, the order stating that he 'ceased to be in government employ on March 2, 1965, was on the face of it erroneous. ' [643C D, E; 644A C] (b) Assuming that the order should be read that the petitioner was not on his duty continuously for more than five years from March 11, 1960 till August 5, 1966 the date of the order even then, the order would be illegal. From August 5, 1961, the date of temporary injunction granted by the Munsiff till April 3, 1962, when that order was vacated by the Subordinate Judge, the Department did not allow the petitioner to join duty in the senior post in spite of several letters written by him. Again on April 11, 1963 when the Munsiff granted a decree in favour of the petitioner, the respondent did not obtain any stay order from the appellate court, and so, the decree of the trial court was in full force till it was set aside in appeal on June 24, 1964. During that period, that is, from April 11, 1963 to June 24, 1964 the petitioner wrote several letters requesting the respondent to permit him to join duty in the senior grade, but the respondent did not permit him to do so. Therefore, there was no question of the petitioner being continuously absent from service for over 5 years during the period referred to when he was willing but the respondent did not allow him to serve, and hence, r. 76 of the Service Code was not applicable. [644E F; 645A D,G; 646D H; 647A B,E F] (c) Even if the r. 76 was applicable and it was a question of automatic termination of service, article 311 applies to such cases also. According to the respondents a continuous absence from duty for over five years apart from resulting in the forfeiture of the office also amounts to misconduct under r. 46 of the Pension Rules disentitling the office to receive pension. The respondent did not give an opportunity to the petitioner to show cause against the order proposed. Hence there was violation of article 311. [647GH ; 648D E] Jai Shankar vs State of Rajasthan, ; , followed. (3) The order dated June 12, 1968 stating that under r. 46 of the Pension Rules the petitioner was not entitled to any pension should also be set aside. [649C] Payment of pension under the rules does not depend upon the discretion of the State Government but is governed by the rules and a government servant, coming within those rules is entitled to claim pension. Under r. 46 a Government servant dismissed or removed for misconduct, insolvency or inefficiency is not eligible for pension. In the present case it was contended that the petitioner 's absence for over five years, amounted to misconduct and inefficiency in service. But when the order dated August 5, 1966 has been held to be illegal then the order dated June 12, 1968 based upon it also falls to the ground. [649B C;D H;65OA B] (4) The grant of pension does not depend upon any order. It is only for the purpose of quantifying the amount having regard to the service and other allied matters that it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of any such order but by virtue of the rules. The right of the petitioner to receive pension is property under article 31(1) and by a mere executive order the State had no power to withhold it. Similarly, the said claim is also property under article 19(1) (f). It, therefore follows, that the order dated June 12, 1968 denying the petitioner the right to receive pension affected his fundamental right and as such the writ petition was maintainable. [650G H; 652B C, D F] K. R. Erry vs State of Punjab, I.L.R. [1967] Punjab & Haryana 279, (F.B) approved. 636 (5) The bar against the Civil Court entertaining any suit relating to the matters under the Pension Act does not stand in the way of a writ of mandamus being issued to the State to properly consider the claim of the petitioner for payment of pension according to law.

The appellant failed to prepare a budget of the Waqf Estate of which he was the mutawalli, for the year 1952 53 and send a copy of it to the Majlis before January 15, 1952, as he was bound to do under section 58(1) of the Bihar Waqfs Act, 1947, and was convicted by the 'Magistrate under section 65(1) of the Act and sentenced to pay a fine of Rs. 100, in default to undergo fifteen days simple imprisonment. It was contended for him that the conviction and sentence were not valid because (1) section 58 of the Act contravened article 19(1) (g) of the Constitution of India, as it gave unrestricted power to the Majlis to alter or modify the budget prepared by the mutawalli without a right of appeal against the action of the Majlis and so imposed an unreasonable restriction on the mutawalli in carrying on his occupation as such, and (2) section 65 Of the Act did not provide for any imprisonment in default of payment of fine. Held, that having regard to the fact that a mutawalli occupies the position of a manager or custodian and the supervision over him by the Majlis with respect to due administration of the waqf property is necessary and that the powers of the Majlis to alter or modify the budget prepared by the mutawalli are controlled by sub section (6) Of section 58 of the Act, the restrictions imposed by section 58 Of the Act on the exercise of his powers 1033 by a mutawalli are reasonable. Accordingly, the provisions Of section 58 'of the Act do not offend article 19 (i) (g) of the Constitution. Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindya Thirtha Swamiar of Sri Shirur Mutt, ; , relied on. The order of the Magistrate providing for imprisonment in default of payment of fine is not invalid in view Of section 33 of the Code of Criminal Procedure read with sections 4o and 67 of the Indian Penal Code.

The petitioner was serving as an officiating Teleprinter Supervisor at Jaipur when the employees of the Posts and Telegraphs Department went on strike from the midnight of July 11, 1960, throughout India and there was a similar strike at Jaipur. The petitioner 's case was that he was on duty that day from 12 noon to 8 p.m. and after his duty was over, he did not go home but went to the dormitory where he fell asleep as he was tired. On hearing some noise he woke up at 11 30 p.m. and wanted to go home but was arrested by the police under the Essential Services Maintenance Ordinance, No. 1 of 1960. The criminal charge was however withdrawn. On July 21, 1960, a chargesheet was served on the petitioner in the following terms: "That Shri Radhey Shyam Sharma I C/S Telegraphist, CTO Jaipur committed gross misconduct in that on the midnight of the 11th July, 1960, he took part in a demonstration in furtherance of the strike of the P. & T. Employees in violation of the orders dated 8 7 1960 issued by the Government of India under the 'Essential Services Maintenance Ordinance, 1960 (1 of 1960) ' prohibiting strikes in any Postal, telegraph or telephone service". The enquiry officer found him guilty of the charge and ordered that his pay should be reduced in the time scale by three stage,% for a period of two years and on restoration the period of reduction was not to operate to postpone his future increments. 0n appeal, the Director General considered the whole matter on merits and rejected the appeal. In this Court it was urged that the punishment imposed upon the petitioner was violative of his fundamental rights under articles 19(1)(a) and (b), reliance being placed on two cases of this court in Kameshwar Prasad vs State of Bihar and O. K. Ghosh vs E. X. Joseph; that sections 3, 4 and 5 of the Ordinance were ultra vires, as they contravened article 19(1.)(a) and (b) and that in any case there was no evidence on which it could ' be found that the charge against him had been proved. Held: The provisions of the Ordinance in sections 3, 4 and 5 did not violate the fundamental rights enshrined in article 19(1)(a) and (b). A perusal of article 19(1) shows that there is no fundamental right to strike, and all that the ordinance provided was with respect to any illegal strike as provided in the Ordinance. There was no provision in the Ordinance which in any way restricted those fundamental rights. It was not in dispute that Parliament had the competence to make a law in the terms of the Ordinance and therefore the President had also the power to promulgate, such an Ordinance. 404 The competence of the legislature therefore being not in dispute it cannot be held that the Ordinance violated the fundamental rights guaranteed under article 19(1)(a) and (b). All India Bank Employees Association vs National Industrial Tribunal, ; , referred to. The two cases relied on by the petitioner have no relevance in connection with the charge in the present case. The punishment given to the petitioner cannot therefore be set aside on the ground that the charge was in violation of the fundamental rights guaranteed under article 19(1)(a) and (b). Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369 and O. K. Ghosh vs E. X. Joseph, [1963] Supp. 1 S.C.R. 789, held inapplicable. If on the undisputed facts the authorities came to the con clusion that the petitioner acted in furtherance of the strike 'Which was to commence half an hour later and was thus guilty of gross misconduct, it could not be said that there was no evidence on which the authorities concerned could find the charge framed against the petititoner proved.

The appellant who was charged with an offence under section 5(2) read with s.5(1)(d) of the Prevention of Corruption Act was acquitted by the Special Judge. But the High Court on appeal by the State, reversed the judgment of he Special Judge and convicted him. In appeal to this Court it was contended on behalf of the appellant that there was no evidence to show on what materials the sanctioning authority applied its mind before granting the sanction under s.6 of the Act. The entire proceedings are void ab initio. Allowing the appeal. ^ HELD: 1 (a). The prosecution of the appellant was without valid sanction and, therefore, cognizance taken by the Special Judge was without jurisdiction. [1011 G] (b) Any case instituted without proper sanction must fail because this being a manifest defect in the prosecution, the entire proceedings are rendered void ab initio. It is incumbent on the prosecution to prove that a valid sanction had been granted by the sanctioning authority after it was satisfied that a case had been made out constituting the offence. This should be done in two ways: either (i) by producing the original sanction which itself contains the facts constituting the offence and the grounds of sutisfaction or (ii) by adducing evidence aliunde showing the facts placed before the authority and the satisfaction arrived at by it. [1010 B D] In the present case no evidence, either primay or secondary, had been led to prove the contents of the note placed before the sanctioning authority nor were the witnesses examined in a position to state the contents of the note. The grant of sanction is not an idle formality but a solemn and sacrosanct act which affords protection to government servanats against frivolous prosecutions and must therefore be strictly complied with before any prosecution could be launched against public servants. [1010G] (b) There is no force in the argument of the State that the Court should presume the facts on the basis of evidence given by one of the witnesses and the order implementing the sanction mentioning those facts. What the Court 1008 has to see is whether or not the sanctioning authority at the time of giving the sanction was aware of the facts constituting the offence and applied its mind for the same. Any subsequent fact coming into existence after the resolution had been passed is wholly irrelevant. [1010 F] (c) There is equally no force in the State 's contention that even if no facts were mentioned in the resolution it must be presumed that the sanctioning authority was satisfied that the accused had received a bribe. There is no question of a presumption being available .o the sactioning authority because at that stage the occasion for drawing a presumption never arises since there is no case in the Court. [1011 B] (d) The presumption does not arise automatically but only on proof of certain circumstances that is to say, where it is proved by evidence in Court that the money said to have been paid to the accused was actually recovered from his possession. It is only then that the Court may presume the amount received would be deemed to be an illegal gratification. The question of sanction arises before the proceedings come to the Court and the question of drawing a presumption does not arise at this stage. [1011 C] (e) The prosecution cannot be given a chance to produce any material before the court at the appellate stage to satisfy that the sanctioninf authority had duly applied its mind before giving the sanction. The prosecution had been afforded a full and complete opportunity at the trial stage to produce whatever material it liked and it had chosen to examine two witnesses; but for reasons best known to it, it did not produce the note which formed the subject matter of resolution of the sanctioning authority. [1011 E] (f) In a criminal case this Court would not ordinarily direct fresh evidence to fill up a lacuna deliberately left by the prosecution. The liberty of the subject was in jeopardy and it cannot be allowed to put in jeopardy again at the instance of the prosecution which failed to avail of the opportunity afforded to it. [1011 J]

Appeal No. 221 of 1956. Appeal from the judgment and decree dated August 5,1955, of the Bombay High Court in Appeal No. 128/X of 1954. section N. Andley, J. B. Dadachanji, Rameshwar Nath and ,P. L. Vohra, for the appellants, 654 A V. Viswanatha Sastri and Tarachand Brij mohan Lal. for the respondents. January 31. , J. This appeal which has come to this Court with a certificate issued by the Bombay High Court raises for our decision a short and interesting question about the scope and effect of the provisions contained in section 89 of the Indian Companies Act, 1913, in relation to the law of banking. This question arises in this way. The appellant, the Oriol Industries, Ltd. (hereafter called the company) was incorporated on May 15, 1945, and it appointed as its managing agents M/s. Poddar Chack & Co. Soon after its incorporation the company passed a resolution on May 21, 1945, whereby it decided to open an account with the respondent, the Bombay Mercantile Bank, Ltd. (hereafter called the bank) and in accordance with the said resolution an account was opened with it on May 28, 1945. Twenty eight cheques were drawn on this account aggregating the total amount of Rs. 28,882 13 0 during the period between May 28, 1945 and July, 31, 1945. These cheques were drawn by K. Poddar and M. J. Chacko in pursuance of the authority conferred on them by the company. On September 28, 1948, by its liquidator the company brought the present suit claiming to recover from the bank the said amount of Rs. 28,882 13 0. The case for the company as set out in the plaint was that the payment of the said amount had been made by the bank wrongfully and negligently and the amount drawn under the said cheques had been wrongfully debited to the company in its account kept by the bank. It appears that the resolution for winding up of the company was held by the court to be null and void, and Bo the plaint was subsequently amended whereby the name of the liquidator was struck out and the suit then purported to be one which was instituted by the company itself The plea raised by the company that the cheques in question had been negligently 'and wrongfully honoured by the bank was 655 seriously disputed by the bank in its statement. Mr. Justice Tendolkar, who tried the suit on the Original Side of the Bombay High Court, however, upheld the plea raised by the company and came to the conclusion that the cheques had been wrongfully B, honoured. Even so, Mr. Justice Tendolkar held that out of the total amount in dispute an amount of Rs. 8,882 13 0 had been actually received by the company and so on equitable grounds he rejected the company 's claim in regard to the said amount. The company 's claim was, however, decreed in respect of the balance of Rs. 20,000. The decree thus passed by Tendolkar, J. was challenged by the bank in its appeal, whereas the rejection of the company 's claim in respect of Rs. 8,882 13 0 by the trial judge gave rise to cross objections by the company. The Court of Appeal has reversed the finding of Tendolkar, J., and has held that the bank was not liable to repay any amount to the company since it had accepted and honoured the cheques issued on it in good faith. It may be stated at this stage that the plea of negligence which had been originally urged by the company in its plaint was expressly given up at the trial. Since the Appeal Court accepted the bank 's case on the principal question of law it did not think it necessary to consider the question of limitation or the question about the applicability of the equitable doctrine on which the trial judge had relied. In the result the appeal filed by the bank was allowed, the cross objections preferred by the company were rejected, and the suit filed by the company was dismissed with costs. The company then moved the High Court for a certificate, and on a certificate being granted it has come to this Court; and on its behalf Mr. Andley has urged that in coming to the conclusion that the company 's claim was unsustainable the Appeal Court has misjudged;the effect of the provisions of section 89 of the Indian Companies Act in relation to the conduct of the bank in the present case. That is how the principal question which falls for our decision is about, the scope and effect of the provisions of s, 89 of the Indian Companies Act. 84 656 Before dealing with the said question of law it is necessary to dispose of a minor point raised by Mr. Andley. He contends that the cheques issued by K. Poddar and M. J. Chacko and honoured by the bank had not been issued in the form required by the resolution which gave them authority to operate on the company 's account with the bank. The relevant resolution passed by the company provided that "the banking accounts of the company be opened with the bank and another bank and that the said banks be and hereby authorised to honour cheques, bills of exchange and promissory notes, drawn, accepted or made on behalf of the company by the Managing Agents M/s. Poddar Chacko & Co., by both the Directors of the Managing Agents firm, namely, Mr. Keshavdeo Poddar and Mr. M. J. Chacko and to act on any instructions so given relating to the account whether the same be overdrawn or not or relating to the transactions of the company. " The argument is that two conditions had to be satisfied before the bank could accept a cheque issued under this resolution; the cheque had to be signed by both the Directors of the Managing Agents firm, and it had to be drawn on behalf of the company. In point of fact, all the cheques have been signed by the two individuals without describing themselves as Directors of the Manging Agents firm and without showing that they had drawn them on behalf of the company. These defects, it is urged, made the cheques irregular and inconsistent with the mandatory requirements of the resolution, and the bank was there fore not justified in honouring the said cheques. In our opinion, this argument is unsound. On a fair and reasonable construction of the resolution it is difficult to uphold the contention that the resolution required the drawers of the cheques to specify on each cheque that they were made or drawn on behalf of the company. The object of the resolution as well as its effect merely was to conform to the requirements of a. 89 of the Indian Companies Act to which we will presently refer. It cannot be said that the resolution required that the drawers of the cheques had to comply with the said condition apart from the requirements of section 89 ; and so it would be unreasonable 657 to treat the said requirement as a condition prescribed by the resolution independently of section 89. In this connection the subsequent resolution passed by the company is significant. It appears that on October 22, 1945, a resolution was passed by the, company authorising M. J. Chacko to sign cheques for the company, and when this resolution was communicated to the bank it was told that the cheques on behalf of the company would thereafter be signed as: it For and on behalf of the Oriol Industries Limited, For Poddar Chacko & Co."; in other words, by this communication the bank was told that it is only cheques signed by M. J. Chacko in the manner specified in the communication that the bank should honour. This communication affords an eloquent contrast to the communication made by the company to the bank in regard to the earlier resolution by which M/s. Poddar and Chacko were authorised to issue cheques on its behalf Therefore, in our opinion, the argument that the impugned cheques accepted by the bank were inconsistent with the specific mandatory requirements authorised by the resolution cannot be accepted. That takes us to the principal question of law. In dealing with the said question it is first necessary to refer to section 26 of the (26 of 1881). This section provides that " every person capable of contracting according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, endorsements, delivery and negotiation of a promissory note, bill of exchange or cheque." This section further provides, inter alia, that " nothing herein contained shall be deemed to empower a corporation to make, indorse or accept such instruments except in cages in which, under the law for the time being in force, they are so empowered. " This section does not purport to make any provision of substantive or procedural law. The latter part of the section merely brings out that a company cannot claim authority to issue a cheque under its first part. The law in regard to the company 's power to issue negotiable instruments has to be found in the relevant provisions of the Companies Act 658 itself We must, therefore, turn to section 89 of the said Act. Section 89 provides that " a bill of exchange, hundi or promissory note shall be deemed to have been made, drawn or accepted or endorsed on behalf of a company if made, drawn, accepted or endorsed in the name of, or by or on behalf of, or on account of, the company by any person acting under its authority express or implied. " It is clear that in order that a company may be bound by a negotiable instrument purporting to have been issued on its behalf two conditions must be satisfied; the instrument must be drawn, made, accepted or endorsed in the name of or by or on behalf of or on account of the company, and the person who makes, draws, endorses or accepts the instrument must have the authority given to him by the company on that behalf. This authority may be either express or implied. There is thus no doubt that before a company can be bound by a negotiable instru ment one of the essential conditions is that the instrument on its face must show that it has been drawn, made, accepted or endorsed by the company. This may be done either by showing the name of the company itself on the instrument, or by the statement of the person making the instrument that he is doing so on behalf of the company. In other words, unless the plain tenor of the negotiable instrument on its face satisfies the relevant requirement the instrument cannot be validly treated as an instrument drawn by the company. This position is not disputed. The importance and significance of the said requirement can be illustrated by reference to a decision of the Privy Council which had occasion to consider a similar requirement under section 27 of the . The said section provides that "every person capable of binding himself or of being bound, as mentioned in Section 26, may so bind himself or be bound by a duly authorised agent acting in his name." In Sadasuk Janki Das vs Sir Kishan Pershad (1) the Privy Council held that the name of the person or the firm to be charged upon a negotiable document should be stated clearly on the face or on (1) Cal. 659 the back of the document so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand. It is not sufficient that the name of the principal should be in some way disclosed; it must be disclosed in such a way that, on any fair interpretation of the instrument his name is the real name of the person liable on the bill. " According to the Privy Council " sections 26, 27 and 28 of the contained nothing inconsistent with the principles just set out, and there was nothing to support the contention urged before it that in an action on a bill of exchange or promissory note against a person whose name properly appears as a party to the instrument it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal. " This decision was no doubt given under section 27 of the , but the principles enunciated in it apply with equal force to a negotiable instrument issued under section 89 of the Indian Companies Act. The inevitable consequence of this requirement is that wherever a negotiable instrument is issued without complying with the said requirement it would not bind the company and cannot be enforced against it. In The Bank of Bombay vs H. R. Cormack (1) it was held by the Bombay High Court that in order to make a company liable on a bill or note it must appear on the face of such bill or note that it was intended to be drawn, accepted or made on behalf of the company, and no evidence dehors the bill or note is admissible under section 47 of the Indian Companies Act, X of 1866, equal to section 89 of the present Act. In support of this decision Sargent, C.J., has cited the observations of Lord Justice James in Miles ' Claim (2) " that it is the law of this country, and always has been the law of this country, that nobody is liable upon a bill of exchange, unless his name, or the name of some partnership, or body of persons of which he is one, appears either on the face or the back of the bill. " Thus there can be no doubt that the failure to comply with the essential requirements of section 89 must necessarily mean that the.negotiable instrument in question (1) Bom. (2) 643. 660 defectively issued cannot be enforced against the company. But the question which arises for our decision is whether this principle can be invoked in the present case where the action is not based on a negotiable instrument. The present dispute is between the bank and its constituent the company, and the claim made 'by the latter proceeds on the assumption that in honouring the cheques irregularly drawn the bank has acted improperly and exposed itself to the charge that it has honoured the cheques wrongfully and improperly. In considering this question it may be relevant to recall that both the courts below have found that the bank has acted bona fide and that the charge of negligence levelled against it by the company had been expressly given up. It is also necessary to bear in mind that when the company opened its account with the bank it was furnished with a book of cheques and it is from the said book that the impugned cheques have been issued. Evidence also shows that K. Poddar and M. J. Chacko had no other joint account with the bank so that it is clear that when the impugned cheques were issued the bank was justified in thinking that the said cheques must have been issued by the two drawers on behalf of the only account on which they could operate, and that the bank thought was done in pursuance of the authority conferred on them by the company by its resolution. In such a case, if the bank honours the cheques can it be said that the company on whose behalf the cheques were purported ,to have been issued can contend that the cheques should not have been honoured and that the amount debited to the company by the bank in its accounts has been improperly and wrongfully debited? It would be noticed that the principle underlying section 89 which is a very healthy and salutary principle affords to the companies protection against claims made on negotiable instruments defectively or irregularly drawn; but, when we deal with a dispute between a company and the bank of which it is a constituent it is difficult to extend the said principle. The said principle in terms is applicable only when a claim is made against a company on a negotiable instrument; in other words, 661 it is only in the matter of enforcement of negotiable instrument against a company that the principle comes into play. It is, therefore, difficult to see how the principle enunciated in section 89 can be extended to a claim made by the company against the bank. In our., opinion, therefore, the High Court was right in coming to the conclusion that section 89 cannot be invoked by the company against the bank in making the present claim. The decisions on which the company relied are all decisions in cases where a negotiable instru ment was sought to be enforced against the company and had thus given rise to a cause of action. No case has been cited before us in which section 89 has been extended to a claim like the present. On the other hand, there is authority of the House of Lords in support of the view which the High Court has taken in the present case. In Mahony vs East Holyford Mining Co. (1), a similar point arose for the decision of the House of Lords. One of the two points in that case had reference to eight cheques which had been defectively or irregularly drawn on behalf of the company and honoured by the bank. In reject ing the company 's claim against the bank in respect of the amount covered by the said cbeques Lord Chelmsford observed as follows: " With respect to the objection that the name of the company is not on eight of the cheques paid by the Bank, and therefore by the Companies Act, 1862, they are invalid, and the official liquidator is entitled, at all events, to the amount of these cheques the short answer is, that although the bankers might have perhaps required that these cheques should be made formally correct before they were paid; yet having paid them upon the demand of the only persons whom they knew as representing the company in the operations upon the account, there is not the slightes t pretence for insisting upon the liability of the Bank to repay the amount of these cheques on the ground of an unauthorised payment of them. " The Lord Chancellor Lord Cairns disposed of the point in these words: " The question being merely as (1) (1875) 7 Eng. & Irish Reports, 869, 662 to the authority given to the bankers to make the payment, it appears to me that when those who drew and those who honoured the cheque knew the account on which it was intended to operate, the result was ,the same as if the account had been mentioned on the face of the cheque, and that no distinction is to be made as to the money paid upon these cheques." Lord Penzance agreed with this opinion and observed that " looking at the way in which the cheques were drawn, and understood by those who drew them, and by those who paid them, they stand in no different way from the rest of the cheques in the case. " It would thus be clear that the authority of this decision of the House of Lords is in favour of the view taken by the High Court that the principle enunciated by section 89 of the Indian Companies Act cannot be extended to a claim made by a company against its bank on the ground that the cheque which the bank accepted and honoured was defective in that it did not comply with the requirements of section 89 and could not have been enforced against it. We ought to add that section 47 of the corresponding English Act of 1862 is exactly in the same terms as section 89 of the Indian Act. It also appears that Chalmers has expressed the same opinion for he says, ,So, too, bankers may be justified in paying cheques out of the funds of a company, where clearly, by the form of the cheques the company would not be liable as drawers if they should not be paid " (1). Similarly, Halsbury approves of the same principle in these words: " although documents omitting the name of the company therefore cannot be relied on as against the company, monies paid under them to persons known to represent the company are not on that account payable over again " (2). The result is the appeal fails and is dismissed with costs. Appeal dismissed. (1) Chalmers on " Bills of Exchange ", P. 63. (2) Halsbury 's Laws of England, 3rd Edn., Vol. , paragraph 830.

The Managing Agents of the appellant company withdrew certain sums of money from its a count with the respondent (1) Mad. 871. (2) Lah. (3) (4) I.L.R. (5) (6) Pat. 106 (7) (1953) I.L.R. K. All. 64. (8) Pat. 653 Bank, which the company had by a resolution authorised the Managing Agents to operate on. The Managing Agents had no other account with the said Bank. The company brought the suit, out of which the present appeal arises, against the Bank for recovery of the said amounts on the ground that the cheques issued by the Managing Agents had been wrongfully honoured by the Bank in that they were signed by them without describing themselves as Directors of the Managing Agents firm and on behalf of the company, as required by the resolution. The trial judge decreed the suit except with regard to a part of the claim which he found to have actually been received by the company. The appeal court dismissed the suit holding that the Bank had paid in good faith and that the company was not entitled to rely on section 89 of the Indian Companies Act. Held, that the court of appeal was right in holding that section 89 of the Indian Companies Act could not be invoked by the appellant in the present case. There can be no doubt that before a negotiable instrument can be enforced against a company under section 89 of the Indian Companies Act, it must on the face of it show that it was drawn, made, accepted or endorsed by the company, and this may be done either by showing the name of the company itself on the instrument, or by statement of the person making the instrument that he was doing so on behalf of the company. Sadasuk janki Das vs Sir Kishan Pershad, Cal. 663, applied. The Bank of Bombay vs H. R. Cormack, Born, 275 and Miles ' claim, , referred to. But the said principle is applicable only to the claim made against a company on a negotiable instrument and cannot be extended to a dispute between a bank and its constituent where the claim is not so based and proceeds on the basis that in honouring the cheques wrongfully drawn the bank acted improperly. Mahony vs East Holiford Mining Co., (1875) 7 Eng. & Irish Reports 869, referred to. Held, further, that the object of the resolution as well as its effect was merely to conform to the requirements of section 89 of the Indian Companies Act, 1913, and not to prescribe any condition precedent independently of that section.

The appellant, a cashier in a rural block development office of Shahjahanpur district, was convicted for misappro priating public money. Both the courts concurrently found that he had pocketed the sum which he claimed to have paid the Panchayat Secretary as salary. The appellant contended that the charge against him was falsified by the voucher and regular entry of the cash register regarding the above payment, which had been ticked and initialled by the Block Development Officer, and pro duced in evidence. Allowing the appeal, the Court HELD: (1) The proposition of litigative finality at the High Court level on findings of fact has been affirmed by this Court, but the exceptions which prove the rule are also well established. A conviction of guilt has been rendered by both the Courts, but certain grave factors conducive to miscarriage of justice, induce us to make an exception. The accused is entitled to the benefit of reasonable doubt owing to the contemporaneous entry in the cash register coupled with the signature of the B.D.O. the same day, as against ipsi dixit later. [689 G, 691 H, 692 G H] (2) Our observations must serve as catalysts to crash strategies on white collar crimes. Gross negligence, even absent mens rea, in handling public funds by those in office must hold penal consequences as it inflicts double injury on the poor masses. [694 G H]

Respondent Bank lodged a complaint before the Bar Council of Delhi against the appellant Advocate, alleging that the appellant and two other Advocates of the M/s. Singh and Company, (a Firm of Advocates and solicitors) were guilty of serious professional misconduct, as they failed to discharge their.professional duties and responsibilities entrusted to them. The case of the Bank was that in 1975, the Bank engaged the Firm to rile a recovery suit for the recovery of Rs. 6,12,164.10 from M/s. Delhi Flooring (P) Ltd. and handed over the case rile containing original and valuable documents. The Firm submitted a bill for riling the recovery suit which included the professional fees and other miscellaneous charges. On 15.11.1975 the Bank paid a sum of Rs. 11,475 which included 1/3rd of the professional fee and the miscellaneous charges. It did not inform the Bank whether the suit was filed or not. On 5.12.1975 the Bank wrote a letter to the Firm to send a copy of the plaint before 8.12.1975 or the Bank would be compelled to withdraw the case from the Firm. On 15.12.1975, one of the partner of the firm informed the Bank the suit was filed on 15.12.1975 in the High Court. Thereafter the Bank was kept in the dark about the fate of the case. Hence the Bank engaged the services of one Mr. Arora, Advocate, in order to find out as to what happened to the suit. On 23.1977, the Bank was informed by Mr. Arora, Advocate that 489 suit was filed on 15.12.1975 in the High Court and on 31.1.1976, it was returned by the Original Branch to the Registry with objections. Mr. Arora, Advocate further informed the Bank on 31.3.1977 that the entire suit paper book was returned to Mr. Singh, Advocate of the Firm on 27.7.1976 for removing the object ions and thereafter the suit was not refiled. The respondent Bank, therefore, claimed before the Bar Council of Delhi that the appellant and his associates misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee. The Disciplinary Committee of the Bar Council of Delhi transferred the case of the Bar Council of India, as the case was pending for more than one year. The Bar Council of India issued notices returnable on 2.11.1980. The appellant and his associates were not present on that date. Therefore fresh notices were issued for 20.12.1980. The appellant did not present on 20.12.1980and ex parte proceedings were ordered. The case was posted for 23.1.1981 for the evidence of the complainant. On 23.1.1981 the appellant moved an application for setting aside the ex parte order dated 20.12.1980, which was allowed and the case was adjourned to 27.2.1981. The case was adjourned from time to time and finally fixed for evidence on 22.8.1981. On 22.8.1981, the appellant 's application for adjournment was rejected. The evidence was concluded, ar guments were heard and the order was reserved. (The complainant had given up its case against one Ms. V.Singh, Advocate an associate of the appellant, and the Bar Council of India did not proceed against her. One Mr. B.Singh, Advocate the other associate of the appellant, was also proceeded against. Notice to him was returned with the postal endorsement "refused" and ex parte proceeding were ordered.) The Disciplinary Committee of the Bar Council of India held that the case against the appellant and his associate was proved beyond reasonable doubt. Their names were removed from the rolls of Advocates of the Bar Council of Delhi and the Sanads granted to them were ordered to be withdrawn. 490 The appellant riled the appeal before this Court, while his associate, riled a review petition before the Bar Council of India, which was still pending. The Bar Council of India granted him stay of the order dated 24.10.1981 in the review proceeding. The appellant contended that the suit was filed by the appellant on 15.12.11975 but the record of the suit file was misplaced/lost by the Registry of the High Court; that by his letter dated 20.8.1977, he informed the Bank about the suit rile being not traceable; and that the record of the suit was to be structured and refiled. Dismissing the appeal, this Court, HELD : 1.01. The letter dated August 20,1977 was not produced, before the Bar Council of India. It has been placed before this Court for the first time. Apart from the ipse dixit of the appellant and Mr. B.Singh in the said letter, there is no evidence on the record to show that the suit rile was misplaced or lost by the High Court Registry. On the other hand, there is cogent and reliable evidence on the record to shows that the Delhi High Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it. [494D E] 1.02. Both the reports of Mr.R.P.Arora, Advocate have been proved on the record of the Bar Council of India as evidence. The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B.Singh was proved beyond doubt. There is no ground to interfere with the order of the Bar Council of India. [495H, 496D]

In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree. Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr. and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89. Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit. Neither provision has any effect on the other as to time. [489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled. Nalinakaya Bysack vs Shyam Sunder Haldar & Ors. , ; at 545; Mersey Docks vs Henderson, [1988] 13 App. 595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors. vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors. vs Madhavan, AIR 1982 Kerala 126, referred to.

In January, 1956 the assessee company whose assets had been valued at Rs. 155 lacs as on December 31, 1955 decided to terminate the services of 22 of its employees with effect from 31st March, 1956 and to pay them retrenchment compensation and compensation for termination of employment. Thereafter Davids, who held the shares of the company entered into an agreement with Tatas to sell to them all the shares for Rs. 155 lacs. The agreement provided that compensation and gratuity payable to the Directors and employees whose services had been terminated and the annuity payable to the managing director should be deducted from the purchase consideration. The assessee claimed deduction under section 10(2)(xv) of the Indian Income Tax Act, 1922 of a sum of Rs. 1.64 lakhs paid by way of retrenchment compensation and compensation for termination of service during the assessment year 1957 58 and a sum of Rs. 16,885 which was the amount of annuity paid to the managing director in each of the three succeeding assessment years. The Income Tax officer disallowed the amounts on the ground that the services of the directors and employees had been terminated not as business expediency but because the purchasers of the shares made it a condition under the agreement. On appeal the Appellate Assistant Commissioner, affirming the view of the Income Tax Officer, held that the decision to pay compensation could not be said to have been taken solely with a view to the business requirement of the company. Dismissing the assessee 's appeal the Appellate Tribunal held that the expenses had not been incurred for the purpose of the company but purely as a result of the bargain between Davids and Tatas and assuming that the payments were beneficial to the assessees by reason of the reduction in its establishment expenses, no deduction could be allowed under section 10(2) (xv) since the payment was made to the benefit of a third party. Relying principally upon the decision of this Court in Gordon Woodroffee Leather Manufacturing Co. vs The Commr. of Income tax, [1962] Supp. 2 SCR 211, the High Court held that the amount involved in the case did not satisfy the test applicable to the expenditure allowable under section 10(2)(xv) of the Act and, therefore, disallowed the expenditure of Rs. 1.27 lakhs out of a sum of Rs. 1.64 lakhs on the ground that it had not been incurred for commercial expediency. The High Court also disallowed the annuity paid to the managing director in the succeeding three assessment years. 879 Allowing the assessee 's appeals ^ HELD: 1(a) The three tests laid down by this Court in Gordon Woodroffee 's case viz., (1) that the payment should have been made as a matter of practice which affected the quantum of salary, (ii) that there was an expectation by the employee of getting a gratuity and (iii) that the sum of money was expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business of the assessee have to be read disjunctively. So read the present case which satisfied the third test fell under section 10(2) (xv) of the Act. The High Court was in error in holding that the amount in question did not satisfy any of the tests applicable to the expenditure allowable under the section. [893H] (b) In order to claim deduction under the section an assessee has to show that the expenditure in question (1) was not an allowance of the nature described in any of the clauses (i) to (xiv) of the section, (ii) was not in the nature of a capital expenditure or personal expenses of the assessee and (iii) had been laid out or expended wholly and exclusively for the purposes of his business, profession or vocation. [891G] (c) Even assuming that the motive behind the payment of retrenchment compensation was that the terms of the agreement of the sale of shares should be satisfied, as long as the amount had been laid out or expended wholly and exclusively for the purpose of the business of the assessee there could be no good reason for denying the benefit of this section if there was no other impediment to do so. [891H] In the instant case the assessee company was neither dissolved nor was its business undertaking sold. It continued to exist as a juristic entity and continued to function even after the transfer of its shares to Tatas. The expenditure was laid out for the purpose of the assessee company 's own trade and not for the trade of Tatas who were only shareholders of the company. As a result of the expenditure the company was benefited and it was possible for it to earn more profits as a consequence of the reduction in the wage bill. It cannot be said that Tatas were in any way benefited financially by reason of reduction in the consideration payable by them for the shares. [893B C] Gordon Woodroffae Leather Manufacturing Co. vs The Commissioner of Income tax, Madras, [1962] Supp. 2 SCR 211, applied. (i) Commissioner of Inland Revenue vs Patrick Thomson, Ltd. (in Liquidation), (ii) Commissioners of Inland Revenue vs J. & R. Allan, Ltd. (In liquidation), (iii) Commissioners of Inland Revenue vs Pattigrew & Stephens, Ltd., , referred to. Commissioner of Income tax, Gujarat vs Laxmi Cement Distributors (P) Ltd., , Commissioner of Income tax, Bombay City I vs Fairdeal Corporation (P) Ltd., ; Commissioner of Income tax, Bombay City I vs Patel Cotton Co. Pvt. Ltd., ; approved. 880 (d) Moreover it is too late in the day whatever might have been the position about two decades ago, to treat the expenditure incurred by the management in paying reasonable sums by way of gratuity and retrenchment compensation or compensation for termination of services as not business expenditure. Such expenditure would ordinarily fall within the scope of section 10(2)(xv) of the Act. [889C] 2. The argument that since there was no necessity to retrench the services of all the employees, the expenditure could not be treated as one laid out wholly and exclusively for the purpose of business has no force. The expression "wholly and exclusively" does not mean "necessarily". Ordinarily it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business. Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim deduction under the section even though there was no compelling necessity to incur such expenditure. The fact that somebody other than the assessee was also benefited by the expenditure should not come in the way of an expenditure being allowed by way of deduction under the section, if it satisfies otherwise the test laid down by law. [894D G] In the instant case the company thought that its business could be carried on with a smaller number of employees and the only way to reduce the number was to terminate the services of all employees by paying compensation and to re employ only some of them. Thereby the company reduced its expenditure on wages payable to its employees. It could not therefore be said that compensation was paid with an oblique motive and without regard to commercial considerations or expediency. [895F]

The appellant was running a Octroi Clearing Agency at 'Mulund Check Post ' in the State of Maharashtra. He used to attend to certain transactions of Montgomery Transport Co. also. On December 16, 1968, a truck of the said transport company arrived at the Check Post with a machine to be delivered to M/s. Imperial Tobacco Co. The appellant informed the Manager of the Transport Company to arrange for the payment of Octroi which amounted to more than Rs. 8,000/ . Accordingly, a sum of Rs. 8,196/ was handed over to the appellant in the presence of the Driver of the truck. It was found out after investigation that the receipt for the payment of Octroi held by the Imperial Tobacco Co. was not genuine and on a complaint lodged by the Company, the appellant was arrested and committed for trial to the Court of Sessions, under section 467, 471 read with section 467 and section 420 of I.P.C. The Trial Court convicted the appellant for an offence under section 471 read with section 467 1. P. C. and for an offence under section 420 1. The appeal to the High Court was dismissed in limine with the word "dismissed". The point raised before this Court was whether the High Court was justified in dismissing the appeal in limine with one word "dismissed", without making a speaking order indicating the reasons for dismissal. Remanding the case to the High Court for rehearing. HELD : (i) The importance of the opinion of the High Court on arguable points requiring consideration in appeal in that Court when questions of fact or law are open to challenge by the appellant was emphasised more than 20 years ago by this Court in Mustaq Hussain vs The State of Bombay, ; Since then, in a series of decisions, this Court has consistently drawn the attention of the High Courts to the desirability of giving an indication of their views on the points raised in arguable cases in accordance with the legal position enunciated by this Court. [552 AB.] (ii) In K. K. Jain vs State of Maharashtra, A.I.R. 1973 S.C. 243 it was reiterated that reasons before the High Court for dismissing the appeal, if recorded, would be a valuable assistance to this Court in finally dismissing of the appeal on merits. Another advantage of recording such reasons is, that the accused appellant, who may not always be present in the court, would have the satisfaction of knowing from the judgment that the points appropriately arising for consideration in his case, were actually argued and duly considered by this High Court while dismissing his appeal. In the prevent case, since the High Court did not record its reasons for dismissing the appeal, this court has no option but to remand the case to the High Court for rehearing and deciding the appeal after considering the points raised and recording its reasons in accordance with law. [552 FG & 553A] 549 Mustaq Hussain vs State of Bombay, ; , and K. K. Jain vs State of Maharashtra, A.I.R. 1973 S.C. 243, referred to.

The appellant, a displaced person, bad a fixed deposit in the Lahore Branch of the respondent Bank which had its head office at Simla, and he also had at the time a cash credit account in the Bank. As the Bank refused to pay the amount of fixed deposit on its maturity but adjusted it towards part payment of the amount said to be due from him, he filed an application to the Tribunal at Banaras under section 4 of the , claiming the amount of the fixed deposit as a debt due from the Bank. During the pendency of the application there were proceedings taken for winding up the Bank in the High Court of Punjab. On the 3rd January 1953 a decree was passed by the Tribunal and the appellant filed an application before it for execution of the decree, which, ultimately, was transferred to the Bombay High Court under the provisions of the Code of Civil Procedure. The appellant 's application before the Bombay High Court for the attachment of the property belonging to the Bank and situate in Bombay was ordered on the 18th June 1954. On the 26th June 1954 the Official Liquidator of the Bank obtained an order from the Punjab High Court purporting to be one under section 45 C of the Banking Companies Act, transferring to itself from the Court of the Banaras Tribunal the proceedings before it for execution of the decree obtained against the Bank by the appellant, and subsequently the order of attachment passed by the Bombay High Court was set aside by the High Court of Punjab on the ground that (1) the provisions of the Banking Companies Act as amended in 1953 had an overriding effect, and that exclusive jurisdiction was vested in the Punjab High Court notwithstanding anything in the Displaced Persons (Debts Adjustment) Act, 1951 and (ii) there was a valid order of transfer to the Punjab High Court, of the execution proceedings taken by the appellant in respect of his decree. The appellant appealed to the Supreme Court. Held, that (1) in view of the wide and ' comprehensive language of sections 45 A and 45 B of the Banking Companies Act, 1949, as 604 amended in 1953, the proceeding to execute the decree obtained by the appellant from the Tribunal against the Bank and all other incidental matters arising therefrom are within the exclusive jurisdiction of the Punjab High Court; (ii) whatever may be the inter se position between the provisions of the Banking Companies Act and those of the in so far as such provisions relate to displaced debtors, the jurisdiction clearly and definitely vested in the High Court by the very specific and comprehensive wording of section 45 B of the Banking Companies Act cannot be said to be overridden or displaced by anything in the , in so far as they relate to displaced creditors; (iii) the Tribunal which is to exercise the jurisdiction for executing the decree in question is a "court" within the meaning of section 45 C of the Banking Companies Act, whatever may be its status when it passed the decree as a Tribunal; (iv) having regard to the scheme and policy of sections 45 B and 45 0 of the Banking Companies Act, in respect of pending matters which have not been brought to the notice of the Court by the Liquidator within three months, there is nothing to prevent the Court exercising its power of transfer at such time when it is brought to the notice of the Court.

These appeals arose out of a representative suit filed on behalf of the creditors of defendants I to 6 who hat executed a trust deed on August 26, 1936, conveying their properties to three trustees with authority to dispose of the one and distribute the ale proceeds ratably amongst the creditors. The trust deed required "the three trustees to act according to the decision arrived at either unanimously or by majority." The trustees accepted the trust and conveyed all the properties except the family house in administration of the trust. Two of the sale deeds in favour of two of the creditors, defendants 13 and 14, a mortgagee creditor, in the suit were executed by only two or the trustees . In a suit brought by the said defendants 1 to 6 for administration of trust the trial court passed a preliminary decree. The High Court on appeal remanded the matter to the trial court for a finding as to the market value of the lands sold. The trial court submitted its finding. At this stage defendants 1 to 6 withdrew the suit which we dismissed. The present suit under O. I, r. 8 of the Code of Civil Procedure we filed on October 29, 1947, before such withdrawal. The claimed made therein, inter alia, were for a declaration that the properties in question were still impressed with the trust, for the removal the surviving trustee and appointment of an a administrator to realise the amount, recover position of the properties and re sell them. The trial Judge passed a decree infavour of the plaintiffs . The High Court in substance confirmed that decree but modified it by awarding simple interest 207 instead of compound Interest decreed in favour of defendant 14. The two sale deeds, executed by only two of the trustees, were declared invalid and it was found that the third trustee did not give his consent to it. The sale deed in favour of defendant 12 was declared invalid on the ground that he had intermeddled with the trust estate and had thus become a trustee de sou tort. The courts below also rejected the pleas of limitation and res judicata raised on behalf of the defendants. Some of the creditor detendants appealed. After the appeals had been admitted by this Court the High Court amended the decretal order by substituting the words 'mesne profits ' by 'net profits ' under sections 151 and 152 of the Code of Civil Procedure. ^ Held, that the question whether article 120 or article 134 of Indian Limitation Act applied to a case had to be decided on the case made in the plaint, read as whole and properly construed. Since the present suit was not one for a mere declaration but for possession of property, having been valued and framed as such, deliverable to the administrator, it was governed by article 134 and not by article 120 of the Act and was thus within time. It was not correct to say that section 63 of the Indian Trust Act was exhaustive as to the remedies available to a beneficiary under a private trust or that claim for constructive possession, such as was made in the present suit, was prohibited under that section. Rani Chhatra Kumari Devi vs Prince Mohan Bikram Shah, Pat. 851, distinguished. Subbaiya Pandaram vs Mohammad Mustapha merachayar , (1923) L. R. 50 IE A. 295, A Subramania Iyer vs P. Nagarathna Naicker , (1910)20 Mad. L. J. 151 and Masjid shahid Ganj vs Shiromani Gurdwara Prabandhak Committee Amritsar (1940) L. R. 67 I. A. 251, referred to. Nor could the suit be said to be barred by res judicata since it did not fall within the scope of section II of the Code of civil Procedure. The suit being one under o. 1, r. 8 of the Code, it could not be said that defendants I to 6, plaintiff in the earlier suit, and the creditors, plaintiffs in the present suit, where the same party or parties claiming through each other. Clause 23 of the trust deed, properly construed, conformed to the provision of section 48 of the Trusts Act that where there are more trustees than one, they must all join in the execution of the trust, and did not provide for an exception to that rule, even though it provided that decisions by the trustees need not a ways be unanimous but could be by majority as well. Such sale deeds as had been executed by 208 two of the trustees only must therefore fail. The alternative. case of consent given by the third trustee to the transaction could be of no avail since it could not be substantiated by evidence Lala man Mohan Das vs Janaki Man Prasad, (1944) L. R. 72 I. A. 39, referred to. The High Court had jurisdiction under sections 151 and 152 of the Code of Civil Procedure to correct the obvious error in the decretal order even though the appeals from the said decree had already been admitted by this Court. Nor could the amendment be challenged on merits. Although a successful plaintiff would not normally be entitled to mesne profits for more than three years in view of article 109 of the Limitation Act, the court had jurisdiction in the case of a trust to make appropriate direction in the decree, while awarding net profiles to the trust and interest to the mortgagee, in adjustment of the equities between them. Salgur Prasad V Har Narain Das (1932) L.R. 59 I. A. 147, Bhagwat Dayal Singh vs Debi Dayal Sahu, (1908) L. R. 35 I. A. 48 and Jagannath Prasad Singh Chowdhury vs Surajmal Jalal , (1926) L. R. 54 I. A. 1, referred to. Even slight intermeddling with the trust estate is sufficient to make a person trustee de son tort. Since in the instant case, the acts of intermeddling by one of the defendant covered a fairly long period, the courts below were right in holding that the sale in his favour must be set aside as one in favour, of a trustee de son tort.

l Appeal No. 313/1956. Appeal from the judgment and decree dated July 25,1952, of the Allahabad High Court in Second Appeal No. 2547 of 1946. B. Ganapathy Iyer and T. M. Sen for the appellant K. P. Gupta, for the respondent. January 31. The Judgment of the Court was delivered by SHAH, J. On January 30, 1943, Bhola Nath Sambhu Ram as agent of the respondent L. Musaddilal delivered a bale of cloth to the railway administration E. 1. at Agra railway station for carriage by railway to the Chola Station in the E. I. Rly. The consignment was accepted by the railway administration and a railway receipt was issued in the name of the consignor Bhola Nath Sambhu Ram. Bhola Nath Sambhu Ram endorsed the railway receipt in favour of the respondent and sent it by post to the respondent. The bale of cloth did not reach Chola, and the railway administration was unable despite efforts to trace it. There was correspondence between the railway administration and the respondent about the consignment. Failing to obtain satisfaction 649 for the loss suffered by him, the respondent served a composite notice under section 77 of the Indian Railways Act and section 80 of the Civil Procedure Code on December 7, 1943, and thereafter on May 18, 1944, filed suit No. 283 of 1944 in the court of the 11 Munsif, Bulandshahr, for a decree for Rs. 782 3 6 being the " price of the bale " and Rs. 200 " for loss on account of nondelivery." The railway administration resisted the claim on the pleas among others that the suit was not maintainable without an effective notice under a. 77 of the Railways Act and that the suit was barred because at the date of the institution of the suit, the period of limitation prescribed by article 31 of the Limitation Act had expired. The trial court decreed the suit. In appeal, the Additional Civil Judge, Bulandshahr, reversed, the decree passed by the trial court and dismissed the suit. A Full Bench of the High Court of Allahabad reversed the decree passed by the first appellate court and restored the decree of the trial court. With certificate of fitness under article 133(1)(c) of the Constitution, this appeal has been preferred by the Union of India. Section 77 of the Railways Act in so far as it is material provides: "A person shall not be entitled to compensation for the loss, destruction or deterioration of goods delivered to be carried, unless his claim to compensation has been preferred in writing by him or on his behalf to the railway administration within six months from the date of the delivery of the goods for carriage by railway. " Section 77 manifestly prescribes a condition precedent to the maintainability of a claim for compensation for goods lost, destroyed or deteriorated while in the custody of the railway administration. The notice prescribed was not served by the respondent upon the railway administration within six months from the date on which the goods were delivered for carriage, and prima facie the suit would be barred for non compliance of a statutory condition precedent. But the respondent pleaded and the plea has found favour with the High Court that the suit filed by him 650 was for compensation not for loss, destruction or it deterioration of the goods, but " for non delivery of the goods. " In the view of the High Court, a claim for compensation for non delivery of goods is a claim distinct from a claim for compensation for loss, destruction or deterioration of goods and to the enforcement of a claim of the former variety by action in a court of law section 77 is not a condition precedent. The railway administration in India is not an insurer of goods: it is merely a bailee of goods entrusted to it for carriage. Section 72 of the Railways Act, prescribes the measure of the general responsibility of a railway administration as a carrier of goods. By that section, the responsibility of a railway administration for loss, destruction or deterioration of goods delivered to be carried by railway is subject to other provisions of the Act to be that of a bailee under section 152 and section 161 of the . Sections 151 and 152 of the deal with the duties of a bailee. If a bailee takes as much care of the goods bailed to him as a person of ordinary prudence would under similar circumstances of his own goods of the same bulk, quality and value as the goods bailed to him, in the absence of a special contract, he is not responsible for loss, destruction or deterioration of the goods bailed. By sections 160 and 161 of the , the bailee is under an obligation to return or deliver according to the bailor 's direction the goods bailed as soon as the time for which the good were bailed has expired or the purpose for which the goods were bailed has been accomplished and if on account of default of the bailee the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods, The railway administration being a bailee of the goods delivered for carriage to it is therefore a bailee during the period when the goods remain in its custody for the purpose and in the course of carriage and for the purpose of delivery after the goods are carried to the destination. 651 But the quantum of care which the railway administration is required to take is that care which it would take having regard to the bulk, quality and value of its own similar goods. Section 77 of the Railways Act is enacted with a view to enable the railway administration to make enquiries and if possible to recover the goods and to deliver them to the consignee and to prevent stale claims. It imposes a restriction on the enforcement of liability declared by section 72. The liability declared by a. 72 is for loss, destruction or deterioration. Failure to deliver is the consequence of loss or destruction of goods; it does not furnish a cause of action on which a suit may, lie against the railway administration, distinct from a cause of action for loss or destruction. By the use of the expression, "loss, destruction or deterioration," what is contemplated is loss or destruction or deterioration of the goods and the consequent loss to the owner tbereof. If because of negligence or inadvertence or even wrongful act on the part of the employees of the railway administration, goods entrusted for carriage are lost, destroyed or deteriorated, the railway administration is guilty of failing to take the degree of care which is prescribed by section 72 of the Railways Act. There are undoubtedly two distinct articles, articles 30 and 31 in the first schedule of the Indian Limitation Act dealing with limitation for suits for compensation against carriers. Article 30 prescribes the period of limitation for suits against a carrier for compensation against loss or injury to goods and article 31 prescribes the period of limitation for suits for compensation against a carrier for non delivery or delay in delivering the goods. The period of limitation under each of these articles is one year but the points of time from which that period is to be reckoned are different. But because the Indian Limitation Act provides different points of time from which the period of limitation is to run, it is not possible to infer that the claim covered by either article is not for compensation for loss, destruction or deterioration of the goods. We are unable to project the provisions of Art, 30 and 31 652 of the Limitation Act upon sections 72 and 77 of the Railways Act and to hold that a suit for compensation for loss because of non delivery of goods does not fall within section 77. The view we have expressed is supported by a large volume of authority in the courts in India for instance The Madras and Southern Mahratta Railway Co., Ltd. vs Haridoss Banmalidoss (1), Hill Sawyers and Co. vs Secretary of State (2), Martab Ali vs Union of India (s), Union of India vs Mitayagiri Pullappa (4), Assam Bengal Railway Co., Ltd. vs Radhika Mohan Nath (5) and Bengal Nagpur Railway Co. Ltd. vs Hamir Mull Chhagan Mull (6). The view expressed to the contrary in the Allahabad High Court in Governor General in Council vs Mahabir Ram (7) and ;by the Patna High Court in Jais Ram Ramrekha Das vs G. 1. P. Railway (8), is in our judgment erroneous. This appeal will therefore be allowed and the respondent 's suit will stand dismissed. As the Union of India was permitted to appeal for obtaining the decision of this Court which may settle the conflict of views even though the amount involved is small, we think that it is just and proper that there should be no order as to costs throughout. Appeal allowed.

The respondent served on the Railway Administration a composite notice under s 77 of the Indian Railways Act and under section So of the Code of Civil Procedure and sued for price of goods and for loss on account of nondelivery. The claim was resisted by the Railway Administration on pleas amongst others that the suit was not maintainable without an effective notice under section 77 of the Railway Act and that the suit was barred because at the date of the suit the period of limitation prescribed by article 31 of the Indian Limitation Act had expired. A full bench of the Allahabad High Court upheld the decree of the trial court in favour of the respondent holding that a claim for compensation for non delivery of goods was a claim distinct from the claim for compensation for loss, destruction or deterioration of the goods, and to the enforcement of a claim of the former variety by action in a court of law under section 77 was not a condition precedent. Held, that section 77 of the Indian Railways Act imposes a restriction on the enforcement of liability declared by section 72 of the Act and prescribes a condition precedent to the maintainability of a claim for compensation for goods lost, destroyed or deteriorated while in the custody of the railway Administration who are bailers and not insurer of goods. The section is enacted with a view to enable the railway administration to make enquiries and if possible to recover the goods and deliver them to the consignee and to prevent stale claims. Failure to deliver goods is the con sequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction, 83 648 Held, further, that merely because articles 30 and 3r of the Indian Limitation Act prescribe different points of time from which the limitation is to run for suits against carriers it cannot be inferred that the claim covered by either article is not for compensation for loss, destruction or deterioration of the goods; and the said articles 30 and 31 cannot be projected upon sections 72 and 77 of the Indian Railways Act for holding that suit for compensation for non delivery of goods does not fall within section 77. The Madras and Southern Mahratta Railway Co. Ltd. vs Haridoss Banmalidoss, Mad. 871, Hill Sawyers and Co. vs Secretary of State,, Lah. 133, Martab Ali vs Union of India, , Union of India vs Mitayagiri Pullappa, I.L.R. [1958] A.P. 323, Assam Bengal Railway Co. Ltd. vs Radhika Mohan Nath and Others, and Bengal Nagpur Railway Co. Ltd. vs Hamir Mull Chhagan Mull and Another Pat. 106, approved. Governor General in Council and Others vs Mahabir Ram and Another, (1953) I.L.R. I All. 64 and Jais Ram Ramrekha Das V. G.I.P. Railway and Another (1929) I.L.R. 8 Pat. 545, overruled.

The petitioner complained that the workmen employed in the two ferries, one at Bhagalpur and the other at Sultanganj, operated by respondent No. 5 were not being paid minimum wages as prescribed by the relevant notifications issued by the State of Bihar under the . Respondent No. 5 contended that the was not applicable to these two ferries. Allowing the writ petition, ^ HELD: The Schedule to the lists various employments in respect of which minimum rates of wages can be fixed by the appropriate Government. Entry 27 of the Schedule which dealt with employment in shops and establishments registered under the Bihar Shops and Establishments Act, 1953, was amended on 25.11.1978 to enlarge its scope to cover employment in any shop or establishment other than that covered under any of the other entries in the Schedule. It is clear from the Explanation to the amended Entry 27 that the word "establishment" in that entry has the same meaning which is assigned to it in the Bihar Shops and Establishments Act, 1953 and the court must, therefore, look at the definition of "establishment" as given in the Bihar Shops and Establishments Act, 1953 in order to determine as to whether the Bhagalpur and Sultanganj ferries could be said to be establishments within the meaning of the amended Entry 27. The word "establishment" is defined in see. 2(6) of Bihar Shops and Establishments Act, 1953 to mean an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession. Now it can hardly be disputed that the Bhagalpur and Sultanganj ferries are establishments which carry on business or trade of plying ferries across the Ganges and they are clearly within the meaning of the word "establishment" in sec. 2(6) of the Bihar Shops and Establishments Act, 1953 and consequently they would also be establishments within the meaning 1012 of that expression as used in the amended Entry 27. The would, therefore, clearly be applicable to employment in the Bhagalpur, and Sultanganj ferries. [1014 D, G H; 1015 A B G H; 1016A] The workmen employed in the Bhagalpur and Sultanganj ferries were entitled to receive minimum wage as set out in the Notification dated 25th June 1975 as amended by the Notification dated 20th January 1979 for the period from 20th January 1979 upto 25th November 1981 and thereafter at the rate fixed in the Notification dated 26th November 1981. [1016 F G]

The appellant was elected to the House of the People from a constituency in the State of Madhya Pradesh. The respondents were the ,other contesting candidates. Respondent No. 1 filed an election petition challenging the election of the appellant. That election petition was dismissed by the Election Tribunal. Against the order of the TribunaL the first respondent preferred an appeal to the High Court under section 116 A 134 159 S.C. 9. 130 of the Representation of the People Act, 1951. Admittedly, the appeal was filed more than 30 days after the order of the Election Tribunal. If the time requisite for obtaining a copy of the order of the Tribunal was excluded, the appeal was filed within 30 days. However, if that was not 'done, the appeal was out of time. The contention of the appellant before the High Court was that the respondent No. 1 was not entitled in law to exclude the time taken by him in obtaining the copy of the order of the Tribunal. That contention was rejected by the High Court. The High Court also found that the appellant was guilty of two, corrupt practices and hence his election was set aside. The appellant came to this Court by special leave. The only question raised before this Court was whether for 'the purpose of computing the period of 30 days prescribed under section 116 A(3) of the Act, the provisions of section 12 of the Limitation Act could be invoked or not. Dismissing the appeal, Held: (per B. P. Sinha, C.J., K. Subba Rao, Raghubar Dayal and N. Rajagopala Ayyangar JJ.) (i) The exclusion of time provided for by section 12 is permissible in computing the period of limitation for filing.the appeal in the High Court. Per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.) (ii) Though the right of appeal is conferred by section 116 A of the Representation of the People Act, 1951, and it is by virtue thereof that the appeal was filed by respondent in the High Court, it is still an appeal " under the Code of Civil Procedure, 1908, to the High Court". To attract article 156 of the First Schedule to the Limitation Act, it is not necessary for an appeal to be an "appeal under the Code of Civil Procedure" that the right to prefer the appeal should be conferred by the Code of Civil Procedure. It is sufficient if the procedure for the filing of the appeal and the power of the Court for dealing with the appeal, when filed, are governed by the Code. Per Raghubar Dayal and Mudholkar JJ. There is no warrant for holding that an appeal which is not given by the Code of Civil Procedure is still an appeal under the Code merely because its procedural provisions govern its course. Where a right of appeal is given by some other law, the appeal must be regarded as one udder that law and not under the Code of Civil Procedure. There is no reason for construing the words "under the Code of Civil Procedure" as meaning "governed in the matter of procedure by the Code of Civil Procedure". Held:(iii) (per B. P. Sinha, C.J., N. Rajagopala Ayyangar and Raghubar Dayal JJ.) The entire sub section (2) of section 29 of the Limitation. Act has to be read as an integrated provision and the conjunction "and" connects the two parts and makes it necessary for attracting cl. (a) that the conditions laid down by the opening words of sub section (2) should be satisfied. 131 Per Subba Rao and Mudholkar JJ. The second limb of sub section (2) of section 29 is wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule. Per Subba Rao J. The use of the word "any" clearly shows that the second part of sub section (2) of section 29 does not depend on the first part or vice versa. The second part of sub section (2) is an independent provision providing for that category of proceedings to which the first part does not apply. Held: (i) that section 116 A does not provide an exhaustive and exclusive code of limitation for the purpose of appeals against orders of Tribunals and also does not exclude the general provisions of the Limitation Act. Section 29(2)(a) of the Limitation Act speaks of express exclusion and there is no express exclusion in section 116 A(3) of the Representation of the People Act, 1951. Moreover, the proviso to section 116 A(3) from which an implied exclusion is sought to be drawn does not lead to any such necessary implication. The proviso only restores the power denied to the Court under section 29(2)(b) of the Limitation Act. If this proviso had not been there, section 29(2)(b) would have excluded the operation of section 5 of the Limitation Act with the result that even if a sufficient cause for the delay existed, the High Court would have been helpless to excuse the delay. (ii)S. 12(2) of the Limitation Act applies to an appeal to the High Court against the order of the Tribunal. An order made under section 98 of the Representation of the People Act, 1951, if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order and thereby attracting the relevant provisions of section 12 of the Limitation Act. Section 12(2) does not say that the order mentioned therein shall be only such order as is defined in the Civil Procedure Code. If a statute provides for the making of an order and confers a right of appeal to an aggrieved party against that order within a prescribed time, the time requisite for obtaining a copy of the order can be excluded. The Act of 1951 empowers the Tribunal to make an order and gives a right of appeal against that order to the High Court and therefore section 12(2) is directly attracted without any recourse to the definition of an order in the Code of Civil Procedure. Per Mudholkar J. The first limb of section 29(2) is concerned only with the proceedings under special or local law for which a period of limitation is prescribed in the First Schedule to the Limitation Act. If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law, certain consequences will follow under the provision. No inconvenience is to be caused by giving a literal and natural interpretation to the expression used by the legislature in the first portion of sub section (2) of section 29 because cases of other kind can easily come under the second portion thereof. Case Law referred to. 132

The Corporation of Calcutta is not precluded from taking proceedings under section 363 of the Calcutta Municipal Act, 1923 by reason of its having taken proceedings prior thereto under section 488 of the Act read with Rule 62 of Schedule XVII. The question of inconvenience to neighbours is not relevant for the purpose of deciding whether an order for demolition should be made under section 363 of the Act. When the Legislature provides that on the same facts proceedings could be taken under two different sections and the penalties provided in those sections are not the same, it obviously intends to treat them as distinct, and, therefore, where no question under section 403 of the Code of Criminal Procedure arises, proceedings taken under one section cannot be treated as falling within the other. The word. "may" in section 363 of the Act does not mean "shall" and the Magistrate has under that section discretion whether he should pass an order for demolition or not. It is a well settled principle that when the legislature entrusts to an authority the power to pass an order in its discretion an order passed by that authority in exercise of that discretion is, in general, not liable to be interfered with by an appellate court, unless it can be shown to have been based on some mistake of facts or misapprehension of the principles applicable thereto. In the present case, however, the orders of the courts below were based on mistakes and misdirections and therefore could not be supported. But the Supreme Court did not think this to be a fit case for an order for the demolition of the buildings in view of certain special circumstances, viz, (1) though section, 363(2), which directs that no appli 126 996 cation for demolition shall be instituted after the lapse of five years from the date of the work, did not, in terms, apply as the proceedings had been started in time, it was nearly five years since the building bad been completed and the interests of the public did not call for its demolition, and (2) the appeal came on a certificate granted under article 134(1)(c) with a view to obtaining the decision of the Supreme Court on certain questions of importance. Abdul Samzad vs Corporation of Calcutta ([1905] I.L.R. , referred to.

Held, per MAHAJAN, MUKHERJEA, DAs and CHANDRASEKHARA AIYAR, JJ. (PATANJALI SASTRI C.J. dissenting). Section 12 of the Bombay Public Safety Measures Act, 1947, in so far, at any rate, as it authorises the Government to direct particular "cases" to be tried by a Special Judge appointed under the Act does not purport to proceed on any classifica tion and therefore contravenes article 14 of the Constitution and is void under article 13 on the principles laid down in the cases of State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284) and Kathi Raning Rawat vs Tht State of Saurash tra ([1952] S.C.R. 435). The appellants who were accused of having committed murder and other serious offences were directed by the Government of Bombay by an order made on the 6th August, 1949, to be tried under the Bombay Public Safety Measures Act by a Special Judge appointed under the Act, charges were framed against them on the 13th January, 1950, and they were convicted in March, 1950. On appeal it was contended before the High Court that the trial and conviction were illegal as the Bombay Public Safety Measures Act was void under article 13 read with article 14of the Constitution which came into force on the 26th January, 1950, but the High Court held that as the proceedings against the accused had commenced before the Constitution, the provisions of articles 13 and 14 did not apply and the conviction was not illegal. Held,by a majority, that although substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable, it cannot be held that after that date, those rights or liabilities must be en forced under the particular procedure that was in force before that date, although it has since that date been repealed or come into conflict with the fundamental right to equal protection of the laws guaranteed by the 711 Constitution, as there is no vested right in procedure. The fact of reference of "cases" to the Special Judge before the Constitution came into force has no reasonable relation to the objects sought to be achieved by the Act, the discrimi nation therefore continued after the Constitution came into force and such continuation of the application of the dis criminatory procedure to the cases of the appellants after the date of the Constitution constituted a breach of the fundamental right guaranteed by article 14, and the appellants were therefore entitled to be tried under the ordinary procedure after the date of the Constitution. PATANJALI SASTRI C.J. (contra). Granting that section 12 of the Bombay Act must, in view of the decision in Anwar Ali Sarkar 's case, be held to be discriminatory and void in so far as it empowers the State Government to refer individual cases to a Special Judge for trial, the trial of the appel lants which had validly started before the Special Judge who had been empowered to try the case cannot be vitiated by the Constitution subsequently coming into force. The provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force. The jurisdiction of the Special Judges validly created and exercised before the Constitution and their competence to try the cases referred to them cannot be affected by the special procedure becoming discriminatory. The correct view is that article 14 does not affect pending trials even in matters of procedure. Moreover the appellants against whom proceedings had been commenced before the Special Judge, were not in the same situation as others and there was nothing discriminatory in a law which permits them to be tried under the special procedure which was applicable to them when the proceedings were started against them.

In a suit filed by plaintiff respondent no.1 before the High Court defendant appellants filed a joint application under section 34 of the for staying proceedings of the suit and referring the matter to arbitration. In view of some formal defects in the said application, the High Court on 25.2.1966 without mentioning the defects ordered. "Application withdrawn with liberty to make a fresh application". on 21.3.1966 the appellants submitted two separate applications for staying the suit in so far as it related to them or in the alternative for stay of the entire suit. The plaintiff respondent resisted the applications as not being in terms of the order dated 25.2.1966. Upholding the objection, Learned Single Judge refused to stay the suit. On appeal, the Division bench of the High Court held that the liberty was granted to 'make a fresh application ' and as such, under the provisions or Order XXIII, C.P.C., the appellants had no right to move two separate applications to stay the suit. In appeal by special leave to this Court it was contended that provisions or Order XXIII, C.P.C. were not applicable to applications filed under section 34 of the ; and that the High Court committed an error in taking a technical view that as liberty was given to withdraw the application in order to make a fresh application, the appellants were not entitled to make separate stay applications. Respondent No. 1 supported the impugned judgment. Allowing the appeals, this Court, 810 HELD: 1. In view of section 41 of the , subject to provisions of the Act, Code of Civil Procedure, 1908 apply to all proceedings before the Court No. provision in the takes away the provisions of Order XIII, C.P.C. from being applied to applications filed under section 34 of the in a suit. [814F, 816B] Hakam Singh vs M/S Gammon (India) Ltd, ; relied on. Nawab Usman Ali Khan vs Sagarmal, ; , held inapplicable. Munshi Ram vs Banwari Lal [1962] Supp; (2) SCR 477; Hansraj Gupta vs Officlal Liquidator Dehradun Musoorie Electric Tramway Co, [1932] L.R. 60 I.A. 13; Union of India vs Mohinder Singh & Co., AIR 1971 JK 10; Union of India vs Rup Kishore, [1957] All. 504; Executive Engineer vs Thingom Iboyaima Singh, AIR 1970 Bom. 250; Ram bharosey vs Peary Lal, AIR 1957 All. 265; Shrinath Bros. vs Century Spinning & Wvg. Co. AIR 1968 Bom 443; India Minerals Co. vs Northern India Lime Making Association, ; Ganeshmal vs Keshoram Cotton Mills, AIR 1952 Cal. 10; Governor General in Council vs Associated Live Stock Farm (India) Ltd., AIr ; Soorajmull Nagarmull vs Sagar Mal, AIR 1978 Cal. 239; Ramchand vs Governor General in Council, AIR 9147 Sind. 147 and Scotish Union of National Insurance Co. vs Saraswati Sajnani, Air 1960 Cal. 22, referred to. 2. In the instant case, apart from section 41 of the providing for application of Code of Civil Procedure and there being no provision taking away provisions of order XXIII, C.P.C. from being applied to the applications for stay filed under section 34 of the , the proceeding started on a plaint filed by the plaintiff and in such a suit if any application was filed under the , the same ought to be governed by the provisions of the Code of Civil Procedure. [816A c] 3.1 The High Court was not right in dismissing the applications on the ground that two applications were not maintainable as the same were not covered within its order dated 25.2.1966. [820E F] 3.2 The term 'a fresh application ' in the order dated 25.2.1966 used in singular had no more significance than the fact that as both the 811 appellants had submitted one joint application, liberty was given to make a fresh application, The main purpose of moving the applications under section 34 of the was to stay the suit proceeding. The intention and purpose of moving two such separate applications was also the same. The explanation given by the appellants was that they were given a legal advice to move two separate applications as there were two different agreements between appellants No. 1 and 2 and the respondent No. 1 There being no element of mala fide in the two applications having been submitted within 30 days of the order dated 25.2.1966, the same were maintainable . [820A c]

Under Rule 2046 (b) of Railway Establishment Code a Ministerial Railway servant was entitled to the higher age of retirement at 60 years (i) if he had entered service on or before 31st March 1938 and (ii) if he held on 31st March 1938 either a lien or a suspended lien on a permanent post under Rule 2008(a) or a provisional lien on a permanent post under Rule 2008(d) without interruption until he was confirmed in that post. The respondent had been appointed a temporary clerk on 10th December 1936 and was confirmed in that post on 1st September 1938. When he was retired on attaining the age of 58, he challenged the orders claiming benefit of Rule 2046(b). The High Court allowed the writ petition holding that since he was confirmed on 1st September 1938 he would be deemed to have been permanently appointed since 10th December 1936. Allowing the appeal by special leave the court, ^ HELD: (1) Rule 2046(b) clearly lays down that not only the first but one of the two alternatives of the second set of conditions must also be fulfilled by the Government servant "on that date" i.e. 31st March 1938. The specified requirement of the rule could not be overridden by some deemed retrospective benefit alleged to accrue from a confirmation subsequent to 31st March 1938. [1086D E] State of Punjab vs Dharam Singh ; ; State of Nagaland vs G. Vasantha A.I.R. 1970 SC 537: Director of Panchayat Raj & Anr. vs Babu Singh Gaur ; , (followed) [His Lordship observed that the position was so clear, under the law, that it should not have been necessary at all for the parties to have had to come to this Court for a correct decision]

The appellant was working as a senior clerk in the office of the chief Commercial Superintendent. Northern Railway, Varanasi on May 22, 1982, the senior Commercial officer wrote a letter to him calling upon him to offer his explanation in regard to twelve charges of gross indiscipline, mostly relating to the Deputy Chief Commercial Superintendent. The appellant submitted his explanation to the charges by his reply dated June 9, 1982. On the very next day, the Deputy Chief Commercial Superintendent served a second notice upon the appellant saying that the explanation offered by him was not convincing but that another chance was being given to him to offer his explanation regarding the specific charges which were conveyed to him earlier. By this letter, the appellant was also called upon to submit his explanation within three days ' as to why deterrent disciplinary action should not be taken against him. The appellant submitted his further explanation on June 14, 1982, but on the very next day, the Deputy Chief Commercial Superintendent passed an order dismissing him from service on the ground that he was not fit to be retained in service. The appellant filed a writ petition in the High Court of Allahabad challenging the order of dismissal on various grounds. The writ petition was dismissed and hence the appeal special leave of the Court. Allowing the appeal, the Court. ^ HELD: 1: 1. The order of dismissal passed against the appellant stands vitiated for the simple reason that the issue as to who, between the appellant and Respondent No. 3 (the dismissing authority) was speaking the truth was decided by Respondent No. 3. The main thrust of the charges against the appellant related to his conduct qua Respondent 3. Therefore, it was not open to the latter to sit in Judgment over the explanation offered by the appellant and decided that the explanation was untrue. No person can be a judge in his own 303 cause and no witness can certify that his own testimony is true. Any one who has a personal stake in an enquiry must keep himself aloof from the conduct of the inquiry. [306 F H] 1: 2. On the facts of the case, the illegality touching the proceedings which ended in the dismissal of the appellant is "so patent and loudly obtrusive that it leaves an indelible stamp of infirmity" on the decision of Respondent No. 3. [307 B C] 2. From the charges 2 to 7 and 11, it is obvious that if an enquiry were to be held into the charges framed against the appellant, the principal witness for the Department would have been Respondent No. 3 (the dismissing authority) himself as the main accuser and the target of appellant 's misconduct. Surprisingly, the explanation dated June 9, 1982 of the appellant to the letter of accusation dated May 22,1982 was considered on its merits by Respondent himself. Thereby, the accuser became the Judge. [305 G H, 306 A] Not only that, the further explanation submitted by the appellant was considered by Respondent No. 3 himself. The order of dismissal dated June 15, 1962 which was issued by Respondent No. 3 recites that he was fully satisfied that it was not reasonably practicable to hold an inquiry into the appellant 's conduct as provided by the Rules and that he had come to the conclusion that the appellant was not fit to be retained in service and had, therefore, to be dismissed, Evidently, Respondent 3 assessed the weight of his own accusations against the appellant and passed a judgment which is one of the easiest to pass, namely, that he himself was truthful person and the appellant a liar. In doing this Respondent No. 3 violated a fundamental principle of natural justice. [305 B C, 306 F] The State of U.P. vs Mohammad Nooh ; , referred to. The contention that inspite of the above legal position, the appellant does not deserve the assistance of the court, since he was habitually guilty of acts subversive of discipline cannot be accepted. In the first place, to hold the appellant guilty of habitual acts of indiscipline is to assume something which remains unproved, Secondly, the illegality from which the order of dismissal passed by Respondent No. 3 suffers is of a character so grave and fundamental that the alleged habitual misbehaviour on the part of the appellant cannot cure or condone it. [307 C E] 4. The aviod needless complications in working out the mutual rights and obligations of the parties, the court directed: (i) The appellant who is due to retire from service shall be treated as having retired from service with effect from April 1, 1984: (ii) He shall be paid arrears of salary due until March 31, 1984 on the basis of salary last drawn by him on June 15, 1982 without taking into account the increments which he might have earned subsequent to that date: 304 (iii) The Provident Fund and gratuity shall also be paid to the appellant as calculated in accordance with the rules, as if no order of dismissal was passed against him; and (iv) he may not and shall not rejoin his duties and he will be treated as on leave between 23rd March, 1984 and 31st March, 1984. [307 F H, 308 A B]

Appeals Nos. 416 of 1958 and 19 of 1959. Appeals by special leave from the Award dated January 13, 1958, of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 218 of 1957. M. C. Setalvad, Attorney General for India, N. A. Pal khivala, G. B. Pai and G. Gopalakrishnan, for the appellant (In C.A. No. 416 of 58) and respondent No. 1 (In C.A. No. 19 of 1959). H. R. Gokhale, section B. Naik and K. R. Choudhury, for the respondent No. 1 (In C.A. No. 416 of 1958) and appellant (In C.A. No. 19 of 1959). January 20. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two cross appeals Go arise from an industrial dispute between the Standard Vacuum Refining Co. of India Ltd. (hereafter called 538 the appellant) and its workmen (hereafter called the respondents). This dispute related to a claim for bonus made by the respondents against the appellant for the year commencing on January 1, 1956, and ending with December 31, 1956. The respondents claimed that for the relevant year they were entitled to receive by way of bonus their nine months ' total earnings inclusive of all allowances and overtime and extra time earnings. After this demand was made the conciliation officer attempted conciliation between the parties but his efforts failed, and so he submitted a failure report under section 12(4) of the (XIV of 1947). The Government of Bombay then considered the said report and was satisfied that there was a case for reference of the said dispute to the Tribunal. That is how the present reference came to be made under section 12(5) of the Act,. The respondents who have made the present claim include 648 employees; amongst them 524 are operatives and 124 belong to the clerical cadre. Before the Tribunal the respondents ' case was that during the conciliation proceedings the appellant had admitted its capacity to pay and to meet the entire claim of bonus made by them; and so it was urged that it was unnecessary to screen the respondents ' claim through the Full Bench formula. They further alleged that the appellant was not paying a living wage to the respondents and there still remained a large gap between the wage actually received by them and the living wage to which they would be ultimately entitled. According to the respondents their claim for bonus should be examined solely by reference to the gap which had to be filled up between the two wages; and in determining the amount of bonus all the legitimate requirements of the respondents should be carefully considered. This claim was denied by the appellant. It denied the respondents ' allegation that during conciliation proceedings it had admitted its capacity to pay the entire amount of bonus claimed by the respondents. It then specifically averred that in law the respondents were not entitled to any bonus because the 539 appellant was paying them a living wage and so one of the essential conditions for the payment of bonus, namely, the need to fill the gap between the actual wage and the living wage was absent in the present case. The appellant then set out its calculations in regard to the average wages paid to the different categories of respondents and supported its plea that they were not entitled to any bonus at all. It may be added that the appellant had already voluntarily paid three months ' basic wages to the respondents by way of bonus, but since the respondents were making a much larger claim the appellant thought it necessary to raise this general issue of law and to contend that the respondents were not entitled to any bonus at all. On these pleadings the Tribunal had to consider the said question of law, but it appears that the material produced before it was so limited and meagre that it thought it would not be possible to arrive at any definite opinion on the question of what is the living wage in Bombay; apparently the Tribunal also thought that it was unnecessary to do so, because it has observed that the present dispute did not relate to wage scales and that the living wage was an illusive concept. Even so, having broadly considered the contentions raised by the appellant it held that " the wages are fair but there is still in a large number of cases a gap between the actual wage and the living wage. " On this finding the Tribunal proceeded to examine the other contentions raised by the parties in regard to the quantum of bonus which should be awarded and it reached the conclusion that the respondents were entitled to receive five months ' basic earnings " excluding dearness and other allowances and overtime " as bonus for the relevant year. Accordingly it has made an award to that effect and has issued appropriate directions in that behalf. This award is challenged by the appellant in its Civil Appeal No. 416 of 1958, and it is urged by the learned Attorney General on its behalf that the tribunal should have held that the appellant was paying a living wage to the respondents and that there was no case for 540 awarding any bonus to the respondents at all during the relevant year. On the other hand the respondents challenge the award by their Civil Appeal No. 19 of 1959, and it is urged by Mr. Gokhale on their behalf that the tribunal was in error in not awarding the respondents a higher bonus than five months ' basic wages. That is how the two cross appeals arise from the award under appeal. The learned Attorney General has criticised the approach adopted by the tribunal in dealing with the question of living wage. He contends that it was necessary that the tribunal should have carefully examined the material produced before it and should have made a definite finding one way or the other. He commented on the fact that the finding is vague and indefinite, and he has contended that the tribunal should have made it clear as to what it exactly meant when it observed that in a large number of cases a gap between the actual wage and the living wage subsisted. This criticism is partly justified. We think it would have been better if the tribunal had addressed itself to the question raised before it by the appellant and made a more definite and precise finding. In this connection, it must, however, be added that the oil companies have been raising this plea for some years past and the plea has been consistently rejected by tribunals during all these years. The present tribunal itself has had occasion to deal with this plea raised by the oil distributing companies, and since the plea had never succeeded in the past and no material change had been proved in regard to the relevant year the tribunal was probably disinclined to treat the plea very seriously and that may explain the approach adopted by it in dealing, with the said plea in the present proceedings. Besides, the tribunal took the view, and we think rightly, that the material produced by the appellant in support of its plea is wholly insufficient and meagre. The point raised is one of general importance and any positive finding on the content of the concept of a living wage in the context of today would naturally affect industrial adjudication in regard to claims of 541 bonus in all industries. That is why, if the appellant was serious about its contention that the living wage standard had been reached in its wage structure it should have produced more satisfactory evidence which would have enabled the tribunal to attempt the task of concretely defining what the concept of living wage means in the context of today. Absence of sufficient and satisfactory material may also explain the approach adopted by the tribunal in dealing with this issue. At the hearing before us the learned Attorney General suggested that we should remand the case to enable his client to lead further and more satisfactory evidence. We have rejected this request. The appellant knew fully well the implications of the plea raised by it and the very large issue which the tribunal would have to consider in dealing with the merits of the said plea. If the appellant was content to support its plea on certain material and did not attempt to lead more satisfactory evidence it cannot blame the tribunal for dealing with the matter on the material such as it was. In such a case it would be futile for the appellant to ask for indulgence from this Court at this late stage. It is admitted that the appellant has paid three months ' basic wages as bonus to the respondents voluntarily for the relevant year, and we were told that an agreement has been reached between the parties in respect of bonus for subsequent years until 1963. They have agreed that for the two succeeding years the decision of this Court will apply and for five years thereafter a specific agreement has been reached for raising the wage structure and providing for the payment of bonus at the agreed rate. The learned Attorney General faintly suggested that the appellant has agreed to pay bonus voluntarily in this manner but the payment is gratuitous and should not affect the main plea raised by it in the present proceedings. Even so, the question raised by the appellant sounds academic and unrealistic, and that is another reason why it is not entitled to the indulgence for which the learned Attorney General has pressed before us. We would, therefore, deal with the point 542 seriously urged before us on behalf of the appellant on the material produced before the tribunal and such additional material as was brought to our notice. At the outset it is necessary to state that the plea raised by the appellant assumes that as soon as a living wage standard has been reached by any employor it would be unnecessary for him to pay any bonus to his employees. The learned Attorney General has naturally relied on the decisions of this Court as well as the decisions of industrial tribunals in support of his argument that the Full Bench formula which governs the decision of bonus disputes postulates that a claim for bonus can be entertained if two conditions are satisfied; the employer must have made profit in the relevant year, which after the deduction of prior charges leaves sufficient available surplus; and there must be a gap between the wages actually paid to the employees and the living wage standard which they hope to reach in due course. In dealing with bonus claims industrial adjudication has so far proceeded on the assumption that in the making of profits labour makes its contribution, and that since it is not receiving a living wage it is entitled to claim that the gap between the actual and the living wages should be filled by the payment of bonus for each relevant year; that no doubt appears to be the result of the relevant decisions on the point (Vide: Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur (1); The Sree Meenakshi Mills Ltd. vs Their Workmen (2). We will revert to this point later. Meanwhile let us proceed to examine the merits of the contention that the appellant is paying the respondents a living wage. It is well known that the problem of wage structure with which industrial adjudication is concerned in a modern democratic State involves on the ultimate analysis to some extent ethical and social considerations. The advent of the doctrine of a welfare State is based on notions of progressive social philosophy which have rendered the old doctrine of laissez J faire obsolete. In the nineteenth centurv the relation between employers and employees were usually governed (1) ; (2) ; , 884.543 by the economic principle of supply and demand, and the employers thought that they were entitled to hire labour on their terms and to dismiss the same at their choice subject to the specific terms of contract between them, if any. The theory of " hire and fire " as well as the theory of " supply and demand " which were allowed free scope under the doctrine of laissez faire no longer hold the field. In constructing a wage structure in a given case industrial adjudication does take into account to some extent considerations of right and wrong, propriety and impropriety, fairness and unfairness. As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the growing strength of the trade union movement collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem. Considerations of the financial position of the employer and the state of national economy have their say, and the requirements of a workman living in a civilised and progressive society also come to be recognised. It is in that sense, and no doubt to a limited extent, that the social philosophy of the age supplies the background for the decision of industrial disputes as to wage structure. As Mrs. Barbara Wootton has pointed out, the social and ethical implications of the arithmetic and the economics of wages cannot be ignored in the present age (1). It is because of this socioeconomic aspect of the wage structure that industrial adjudication postulates that no employer can engage industrial labour unless he pays it what may be regarded as the minimum basic wage. If he cannot pay such a wage he has no right to engage labour, and no justification for carrying on his industry; in other words, the employment of sweated labour which would be easily available to the employer in all undeveloped and even under developed countries is ruled out on the ground that the principle of supply and demand has lost its validity in the (i) " The Social Foundations of Wage Policy " by Barbara Wootton Allen & Unwin. 70 544 matter of employment of human labour, and that it is the duty of the society and the welfare State to assure to every workman engaged in industrial operations the payment of what in the context of the times appears to be the basic minimum wage. This position is now universally recognised. In dealing with wage structure it is usual to divide wages into three broad categories: the basic minimum wage is the bare subsistence wage; above it is the fair wage, and beyond the fair wage is the living wage. It would be obvious that the concepts of these three wages cannot be described in definite words because their contents are elastic and they are bound to vary from time to time and from country to country. It would be difficult and also inexpedient to attempt the task of giving an adequate precision to these concepts. What is a subsistence wage in one country may appear to be much below the subsistence level in another; the same is true about a fair wage and a living wage; what is a fair wage in one country may be treated as a living wage in another, whereas what may be regarded as a living wage in one country may be no more than a fair wage in another. Several attempts have nevertheless been made to describe generally the contents of these respective concepts from time to time. The most celebrated of these attempts was made by Mr. Justice Higgins in his judgment in 1907 in a proceeding usually referred to as the Harvester Case. Sitting as President of the Commonwealth Court of Conciliation and Arbitration, the learned Judge posed the question as to what is the model or criterion by which fairness or reasonableness is to be determined, and he answered it by saying that " a fair and reasonable wage in the case of an unskilled labourer must be ail amount adequate to cover the normal needs of the average employee regarded as a human being living in a civilised community." (1) (1) Cited by Foender in "Better Employment Relations", , 178, 545 In their work " Industrial Democracy " published in 1920 Sidney and Beatrice Webb observed that "there is a growing feeling not confined to trade unionists that the best interests in the community can only be attained by deliberately securing to each section of the workers those conditions which are necessary for the continuous and efficient fulfilment of its particular function in the social machine " (p. 590). In 1919 the Commissioner of the Bureau of Labour Statistics conducted a tentative budget enquiry in the United States of America, and analysed the objects with reference to three concepts, namely, the pauper and poverty level, the minimum of subsistence level and the minimum of health and comfort level; the last was taken for determining the standard of a living wage. This classification was approved by the Royal Commission on the Basic Wage for the Commonwealth of Australia, and it proceeded through norms and budget enquiries to ascertain what the minimum of comfort level should be. The Commission quoted with approval the description of minimum health and comfort level in the following terms : " This represents a slightly higher level than that of subsistence, providing not only for the material needs of food, shelter and body covering, but also for certain comforts such as clothing sufficient for bodily comfort, and to maintain the wearer 's instinct of self respect and decency, some insurance against the more important misfortunes death, disability and fire good education for the children, some amusement, and some expenditure for self development " (1). According to the United Provinces Labour Enquiry Committee wages were classified into four categories, poverty level, minimum subsistence level, the subsistence plus level, and the comfort level (2). The third category would approximate to the fair wage, and the fourth to the living wage. According to the South Australian Act of 1912 the living wage means " a sum (1) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour pp.5 and 6.(2) Ibid. 546 sufficient for the normal and reasonable needs of the average employee living in a locality where work under consideration is done or is to be done ". On the other hand, the Queensland Industrial Conciliation and Arbitration Act provides that the basic wage paid to an adult male employee shall not be less than is " sufficient to maintain a well conducted employee of average health, strength and competence, and his wife and ' a family of three children in a fair and average standard of comfort, having regard to the conditions of living prevailing among employees in the calling in respect of which such basic wage is fixed. and provided that in fixing such basic wage the earnings of the children or wife of such employee shall not be taken into account " (1). The Fair Wages Committee which made its Report in 1949 broadly accepted the view expressed by the Royal Commission on the basic wage for the Commonwealth of Australia which we have already cited. According to the Committee, " the living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill health, requirements of essential social needs, and a measure of insurance against the more important misfortunes including old age (2). " The Committee emphasised that " the minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. For this purpose the minimum wage must also provide for some measure of education, medical requirements and amenities " (3). In this connection it would be useful to refer to the observations made by Philip Snowden in regard to the concept of living wage. These observations are generally cited with approval by industrial tribunals. Said Snowden, " it may be possible to give (1) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour p. 5. (2) Ibid. (3) Cited in the Report of the Committee on Fair Wages published by the Government of India, Ministry of Labour p. 8. 547 a precise or satisfactory definition of a living wage, but it expresses an idea, a belief, a conviction, a demand. The idea of a living wage seems to come from the fountain of justice which no man has ever seen, which no man has ever explained, but which we all know is an instinct divinely implanted in the human heart. A living wage is something far greater than the figures of a wage schedule. It is at the ' same time a condemnation of unmerited and unnecessary poverty and a demand for some measure of justice (1). " On the problem of converting the concept of living wage into monetary terms this is what Snowden had said: " The amount of the living wage in money terms will vary as between trade and trade, between locality and locality. But the idea is that every workman shall have a wage which will maintain him in the highest state of industrial efficiency, which will enable him to provide his family with all the material things which are needed for their health and physical well being, enough to enable him to qualify to discharge his duties as a citizen"(2). It is in this broad and idealistic sense that article 43 of the Constitution has referred to the living wage when it enunciates the Directive Principle that the State shall endeavour, inter alia, to secure by suitable legislation, or economic organisation, or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. This Court has recognised this idealistic position of the concept of living wage in the case of Express Newspapers (Private) Ltd. vs The Union of India (3). It would thus be obvious that the concept of a living wage is not a static concept; it is expanding and the number of its constituents and their respective contents are bound to expand and widen with the development and growth of national economy. That is why it would be impossible to attempt the (1) Philip Snowden " The Living Wage ", p. 1. (2) Ibid. (3) , 79 82. 548 task of determining the extent of the requirement of the said concept in the context of today in terms of rupees, annas and pies on the scanty material placed before us in the present proceedings. We apprehend that it would be inexpedient and unwise, to make an effort to concretise the said concept in monetary terms with any degree of definiteness or precision even if a 'fuller enquiry is held. Indeed, it may be true to say that in an under developed country it would be idle to describe any wage structure as containing the ideal of the living wage, though in some cases wages paid by certain employers may appear to be higher than those paid by others. As observed in its Report by the Commission of Enquiry on " Emoluments and Conditions of Service of Central Government Employees, 1957 59 ", " taking a standard family as consisting of four members of whom only one is an earner, the average income of a family at the highest figure during the nine years ending in 1957 58 would work out at Rs. 1,166/ per annum or about Rs. 97/ per mensem. The minimum wage cannot be of the order of Rs. 125/when on the basis of the national income the average for a family works out only to Rs. 97/ per mensem. " Therefore, looking at the problem of industrial wages as a whole it would not be possible to predicate that our wage structure has reached even the level of a fair wage. It is possible that even so some employers may be paying a very high wage to their ' workmen, and in such a case it would be necessary to examine whether the wages paid approximate to the standard of the living wage; but in deciding this question the proper approach to adopt would be to consider whether the wage structure in question even approximately meets the legitimate requirements of the components consti tuting the concept of a living wage. For that purpose it may not be essential, and on the material produced before us it is not even possible, first to determine what in terms of money those constituents would denote in the context of today. The learned Attorney General 's argument that we should first determine independently what amount in terms of rupees, annas and pies would be treated as a living wage today 549 obviously ignores the complexity of the problem and the poverty of the material adduced by the appellant in the present proceedings. There is another aspect of this question to which we must incidentally refer. We are dealing with the contents of the living wage in the present appeal not for the purpose of fixing a wage structure; the contention raised by the appellant is that since the wages paid to the respondents have reached the stage of a living wage there is no gap between the actual wage and the living wage, and so there is no occasion to make a claim for bonus. While dealing with this contention there would be no justification for ignoring the idealistic character of the living wage is specified in article 43 of the Constitution ; and so, it would be necessary to enquire whether the wage in question satisfies the tests laid down by the Royal Commission on the basic wage for the Commonwealth of Australia which has been endorsed by the Fair Wages Committee 's Report and broadly approved by this Court in the Express Newspapers ' case (1). The question which we must now consider is whether the appellant has succeeded in showing that its wage structure has reached the standard of the living wage which has been specified as one of the ultimate objectives by article 43 and which is the ideal that the working population of the country hopefully looks forward to achieve. Before the tribunal the Union filed statements to show that the wage structure prevailing amongst the respondents is no more than the need based minimum wage. In support of this plea they referred to the resolution which has been unanimously passed at the 15th Session of the Indian Labour Conference held in New Delhi on July 11 and 12, 1957. This resolution makes a declaration about the wage policy which should be followed during the Second Five Year Plan. The Tripartite Committee which passed the resolution considered the relevant notes placed before it, and held that they would be useful as background material for (1) 550 wage fixation. It then took note of the difficulties in assessing quantitatively the individual importance of various factors affecting wage fixation such as product ivity, cost of living, the relation of wages to national income and so on, and proceeded to discuss the wage policy with specific reference to minimum wages and fair wages. With regard to the minimum wage fixation it was agreed that the minimum wage was need based to ensure the minimum human needs of the industrial worker irrespective of any other considerations. To calculate the minimum wage the Committee accepted the following norms and recommended that they should guide all wage fixing authorities including Minimum Wage Committees, Wage Boards, adjudicators, etc. (ii) Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr. Aykroyd for an average Indian adult of moderate activity. (iii) Clothing requirements should be estimated at a per capita consumption of 18 yards per annum which would give for the average workers family of four, a total of 72 yards. (iv) In respect of housing, the rent corresponding to the minimum area provided for under Government 's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage. (v) Fuel, lighting and other I miscellaneous ' items of expenditure should constitute 20% of the total minimum wage. " Having set forth these norms the Committee recognised the existence of instances where difficulties may be experienced in implementing its recommendations, and so it added that wherever the minimum wage fixed went below its recommendations it would be incumbent on the authorities concerned to justify the 551 circumstances which prevented them from adherence to the norms prescribed by the Committee. Having thus unanimously agreed on the content of the need based minimum wage the Committee proceeded to observe that as regards fair wages it was agreed that the Wage Board should go into the details in respect of each industry on the basis of the recommendations contained in the Report of the Committee on Fair Wages. The respondents treated this unanimous resolution as the basis for their claim that the wages paid to them by the appellant were no better than the need based minimum contemplated by the said resolution. Accordingly they set out the diet requirements extracted from Health Bulletin No. 23, and converted the said requirements into monetary terms at Rs. 123 75 nP. Having thus arrived at the calculation of the value of the diet requirements of workmen (Exs.U 4 and U 5) they proceeded to make calculations about the money content of the need based minimum wage at Rs. 209 70 (exhibit U 6). This conclusion has been reached on the basis that the minimum diet requirements would be Rs. 123 75 nP., clothing requirements would be Rs. 9/ , rent would be Rs. 42/ and miscellaneous expenditure at 20% of the total of the three preceding items would be Rs. 34 95 nP. Their case was that in view of the fact that Rs. 209 70 nP. approximates to the standard of the need based minimum wage the claim that the wage structure of the appellant has reached the living wage standard cannot be sustained. On the other hand the appellant sought to justify its claim principally on the calculations made by the Textile Labour Committee which had made its report in 1940. It may be pointed out that in its statement (exhibit C 6) the appellant has used the expressions " fair wage " and " living wage " somewhat indiscriminately, and seems to have assumed that the norms prescribed by the Tripartite resolution had relation to a fair wage and not the need based minimum wage. That, however, does not appear to be accurate, According to 71 552 the Textile Committee 's report the money content of the living wage in 1940 was Rs. 50/ to Rs. 55/ per month. This total is taken as the basis by the appellant in making its relevant calculations. The appellant has then referred to the norms prescribed by the Tripartite resolution and has assumed that the total of the need based minimum wage would be Rs. 40 14 0, and since there had been a rise in the cost of living after 1940 the appellant has multiplied Rs. 41/ by 3.5 which gave the amount of Rs. 143.50 nP. Thus, according to the appellant the need based minimum would not be the said amount of Rs. 209/ as calculated by the respondents. Then the appellant added that even if Rs. 55/was taken as the equivalent of the living wage in 1940 and the same is multiplied by 3 5 one gets Rs. 192.50 nP. and that should represent the living wage in the relevant year. Having thus reached the figure of Rs. 192.50 nP. as the monetary value of the living wage in the relevant year, the appellant purported to support its plea that its wage structure had reached the status of a living wage by relying on the average wages paid by it to the respective categories of its employees. Taking the class of operatives which comprises 524 workmen the average wage packet consisting of the basic salary, the dearness allowance and the value of the amenities supplied by the appellant to them equals Rs. 273.65 nP. The average wages in regard to the 124 clerks reach the figure of Rs. 370.11 nP., and the average wages for the total employees taken together reach the figure of Rs. 301.16 nP. According to the appellant whichever figure is taken it is much above Rs. 192.50 nP., and that must lead to the inference that the living wage standard has been reached by the appellant. That is how both the parties presented their respective contentions before the tribunal and before us. We have already indicated that the appellant 's calculations are made on the assumption that the figure of Rs. 50/ to Rs. 55/ per month can be taken 553 to be the monetary content of the living wage in 1940. In support of this assumption the appellant strongly relies on the Textile Committee 's report. This Committee was appointed in 1940 and was charged with the duty of conducting an investigation into the question of adequacy of wages in cotton textile industry of the Province of Bombay and to kindred matters relating to the industry. It was asked to enquire, inter alia, into the adequacy or inadequacy of wages earned in relation to a living wage standard, and if it found that in any occupation, centre or unit of the industry wages were inadequate it was asked to enquire into and report upon the reasons therefor. The Committee realised that the data supplied before it was insufficient but nevertheless it thought that it would be possible to consider the broad constituents of the concept of the living wage and use the said measure " not for the determination of a dispute or the grant of an award but only for ascertaining in a general manner whether the present level of earnings is or is not adequate in relation to it." The Committee then examined the material which was available to it; it took the view that the living wage standard should be determined in respect of the family unit, and for its calculation it converted the total number of members in the family into standard consumption units according to the formula evolved by Dr. Aykroyd in his Health Bulletin No. 23. According to this formula each family was assumed to consist of a workman, his wife and two dependents or children and their consumption units were treated respectively as 1.8 and 0.6 each respectively, the total consumption units thus being 3.0. Then the Committee considered the problem of housing and the expenditure on rent and other items of expenditure such as clothing, fuel and lighting and miscellaneous. In regard to the housing the Committee thought that for a family of four 180 sq.ft. may be held as the minimum in Bombay though according to it the floor area may be put a 554 little higher in less overcrowded places. It is on these calculations that the amount of Rs. 55 was held by the Committee to be the monetary value of the living wage standard. Naturally enough the appellant treats this conclusion as the foundation for its claim that it is paying a living wage to the respondents. In our opinion it would be unreasonable and unsafe to treat the conclusions of this Committee as to the monetary value of the living wage in 1940 as sound and to make it the basis of our calculations today. Incidentally the method of multiplying the figure deduced by the Committee by 3.5 is materially defective. The proper approach to adopt would be to evaluate each constituent of the concept of the living wage in the light of the prices prevailing today and thus reach a proper conclusion ; but apart from it, the main objection against adopting the figure reached by the Committee is that even in 1940 the said figure could not be properly regarded as representing anything like a living wage standard. The object with which the Committee proceeded to hold its enquiry was in a sense negative; it was to determine the question as to how far the prevailing wages were deficient having regard to some reasonable concept of a living wage standard. The material before it was insufficient to determine satisfactorily the money content of the said concept and the Committee itself was conscious that its calculations were bound to be broad and general and conditioned by the data available to it, and what is more important conditioned by the notions of social justice then prevailing. Since 1940 the concept of social justice has made very great progress and the Constitution of the country has now put a seal of approval on the ideal of a welfare State. Besides, it may seem entirely unrealistic to talk of a living wage in the light of our national economy in 1940 and to evaluate its content at Rs. 50 to Rs. 55 per month. It is obvious that the Committee was really thinking of what is today described 555 as the minimum need based wage, and it found that judged by the said standard the current wages were deficient. In its report the Committee has used the word " minimum " in regard to some of the constituents of the concept of living wage, and its calculations show that it did not proceed beyond the minimum level in respect of any of the said constituents. Therefore, though the expression ',living wage standard" has been used by the Committee in its report we are satisfied that Rs. 50 to Rs. 55 cannot be regarded as anything higher than the need based minimum wage at that time. If that be the true position the whole basis adopted by the appellant in making its calculations turns out to be illusory. All that the calculations made by the appellant would show is that the wages paid to the respondents are somewhat higher than what would be required by the concept of the need based wage. It is obvious that between the need based wage and the living wage there is a very long distance. This conclusion is strengthened by some of the observations made by the Commission of Enquiry on " the Emoluments and Conditions of Service of Central Government Employees ". In its report the Commission has referred to the Tripartite resolution on the need based minimum wage, and in the light of the exhaustive material produced before it, and after consulting experts and specialists whose advice was available to it, it has reached the conclusion that (a) the minimum remuneration worked out according to the recommended formula may be of the order of Rs. 125 / as compared to Rs. 52.50 which with some exceptions is the upper limit of minimum wages fixed under the law, (b) that it would be about 70 to 80% higher than the rates generally prevailing in the organised sectors of industry where wages are fixed either by collective bargaining or through conciliation and adjudication proceedings, and (c) that it would be well above the highest wages, i.e., Rs. 112/ (in cotton textiles industry in Bombay average for 1958) which any considerable number of unskilled workers are at present getting in the country (p. 65). We may incidentally add that having regard to its terms of reference the Commission did not feel it advisable to recommend the increase of the Central employees ' wages to the level of the need based minimum for reasons set out by it in its report. That is why it thought it reasonable to recommend that " the minimum remuneration payable to a Central employee which at present is Rs. 75 per mensem should be increased to Rs. 80 per mensem (p. 74). Reverting to the components of the concept of the living wage once again it may be relevant to observe that the principal component of the dietary requirements of a workmarn 's family is generally examined in the light of Dr. Aykroyd 's formula According to Dr. Aykroyd "in dealing with diet it is well to remember the distinction between an optimum and an adequate diet. An optimum diet is one which ensures for the functioning of the various life processes at their very best, whereas an adequate diet maintains these processes but not at their peak levels. Dr. Aykroyd, however, took the view that having regard to our national economy even an adequate or balanced diet may not be within the reach of every one, and so he observed that " it would be wise to effect a compro. mise by temporarily sacrificing the ideal to the necessity of making the improvement economically possible. " With this object he has tabulated the requirements of the improved diet which contains the (1) Health Bulletin No.23 The Nutritive Value of Indian Foods and the Planning of satisfactory Diets By Dr. Aykroyd and revised by Dr. V. N. Patwardhan Published by the Nutrition Research Laboratories, Indian Council of Medical Research, Coonoor. 557 essential nutrients but which would not be as costly as the balanced diet. Now there can be no doubt that in dealing with the monetary value of the content of the concept of the living wage it would not be enough to evaluate the diet requirement with reference to the improved or even the balanced diet. The improved vegetarian diet which has generally been taken into account in making the relevant calculations would be wholly inappropriate in making calculations with regard to a living wage. Under the living wage a workman would be entitled to claim an optimum diet as prescribed by Dr. Aykroyd. Similarly, the requirements as to clothing and residence which have been recognised in the Tripartite resolution, though appropriate in reference to a need based minimum wage, would have to be widened in relation to a living wage. Besides, in determining the money value of the living wage it would be necessary to take into account the requirements of "good education for children, some amusement, and some expenditure for self development ", and it is hardly necessary to emphasise that the content of these requirements cannot be easily converted into terms of money and they would obviously vary from time to time and would show an expansive tendency with the growth of national economy and with the advent of increasing prosperity for the nation as a whole and for any given industry in particular. In this connection it may be pertinent to observe that in deciding the question as to whether the living wage has been introduced by any employer normally it would be necessary to examine the wage structure paid to the relevant working class as a whole. It is well established that the claim for bonus is recognised on the basis of the contribution made by the working class as a whole to the profits of the employer, and we think it would be invidious, and on principle unreasonable, to isolate 558 a few cases where higher wages may be paid and to claim immunity from the payment of bonus in respect of such cases. In the absence of special circumstances prima facie the most expedient method to adopt would be to take the average of the wages paid to the relevant working class as a whole. It is, however, unnecessary to pursue this matter further and to pronounce a definite decision on it because, as we have just indicated, even taking the clerical category where the average works highest at Rs. 370.11 nP. we feel no hesitation in holding that the said average is much below the standard living wage. The said average is much above the need based minimum and may fall in the medium level of a fair wage; but that itself would show that it is much below the standard of the living wage. Similarly, Rs. 273.65 nP. which is the average of the operatives as well as Rs. 301.16 nP. which is the average of the operatives and the clerical staff taken together may be regarded as constituting wage structure which is above the need based minimum structure and may be treated as approximating to the lower level of the fair wage. One has merely to take into account the various constituent elements of the living wage to realise that these averages fall far short of the standard of the living wage. In reaching such a conclusion it is hardly necessary first to arrive at a concrete determination as to the money value of the living wage. In our opinion, taking the broad aspect of the concept of the living wage into consideration, and bearing in mind its idealistic and expanding character, it would be possible, and not very difficult either, to say about a given wage such as the one with which we are concerned in the present appeal that it does not reach the standard of a living wage. We must accordingly hold that the claim made by the appellant that it is paying a living wage to its employees cannot be sustained. It still remains to consider some of the decisions to which our attention was invited. In Standard Vacuum Oil Company. In that connection the tribunal referred to the Textile Committee 's report and assumed that Rs. 50/ to Rs. 55/ , that is to say, on an average Rs. 52 8 0 represented the money value of a living wage in 1940. On that assumption the tribunal made certain calculations and held that its" award may be regarded as the first approximation towards attaining the living wage standard. The learned Attorney General has relied on this decision in support of his argument that the basis supplied by the Textile Committee 's report was treated as valid for the pur pose of determining the money value of the living wage. For the reasons which we have already indicated we must hold that the tribunal was in error in treating Rs. 52 8 0 as the money value of the living wage even in 1940. The same comment falls to be made about the calculations made by the Labour Appellate Tribunal in Burmah Shell, etc., Oil Companies in Madras vs Their Employees (1). In that case the Appellate Tribunal thought that if 50% be added to the minimum wage of the employees that may assist them to attain the goal of the living wage, and this conclusion was based on the Textile Committee 's report. Similarly, the calculations made by the Industrial Tribunal, Madras, in Workers of section V. O. C. Ltd. (Standard Vacuum Employees ' Union) vs Standard Vacuum Oil Co. Ltd. (2), suffers from the same infirmity. Therefore, the three industrial decisions on which the appellant relied cannot assist it in establishing its contention that a living wage is paid to the respondents. In Burmah Shell Oil Storage and Distributing Co. of India, Ltd., Bombay vs Their Workmen (3) the Labour Appellate Tribunal had occasion to consider the content of the living wage. In that connection it referred to the Report of the Fair Wages Committee, and observed that the level of national income in India is so low that the country is unable to afford to prescribe by law a minimum wage which would correspond to the concept of a living wage. " The rudder is set in (1) (2) (3) , 72 560 the direction of a living wage", observed the Appellate Tribunal, " but the destination is not yet within sight; the gradual emergence of a welfare State will naturally help but even here progress is necessarily slow ". In our opinion, this statement shows the correct approach to the problem of determining the content of the concept of the living wage. In Standard Vacuum Oil Company vs Their Employees (1) the Labour Appellate Tribunal was called upon to consider the plea that the companies were paying a living wage to their employees. In dealing with the said contention the Appellate Tribunal observed that "the measurement of the living wage standard in terms of money has not been prescribed by law of the country, nor, as far as we are aware, has been determined anywhere in any scientific basis ". In its opinion, it was not possible nor necessary to fix the amount with exactitude which should form the minimum living wage after an exhaustive enquiry for considering the question of bonus, because, according to the principle laid down the whole gap between the existing wages and the living wage need not be filled up. That is why it thought that it would be sufficient for the purpose if an approximate idea can be formed by taking into account the approximate expenditure on the necessary items of requirements of the living wage standard. On these considerations the plea raised by the companies was rejected. It would thus be seen that the oil companies have been persistently making the claim before the industrial tribunals that they need not be called upon to pay bonus to their employees on the ground that they are paying them a living wage, and this plea has so far been consistently rejected. As we have already pointed out it may partly be because of this trend of industrial decisions that in the present proceedings the tribunal did not think it necessary to deal with the point elaborately or to make a definite finding. Before we part with this appeal we ought to add that if we had upheld the appellant 's claim it would have been necessary for us to consider the relevance (1) 561 and validity of the respondents ' alternative claim that in case living wage is paid by the appellant to them they should be allowed a share in the profits made by the appellant during the relevant year on the basis of profit sharing. It is true that industrial adjudication so far has consistently emphasised the fact that the payment of bonus is intended to fill the gap between actual wages and the living wage. Obviously no occasion has so far arisen to consider whether a claim for bonus can be made even after the standard of living wage has been attained because no employer has so far succeeded in showing that a living wage standard has been reached. We are making these observations because we wish to make it clear that our decision in the present appeal should not be taken to mean that as soon as a living wage standard is reached no claim for bonus can be made by the workmen; that is a question which may have to be considered on its merits if and when it arises. Until the stage is reached where a plea that living wage is paid can be reasonably made and proved it is desirable that industrial adjudication in regard to the payment of bonus should not be unnecessarily complicated by raising such a plea from year to year. That takes us to the appeal preferred by the respondents. The tribunal did not think it necessary to work out calculations because, according to the bonus formula, it was conceded that the available surplus in the hands of the appellant was very large. It, however, took into account the wage scales and salaries in the appellant 's concerns and other relevant factors and concluded that awarding five months ' bonus " strikes a fair balance between the conflicting standards of the workmen and the company ". Mr. Gokhale contends that five months ' bonus is too meagre and that the respondents were entitled to a much higher rate of bonus. On the other hand the learned Attorney General contends that we should put a ceiling in the matter of awarding bonus so that excessive claims for bonus would be discouraged. In our opinion it would be inadvisable and inexpedient to put such a ceiling in the matter of awarding bonus. 562 It is now well established that in awarding bonus industrial adjudication has to take into account the legitimate claims of the industry, its shareholders who are entitled to claim a return on the investment made by them and the workmen. This Court has consistently refused to lay down any rigid rule or formula which would govern the distribution of the available surplus between the three claimants. The decision of this question must inevitably depend on a proper assessment of all the relevant facts. If wages are small and the profits are high then the workmen would be entitled to have a high rate of bonus. Indeed, if an employer makes consistently high profits and the wages continue to be low it may justify the increase in the wage structure itself ; in other words, the award of bonus would have some relation to the wages paid to the employees. It is also true that unreasonably high or extravagant claims for bonus cannot be entertained just because the available surplus would justify such a claim. As has been observed by the Labour Appellate Tribunal in Burmah Shell Oil Storage and Distributing Co. of India Ltd., Bombay vs Their Workmen (1) care must be taken to see that the bonus which is given is not so excessive as to create fresh problems in the vicinity that upset emoluments all round or that it creates industrial discontent or the possible emergence of a privileged class. The impact of the award of bonus in an industrial dispute on comparable employments or on other employments in the region cannot be altogether ignored, though its effect should not be over estimated either. Having regard to the fact that the distribution of available surplus must inevitably depend in each case on its own facts this Court has generally refused to interfere with the decision of the tribunal on the ground that any decision on the question of distribution should be left to its discretion. In the present case the (1) 563 tribunal has considered all the relevant factors and has come to the conclusion that five months ' bonus would meet the ends of justice. We do not see any reason to interfere with this award. In the result both the appeals fail and are dismissed. There will be no order as to costs in both the appeals. Appeals dismissed.

The workmen claimed bonus for the year 1956 equivalent to nine months ' total earnings on the ground that the employers had admitted their capacity to pay and that there was a big gap between the wage actually received and the living wage. The employers contended that they were paying the workmen a living wage and they were not entitled to any bonus. The employers relying mainly on the Report of the Textile Labour Committee, 1940, contended that if the living wage in 1940, i.e., Rs. 55/ was multiplied by 35 (due to rise in prices) it gave Rs. 192.50 as the living wage in 1956 and they were paying their workmen at a higher rate. The workmen relied on the recommendations of the Indian Labour Conference, 1957, to show that Rs. 209.70 approximated to the standard of the need based minimum wage and that the average wage paid by the employers was nothing more than this. The Tribunal held that the wages paid were fair but that there was still a gap between the actual wage and the living wage and awarded bonus equivalent to five months ' basic wages. Held, that the employers had failed to establish that they were paying a living wage to the workmen. In construing wage structure the considerations of right and wrong, propriety and impropriety, fairness and unfairness are also taken into account to some extent. As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the. growing strength of the trade union movement collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem. Wages are usually divided into three broad categories: the basic minimum wage, the fair wage and the living wage. The concept of these three wages cannot be described in definite words ,is their contents are elastic and vary from time to time and from place to place. The concept of a living wage is not a static concept; it is expanding and the number of its constituents and their 537 respective contents are bound to expand and widen with the development and growth of national economy. In an under developed country no wage structure could be described as reaching the ideal of a living wage. It is unreasonable and unsafe to treat the Report of the Textile Labour Committee, 1940, as to the monetary value of the living wage in 1940 as sound. The figure reached by the committee in 1940 did not represent anything like a living wage; it really represented the minimum need based wage. Besides, the method of multiplying the figure by 35 was materially defective ; the proper approach was to evaluate each constituent of the concept of the living wage in the light of the present day prices. Even the highest average wage paid by the employers was much below the standard of the living wage though it was above the need based minimum. Express Newspapers (P.) Ltd. vs Union of India, , Standard Vacuum Oil Company vs Their Workmen, , Burmah Shell, etc., Oil Companies in Madras vs Their Employees, , Woykers of S.V.O.C., Ltd. (Standayd Vacuum Employees ' Union) vs Standard Vacuum Oil Co. Ltd., and Standard Vacuum Oil Company vs Their Employees, , referred to. Burmah Shell Oil Storage and Distributing Co. of India, Ltd., Bombay vs Their Workmen, , approved. Quaeye: Whether the workmen would be entitled to bonus even if a living wage is paid to them by the employers. Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, and Syee Meenakshi Mills Ltd. vs Their Workmen, ; , referred to.

An industrial dispute arose between the appellant and its workmen as to payment of bonus for the years 1957 58 and 1958 59. The dispute was referred for adjudication to the tribunal. The respondents claimed bonus on the basis that payment of some bonus at Christmas had become an implied condition of service between the appellant and its workmen. The workmen claimed 1 1/2 months wages for each year on the basis of an implied term of service. On these facts the tribunal held on the basis of the decision of this Court in M/s. Ispahani Ltd. vs Ispahani Employees Union that payment of bouns at the rate of 1 1/2 months ' salary as an implied condition of service had been established. It is this award of the tribunal which ha, , been challenged before this Court. Held: (i) Where the payment of bonus is connected with a festival it is possible to infer that there is an implied condition to pay something at the time of the festival, even though the payment has not been made at a uniform rate in previous years. In the present case, the payment has not been uniform over the years and before an implied term of service to pay bonus can be inferred it must be shown that the payment was connected with some festival. Therefore the tribunal was not right in holding that there could be an implied condition of service as to payment of bonus unconnected with any festival. In the present case, though the amount paid in December was originally called an advance, at least one month 's salary out of the so called advance always remained with the work men and was treated as bonus connected with Christmas festival. On the facts of this case it was held that there was an implied condition of service between the appellant and its workmen that something would be paid every year about Christmas time as festival bonus. M/s. Ispahani Ltd. vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, relied on. (ii) In a case of payment which is made at different term and is not at a uniform rate the duty of the court is to connect the payment with a festival (in this case Christmas). On the evidence in this case it is clear that the minimum is only one month 's salary payable about Christmas time and this was actually paid in 1951 52 and 1953 54. Therefore the payment of one month 's salary as Christmas bonus is proved as an implied condition of service between the appellant and its workmen on the admitted facts of this case.

These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act. Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure. A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed. There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court. Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,. R. , approved. There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award. The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable. There can be no difference in law between an arbitaration by agreement of parties and one under a statute. A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator. If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it. An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on. National Telephone Company Limited vs Postmaster General, , explained.

The appellant Co operative Society has filed this appeal by special leave against the High Court 's order passed in a writ petition filed by it whereby the High Court set aside the award of the Industrial Tribunal. The High Court in the impugned order held that the appellant is liable to pay to its employees bonus at the rate of 20 per cent of its total annual earnings for the years 1975 76, 1976 77 and 1977 78. The appellant contends that the High Court went wrong in directing the appellant to pay bonus with regard to various amounts invested by it as permitted by the relevant provi sions of the Maharashtra Cooperative Societies Act 1960, and the amounts carried forward to its reserve fund. According to the appellant, the High Court neither read the provisions of Sec. 6(d) of the Bonus Act 1965 correctly nor was it justified in relying on the Explanation to the 3rd Schedule to the Bonus Act. Dismissing the appeal subject to the modification indi cated in the judgment hereinbelow, this Court, HELD: The expression "capital" is not defined under the Bonus Act. It must therefore be understood in the sense in which that expression is generally understood. That means all amounts which are classified as capital in contrast to revenue must qualify for deduction subject to the limit of 8.5 per cent, provided such capital is invested by the Society in its establishment as evidenced by its books of accounts at the commencement of the accounting year. Any such capital upto 8.S per cent is thus deductible. Further more, all sums which have been carried forward in respect of the relevant accounting year to a reserve fund as required under any law applicable to Co operative Societies for the time being in force are also deductible from gross profits. [269B D] 267 Accordingly all such amounts held by the Society as reserve fund in terms of Sec. 66 of the Co operative Socie ties Act must qualify for deduction. [269H] If larger amounts are carried forward to the reserve fund in terms of Sec. 66, all such amounts will come within the ambit of item (4) of the 3rd Schedule to the Bonus Act and qualify for deduction. [270A B]

The respondent company, which was incorporated in New York and carried on business in spices, brought a suit in the original side of the Bombay High Court against the appellant for recovery of a sum of Rs. 92,884 4 10 on the basis of a judgment of the Supreme Court of the State of New York affirming two awards obtained by it and also on the awards in the alternative. 20 The respondent was a partnership firm carrying on import and export business in Bombay. By two letters exchanged between them, the appellant and the respondent agreed to do business in turmeric fingers on the terms and conditions of the American Spice Trade Association, one of which was an arbitration clause which ran as follows : "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Asso ciation printed on the reverse side thereof. This contract is made as of in New York. " The appellant failed to supply turmeric in terms of the two contracts it entered into with the respondent. The respondent put the matter into arbitration in pursuance of the arbitration clause. The appellant took no part in it. The arbitrators gave the two awards in favour of the respondent for damages. The appellant did not pay. The respondent then took appropriate proceedings and got the awards confirmed by the judgment of the Supreme Court of the State of New York. The single judge of the Bombay High Court who tried the suit held that it was not maintainable either on the foreign judgment or on the awards and (dismissed the suit. The Division Bench on appeal held that the suit was maintainable on the awards, though not on the judgment, as part of the cause of action had arisen in Bombay and the relevant facts had been proved by the Public documents produced by the respondent and the admissions made by the appellant and decreed the suit. Held, (per Dayal and Mudholkar JJ.) The decision of the Single judge of the High Court that the suit was not maintainable on the foreign judgment must be affirmed but on other grounds. Apart from the provisions of the Arbitration Protocol and Conventions Act, 1937, foreign awards and foreign judgments based upon award arc enforceable in India on the same grounds and in the same circumstances in which they are enforceable in England under the Common Law on grounds of justice, equity and good conscience. On the original side of the Bombay High Court English Common Law is also applicable under cl. 19 of the Letters Patent read with cl. XLI of the Charter of that Court. If the award is followed by a judgment which is rendered in a proceeding in which the person against whom judgment is sought can take objections as to the validity of the award, the judgement will be enforceable in England. Even then the plaintiff will have the right to sue on the original course of action. Secondly, even a foreign award will be enforced only if it satisfies mutate 's mutandis the tests applicable to the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration. But there is a difference of opinion in this connection on two matters, (1) whether an award which 21. is followed by a judgment can be enforced as an award or whether the judgment alone can be enforced, and (2) whether an award which is not enforceable in the country in which it was made without an enforcement order or a judgement, can be enforced or in such a case the only remedy is to sue on the original cause of action. Thirdly, both a foreign judgment and a foreign award may be sued upon provided certain conditions are fulfilled one of which is that it has become final. Although, therefore, the respondent could sue on the original cause of action in the Bombay High Court that cause of action must be distinguished from the one furnished by the 'judgment of the New York Supreme Court which must be held to have arisen in New York and not in Bombay and was a cause of action independent of the one afforded by the contracts and the Bombay High Court would, consequently, have no jurisdiction to try the suit based on that judgment. East India Trading Co. vs Carmel Exporters & Importers Ltd., , Schibsby vs Westenholz., and Re Davidson 's Settlement Trust, (1873) L. R. 15 Eq. 383, referred to. In a suit based on a foreign award the plaintiff has to prove,. (1) that the contract between the parties provided for arbitration by a tribunal in a foreign country, (2) that the award is in accordance with the agreement, (3) that the award is valid according to the law of that country (4) that it was final according to that law and, (5) that it was subsisting award at the date of the suit. The essential difference between a foreign judgement and 2 foreign award is that while the former is a command of the foreign, sovereign and the coming of nations accords international recognition to it if it fulfill certain basic requirements, the latter is founded on the contract between the parties and is not given the status of a judgment in the country in which it is made 'and cannot claim the same international status as the act of a foreign sovereign. Even though an award may not have obtained the status of judgment in the country in which it is made, if it possesses the essential attribute of a judgment, that is finality, it can be sued upon in in other country. Union Nationaledes Cooperatives Agricoles de Careales vs Robert Catterall & Co. Ltd. ' , referred to. But the finality that r. 15, cl. (E) of the American Spice Trade Association gives to the awards in question is no more than a matter of contract between the parties and must be subject to the law of the State. A reference to the laws of the State of New York makes it abundantly clear that the relevant provisions of the laws of the 22 State under which alone the awards could become final had not been complied with and they could not, therefore, provide a cause of action for the suit. For an award to furnish a fresh cause of action, it must be final. If the law of the country in which it was made gives finality to the judgment based on an award and not to the award itself, the award cannot furnish a cause of action in India. Although the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question not being final the suit must fail. Per Subba Rao J. The doctrine of non merger of the original cause of action with the foreign judgment pronounced upon it is a well established doctrine. Popat vs Damodar, , Oppenbeim and Co. vs Mohmed Haneef, Mad. 496 and Nil Ratan Mukhopahya vs Cooch Behar Loan Office, Ltd. I.L.R. , referred to. If the contract does not merge in the judgment, by a parity of reasoning an award on which a foreign judgment is passed cannot also merge in the judgment. There is no distinction between a foreign award which would require an enforcement order to be enforceable in law and an award which cannot be enforced except by a judgment. An en forcement order as well as a judgment on an award serves the same purpose and they are two different procedures for enforcing, an award. Meerifield Ziegler & Co. vs Liverpool Cotton Association Ltd., , referred to. A suit would, therefore, lie on a foreign award completed according to the law of that country and before a decree can be passed on it three things must be proved, (1) arbitration agreement, (2) that the arbitration was conducted in accordance with the agreement, and (3) that the award was valid according to the law of the country when it was made. Norske Atlas Insurance Co. Ltd. vs London General Insurance Company Limited. , referred to. It was not correct to say that the High Court had gone wrong in holding that the three necessary conditions had been proved by the admission of the appellants in their pleadings. Rules 3, 4 and 5 of the Order VIII of the Code of Civil Procedure form an integrated code dealing with the manner in ,which the allegations of fact made in a plaint has to be traversed :and the legal consequences that follow from its non compliance. 23 The written statement must deal specifically with each allegation of fact made in the plaint and if the defendant denies any such fact, such denial must not be evasive, he must answer the point of substance and if he fails to do so the said fact must be take to be admitted. The discretion under the proviso to r. 5 has to be exercise by the court as justice demands and particularly according to the nature of the parties, standard of drafting prevailing in the locality and the practice of the court. There can be no doubt that pleadings on the original side of the Bombay High Court have to be strictly construed in the light of the said provisions unless the court thinks fit to exercise it discretion under the proviso. Tildesley vs Harper, and Laxmi narayan vs Chimniram Girdharilal, Bom. 89 referred to. The said three conditions were also proved by the exhibited record of the proceedings of the Supreme Court of New York containing the certificate of the Consul General of India in New York and certified copies of the order and judgment of the Supreme Court. While under section 78(6) of the Indian Evidence Act, proof of the character of the document according to the law of the foreign country, is condition precedent to its admission, such admission is not a condition precedent for drawing the requisite presumption under section 86 of the Act. That presumption can be drawn before the document is admitted. The judgment of the Supreme Court of New York, therefore, which satisfied the first two conditions laid down by section 78(6), could be legitimately admitted into evidence. The contracts between the parties having been concluded within the local limits of the original jurisdiction of the Bombay High Court, a part of the cause of action must have arisen there. and that court had jurisdiction to try the suit on the awards.

The appellants, who were the managements of the three hotels, decided to dismiss some of their workmen who were found guilty of misconduct as a result of enquiries held by them and suspended them without pay pending the receipt of the permission of the Industrial Tribunal under section 33 Of the . The workmen applied to the Industrial Tribunal for the grant of interim relief pending disposal of the applications and the Tribunal granted the relief prayed for amounting to full wages and a sum of Rs. 25 per head per month in lieu of food. The managements appealed against such grant, but the Labour Appellate Tribunal dismissed the appeal . The appellants came up to this court by special leave. The two questions for ,decision in the appeals were, (1) whether any wages were at all payable to the suspended workmen pending permission being sought under section 33 to dismiss them and the decision of the applications under section 33 Of the Act, and, (2) whether the Industrial Tribunal was competent to grant interim relief except by an interim award that was published. Held, that it was well settled that under the ordinary law of master and servant the power to suspend the servant without 477 pay could not be implied as a term in an ordinary contract of service between the master and the servant but must arise either from an express term in the contract itself or a statutory provision governing such contract. Hanley vs Pease & Partners, Limited, ; Wallwork vs Fielding and Ors. , ; Secretary of State for India in Council vs Surendra Nath Goswami, I.L.R. and Rura Ram vs Divisional Superintendent, N. W. R., I.L.R. VII (1954) Punj. 415, referred to. But section 33 of the , which took away the right of the employer to dismiss the employee except with the permission of the Industrial Tribunal, introduced a fundamental change in industrial law in modification of the common law by empowering the employer by implication to suspend the contract of employment and thus relieve himself of the obligation to pay the wages and the employee of rendering service, where, as a result of a proper enquiry, he came to the conclusion that an employee should be dismissed. In the peculiar circumstances created by the enactment of section 33 Of the Act it was just and fair that Industrial Tribunals, which had the power to go beyond the ordinary law of master and servant, should imply such a term in the contract of employment. The result, therefore, would be that if the Tribunal granted the permission, the suspended contract would come to an end and there would be no further obligation on the part of the employer to pay any wages after the date of suspension. If on the other hand, the permission was refused. the workmen would be entitled to all their wages from the date of suspension. Western India Automobile Association vs The Industrial Tribunal, Bombay, and Rohtas Industries Ltd. vs Brijnandan Pandey, ; , referred to. Lakshmi Devi Sugar Mills Ltd. vs Pt. Ram Sarup, ; ; The Management of Ranipur Colliery vs Dhuban Singh, C.A. 768/57, decided on 20 4 59, M/s. Sasa Musa Sugar Works (P) Ltd. vs Shobrati Khan, C. As. 746 and 747/57, decided on 29 4 59 and Phulbari Tea Estate vs Its Workmen, [1960] (1) S.C.R. 32 explained and relied on. But the employer 's power of suspension could not take away the power of the Tribunal to grant interim relief to the workmen under the Act, the words " incidental thereto " occurring in section 10(4) of the Act made it clear that interim relief, where admissible, could be granted as a matter incidental to the main question under reference, although it might not be expressly mentioned in the terms of the reference. It is not necessary to decide whether an interim relief of this nature amounted to an interim award. Even assuming that the Industrial Tribunal could not grant interim relief except by an interim award which required publication that could not preclude 478 this Court from granting interim relief in the same manner as the Industrial Tribunal could and sections 15, 17 or 17A could have no of application to such an order passed by this Court. Ordinarily interim relief could not be the whole relief the workmen would get in case of final success and the appellants should not be made to pay more than half the amount adjudged by the Industrial Tribunal as interim relief in these cases.

Over 9,000 employees of the Respondent Board, represented by seven Unions, demanded an increase in the dearness allowance payable to them, the payment of gratuity to some employees, and the calculation of pension payable to other employees after adding 50% of the dearness allowance. Six of the Unions representing the employees amicably settled the disputes with the Board which granted increases in dearness allowance on the other demands being given up. The seventh Union declined to accept the settlement and the dispute was eventually referred for adjudication by the Industrial Tribunal. Before the Tribunal took up the reference, all except 466 of the employees individually accepted the settlement. At the hearing of the reference it was contended by the remaining employees through the seventh Union that the total wage packet including the dearness allowance claimed by them would only satisfy the requirement of a minimum wage and the Board 's capacity to pay the increases demanded was, therefore, irrelevant; furthermore, although the Board was an industry in the public sector, it must also be made to pay wages on the same basis as private sector employers; two electric supply companies in ",the area were paving wages which were much higher and there was no justification for refusing the demand for additional dearness allowance which would place the employees of the Board on par with the ,employees of those companies. The Tribunal in its award rejected all the workmen 's demands. It found that the demand for increased dearness allowance was not confined to achieving a minimum wage but as a result of its acceptance the wages would be above the minimum wage. The Tribunal also found that the Board having inherited an accumulated deficit of over Rs. 2 crores from its predecessor, the Bombay State Electricity Board, having sustained heavy losses in its working and having undertaken a further liability to pay increased dearness allowance, it had no capacity to undertake the further burden of paying about Rs. 49 lakhs per year as increased dearness allowance or to meet the other demands. The Tribunal held that the position in the other two electric supply companies was not comparable 'with the Board. In appeal to this Court against the award it was contended inter alia, that the Tribunal was wrong in judging the capacity of the Board after taking into account the deficit of Rs. 2 crores which it had inherited from its predecessor; and that the financial capacity of the Board should 174 175 have been judged only on the basis of its commercial undertaking excluding the activities of the Board which were in the nature of national duties. HELD : The Tribunal had rightly rejected the demands of the appellants. (i) As the appellants had failed to show that they would not be receiving the minimum wage with their basic pay and the increased dearness allowance offered by the Board, the financial capacity of the Board for acceding to the demands made became a relevant consideration. Hindustan Antibiotics Ltd. vs The Workmen & Others, ; and The Hindustan Times Ltd. vs Their Workmen, [1964] 1 S.C.R. 234 referred to. Although the deficit inherited by the Board from its predecessor could not be treated as a revenue loss for determining the Board 's financial capacity and was in the nature of a capital loss, even this loss could not be completely ignored. Apart from this, it was clear 'On the facts that during three years after its formation the Board had incurred heavy losses of about Rs. 110 lakhs and it did not, therefore, have the capacity of bearing the additional financial burden involved in meeting the appellants ' demands. [179 D F; 180 E] (ii) When the Board was constituted under the Electricity (Supply) Act No. 54 of 1948 and was, by its constitution, charged with the general duty of promoting the coordinated development of the generation, supply and distribution of electricity within the State, its capacity to bear the burden of paying wages to its employees had to be worked out after taking into account all the activities which the statute required it to carry on. The running of power houses was only one of the branches of those activities. The profit that the Board earned could only be worked out after including in the accounts all the expenditure incurred by it on all its development and other schemes for distribution of electricity to consumers in urban and rural areas. [181 B D] While an industry in the public sector was not exempt from application of principles which apply to an industry in the private sector and the respondent board must also be made to pay wages on the same basis as private sector employers the additional burden in either sector for paying anything above a minimum wage can only be justifiably imposed in industrial adjudication if the employer bad the capacity to meet that burden. [181 E F] The Tribunal had rightly held that neither of the other two electric companies were comparable with the Board. These two companies merely carried on the activity of direct supply of electricity to consumers in the towns and cities whereas the functions of the Board included the development and execution of schemes for supply of electricity to new areas. Williamsons (India) Private Ltd. vs Its Workmen , referred to.

The cement factory in question which is in the State of Bihar belonged to the appellant company and a limestone quarry owned by the same company As situate about a mile and a half from the factory. Limestone being the principal rawmaterial for the manufacture of cement, the factory depended exclusively for the supply of limestone on the said quarry. On behalf of the labourers in the limestone quarry certain demands were made on the management of the company but as they were rejected they went on strike; and on account of the non supply of limestone due to the strike, the management had to close down certain sections of the factory and to lay off the workers not required during the period of closure of the sections concerned. Subsequently, after the dispute between the management and the workers of the limestone quarry was settled and the strike came to an end, a demand was made on behalf of the workers of the factory who had been laid off during the strike, for payment of lay off compensation under section 25C of the , but the management refused the demand relying on cl. (iii) to section 25E of the Act, which provided that " no compensation shall be paid to a workman who had been laid off. . . if such laying off is due to strike. . on the part of workmen in another part of the establishment ". The Industrial Tribunal took the view that the limestone quarry was not part of the establishment of the cement factory and that the workmen in the latter were not disentitled to lay off compensation by reason of Cl. (iii) of section 25E of the Act. The appellant company appealed by special leave to the Supreme Court and contended that the decision of the Tribunal was erroneous because the facts of the case showed (a) that in respect of both the factory and the limestone quarry there was unity of ownership, unity of management, supervision and control, unity of finance and employment, unity 704 of labour and conditions of service of workmen, functional integrality, general unity of purpose and geographical proximity, and (b) that the strike was decided on by the same Workers ' Union which consisted of the workmen at the factory and the quarry. It was contended for the respondents inter alia (1) that the conclusion of the Industrial Tribunal that the factory and the limestone quarry are not parts of one establishment is a finding of fact which should not be disturbed in an appeal by special leave, (2) that the effect of the Explanation to section 25A of the Act is to negative the idea of a factory and a mine forming parts of one establishment, and (3) that since in the matter of reference of industrial disputes, the Act gives jurisdiction to two distinct authorities, the Central Government in respect of the limestone quarry and the State Government in respect of the factory, the two units, the factory and mine, cannot be treated as one establishment. Held: (1) that the question whether the factory and the limestone quarry form one establishment depends upon the true scope and effect of the expression "in another part of the establishment" in cl.(iii)of section 25E of the , and involves a consideration of the tests which should be applied in determining whether a particular unit is part of a bigger establishment, and though for that purpose certain preliminary facts must be found, the final conclusion to be drawn therefrom is not a mere question of fact ; (2) that the true scope and effect of the Explanation to section 25A of the Act is that it explains what categories, factory, mine or plantation, come within the meaning of the expression " industrial establishment "; it does not deal with the question as to what constitutes one establishment and lays down no tests for determining that question; (3) that existence of two jurisdictions does not necessarily imply that for all purposes of the Act, and particularly for payment of unemployment compensation, the factory and quarry must be treated as separate establishments ; and, (4) that on the facts of the present case the limestone quarry and the factory constituted one establishment within the meaning of cl. (iii) of section 25E of the Act and that the workmen at the factory were not entitled to claim lay off compensation.

Appeals Nos. 54 and 55 of 1957. Appeals from the judgment and decree dated March 11, 1953, of the Judicial Commissioner 's Court, Rewa, in First Appeals Nos. 104 and 116 of 1952. B. C. Misra, for the appellant. Tarachand Brijmohan Lal, for the respondent. January 31. The Judgment of the Court was delivered by HIDAYATULLAH, J. Mahabir Prashad Rungta, appellant in these two appeals, was plaintiff in his own suit and defendant in a counter suit filed by Durga Datt, the respondent. The two appeals have been filed on certificates granted by the Judicial Commissioner, Vindhya Pradesh against a common judgment and decree of the Judicial Commissioner 's Court in four appeals filed by the rival parties, two in each civil suit. Certificate was also granted to the respondent; but he did not take steps in that behalf, and we are, therefore, concerned only with the appeals of Mahabir Prashad Rungta. The two suits were filed in the following circumstances: Rungta owns a colliery at Budhar in Madhya Pradesh. On October 30, 1950, an agreement was executed between Rungta and the respondent, Durga Datt. Durga Datt agreed to transport coal from the colliery to the railway station at the rate of Rs. 2 8 0 per ton for a period of two years commencing from November 11, 1950, to November 10, 1952. That agreement is exhibit P 1. The case of Rungta was that Durga Datt broke the contract from July 29, 1951, by stopping the work of transport. Durga Datt in his suit on the other hand, averred that Rungta had 641 broken the agreement and work of carriage as a result was stopped from July 30, 1951. The difference of a day between them is of no consequence. Rungta 's case was that as a result of the breach of the contract on the part of Durga Datt, he was required to employ other carriers and to pay them at Rs. 3 per ton, and he incurred demurrage and damages to his constituents for delay in supplies. He, therefore, claimed a sum of Rs. 60,000 as damages, including Rs. 20,000 as general damages for loss of business, credit and repu tation. He admitted that a sum of Rs. 15,087 5 0 was owed by him to Durga Datt on account of coal carried by the latter, and he thus claimed Rs. 44,912 11 0, after allowing credit for that sum. Durga Datt, in his suit, asked for a decree for Rs. 49,544 12 0. This included Rs. 26,139 11 0 on account of arrears of bills and Rs. 905 1 0 as interest on the amount. The balance (Rs. 22,500) was claimed as damages for loss of business and profits of the unexpired period of the contract at Rs. 1,500 per month. In giving the particulars for Rs. 26,139 11 0, Durga Datt stated that he had transported 15,844 tons 2 Cwts. of coal to the end of July, 1951, which were loaded in the wagons and despatched. He also claimed Rs. 7,500 in respect of 3,000 tons of coal which he had transported to the railway yard, but which had not beed loaded in the wagons. After adjusting sundry amounts and allowing credit for Rs. 21,861 7 6, he claimed Rs. 26,139 11 0, as stated above. Durga Datt alleged that Rungta was guilty of breach of the contract, particularly of cls. (4), (5) and (8) thereof, which compelled him to rescind the contract. These clauses may be quoted here: "(4) Petrol : It will be arranged by party No. 1 himself but party No. 2 will help in time of need to get the petrol; the expenses incurred by party No. 2 for securing such petrol will be borne by party No. 1. If party No. 2 in spite of his best efforts cannot arrange for petrol then in such case party No. 1 will not be responsible for any loss in regard to transportation of coal. 642 (5) Payment of Bills: Party No. 2 will make payment of Bills of party No. 1 for actual despatch of coal on the 10th of the following months; (8) The road will be kept in repair by party No. 2. " The two suits were consolidated by the trial Judge, and evidence was partly recorded separately and partly for the two suits together. The trial Judge held that the breach of the contract proceeded from Durga Datt, and the suit of Rungta was decreed in the sum of Rs. 12,900 as damages due to him. In the other suit, the trial Judge held that Durga Datt was entitled to a payment of Rs. 26,695 6 6 and a decree for Rs. 13,795 6 6 was passed in his favour after setting off the two amounts against each other. The rest of the claims in the two suits were dismissed. The parties were dissatisfied with the decrees, and four appeals were filed. The learned Judicial Commissioner reversed the decision of the trial Judge. He held that Rungta was guilty of the breach of the contract, because he had not made payments to Durga Datt as laid down by el. (5) of the agreement and had not kept the road in repair. He ordered the dismissal of Rungta 's suit in its entirety, and reducing the amount decreed in Durga Datt 's favour by Rs. 918 6 0 for which there was a double charge, he passed a decree for Rs. 25,113 4 0 awarding interest at 6 per cent. per annum on the amount from August 1, 1951, till date of realisation. In these two appeals, Rungta challenges (a) the dismissal of his suit for damages based on the finding that the breach proceeded from him; (b) the inclusion of Rs. 7,500 in respect of 3,000 tons of coal said to have been transported to the railway yard but not loaded in the wagons; and (c) the award of, and in the alternative the rate of, interest. The main question in these appeals is, who was responsible for the breach of the contract ? The admitted position is that work stopped about the end of July, 1951. Previous to the closure of work, each party had written letters of protest to the other, Rungta complaining that Durga Datt had slowed his work and he was suffering loss, and Durga Datt 643 complaining that lack of arrangements for petrol, failure to repair the road and the withholding of the money due to him were making it impossible for him to fulfil the contract. The trial Judge did not accept the case set up by Durga Datt, and held that he had wilfully stopped work. The learned Judicial Commissioner, on the other hand, held that Rungta had unreasonably and in breach of the agreement, withheld large payments and had left the road in a poor state of repair and thus caused the breach of the contract. He did not attach much importance to the controversy over the supply of petrol, which controversy was not mooted before us again. of the two reasons on which Rungta was held responsible for the breach of the contract, the important one was the withholding of payment. Learned counsel for Rungta contended that time was not of the essence of the contract, and that, in any case, the payment of bills to Durga Datt depended upon the presentation of the bills in time. From the evidence, it appears that when the trucks were loaded, coal was not weighed. It was weighed at the bridge where the wagons were loaded, details of which were either with the railway company, or with the representative of Rungta at the station. Durga Datt was required to obtain the information from one source or the other, before he could make his bills. How much coal was transported by Durga Datt was a fact also within the knowledge of Rungta, and the clause quoted above merely provided for payment of the bills by the 10th of the following month, without stating expressly that the presentation of bill was a condition precedent to the payment. The learned Judicial Commissioner held, on both the points, against Rungta, and in our opinion, rightly. Even if the presentation of the bills be regarded as a condition precedent to payment, it is clear enough that Rungta paid not the whole of the amounts due under the bills but, only small sums from time to time. Learned counsel for Rungta contended that Durga Datt, by receiving such payments and by not insisting on his rights, must be deemed to have waived payment in a lump sum under cl. But no case of waiver 644 was pleaded by him,, and the evidence, if any, cannot be looked into. In any event, an examination of the accounts between the parties discloses that payments were, in fact, withheld. Under the agreement, 10 per cent. of the bills was to be withheld to build up a security deposit of Rs. 2,000, and an amount in excess of this was withheld by the end of May. No doubt, the bills were not presented by Durga Datt at the end of each month; bills for April and May were submitted on July 16, 1951 and bills for June and July, on August 6 and 12 respectively. Even so, the indebtedness of Rungta to Durga Dutt stood as follows: 16th July, 1951 about Rs. 7,835 27th July, 1951 " Rs. 6,790 6th August, 1951 " Rs. 11,170 12th August, 1951 " Rs. 15,590 These sums were in addition to a security deposit of Rs. 2,038. Whatever might be the intent and purpose of the clause in question, it is clear enough that Rungta was withholding substantial amounts over a very long period without any reasonable cause. To Durga Datt, the receipt of money in time was a vital consideration if he was to fulfil his contract at all. It was not to be expected that he would go on carrying thousands of tons of coal from the colliery without receiving payments. In our opinion, these facts speak for themselves, and amply support the finding of the learned Judicial Commissioner that Rungta was really responsible for hamstringing the work of Durga Datt. Why Rungta did so is not very clear from the record of the case, though an 'attempt was made to show that the quantity of coal transported from month to month was falling. An abstract of the quantities transported does not support this allegation. This abstract is of the quantity loaded in wagons. The figures are almost constant, except in one month (April). There were, of course, variations in the quantity of coal loaded in the wagons from month to month; but the evidence shows that some coal remained at the siding in heaps and was not loaded immediately. The variation in the quantity also might have been due as much to Durga Datt as to the colliery and its output. In our judgment, no 645 inference can be drawn from the abstract, showing the quantities of coal loaded into the wagons, that Durga Datt had slackened work after May. Learned counsel for Rungta cited some cases in which time was not considered as of the essence of the contract. Most of these cases deal with immovable property, where a different rule applies. In commercial transactions, time is ordinarily of the essence, and in the agreement, with which we are concerned, the payment of bills by a particular date was expressly mentioned. The intention, obviously, was that Durga Datt would receive payments for work executed as soon as the amounts became due. Rungta did not pay these amounts, which were also within his own knowledge either by the 10th of the following month or even within a reasonable time after the presentation of the bills. In these circumstances, we are of opinion that cl. (5) was breached by Rungta. In addition to this, there were difficulties of the road being in a bad state during the rainy season. The evidence shows that the wheels of the trucks used to sink in the mud frequently and the trucks had to be dragged out. For this state of affairs, Rungta was mainly responsible under cl. The inclusion of the clause in the agreement itself shows that the parties realised that there might be hindrance to, the trucks, if the road was not repaired. The finding of the Judicial Commissioner on this part of the case is, therefore ' sound, though that reason by itself might not have been sufficient for stopping the work altogether and rescinding the contract. The case is thus covered by section 55 of the Indian Contract Act, and Durga Datt was entitled to rescind the contract, when the very important condition of the agreement was broken by Rungta. We confirm the finding of the Judicial Commissioner on this part of the case. This brings us to the inclusion of Rs. 7,500 on account of 3,000 tons of coal alleged to have been transported. The evidence on. this part of the case is somewhat unsatisfactory. Fortunately for Durga Datt, some of the witnesses of Rungta admitted that besides coal 646 which was loaded in the wagons, there were three large heaps of coal lying in the yard and that this coal was transported by Durga Datt. The estimate of Durga Datt was 3,000 tons. That is no more than a mere guess. A railway official was examined in the case, and he stated that loose coal was sufficient to fill " 100 or 50 wagons ". From the schedule filed, it appears that a wagon carries on an average 20 tons. Taking the number of wagons as 75, the quantity could not exceed 1,500 tons. A sum of Rs. 3,750 as payment for 1,500 tons at Rs. 2 8 0 per ton ought to have been included, instead of Rs. 7,500. To that extent, the decree in favour of Durga Datt would be modified. There remains the question of interest. Interest for a period prior to the commencement of suit is claim. able either under an agreement, or usage of trade or under a statutory provision or under the Interest Act, for a sum certain where notice is given. Interest is also awarded in some cases by Courts of equity. (Bengal Nagpur Railway Co. Ltd. vs Ruttanji Ramji (1)). In the present case no agreement about interest was made, nor was it implied: The notice which was given did not specify the sum which was demanded, and, therefore, the Interest Act does not apply. The present case also does not fall within those cases in which Courts of equity grant interest. Learned counsel for Durga Datt claimed interest as damages; but it is well settled that interest as damages cannot be awarded. Interest up to date of suit, therefore, was not claimable, and a deduction shall be made of such interest from the amount decreed. As regards interest pendente lite until the date of realisation, such interest was within the discretion of the Court. The rate fixed is 6 per cent. which, in the circumstances and according to the practice of Courts, appears high. Interest ,shall be calculated at 4 percent. per annum instead of at 6 per cent., and the decree shall be modified accordingly. Except for reduction in the amount decreed by Rs. 3,750 and of interest up to the date of the filing of the suit which has been disallowed arid of the rate of (1) (1937) L.R. 65 1.A. 66. 647 interest pendente lite until realisation, the appeals shall stand dismissed. In view of the substantial failure of the appeals, the appellant shall pay the costs in this Court. One hearing fee.

The respondent had agreed to transport coal from the appel lant 's colliery to the railway station. The appellant had to keep the road in repair and arrange for petrol and had to make the payment for the actual coal despatched by the 10th of the following month. The appellant complained that he was suffering loss as the respondent had slowed down the work and the respondent complained that by not arranging for the petrol, not keeping the road in repairs and not making payments of amounts due the appellant had made it impossible to fulfil the contract. The quantity of coal transported was a fact within the knowledge of the appellant and the agreement merely provided for payment of the bills by 10th of the following month, without stating expressly that the presentation of bill was a condition precedent to the payment. The appellants contended that time was not of the essence of the contract and in any case the payment of the bills depended upon the presentation of bills in time and also challenged the award of the interest. Held, that in commercial transactions time is ordinarily of the essence of the contract and was made so in the contract and when this important condition of the agreement was broken, section 55 of the Indian Contract Act could be invoked by the aggrieved party and he was entitled to rescind the contract. In the present case by withholding the payment of the bills cl. (5) of the contract was breached by the appellant. Held, further, that interest for a period prior to the com mencement of suit is claimable either under an agreement or usage of trade or under a statutory provision or under the Interest Act for,% sum certain where notice is given These 640 conditions not being satisfied and this being not a case in which Court of Equity grants interest, interest was not awardable as damages. Held, further, that interest pendente lite being in the discretion of Court, should be fixed in accordance with the circumstances and practice of the Court and should not be too high. Bengal Nagpur Railway Co. Ltd. vs Ruttanji Ramji, (1937) L.R. 65 I.A. 66, referred to.

The appellant challenged the respondent 's election to the Gujarat State Legislative Assembly in February 1967, on the ground, inter alia, that he had committed corrupt practice under section 123(5) of the Representation of the People Act, 1951. It was alleged that a car was hired or procured by the returned candidate and on the date of the poll it was used for free conveyance of three ladies to the polling booth. The High Court dismissed the petition. In the appeal to this Court it was contended that an inference arose in the present case that the ladies must have been taken free to the polling booth and reliance was placed in this respect on certain findings given by the High Court. There was also a prayer that a general recount was wrongly disallowed by the High Court and that it should be ordered in the present appeal. HELD: Dismissing the appeal: (i) section 123(5) requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. 'and (3) for the free conveyance of an elector. [102 B C] In the present case there was proof that the vehicles were procured; there was also proof that a particular vehicle was in fact used for the conveyance of the three lady voters to the polling booth; what was not proved was that there was free conveyance of the ladies in that vehicle. The burden of establishing that this fact was on the appellant petitioner and it was not impossible, of proof because the owner of the car or the driver or the ladies could have been examined to show that the, ladies had traveled free in the vehicle. in the absence of this proof the ingredients of the section had not been established and there was therefore no room for interference with the High Court 's decision though based on slightly different reasons. The High Court 's finding that the ladies must have travelled free was a mere surmise because there was no evidence whatever on this part of the case. [100 H, 102 G, H] (2) A scrutiny of the pleadings showed that there was no plea on which the prayer for a recount could be rested though in the relief clause there was mention of a general recount. The pleas concerned the votes caste by impersonators 'and rejected votes and as these had already been considered, there was no room for a further count. [103 B]

The appellants obtained a decree against the respondent in the court of Sub Judge, Bankura (West Bengal) on December 3, 1949. On March 28, 1950 they applied to the court which passed the decree to transfer the decree with a certificate of non satisfaction of the court at Morgan in the then State of Madhya Bharat. It was ordered accordingly. The Judgment debtors resisted the execute on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed ex parte. The court accepted that contention and dismissed the execution petition on December 29, 1950. On April , 1951 the Code of Civil Procedure (Amendment) Act 2 of 1951 came into force. By this Act the Code was extended to the former State of Madhya Bharat as well as various other places. Meanwhile the appellants appealed against the order of the Additional District Judge Morena dismissing the execution petition to the High Court of Madhya pradesh. The appeal was allowed. In further appeal this Court 'restored the order of the Addl. District Judge, Morena. Thereafter on February 15, 1963 the appellants filed another execution case before the Bankura Court praying for the transfer of the decree to the Molrena Court for execution. The Bankura Court again ordered the transfer of the decree of the Morena Court. The judgment debtors resisted execute on the flowing grounds : (1) that it was barred by yes judicature in view of the aforesaid decision of this Court; (2) that it was barred by section 48 of the Code of Civil Procedure; (3) that it was barred by limitation and (4) that it was not executable because it was the decree of a foreign court. The Addl. District Judge rejected the objections. The High Court in appeal agreed with the executing court that the execution petition was neiber barred by resjudicata nor was there any bar of limitation but it disagreed with that court and held that the decree was not executable as the court which passed the decree was a foreign court. The decree holders filed the present appeal by special leave. The questions which fell for consideration were : (i) whether the decree under execution was not executable by courts situate in the area comprised in the former State of Madhya Bharat; (ii) whether the decree was barred by section 48 of the Code. HELD:Per Sikri C.J., Mitter, Hyde and Bhargava JJ. (1) (a) On the date when the decree under execution was passed foreign court ' was 8 1 100 SupCII71 816 defined in section 2(5) of the Code as a court situate beyond the limits of British India which had no authority in British India and was not established or continued by the Central Government. After the amendment of the Code of Civil Procedure in 1951. 'foreign court ' under the Code means a court situate outside India and not established or continued by the authority of the Central Government. Whether we take the earlier definition or the present definition the Bankura Court could not be considered as a foreign court within the meaning of that expression in the Code. 'Foreign judgment ' is defined as the 'judgment of a foreign court '. Hence the decree under execution could not be considered as a foreign decree for the purpose of the Code. [820 D G] Accordingly the judgment debtors could not take advantage of the provision in section 13(b) of the Code under which the ex parte decree of a foreign court is not conclusive. Nor could they take advantage of section 13(d). They were served with notice of suit but did not choose to appear before the court. Hence, there was Po basis for the contention that any principle of natural justice has been contravened. Further section 13(d) was not applicable because the judgment in question was not a foreign judgment. [821 D] (b) Under Private International Law a decree passed by a foreign court to whose juri diction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred jurisdiction on the domestic courts over the foreigners either generally or in specified circumstances. Clause (c) of section 20 of the Code provides that subject to the limitations mentioned in the earlier sections of the Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part, arises. This provision confers jurisdiction on a court in India over foreigners when the cause of action arises within its jurisdiction. There was not dispute in the present case that the cause of action for the suit which led up to the decree under execution arose within the jurisdict on of the Bankura Court. Hence, it must be held that the suit in question was properly instituted. Accordingly the decree in question was a valid decree though it might not have been executable at one stage in courts in the former Indian States [822 B F] Sardar Gurdyal Singh vs The Rajah of Faridkot, 21 I.A. 171, referred to. (c) A combined reading of sections 2(12), 38, 39 and 40 of the Code shows that a decree can be transferred for execution only to a court to which the Code apple . This is what was ruled by this Court in Hansraj Nathu Ram 's case. But by the date the transfer in the present case was made, the Code had been extended to the whole of India. It followed that the transfer of the decree in question which was not a foreign decree, to the Morena Court, was in accordance with the provisions of the Code. [823 B D] Hansraj Nathu Ram vs Lalii Raja & Sons of Bankura, , applied. Narsingh Rao Shitole vs Shri Shankar Saran & Ors., ; , distinguished. (d) Section 20(1)(b) of the Code of Civil Procedure Amendment Act, 1951 by which the Code was extended to Madhya Bharat and other areas undoubtedly protects the right acquired and privileges accrued under the law repealed by the amending Act. But even by straining the language of the provision it cannot be said that the non executabilitv of the decree within a particular territory can be considered a privilege [824 E F] 817 Nor is it a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950. In the first peace in order to get the benefit of this provision the non executability of the decree must be a right, and secondly it must be a right that had accrued from the provisions of the repealed law. It Was difficult to consider the non executability of the decree in Madhya Bharat as a vested right of the judgment debtors. The non executability in question pertained to the jurisdiction of certain courts and not to the "rights of the judgment debtors. Further the relevant provision of the Code of Civil Proedue in force in Madhya Bharat did not confer the, right claimed by the judgment debtors. All that had happened in view of the extension of +he Code to the whole of India in 1951 was that the decrees which could have been executed only by courts in British India were made ' executable in the whole of India. The change made was one relating to procedure and jury diction. By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court was now competent to execute the decree [825 A E] Hamilton Gell vs White , Abbot vs Minister for Lands, and G. Ogden Industries Pvt. Ltd. vs Lucas, , applied. (ii)The execution was also not barred, by section 48 of the Cod . For considering the true impact of cl. (b) of sub section 2 of section 48 of the Code provisions of articles 181 and 182 of the Limitation Act, 1908 have also to be taken into consideration. These provisions clearly go to indicate that the period prescribed under section 48(1) of the Code is a period of limitation. This interpretation is strengthened by the subsequent history of the legislation. By the section 48 of the Code is deleted. It , place has not been taken by article 136 of the Limtation Act of 1963 The High Courts also are now unanimous that section 48 of tile (ode is controlled by the provisions of the Limitation Act, 1908. [828 A C] Kandaswami Pillai vs Kamappa Chetty, A I R, , Durg vs Poncham, I.L.R. [1939] All. 647, Sitaram vs Chunnilalsa, I.L.R. , Amarendra vs Manindra, A.I.R. '1955 Cal. 269, Krishna Chandra v Parovatamma, A.I.R. 1953 Orissa 13 and Ramgopal vs Sidram, A.I.R. 1943 Bom. 164 referred to. Per Jaganmohan Reddy, J. (Concurring) No question of 'a vested right or privilege arose to entitle the respondent to challenge execution proceedings in Morena Court. The decree granted by the Bankura Court was executable by the Courts governed by the same Code, by talk Court which passed it or by the Court to which it was transferred. One the Code was made applicable to the whole of India by Amendment Act 11 of 1951 the decree was no longer a foreign decree qua the Morena Court which was a court under the Code to which the Bankura Court could transfer the decree for execution. No doubt in ' Shitole 's case it was observed that section 13 of the Code creates substantive rights and not merely procedural and therefore defenses that were open to the resno dents were not taken away by any constitutional changes, but the ratio of the decision was that the Gwalior Court not being a court that passed the decree after the coming into force of Act 11 of 1951 the Allahabad Court could not execute it. The impediment did not exist now in that the Bankura Court bad transferred the decree to a court under the Code. the plea that section 48 Civil Procedure Code presents a bar of limitation was also not tenable. [831 F H] 818 Kishendas vs Indo Carnatic Bank Ltd. A.I.R. 1958 A.P. 407 Sardar Gurdayal Singh V. Raja of Firidkote, 21 I.A. 171, Rai Rajendra Sardar Maloji Narsingh Rao Shirole vs Shri Shankar Saran, ; and Hansaj Nathuram Y. Lalji Raja

The appellant applied on 14 10 1961 for a prospecting licence for an area of 833.53 acres under rule 9(1) of the Mineral Concessions Rules, 1960. The application was in order, in all respects, except to the extent that instead of Rs. 32/ , the fees payable, a sum of Rs. 24/ only was paid. However, on realisation of this mistake, he paid the deficit of Rs. 8/ on 28 12 1961 and, by way of abundant caution, made a fresh application on_26 2 1962. Respondent No. 1 had applied on 2 11 1961 for a prospecting licence for 748.16 acres out of which 272.40 acres were common with those for which the appellant had already applied. Since no orders were passed disposing of the applications of the appellant within 90 days of the making of it, the appellant filed a revision before the Central Government treating this omis sion on the part of the State to be tentamount to refusal of his application as provided by rule 11(1). On 20 10~1964, the Central Government asked the State Government to con sider the application of the appellant dated 14 10 1961 within the next 9 months. The State Government, instead of considering the application dated 14 10 1961 as directed, offered thrice, on 30 1 1965, 7 7 1965 and 2 4 1970, a prospecting licence for an area of 365 acres which was not accepted by him and his attempts by way of revision against these orders to the Central Government and a writ petition in the High Court failed. The State Government, however, on 22 6 1965, directed the grant of a prospecting licence to respondent No. 1 for an area including 272.40 acres in dispute which was actually executed in his favour on 30 4 1970. The appellant 's objection before the Collector against this was rejected. On 12 4 1973, the Central Government accepted the objection relating to 272.40 acres and opined that his application dated 14 10 1961 was earlier in point of lime within the meaning of section 11(2) of the Mines & Minerals (Regulation and Development) Act, 1957. Against this order the respondent No. 1 went to the High Court under article 226 of the Constitution. The High Court quashed the orders of the Central Government, by its order dated 12 3 1974 and held the application of the appellant dated 14 10 1961 not having been accompanied by the correct fee was no application at all in the eye of law. Accepting the appeal by special leave, the Court, HELD: (1) After considering legal position and all the facts and equities of the case, the Central Government correctly held, on the question of law before it, that the appellant 's application before the State Government was a valid one as it had been entertained without objection even if it was not accompanied, when filed, by the correct amount of fee. [706 A, E] (2) The Central Government had correctly relied upon an estoppel against the State Government. The deficiency in the fees having been duly accepted on behalf of the State Government, it was bound to proceed on the assumption that there was a proper application before it valid from the date of filing it. The State Government was precluded by its own deeds from denying the validity of the application. [706 A, E] 703 (3) There is no patent error upon the face of the record warranting a correction in exercise of its extraordinary jurisdiction under article 226 of the Constitution by the High Court in the instant case. On the other hand, High Court itself committed an apparent error in holding that an appli cation which has only to be accompanied by the fee would be considered validly filed on the date on which it was filed only if proper fees has been tendered with it when it was filed. [706 G H] (4) It is not very becoming for Governmental authorities when duties laid down by statutory rules having been per formed by them, to take shelter behind such technicalities for denying a citizen 's right to have his application con sidered and decided. Rule 11(1) of the Rules framed was a recognition of that right so that an applicant for a licence under the Rules could approach the Central Government in case the State Government did not pass the required orders within a reasonable time. [706 E F] (5) A right and reasonable procedure looks to substance rather than form of acts or transactions in order to deter mine their nature. There is no rule whatsoever which says that failure to submit the correct fee at the time of the filing of the application will make the application void or invalid. Rule 13 makes it clear, by differentiating between an application and the fee by which it has to be accompa nied. The fee can be refunded but the application made remains. The filing of the application is one thing and compliance of some annexed duty, which is legally separable, is another, unless a statute or a rule provides otherwise. [707 A, C, 708 H 709 C] (6) It is clear from section 19 that the Act itself provides what is void and ineffective where that is the intention. Section 19 attaches a voidness only to a grant made without due compliance. with all rules. It is nowhere said that the Act of making an application will be similarly void for breach of rules. [709 B C] (7) In the instant case, in view of the provisions of section 19 of the Act, a prospecting licence in favour of respond ent No. 1 was itself void to the extent of an area of 272.40 acres for which, a licence had already been properly applied for by the appellant. Unless the applicant 's application had been properly refused for a valid reason, he could not be denied the benefit of section 11(2) of the Act. It may be that a licence cannot be granted without making good the deficiency in fee which should accompany the application, but that does nor mean that a bona fide application accompa nied by an incorrectly calculated fee or a fee which is deficient by oversight could not be made at all or if made must be treated as void or of no effect whatsoever. [709 C G] (8) The use of the word "shall" in imposing a duty is not conclusive on the question whether the duty imposed is mandatory or directory. It is not the breach of every mandatory duty in performing a prescribed act that could make an action totally ineffective or void ab initio. The meaning of the. word "shall" in Rule 9(2) of the Mineral Concessions Rules, 1960, was only incidentally involved here. [707 B C]

The respondent, a company incorporated in the former State of Bhopal, presented a petition in August 1960 under article 226 of the Constitution in the High Court of Madhya Pradesh for a writ restraining the State of Madhya Pradesh from enforcing the Bhopal State Agricultural Income tax Act, 1953, claiming that the Act contravened the respondent 's right under article 14 of the Constitution. By the the territory of the State of Bhopal was 847 incorporated from November 1, 1956 into the newly formed State of Madhya Pradesh. The by section 119 continued the operation of the laws in force in the territories in which they were previously in force until the competent legislature or authority amended, altered or modified these laws. Shortly after the reorganisation. the Madhya Pradesh Adaptation of Laws Order, 1956 was issued so as to make certain laws applicable uniformly to the entire State and later the Legislature by the Madhya Pradesh Extension of Laws Act, 1958 made other alterations in the laws applicable to the State. But Bhopal Act 11 of 1953 remained unamended or unaltered: nor was its operation extended to the other areas or regions in the State with the result that Agricultural Income tax was levied within the territory of the former State of Bhopal and not in the rest of the territory of the State of Madhya Pradesh. The High Court held that the provisions of Bhopal Act 11 of 1953 contravened article 14 of the Constitution and observed that though the State had removed diversity in some of the laws of the component regions, no attempt was made to remove discrimination between the territory of the former Bhopal State and the rest of the territories of the State of Madhya Pradesh with respect to this law. Held: (i) Where application of unequal laws is reasonably justified for historical reasons, a geographical classification founded on those historical reasons would be upheld. The legislature has always the power to make special laws to attain particular objects and for that purpose has authority to select or classify persons, objects or transactions upon which the law is intended to operate. Differential treatment becomes unlawful only when it is arbitrary or not supported by a rational relation with the object of the statute. Bhaiyalal Shukla vs State of Madhya Pradesh, [1962] Supp. 2 S.C.R. 257, The State of Madhya Pradesh vs The Gwalior Sugar Co., , Maharaj Kumar Prithivi Rai vs State of Rajasthan, C.A. Nos. 327 328, dated 2 11 1960 and Anand Prasad Lakshminivas Ganeriwal vs State of Andhra Pradesh, A.I.R. 1953 S.C. 853. relied on. State of Rajasthan vs Rao Manohar Singhji, [1954] S.C.R. 996, explained. (ii) It would be impossible to lay down any definite time limit within which the State had to make necessary adjustments so as to effectuate the equality clause of the Constitution. It cannot be said that because a certain number of years have elapsed or that the State has made other laws uniform, the State has acted improperly in con tinuing an impost which operates upon a class of citizens more harshly than upon others. (iii) To make out a case of denial of the equal protection of laws under article 14, a plea of differential treatment is by itself not sufficient. An applicant pleading such denial must make out that not only he 848 had been treated differently from others but he has been so treated from persons similarly circumstanced without any reasonable basis, and such differential treatment is Unjustifiably made.

The appellant was carrying on the business of a railway contractor in a place in the district of R. In April 1943, the Income tax Officer of R which was under the charge of the Commissioner of Income tax, Bengal (Mufassil), served a notice under section 22(2) of the Indian Income tax Act, 1922, on the appellant who in pursuance of the notice filed the return on February 28, 1944. The Income tax Officer then served notices on him under SS. 22(4) and 23(2) Of the Act for the production of books, etc., but before the final assessment was made, the Central Board of Revenue by an order passed under section 5(2) of the Act, transferred the appellant 's case along with some other assessment cases, to the Commissioner of Income tax (Central), Calcutta. On February 11, 1948, the Income tax Officer, Calcutta, to whom the appellant 's case was assigned, issued notices again under SS. 22(4) and 23(2) of the Act and after making the usual enquiries made the assessment order on March 15, 1948. The appellant 's appeals to the Appellate Assistant Commissioner and then to the Appellate Tribunal raising objections to the legality of the transfer of his case to Calcutta and to the jurisdiction of the Income tax Officer, Calcutta, were dismissed. The Appellate Tribunal held that as the objection related to the place of assessment it was not competent for the Tribunal to go into that question. The appellant then made an application to the Commissioner of Income tax for reference under section 66(1) of the Act, but this was dismissed on the ground that the assessee never raised any objection before the Income tax Officer to his jurisdiction and that, in any case, the question of jurisdiction could not arise out of the order of the Tribunal. An application filed by the appellant to the High Court under section 66(2) of the Act was dismissed and though the order of dismissal was not taken up on appeal, the appellant filed an appeal to the Supreme Court against the order of the Appellate Tribunal. It was contended for the appellant that under section 64(1) and (2) of the Act he was entitled to be assessed by the Income tax Officer of the area within which the place of his business was situate, that the 302 assessment by the Income tax Officer of Calcutta was illegal assumption of jurisdiction and that, in any case, the order of transfer by the Central Board of Revenue under section 5(2) of the Act was not valid because, if it wanted to transfer the assessment proceedings from the file of one Income tax Officer to another it could be done only under section 5(7A) and not under section 5(2). Held : (1) Sub section (7A) of section 5 which confers on the Central Board of Revenue the power to transfer any case from one Income tax Officer to another is not a provision which in any way modifies or cuts down the power given to the Central Board of Revenue under sub section 2 of section 5 which enables it to specify as to which of the Commissioners would perform functions in respect of different areas, persons, incomes or cases or classes thereof. The two sub sections are complementary and operate in two separate spheres. Pannalal Binjraj vs Union of India, ; and Bidi Supply Co. vs Union of India, ; , distinguished. In the present case, the Central Board of Revenue directed the Commissioner of Income tax (Central), Calcutta, to exercise his functions in respect of certain cases including the case of the appellant and that fell under section 5(2) and not under section 5(7A). The order of transfer was, therefore, valid. (2)The jurisdiction of the Income tax Officer, Calcutta, to make the assessment on the appellant cannot be challenged, in view of sub section 5(a) of section 64 of the Act, under which sub sections (1) and (2) of section 64 have no application to an assessee in respect of whom anorder has been made by the Central Board of Revenue under S.5(2) of the Act. (3) Objections as to the place of assessment cannot be raised in appeal either before the Appellate Assistant Commissioner or before the Appellate Tribunal. Wallace Brothers & Co. Ltd. vs Commissioner of Income tax, Bombay, Sind and Baluchistan, and Seth Kanhaiyalal vs Commissioner of Income tax, [1936] 5 I.T.R. 739, relied on. Dayaldas Kushiram vs Commissioner of Income tax (Central), and Dina Nath Hem Raj vs Commissioner of Income tax, All. 616, distinguished. Consequently, as the question as to the place of assessment could not arise out of the order of the Appellate Tribunal no such question of law could be referred to the High Court.

The respondent imported 2,000 drums of mineral oil and the appellant confiscated 50 drums and imposed a personal penalty. The appeal of the respondent was dismissed by the Central Board of Revenue. The respondent filed a petition under article 226 of the Constitution in the Calcutta High Court. A Full Bench of the High Court held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in the case of Saka Venkata Subbha Rao. However, as the Central Board of Revenue had merely dismissed the appeal against the 564 order of the appellant, the High Court further held that it had jurisdiction to pass an order against the appellant. The appellant came to this Court after obtaining a certificate. Held that the appellant had merged into that of the Central Board of Revenue and hence no order could be issued against the appellant. It is only the order of the appellate authority which is operative after the appeal is disposed of. It is immaterial whether the appellate order reverses the original order, modifies it or confirms it. The appellate order of confirmation is as efficacious as an operative order as an appellate order of reversal or modification. As the appellate authority in this case was beyond the territorial jurisdiction of the High Court, it was not open to the High Court to issue a writ to the original authority which was within its jurisdiction. Election Commission, India vs Saka Vankata Subba Rao, , A. Thangal Kunju Mudatiar vs M. Venkitachalam Poiti, ; , Commissioner of Income tax vs M/s. Amritlal Bhogilal & Co. [1959] section C. R. 713 and Madan Gopal Rungta vs Secretary to the Government of Orissa, (1962) (Supp.) 3 S.C.R. followed. Barkatali vs Custodian General of Evacuee Property, A. 1. R. , overruled. Joginder Singh Waryam Singh vs Director, Rural Rehabilitation, Pepsu, Patiala, A. 1. R. 1955 Pepsu 91, Burhanpur National Textile Workers Union vs Labour Appellate Tribunal of India at Bombay, A. I. R. , and Azmat Ullah vs Custodian, Evacuee Property, A.I.R. 1955 All 435, approved. State of U. P. vs Mohammed Nooh, ; , distinguished.

The appellants in both the appeals were allotted a plot each "provisionally subject to the final approval of Government" and possession thereof was also given in 1956. Six years later by letter dated 31 10 62 they were informed that "the State Government has not approved the allotment in your favour and the provisional allotment made in your favour stands cancelled". Steps were to be taken for the eviction as per the said letter of cancellation, but before any action was taken, the District Magistrate requisitioned the said plots for defence purposes under section 29 of the Defence of India Act, 1922. The letters of requisition were addressed to the appellants and possession taken. No steps were taken by the Department for taking formal or symbolical possession of the plots in question after they were requisitioned by the Magistrate. Later on, while derequisitioning the said plots under section 35(1) of the Defence of India Act 1962, the Magistrate "specified the Director of Industries, Kanpur as the person to whom the possession of the said plots shall be given". Possession was given accordingly and the Director of Industries in CA 560/70 in turn allotted the plot covered in it to one Mrs. B. K. Anand respondent 5 therein. The writ Petitions filed by the appellants in the High Court challenging the said orders failed and hence the appeal by special leave. Allowing CA 559/70 and dismissing CA 560/70, the Court, ^ HELD: The inquiry envisaged under sub section (1) of section 35 of the Defence of India Act, 1962, is necessitated only if facts and events taking place after requisition necessitate it. Otherwise not. As for example, suppose, possession of a property is taken from X and after requisition he dies and dispute starts between his heirs as to who is entitled to get back the property. A summary and prima facie inquiry may be made under sub section (1) and property may be released in favour of the person who may be entitled to the possession of it in the opinion of the Government. Of course such a decision would be subject to the adjudication of the rights of the parties in accordance with sub section [814 C E] Facts anterior to the requisition are not necessary to be investigated for release of the property because the property has to be released in favour of the person from whom possession was taken. If it were not so then it would be enlarging the scope of the inquiry envisaged under sub section (1) of section 35 of 810 the Act and the power of the Government to adjudicate upon anterior title of the various claimants to the property. This is not the scope of the inquiry. [814 E F] Technically speaking on a correct interpretation of the law the property on de requisition ought to have been released in favour of the two appellants in the two appeals from whom possession was taken at the time of requisition. The requisition was effected by an order in writing addressed to the person in possession of the property in accordance with sub section (2) of section 29. He may not be the owner of the property. But on requisition possession was taken from him. [814 C D, F G] [The Court, however, passed a qualified and conditional order in terms].

Appeal No. 105 of 1950. Appeal from the Judgment and Order dated March 22, 1945, of the Court of the Judicial Commissioner, Ajmer Merwara, Ajmer (Davies J. C.) in Civil First Appeal No. 16 of 1944, arising out of the Judgment and Decree dated March 13, 1944, of the Court of the Judge, Small Causes, Ajmer, and Additional District Judge, Ajmer, in Civil Suit No. 28 of 1942. section section Deedwania for the appellant. M. C. Setalvad, Attorney General for India, (J. N, Sharma, with him) for the respondents, 199 1952. November 10. The Judgment of the Court was delivered by MAHAJAN 'J. This is an appeal by special leave granted by the Privy Council and limited to the question of court fee, viz., whether the memorandum of appeal presented to the High Court court fee was payable under section 7 (iv) (e) or article 17 of Schedule II of the Court Fees Act. The question whether the memorandum of appeal was properly stamped arose in the following circumstances: Edward Mills Co. Ltd. is a joint stock company situate in Beawar, Ajmer Merwara. In accordance with the provisions of the articles of the company one Seth Gadh Mal Lodha and Rai Sahib Moti Lal (respondent No. 2) were its chairman and managing director respectively since 1916. Seth Gadh Mal Lodha represented his family 'firm of Kanwal Nain Hamir Singh, while Rai Sahib Moti Lal represented the joint family firm of Champa Lal Ram Swaroop, 1st July, 1938, Rai Sahib Moti Lal and his firm were adjudged insolvents by the Bombay High Court. The result was that respondent No. 2 had to vacate the office of managing director and the members of his firm also became ineligibleforit. By a resolution of the board of direetors passed 18th July, 1938, Gadh Mal Lodha was appointed to take the place of Rai Sahib Moti Lal as managing director. Gadh Mal Lodha died llth January, 1942, and the board of directors then appointed Seth Sobhagmal Lodha to act as chairman as well as managing director till the, appointment was made by the company. An extraordinary meeting of the company was called for the 8th February, 1945, for the election of the chairman. At this meeting conflict &rose between the two groups represented by Sobhagmal Lodha and Moti Lal. The chairman therefore dissolved the meeting but the supporters of Moti Lal continued to hold it and passed a resolution appointing him as the sole agent and chairman for a period of twenty years a remuneration equal to ten per cent of the profits of the company It is this 200 resolution of the 8th February, 1942, which has led to the present dispute. Seth Sobhagmal in the situation that arose approached the District Judge of Ajmer with the prayer that a general meeting of the company may be held under the supervision of the court. This request was allowed 11th February, 1942, and the court ordered that the meeting be held 12th February, 1942, under the chairmanship of Seth Sobhagmal. Respondent No. 2 being aggrieved by this order, filed an ap plication in revision in the Court of the 'judicial Commissioner impugning the order. The learned Judicial Commissioner allowed the revision and directed that the resolution of the 8th February, 1942, should be acted upon. Having failed to get redress in the summary proceedings, the appellant then filed the suit out of which this appeal arises for quashing the resolution of the 8th February, 1942. In the plaint he asked for the following relies: 1. That it be declared that the appointment of defendant No. 2 is illegal, invalid and ultra vires and that he has no right to act as chairman, managing director etc. of defendant No. 1; 2. That a receiver be appointed to take charge of the management of the company, until a properly qualified chairman managing director etc. are duly appointed as required by the memorandum and articles of the company. The plaint bore a court fee stamp of Rs. 10 only, but the objection of the respondents that court fee was payable relief No. 2 the appellants paid ad valorem fee Rs. 51,000 which was the valuation of the suit for purposes of jurisdiction. The Additional District Judge dismissed the suit the preliminary ground that it was not maintainable as it related to the internal management of the company and that the, appellants had no right to bring it without impleading the directors who were necessary parties to it. 201 Aggrieved by this decision of the trials Judge, the appellants preferred an appeal to the Court of the Judicial Commissioner, Ajmer Merwara, at Ajmer. The memorandum of appeal was Stamped with a courtfee stamp of Rs. 1 0 and it was expressly stated therein that relief No. 2 of the plaint was given up. An objection was raised regarding the amount of courtfee paid the memorandum of appeal. The Judicial Commissioner ordered that proper court fees be paid thereon in a month. In this order no reasons were given for this decision. The additional fee demanded was not paid, and the Judicial Commissioner dismissed the appeal with costs 22nd March, 1945. An application was made for leave to appeal to the Privy Council against this order but, it was refused. In the order refusing leave it was said as follows: " appeal to this court, the memorandum was again stamped with a ten rupee stamp only and the respondents therefore objected. It having been conceded by plaintiffs earlier that the relief for the receivership was consequential to the relief for the declaration, the appellants were directed to pay the same stamp as had been paid in the trial Court. They objected stating that they had expunged from their memorandum of appeal the request that the court should appoint a receiver and that they were not, therefore, liable to pay the same amount this a notice was issued and counsel were beard. It being clearly set out in section 42 of the Specific Relief Act that no court shall grarant a declaration only where the plaintiff being able to seek further relief than a mere declaration of title omits to do so, the appellants were directed to pay as earlier ordered the same amount as bad ultimately been paid the plaint. They had earlier sought a consequential relief and the court 'was, therefore, entirelv unable to hold that the plaintiffs were unable to seek a further relief, they having sought the relief in the lower court and it having been refused to them. The amount of the stamp was not paid and the appeal was therefore dis missed with costs. " 202 The reasons for demanding additional court fee, though not mentioned in the original order, are stated in this order. The question for determination in this appeal is whether the order of the Judicial Commissioner demanding additional court fee can be sustained in law. A memorandum of appeal, as provided in article 1 of Schedule I of the Court Fees Act, has to be stamped according to the value of the subject matter in dispute in appeal; in other words, the relief claimed in the memorandum of appeal determines the value of the appeal for purposes of court fee. The only relief claimed in the memorandum of appeal was the first one mentioned in the plaint. This relief being purely of a declaratory character, the memorandum of appeal was properly stamped under article 17 of Schedule II It is always open to the appellant in appeal to give up a portion of his claim and to restrict it. It is further open to him; unless the relief is of such a nature that it cannot be split up, to relinquish a part of the claim and to bring it within the amount of court fee already paid: Brahnmnandam vs Secretary of State for India(1); Ram Prasad vs Bhiman(2); Karam Chand vs Jullundur Bank Ltd(1); Neelachalam vs Nara singha Das(4); Sah Bamehand vs Pannalal(5); Chuni Lal vs Sheo Charanlat Lalman(1). The plaintiffs in express terms relinquished the second relief,they had claimed in the plaint, in their memorandum of appeal. For the purpose of deciding whether the memorandum of appeal was properly stamped according to the subjectmatter of the appeal, it was not open to the Judicial Commissioner to canvass the question whether the suit with the second prayer eliminated from it fell within the mischief of the proviso to section 42 of the Specific Relief Act. That was a question which related to the merits of the appeal and did not concern its proper institution this ground, therefore, the Judicial Commissioner had no jurisdiction to demand (I) Mad. 48 (2) All. 151. (3) A.I.R. 1927 Leh. 543. (4) A.R. (5) A.I.R. 1929 All. (6) All. 203 additional fee from the plaintiffs and the appeal could not be dismissed for failure to meet it. We are thus of the opinion that the order demanding additional court fee the memorandum of appeal as it stood, ' that is, minus the second prayer, was erroneous and we hold that the memorandum of appeal was properly stamped, as the subject matter of the appeal was purely of a declaratory character. Mr. Setalvad for the respondents contended that the first relief claimed in the plaint, and which was the subject matter of the appeal included within it consequential relief and was not purely declaratory in nature and therefore the Judicial Commissioner was right in demanding additional court fee the value of the consequential relief. It was said that the words that respondent No. 2 "had no right to act as chairman and managing director" amounted to a claim for consequential relief. We are unable to agree. The claim contained in the first relief of the plaint is to the effect that it be declared that defendant No. 2 has no right to act as chairman an managing director because of his appointment being illegal, invalid, and ultra vires. The declaration claimed is in negative form that defendant No. 2 has no right to act as chairman and managing director. No claim for a consequential relief can be read within this prayer. The words "that defendant 2 has no right to act as chairman. . ' ' are mere repetition and reiteration of what is contained in the opening sentence of the paragraph. This contention of Mr. Setalvad, therefore, cannot be sustained. It was next contended that in view of the provisions of section 12 of the Court Fees Act it should be held that the decision of the Judicial Commissioner ' was final, and could not be challenged in appeal. Section 12 of the Court Fees Act enacts as follows: "Every question relating to Situation for the purpose of determining the amount of any fee chargeable under this chapter a plaint or memorandumu 204 of appeal shall be decided by the court in which such plaint or memorandum, as the case may be, is filed, and such decision shall be final as between the parties 'to the suit. " The provisions of this section have to be read and construed keeping in view the provisions of the Code of Civil Procedure. Order VII, Rule 11, Civil Procedure Code, provides as follows: "The plaint shall be rejected (b) where the relief claimed is undervalued and the plaintiff, being required by the court to correct the valuation within a time to be fixed by the court, fails to do so;. (d) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, being required by the court to supply the requisite stamp paper within a time to be fixed by the court, fails to do so. " An order rejecting a plaint is a decree as defined in section 2; sub section (ii), and is appealable as such. There is an apparent conflict between the provisions of the Code of Civil Procedure and the provisions of section 12 which make the order relating to valuation final and efforts to reconcile the provisions of the Court Fees Act and the Code have resulted in some divergence of judicial opinion the construction of the section. In a number of decisions the Calcutta High Court took the view that the finality declared by section 12 of the Court Fees Act had been taken away by the relevant provisions of the Code, as the order rejecting a plaint was appealable as a decree, no matter whether the dispute related to the category under which the same falls for purposes of court fee or only to valuation pure and simple under a particular category: Vide In re Omrao Mirza vs Mary Jones(,) and Tara Prasanna Chongdar vs Nrisingha Moorari Pal(1). This extreme view has not been maintained in later decisions and it has been held that the finality declared by section 12 is limited only to the question (2) Cal. 205 of valuation pure and simple and does not relate to the category under which a certain suit falls: Tariman Khatun vs Secretary o State for India in Council(1). The Allahabad High Court in its earlier decisions took the extreme view: Vide Muhammad Sadik vs Muhammad Jan(2). Later that court veered round to the view that the finality declared by section 12 only related to matters of, appraisement. The High Court of Lahore has placed a similar construction the meaning of the expression "valuation" in section 12 and has held that the finality attaches only to a decision which concerns valuation simpliciter and no finality attaches when a court decides a question whether a case falls within one or other category of the cases mentioned in the different sections and schedule of the Court Fees Act: Vide Mahna Singh vs Bahadur Singh(1); Mst. Parmeshri vs PannaLal(1). Thisviewhasconsistentlybeenheldin thatcourt. The Madras High Court took the same view in Lakshmi Amma vs Janamajayam Nambiar(5); Annamalai Chetty V. Cloete(6); and Narasimhalu Chetty vs Bamayya Naidu(7). Mr. Setalvad drew our attention to the recent Full Bench decision of that court in Madana Mohana Naiko vs Krupasindhu Naiko(1). That case, however, concerned the second part of section 12 and was not concerned directly with the construction to be placed the first part of the section. It, however, contains certain observations indicating that in the opinion of the judges there was no ground for this restricted construction of the word " valuation " in section 12 and that the finality declared bysection 12 attached not only to valuation pure and simple but also attached to decisions relating to category under which a suit or appeal falls for purposes of court fee. These obiter observations, however, cannot be said to ,,overrule the earlier Full Beach decision of that court in Lakshmi Amma vs Janamajayam Nambiar(5). In a (1) I.I.R.(1940) (2) (1889) I.L.R. II All. 91, F.B. (3) (4) A I.R. 27 (5) , F.B. (6) Mad. 204. (7) A.I.R. 1942 Mad. (8) A.I.R. 1937 Mad. 81. 206 later decision in Narasimhalu Chetty vs Bamayya Naidu(1), the decision of the Full Bench was explained as not in any way overruling the decision in Lakshmi Amma vs Janamajayam Nambiar(2). All recent decisions of the Bombay High Court have taken the same view: Vide Dada vs Nagesh(3); Krishnaji Bari Dhandhere vs Gopal Narain Dhandhere(4). Mr. Setalvad drew our attention to an earlier decision of the Bombay High Court in Vithal Krishna vs Balakrishna Janardan(5). In that case the court undoubtedly held that no appeal lay and the finality declared by section 12 was comprehensive enough to include all questions whether relating to category or valuation pure and simple. It was, however, held that the High Court could correct an erroneous decision in the exercise of its revisional powers. Thus the finality declared by section 12 was destroyed by the exercise of powers of appeal under the guise of exercising revisional jurisdiction. In Patna and Oudh the game view has been taken as in Lahore. Vide Chandramoni Koer vs Basdeo Narain Singh (6); Gumani vs Banwari(7). It thus appears that the consensus of judicial opinion is against the construction suggested by Mr. Setalvad. We think that the construction given to the language in section 12 in these decisions is right, and our reasons for saying so are these: The difference in the phraseology employed in sections 5 and 12 of the Court Fees Act indicates that the scope of section 12 is narrower than that of section 5. Section 5 which declares decisions questions of court fee whenever they arise in the chartered High Courts as final makes a decision as to the necessity of paying a fee or the amount thereof final. Whereas section 12 makes a decision every question relating to valuation for the purpose of determining the amount of any fee payable under chapter 3 a plaint or memorandum of appeal final. Had section 12 been drafted somewhat as follows (i) A.I.R. 1942 Mad. 502.(5) (1886) I.L.R. lo Bom. 610, F.B, (2) F.B.(6) (3) Bom. 486.(7) (4) A.I.R. 1936 Bom. 207 "If any dispute arises as to the amount of any fee chargeable under this chapter a plaint or memorandum of appeal, it shall be decided by the court in which such plaint or memorandum is filed and such decision shall be final as between the parties$), then the construction contended for by Mr. Setalvad might have been upheld. When the two sections in the same Act relating to the same subject matter have been drafted in different language, it is not unreasonable to infer that they were enacted with a different intention and that in one case the intention was to give finality to all decisions of the taxing officer or the taxing judge, as the case may be, while in the other case it was only intended to give finality to questions of fact that are decided by a court but not to questions of law. Whether a case falls under one particular section of the Act or another is a pure question of law and does not directly determine the valuation of the suit for 'purposes of court fee. The question of determination of valuation or appraisement only arises after it is settled in what class or category it falls. It has been argued in some decisions that it is absolutely necessary to decide the category in which a case falls before assessing its value and therefore the determination of the question of category is necessarily involved in the determination of the valuation of the suit for purposes of courtfee. This argument, though plausible, does not seem sound. The actual assessment of the value depends either arithmetical calculations or upon a valuation by an expert and the evidence led in the case, while the decision of the question of category is one of law and may well be said to be an independent question antecedent but not relating to valuation. The expression " valuation" interpreted in its ordinary meaning Of "appraisement", cannot be said to necessarily include within its ambit the question of category which is a matter of law. The construction placed this section by a long course of decisions is one which 208 reconciles the provisions of the Court Fees Act with that of the Code of Civil Procedure and does not make those provisions nugatory and is therefore more acceptable than the other constructions which would make the provisions of either one or the other of these statutes nugatory. Perhaps it may be possible to reconcile the provisions of the two statutes by holding that the finality declared by section 12 of the Court Fees Act means that the parties cannot impugn such a decision by preferring an appeal but that it does not confer such decisions a complete immunity from examination in a higher court. In other words section 12 when it says that such a decision shall be final between the parties only makes the decision of the court a question of court fee nonap pealable and places it the same footing as other interlocutory nod appealable orders under the Code and it does no more than that. If a decision under section 12 is reached by assuming jurisdiction which the court does not possess or without observing the formalities which are prescribed for reaching such a) decision, the order obviously would be revisable by the High Court in the exercise of revisional powers. Similarly, when a party thinking that a decision under section 12 is palpably wrong takes the risk of his plaint being rejected or suit dismissed and then appeals from the order rejecting the plaint or from the decree dismissing the suit but not from the decision the question of court fee, then it is open to him to challenge the interlocutory order even the question of court fee made in the suit or apppal. The word "finality" construed in the limited sense in which it is often used in statutes means that no appeal lies from an order of this character as such and it means no more than that. Conceding for the sake of argument but not admitting that Mr. Setalvad is right in his contention that section 12 is comprehensive enough to include within its ambit all questions relating to court fee whether they involve a decision as to question of category or as to valuation simpliciter, in the present 209 case the Judicial Commissioner decided none of these questions and: his decision cannot be said to be one falling within the ambit of section 12. All that the Judicial Commissioner decided was that as the suit could not be maintained without asking for relief No. 2, the same fee was payable the memorandum of appeal as the plaint. In substance the court decided an issue regarding the maintainability of the appeal without first deciding whether the appeal had been properly instituted in that court. No finality can attach to such a decision by the provisions of section 12, as in reality it decides no question within, the ambit of section 12 of the Court Fees Act. For the reasons given above the second objection raised by Mr. Setalvad that no appeal lies from the order of the Judicial Commissioner by special leave is without force and is overruled. The result, is, that the appeal is allowed, the decision of the Judicial 'Commissioner dismissing the appeal is set aside and the case remanded to him for decision in accordance with law the basis that the memorandum of appeal presented to him was properly stamped. The appellants ' costs of this appeal will be costs in the appeal in the Court of the Judicial Commissioner. Appeal allowed.

In a plaint the following reliefs were asked for, viz., (i) that it be declared that the appointment of 'defendant No. 2 as chairman of the board of directors of a company is illegal, invalid and ultra vires and that he has no, right to act as chairman, managing director etc., and (ii) that a receiver be appointed to take charge of the management of the company. The 'plaint bore a court fee stamp of Rs. 10 only but, the objection of the defendants, ad valorem fee was paid Rs. 51,000 which was the valuation of the suit. The suit was dismissed and the plaintiff preferred an appeal giving up the second relief and paying a court fee of Rs. 10 only. The appellate Court ordered payment of ad valorem court fee and non compliance rejected the memorandum of appeal, 0n further appeal: ' 198 Held, (i) that it was o pen to the appellant to give up the second relief in appeal and, as the subject matter of the appeal was of & purely declaratory nature, the memorandum of appeal was properly stamped; (ii)that the first relief was of a purely declaratory nature and did not involve any consequential relief ; (iii)that section 12 of the Court Fees Act did not preclude the Court from considering the correctness of the order of the low er appellate court rejecting the appeal the ground that the memorandum of appeal was not properly stamped. The finality imposed by section 12 of the Court Fees Act deci sions relating to court fee attaches only to decisions concerning valuation simpliciter; it does not attach to decisions relating to the category under which a suit or appeal falls for purposed of court fees. Section 12 of the Court Fees Act when it says that such a decision shall be final between the parties only makes the decision of the court a question of court fee non appealable and places it the same footing as other interlocutory non appealable orders under the Code and does no more than that. If a decision under section 12 is reached by assuming jurisdiction which the court does not possess or without observing the formalities which are prescribed for reaching such a decision, the order obviously would be revisable by the High Court in the exercise of revisional powers. Similarly, when a party thinking that a decision under section 12 is palpably wrong takes the risk of his plaint being rejected or suit dismissed and then appeals from the order rejecting the plaint or from the decree dismissing the suit but not from the decision the question of court fee, then it is open to him to challenge the interlocutory order even the question of court fee in the suit or appeal. The word " finality " construed in the limited sense in which it is often used in statutes means that no appeal lies from an order of this character as such and it means no more than that.

The father of respondent No. 1, who was the Zamindar, filed a suit for the eviction of Ramprasad, the father of appell ants, from certain plots of land. The suit was decreed and the Zamindar took possession of the land. Ramprasad filed an appeal before the Additional Commissioner but the same was dismissed . He preferred a second appeal before the Board of Revenue during the pendency of which the matter was compromised whereunder he was recognised as tenant of the land in dispute and the order of eviction was; thus nullified. He applied for restitution of possession under section 144 of the Code of Civil Procedure. The application was resisted by Dataram and others who had been inducted as tenants on these plots of land during the pendency of the appeals. The trial court allowed the application but its order was reversed by the Additional Commissioner who held that the newly inducted tenants could not be dispossessed. Its order was affirmed by the Board of Revenue in revision. Thereafter fie filed a petition under article 226 of the Constitution in the High Court challenging the decision of the Board of Revenue, but that petition was dismissed on merits. No appeal was attempted to be filed against the order of the High Court either by applying for a certificate or moving this Court for special leave under article 136. The appellants have instead come to this Court in appeal by special leave against the order of the Board of Revenue. A preliminary objection was raised on behalf of of the respondent that the appeal was not maintainable as it was barred by res judicata. Held, that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings. 829 Daryao vs State of U. P., [19621 1 section C. R. 574 and Indian Aluminium Co. Ltd. V. The Commissioner of Income tax, West Bengal, (1961) 43 , relied on. Chandi Prasad Chokhani vs State of Bihar, [1962] 2 section C. R. 276, explained.

The respondent No. 1 in this appeal was manufacturing Spun yarn. In the manufacture of the said product, the respondents used as raw material cellulosic fibres and non cellulosic fibres. Prior to 7th July, 1983, the respondents had filed a classification list in respect of the spun yarn manufactured by them showing the same as covered by Item No. 18 (III) (i) in the first schedule to the Central Excises and Salts Act, 1944 ("Central Excises Act"). This classification was on the basis that the spun yarn was manufactured by them out of non collulosic synthetic waste. The said classification list was approved by the excise authorities on 7th July, 1983. A supplementary classification list was approved on 15th October, 1983. Samples were drawn out of the spun yarn manufactured by the respondents and sent for chemical analysis. Reports were submitted by the Chemical Analyser. On 7th February, 1984, the Superintendent of Central Excises issued a demand notice against the respondent No. 1 on the footing that there was short payment of excise duty as the goods manufactured by the respondents were liable to be classified under Central Excises Tariff Item No. 18(III) (ii). The respondents filed a writ petition in the High Court, challenging the notice of demand. On 9th February, 1984, the Assistant Collector of Central Excises passed an order modifying the approval granted to the classification lists submitted by the respondents and classifying the aforesaid product of the respondents under Item No. 18(III) (ii) of Schedule I of the Central Excises Act, on the basis of which the Superintendent, Central Excises, issued on the 10th February, 1984, a notice to the respondent No. 1, calling upon them to show cause why duty short levied should not be recovered from them under the provisions of section 11 A of the Central Excises Act. A second similar show cause notice was also issued. The Assistant Collector passed orders of adjudication dated 5th 839 March, 1984, modifying the classification lists and confirming the demand made under the aforesaid notice of demand. The respondents petitioners thereupon amended their aforesaid writ petition to challenge the two show cause notices and the orders of adjudication. The petitioners also filed an appeal before the Collector of Central Excises against the said orders of adjudication. The High Court allowed the writ petition in part, quashing the notice of demand for the period 15th August, 1983 to 6th February, 1984, and the orders modifying the classification lists, and directing the Collector, Central Excises to hear the appeal of the petitioners on merits considering their evidence in respect of the period from 7th February, 1984 onwards. The High Court took the view that the show cause notice served on the petitioner could be treated as valid only in respect of the period from 7th February, 1984, onwards and not retrospectively from 15th August, 1983 to 6th February, 1984. The Union of India, the Collector of Central Excises and other Excise officers then moved this Court by this appeal against the decision of the High Court. Dismissing the appeal, the Court, ^ HELD: If the Cellulosic spun yarn made by a manufacturer with the aid of power contains man made fibre of non cellulosic origin, it will fall under Item No, 18(III) (ii), but if it does not contain any man made fibre of non cellulosic origin, it will fall under Item No. 18(III) (i) and duty would be leviable there at a lower rate. [843B C] Under the provisions of Section 11 A of the Central Excises Act, before any demand is made on any person chargeable in respect of non levy or short levy or under payment of duty, a notice requiring him to show cause why he should not pay the amounts specified in the notice must be served on him. In this case, no such notice was served. The aforesaid notice of demand dated 7th February, 1984, was in violation of the provisions of Section 11 A and is bad in law, and the High Court was fully justified in quashing the same. [843G H;844G H] The appellants contended that although the notice of demand might be set aside, the notice to show cause dated 9th/10th February, 1984, should be treated as a valid notice in respect of the period from 15th August, 1983 to 6th February, 1984 and the period from 7th February, 1984, onwards. The notice referred to the service of notice of demand dated 7th February, 1984 on the respondent No. 1. The notice set out as an established fact that the classification lists submitted by the 840 respondents had been modified by the Assistant Collector, and the only matter with respect to which the respondents were asked to show cause was with regard to the quantification of the amount of short levy which was liable to be recovered from the respondent No. 1. The Notice could not be regarded as a show cause notice against the modification of the classification lists in respect of the aforesaid period. The show cause notice was bad in law and of no legal effect as far as the earlier period was concerned. Under Section 11 A of the Central Excises Act, the notice can relate only to a period of six months period to the issue of that notice except in cases where it is alleged that the short levy or payment has occurred by reason of fraud, collusion or wilful misrepresentation or suppression of facts or contravention of the provisions of the said Act or rules, as contemplated in the proviso to sub section (1) of Section 11 A. No such case was made out in the said show cause notice. The said show cause notice must be struck down in so far as the period upto 6th February, 1984, was concerned and could be regarded as a proper show cause notice only in respect of the subsequent period from 7th February, 1984 onwards. Under the said show cause notice, the question of short levy or non levy of excise duty prior to 6th February, 1984, could not be gone into by the Collector and the High Court was right in the view it took. [845B C;846A E] Gokak Patel Vokkart Ltd. vs Collector of Central Excise, Belgaum, ; , referred to.

Surinder Kumar and Virender Kumar (defendants in the suit) purchased on May 9, 1958 a plot of land in District Gurgaon. On January 9, 1959 the plaintiffs filed a suit in the Civil Court to pre empt the sale. On November 16, 1961 the Government of Punjab issued in exercise of the power conferred by section 8(2) of the Punjab Pre emption Act, 1913, a notification declaring "that no right of pre emption shall exist with respect to urban of village immovable property or agricultural land when purchased by any person for setting up or expansion of any industry in the State with the permission of the Director of Industries, Punjab. " By order dated February 16. 1962 the Civil Court passed a decree for preemption conditionally on payment of the amount for which the property was sold. The Civil Court found that the defendants had failed to establish that they intended to establish a factory on the land in question. The defendants appealed to the Court of the Senior Subordinate Judge against the decree of the Trial Court. Thereafter the Government of Punjab issued another notification on September 3,1962, that the Governor of Punjab was pleased to order that "no right of pre emption shall exist with respect to the sale of land, described in the Schedule to this Notification made on the 9th May, 1958, in favour of Messrs. Surinder Kumar and Virender Kumar, opposite Railway Station, Faridabad for the establishment of a factory for manufacture of cork products". In the Schedule was described the property aforesaid purchased by the defendants. The plaintiffs then moved a petition in the High Court chal lenging the validity of the Notification dated September 3, 1962 among others On the ground that in issuing the order the Government acted mala fide. The High Court held that the notification extinguishing the right of pre emption in the property,issued during the pendency of the appeal did not disentitle the plaintiffs to maintain their claim of preemption already exercised and in respect of which a decree was granted to them. The notification dated September 3, 1962 was held to have been issued mala fide and on that account invalid though section 8(2) of the Punjab Act 1 of 1913 was held not offend article 14 of the Constitution. With special leave the State of Punjab appealed to this Court, HELD : The High Court rightly held on the facts that the impugned notification was issued mala fide. The plaintiffs who claimed that they bad a right to pre empt the sale filed a suit against the defendants and obtained a decree. On the finding of the High Court it was clear that except disclosing that the defendants intended to construct a factory, nothing more was said. The State Government still proceeded to exclude from the operation of the Act the land so as to defeat the right of preemption exercised by the plaintiffs in respect of which a decree was passed 551 by the Civil Court. The State Government had not in their affidavit satisfactorily explained the circumstances in which the order was passed. The conclusion of the High Court was borne out by the evidence and no ground was made out calling for interference in this appeal by special leave. [554 E; 556 B C] The contention on behalf of the State that the party alleging that the action of the State was not bona fide must name the officer or officers guilty of conduct which justifies an inference that the official act was done for a collateral purpose, could not be accepted. It would be placing an intolerable burden of proof of a just claim to require a party alleging mala fides of State action to aver in his petition and to prove by positive evidence that a particular officer was responsible for misusing the authority of the State by taking action for a collateral purpose. [5.55 F H] [The impugned notification having been held invalid the question whether section 8(2) of the Punjab Pre emption Act was ultra vires article 14 of the Constitution did not survive for consideration.] [553 B]

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

The appellant a private company was carrying on the business of manufacture and sale of artificial marbles and tiles. In or about 1957 the company moved the Government for acquiring additional land for purposes of the company and the Government on January 7, 1958 issued a notification under section 4 of the Land Acquisition Act, 1894, which was followed by a separate notice by the Land Acquisition officer acquiring the land in dispute. This was followed by another notification under section 6 of the Act which was served on the respondent on January 25, 1960. The purpose of the acquisition was mentioned in the notification, as "public purposes for which the land is needed for Himalayan Tiles and Marble (Pvt) Ltd." The acquisition proceedings culminated in an award made under section 12 of the Act on April 11, 1961, which was published in the State Gazette on April 18, 1961. On December 11, 1961 a letter was written on behalf of the Government informing the owner of the acquired land that possession would be taken on or about the 12th of January, 1962. The first respondent in his writ petition to the High Court, contended that the Government was not competent to acquire the land for purposes of a private company which could not be said to be a public purpose under section 4 of the Act and prayed that the entire land acquisition proceedings should be quashed. A Single Judge of the High Court accepted the plea, allowed the writ petition and quashed the land acquisition proceedings along with the notifications. The appellant filed an appeal before the Letters Patent Bench which confirmed the view of the Single Judge and dismissed the appeal on the ground that the appellant had no locus standi to file the appeal, as it was not 'a person interested ' within the meaning of section 18(1) of the Act. In the appeal to this Court it was contended on behalf of the appellant: (1) the Letters Patent Bench of the High Court was wrong in holding that the appellant was not 'a person interested ' and therefore had no locus standi to file an appeal, and (2) in view of the various amendments in the Land Acquisition Act, 1894 particularly in sections 40 and 41 it could not be said that the acquisition under section 4 was ultra vires of the Act. 236 Dismissing the appeal, ^ HELD: 1(i) The appellant was undoubtedly 'a person interested ' as contemplated by section 18(1) of the Act. The High Court committed an error in throwing out the appeal of the appellant on the ground that it had no locus standi to file an appeal before the Bench. [243F] (ii) The 'definition of 'a person interested ' given in Section 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation. [240D] In the instant case, the lands were actually acquired for the purpose of the Company and once the land vested in the Government, after acquisition, it stood transferred to the Company under the agreement entered into between the Company and the Government. Thus it cannot be said that the Company had no claim or title to the land at all. Secondly, since under the agreement the Company had to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the Company may not have to pay a very heavy amount of money. For this purpose, the Company could undoubtedly appear and adduce evidence on the question of the quantum of compensation. [240E F] (iii) The preponderance of judicial opinion seems to favour the view that the definition of person interested must be liberally construed so as to include a body, local authority, or a company for whose benefit the land is acquired and who is bound under an agreement to pay the compensation. This view accords with the principles of equity, justice and good conscience. [243 B] (iv) The view taken by the Orissa High Court or even by the Calcutta High Court that a company, Local authority or a person for whose benefit the land is acquired is not an interested person is not correct. Such a person is vitally interested both in the title to the property as also in the compensation to be paid thereof because both these factors concern its future course of action and if decided against him seriously prejudice his rights. [243E] Sunder Lal vs Paramsukhdas ; referred to; The Hindustan Sanitryware and Industries Ltd. Bahadurgarh & Anr. vs The State of Haryana & Ors A.I.R. [1972] Punjab & Haryana 59, M. Kurpuswami vs The Special Tahsildar (L.A.) II Industrial Estate Ambathur at Saidapet, Madras {1967] approved; Comilla Electric Supply Ltd. vs East Bengal Bank Ltd. Comilla & ors. A.I.R. [1939] Calcutta 669; State of orissa through the Land Acquisition Collector, Sambalpur vs Amarandra Pratap Singh & Anr. A.I.R. [1967] orissa, 180 over ruled. 2(i) The properties not having vested in the Government the acquisition was not complete and its invalidity could not be cured by section 7 of the amendment Act. [246 G] (ii) The basis of the decision in R. L. Arora vs State of U. P. [1962] Supp. 2 SCR 149 was removed by the . By virtue of Section 7 of the amending Act, retrospective effect was given to the amendment superseding any judgment, decree or order passed before July 20, 1962. The validity of the amending Act was upheld in R. L. Arora vs State of Uttar Pradesh ; [239 A, E] (iii) Even under section 7 of the amending Act, an acquisition made by a company prior to July 20, 1962 must fulfil the following conditions: (a) that 237 the land has been acquired and is vested in Government, (b) that the acquisition has been made under Clauses (a) and (b) or section 41, (c) that every such acquisition and any proceeding, order etc. shall be deemed always as valid as if the provisions of sections 40 and 41 of the Act, as amended by the amending Act, were in force at all material times; and (d) that by virtue of section 7 validity to the acquisition is given to all actions taken in connection there with in spite of any judgment, decree or order of any court to the contrary. [244F H] In the instant case the first condition that there must be a complete acquisition before section 7 could validate the same has not been fulfilled at all. [245A] (iv) Until the possession of the entire land acquired was taken by the Government, the acquisition could not be a complete acquisition so as to attract the operation of section 7 of the amending Act. [246H 247A] In the instant case the appellant did not appear before the Single Judge in the writ petition filed by the. respondents and the petition was contested only by the State. Perhaps the appellant may have thought that as his interests were fully safeguarded lay the Government, it was not necessary for it at that stage to appear before the High Court. The pleas of both the parties taken together clearly show that the entire possession of the property did not pass to the Government and thus no title vested, in the Government despite the notification acquiring the land. [246F G]

These appeals by Special Leave and a petition for Special leave arose out of different judgments of the High Court. The main issue involved was whether the location of Revenue Mandal Headquarters in the State of Andhra Pradesh under section 3(5) of the Andhra Pradesh District (Formation) Act, 1974, was a purely governmental function, not amenable to the writ jurisdiction of the High Court. Writ Petitions were filed in the High Court by individuals and gram panchayats questioning the legality and propriety of the formation of certain Revenue Mandals and location of certain Mandal Headquarters notified in preliminary notification issued under sub section (5) of Section 3 of the Act. In some cases, the High Court declined to interfere with the location of Mandal Headquarters, holding that the government was the best judge of the situation, or on the ground that there was a breach of guidelines it directed the Government to reconsider the question of location of the Mandal Headquarters. In some cases, the High Court quashed the final notification for location of the Mandal Headquarters at a particular place, holding that there was a breach of guidelines based on the system of marking and also on the ground that there were no reasons disclosed for deviating from the preliminary notification for location of the Mandal Headquarters at another place. Allowing Civil Appeal Nos. 1980, 1982, 1985 and 1987 of 1986 and all other appeals and Special Leave Petitions directed against the judgments of the High Court, whereby the High Court had interfered with the location of the Mandal Headquarters, the Court, ^ HELD: It was difficult to sustain the interference by the High Court in some of cases with the location of the Mandal Headquarters and the quashing of the impugned notification on the ground that the Government had acted in breach of the guidelines in that one place or 695 the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the areas surrounded by it or that merely because a particular person who was an influential Member of Legislative Assembly belonging to the party in opposition had the right of representation but failed to avail of it. The location of Headquarters by the Government by the issue of the final notification under sub s (5) of section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like Gram Panchayats and the general public, keeping in view the relevant factors. Even assuming that any breach of the guidelines for the location of the Mandal Headquarters was justiciable, the utmost that the High Court could have done was to quash the impugned notification in a particular case and direct the Government to reconsider the question. There was no warrant for the High Court to have gone further and direct the shifting of the Mandal Headquarters at a particular place. [711B E] The guidelines are merely in the nature of instructions issued by the State Government to the Collectors regulating the manner in which they should formulate their proposals for formation of a Revenue Mandal or for the location of its Headquarters keeping in view the broad guidelines laid down in Appendix I to the White Paper issued by the Government laying down the broad guidelines. The guidelines had no statutory force and they had also not been published in the Official Gazette. They were mere departmental instructions for the Collectors. The ultimate decision as to the formation of a Revenue Mandal or location of its Headquarters was with the Government. It was for that reason that the Government issued preliminary notification under sub s (5) of section 3 of the Act. Deviation from the guidelines in some of the aspects was usually for reasons of administrative convenience keeping in view the purpose and object of the Act i.e. to bring the administration nearer to the people. There was nothing on record to show that the decision of the Government in any of these cases was arbitrary or capricious or was one not reached in good faith or actuated with improper considerations or influenced by extraneous considerations. In a matter like this, conferment of discretion upon the Government in the matter of formation of a Revenue Mandal or location of its Headquarters in the nature of things necessarily leaves the Government with a choice in the use of the directions conferred upon it. [713A F] It was difficult to sustain the judgments of the High Court in the 696 cases where it had interfered with the location of Mandal Headquarters and quashed the impugned notifications on the ground that the Government had acted in breach of the guidelines in that one place or the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the area surrounded by it. The location of Headquarters by the Government by the issue of the final notification under sub section (5) of Section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like the gram panchayats and the general public. Even assuming that the Government while accepting the recommendations of the Cabinet Sub Committee directed that the Mandal Headquarters should be at one place rather than at another place as recommended by the Collector concerned in a particular case, the High Court would not have issued a writ in the nature of mandamus to enforce the guidelines which were nothing more than administrative instructions not having any statutory force, which did not give rise to any legal right in favour of the writ petitioners. The petitions filed under Article 226 of the Constitutions before the High Court were dismissed. [723G H; 724A D] Gram Panchayat, Chinna Madur & Orr. vs The Government of Andhra Pradesh, [1986] 1 Andhra Weekly Reporter 362; C.J. Fernandez vs State of Mysore & Ors., ; ; Padfield vs Minister of Agriculture Fisheries & Food, ; ; Laker Airways Ltd. vs Department of Trade, at 705; Council of Civil Service Unions and Others vs Minister for the Civil Service, ; ; Secretary of State for Education and Science vs Tameside M.B.C.; , ; Breen vs Amalgamated Engineering Union, at 190; R.V. Criminal Injuries Compensation Board, explain, and Ridge vs Baldwin, ; , referred to.

Respondent No. 1 the Provident Fund Commissioner called upon the appellant Food Corporation of India to deposit contribution payable by it under the Employees ' Provident Fund and Miscellaneous Provisions Act, 1952 and the scheme thereunder, in respect of workers employed by the contrac tors appointed by the appellant for handling storing and transporting food grains and other articles in its depots in Rajasthan. On appellant 's non compliance, Respondent No. 1 made an order under Section 7A of the Act determining the amount payable by the appellant. Against the aforesaid order, the appellant filed writ petition before the High Court, which dismissed the same. Hence the appeal, by spe cial leave, by the appellant Corporation. It was contended that the appellant was denied a reason able opportunity to produce actual proof of identification of workers in respect of whom contribution was payable inasmuch as Respondent No. 1 neither gave notice to contrac tors, who were in possession of the relevant lists of work ers, nor made them parties to the proceedings, despite its repeated requests. Allowing the appeal, HELD: The Commissioner, while conducting an inquiry under Section 7A of the Employees, Provident Fund and Mis cellaneous Provisions Act, 1952 has the same powers as are vested in a court under the Code of Civil Procedure for trying a suit. Thus, the Commissioner is authorised to enforce attendance in person and also to examine any person on oath. He has the power requiring the discovery and pro duction of documents. This power was given to the Commis sioner to decide not abstract questions of law, but only to determine actual concrete differences in payment of contri bution and other dues by identifying the 756 workmen. The Commissioner should exercise all his powers to collect all evidence and collate all material before coming to proper conclusion. That is the legal duty of the Commis sioner. It would be failure to exercise the jurisdiction particularly when a party to the proceedings requests for summoning evidence from a particular person. [757H; 758A; F H] In the instant case, the appellant Corporation had some problems in collating the lists of all workers engaged in depots scattered at different places. It requested the respondent Commissioner to summon the contractors to pro duce the respective lists of workers engaged by them. Howev er, the appellant Commissioner did not summon the contrac tors, nor the lists maintained by them. The matter is, therefore, remitted to the Commissioner for fresh disposal. [757F; 759A]

87 of 1959. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. M. P. Amin, Dara P. Mehta, P. M. Amin; section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra for the petitioners. A. V. Viswanatha Sastri, R. Ganapathy Iyer, P. Kesava Pillai and T. M. Sen, for the respondents. H. N. Sanyal, Additional Solicitor General of India, B. Sen and R. H. Dhebar, for the Intervener. 541 1960. November, 21. The, Judgment of P. B. Gajendragadkar, A. K. Sarkar, K. Subba Rao and J. R. Mudholkar, JJ., was delivered by P. B. Gajendragadkar J., K. N. Wanchoo, J., delivered a separate judgment. GAJENDRAGADKAR, J. This is a petition filed under article 32 of the Constitution in which the validity of the Orissa Mining Areas Development Fund Act,( , 1952 (XXVII of 1952), is challenged. The first petitioner is a public limited company which has its registered office at Bombay. A large majority of its shareholders are citizens of India; some of them are themselves companies incorporated under the Indian Companies Act. Petitioners Nos. 2 to 7 are the Directors of Petitioner No. 1, the second petitioner being the Chairman of its Board of Directors. These petitioners are all citizens of India. At all material times the first petitioner carried on and still carries on the business of producing and selling coal excavated from its collieries at Rampur in the State 'of Orissa. Two leases have been executed in its favour; the first was executed on October 17, 1941, by the Governor of Orissa whereby all that piece or parcel of land in the registration district of Sambalpur admeasuring about 3341.79 acres has been demised for a period of 30 years commencing from September 1, 1939, in consideration of the rent reserved thereby and subject to the covenants and conditions prescribed thereunder; and the second is a surface lease executed in its favour by Mr. Mohan Brijraj Singh Dee on April 19, 1951, in relation to a land admeasuring approximately 211.94 acres for a like period of 30 years commencing from February 4, 1939, in consideration of the rent and subject to the terms and conditions prescribed by it. Pursuant to section 5 of the Orissa Estates Abolition Act, 1951, all the right, title and interest of the Zamindar of Rampur in the lands demised to the first petitioner under the second lease vested in respondents, the State of Orissa. Since then the first petitioner has duly paid the rent reserved by the said lease to the appropriate authorities appointed by respondent 1, 69 542 and has observed and performed all the conditions and covenants of the said lease. In exercise of its rights under the said two leases the first petitioner entered upon the lands demised and has been carrying on the business of excavating and producing coal at its collieries at Rampur. In December, 1952, the Legislature of the State of Orissa passed the impugned Act; and it received the assent of the Governor of Orissa on December 10, 1952. It was, however, not reserved for the consideration of the President of India nor has it received his assent. In pursuance of the rule making power conferred on it by the impugned Act respondent 1 has purported to make rules called the Orissa Mining Areas Development Act Rules, 1955; these rules have been duly notified in the State Gazette on January 25, 1955. Subsequently, the Administrator, respondent 2, appointed under the impugned Act issued a notification on June 24, 1958, whereby the first petitioner 's Rampur colliery has been notified for the purpose of liability for the payment of cess under the impugned Act. The area of this colliery has been determined at 3341.79 acres. In its appeal filed under rule 3 before the Director of Mines the first petitioner objected to the issue of the said notification, inter alia, on the ground that the impugned Act and the rules framed under it were ultra vires and invalid; no action has, however, been taken on the said appeal presumably because the authority concerned could not enter tain or deal with the objections about the vires of the Act and the rules. Thereafter on March 26, 1959, the Assistant Administrative Officer, respondent 3, called upon the first petitioner to submit monthly returns for the assessment of the cess. The first petitioner then represented that it had filed an appeal setting forth its objections against the notification, and added that until the said appeal was disposed of no returns would be filed by it. In spite of this representation respondent 3, by his letter of May 6, 1959, called upon the 543 first petitioner to submit monthly returns in the prescribed form and issued the warning that failing compliance the first petitioner would be prosecuted under section 9 of the impugned Act. A similiar demand was made and a similar warning issued by respondent 3 by his letter dated June 6, 1959. It is under these circumstances that the present petition has been filed. The petitioners contend that the impugned Act and ' the rules made thereunder are ultra vires the powers of the Legislature of the State of Orissa, or in any event they are repugnant to the provisions of an existing law. According to the petition the cess levied under the impugned Act is not a fee but is in reality and in substance a levy in the nature of a duty of excise on the coal produced at the first petitioner 's Rampur colliery, and as such is beyond the legislative competence of the Orissa Legislature. Alternatively it is urged that even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948. The petitioners further allege that even if the said levy is held to be a fee it would be similarly ultra vires having regard to Entry 52 in List I read with Central Act LXV of 1951. According to the petitioners the impugned Act is really relatable to Entry 24 in List III, and since it is repugnant with Central Act XXXII of 1947 relatable to the same Entry and covering the same field the impugned Act is invalid to the extent of the said repugnancy under article 254. On these allegations the petitioners have applied for a writ of mandamus or a writ in the nature of the said writ or any other writ, order or direction prohibiting the respondents from enforcing any of the provisions of the impugned Act against the first petitioner; a similar writ or order is claimed against respondent 3 in respect of the letters addressed by him to the 1st petitioner on March 3, 1959 and June 6, 1959. This petition is resisted by respondent 1 on several grounds. It is urged on its behalf that the levy 544 imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II and its validity is not affected either by Entry 54 read with Act LIII of 1948 or by 'Entry 52 read with Act LXV of 1951. In the alternative it is contended that if the said levy is held to be a tax and not a fee, it would be a tax relatable to Entry 50 in List II, and as such the legislative competence of the State Legislature to impose the same cannot be successfully challenged. Respondent 1 disputes the petitioner 's contention that the impugned Act is relatable to Entry 24 in List III; and so, according to it, no question of repugnancy with the Central Act XXXII of 1947 arises. After this appeal was fully argued before us Mr. Amin suggested and Mr. Sastri did not object that we should hear the learned Attorney General on the question as to whether even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948. Accordingly we directed that a notice on this point should be served on the learned Attorney General and the case should be set down for hearing on that point again. For the learned Attorney General the learned Additional Solicitor General appeared before us in response to this notice and we have had the benefit of hearing his arguments on the point in question. The first question which falls for consideration is whether the levy imposed by the impugned Act amounts to a fee relatable to Entry 23 read with Entry 66 in List II. Before we deal with this question it is necessary to consider the difference between the concept of tax and that of a fee. The neat and terse definition of tax which has been given by Latham, C. J., in Matthews vs Chicory Marketing Board (1) is often cited as a classic on this subject. "A tax", said Latham, C. J., "is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment for services rendered". In bringing out the essential features of a tax this defini (1) ; , 276. 545 tion also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money. by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become, a part of the consolidated fund. It is earmarked and set apart for the purpose of services for which it is levied. There is, however, an element of compulsion in the imposition of both tax and fee. When the Legislature decides to render a specific service to any area or to any class of persons, it is not open to the said area or to the said class of persons to plead that they do not want the service and therefore they should be exempted from the payment of the cess. Though there is an element of quid pro quo between the tax payer and the public authority there is no option to the tax payer in the matter of receiving the service determined by public authority. In regard to fees there is, and must always be, co relation between the fee collected and the service intended to be rendered. Cases may arise where under the guise of levying a fee Legislature may attempt to impose a tax; and in the case of such a colourable exercise of legislative power courts would have to scrutinise the scheme of the levy very carefully and determine whether in fact there is a co relation between the service and the levy, or whether the levy is either not co related with service or is levied to such an 546 excessive extent as to be a presence of a fee and not a fee in reality. In other words, whether or not a particular cess levied by a statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case. The distinction between a tax and a fee is, however, important, and it is recognised by the Constitution. Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes; but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy fees in respect of any of the matters covered in the said List excluding of course the fees taken in any Court. The question about the distinction between a tax and a fee has been considered by this Court in three decisions in 1954. In The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1) the vires of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 195 1), came to be examined. Amongst the sections challenged was section 76(1). Under this section every religious institution had to pay to the Government annual contribution not exceeding 5% of its income for the services rendered to it by the said Government; and the argument was that the contribution thus exacted was not a fee but a tax and as such outside the competence of the State Legislature. In dealing with this argument Mukherjee, J., as he then was, cited the definition of tax given by Latham, C.J., in the case of Matthews (2), and has elaborately considered the distinction between a tax and a fee. The learned judge examined the scheme of the Act and observed that "the material fact which negatives the theory of fees in the present case is that the money raised by the levy of the contribution is not earmarked or specified for defraying the expense that the Government has to incur in performing the services. All the collections go to the consolidated fund of the State and all the expenses have to be met not out of those collections but out of the general revenues by a proper method of appropriation as is done in the (1) ; (2) ; 547 case of other Government expenses". The learned judge no doubt added that the said circumstance was not conclusive and pointed out that in fact there was a total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution. That is why section 76(1) was struck down as ultra vires. The same point arose before this Court in respect of the Orissa Hindu Religious Endowments Act, 1939, as amended by amending Act 11 of 1952 in Mahant Sri Jagannath Ramanuj Das vs The, State of Orissa (1). Mukherjea, J., who again spoke for the Court, upheld the validity of section 49 which imposed the liability to pay the specified contribution on every Mutt or temple having an annual income exceeding Rs. 250 for services rendered by the State Government. The scheme of the impugned Act was examined and it was noticed that the collections made under it are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes. They go to constitute a fund which is contemplated by section 50 of the Act, and this fund to which the Provincial Government contributes both by way of loan and grant is specifically set apart for the rendering of services involved in carrying out the provisions of the Act. The same view was taken by this Court in regard to section 58 of the Bombay Public Trust Act, 1950 (Act XXIX of 1950) which imposed a similar contribution for a similar purpose in Ratilal Panachand Gandhi vs The State of Bombay (2). It would thus be seen that the tests which have to be applied in determining the character of any impugned levy have been laid down by this Court in these three decisions; and it is in the light of these tests that we have to consider the merits of the rival contentions raised before us in the present petition. On behalf of the petitioners Mr. Amin has relied on three other decisions which may be briefly considered. In P. P. Kutti Keya vs The State of Madras (3), the Madras High Court was called upon to consider, inter (1) ; (2) [1954] S.C.R. 1055. (3) A.I.R. 1954 Mad. 621. 548 alia, the validity of section 11 of the Madras Commercial Crops Markets Act 20 of 1933 and Rules 28(1) and 28(3) framed thereunder. Section 11(1) levied a fee on the sales of commercial crops within the notified area and section 12 provided that the amounts collected by the Market Committee shall be constituted into a Market Fund which would be utilised for acquiring a site for the market, constructing a building, maintaining the market and meeting the expenses of the Market Committee. The argument that these provisions amounted to services rendered to the notified area and thus made the levy a fee and not a tax was not accepted by the Court. Venkatarama Aiyar, J., took the view that the funds raised from the merchants for a construction of a market in substance amounted to an exaction of a tax. Whether or not the construction of a market amounted to a service to the notified area it is unnecessary for us to consider. Besides, as we have already pointed out we have now three decisions of this Court which have authoritatively dealt with this matter, and it is in the light of the said decisions that the present question has to be considered. In Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co. (1), the Privy Council had to deal with the validity of forest protection impost levied by the relevant section of the Forest Act R. section B. C. 1936. The lands in question were statutorily exempted from taxation, and it was urged against the validity of the impost that the levy of the said impost was not a service charge but a tax; and since it contravened the exemption from taxation granted to the land it was invalid. This plea was upheld by the Privy Council. The Privy Council did consider two circumstances which were relevant; the first that the levy was on a defined class of interested individuals, and the second that the fund raised did not fall into the general mass of the proceeds of taxation but was applicable for a special and limited purpose. It was conceded that these considerations were relevant but the Privy Council thought that the weight to be attached to them should not be exagge (1) 540 rated. In appreciating the weight of the said relevant circumstances the Privy Council was impressed by the fact that the lands in question formed an important part of the national wealth of the Province and their proper administration, including in particular protection against fire, is a matter of high public concern ' as well as one of particular interest to individuals. In other words, the effect of the impugned provision was, that the expenses of what was the public service of the greatest importance for the Province as a whole had been divided between the general body of tax. payers and those individuals who had a special interest in having their property protected. It would thus appear that this decision proceeded on the basis that what was claimed to be a special service to the lands in question was in reality an item in public service itself, and so the element of quid pro quo was absent. It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from pub lic service, and in essence is directly a part of it, diffe rent considerations may arise. In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve. Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequences. That is the true test in determining the character of the levy. In Parton. vs Milk Board (Victoria)(1), the validity of the levy imposed on dairymen and owners of milk depots by section 30 of the Milk Board Act of 1933 as amended by subsequent Acts of 1936 1939 was (1) ; 70 550 challenged, and it was held by Dixon, J., that the levy of the said contribution amounted to the imposition of a duty of excise. This decision was substantially based on the ground that the statutory board "performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense" that is to say the element of quid pro quo was absent qua the persons on whom the levy had been imposed. Therefore none of the decisions on which Mr. Amin has relied can assist his case. Let us now examine the scheme of the impugned Act. As the preamble shows it has been passed because it was thought expedient to constitute mining areas and a Mining Areas Development Fund in the State of Orissa. It consists of 11 sections. Section 3 of the Act provides for the constitution of a mining area whenever it appears to the State Government that it is necessary and expedient to provide amenities like communications, water supply and electricity for the better development of any area in the State of Orissa wherein any mine is situated, or to provide for the welfare of the residents or to workers in any such areas within which persons employed in a mine or a group of mines reside or work. Under this section the State Government has to define the limits of the area. and is given the power to include within such area any local area contiguous to the same or to exclude from such area any local area comprised therein; that is the effect of section 3(1). Section 3(2) empowers the owner or a lessee of a mine or his duly constituted representative in the said area to file objections in respect of any notification issued under section 3(1) within the period specified, and the State Government is required to take the said objection into consideration. After considering objections received the State Government is authorised to issue a notification constituting a mining area under section 3(3). Section 4 deals with the imposition and collection of cess. The rate of the levy authorised shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth. Section 5 provides for the constitution of the Orissa Mining Areas Development 551 Fund. This fund vests in the State Government and has to be administered by such officer or officers as may be appointed by the State Government in that, behalf Section 5(2) requires that there shall be paid to the credit of the said fund the proceeds of the cess recovered under section 4 for each mining area during the quarter after deducting expenses, if any, for collection and recovery. Section 5(3) contemplates that to the credit of the said fund shall be placed all collections of cess under section 5(2) as well as amounts from State Government and the local authorities and public subscriptions specifically given for any of the purposes of the fund. Section 5(4) deals with the topic of the appli cation of the said fund. The fund has to be utilised to meet expenditure incurred in connection with such measures which in the opinion of the State Government are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of the mining areas, and to meet the welfare of the labour and other persons residing or working in the mining areas. Section 5(5) lays down that without prejudice to the generality of the foregoing provisions the fund may be utilised to defray any of the purposes specified in cls. (a) to (e). Under section 5(6) the State Government is given the power to decide whether any particular expenditure is or is not debitable to the fund and their decision is made final; and section 5(7) imposes on the State Government an obligation to publish annually in the gazette a report of the activities financed from the fund together with an estimate of receipts and expenditure of the fund and a statement of account. Section 6 prescribes the mode of constituting an advisory committee. It has to consist of such number of members and chosen in such manner as may be prescribed, provided however that each committee shall include representatives of mine owners and workmen employed in mining industry. The names of the members of the committee are required to be published in the gazette. Section 7 deals with the appointment and functions of the statutory authorities to carry out the purpose of the Act, while section 8 confers on the State Government power to 552 make rules. Section 9 prescribes penalties and provides for prosecutions; and section 10 gives protection to the specified authorities or officers in respect of anything done or intended to be done by them in good faith in pursuance of the Act or any rules or order made thereunder. Section 11, which is the last section confers on the State Government the power to do anything which may appear to them to be necessary for 'the purpose of removing difficulties in giving effect to the provisions of the Act. The scheme of the Act thus clearly shows that it has been passed for the purpose of the development of mining areas in the State. The basis for the operation of the Act is the constitution of a mining area, and it is in regard to mining areas thus constituted that the provisions of the Act come into play. It is not difficult to appreciate the intention of the State Legislature evidenced by this Act. Orissa is an underdeveloped State in the Union of India though it has a lot of mineral wealth of great potential value. Un fortunately its mineral wealth is located generally in areas sparsely populated with bad communications. Inevitably the exploitation of the minerals is handicapped by lack of communications, and the difficulty experienced in keeping the labour force sufficiently healthy and in congenial surroundings. The mineral development of the State, therefore, requires that provision should be made for improving the communications by constructing good roads and by providing means of transport such as tramways; supply of water and electricity would also help. It would also be necessary to provide for amenities of sanitation and education to the labour force in order to attract workmen to the area. Before the Act was passed it appears that the mine owners tried to put up small length roads and tramways for their own individual purpose, but that obviously could not be as effective as roads constructed by the State and tramway service provided by it. It is on a consideration of these factors that the State Legislature decided to take an active part in unsystematic development of its mineral areas which would help the mine owners in moving their 553 minerals quickly through the shortest route and would attract labour to assist the excavation of the minerals. Thus there can be no doubt that the primary and the principal object of the Act is to develop ' the mineral areas in the State and to assist more efficient and extended exploitation of its mineral wealth. The constitution of the advisory committee as prescribed by section 4 emphasises the fact that the policy of the Act would be to carry out with the assistance of the mine owners and their workmen. Thus after a mining area is notified an advisory committee is constituted in respect of it, and the task of carrying out the objects of the Act is left to the care of the said advisory committee subject to the provisions of the Act. Even before an area is notified the mine owners are allowed an opportunity to put forward their objections. These features of the Act are also relevant in determining the question as to whether the Act is intended to render service to the specified area and to the class of persons who are subjected to the levy of the cess. Section 5 shows that the cess levied does not become a part of the consolidated fund and is not subject to an appropriation in that behalf; it goes into the special fund earmarked for carrying out the purpose of the Act, and thus its existence establishes a correlation between the cess and the purpose for which it is levied. It was probably felt that some additions should be made to the special fund, and so section 5(3) contemplates that grants from the State Government and local authorities and public subscriptions may be collected for enriching the said fund. Every year a report of the activities financed by the fund has to be published together with an estimate of receipt and expenditure and a statement of accounts. It would thus be clear that the administration of the fund would be subject to public scrutiny and persons who are called upon to pay the levy would have an opportunity to see whether the cess collected from them has been properly utilised for the purposes for which it is intended to be used. It is not alleged by the petitioners 554 that the levy imposed is unduly or unreasonably excessive so as to make the imposition a colourable exercise of legislative power. Indeed the fact that the accounts have to be published from year to year affords an indication to the contrary. Thus the scheme of the Act shows that the cess is levied against the class of persons owning mines in the notified area and it is levied to enable the State Government to render specific services to the said class by developing the notified mineral area. There is an element of quid pro quo in the scheme, the cess collected is constituted into a specific fund and it has not become a part of the consolidated fund, its application is regulated by a statute and is confined to its purposes, and there is a definite co relation between the impost and the purpose of the Act which is to render service to the notified area. These features of the Act impress upon the levy the character of a fee as distinct from a tax. It is, however, urged that the cess levied by section 4(2) is in substance and reality a duty of excise. As we have already noticed section 4(2) provides that the rate of such levy shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth; in other words it is the value of the minerals produced which is the basis for calculating the cess payable by mine owners, and that precisely is the nature in which duty of excise is levied under Entry 84 in List I. The said Entry empowers Parliament to impose duties of excise, inter alia, on goods manufactured or produced in India. When minerals are produced from mines and a duty of excise is intended to be imposed on them it would be normally imposed at the pit 's mouth, and that is precisely what the impugned Act purports to do. It is also contended that the rate prescribed by section 4(2) indicates that it operates not as a mere fee but as a duty of excise. This argument must be carefully examined before the character of the cess is finally determined. It is not disputed that under Entry 23 in List II read with Entry 66 in the said List the State Legislature can levy a fee in respect of mines and mineral development. Entry 23 reads thus: "Regu lation of Mines and mineral development subject to 555 the provisions of List I with respect to regulation and development under the control of the Union". We will deal with the condition imposed by the latter part of this Entry later. For the present it is enough to state that regulation of mines and mineral development is within the competence of the State Legislature. Entry 66 provides that fees in respect of any of the matters in the said List can be imposed by the State Legislature subject of course to the exception of fees taken in any Court. The argument is that though the State Legislature is competent to levy a fee in respect of mines and mineral development, if the statute passed by a State Legislature in substance and in effect imposes a duty of excise it is travelling outside its jurisdiction and is trespassing on the legislative powers of Parliament. This argument is based on two considerations. The first relates to the form in which the levy is imposed, and the second relates to the extent of the levy authorised. The extent of the levy authorised would always depend upon the nature of the services intended to be rendered and the financial obligations incurred thereby. If the services intended to be rendered to the notified mineral areas require that a fairly large cess should be collected and co relation can be definitely established between the proposed services and the impost levied, then it would be unreasonable to suggest that because the rate of the levy is high it is not a fee but a duty of excise. In the present case, if the development of the mining areas involves con siderable expenditure which necessitates the levy of the prescribed rate it only means that the services being rendered to the mining areas are very valuable and the rate payer in substance is compensating the State for the services rendered by it to him. It is significant that the petitioners do not seriously suggest that the services intended to be rendered are a cloak and not genuine, or that the taxes levied have no relation to the said services, or that they are unreasonable and excessive. Therefore, in our opinion, the extent of the rate allowed to be imposed by section 4(2) cannot by itself alter the character of the levy from a 556 fee into that of a duty of excise. If the co relation between the levy and the services was not genuine or real, or if the levy was disproportionately higher than the requirements of the services intended to be rendered it would have been another matter. Then as to the form in which the impost is levied, it is difficult to appreciate how the method adopted by the Legislature in recovering the impost can alter its character. The character of the levy must be determined in the light of the tests to which we have already referred. The method in which the fee is recovered is a matter of convenience, and by itself it cannot fix upon the levy the character of the duty of excise. This question has often been considered in the past, and it has always been held that though the method in which an impost is levied may be relevant in determining its character its significance and effect cannot be exaggerated. In Balla Ram vs The Province of East Punjab (1) the Federal Court had to consider the character of the tax levied by section 3 of the Punjab Urban Immoveable Property 'tax Act XVII of 1940. Section 3 provided as follows: "There shall be charged, levied and paid an annual to tax on buildings and lands situated in the rating areas shown in the schedule to this Act at such rate not exceeding twenty per centum of the annual value of such buildings and lands as the Provincial Government may by notification in official gazette direct in respect of each such rating area". The argument urged before the Federal Court was that the tax imposed by the said section was in reality a tax on income within the meaning of Item 54 in List I of the Seventh Schedule to the Constitution Act of 1935, and as such it was not covered by Item 42 in List II of the said Schedule. This argument was rejected on the ground that the tax levied by the Act was in pith and substance a tax on lands and buildings covered by Item 42. It would be noticed that the basis of the tax was the annual value of the building which is the basis used in the Indian Income tax Act for determining income from property; and so, the attack against the section was based on (1) 557 the ground that it had adopted the same basis for leaving the impost as the Income tax Act and the said basis determined its character whatever may be the appearance in which the impost was purported to be levied. In repelling this argument Fazl Ali, J. observed that the crucial question to be answered was whether merely because the Income tax Act has adopted the annual value as the standard for determining the income it must necessarily follow that if the same standard is employed as a measure for any other tax that tax becomes a tax on income. The learned judge then proceeded to add that if the answer to this question is to be given in the affirmative then certain taxes which cannot possibly be described as income tax must be held to be so. In other words, the effect of this decision is that the adoption of the standard used in Income tax Act for getting at the income by any other act for levying the tax authorised by it would not be enough to convert the said. tax into an income tax. During the course of this judgment Fazl Ali, J. also noticed with approval a similar view taken by the Bombay High Court in Sir Byramjee Jeejeebhoy vs The Province of Bombay (1). This decision has been expressly approved by the Privy Council in Governor General in Council vs Province of Madras (2). Consistently with the decision of the Federal Court their Lordships expressed the opinion that "a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods and not on sales or the proceeds of the sale of goods. The two taxes, the one levied on the manufacturer in respect of his goods and the other on the vendor in respect of his sales may in one sense overlap, but in law there is no overlapping; the taxes are separate and distinct imposts. If in, fact they overlap that may be because the taxing authority imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article (1) I.L.R. (2) (1945) L.R. 72 I.A. 91. 71 558 leaves the factory or workshop for the first time on the occasion of its sale". In that case the question was whether the tax authorised by the Madras General Sales Tax Act, 1939, was a tax on the sale of goods or was a duty of excise, and the Privy Council held it was the former and not the latter. Therefore, in our opinion, the mere fact that the levy imposed by the impugned Act has adopted the method of determining the rate of the levy by reference to the minerals produced by the mines would not by itself make the levy a duty of excise. The method thus adopted may be relevant in considering the character of the impost but its effect must be weighed along with and in the light of the other relevant circumstances. In this connection it is always necessary to bear in mind that where an impugned statute passed by a State Legislature is relatable to an Entry in List II it is not permissible to challenge its vires only on the ground that the method adopted by it for the recovery of the impost can be and is generally adopted in levying a duty of excise. Thus considered the conclusion is inevitable that the cess levied by the impugned Act is neither a tax nor a duty of excise but is a fee. The next question which arises is, even if the cess is a fee and as such may be relatable to Entries 23 and 66 in List II its validity is still open to challenge because the legislative competence of the State Legislature under Entry 23 is subject to the provisions of List I with respect to regulation and development under the control of the Union; and that takes us to Entry 54 in List I. This Entry reads thus: "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". The effect of reading the two Entries together is clear. The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to 559 the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of (,he State Legislature itself. This position is not in dispute. It is urged by Mr. Amin that the field covered by the impugned Act has already been covered by the Mines and Minerals (Regulation and Development) Act, 1948, (LIII of 1948) and he contends that in view of the declaration made by section 2 of this Act the impugned Act is ultra vires. This Central Act was passed to provide for the regulation of mines and oil fields and for the development of minerals. It may be stated at this stage that by Act LXVII of 1957 which has been subsequently passed by Parliament, Act LIII of 1948 has now been limited only to oil fields. We are, however, concerned with the operation of the said Act in 1952, and at that time it applied to mines as well as oil fields. Section 2 of the Act contains a declaration as to the expediency and control by the Central Government. It reads thus: "It is hereby declared that it is expedient in the public interest that the Central Government should take under its control the regulation of mines and oil fields and the development of minerals to the extent hereinafter provided". It is common ground that at the relevant time this Act applied to coal mines. Section 4 of the Act provides that no mining lease shall be granted after the commencement of this Act otherwise than in accordance with the rules made under this Act. Section 5 empowers the Central Government to make rules by notification for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area. Sections 4 and 5 thus 560 purport to prescribe necessary conditions in accordance with which mining leases have to be executed. This part of the Act has no relevance to our present purpose. Section 6 of the Act, however, empowers the Central Government to make rules by notification in the official gazette for the conservation and development of minerals. Section 6(2) lays down several matters in respect of which rules can be framed by the Central Government. This power is, however, without prejudice to the generality of powers conferred on the Central Government by section 6(1). Amongst the matters covered by section 6(2) is the levy and collection of royalties, fees or taxes in respect of minerals mined, quarried, excavated or collected. It is true that no rules have in fact been framed by the Central Government in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference. If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union. In such a case the test must be whether the legislative declaration covers the field 561 or not. Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948. It still remains to consider whether section 2 of the said Act amounts in law to a declaration by Parliament as required by article 54. When the said Act was passed in 1948 the legislative powers of the Central and the Provincial Legislatures were governed by the relevant Entries in the Seventh Schedule to the Constitution Act of 1935. Entry 36 in List I corresponds to the present Entry 54 in List I. It reads thus: "Regulation of Mines and Oil Fields and mineral development to the extent to which such regulation and development under Dominion control is declared by Dominion law to be expedient in public interest". It would be notic ed that the declaration required by Entry 36 is a declaration by Dominion law. Reverting then to section 2 of the said Act it is clear that the declaration contained in the said section is put in the passive voice; but in the context there would be no difficulty in holding that the said declaration by necessary implication has been made by Dominion law. It is a declaration contained in a section passed by the Dominion Legislature ' and so it is obvious that it is a declaration by a Dominion law; but the question is: Can this declaration by a Dominion law be regarded constitutionally as declaration by Parliament which is required by Entry 54 in List I. It has been urged before us by the learned Additional Solicitor General and Mr. Amin that in dealing with this question we should bear in mind two general considerations. The Central Act has been continued under article 372(1) of the Constitution as an existing law, and the effect of the said constitutional provision must be that the continuance of the existing law would be as effective and to the same extent after the Constitution came into force as before. It is urged that after the said Act was passed and before the Con stitution came into force no Provincial Legislature could have validly made a law in respect of the field covered by the said Act, and it would be commonsense to assume that the effect of the continuance of the 562 said law under article 372(1) cannot be any different. In other words, if no Provincial Legislature could have trespassed on the field covered by the said Act before the Constitution, the position would and must be the same even after the Constitution came into force. It is also contended that for the purpose of bringing the provision of existing laws into accord with the provisions of the Constitution the President was given power to make by order appropriate adaptations and modifications of such laws, and the object of making such adaptations obviously was to make the continuance of the existing laws fully effective. It is in the light of these two general considerations, so the. argument runs, must the point in question be considered. The relevant clause in the Adaptation of Laws Order, 1950, on which reliance has been placed in support of this argument is el. 16 in the Supplementary Part of the said Order. This clause provides that subject to the provisions of this Order any reference by whatever form of words in any existing law to any authority competent at the date of the passing of that law to exercise any powers or authorities, or to discharge any functions, in any part of India shall, where a corresponding new authority has been constituted by or under the Constitution, have effect until duly repealed or amended as if it were a reference to that new authority. The petitioners contend that as a result of this clause the declaration made by the Dominion Legislature in section 2 of the Central Act must now be held to be the declaration made by Parliament. Is this contention justified on a fair and reasonable construction of the clause? That is the crux of the problem. In considering this question it would be relevant to recall the scheme of the Adaptation of Laws Order, 1950. It consists of Three Parts. Part 1 deals with the adaptation of Central Laws and indicates the adaptation made therein; Part 11 deals with the adaptation of Provincial Laws and follows the same pattern; and Part III is a Supplementary Part which contains provisions in the nature of supplementary provisions. A perusal of the clauses contained in Part 563 I would show that though some adaptation was made in Act LIII of 1948 it was not thought necessary to make an adaptation in section 2 of the said Act whereby the declaration implied in the said section has been expressly adapted into a declaration by Parliament. Now, the effect of el. 16 in substance is to equate an authority competent at the date of the passing of the existing law to exercise any powers or authorities, or to discharge any functions with a corresponding new authority which has been constituted by or under the Constitution. Reference to the authority in the con. text would suggest cases like reference to the Governor General eo nomine, or Central Government which respectively would be equated with the President or the Union Government. Prima facie the reference to authority would not include reference to a Legislature; in this connection it may be relevant to point out that article 372(1) refers to a competent Legislature as distinguished from other competent authorities. That is the first difficulty in holding that el. 16 refers to the Dominion Legislature and purports to equate it with the Parliament. It is clear that for the application of this clause it is necessary that a reference should have been made to the authority by some words whatever may be their form. In other words it is only where the existing law refers expressly to some authority that this clause can be invoked. It is difficult to construe the first part of this clause to include authorities to which no reference is made by any words in terms, but to which such reference may be implied; and quite clearly the Dominion Legislature is not expressly referred to in section 2. In construing the present clause we think it would be straining the language of the clause to hold that an authority to which no reference is made by words in any part of the existing law could claim the benefit of this clause. Besides, there is no doubt that when the clause refers to any authority competent to exercise any powers or authorities, or to discharge any functions, it refers to the powers, authorities or functions attributable to the existing law itself; that is to say, authorities 564 which are competent to exercise powers or to discharge functions under the existing laws are intended to be equated with corresponding new authorities. It is impossible to hold that the Dominion Legislature is an authority which was competent to exercise any power or to discharge any function under the existing law. Competence to exercise power to discharge functions to which the clause refers must inevitably be related to the existing law and not to the Constitution Act of 1935 which would be necessary if Dominion Legislature was to be included as an authority under this clause. The Constitution Act of 1935 had been repealed by the Constitution and it was not, and could not obviously be, the object of the Adaptation of Laws Order to make any adaptation in regard to the said Act. Therefore, the competence of the Dominion Legislature which flowed from the relevant provisions of the Constitution Act of 1935 is wholly outside this clause. We have carefully considered the arguments urged before us by the learned Additional Solicitor General and Mr. Amin but we are unable to hold that cl. 16 can be pressed into service for the purpose of supporting the conclusion that the declaration by the Dominion Legislature implied in section 2 of Act LIII of 1948 can, by virtue of cl. 16, be held to be a declaration by Parliament within the meaning of the relevant Entries in the Constitution. If that be the true position then the alternative challenge to the vires of the Act based on el. 16 of the Adaptation of Laws Order must fail. There is another possible argument which may prima facie lead to the same conclusion. Let us assume that the result of reading article 372 and cl. 16 of the Adaptation of Laws Order is that under section 2 of Act LIII of 1948 there is a declaration by Parliament as suggested by the petitioners and the learned Additional Solicitor General. Would that meet the requirements of Entry 54 in List I of the Seventh Schedule? It is difficult to answer this question in the affirmative because the relevant provisions of the Constitution are prospective and the declaration by Parliament specified by Entry 54 must be declaration made by 565 Parliament subsequent to the date when the Constitution came into force. Unless a declaration is made by Parliament after the Constitution came into force it will not satisfy the requirements of Entry 54, and that inevitably would mean that the impugned Act is validly enacted under Entry 23 in List II of the Seventh Schedule. If that be the true position then it would follow that even on the assumption that el. 16 of the Adaptation of Laws Order and article 372 can be construed as suggested by the petitioners the impugned Act would be valid. Faced with this difficulty, both the learned Additional Solicitor General and Mr. Amin argued that cl. 21 of the said Order may be of some assistance. Clause 21 reads thus: "Any Court, Tribunal, or authority required or empowered to enforce any law in force in the territory of India immediately before the appointed day shall, notwithstanding that this Order makes no provision or insufficient provision for the adaptation of the law for the purpose of bringing it into accord with the provisions of the Constitution, construe the law with all such adaptations as are necessary for the said purpose". Assuming that this clause is valid we do not see how it is relevant in the present case. All that this clause purports to do is to empower the Court to construe the law with such adaptations as may be necessary for the purpose of bringing it in accord with the provisions of the Constitution. There is no occasion to make any adaptation in construing Act LIII of 1948 for bringing it into accord with the provisions of the Constitution at all. The said Act has been continued under article 372(1) and there is no constitutional defect in the said Act for the avoidance of which any adaptation is necessary. In fact what the petitioners seek to do is to read in section 2 of the said Act the declaration by Parliament required by Entry 54 so as to make the impugned Act ultra vires. Quite clearly cl. 21 cannot be pressed into service for such a purpose. Therefore, we reach this position that the field covered by Act LIII of 1948 is substantially the same as the field covered by the 72 566 impugned Act but the declaration made by section 2 of the said Act does not constitutionally amount to the requisite declaration by Parliament, and so the limitation imposed by Entry 54 does not come into operation in the present case. Act LIII of 1948 continues in operation under article 372; with this modification that so far as the State of Orissa is concerned it is the impugned Act that governs and not the Central Act. Article 372(1) in fact provides for the continuance of the existing law until it is altered, repealed or amended by a competent Legislature or other competent authority. In the absence of the requisite parliamentary declaration the legislative competence of the Orissa Legislature under Entry 23 read with Entry 66 is not impaired, and so the said Legislature is competent either to repeal, alter or amend the existing law which is the Central Act LIII of 1948; in effect, after the impugned Act was passed, so far as Orissa is concerned the Central Act must be deemed to be repealed. This position is fully consistent with the provisions of article 372. The result is that the material words used in cls. 16 and 21 being unambiguous and explicit, it is difficult to give effect to the two general considerations on which reliance has been placed by the petitioners. Incidentally the present case discloses that in regard to the requisite parliamentary declaration prescribed by Entry 54 in List I in its application to the pre Constitution Acts under corresponding Entry 36 in List I of the Constitution Act of 1935, there is a lacuna which has not been covered by any clauses of the Adaptation of Laws Order; that, however, is a matter for Parliament to consider. There is one more point which is yet to be considered. Mr. Amin contends that Entry 23 in List II is subject to the provisions in List I with respect to regulation and development under the control of the Union, and according to him Entry 52 in List I is one of such provisions. In this connection he relies on the said Entry which deals with industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest, and Industries (Development and Regulation) Act, 1951 (LXV 567 of 1951). This Act has been passed to provide for the development and regulation of certain industries one of which undoubtedly is coal mining industry. Section 2 of this Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. This declaration is a declaration made by Parliament, and if the provisions of the Act read with the said declaration covered the same field as is covered by the impugned Act, it would undoubtedly affect the vires of the impugned Act; but in dealing with this question it is important to bear in mind the doctrine of pith and substance. We have already noticed that in pith and substance the impugned Act is concerned with the development of the mining areas notified under it. The Central Act, on the other hand, deals more directly with the control of all industries including of course the industry of coal. Chapter II of this Act provides for the constitution of the Central Advisory Council and Development Councils, chapter III deals with the regulation of scheduled industries, chapter IIIA provides for the direct management or control of industrial undertakings by Central Government in certain cases, and chapter IIIB is concerned with the topic of control of supply, distribution, price, etc, of certain articles. The last chapter deals with miscellaneous incidental matters. The functions of the Development Councils constituted under this Act prescribed by section 6(4) bring out the real purpose and object of the Act. It is to increase the efficiency or productivity in the scheduled industry or group of scheduled industries, to improve or develop the service that such industry or group of industries renders or could render to the community, or to enable such industry or group of industries to render such service more economically. Section 9 authorises the imposition of cess on scheduled industries in certain cases. Section 9(4) provides that the Central Government may hand over the proceeds of the cess to the Development Council there specified and that the Development Council shall utilise the said proceeds to achieve the objects mentioned in cls. (a) to (d). These 568 objects include the promotion of scientific and industrial research, of improvements in design and quality, and the provision for the training of technicians and labour in such industry or group of industries. It would thus be seen that the object of the Act is to regulate the scheduled industries with a view to improvement and development of the service that they may render to the society, and thus assist the solution of the larger problem of national economy. It is difficult to hold that the field covered by the declaration made by section 2 of this Act, considered in the light of its several provisions, is the same as the field covered by the impugned Act. That being so, it cannot be said that as a result of Entry 52 read with Act LXV of 1951 the vires of the impugned Act can be successfully challenged. Our conclusion, therefore, is that the impugned Act is relatable to Entries 23 and 66 in List II of the Seventh Schedule, and its validity is not impaired or affected by Entries 52 and 54 in List I read with Act LXV of 1951 and Act LIII of 1948 respectively. In view of this conclusion it is unnecessary to consider whether the impugned Act can be justified under Entry 50 in List II, or whether it is relatable to Entry 24 in List III and as such suffexs from the vice of repugnancy with the Central Act XXXII of 1947. The result is the petition fails and is dismissed with costs. WANCHOO, J. I have read the judgment just delivered by my learned brother Gajendragadkar J. and regret that I have not been able to persuade myself that the cess levied in this case on all extracted minerals from any mine in any mining area at a rate not exceeding five per centum of the value of the minerals at the pit 's mouth by the Orissa State Legislature under section 4 of the Orissa Mining Areas Development Fund Act, No. XXVII of 1952, (hereinafter called the Act) is a fee properly so called and not a duty of ex cise. The facts are all set out in the judgment just delivered and I need not repeat them. The scheme of the Act, as appears from section 3 thereof is to give power to the State Government, whenever it 569 thinks it necessary and expedient to provide amenities, like communications, water supply and electricity for the better development of any area in the State where , in any mine is situated or to provide for the welfare of residents or workers in any such area within. which persons employed in a mine or a group of mines reside or work, to constitute such an area to be a mining area for the purposes of the Act, to define the limits of the area, to include within such area any local area contiguous to the same and defined in the notification and to exclude from such area any local area comprised therein and defined in the notification. A notification under section 3 is made, after hearing objections from owners or lessees of mines. After such an area is con stituted under section 3, a cess is imposed under section 4 on all extracted minerals from any mine in any such area at the rate not exceeding five per centum of the value of the minerals at the pit 's mouth. The cess so collected is credited to a fund called the Orissa Mining Area Development Fund created under section 5 of the Act, besides other amounts with which we are not concerned in this case. The Fund is to be applied to meet expenditure incurred in connection with such measures, which in the opinion of the State Government, are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of mining areas and to meet the welfare of labour and other persons residing or working in the mining areas. Then come other provisions for working out the above provisions including section 8, which gives power to the State Government to frame rules to carry. into effect the purposes of the Act. The Rules were framed under the Act in January, 1955. The constitutional competence of the Orissa State Legislature to levy the cess under the Act is attacked on two main grounds. In the first place, it is urged that the cess is in pith and substance a duty of excise under item 84 of List I of the Seventh Schedule and therefore the levy of such a cess is beyond the competence of the Orissa State Legislature. In the second place, it is urged that even if the cess is a fee, in view 570 of the two Acts of the Central Legislature and Parliament, namely, The Mines and Minerals (Regulation and Development) Act, No. LIII of 1948 and The Industries (Development and Regulation) Act, No. LXV of 1951, the Orissa Legislature was not competent to pass the Act. The petition has been opposed on behalf of the State of Orissa and the main contentions urged on its behalf are that the cess is a fee properly so called and not a duty of excise and therefore the Orissa State Legislature was competent to levy it and the two Central Acts do not affect that competence. In the alternative it has been urged that even if the cess is a tax the State Legislature was competent to levy it under item 50 of List If of the Seventh Schedule. The first question therefore that falls for consideration is whether the cess in this ' ease is a tax or a fee. Difference between a tax properly so called and a fee properly so called came up for consideration before this Court in three cases in 1954 and was considered at length. In the first of them, namely, The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt it was pointed out that "though levying of fees is only a particular form of the exercise of the taxing power of the State, our Constitution has placed fees under a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself". It was also pointed that "the essence of a tax is compulsion, that is to say, it is imposed under statutory power without the taxpayer 's consent and the payment is enforced by law. The second characteristic of a tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when (1) ; 571 collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the tax payer and the public authority. Another feature of taxation is that as it is a part of the common burden, quantum of imposition upon the tax payer depends generally upon his capacity to pay. " As to fees, it was pointed out that "a 'fee ' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. " Finally, it was pointed out that "the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. . . Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. " The consequence of these principles was that "if, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision be co related to the expenses incurred by Government in rendering the services. . . If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax." Having laid down these principles, that case then considered the vires of section 76 of the Madras Hindu Religious and Charitable Endowments Act, No. XIX of 1951, and it was pointed out that the material fact which negatived the theory of fees in that case was that the money raised by levy of the contribution was not ear marked or specified for defraying the expenses 572 that the Government had to incur in performing the services. All the collections went to the consolidated fund of the State and all the expenses had to be met not out of those collections but out of the general revenues by a proper method of appropriation as was done in the case of other government expenses. That in itself might not be conclusive, but in, that case there was total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution under the provision of section 76 and in those circumstances the theory of return or counter payment or quid pro quo could not have any possible application to that case. Consequently, the contribution levied under section 76 was held to be a tax and not a fee. In the second case of Mahant Sri Jagannath Ramanuj Das vs The State of Orissa (1), a similar imposition by the Orissa Legislature came up for consideration. After referring to the earlier case, it was pointed out that "two elements are thus. essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly. But this by itself is not enough to make the imposition a fee, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State to be spent for general public purposes." The Orissa imposition was held to be a fee because the collections made were not merged in the general public revenue and were meant for the purpose of meeting the expenses of the Commissioner and his office which was the machinery set up for due administration of the affairs of the religious institution. They went to constitute a fund which was contemplated by section 50 of the Orissa Act and this fund was specifically set apart for rendering services involved in carrying out the provisions of the Act. The third case, namely, Ratilal Panachand Gandhi (1) ; 573 vs The State of Bombay (1) came from Bombay. 58 of the Bombay Act, No. XXIX of 1950, provided for an imposition in proportion to the gross annual income of the trust. This imposition was levied for the purpose of due administration of the trust property and for defraying the expenses incurred in connection with the same. After referring to the two earlier cases, the Court went on to say that "taxis a common burden and the only return which the taxpayer gets is participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus in fees there is always an element of quid pro quo which is absent in a tax. . But in order that the collections made by the Government can rank as fees, there must be co relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services. " It was then pointed out that the contributions, which were collected under section 58, were to be credited in the Public Trusts Administration Fund as constituted under section 57. This fund was to be applied exclusively for the payment of charges for expenses incidental to the regulation of public trusts and for carrying into effect the provisions of the Act. The imposition therefore was in that case held to be a fee. These decisions clearly bring out the difference between a tax and a fee and generally speaking there is always an element of quid pro quo in a fee and the amount raised through a fee is co related to the expenses necessary for rendering the services which are the basis of quid pro quo. Further, the amount collected as a fee does not go to augment the general revenues of the State and many a time a special fund is created in which fees are credited though this is not absolutely necessary. But as I read these deci sions, they cannot be held to lay down that 'What is in pith and substance a tax can become a fee merely (1) [1954] S.C.R. 1055. 574 because a fund is created in which collections are credited and some services may be rendered to the persons from whom collections are made. If that were so, it will be possible to convert many taxes not otherwise leviable into fees by the device of creating a special fund and attaching some service to be rendered through that fund to the persons from whom collections are made. I am therefore of opinion that one must first look at the pith and substance of the levy, and if in its pith and substance it is not essentially different from a tax it cannot be converted into a fee by creating a special fund in which the collections are credited and attaching some services to be rendered through that fund. Let me then look at the pith and substance of the cess, which has been imposed in this case. The cess consists of a levy not exceeding five per centum of the value of the minerals at the pit 's mouth on all extracted minerals. Prima facie such a levy is nothing more nor less than a duty of excise. Item 84 of List I gives power to levy duties of excise exclusively to the Union and is in these terms : "Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry. " This item gives power to Parliament to impose duties of excise on all goods manufactured. or produced in India with certain exceptions mentioned therein. Taking this particular case, coal is produced from the mine and would clearly be covered by the words " other goods produced in India" and a duty of excise can be levied on it. What then exactly is meant by a duty of excise? Reference in this connection may be made to Governor General in Council vs Province of Madras (1). In that case the point arose whether the sales tax imposed by the Madras Legislature was a duty of excise. The Privy Council pointed out that (1) (1945) L.R. 72 I.A. 91. 575 "in a Federal constitution in which there is a division of legislative powers between Central and Provincial legislatures, it appears to be inevitable that controversy should arise whether one or other legislature is not exceeding its own, and encroaching on the other 's, constitutional legislative power, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax but its real nature, its 'pith and substance ' as it has sometimes been said which must determine into what category it falls. " The Privy Council went on to consider what a duty of excise was and said that "it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods. Though sometimes a duty of excise may be imposed on first sales, a duty of excise and a tax on the sale of goods were separate and distinct imposts and in law do not overlap." The Privy Council approved of the decisions of the Federal Court in re The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (1) and The Province of Madras vs Messrs. Boddu Paidanna and Sons (2). It seems to have been urged that because in some cases a duty of excise may be levied on the occasion of the first sale and a sales tax may also be levied on the same occasion, there is really no difference between the two. It is however clear that a duty of excise is primarily a tax on goods manufactured or produced; it is not a tax on the sale of goods, though the taxing authority may as a matter of concession to the producer not charge the tax immediately the goods are produced and may postpone it, to make it easy for the producer to pay the tax, till the first sale is made by him; nevertheless the charge is still on the goods and is therefore a duty of excise. On the other hand, a sales tax can only be levied when a sale is made and there is nothing to prevent its levy on the first sale. The two concepts (1) (2) (1948) F.C.R. go. 576 are however different and, as the Privy Council pointed out, a sales tax and a duty of excise are separate and distinct imposts and in law do not overlap. The pith and substance of a duty of excise is that it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. Let me therefore see what the Orissa Legislature has done in the present case. It has levied a cess at a rate not exceeding five per centum on the value of minerals at the pit 's mouth on all extracted minerals. All the extracted minerals are nothing other than goods produced and the cess is levied on the goods produced at a rate not exceeding five per centum of the value at the pit 's mouth. The cess therefore in the present case cannot be anything other than a duty of excise. The pith and substance of the cess in this case falls fairly and squarely within entry 84 of List I and is therefore a duty of excise, which cannot be levied by the Orissa State Legislature. I may in this connection refer to the cesses levied by the Central Legislature and Parliament by Act XXXII of 1947 and by the Act No. LXV of of Act XXXII of 1947 lays down that there shall be levied and collected as a cess for the purposes of that Act a duty of excise on all coal and coke dispatched from collieries at such rate not less than four annas and not more than eight annas per ton as may from time to time be fixed by the Central Government by notification in the Official Gazette. This is obviously a tax on the goods produced, the basis of the tax being so much per ton. Again sec. 9 of Act LXV of 1951 lays down that there may be levied and collected as a cess for the purposes of that Act on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order a duty of excise at a rate not exceeding two annas per centum of the value of the goods. This again is clearly a tax on goods produced or manufactured and is in the nature of a duty of excise, the basis of the tax being so much of the value of the goods. If these two taxes are duties of excise, 577 I fail to see any difference in pith and substance between these two taxes and the cess levied under the Act. It is however urged that the method employed in the Act for realising the cess is only a method of quantification of the fee and merely because of this quantification, the pith and substance of the impost does not change from a fee to a duty of excise. Reference in this connection was made to three cases of quantification. In Sir Byramjee Jeejeebhoy vs The Province of Bombay (1), a question arose with respect to a tax imposed on urban immovable property, whether it was a tax on lands and buildings. The challenge to the tax was on the ground that it was tax on income or capital value within items 54 and 55 of List I of the Seventh Schedule of the Government of India Act and could not therefore be imposed by the Bombay Legislature. It was held that the tax was a tax on lands and buildings within the meaning of item 42 of List II of the same Schedule and that the basis of the tax, which was the annual value, would not convert it into a tax on income or capital value. The High Court considered the pith and substance of the said Act and came to the conclusion that every tax on annual value was not necessarily a tax on income and it was held that the mode of assessment of a tax did not determine its character and one has to look to the essential character of the tax to decide whether it was a tax on income or on lands and buildings. Looking to the pith and substance of the tax it was held in that case that it was a tax on lands and buildings. That decision was in the circumstances of that case right because the intention of the legislature was not to tax the income of any one; the essential character of the tax in that case was to tax the lands and buildings and the annual value of the lands and buildings was only taken as a mode of levying the tax. In the present case, however, the very mode of the levy of the cess is nothing other than the levy of a duty of excise and therefore the principle of quantification for purposes of a fee cannot be extended to (1) I.L.R. 578 such an extent as to convert what is in pith and substance a tax into a fee on that basis. The next case to which reference was made is Municipal Corporation, Ahmedabad vs Patel Gordhandas Hargovandas (1). In that case the Ahmedabad Bo. rough Municipality had levied a rate on open lands and the basis of the levy was one per centum of the capital value of the land. It was urged that this amounted to a capital levy within entry 54 of List I; but the court repelled that contention and held that the levy was in pith and substance a tax on lands, which came within entry 42 of List II of the Seventh Schedule to the Government of India Act. A distinction was made between a tax on land which is levied on the basis of its capital value and a tax which is on capital treating it as an asset itself. This decision also, if I may say so with respect, is correct, for the basic idea was to tax lands and some method had to be found for doing so and the method evolved, though it might look like a capital levy, was in pith and substance not so. But the theory of quantification which is the basis of these two cases cannot be stretched so far as to turn levies which are in pith and substance taxes into fees, by the process of attaching certain services and creating a fund. The third case is Ralla Ram vs The Province of East Punjab (2). That was a case of a tax on lands and buildings and annual value was the basis on which the tax was levied. The Federal Court rightly pointed out that the pith and substance of the levy had to be seen and on that view it was not income tax but a tax on lands and buildings and the method adopted was merely a method of quantification. The Federal Court also pointed out that "where there is an apparent conflict between an Act of the Federal Legislature and an Act of the Provincial Legislature, we must try to ascertain the pith and substance or the true nature and character of the conflicting provisions and that before an Act is declared ultra vires, there should be an attempt to reconcile the two conflicting jurisdictions, and, only if such a reconciliation should prove (1) I.L.R. (2) 579 impossible, the impugned Act should be declared invalid. " It may also be pointed out that in all these three cases, one source of income of an individual or one item out of the total capital of an individual was the basis of calculation while income tax or capital levy is generally on the total income or the total capital of a person. That aspect must have gone into the decision that the method employed was merely a mode for imposing a tax on lands and buildings. In the present case, however, I see no difference between the method of imposing a duty of excise and the method employed in the Act for imposing a cess a matter which will be clear from the cesses imposed under the two Central Acts already referred to (No. XXXII of 1947 and No. LXV of 1951). It is not as if there could be no method of imposing a fee properly so called in this case except the one employed. Two methods readily suggest themselves. A lump sum annual fee could be levied on each mine even on a graded scale depending on the size of the mine as evidenced by its share capital. Or a similar graded fee could be levied on each mine depending on its size determined by the number of men employed therein. Where therefore the result of quantification is to bring a particular impost entirely within the ambit of a tax it would not be right to say that such an impost is still a fee, because certain services have to be rendered and a fund has been created in which collections of the impost are credited. If this were permissible many taxes not otherwise leviable would be converted into fees by the simple device of creating a special fund and attaching certain services to be rendered from the amount in that fund. That would in my opinion be a colourable exercise of the power of legislation, as explained in K. C. Gajapati Narayan Deo vs The State of Orissa (1). Let me illustrate how taxes can be turned into fees on the so called basis of quantification with the help of the device of creating a fund and attaching certain services to be rendered out of monies in the fund. Take the case of income tax under item 82 of List I of the Seventh Schedule, which is exclusively reserved (1) ; 580 for the Union. Suppose that some State Legislature wants to impose a tax on income other than agricultural income in the garb of fees. All that it has to do is then to create a special fund out of the amounts collected and to attach rendering of certain services to the fund. All that would be necessary would be to define the services to be rendered so widely that the amount required for the purpose would be practically limitless. In that case there would be no difficulty in levying any amount of tax on income, for the amount collected would always be insufficient for the large number of services to be rendered. What has to be done is to find out a number of items in Lists II and III of the Seventh Schedule in respect of which fees can be levied by the State Legislature. These fees can be levied on a total basis for a large number of services under various entries of Lists II and III. A fund can be created, say, for rendering services of various kinds to residents of one district. In order to meet the expenses of tendering such services, suppose, the legislature imposes a tax on every one in the district at 10 per centum of the net total income (other than agricultural income); the amount so collected is put in a separate fund and ear marked for such special services to be rendered to the residents of that district. Can it be said that such a levy is a fee justified under various entries of Lists II and III, and not a tax on income, on the ground that this is merely a mode of quantification? As an instance, take, item 6 of List II, "Public health and sanitation, hospitals and dispensaries"; item 9, "Relief of the disabled and unemployable"; item II, Education; item 12, Libraries, museums and similar institutions"; item 13, communications, that is to say, roads, bridges and other means of communications; item 17, "Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power"; and item ', 25, "Gas and gas works"; item 23 of List III, "Social security and social insurance, employment and unemployment"; item 24, "Welfare of labour including conditions of work, provident funds, employers ' liability workmen 's compensation, invalidity and old age 581 pensions and maternity benefits"; item 25, "Vocational and technical training of labour"; and item 38, "Electricity". Assume that a fund is created for rendering, these services to the residents of a district. The State Legislature is entitled to impose fees for rendering these services to the residents of the district; the costs of these services would obviously be limitless and in order to meet these costs, the State legislature levies a consolidated fee for all these purposes at 10 per centum of the total net income on the residents of the district (excluding his agricultural income) as a measure of quantification of the fee. Can it be said in the circumstances that such a levy would not be Income tax, simply because a fund is created to be used in the district where collections are made and these services have to be rendered out of the fund so created to the residents of that district and to no others? The answer can only be one, viz., that the nature of the impost is to be seen in its pith and substance; and if in pith and substance it is income tax within item 82 of List I of the Seventh Schedule it will still remain income tax in spite of the creation of a fund and the attaching of certain services to the monies in that fund to be rendered in a particular area. Such an impost can never be justified as a consolidated fee on the ground that it is merely a method of quantification. Compare what has been done in this case. Sec. 3 of the Act which refers to the services to be rendered mentions communications, that is,, roads, bridges and other means of communication (barring those given in List I), water supply and electricity, for the better development of the area. These three items themselves would mean expenditure of such large amounts that anything could be charged as a fee to meet the costs, particularly in an undeveloped State like Orissa. Further, the section goes on to mention provision for the welfare of residents or workers in any such area, which would include such things as social security and social insurance, provident funds, employer 's liability, workmen 's compensation, invalidity and old age pensions and maternity benefits and may be even employment and unemployment. Again large funds would 74 582 be required for these purposes. Therefore, the services enumerated in section 3 being so large and requiring such large sums, any amount can be levied as a fee and in the name of quantification any tax, even though it may be in List I, can be imposed; and that is exactly what has been done, namely, what is really a duty of excise has been imposed as a fee for these purposes which fall under items 13 and 17 of List II and 23, 24 and 38 of List III. There can be no doubt in the circumstances that the levy of a cess as a fee in this case is a colourable piece of legislation. I do not say that the Orissa State Legislature did this deliberately. The motive of the legislature in such cases is irrelevant and it is the effect of the legislation that has to be seen. Looking at that, the cess in this case is in pith and substance nothing other than a duty of excise under item 84 of List I and therefore the State legislature was incompetent to levy it as a fee. The next contention on behalf of the State of Orissa is that if the cess is not justified as a fee, it is a tax under item 50 of List II of the Seventh Schedule. Item 50 provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development. This raises a question as to what are taxes on mineral rights. Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise. If taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes on mineral rights and duties of excise under item 84 of List I. A comparison of Lists I and II of the Seventh Schedule shows that the same tax is not put in both the Lists. Therefore, taxes on mineral rights must be different from duties of excise which are taxes on minerals produced. The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines. The usual method of working them is for the owner of the mine to grant mining leases to those who have got the capital to work the mines. There should 583 therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted. Thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that. Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted would be duties of excise. It is said that, there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub leases there would be no way of levying tax on mineral right, ,. It is enough to say that these cases also, rare though they are, present no difficulty. Take the case of taxes on annual value of buildings. Where there is a lease of the building, the annual value is determined by the lease money; but there are many cases where owners themselves live in buildings. In such cases also taxes on buildings are levied on the annual value worked out according to certain rules. There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which, for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else. There can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced. Therefore the present case is not a tax on mineral rights; it is a tax on the minerals actually produced and can be no different in pith and substance from a tax on goods produced which comes under Item 84 of List I, as duty of excise. The present levy therefore under section 4 of the Act cannot be justified as a tax on mineral rights. In the view I have taken, it is not necessary to consider the other point, raised on behalf of the petitioners, namely, that even if it is a fee, in view of the two Central Acts (mentioned earlier) the, Orissa Legislature was not competent to pass the Act. I would 584 therefore allow the petition, and declare that the Orissa Mining Areas Development Fund Act, 1952, is beyond the constitutional competence of the Orissa Legislature to pass it. The whole Act must be struck down because there will be very little left in the Act if section 4 falls as it must. The legislature would never have passed the Act without section 4. By COURT. In accordance with the majority Judgment of the Court, the Writ Petition is dismissed with costs.

The petitioners challenged the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952, which by section 3 empowered the State Government to constitute mining areas for the purpose of providing them with certain amenities after hearing objections from the lessees, by section 4 to impose and collect a cess not exceeding 5% of the valuation of the minerals at the pit 's mouth and by section 5 created a fund to which the cess was to be credited. The petitioners ' case, inter alia, was that the impugned Act and the rules made thereunder were ultra vires the powers of the State Legislature, the cess levied thereunder was not a fee but a duty of excise on coal within Entry 84 of List I of the Seventh Schedule to the Constitution and repugnant to Coal Mines Labour Welfare Fund Act, 1947 (Act XXXII of 1947), and, alternatively, even supposing it was a fee relatable to Entries 23 and 66 of List II, it was hit by Entry 54 of List I read with the Mines and Minerals (Regulation and Development) Act 1948 (Act LIII of 1948), or by Entry 52 of List I read with the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951). It was urged on behalf of the State, inter alia, that the cess was a fee and not a duty of excise and the competence of the State Legislature to levy it was not affected by the Central Acts. Held (per Gajendragadkar, Sarkar, Subba Rao and Mudholkar, JJ.), that the cess imposed by the Act was a fee relatable to Entries 23 and 66 of List II of the Seventh Schedule to the Constitution and the Constitutional validity of the impugned Act was beyond question. Although there can be no generic difference between a tax and a fee since both are compulsory exactions of money by public authorities, there is this distinction between them that whereas a tax is imposed for public purposes and requires no consideration to support it, a fee is levied essentially for services rendered and there must be an element of quid pro quo between the person 538 who pays it and the public authority that imposes it. While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose. Whether a cess is one or the other would naturally depend on the facts of each case. If in the guise of a fee, the Legislature imposes a tax, it is for the Court on a scrutiny of the scheme of the levy, to determine its real character. The distinction is recognised by the Constitution which while empowering the appropriate Legislatures to levy taxes under the Entries in the three lists refers to their power to levy fees in respect of any such matters, except the fees taken in court, and tests have been laid down by this Court for determining the character of an impugned levy. Matthews vs Chicory Marketing Board, ; , The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; , Mahant Sri Jagannath Ramanuj Das & Any. vs The State of Orissa, ; , and Ratilal Panachand Gandhi vs The State of Bombay, [1954] S.C.R. 1055, referred to. P. P. Kutti Keva & Ors. vs The State of Madras, A.I.R. , Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co., and Parton & Any. vs Mils Board (Victoria), (1949) 80 C.L.R. 229, considered and held inapplicable. 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 being of no consequence that the State may ultimately and indirectly be benefited by it. So judged, the scheme of the impugned Act leaves no manner of doubt that the levy authorised by it is a fee and not a tax. The amount of the levy must depend on the extent of the services sought to be rendered and if they are proportionate, it would be unreasonable to say that since the impost is high it must be a duty of excise. The rate specified by section 4(2) of the Act, therefore, cannot by itself alter the character of the levy and constitute a trespass by the State Legislature on the legislative powers of the Parliament under Entry 84 of the List I. Nor can the method prescribed by the Legislature for re covering the levy by itself alter its character. The method is a matter of convenience and, though relevant, has to be tested in the light of other relevant circumstances. It is not permissible to challenge the vires of a statute relatable to an Entry in List II solely on the ground that the method adopted for the recovery of the impost can and generally is adopted in levying a duty of excise. Ralla Ram vs The Province of East Punjab, , Byramjee Jeejeebhoy vs The Province of Bombay & Anr. I.L.R. 539 and Governor General in Council vs Province of Madras, (1945) 'L.R. 72 I.A. 91, considered. The limitation imposed by the latter part of Entry 23 of List II is a limitation on the legislative competence of the State ' Legislature itself and the test whether a statute passed by the State Legislature thereunder was ultra vires would be whether the requisite declaration under Entry 54, List I, has been made by Parliament by law covering the same field or not; it is not necessary in order to make the declaration effective that rules should also be made and enforced. Although by operation of article 372 of the Constitution Act LIII of 1948 was an existing Act substantially covering the same field as covered by the impugned Act, there was no adaptation of section 2 of that Act whereby a declaration implied by it could be said to have been adapted to a declaration by Parliament. Clause 16 of the Adaptation of Laws Order, 1950, properly construed, cannot be held to refer to the Dominion Legislature and equate it with the Parliament. It can be resorted to only where the existing law expressly refers to some authority that can be equated with the corresponding new authorities. Since the Dominion Legislature was not so referred to, its competence under the Constitution Act of 1935, repealed by the Constitution of India, was clearly outside the clause. Nor can Cl. 21 of the order be of any help to the petitioners. Consequently, in the absence of the requisite Parliamentary declaration, the competence of the Orissa State Legislature under Entry 23 read with Entry 66 of the List II was not impaired and the impugned Act must be deemed to have repeal ed the Central Act, so far as that State was concerned. This case incidentally discloses that in regard to the requisite Parliamentary declaration prescribed by Entry 54 in List I in its application to the pre constitution Acts under corresponding Entry 36 in List I of the Constitution Act of 1935, there is a lacuna which has not been covered by any clauses of the Adaptation of Laws Order, 1950. Nor was the impugned Act ultra vires the State Legislature by operation of Entry 52 of List I read with section 2 of the Industries (Development and Regulation) Act, 1951 (LXV of 1951). That Act, in pith and substance, deals more directly with the control of certain specified industries including the coal industry, while the impugned Act is concerned with the development of the mining areas notified under it. The field covered by the two Acts was not, therefore, the same. per Wanchoo, J. In order to determine whether a levy is a tax or a fee, what has to be considered is the pith and sub stance of the levy. Where the levy in pith and substance is not essentially different from a tax, it cannot be converted into a fee by crediting it to a special fund and attaching certain services to it. 540 The Commissioner, Hindu Religious Endowments, Madras, vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; , Mahant Sri Jaannath Ramanuj Das vs The State of Orissa, ; and Ratilal Panachand Gandhi vs The State of Bombay, [1954] S.C.R. 1055, discussed. A duty of excise in pith and substance is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is different and distinct from a sales tax and in law they do not overlap. Governor General in Council vs Province of Madras, 72 I.A. 91, referred to. What the impugned Act did was to provide for the levying of the cess on the goods produced at a rate not exceeding five per centum of the value at the pit 's mouth. The cess was, therefore, in pith and substance a duty of excise falling within Entry 84 of List I, which the State legislature could not levy. It was not correct to say that the method employed by the impugned Act for realising the cess was a mere method of quantification and did not affect its character which was that of a fee. In the present case the very mode of the levy of the cess is nothing other than the levy of a duty of excise, and, therefore, the principle of quantification for purposes of a fee could not be so extended as to convert what was in pith and substance a tax into a fee. Sri Byramjee Jeejeebhoy vs The Province of Bombay, I.L.R. , Municipal Corporation, Ahmedabad vs Patel Gor dhandas Hargovandas, I.L.R. and Ralla Ram vs The Province of East Punjab, , considered. K. C. Gajapati Narayan Deo vs The State of Orissa, ; , referred to. The cess levied under section 4 of the Act could not be justified as a tax on mineral rights under Entry 50 of List II of the Seventh Schedule and the impugned Act was in effect a colourable piece of legislation.

In exercise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 the Government of Tamil Nadu issued a Notification G.O. Ms. 2000 (Homo Department) dated 16th August, 1976 exempting all the buildings owned by the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions of the Act. The tenants challenged the Notification granting total exemption through the said Notification on three grounds namely; (a) that section 29 of the Act suffers from the vice of excessive delegation of legislative powers in as much as it vests in the State Government unguided and uncontrolled discretion in the matter of granting exemptions and is, therefore, violative of Article 14 of the Constitution; (b) that the Notification dated 16th August, 1976 deprives the tenants of all such buildings (belonging to Hindu. Christian and Muslim religious public trusts and public charitable trusts) of the equal protection of the beneficial provisions of the Act which is available to the tenants of other buildings and as such the same is discriminatory offending against the equal protection clause of Article 14; and (c) that in any event the total exemption from all the provisions of the Act granted to such buildings, where partial exemption would have sufficed is excessive, unwarranted and unsupportable. The State Government and the respondent landlords have refuted all the grounds on which the exemption has been challenged and further sought to justify the grant of total exemption mainly on the basis that the freedom (right) to recover the reasonable market rent would be ineffective without the freedom to evict the tenant. Dismissing the writ petitions and the civil appeals the Court, 399 ^ HELD: 1.1 In view of the decision of the Supreme Court in P.J. Irani vs The State of Madras, ; dealing with an identical provision contained in the earlier Madras enactment the challenge to the Constitutional validity of section 29 cannot be sustained. [405A B] P. J. Irani vs State of Madras, ; ; State of Madhya Pradesh vs Kanhaiyalal, 1970 (15) M.P.L.U SC 973 relied on. The rationale behind the conferal of such power to grant exemptions or to make exceptions is that an inflexible application of the provisions of the Act may under some circumstances result in unnecessary hardship entirely disproportionate to the good which will result from a literal enforcement of the Act and also the practical impossibility of anticipating in advance such hardship to such exceptional cases. In the matter of beneficial legislations also there are bound to be cases in which an inflexible application of the provisions of the enactment may result in unnecessary and undue hardship not contemplated by the legislature. The power to grant exemption under section 29 of the Act, therefore, has been conferred not for making any discrimination between tenants and tenants but to avoid undue hardship or abuse of the beneficial provisions that may result from uniform application of such provisions to cases which deserve different treatment. Of course, the power to grant exemption has to be exercised in accordance with the policy and object of the enactment gatherable from the preamble as well as its operative provisions without subverting the general purpose of the enactment. [406G H, 407A B] P. J. Irani vs State of Madras, ; relied on. Gorieb vs Fox, [1926] 71 Lawyers Edition at page 1230 quoted with approval . That Tamil Nadu Act is a piece of beneficial legislation intended to remedy the two evils of rackrenting (exaction of exhorbitant rents) and unreasonable eviction generated by a large scale of influx of population to big cities and urban areas in the post Second World War period creating acute shortage of accommodation in such areas and the enactment avowedly protects the rights of tenants in occupation of buildings in such areas from being charged unreasonable rents and from being unreasonably evicted therefrom. The Legislature itself has made a rational classification of buildings belonging to government and buildings belonging to religious, charitable, educational and other public institutions and the different treatment accorded to such buildings under section 10(3) (b) of the Act, which obviously proceeds on the well founded assumption that the government as well as the landlords of such buildings are not expected to and would not indulge in rack renting or unreasonable eviction. This and similar other provisions crystalize the policy and the purposes of the Act and furnish the requisite guidance which can legitimately govern the exercise of power conferred on the State Government under section 29 of the Act The power to grant exemptions or make exceptions could be legitimately exercised by the State Government in areas or cases where the mischief sought to be remedied by 400 the Act is neither prevalent nor apprehended as also in cases (individual or class of cases) where a uniform or inflexible application of the law is likely to result in unnecessary or undue hardship (here the landlords) or in cases where the beneficial provision is likely to be or is being abused by persons for whom it is intended there the tenants) [407D E, 408F H, 409A] 3.1. Public religious and charitable endowments or trusts constitute a well recognised distinct group in as much as they not only serve public purposes but the disbursement of their income is governed by the objects with which they are created and buildings belonging to such public religious and charitable endowments or trusts clearly fall into a distinct class different from buildings owned by private landlords. Therefore, their classification into one group done by the State Government while issuing the impugned notification must be regarded as having been based on an intelligible differentia. [409F G] 3.2. In view of the counter affidavit filed by the State Government dated 10 2 1981 and the supplementary counter affidavit dated 24th September, 1983 to the effect that the government was satisfied that "in all these cases, the rent paid by the tenants was very low, meagre and that the provisions of fixation of fair rent under the Act would not meet the ends of justice and the situation will still continue in which the tenant will be exploiting the situation and the helplessness of the public religious trusts and charitable institutions and hence they decided to withdraw the protection given under the Act to the tenants of such buildings", not having been challenged by way of rejoinder affidavits by the petitioners/appellants, it is clear that buildings belonging to such public religious and charitable endowments or trusts clearly fell into a class where undue hardship and injustice relating to them from the uniform application of the beneficial provisions of the Act needed to be relieved and the exemption granted will have to be regarded as being germane to the policy and purposes of the Act. In other words, the classification made has a clear nexus with the object with which the power to grant exemption has been conferred upon the State Government under section 29 of the Act. [411C, 412B G] State of Rajasthan vs Mukanchand and Others, ; ; held inapplicable. Granting total exemption cannot be regarded as excessive or unwarranted. The two objectives of the enactment, namely, to control rents and to prevent unreasonable eviction are interrelated and the provisions which subserve these objectives supplement each other It is obvious that if the trustees of the public religious trusts and public charities are to be given freedom to charge the normal market rent then to make that freedom effective it will be necessary to arm the trustees with the right to evict the tenants for non payment of such market rent. The State Government on materials before it came to the conclusion that the 'fair rent ' filled under the Act was unjust in case of such buildings and it was necessary to permit the trustees of such buildings to recover from their tenants reasonable market rent and if that be so non eviction when reasonable market rent is not paid would be unreasonable and if the market rent is paid by the 401 tenants no trustee is going to evict them. Further, it is conceivable that trustees of buildings belonging to such public religious institutions or public charities may desire eviction of their tenants for the purpose of carrying out major or substantial repairs or for the purpose of demolition and reconstruction and the State Government may have felt that the trustees of such buildings should be able to effect evictions without being required to fulfil other onerous conditions which must be complied with by private landlord when they seek evictions for such purpose. [413D E, 414C G] 3.4. The manner in which exemption from rent control provisions should be granted, whether it could be partial or total and if so on what terms and conditions would be matters for each State Government to decide in the light of the scheme and provisions of the concerned enactment and the facts and circumstances touching the classification made. And if the State of Madras has thought fit to grant the exemption in a particular manner by the impugned notification is cannot be faulted. if to exemption so granted is not illegal or unconstitutional. [415A B]

The appellant owned a land which was held for the of miscellaneous inferior services and was classified as a Huzur Sanadi Inam land. The respondents were in possession of the land as tenarlts and were declared as purchasers under the Bombay Tenancy & Agricultural Lands Act, 1948. The Tenancy Act provides by section 32 that on 1st April, 1957, every tenant subject to certain conditions shall be deemed to have purchased from his landlord the land held by him as a tenant. The Bombay Legislature passed the Bombay Merged Territories Miscellaneous Alienations Abolition Act of 1955. The appellant contended that in view of the provisions of the Abolition Act, the relationship of landlord and tenant came to an end between the appellant and the respondents and that, therefore, respondents have no right to purchase the land. The contention of the appellant was negatived by the Agricultural Lands Tribunal which was confirmed in appeal by the special Deputy Collector and in revision by the Maharashtra Revenue Tribunal. A writ petition filed by the appellant in the High Court of Bombay was summarily dismissed Dismissing the appeal by Special Leave, ^ HELD: 1. By section 4 of the Abolition Act, all alienations in the Merged Territories were abolished with effect from the appointed date. Sections 6, 7, 8 and 9 of the Abolition Act provide for the grant of occupancy rights hl respect of the erstwhile Inam Iands. There is no provision in that Act by virtue of which the relationship of landlord and tenant between the ex lnamdar and his tenant would stand extinguished. On the contrary, section 28 Provides that nothing contained in the Act shall in any way be deemed to effect the application of any of the provisions of the Tenancy Act to any alienated land or the mutual rights and obligations of a landlord and his tenants save in so far as the said provisions are in any way inconsistent with the express provisions of the Act. The provisions of the Tenancy Act contained in section 32 are in no way inconsistent with any of the express provisions of the Abolition Act. [495 A, B C, & D] 2. Section 32(O) of the Tenancy Act applies only to tenancies created after the tiller 's day. [495E] 3. The object of the Abolition Act was the elimination of Inamdars as intermediaries and not the eviction of the tillers of the soil. [495G] 4. Section 32G(6) of the Tenancy Act shows that nothing contained in the Abolition Act can affect the tenant 's right of Purchase under section 32, even if any land is regranted to the holder under the Abolition Act on condition that it was not transferable. [496A B]

The petitioner, an associations of dealers engaged in the business of selling dry fruit in North India, who purchase dry fruits either locally or through imports from outside India, challenged the grant of additional licences to the respondents diamond exporters, under Article 32 of the Constitution. On behalf of the petitioners, it was contended: (i) that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy; (ii) that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and, therefore, the diamond exporters are not entitled to import dry fruit; and (iii) that the import of dry fruit is covered by item 121 in Appendix 2 Part B (List of Restricted Items) of the Import Policy 1985 88 and, therefore, the respondents are not entitled to resort to Item 1 of Appendix 6. On behalf of the respondents, it was contended: (i) that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial); (ii) that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86; (iii) that item 121 of Appendix 2 Part B (List of Restricted Items) is not attracted because it refers to "consumer goods", and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6; and (iv) that the petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated, in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8, 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds. Allowing the Writ Petition and the Appeal, ^ HELD: 1. Respondents Nos. 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79. [97F] 2. Under the Import Policy 1978 79, dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence. No Additional Licence was required. By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could, therefore, be said to arise. The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (exluding cashewnuts). The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users (Industrial). Under the Import Policy 1978 79 their import was open to all persons.[94F,C] 3. The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity. Dry fruits (excluding cashewnuts) could be imported by all persons under Open General Licence under the Import Policy 1978 79. But under the Import Policy 1985 88 dry fruits (excluding cashewnuts and dates) are no longer open to import under Open General Licence. If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) is Chapter XIII of the Import Policy 1985 88, which declares that import of dry fruits (excluding cashewnuts and dates) will be allowed against licences issued to dealers engaged in this trade. [94E H] 4. The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates). They are, therefore, not entitled to the advantage of paragraph 181(3) of the Import Policy 1985 88. [95A B] 5. Dry fruits must be regarded as consumer goods of agricultural 90 origin. The words "agricultural origin" are used in the broadest sense. Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88. In as much as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial). "Consumables" are referred to in item 1 of Appendix 6 as goods meant for Actual Users (Industrial) "Consumer goods" in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users (Industrial).[95F H; 96A] 6. The expression "specifically banned" occurring in the order dated April 18, 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences. The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy. Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of the Import Policy 1978 79. Appendix 2 Part B (List of Restricted Items) was also the successor of Appendix 4 (List of Absolutely Banned Items). Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List. [96B E] The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79. The diamond exporters holding Additional Licences were, therefore, not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.[96F G] 7. The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits. The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88. Dry fruits are not included in that List and, therefore, they cannot be imported under Additional Licences. They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985. [97B C] 8. An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities. [97E] 91

The appellant applied on 14 10 1961 for a prospecting licence for an area of 833.53 acres under rule 9(1) of the Mineral Concessions Rules, 1960. The application was in order, in all respects, except to the extent that instead of Rs. 32/ , the fees payable, a sum of Rs. 24/ only was paid. However, on realisation of this mistake, he paid the deficit of Rs. 8/ on 28 12 1961 and, by way of abundant caution, made a fresh application on_26 2 1962. Respondent No. 1 had applied on 2 11 1961 for a prospecting licence for 748.16 acres out of which 272.40 acres were common with those for which the appellant had already applied. Since no orders were passed disposing of the applications of the appellant within 90 days of the making of it, the appellant filed a revision before the Central Government treating this omis sion on the part of the State to be tentamount to refusal of his application as provided by rule 11(1). On 20 10~1964, the Central Government asked the State Government to con sider the application of the appellant dated 14 10 1961 within the next 9 months. The State Government, instead of considering the application dated 14 10 1961 as directed, offered thrice, on 30 1 1965, 7 7 1965 and 2 4 1970, a prospecting licence for an area of 365 acres which was not accepted by him and his attempts by way of revision against these orders to the Central Government and a writ petition in the High Court failed. The State Government, however, on 22 6 1965, directed the grant of a prospecting licence to respondent No. 1 for an area including 272.40 acres in dispute which was actually executed in his favour on 30 4 1970. The appellant 's objection before the Collector against this was rejected. On 12 4 1973, the Central Government accepted the objection relating to 272.40 acres and opined that his application dated 14 10 1961 was earlier in point of lime within the meaning of section 11(2) of the Mines & Minerals (Regulation and Development) Act, 1957. Against this order the respondent No. 1 went to the High Court under article 226 of the Constitution. The High Court quashed the orders of the Central Government, by its order dated 12 3 1974 and held the application of the appellant dated 14 10 1961 not having been accompanied by the correct fee was no application at all in the eye of law. Accepting the appeal by special leave, the Court, HELD: (1) After considering legal position and all the facts and equities of the case, the Central Government correctly held, on the question of law before it, that the appellant 's application before the State Government was a valid one as it had been entertained without objection even if it was not accompanied, when filed, by the correct amount of fee. [706 A, E] (2) The Central Government had correctly relied upon an estoppel against the State Government. The deficiency in the fees having been duly accepted on behalf of the State Government, it was bound to proceed on the assumption that there was a proper application before it valid from the date of filing it. The State Government was precluded by its own deeds from denying the validity of the application. [706 A, E] 703 (3) There is no patent error upon the face of the record warranting a correction in exercise of its extraordinary jurisdiction under article 226 of the Constitution by the High Court in the instant case. On the other hand, High Court itself committed an apparent error in holding that an appli cation which has only to be accompanied by the fee would be considered validly filed on the date on which it was filed only if proper fees has been tendered with it when it was filed. [706 G H] (4) It is not very becoming for Governmental authorities when duties laid down by statutory rules having been per formed by them, to take shelter behind such technicalities for denying a citizen 's right to have his application con sidered and decided. Rule 11(1) of the Rules framed was a recognition of that right so that an applicant for a licence under the Rules could approach the Central Government in case the State Government did not pass the required orders within a reasonable time. [706 E F] (5) A right and reasonable procedure looks to substance rather than form of acts or transactions in order to deter mine their nature. There is no rule whatsoever which says that failure to submit the correct fee at the time of the filing of the application will make the application void or invalid. Rule 13 makes it clear, by differentiating between an application and the fee by which it has to be accompa nied. The fee can be refunded but the application made remains. The filing of the application is one thing and compliance of some annexed duty, which is legally separable, is another, unless a statute or a rule provides otherwise. [707 A, C, 708 H 709 C] (6) It is clear from section 19 that the Act itself provides what is void and ineffective where that is the intention. Section 19 attaches a voidness only to a grant made without due compliance. with all rules. It is nowhere said that the Act of making an application will be similarly void for breach of rules. [709 B C] (7) In the instant case, in view of the provisions of section 19 of the Act, a prospecting licence in favour of respond ent No. 1 was itself void to the extent of an area of 272.40 acres for which, a licence had already been properly applied for by the appellant. Unless the applicant 's application had been properly refused for a valid reason, he could not be denied the benefit of section 11(2) of the Act. It may be that a licence cannot be granted without making good the deficiency in fee which should accompany the application, but that does nor mean that a bona fide application accompa nied by an incorrectly calculated fee or a fee which is deficient by oversight could not be made at all or if made must be treated as void or of no effect whatsoever. [709 C G] (8) The use of the word "shall" in imposing a duty is not conclusive on the question whether the duty imposed is mandatory or directory. It is not the breach of every mandatory duty in performing a prescribed act that could make an action totally ineffective or void ab initio. The meaning of the. word "shall" in Rule 9(2) of the Mineral Concessions Rules, 1960, was only incidentally involved here. [707 B C]

Certain lands were situated in the erstwhile State of Baroda before it became a part of the State of Bombay by merger. The Bombay Tenancy and Agricultural Lands Act, 1948, was extended to Baroda on August 1, 1949. Suits were filed in the Civil Court by appellants landlord , against the respondents who were their tenants on the ground that the latter became trespassers with effect from the beginning of the new agricultural season in May, 1951. Decrees for possession were passed by the Civil Court in favour of landlords and the same were confirmed by the first appellate court. However, the High ' Court accepted the appeals and dismissed the suits. It was held that under the provisions of section 3 A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed to be a protected tenant from August 1, 1950 and that vested right could not be affected by the notification dated April 24, 1951 issued under section 89 (1) (d) of the Act of 1948 by which the land in suit was excluded from the operation of the Act. The notification dated April 24, 1931 had no retrospective effect and did not take away the protection 708 afforded to tenants by section 3A. The landlords came to this Court by special leave. It was conceded that the appellants ' suits for possession would fail if the Act applied to the tenancies in question, because in that case only revenue courts had jurisdiction to try them. However, reliance was placed on notification dated April 24,1951 which excluded the land in suit from the operation of the Act. It was also contended on behalf of appellants that the subsequent notification cancelling the first one, could not take away the rights which had accrued to them as a result of the first notification. Held, that the notification dated April 24, 1951 was cancelled by another notification dated January 12, 1953. The second notification was issued when the matter was still pending in the first court of appeal. The suits had therefore to be decided on the basis that there was no notification in existence which would take the disputed lands out of the operation of the Act. The first appellate court was wrong in holding that the suits had to be decided on the basis of facts in existence on the date of filing of the suits. Held, further, that the second notification cancelling the first one did not take away any rights which had accrued to the landlords. If the landlords had obtained an effective decree and had succeeded in ejecting the tenants as a result of that decree which may have become final between the parties, that decree may not have been re opened and the execution taken thereunder may not have been recalled. However, it was during. the pendency of the suit at the ap pellate stage that the second notification was issued cancelling the first and the court was bound to apply the law as it was on the date of its judgment. Held, also, that clauses (a), (b) and (c) of section 88(1) applied to things as they were on the date of the commence ment of the Act of 1948 whereas clause (d) authorised the State Government to specify certain areas as being reserved for urban non agricultural or industrial development, by notification in the Official Gazette, from time to time. It was specifically provided in clauses (a) to (c) that the Act, from its inception, did not apply to certain areas then identified, whereas clause (d) had reference to the future. The State Government could take out of the operation of the Act such areas as in its opinion should be reserved for urban nonagricultural or 'industrial development. Clause (d) would come into operation only upon such a notification being issued by the State Government. In Sukharam 's case, this Court never intended to lay down that the provisions of 709 clause (d) were only prospective and had no retrospective operation. Unlike clauses (a) to (c) which were clearly prospective, clause (d) had retrospective operation in the sense that it would apply to land which would be covered by the notification to be issued by the Government from time to 2 time so as to take that land out of the operation of the Act of 1948, granting the protection. So far as clauses (a) to (c) were concerned, the Act of 1948 would not apply at all to lands covered by them, but that would not take away the rights conferred by the Act of 1939 which was repealed by the Act of 1948. Section 89(2) specifically preserved the existing rights under the repealed Act. Sukharam 's case was about the effect of clause (c) on the existing rights under the Act of 1939 and it was in that connection that this Court observed that section 88 was prospective. However clause (d) is about the future, and unless it has the limited retrospective effect indicated earlier, it will be rendered completely nugatory. The intention of the legislature obviously was to take away all the benefits arising out of the Act of 1948 (but not those arising from the Act of 1939) as soon as the notification was made under clause (d). Sakharam vs Manikchand Metichand Shah, ; , explained.

There was 'much ado about nothing ' about these Writ Petitions under Article 32 of the Constitution. The petitions sought to challenge the Vires of sections 14(1)(b), 16(2) and, incidentally, sec. 30(ii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 on the ground of being arbitrary, discriminatory and unreasonable. The different petitions had different facts, and it was considered appropriate to deal with the facts of the writ petition filed by Prabhakaran Nair (Writ Petition No. 506 of 1986) as a typical case to appreciate the points in issue. In that case, the respondents landlords, after purchasing the premises in dispute from the erstwhile owner, filed an application for the eviction of the petitioner from the said premises on the grounds of non payment of rent under section 10(2)(1), unlawful sub letting under section 10(2)(ii)(a), causing damages to the premises under section 10(2)(iii) and demolition and reconstruction of the premises under section 14(1)(b) of the Tamil Nadu Rent Act. The Trial Court ordered eviction only under section 14(1)(b) of the Act for demolition and reconstruction, rejecting the other grounds. The appellate court dismissed the appeal of the petitioner. The High Court also dismissed the civil revision petition of the petitioner. The petitioner then filed a petition for Special Leave in this Court against the judgment and order of the High Court. In the meanwhile, the City Civil Court, on January 29, 1983, granted interim injunction, restraining the respondents landlords from demolishing the building till the disposal of an application filed by the petitioner in the suit, against the erstwhile owner and the present landlords for specific performance of an agreement to sell the premises to the petitioner. The injunction was stated to have been confirmed and was still continuing as the said application for specific performance was still pending in the City Civil Court. 2 This Court dismissed the petition for special leave, observing that the petitioner would be at liberty to file, if so advised, a writ petition under Article 32 of the Constitution, challenging the validity of section 14(1)(b) of the Act. The petitioner filed this writ petition, challenging the validity of sections 14(1)(b) and 16(2) of the Tamil Nadu Rent Act as being arbitrary, discriminatory, unreasonable and unconstitutional, and contending consequently that the eviction order passed against him under section 14(1)(b) was illegal. Several of the other writ petitions were on this issue. Dismissing the Writ Petitions, the Court, ^ HELD: In this case, the Court was not concerned with clause (ii) of section 30 of the Tamil Nadu Act, a challenge to the validity of which had been accepted by the Court in Rattan Arya and others vs State of Tamil Nadu and another; , and the section 30(ii) had been struck down as violative of Article 14 of the Constitution. [10E] Under section 14(1)(b) of the Act, a landlord could make an application to the Rent Controller for possession of a building, and the Rent Controller, if satisfied that the building was bona fide required by the landlord for the immediate purpose of demolition and such demolition was for the purpose of erecting a new building on the site of the building sought to be demolished, might pass an order, directing the tenant to deliver possession of the building to the landlord before a specified date. Under the provisions of the Act, the landlord has to commence the work of demolition not later than one month and the entire demolition work shall be completed before the expiry of three months from the date he recovers possession of the entire building, and in the case of massive buildings, demolition can take six months or even a year, in which case, for reasons to be recorded in writing, the controller may allow further period. During that period a tenant was bound to have found some other suitable alternative accommodation. In the case of a building vacated for repairs under section 14(1)(a) of the Act, a tenant may arrange for a temporary accommodation for a few months and then return to the building. It was not practicable and would be anomalous to expect a landlord to take back a tenant for a re constructed building after a long lapse of time during which the tenant must necessarily have found some other suitable accommodation. This was the true purpose behind section 14(1)(b) read with section 14(2)(b). In that view of the matter, the Court was unable to accept the submission that in providing for the re induction of the tenant in the case of repairs and not in the 3 case of re construction, there was any unreasonable and irrational classification without any basis. The absence of the provision for reinduction does not ipso facto make the provisions of the Act unfair or make the Act self defeating. [11G, 12A C,D G, 18E] As regards the submission that in most of the Rent Acts, there was a provision for re induction of the tenant after re construction, but in the case of the Tamil Nadu Act, there was no such provision and this was violative of Article 14 of the Constitution, Article 14 of the Constitution does not authorise the striking down of a law of one State on the ground that in contrast with a law of another State on the same subjects, its provisions are discriminatory, and nor does it contemplate a law of the centre or of the State dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of two enactments; the source of authority for the two statutes being different, Article 14 could have no application, as observed by a Constitution Bench of this Court in the State of Madhya Pradesh vs G.C. Mandawar; , [12G, 13A C] The Act sought to restore the balance in the scale which is otherwise weighted in favour of the stronger party which had larger bargaining power. The Act balances the scales and regulates the rights of the parties fairly and cannot be construed only in favour of the tenant. The main provision of section 14(1)(b) enables a landlord to make an application to the rent controller for possession of the building for demolition for re construction of a new building in its place. If the Rent Controller is satisfied with the bona fide need of the landlord, he may pass an order, directing the tenant to deliver possession of the building to the landlord before a specified date. There must be a bona fide need of the landlord. It could not be said that section 14(1)(b) was arbitrary and that excessive powers had been given to the landlords. [16G H, 17D E] The provisions of the Act imposed restrictions on the landlord 's right under the common law or the Transfer of Property Act to evict the tenant after the termination of his tenancy. The nature, the form and the extent of the restrictions to be imposed on the landlord 's right and consequent extent of the protection to be given to the tenants is a matter of legislative policy and judgment. It is inevitably bound to vary from one State to another according to the local, peculiar conditions prevailing in each State. When the Courts are confronted with the problem of a legislation being violative of Article 14, the Courts are not concerned with the unwisdom of the legislation. "In short, unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review" 4 observations of Krishna Iyer, J. in Murthy Match Works, etc., vs Asstt. Collector of Central Excise, etc., [1974]3 S.C.R. 121, may be seen in this connection. [18F H,19G] The purpose underlying section 14(1)(b) read with section 16(2) of the Act is to remove or mitigate the disinclination on the part of the landlords to expend moneys for demolition of the dilapidated buildings and reconstruct new buildings in their places. It is a matter of which judicial notice can be taken that the return from the old and dilapidated buildings is very meagre, and in several cases, such buildings prove uneconomic for the landlords, resulting in the deterioration of the condition of the buildings, and there are even collapses of such buildings. It is for this purpose that the landlord is given by section 14(1)(b), read with section 16, an incentive in the form of exemption from the provisions of the Act for five years in respect of the reconstructed building. The principle underlying such exemption is not discriminatory against the tenants, nor is it against the policy of the Act. It only serves as an incentive to the landlord for creation of additional accommodation to meet the growing housing needs. These provisions providing for exemption of the new buildings from the provisions of the Rent Act for a period of five years or ten years were upheld vide the decision of this Court in Punjab Tin Supply Co., Chandigarh and Ors. vs The Central Govt. & Ors. , ; at 216, 217. [20C G] The Court was unable to accept the submission that the absence of the right of induction of the tenants in the reconstructed premises was either arbitrary or unreasonable. The Act must be so construed that it harmonises the rights of the landlords and at the same time protects the tenants and also serves best the purpose of the Act, and one of the purposes of the Act is to solve the acute shortage of accommodation by making rational basis for eviction and encouraging building and re building which is at the root of all causes of shortage of accommodation. [23D;24E F] OBITER: There is an acute shortage of housing. The laws relating to letting and landlord and tenant in the different States have from different States ' angles tried to grapple with the problem. Yet, in view of the magnitude of the problem, the problem has become insoluble and the litigations abound and people suffer. More houses, therefore, must be built and more accommodation must be made available for the people to live in. The laws of the landlord and tenant must be made rational, humane, certain and capable of being quickly implemented. The landlords having premises in their control should be induced and 5 encouraged to part with the available accommodation on certain safe guards which will strictly ensure their recovery when wanted. Men with money should be given proper and meaningful incentives, as in some European countries, to build houses. Tax holidays for new houses can be encouraged. The tenants should also be given protection and security and certain amount of reasonableness in the rent. Escalation of prices in the urban properties, land, materials and houses must be rationably checked. The country very vitally and urgently requires a National Housing Policy if we want to prevent a major breakdown of law and gradual disillusionment of the people. After all shelter is one of our fundamental rights. The New National Housing Policy must attract new buildings, rationalise the rent structure and the rent provisions and bring certain amount of uniformity, leaving scope for sufficient flexibility amongst the States to adjust such legislation according to their needs. This Court and the High Courts should also be relieved of the heavy burden of the rent litigations. Tier of appeals should be curtailed. Laws must be simple, rational and clear. Litigation must come to an end quickly. Such New Housing Policy must comprehend the present and anticipate the future. The idea of a National Rent Tribunal on an All India basis should be examined. This has become an urgent imperative of today 's revolution. A fast changing society cannot operate with unchanging law and preconceived judicial attitude. [25B H] Rattan Arya and others vs State of Tamil Nadu and another; , ; State of Madhya Pradesh vs G.C. Mandawar; , ; section Kannappa Pillai and another vs B. Venkatarathnam, 78 Law Weekly 363; P.J. Irani vs State of Madras, ; ; section Kandaswamy Chettiar vs State of Tamil Nadu and another; , ; Raval & Co. vs K.C. Ramachandran & Ors., ; ; Murlidhar Agarwal and another vs State of U.P. and others; , ; Shah Bhojraj Kuverji Oil Mills and Ginning Factory vs Subbash Chandra Yograj Sinha, ; ; Metalware & Co., etc. vs Bansilal Sharma and Ors., etc. ; , ; Meta Ram vs Jiwan Lal, [1962] Suppl. 2.S.C.R. 623; Murthy Match Works, etc. vs Asstt. Collector of Central Excise, etc.; , ; In re: The Special Courts Bill, 1978, ; Punjab Tin Supply Co. Chandigarh & Ors. vs The Central Govt. State of Haryana and Anr., ; at 226, 227; Mehsin Bhai vs Hale and Company G. T. Madras, ; Metalware Co. etc. vs Bansilal Sharma and others, etc. ; , at 1117, 1118 Punjab Tin Supply Co., Chandigarh etc. vs The Central Govt. and Ors. , ; ; Motor General Traders and Anr. etc. vs 6 State of Andhra Pradesh and Ors. etc. ; , at 605; Atam Prakash vs State of Haryana and Ors., ; Panchamal Narayan Shenoy vs Basthi Venkatesha Shenoy, ; ; Jiwanlal & Co. and Ors. vs Manot and Co., Ltd., 64 Calcutta Weekly Notes, 932 at 937 and M/s. Patel Road ways Private Limited, Madras vs State of Tamil Nadu and Ors., , referred to.

S, the owner of some land in a village in Punjab, died leaving a widow and the respondent, his daughter by another wife. The widow sold a part of the land in February 1958 to the appellants, whereupon the respondent filed a suit for possession by pre emption of the land sold. The trial court decreed the suit and a first appeal was dismissed. A single bench of the High Court allowed the second appeal on the view that the respondent not being the widow 's daughter, had no right of pre emption under section 15(2) of the Punjab Pre emption Act, 1913, as amended by the Punjab Pre emption Amendment Act, 1960. However, a division bench in a Letters Patent appeal, relying on an amendment made by the PUnjab Preemption Amendment Act, 1964 in section 15(2)(b), reversed the judgment of the single bench and decreed the suit. It was contended in appeal to this Court that there is no indication in the Amendment Act of 1964 that it is to have retrospective operation and the amendment made by it should be deemed to be only prospective. HELD: The Amendment Act of 1964 was merely of a clarificatory or declaratory nature. Even in the absence of words which were inserted by the Amendment Act of 1964 under section 15(2)(b) the only possible interpretation and meaning of the words "in the son or daughter of such female" could have reference to and cover the son or daughter of the husband of the 'female. The entire scheme of section 15(2) is that the right of pre emption has been confined to the issues of the last male holder from whom the property which has been sold came by inheritance. [805 H] Under section 15(2)(b) the right of pre emption would vest firstly in the son or daughter of the husband of the female meaning thereby either her own off springs from the husband whom she had succeeded or the son or daughter of that husband even from another wife. [806 G] In the present case the respondent was entitled to exercise her right of pre emption under paragraph First of clause (b) of section 15(2) even before the Amendment of 1964. Whatever doubts existed they were removed by that Act which must be given retrospective operation. [807 E F] Ram Sarup vs Munshi & Ors, ; and Mota Singh vs Prem Parkash Kaur & Ors., I.L.R. [1961] Punj. 614, 627; referred to.

15 of 1959, 14 of 1960 and 21 of 1959. Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights. Frank Anthony and J. B. Dadachanji, for the petitioners (In Petns. Nos. 15 and 21 of 1959). 612 H. J. Umrigar, O. P. Rana and A. G. Ratnaparkhi, for the petitioners (In Petn. No. 14 of 1960). L. K. Jha and section P. Varma, for the respondent (In Petn. No. 15 of 1959). C. K. Daphtary, Solicitor General of India, M. Adhikari, Advocate General for the State of Madhya Pradesh and I. N. Shroff, for the respondent (In Petn. No. 14 of 1960). H. N. Sanyal, Additional Solicitor General of India and C. P. Lal, for the respondent (In Petn. No. 21 of 1959). November 23. The Judgment of the Court was delivered by section K. DAS, J. These three writ petitions have been heard together, as they raise common questions of law and fact. They relate, however, to three different enactments made by the Legislatures of three different States Bihar in writ petition No. 15, Uttar Pradesh in writ petition No. 21, and Madhya Pradesh in writ petition No. 14. The petitioners in the several petitions have challenged the 'validity of a number of provisions of the enactments in question and, in some cases, also of the rules made thereunder. The impugned provisions are similar in nature, but are not exactly the same. Therefore, we shall first state in general terms the case of the petitioners and then consider in detail and separately the impugned provisions in each case. But before we do so, it is necessary to refer to some background history of the legislation under consideration in these cases. In the year 1958 this Court had to consider the validity of certain provisions of three Acts: (1) The Bihar Preservation and Improvement of Animals Act, (Bihar Act II of 1956); (2) the Uttar Pradesh Prevention of Cow Slaughter Act, 1955 (U. P. Act 1 of 1956); and (3) the Central Provinces and Berar Animal Preservation Act, 1949 (C. P. and Berar Act LII of 1949). The Bihar Act put a total ban on the slaughter of all 613 categories of animals of the species of bovine cattle. The U. P. Act put a total ban on the slaughter of cows and her progeny which included bulls, bullocks, heifers and calves. The C. P. and Berar Act placed a total ban on the slaughter of cows, male or female calves of cows, bulls, bullocks, and heifers, and the slaughter of buffaloes (male or female, adults or calves) was permitted only under a certificate granted by the proper authorities. These three Acts were enacted in pursuance of the directive principle of State policy contained in article 48 of the Constitution. The petitioners who challenged the various provisions of the aforesaid Acts in 1958 were engaged in the butcher 's trade and its subsidiary undertakings; they challenged the constitutional validity of the Acts on the ground that they infringed their fundamental rights under articles 14, 19(1)(f) and (g) of the Constitution. In the decision which this Court gave in Mohd. Hanif Quareshi vs The State, of Bihar (1), it held (i) that a total ban on the slaughter of cows of all ages and calves of cows and of she buffaloes, male or female, was quite 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 (iii) that a total ban on 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 not in the interests of the general public and was invalid. In the result this Court directed the respondent States not to enforce their respective Acts in so far as they were declared void by it. This led to some amending or new legislation, and we are concerned in these three cases with the provisions of these amending or new Acts and the rules made thereunder. In Bihar (Writ Petition No. 15 of 1959) the impugned Act is called the Bihar Preservation and Improvement of Animals (1) ; 78 614 (Amendment) Act, 1959 which received the assent of the Governor on January 13, 1959. in Uttar Pradesh (Writ Petition No. 21 of 1959) the impugned Act is called the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Act, 1958 and in Madhya Pradesh (Writ Petition No ' 14 of 1960) a new Act was passed called the Madhya Pradesh Agricultural Cattle Preservation Act, 1959 (Act 18 of 1959) which received the assent of the President on July 24, 1959 and came into force on January 15, 1960. The rules made there under are called the Madhya Pradesh Agricultural Cattle Preservation Rules, 1959. The general case of the petitioners, who are several in number in each of the three cases, is that they are citizens of India and carry on their profession and trade of butchers; they allege that the various provisions of the impugned legislation infringe their fundamental rights in that they, for all practical purposes, have put a total ban on the slaughter of she buffaloes, bulls or bullocks, even after such animals have ceased to be useful, and have virtually put an end to their profession and trade. It is pointed out that the age up to which the animals referred to above cannot be slaughtered (20 or 25 years) has been put so high that the practical effect is that no animals can be slaughtered, and the amending or new legislation has put in other restrictions so arbitrary and unreasonable in nature that in effect they amount to a prohibition or destruction of the petitioner 's right to carry on their trade and profession. The following allegations quoted from one of the petitions (Writ Petition No. 15 of 1959) give a general idea of the nature of the case which the petitioners have put forward: "That there is good professional authority for the view that even in countries where animal husbandry is organised on a highly progressive and scientific basis, cattle seldom live beyond 15 or 16 years. That there is also good authority to the effect that even pedigree breeding bulls are usually discarded at the age of 12 or 14 years. , That in India bulls and bullocks and she buffaloes rarely live even up to the age of 15 years; draught bullocks begin to age after eight years, 615 That the raising of the age limit from 15 to 20 years is arbitrary, unreasonable and against the general public interests and is repugnant to and infringes the, fundamental rights of the, petitioners under Article 19 (1)(f) and (g) of the Constitution. That section 3 of the amending Act is a mala fide, colourable exercise of power, repugnant to the fundamental rights of the petitioners under Article 19 (1)(f) and (g). That this arbitrary raising of the age limit will be against the public interests For the following among ' other reasons: (i) That there will, in fact, be no bulls or bullocks or she buffaloes available for slaughter as few, if any, of such animals survive in India up to the age of 15 years; (ii) that the profession, trade and occupation of millions of Muslims will be permanently and irreparably injured; (iii) that millions of members of the minority communities such as Christians, Scheduled Castes, Scheduled Tribes and Muslims, for whom cattle beef is a staple item of their diet, will be deprived of this diet; (iv) that the menace of the rapidly increasing uneconomic cattle population in such matters as the destruction of crops, being a public nuisance, will be accentuated by this arbitrary age limit, and in effect will ensure that bulls and bullocks cannot be slaughtered; (v) that the menace of the rapidly increasing population of uneconomic cattle to the fodder and other animal food resources of the country will be accentuated. (vi) that the competition between the rapidly increasing cattle population, a large percentage I of which is uneconomic and useless, add the human population for available land will be accentuated; (vii) that this piece of legislation will ensure the steady increase of useless bulls and bullocks and must react disastrously against any attempt to improve milk production, bullock power or animal husbandry generally." 616 Similar allegations have been made in the other two petitions also. The correctness of these allegations has been con. tested on behalf of the respondent States, which through some of their officers have filed affidavits in reply. We shall presently examine at greater length the averments made in these affidavits, but we may indicate here in broad outline what their general effect is. In Bihar the age below which the slaughter of she buffaloes, bulls and bullocks is prohibited is 25 years. The respondent State has taken the plea that the usefulness or longevity of live stock for breeding and other purposes depends to a very great extent on (a) better animal husbandry facilities like feeding and management and (b) control of animal diseases, and as these facilities are now available in a greater measure, the legislature came to the conclusion that a bull or bullock or a she buffalo below 25 years of age continues to remain useful; if a bull, bullock or shebuffalo is permanently incapacitated below that age the impugned provision permits its slaughter and therefore the legislation which is challenged conforms to the decision of this Court and does not violate any fundamental right. In Uttar Pradesh the age is 20 years as respects bulls or bullocks, with a further restriction to be referred to later. The reply of the res pondent State is that bulls or bullocks do not become unfit at the age of 12 or 14 years as alleged by the petitioners; on the contrary, they continue to be useful and at no time they become entirely useless. It is then stated in the affidavit: "As a matter of fact, the age up to which the animals can live and are serviceable depends upon the care and attention they receive and the quality of the grass on which they are grazed. . . . . .According to a high authority the average age of an ox under favourable conditions would be between 15 to 20 years. Even under conditions prevailing in Uttar Pradesh, bulls can live upto 20 years or more as would appear from an analysis of a survey report of the animal husbandry department. " 617 On these averments the respondent State contends that the legislation is valid. In Madhya Pradesh also the age is 20 years. The Under Secretary to the( State Government in the Agricultural Department ' has made the reply affidavit in which it has been stated inter alia that conditions in Madhya Pradesh are different from conditions in other States. The affidavit then states: "The State of Madhya Pradesh has a total area of 107,589,000 acres, out of which total cropped area is 43,572,000 acres. Forest area is 33,443,000 acres, area not available for cultivation is 11,555,000 acres, uncultivated land is 18,405,000 acres and fallow land is 5,834,000 acres. It will thus be seen that this State has a large forest area and plenty of grass land for pasturage. As the forests supply the greater part of the fuel needs of the human population, the dung of animals is largely available as manure. The legislature considered that bulls, bullocks and buffaloes are useful in this State till they are well past twenty years of age and that they should not be slaughtered till they are past that age and are also unfit for work or breeding. The problem of animals dying of slow starvation or of worthless animals depriving useful animals of fodder needs no consideration in this State. The agricultural community in the State benefits by the existence of animals as long as they are useful. " There are also further averments as to the shortage of breeding bulls, working bullocks and she buffaloes in Madhya Pradesh. On these averments the contention of the respondent State is that the cattle in that State are useful up to the age of 20 years. We have indicated above in general terms the case of the petitioners and the reply which the respondent States have given. We proceed now to a detailed consideration of the impugned legislation in each case. (1) We take up first the Bihar Preservation and Improvement of Animals (Amendment) Act, 1959 and the rules made under the main Act of 1955. Section 3 of the Act as amended reads: "section 3.

In Mohd. Hanif Quareshi vs The State of Bihar the Supreme Court held that a total ban on the slaughter of bulls, bullocks and she buffaloes after they had ceased to be useful was not in the interests of the general public and was invalid. Thereafter, the Bihar Legislature passed the Bihar Preservation and Improvement of Animals (Amendment) Act, 1958, the Uttar Pradesh Legislature passed the U. P. Prevention of Cow Slaughter (Amendment) Act, 1958 and the Madhya Pradesh Legislature passed a new Act, the M. P. Agricultural Cattle Preservation Act, 1959. Section 3 of the Bihar Act prohibited the slaughter of a bull, bullock or she buffalo except when it was over 25 years of age and had become useless. Rule 3 of the Bihar Preservation and Improvement of Animals Rules, 1960 prescribed that the certificate for slaughtering an animal could be granted only with the concurrence of the Veterinary Officer and the Chairman or Chief Officer of a District Board, Municipality etc., and if the two differed, then according to the decision of the Sub Divisional Animal Husbandary Officer. Section 3 of the U. P. Act permitted the slaughter of a bull or bullock only if it was over 20 years of age and was permanently unfit. It further provided that the animal could not be slaughtered within 20 days of the grant of 'a certificate that it was fit to be slaughtered and gave a right of appeal to any person aggrieved by the order granting the certificate. Section 4(1)(b) of the Madhya Pradesh Act provided that no bull, bullock or buffallo could be slaughtered except upon a certificate issued by the competent authority and section 4(2)(a) provided that no certificate could be issued unless the animal was over 20 years of age and was unfit for work or breeding. Section 4(3) gave a right of appeal to any person aggrieved by the order of the competent authority. Section 5 provided that no animal 611 shall be slaughtered within 10 days of the date of the issue of the certificate and where an appeal was preferred against the grant of the certificate, till the time such appeal was disposed of. The petitioners, who carried on the profession and trade of butchers, contended that the various provisions of the three Acts set out above infringed their fundamental rights by practically putting a total ban on the slaughter of bulls, bullocks and she buffaloes even after the animal had ceased to be useful and thus virtually put an end to their profession and trade. Held, (i) that the ban on the slaughter of bulls, bullocks and she buffaloes below the age of 20 or 25 years was not a reasonable restriction in the interests of the general public and was void. A bull, bullock or buffalo did not remain useful after 15 years, and whatever little use it may have then was greatly offset by the economic disadvantages of feeding and maintaining unserviceable cattle. The additional condition that the animal must, apart from being above 20 or 25 years of age, also be unfit was a further unreasonable restriction. Section 3 of the Bihar Act, section 3 of the U. P. Act and section 4(2)(a) of the M. P. Act were invalid. (ii) Rule 3 of the Bihar Rules was bad as it imposed dis proportionate restrictions on the rights of the petitioners. The procedure involved such expenditure of money and time as made the obtaining of the certificate not worthwhile. (iii) The provisions in the Uttar Pradesh and Madhya Pradesh Acts providing that the animal shall not be slaughtered within 20 and10 days respectively of the issue of the certificate and that any person aggrieved by the order of the competent authority, may appeal against it, were likely to hold up the slaughter of the animal for a long time and practically put a total ban on slaughter of bulls, bullocks and buffaloes even after they had ceased to be useful. These provisions imposed unreasonable restrictions on the fundamental rights of the petitioners and were void. Mohd. Hanif Quareshi vs The State of Bihar, [1959] S.C.R. 629, State of Madras vs V. G. Row, ; and The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga, , referred to.

The respondents challenged the constitutional validity of section 37(5)(a) of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972, before the High Court on the ground that it places unreasonable restriction on the commission agent and puts a great burden on him for storing the goods given to him by his principal, without charging the commission for its safe custody. The plea was accepted and the High Court struck down the impugned provision as unconstitutional. Allowing the appeal by Special Leave, the Court, HELD: Section 37(5)(a) is constitutionally valid and there is no hardship or unreasonableness in it. The provi sion prevents the commission agent from levying any addi tional charges from the farmer or the principal for safe custody of the goods. but section 37(4) of the Act compensates him by authorising him to charge not only his commission from the, principal trader, but also the expenses incurred by him for the purpose of storing the produce, and the services rendered by him. [620 D, E, G]

The appellant and respondents 7 to 13 are Assistant Conservators of Forest and are governed by the Bihar Forest Service Rules, 1953. As per Rule 3 thereof appointment to the said post is made either by direct recruitment or by promotion of selected Rangers. The appellant and respondents 7 to 12 were promoters and respondent 13 was a direct recruit. Though the appellant was promoted subsequent to the promotion of respondents 7 to 12, his appointment was made retrospective. The appellant was the last to be confirmed as Assistant Conservator of Forest. As a Ranger also the appellant was appointed much later to respondents 7 to 12. On the basis of confirmation seniority has been determined. The appellant challenged the seniority of respondents 7 to 13 over him, by way of a Writ Petition in the High Court. He relied on a memorandum to the Cabinet which contained a note that if the appellant was found fit for promotion his place would be above 10 general category officers and since the memorandum was approved by the Cabi net his name in the seniority list should have been placed above those officers. The respondents resisted the claim stating that the Cabinet had not approved the memorandum in its entirety. The High Court dismissed the Writ Petition and this appeal, by special leave, is against the said judgment. The contentions raised before the High Court were reiterated in this appeal, this appeal. Dismissing the appeal, 202 HELD: 1.1. Rule 35 of the Bihar Forest Service Rules, 1953 specifically deals with seniority. In the instant case, Clause (i) of the proviso is not attracted. Even Clause (ii) is not attracted inasmuch as respondent No. 13 even though was appointed by direct recruitment, was not appointed "at the same time" as the appellant and respondents7 to 12. It is Clause (iii) which is relevant for the determination of the seniority inter se of the appellant and respondents 7 to 12. On a plain reading of this Clause it is apparent that on substantive appointment of Rangers to the service by promo tion, their seniority inter se in the service is to be governed by "their seniority inter se held as Rangers". The appellant as well as respondents 7 to 12 have already been confirmed as Assistant Conservator of Forest and meet the requirement of "substantive appointment to the service by promotion". In order to determine their inter se seniority as Assistant Conservator of Forest, therefore, their senior ity inter se as Rangers shall be the determining factor. Respondents 7 to 12 had been appointed as Rangers much before the date on which the appellant was appointed as a Ranger. Hence the claim of seniority as made by the appel lant has no substance. [204D; 205B E] 1.2. It is settled law that the provisions of statutory rules cannot be modified or altered by executive instruc tions, and it is only in the absence of statutory rules that executive instructions have relevance. As such even if for the sake of argument it may be accepted that on account of the memorandum to the Cabinet or any other executive in struction the appellant was to be given seniority as claimed by him, it could not be done, as in case of a conflict, the statutory provisions contained in proviso (iii) of Rule 35 of the Rules shall prevail. [205E F]

These two petitions challenged the constitutional validity of the Punjab Special Powers (Press) Act, 1956 (No. 38 of 1956) passed by the State Legislature in the wake of the serious communal tension that had arisen between the Hindus and the Akali Sikhs over the question of the partition of the State on a linguistic and communal basis. The petitioners were the editors, printers and publishers, respectively, of the two daily newspapers, Pratap and Vir Arjun, printed and published simultaneously from jullundur and New Delhi, whose admitted policy was to support the "Save Hindi agitation". Two notifications under section 2(1)(a) of the impugned Act were issued against the editor, printer and publisher of the two papers published from Jullundur by the Home Secretary prohibiting him from printing and publishing any matter relating to the 'Save Hindi agitation ' in the two papers for a period of two months. Two other notifications in identical terms were issued under section 3(1) of the impugned Act against the other petitioner, the editor, printer and publisher of the two papers in New Delhi prohibiting him from bringing into the Punjab the newspapers printed and published in. New Delhi from the date of the publication of the notifications. Unlike section 2(1) of the impugned Act which provided a time limit for the operation of an order made thereunder as also for a representation to be made by the aggrieved person, section 3 of the Act made no such provision. It was contended on behalf of the petitioners that both the sections were ultra vires the State Legislature inasmuch as they infringed articles 19(1)(a) and 19(1)(g) of the Constitution and were not saved by articles 19(2) and 19(6) of the Constitution. It was urged that the sections imposed not merely restrictions but a total prohibition against the exercise of the said fundamental rights by prohibiting the publication of all matters relating to the 'Save Hindi agitation ' under section 2(1)(a) and by a complete prohibition of the entry of the two papers into the whole of the Punjab under section 3(1) of the Act, that even supposing 309 that the sections merely imposed restrictions and not a total prohibition, the restrictions were not reasonable, that the sections gave unfettered and uncontrolled discretion to the State Government and its delegate, that the Act did not provide for any safeguard against an abuse of the power, that the language of the sections being wide enough to cover restrictions both within and cutside the limits of constitutionally permissible legislative action they were ultra vires the Constitution and that the notification under section 2(1)(a) of the Act as made would prevent even the publication of anything against the 'Save Hindi agitation ' and should have been restricted to such matters alone as were likely to prejudicially affect the public order. Held, that the restrictions imposed by section 2(1)(a) of the impugned Act were reasonable restrictions within the meaning of article 19(2) of the Constitution and the petition directed against the notifications issued thereunder must fail, but since section 3 Of the Act did not provide for any time limit for the operation of an order made thereunder nor for a representation by the aggrieved party to the State Government, the restrictions imposed by it were not reasonable restrictions under article 19(6) of the Constitution and the petition directed against the notifications made thereunder must succeed. Held further, that there can be no doubt that the right of freedom of speech and expression carries with it the right to propagate one 's views and the several rights of freedom guaranteed by article 19(1) of the Constitution are exercisable throughout India but whether or not any restrictions put on those rights amount to a total prohibition of the exercise of such rights must be judged by reference to their ambit. So judged, the restrictions imposed in the instant cases with regard to the publications relating to only one topic and the circulation of the papers only in a particular territory could not amount to a total prohibition of the exercise of the fundamental rights. The expression "in the interest of" in articles 19(2) and 19(6) of the Constitution makes the protection they afford very wide and although free propagation and interchange of views are ordinarily in social interest, circumstances may arise when social interest in public order is greater and the imposition of reasonable restrictions on the freedom of speech and expression and on the freedom of carrying on trade or business becomes imperative. Regard being had to the surrounding circumstances in which the impugned Act was passed, its object, the extent and urgency of the evil it sought to remedy, and the enormous power wielded by the Press, with modern facilities of quick circulation, and the consequence that any abuse of it might lead to, the restrictions imposed by the impugned Act must be held to be reasonable restrictions under the Articles. The State of Madras vs V. G. Row, ; , followed. 310 It was only in the fitness of things that the State Legislature should have left the wide preventive powers under the sections to the discretion of the State Government, charged with the maintenance of law and order, or to its delegate, to be exercised on their subjective satisfaction. To make the exercise of these powers justiciable and subject to judicial scrutiny would be to defeat the purpose of the enactment. Dr. N. B. Khare vs The State of Delhi, ; , referred to. But such discretion was by no means unfettered and uncontrolled. The two sections laid down the principle that the State Government or its delegate could exercise such powers only if they were satisfied that such exercise was necessary for the purpose mentioned in the sections and not otherwise. Where there was any abuse of such powers, therefore, what could be struck down was the abuse itself but not the statute. Dwaraka Prasad Laxmi Nayain vs The State of Uttar Pradesh, ; , held inapplicable. Harishankar Bagla vs The State of Madhya Pradesh, , relied on. In view of the amended provisions of article 19(2) of the Constitution and the language of the two sections limiting the exercise of the powers to the purposes specifically mentioned therein, the principles enunciated by this Court in Ramesh Thappay 's case and applied to Chintaman Rao 's case could have no application to the instant cases. Ramesh Thappay vs The State of Madras, ; and Chintaman Rao vs The State of Madhya Pradesh, (1950) S.C. R. 759, held inapplicable. The two provisos to section 2(1)(a) and cl. (b) of section 2(1) clearly show that the restrictions imposed by section 2 are reasonable restrictions on the exercise of the rights guaranteed by articles 19(1)(a) and 19(1)(g) and are, therefore, protected by articles 9(2) and 19(6) of the Constitution. There could be no basis for the grievance that the notifica tion under section 2(1)(a) prevented the publication even of matters against the 'Save Hindi agitation '. If there was a change in the policy of the papers, the time limit provided for the operation of the notifications and the right to make a representation provided ample remedies for the petitioner. To introduce into the notifications the suggested qualification would be to make the exercise of the powers conferred by the section dependent on an objective test subject to judicial scrutiny and defeat the very purpose of the section.

The Settlement Officer under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 suo motu made an inquiry as to whether a particular village notified by the State Government was an estate or not within the contemplation of section 9(2) of the Act and held that it was not an "inam estate" within the meaning of section 2(7) of the Abolition Act but that the village became an estate by virtue of Madras Estates Land (3rd Amendment) Act, 1936. Ther appellants unsuccessfully appealed to the Estate Abolition Tribunal. The appellant then instituted a suit (O.S. 47 of 1953) against the State Government for a declaration that the village was not an "estate" under section 3(2)(d) of them Madras Estates Land Act, 1908 and consequently Madras Estate (Reduction of Rent) Act, 1947 and the Abolition Act were not applicable to it. The trial court decreed the suit. The State Preferred an appeal. During the pendency of the appeal the appellant filed a suit (O.S. No. 101 of 1954) against the respondents for recovery of certain amount as rent or damages in respect of lands cultivated by them in the village in dispute. The respondents contended that the village was an estate within the meaning of the Act and that it had been so held by the Settlement Officer. Ultimately both the parties filed a joint memo on 26th March, 1958 that they would abide by the decision of the High Court or the Supreme Court in the appeal or revision arising out of the suit (O.S. 47/53) on the question whether the village was or was not an "estate" under, section 3(2)(d) of the Madras Estates Land Act. The High Court (in A.S. No. 668 of 1954 which was an appeal arising out of O.S. 47 of 1953) confirmed the decree of the trial court that the village in dispute was not an 'estate '. The State did not appeal, with the result that the High Court 's decision became final and the decree dated 28th March, 1958 became, effective. Against the decree of 28th March, 1958 the appellants preferred an appeal (A.S. 239 of 1961) to the High Court. The appeal related only to the extent of the land in the possession of the respondents and the quantum of rent or damages. The appellants ' claim was that the entire land was under cultivation of the respondents and so the lower court was wrong in not decreeing the appellants ' claim for rent or damages in toto. The respondents raised a preliminary objection at the time of hearing of the appeal that the suit itself was incompetent as the Civil Court had no jurisdiction to decide whether the suit village was an estate or not and, therefore, any (decision given by the High Court would not bind the parties and the decree in O.S. 101 of 1954 would be without Jurisdiction rendering it null and void and that the Settlement Officer was the competent authority to decide the tenure of the village and his deci sion had become final in view of the introduction of section 9A by Act 20 of 1960. The High Court upheld the preliminary objection of the respondents and rejected the contentions of the appellants that since section 9A was inserted by an amendment which came into force on 23rd June, 1960, it could not affect the compromise decree of the court passed on March 28, 1958 or the decree of the High Court by which both the parties agreed to abide by the decision of the High Court or the Supreme Court in appeal or revision arising out of O.S. 47 of 1953. The High Court held that the Civil Court was not the forum for the suit as framed by the appellants and the questions raised in the suit L748SuP CI/74 656 including the claim for arrears of rent or damages, were outside the jurisdiction of the Civil Court, and so dismissed the appeal. Allowing the appeal, HELD:1 (a) There is no doubt that the question was within the competence of the Civil Court. Under the Abolition Act, as it stood at the material date, the inquiry of the Settlement Officer could legitimately be confined to the ascertainment of only two disputes of fact, viz., (i) Was the village an "inam village"? (ii) If so, was it an 'Inam Estate ' as defined in section 2(7) of the Abolition Act ? Once issue (ii) was determined, the inquiry would be complete and the limits of his exclusive jurisdiction circumscribed by section 9(1) reached; if he went beyond those limits to investigate and determine something which is unnecessary or merely incidental or remotely related to issue No. (ii), 'then such incidental or unnecessary determination could be questioned in a Civil Court. [668FG] (b) Any finding recorded by the Settlement Officer regarding the property in question being an 'inam village ' or not, ' is not final or conclusive it being a finding of a jurisdictional fact only, the Preexistence of which is a sine qua non to the exercise of his exclusive jurisdiction by the Settlement Officer. [668H] (c) The legislature must have visualised that under the cloak of an erroneous finding as to the existence or nonexistence of this prerequisite, the Settlement Officer may illegally clutch at jurisdiction not conferred on him or refuse to exercise jurisdiction vesting in him. Perhaps that is why the statute does not leave the final determination of this preliminary fact to the Settlement Officer/Tribunal and his erroneous finding on that fact is liable to be questioned in a Civil Court. Once it is held that determination of this fact is not a matter of the exclusive jurisdiction of the Settlement Officer, the appellants cannot be debarred on the basis of any doctrine of res judicata from getting the matter fully and finally adjudicated by a court of competent jurisdiction. [669B C; E] Addanki Tiruvenkata Tata Desika Charyulu vs State of Andhra Pradesh A.I.R. 1964 S.C. 807 followed. District Board, Tanjore vs Noor Mohammed, (1952) 2 MJ. 586 (S.C.) referred to. (2) It is well settled that ordinarily when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was taken unless the new statute shows a clear intention to vary such rights. A plain reading of the impugned Act would show that there was nothing of this kind which expressly or by necessary intendment affects pending actions. [67OC D] (b) There is no non obstante clause in the amending Acts 17 and 18 of 1957 with reference to pending or closed civil actions. These amending Acts ' were published in the government gazette of December 23, 1957 and will therefore be deemed to have come into force from that date only. They could therefore be construed as having prospective operation only. [67OG H] (c) In the Amending Act 20 of 1960 also no back date for its commencement has been mentioned. It will, therefore, be deemed to have commenced on June 23, 1960 which is the date on which it was published in the Government gazette. [674E] Section 9A takes in its retrospective sweep only those decisions of the Settlement Officer or the Tribunal which at the commencement of 'the Amending Act 20 of 1960 were subsisting and had not been totally vacated or rendered non est by a decree of a competent court. [675 F] In the instant case the decision of the Settlement Officer dated September 2, 1950 was not such a decision. It had ceased to exist as a ' result of the inter linked decree in O.S. 47 of 1953 and O. section 101 of 1954 passed before the enactment of the Amending Act. The Amending Act of 1960, therefore, does not in any way affect the finality or the binding effect of those decrees. [675G] 657 (d) Order 23 rule 3 C.P.C. not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit. If the compromise agreement was lawful the decree to the extent it was a consent decree was not appealable because of the express bar in section 96(3) of the Code. [672E] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; , Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality and Reid vs Reid at 408, followed. (e) In any suit the parties, in order to avoid unnecessary expenses and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage There was nothing unlawful and improper in such an arrangement particularly when the interests,of the respondents were sufficiently safeguarded by the State. By no stretch of reasoning it could be said that the agreement was collusive or was an attempt, to contract out of the statute. In the instant case as soon as the parties made the agreement to abide by the determination in the appeal (A. section 668) and induced the court to pass a decree in terms of that agreement the principle of estoppel underlying section 96(3) C.P.C. became operative and the decree to the extent it was in terms of that agreement became final and binding between the parties. It was as effective in creating an estoppel between the Parties as a judgment on contest. [672F C & 673C] In the instant case that part of the decree in suit No. 101 of 1954 and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement. The combined effect of the two integrated decrees was to completely vacate and render non est decision dated September 2, 1950 of the Settlement Officer. [673F] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; applied. Per Krishna Iyer, J. concurring Courts have to be anchored to well known canons of statu tory construction and if they are out of tune With the law maker 's meaning and purpose the legitimate means of setting things right is to enact a new Interpretation Act. [678B] The Indian Constitution, adopting the fighting faith of equal I protection of the laws to all citizens, necessarily contemplates a new jurisprudence where vested rights may be, and often times are, extensively interfered. with for achieving the founding fathers ' social goals. Legislative exercises directed towards distributive justice as in the present case, cannot be considered in the light of dated value system, though sanctified by bygone decisions of Courts. [677H] In the present case the Act in question is clear about its intent and its application gives little difficulty.

The petitioners challenged the constitutional validity of Jammu and Kashmir Agrarian Reforms Act, 17 of 1976 on the ground that the Act violated Articles 14, 19 and 31 of the Constitution. The petitioners contended that as the Act contained certain provisions which were not co related to agrarian welfare, the Act could not be said to be a measure of agrarian reform and therefore not saved by Article 31A of the Constitution. Dismissing the petitions, ^ HELD: The Act is a measure of agrarian reform and is saved by article 31A from the challenge under articles 14, 19 or 31 of the Constitution. [541 D] The question as to whether any particular Act is a measure of agrarian reform has to be decided by looking at the dominant purpose of that Act. In the instant case the dominant purpose of the statute is to bring about a just and equitable redistribution of lands, which is achieved by making the tiller of the soil the owner of the land which he cultivates and by imposing a ceiling on the extent of the land which any person, whether landlord or tenant, can hold. The matters which are dealt with by the Act are essential steps in any well conceived scheme of agrarian reform. The decision in Kochuni was treated in Ranjit Singh as a special case which cannot apply to cases where the general scheme of legislation is definitely agrarian reform and under its provisions, something ancillary thereto in the interests of rural economy has to be under taken to give full effect to those reforms. [541 A D, 541 D] Ranjit Singh vs State of Punjab, ; and Kavalappara Rottarathil Kochuni & Ors. vs State of Madras & Ors., , referred to. The circumstance that the Act is made applicable to agricultural lands situated within the limits of local authorities will not affect its character as a measure of agrarian reform. If any land situated in a developed area is used predominantly for the purpose of agriculture, it is open to the legislature to 537 include that land in a scheme of agrarian reform so as to make the tiller of that land its owner. The hypothetical possibility that after becoming statutory owners of agricultural lands situated in developed areas on payment of a paltry price, the tillers will part with those lands at a high price which lands in developed areas like urban areas fetch, cannot affect the basic position that the Act is conceived in the larger interest of agrarian reform. The payment of a larger compensation to land holders under a land reform law than what would be payable under an Act like the Urban Ceiling Act does not lead to the conclusion that the former is not a measure of agrarian reform. [543 A F] Section 7(2)(b) of the Act creates an anomalous situation, especially in the context of the definition of 'personal cultivation ' in section 2(12) of the Act. If it is permissible to cultivate a land through another person as specified in clauses (b) to (g) of section 2(12), there is no reason why residence in the village where the land is situated or in an adjoining village should be compulsory for all persons, even for minors, widows, insane persons and persons in detention. The exception made by the legislature in favour of the members of defence forces ought to be extended to these other persons also. The exclusion of a constitutional challenge under Articles, 14, 19 and 31 which is provided for by Article 31A does not justify in equity the irrational violation or these articles. [543 G, 544 B D] Waman Rao & Ors. vs Union of India & Ors. ; , referred to.

In 1951, several State legislative measures passed for giving effect to a policy of agrarian reform faced a serious challenge in the Courts. In order to assist the State Legislatures to give effect to the policy, articles 31A and 31B were added to the Constitution by the Constitution (First. Amendment) Act, 1951. Article 31B provided that none of the Acts specified in the Ninth Schedule to the Constitution shall be deemed to be void or ever to have become void. In 1.955, by the Constitution (Fourth Amend ment) Act, article 31A was amended. Notwithstanding those amendments some legislative measures adopted by different States for giving effect to the policy were effectively challenged. In order to save the validity of those Acts as well as of other Acts which were likely to be struck down, Parliament enacted the Constitution (Seventeenth Amendment), Act 1964, by which article 31A was again amended and 44 Acts, were added to the Ninth Schedule. The petitioners in the Writ Petitions in Supreme Court, and interveners, were persons affected by one or other of those Acts. They contended that none of the Act by which they were affected could be saved because the Constitution (Seventeenth Amendment) Act was constitutionally invalid. It was urged that : (i) Since the powers prescribed by article 226, which is in Chapter V, Part VI of the Constitution, were likely to be affected by Seventeenth Amendment, the special procedure laid down in the proviso to article 368, namely ' requiring the ratification by not less half the number of States, should be followed; (ii) The decision in Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , which negatived such a contention when dealing with the First Amendment, should be reconsidered; (iii) The Seventeenth Amendment Act was a legislative measure in respect of land and since Parliament had no right to make a law in respect of land, the Act was invalid and (iv) Since the Act purported to set aside decisions of Court of competent jurisdiction, it was unconstitutional. HELD (by P. B. Gajendragadkar C. J., Wanchoo, and Raghubar Dayal JJ.) : (i) The main part of article 368 and its proviso must on a reasonable construction be harmonised with each other in the sense that the scope and effect of either of them should not be allowed to be unduly reduced or enlarged. Such a construction requires that if amendment of the fundamental rights is to make a substantial inroad on the High Court 's powers under article 226, it would become necessary to consider whether the proviso to article 368 would cover such a case. If the effect is indirect, incidental or otherwise of an insignificant order the proviso may not apply. In dealing With such a question, the test to be adopted is to find the pith and substance of the impugned Act. So tested it is clear that the Constitution (Seventeenth Amendment) Act amends the fundamental rights solely with the object of removing obstacles in the fulfilment of a socioeconomic policy. Its effect 934 on article 226 is incidental and insignificant. The Act therefore falls under the substantive part of article 368 and does not attract the proviso. [940 D E; 941 B E; 944 D F] (ii) On the contentions urged there was no justification for reconsidering Shankari Prasad case. [947 G H] Though the Constitution is an organic document intended to serve as a guide to the solution of changing problems the Court should be reluctant to accede to the suggestion that its earlier decisions should be lightheartedly reviewed and departed from. In such a case the test is : Is it absolutely and essential that the question already decided should be reopened. The answer to the question would depend on the nature of the infirmity alleged in the earlier decision, its import on public good and the validity and compelling character of the considerations urged in support of the contrary view. It is therefore relevant and material to note that if the argument urged by the petitioners were to prevail, it would lead to the inevitable consequence that the amendments of 1951 and 1955 and a large number of decisions dealing with the validity of the Acts in the Ninth Schedule would be exposed to serious jeopardy. [948 E H; 949 A B] (iii) Parliament in enacting the impugned Act was not making any provision of land Legislation but was merely validating land Legislation already passed by the State Legislatures in that behalf. [945 C] (iv) The power conferred by article 368 on Parliament can be exercised both prospectively and retrospectively. It is open to Parliament to validate laws which have been declared invalid by courts. [945 E F] (v) The power conferred by article 368, includes the power to take away the fundamental rights guaranteed by Part III. In the context of the constitution it includes the power of modification, or changing the provisions, or even an amendment which makes the said provisions inapplicable in certain cases. The power to amend is a very wide power and cannot be controlled by the literal dictionary meaning of the word "amend". The expression "amendment of the Constitution" plainly and unambiguously means amendment of all the provisions of the Constitution. The words used in the proviso unambiguously indicate that the substantive part of the Article applies to all the provisions of the Constitution. A B; 951 B] The word "law" in article 13(2) does not include a law passed by Parliament by virtue of its constituent power to amend the Constitution. if the Constitution makers had intended that any future amendment of the provisions in regard to fundamental rights should be subject to article 13(2), they would have taken the precaution of making a clear provision in that behalf. It would not be reasonable to proceed on the basis that the fundamental rights in Part III were intended to be finally and immutably settled and determined once for all and were beyond the reach of any future amendment. The Constitution makers must have anticipated that in dealing With the socioeconomic problems which the legislatures may have to face from time to time, the concepts of public interest and other important considerations may change and expand, and so, it is legitimate to assume that the Constitution makers knew that Parliament should be competent to make amendments in those rights so as to meet the challenge of the problems which may arise. The fundamental rights guaranteed by Part III could not have been intended to be eternal, inviolate and beyond the reach of article 368 for, even if the powers to amend the fundamental 'rights were not included in the Article, Parliament ran by a suitable amendment of the Article take those powers. [951 F H; 954 F H; 955 E G] Article 226 which confers on High Court the power to issue writs falls under the proviso to article 368, while article 32 which is itself a guaranteed fundamental right and enables a citizen to move the Supreme Court to 935 issue writs, fall under the main part of the section. Parliament may consider whether the anamoly which is apparent in the different modes prescribed by article 368 for amending articles 226 and 32 respectively, should not be remedied by including Part III itself in the proviso. [956 E G] Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , followed. A. K. Gopalan vs State of Madras, ; and In re: The Delhi Laws Act; , , referred to. (vi) It is not reasonable to suggest that, since the impugned Act amends only articles 31A and 31B and adds several Acts to the Ninth Schedule it does not amend the provisions of Part III but makes an independent provision, and so, comes within the scope of the proviso to article 368. If Parliament thought that instead of adopting the cumbersome process of amending each relevant Article in Part III, it would be more appropriate to add articles 31A and 31B, then what Parliament did in 1951 has afforded a valid basis for further amendments in 1955 and in 1964. [946 B E] (vii) The fact that the Acts have been included in the Ninth Schedule with a view to making them valid, does not mean that the Legislatures which passed the Acts have lost their competence to repeal or amend them. Also, if a legislature amends any provision of any such Act, the amended provision would not receive the protection of article 3 1B and its validity will be liable to be examined on the merits. [956 A C] Per Hidayatullah and Mudholkar JJ. Quaere (i) Whether the word "law" in article 13(2) of the Constitution excludes an Act of Parliament amending the Constitution. [959 E F; 968 G] (ii) Whether it is competent to Parliament to make any amendment at all to Part III of the Constitution. [961 F G; 968 G] Per Mudholkar J. An amendment made by resort to the first part of article 368 could be struck down upon a ground such as taking away the jurisdiction of High Courts under article 226 or of the Supreme Court under article 136 or that the effect of the amendment is to curtail substantially, though indirectly, the jurisdiction of the High Courts under article 226 or the Supreme Court under article 136, and recourse had not been had to the proviso to article 368. The question whether the amendment was a colorable exercise of power by Parliament may be relevant for consideration in the latter kind of case. [969 D F] The attack on the Seventeenth Amendment Act was based on grounds most of which were the same as those urged and rejected in the earlier case of Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , and on some grounds which are unsubstantial. No case has therefore been made out by the petitioners either for the reconsi deration of that decision or for striking down the Seventeenth Amendment. [963 FG] The following matters however were not considered in Sankari Prasad 's case and merit consideration : (i) Where Legislation deals with the amendment of a provision of the Constitution, does it cease to be law within the meaning of article 13(2) merely because it has to be passed by a special majority ? [964 B C] (ii) Where a challenge is made before the Court on the ground that no amendment to the Constitution had in fact been made or on the ground that it was not a valid amendment, would it not be the duty of the Court and within its power to examine the question and to pronounce upon it since this is precisely what a Court is competent to do in regard to any other law? (iii) Is the statement in A. K. Gopalan vs State of Madras, ; that the fundamental rights are the minimum rights reserved by the people to themselves, and therefore unalterable, inconsistent with the statement in In re ; , that Parliament has plenary powers of legislation ? [965 D E] (iv) Whether making a change in the basic features of the Constitution can be regarded merely as an amendment or would it be, in effect, rewriting a part of the Constitution, and if it is the latter, would it be within the purview of article 368 ? [966 H, 967 A] (v) Upon the assumption that Parliament can amend Part III of the Constitution and was therefore competent to enact articles 31A and 31B, as also to amend the definition of "estate", can Parliament validate a State law dealing with land ? [968 H, 969 A] (vi) Could Parliament go to the extent it went when it enacted the First Amendment and the Ninth Schedule and now when it added 44 more agrarian laws to it ? Or, was Parliament incompetent to go, beyond enacting article 31A in 1950, and now, beyond amending the definition of "Estate" ? [969 B C]

Articles 32 and 136 When root of the grievance and the fruit of writ are not individual but collective courts power is one of affirmative structuring of redress to make it meaningful and socially relevant Decisional guidelines to be given. The State of Kerala appointed a Commission to recommend which sections of the people required special treatment under article 15(4) having regard to their social and educational conditions. That Commission recommended equitable allocation of seats on the bais of education backwardness of the Malabar area. Substantially founding itself on these recommendations the these recommendations the State Government evolved a formula, which by polling all applications for admission to the four medical colleges in the state one consolidated list was prepared and candidates were selected strictly according to the marks secured by them. This scheme having been struck down by the High Court, a fresh expert committee was appointed to examine the quo modo of admissions to medical colleges. The Government on the basis of these recommendations decided that seats available for the medical course might be distributed for the students of the two 1, Universities of Kerala and Calicut in the ratio of the candidates registered for the pre degree and B. Sc. course in them. In a writ petition under article 226 the High Court held that the scheme of selection for admission to the medical colleges on an assessment of merits of students drawn from different universities with no uniformity of standards is objectionable and the linkage of the division of seats with the registered student strength of the universities bears no nexus and is violative of article 14 of the Constitution. On the question of the validity of the scheme of selection for admission to the medical colleges. ^ HELD : 1. Current conditions warrant the classification of student community on the zonal basis not as a legitimation of endless perpetuation but as a transient panacea for a geo human hadicap which the State must actively strive to undo.[980E] 2.The principal of reservation with weightage for the geographical area of the Malabar district is approved.[980 G] 3 The reasoning of the High Court that there is such substantial difference in the pre degree courses and evaluations between the sister universities within the same State that the breach of article 14 by equal treatment of the marks un 975 equally secured by the examinees in the two Universities may be spelt out. Every inconsequential differentiation between two things does not constitute the vice of discrimination, if law clubs them together ignoring vanial variances. Article 14 is not a voodoo which visits. with invalidation every executive or legislative fusion of things or categories where there are no pronoanced inequalities. Mathematical equality is not the touchstone of constitutionality. [983 E F] State of Jammu & Kashmir vs Triloki Nath Khosa & Anr. ; at 42 referred to. A large latitude is allowed in this area to the State to classify or declassify based on diverse considerations of relevant pragmatism and the judiciary should not "rush in" where the executive varily treads. [984 A] 5. Many colleges are run by the State or institutional managements where pre degree or degree courses are undertaken, The teachers move from one university jurisdiction to the other, the teaching material is inevitably of a like nature, the subjects taught must ordinarily be alike. The examiners are usually drawn from within the State or neighbouring States. Even the composition of the academic bodies in the two universities may have common members. The University Act themselves are substantially similar. To surmise discrimination from possibilities is alien to the forensic process in the absence of hand facts. Gross divergences exist amoung Universities affecting the quality of the teaching and the inaiking. the anomalies of grading and the absurdity of equating the end product on the blind assumption that the same marks mean the same excellence. But not glib surmises but solid facts supply the sinews of discriminatory inequality or equality. Some backward universities and colleges have degenerated into degree dealers bringing rapid discredit to Indian Academic status. [984 D F] 6. The vagarious element in marking and moderation of marks may be a fact of life, but too marginal to qualify for substantial difference unless otherwise made out Indeed. there may be differences among the colleges under the same University. among the examiners in the same University. Such fleeting factors or eohemeral differences cannot be the solid foundation for a substantial differentiation which is the necessary pre condition for quashing an executive or legislative act as too discriminatory to satisfy the egalitarian essence of Art 14. [984 H 985 A] 7. The functional validation of the writ jurisdiction is an appropriate examination of the substantiality of the alleged disparity. [985 B] 8. The corner stone of classification adopted for medical admission. by the Government was University wise allocation. By itself. this approach had constitutional sanction. [986 C] D. N. Chanchala vs State of mysore & Ors. etc. [1971] Supp. SCR 608; relied on 9. The discriminatory vice,if University wise classification and consequential allocation of seats were resorted to, was pressed therein but repelled. The fundamental `educational realities and resultant resolution of the legal imbrogliro are instructively presented therein, which have special relevance to the instant case because the social facts, constitutional confrontations and administrative answers in the Kerala and Karnataka litigations are similar. [986 D, 986 H 987 A] 976 10.The injection of the University wise student strength is drawing the redherring across the trail an irrelevance that invalidates the scheme. There is no nexus between the registered student strength and the seats to be allotted. The fewer the colleges the fewer the pre degree or degree students. And so, the linkages of the division of seats with the registered student strength would make an irrational inroad into the University wise allocation. Such a formula would be a punishment for backwardness, not a promotion of the advancement. The discriminatory paring down based on unreason cannot be upheld. [990 G H] 11. Law is not unimaginative, especially in the writ jurisdiction where responsible justice is the goal. The court cannot adopt a rigid attitude of negativity and sit back after striking down the scheme of Government leaving it to the helpless Government caught in a crisis to make do as best as it may, or throwing the situation open to agitational chaos to find a solution by demonstrations in the streets and worse. In the instant case unable to stop with merely declaring that the scheme of admission accepted by Government is ultra vice and granting the relief to the petitioner of admission to the medical colleges, the need for controlling its repercussions calls for judicial response. [991 H 992 A] 12. An incisive study of the exercise of the writ power in India may reveal that it limits its actions by quashing or nullifying orders proceeding on a violation of law, but stops short of a reconstruction whereby a valid scheme may replace a void project. This is symptomatic of an obsolescent aspect of the judicial process, its remedial shortcomings in practice and the need to innovate the means, to widen the base and to organise the reliefs so that the Court actualises social justice even as it inhibits injustice. [978 A B] 13. This community perspective of the justice system explains why the Court has resorted to certain unusual directions and has shaped the ultimate complex of orders in these proceedings in a self acting package. Chronic social disability cannot be amenable to instant administrative surgery and law shall not bury its head, ostrich fashion, in the sands of fiction and assume equality where the opposite is the reality. [978 C, 980 C] 14. The rule of law runs close to the rule of life and where socieal life, as between one part of the State and another, is the victim of die hard disparties, the constitutional mandate of equal justice under the law responds to it pragmatically and permits classification geared to eventual equalisation. The writ of this Court binds the parties on record who must abide by the directions issued necessitated by the exigency of the situation and the need to do justice. [993 D] 16. The court system belongs to the people and must promote constructive justice; and all institutions, including the Governments and Universities, likewise belong to the people. This commitment is the whet stone for doing justice in the wider context of social good. [993 E F] 17. Leaving the Judgment of the High Court in the conventional form of merely quashing the formula of admission the remedy would have aggravated the malady, confusion, agitation, paralysis. The root of the grievance and the fruit of the writ are not individual but collective and while the "adversary system" makes the Judge a mere umpire, traditionally speaking, the community orientation of the judicual function, so desirable in the Third World remedial juris 977 prudence, transforms the courts ' power into affirmative structuring of redress so as to make it personally meaningful and socially relevant. Frustration of invalidity is part of the judicial duty; fulfilment of legality is complementary. This principle of affirmative action is within the court 's jurisdiction under Art 136 and article 32 and the present cases deserve its exercise. Decisional guidelines given.[994 B F]

Appeal No. 364 of 1957. Appeal from the judgment and order dated February 22, 1956, of the former Bombay High Court in I.T.R. No. 31/1955. N. A. Palkhivala and I. N. Shroff, for the Appellants. A. N. Kripal and D. Gupta, for the Respondent. 1960. November 22. The Judgment of the Court was delivered by SHAH, J. This is an appeal by seven appellants with leave granted by the High Court of Judicature at Bombay certifying that it involves a question of importance. The appellants held 570 out of a total issue of 800 shares of the Navjivan Mills Ltd., Kalol, a public limited company hereinafter referred to as the Mills. Between the years 1943 47, the Mills purchased 5,000 shares of the Bank of India Ltd. At an extraordinary general meeting of the shareholders of the Bank of India held on May 6, 1948, a resolution was passed increasing the share capital of the Bank and for that purpose offering new shares to the existing shareholders in the proportion of one new share for every three shares held by the shareholders. The face value of the new shares was to be Rs. 50, but the shares were issued at a premium of Rs. 50. The shareholders had to pay Rs. 100 for each new share. The Mills as the holder of 5,000 shares became entitled to receive 1,6662 shares of the Bank of India at the rate of Rs. 100 per share. The Bank of India communicated its resolution by letter dated May 25, 1948 and enclosed therewith three forms, form A for acceptance, form 586 B for renunciation and 'form C which may compendiously be called a form for allotment to nominees. On receiving the circular letter, the Directors of the Mills passed the following resolution: "Resolved that the company having a holding of 5,000 ordinary shares in the capital of the Bank of India Ltd. having now received an intimation from the said Bank that this company is entitled to get 1,6662 more ordinary shares on payment of Rs. 50 as capital and Rs. 50 as premium per each share and it is considered proper to invest in the said issue of the said Bank the funds of this company to the extent of 66 shares only and to distribute the right of this company to the remaining 1,600 shares of the said issue amongst the shareholders of this company in the proportion of the shares held by them in this company. IT IS HEREBY RESOLVED that the funds of this company may be invested in the 66 shares out of 1,666 shares offered by 'the Bank of India Ltd., and the right to the remaining 1,600 shares is hereby distributed among 800 shares of this company in the proportion of right to two shares of the Bank per one ordinary share held in this company. The Managing Agents may take steps to intimate the shareholders to exercise the right if they like to do so. " Accordingly, the Mills exercised the right to take over only 66 shares out of the shares offered and resolved that the right to the remaining 1,600 shares be distributed amongst its 800 share holders. The seven appellants as holders of 570 shares of the Mills became entitled to 1,140 shares of the Bank of India. The appellants agreed to the allotment of these shares and ultimately transferred them to a private company Jesinghbai Investment Co. ' Ltd. The assessment of the seven appellants and of other shareholders of the Mills was reopened under section 34(1)(a) of the Indian Income Tax Act by the Income Tax Officer on the footing that, the release by the Mills of the shares of the Bank of India amounted to a distribution of "dividend" and the value of the right released in favour of the shareholders though taxable 587 under section 12 of the Act, had escaped tax. The order of the Income Tax Officer reassessing the income of the seven appellants was confirmed in appeal by the Appellate Assistant Commissioner and by the Appellate Tribunal. At the instance of the appellants, the i following question was submitted by the Tribunal to the High Court at Bombay under section 66(1) of the Income Tax Act: "Whether on the facts and circumstances of the case the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd. in favour of the assessees amounted to a distribution of "dividend" within the meaning of section 2(6A) of the Indian Income Tax Act. " The High Court reframed the question as follows: "Whether on the facts and circumstances of the case, the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd., in favour of the assessees amounted to a distribution of "dividend"?" and answered it in the affirmative. The High Court observed that the definition of "dividend" in section 2(6A) was an inclusive and not an exhaustive definition, and even if the distribution of the right to the shares of the Bank of India could not be regarded as dividend within the extended meaning of that expression in section 2(6A), it was still dividend within the ordinary meaning of that expression and was taxable as income in the hands of the appellants. Counsel for the appellants contended that the High Court was not justified, having regard to the form of the question which expressly related to the distribution of the right to the Bank of India shares being dividend within the meaning of the definition in section 2(6A) of the Income Tax Act, in enlarging the scope of the question and in answering it in the light of its ordinary meaning. There is no substance in this contention. "Dividend" is defined in section 2(6A) as inclusive of various items and exclusive of certain others which it is not necessary to set out for the purpose of this appeal. "Dividend" in its ordinary meaning is a 588 distributive share of the profits or income of a company given to its shareholders. When the Legislature by section 2(6A) sought to define the expression "dividend" it added to the normal meaning of the expression several other categories of receipts which may not otherwise be included therein. By the definition in section 2(6A), "dividend" means dividend as normally understood and includes in its connotation several other receipts set out in the definition. The Tribunal had referred the question whether the distribution of the right to apply for the Bank of India shares amounted to distribution of dividend within the meaning of section 2(6A) and in answering that question, the High Court had to take into account both the normal and the extended meaning of that expression. In the question framed by the Tribunal, there is nothing to indicate that the High Court was called upon to advise on the question whether the receipts by the appellants amounted to dividend only within the extended definition of that expression in section 2(6A). It was also urged that in nominating its shareholders to exercise the option to purchase the new issue of the Bank of India, the Mills did not distribute any dividend. The Mills were, it is true, not obliged to accept the offer made by the Bank of India, however advantageous it might have been to the Mills to accept the offer: it was open to the Mills to renounce the offer. The Mills had three options, (1) to accept the shares, (2) to decline to accept the shares, or (3) to surrender them in favour of its nominee. It is undisputed that when the shares were offered by the Bank of India to its shareholders, the right to apply for the shares had a market value of Rs. 100 per share. The face value of the new share was Rs. 50 but the shareholders had to pay a premium of Rs. 50, thus making a total payment of Rs. 100 for acquiring the new share. The new shares were quoted in the market at more than Rs. 200: and the difference between the amount payable for acquiring the shares under the right offered by the Bank of India and the market quotation of the shares was indisputably the value of the right. The Mills could not be compelled to obtain 589 this benefit if it did not desire to do so: it could accept the shares or decline to accept those shares or exercise the option of surrendering them in favour of its nominees. This last option could be exercised by nominating the persons who were to take over the shares and that is what the Mills did. The Mills requested the Bank of India to allot the shares to its nominees, and the request for allotment to its nominees amounted to transfer of the right. By its resolution, the Mills in truth transferred a right of the value of Rs. 200 for each share held by its shareholders. This was manifestly not distribution of the capital of the Mills. It was open to the Mills to sell the right to the shares of the Bank of India in the market, and to distribute the proceeds among the shareholders. Such a distribution would undoubtedly have been distribution of dividend. If instead of selling the right in the market and then distributing the proceeds, the Mills directly transferred the right, the benefit in the hands of the shareholders was still dividend. Dividend need not be distributed in money; it may be distributed by delivery of property or right having monetary value. The resolution, it is true, did not purport to distribute the right amongst the shareholders as dividend. It did not also take the form of a resolution for distribution of dividend; it took the form of distribution of a right which had a monetary value. But by the form of the resolution sanctioning the distribution, the true character of the resolution could not be altered. We are therefore of the view that the High Court was right in holding that the distribution of the right to apply for and obtain two shares of the Bank of India (at half their market value) for each share held by the shareholders of the Mills amounted to distribution of dividend. The appeal fails and is dismissed with costs. Appeal dismissed.

The appellants were shareholders of a company known as Navjivan Mills Ltd. which held a large number of shares of the Bank of India. The Bank with the object of increasing their share capital offered some more shares to the Mills for a price including premium which was about half the market value. The Mills purchased a small number of the shares so offered with their own funds and distributed their right to acquire the remaining shares to their shareholders in the proportion of two shares of the Bank for one share held by them. The assessment of the appellant was reopened by the Income Tax Officer under section 34(1)(a) of the Income tax Act on the footing that the release of the right to the shares of the Bank of India amounted to distribution of dividend. Appeals against the order of the Income Tax Officer having failed, the High Court at the instance of the appellants framed the following question: "Whether on the facts and circumstances of the case, the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd. in favour of the assessees amounted to a distribution of "dividend"? 585 The High Court answered the question in the affirmative. On appeal with a certificate of the High Court, Held, that the view taken by the High Court was correct. The distribution to the shareholders of the Mills of the right to obtain two shares of the Bank of India for each share held by them at half the market value amounted to distribution of "dividend" which was liable to be taxed.

These appeals raised an identical question. Civil Appeals Nos 4291 and 4292 of 1984 were preferred against the judgment of the Madras High Court in Writ Appeals Nos. 561 and 562 of 1983. The appellant in these two appeals, an employee in the Bank of India, which is a Nationalised Bank, was dismissed. Aggrieved, he preferred an appeal under section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Tamil Nadu Shops Act). A preliminary objection was raised by the Bank to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the exemption contained in Section 4(1)(c) thereof. The Appellate Authority held that the preliminary objection might be decided along with the appeal. The bank thereupon filed two writ petitions in the High Court, one for a direction to the Appellate Authority to dispose of the preliminary objection before disposing of the appeal on merits, and the other, for a direction to the Appellate Authority not to proceed with the appeal. Both the Writ Petitions were allowed by a Single Judge of the High Court on the ground that the Bank was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in section 4(1)(c). Against that decision, two writ appeals aforementioned were filed, which were dismissed by a Division Bench of the High Court by the Judgment under appeal in these two appeals. The same judgment of the High Court had disposed of Writ Petition No. 1550 of 1981 also, which had arisen out of an application under section 51 of the Tamil Nadu Shops Act made by the employees of the State Bank of India before the Commissioner of Labour for a direction that all the provisions of that Act would apply to them, being employed in the State Bank. The State Rank had contended that it was an establishment under the Central 663 Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it. The Commissioner of labour had rejected the plea of the State Bank and held that the provisions of the Act were applicable to it. Civil Appeal No. 4329 of 1984 was preferred against the said Judgment by the State Bank 's Staff Union and Civil Appeal No. 4735 of 1984 was preferred by the employees concerned. Civil Appeal No. 1120 of 1976 was preferred by Syndicate Bank, a Nationalised Bank, against the judgment of the Andhra Pradesh High Court (Division Bench), dismissing the Writ Appeal No. 268 of 1975 and upholding the order of a Single Judge dismissing the Writ Petition No. 5973 of 1973 filed by the appellant Syndicate Bank. The services of Respondent No. 3 in the appeal had been terminated by the appellant Syndicate Bank. An appeal was preferred by the said respondent before the Labour officer under the Andhra Pradesh Shops and Establishment Act, 1966 (the Andhra Pradesh Shops Act). The Labour officer allowed the appeal which was confirmed in a second appeal by the Labour Court. Aggrieved by these orders, the Bank filed the Writ Petition above said. It was urged by the appellant Bank that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf. Civil Appeal No. 1042 was preferred by the Syndicate Bank against the judgment of the Andhra Pradesh High Court, dismissing the Writ Petition No. 86 of 1979. Respondent No. 3 in the appeal had been dismissed by the appellant bank. He preferred an appeal which was allowed. The Bank preferred a second appeal before the Labour Court, which was dismissed. The Bank filed the aforesaid writ Petition before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act were not applicable to it in view of the exemption contained in this behalf. The High Court dismissed the Writ Petition. Civil Appeal No. 837 of 1984 was preferred by the Bank of India a nationalised bank, against the judgment of the Kerala High Court dismissing the Writ Petition No. 1419 of 1978. Respondent No. 1 in the appeal had preferred an appeal under section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (the Kerala shops Act) against an order passed by the appellant Bank, discharging him from service. A preliminary objection was raised by the Bank with regard to the maintainability of the appeal on the ground that it being an establish 664 ment under the Central Government within the meaning of section 3(1)(c) of that Act, the provisions thereof including section 18 above said were not applicable to it. The objection was overruled by the appellate authority. The Bank filed the original Petition abovementioned in the High Court which dismissed the same. Dismissing the Civil Appeals Nos . 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984, and allowing the Civil Appeal Nos. 1120 of 1976, 1042 of 1979 and 837 of 1984, the Court, ^ HELD: The common question which arose for consideration in all these appeals was as to whether the Nationalised Banks and the State Bank of India were establishments under the Central Government within the meaning of the Acts above said and consequently the provisions of the said Acts were not applicable to these Banks in view of the exemption contained therein in this behalf. [670E] In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the said Acts, it was not disputed even by counsel for the banks, that a bank is an establishment. Consequently, unless exempted, the provisions of the said Acts would apply to the State Bank of India and the nationalised banks also. [670F G] A conspectus of the provisions of the (Act No. 23 of 1955) and the (Act No. 5 of 1970), read with the dictionary meaning of the term "under" leaves no manner of doubt that the State Bank of India and the nationalised banks are clearly establishments under the Central Government.[677D] For the employees of these banks, it was urged that these banks were autonomous corporations having distinct juristic entity with a corporate structure of their own and could not as such be treated to be owned by the Central Government. According to counsel, the word "under" used in the expression "under the Central Government" con noted complete control in the sense of being owned by the Central Government. Disagreeing with that submission it was held that the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced that they cannot be establishments under the Central Government. [677E F; 678A] 665 If the criteria laid down in Ajay Hasia, etc. vs Khalid Mujib Sehravardi & Ors. etc. ; , decided by a Constitution Bench of this Court, was applied to the facts of these cases, it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and their employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks. As pointed out by this Court in Biharilal Dobray vs Roshan Lal Dobray; , , the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control. [679G H;682E F] In view of these considerations, no exception could be taken to the view of the Madras High Court in its judgments which were the subjectmatter of the Civil Appeal Nos. 4291 and 4292 of 1984, 4375 of 1984 and 4329 of 1984. As regards the judgment of the Kerala High Court and the judgment of the Andhra Pradesh High Court under appeal even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein particularly with regard to deep and pervasive control are relevant for deciding the point in issue, and also it was sufficient to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration, it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government. As regards the circumstances that even though the Reserve Bank of India is mentioned specifically in the relevant clause containing exemption, neither the State Bank of India nor the nationalised banks are so mentioned, it is to be pointed out that the Reserve Bank of India was established as shareholders ' Bank under Act 2 of 1934. The Kerala Shops Act and the Andhra Pradesh shops Act, of the years 1960 and 1966, were modelled almost on the pattern of the Tamil Nadu Shops Act, which is of the year 1947. When section 4(1)(c) of this Act referred to the Reserve Bank of India in 1947, it obviously referred to it as the Shareholders ' Bank. The Reserve Bank Transfer to Public ownership Act (Act 82 of 1948) came into force on 1st January, 1949, and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government. In this background, no undue emphasis could be placed on the circumstances that the State Bank of India or the nationalised banks did 666 not find mention in the provision containing exemption even though the Reserve Bank of India was specially mentioned therein. For the response stated above, the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserved to be set aside.[683C H] On the view the Court had taken that the State Bank of India and the nationalised banks are establishments under the Central Government, the Court did not consider the question as to whether these banks were establishment, which not being factories within the meaning of the , were, in respect of matters deal with in the Tamil Nadu Shops Act, governed by a separate law for the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub section (1) of section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act. [684A B] Civil Appeals Nos. 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984 were dismissed. Civil Appeal No. 1120 of 1976 was allowed and the judgment of the High Court in Writ Appeal No. 268 of 1975 as also the Judgment of the Single judgement the Writ Petition No. 5973 of 1973 as well as the orders of the Labour officer in the appeal filed by respondent No. 3 and of the Second Appellate Authority m the second appeal filed by the appellant Bank under the provisions of the Andhra Pradesh Shops Act were set aside. Civil Appeal No. 1042 of 1979 was allowed and the judgment of the Andhra Pradesh High Court in the Writ Petition No. 86 of 1979 as also the orders passed by the first and second appellate authorities in the appeals preferred by respondent No. 3 and the bank under the Andhra Pradesh Shops Act were set aside. Civil Appeal No. 837 of 1984 was allowed and the judgment of the Kerala High Court in Writ Petition No. 1419 of 1978 was set aside. The preliminary objection raised by the bank before the Appellate Authority in the appeal filed by respondent No. I under section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable was upheld, with the result that if the said appeal was still pending would be disposed of as not maintainable and in case it had been decided, the said decision should be treated as without jurisdiction.[684C F] The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act referred to above had been held to be not maintainable and the orders passed therein had been set aside, would be at liberty to take recourse to such other remedies as might be available to them in law. [684G] 667 Ajay Hasia, etc. vs Khalid Mujib Sehravardi & etc. ; , ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., ; Hindustan Aeronautics Ltd. vs The Workmen and Ors., ; ; Graham vs Public Works Commissioner, ; Regional Provident Fund Commissioner, Karnataka vs Workmen represented by the General Secretary, Karnataka Provident Fund Employees ' Union and Another, [1984] II L.L.J. 503; Western Coalfields Ltd. vs Special Area Development Authority, Korba and Anr., ; ; Rashriva Mill Mazdoor Sangh, Nagpur vs The Model Mills, Nagpur and Anr., ; ; Union of India & Ors. vs N. Hargopal and Ors., ; Thote Bhaskara Rao vs The A.P. Public Service Commission and Ors., Judgment Today and Biharilal Dobray vs Roshan Lal Dobray, ; , referred to.

On a winding up petition being filed in respect of the respondent company in June, 1965, a provisional liquidator was appointed, who took charge of the Cotton Textile Mills of the Company after they had stopped working. Thereafter an agreement was entered into in August, 1965 between the S group who owned the majority of equity shares in the company and the J group which agreed to buy the shares and to take over the management. The agreement provided, inter alia, that after the J group took over, the Company would execute a second legal mortgage of its fixed and other assets in favour of the S group and certain other unsecured creditors mentioned in Schedule B to the agreement m consideration of which those creditors; agreed to receive interest at a nominal rate and receive repayment of their debts over a long period. The agreement also contained provision which contemplated the Company obtaining loans from certain financial institutions, the Central and State Governments and other persons and securing them by a prior charge over its fixed assets as well as liquid assets; After this agreement with the unsecured creditors and another with the workers union, the COmpany submitted a scheme for the sanction of the High Court. By an order in February, 1966, a single Judge of the High Court approved the scheme which provided, inter alia, for payments to various categories of creditors within specified periods and for the execution of a second mortgage in favour of the Schedule B creditors; or alternatively for the execution of a debenture trust deed 'and the issue of debentures in their favour if sanction of the Controller of Capital Issues could be obtained. It was also provided in clause (4) of the scheme that the J group "will provide the necessary finance required for running the mills". The winding up petition was then withdrawn, the provisional liquidator discharged and 'the J group Wok over the Company 's management. The mills were restarted in April, 1966 and payments to various categories of creditors other than the Schedule B creditors were duly made. However in view of certain disputes between the two groups, the company did not execute the mortgage or the proposed debenture trust deed in favour of the Schedule B creditors. The mills continued to work until June, 1967, but the management experienced various difficulties in raising adequate working finances. in securing sufficient supplies of cotton, due to price rise following devaluation of the Rupee in 1966 and for various other reasons. In view of 867 these the mills were eventually closed down in June, 1967, and thereafter the Company and others filed a petition for its winding up. However, the Company Judge in the High Court took the view that under clause (4) of the scheme the J group were bound not only to procure but to personally bring in the finance sufficient to work the mills. Holding that the scheme was workable he directed the J group to provide the necessary finance. He also directed the company to execute the debenture trust deed in favour of the unsecured creditors in Schedule B. He therefore dismissed the winding up petitions. In appeal, a Division Bench of the High Court held that the Company Judge was in error in giving the said directions and in dismissing the petitions for winding up. Accordingly, it allowed the appeals and ordered winding up of the company. In appeal to this Court it was contended inter alia that the Appeal Court was in error in setting aside the directions given by the Company Judge and in ordering winding up instead; the Company had reached its unsatisfactory position in view of (i) the failure of the J group to provide finance in accordance. with clause (4) of the scheme; and (ii) giving away the processing unit of the mills which was the most profit yielding part of the mills for a nominal value to a nominee of the J group. It was also contended that once the scheme was sanctioned by the court, it became a statutory bargain and pan of the company 's constitution, and therefore, all further arrangements of the company 's affairs had to be on the basis of the rights and obligations thereunder; if the company were to be wound up, such winding up could only be Ordered after compelling it to carry out those obligations and it would be opposed to equity and public policy to allow the company to escape its obligations by ordering it to be wound up; even if the scheme could be ignored by directing winding up, it could only be done by putting the parties in the position they were prior to the scheme; and that the winding up of the company being at the instance of the J group who had failed to carry out their obligation to find the finance, acceding to their prayer for winding up was tantamount to acceding to their default. It was further contended on behalf of the Schedule B creditors that the J group had deliberately failed to secure permission of the Controller of Capital Issues for execution of the debenture trust deed and that they were entitled to a charge on the company 's assets not merely on the second mortgage being executed. but irrespective of it and in presenti; as the agreement of August, 1965, specified the property out of which a debt was to be payable and this was coupled with an intention to subject such property to a charge, the property became subject to a charge in presenti even though a regular mortgage was to be executed 'at some future date. HELD: Dismissing the appeal: (1) The direction of the Company Judge that the J group must provide the required finance was nebulous and vague and impossible of being enforced. In the.absence of any enquiry as to whether the mills could be worked at a profit no court would compel a party to furnish monies without even specifying how much 'and for how long he should provide. If such a direction was not possible, no direction could be given under section 392(1) to work the scheme as its implementation depended on the 'mills working at profit. The only course left to the Court was to pronounce that in the circumstances then prevailing the scheme could not be satisfactorily worked and, therefore, a winding up order under section 392(2) had become inevitable. [887 H 888 B] 868 Although the scheme had statutory force, it had to be construed as a commercial document, that is, in the manner in which businessmen would read it. There can be no doubt that the J group took the responsibility to provide finance required for running the; mills so that from out of their profits the obligation to pay the creditors could be met in the manner laid down in the scheme. Therefore, the J group were to "provide" finance either on the credit of the company or on the security of its 'assets, or if necessary, their own monies for running the mills in the commercial sense, i.e. with a reasonable prospect of making profits and not in all events and in all circumstances. even if there was no prospect of running them in reasonable profit. Such a constitution would be contrary to the fact that the creditors knew there was hardly any chance of their being paid and wore anxious that instead of taking the company into liquidation the mills should be restarted and their dues paid bit by bit. By virtue of the provisions of section 391 of the Act, a scheme is statutorily binding even on creditors and share holders who dissented from or were opposed to its being sanctioned. It has statutory force in that sense and therefore cannot be altered except with the sanction of the Court even if the share holders and the creditors acquiesce in such alteration. The effect of the scheme is "to supply by recourse to the procedure thereby prescribed the absence of that individual 'agreement by every member of the clause. to be bound by the scheme which would otherwise be necessary to give it validity". Sub sec. (2) of section 391 of the Act allows the decision of the majority prescribed therein to bind the minority of creditors and shareholders and it is for that reason that a scheme is said to have statutory operation and cannot be varied by the shareholders or the creditors unless such variation is sanctioned by the court. The effect, therefore, of a scheme between a company and its creditors is that so long as it is carried out by the company by regular payment in terms of the scheme, a creditor who is bound by it cannot maintain a winding up petition. But if the company commits a default, there is a debt presently due by the company and a petition for winding up can be sustained at the instance of a creditor. The scheme, however, does not have the effect of creating a new debt; it simply makes the original debt payable and in the manner and to the extent provided in the scheme. It cannot be said that a winding up order can Only be passed after compelling the company to complete the rights which are still incomplete under the scheme. [891 F] Once a scheme is cancelled under section 39 '2(2) on the ground that it cannot be satisfactorily worked and a winding up order passed, such order is deemed to be for all purposes one made under section 433. It is not as if because the scheme has been sanctioned under section 391 that a winding up order under section 39 '2(2) cannot be made. If the contention, that a winding up order can only be made subject to the rights and obligations of the parties under the scheme were to be right, it would mean that where a company makes default in paying an instalment on the date prescribed by the scheme and a creditor files a winding up petition, even though a winding up order is made on the basis that the debt has become presently payable, still the creditor is bound by the scheme and his debt is to be. payable by instalments as provided by the scheme. [893 C E] (2) The Appeal Court was right in holding that no proof had been offered in support of the allegation that the I group had let out the processing unit of the mills which was the most profit yielding part to one of their nominees to the prejudice of the company. 869 (3) An examination of the scheme and the agreement of August 1965 did not show that there was any intention to subject the company assets a charge in presenti in favour of the Schedule B creditors. The provisions of these two documents amounted only to an agreement to mortgage which could give rise to an obligation to specifically perform it but did not constitute either a mortgage under section 58 or a charge under section 100 of the Transfer of Property Act. There was, therefore, no force in the contention that the: Schedule B creditors, irrespective of the proposed mortgage, were entitled to be treated as secured creditors. [889 G] Jewan Lal Daga vs Nilmani Choudhuri, 55 I.A. 107; Khajeh Solehman Quadir vs Salimullah, 49 I.A. 153; Hukamchand vs Radha Kishan, A.I.R. 130 P.C. 76; referred to. (4) On the findings by the Appeal Court that the company was commercially insolvent and the scheme could not be satisfactorily worked with or without modifications, the only alternative for that Court was to pass the winding up order under section 392(2). Court could not have completed, as contended by the appellants, their rights which were still incomplete or order the company to execute a debenture trust deed or the second mortgage, and thus set up the appellants and the other Schedule B creditors as secured creditors against the rest of the unsecured creditors. Such an order could not be passed as it would be contrary to and in breach of the right of distribution pari passu of the joint body of unsecured creditors. The Appeal Court had, therefore correctly followed the principle that the status of creditors which could be recognised was that which existed at the date of the ' windingup order, that the second mortgage or the debenture trust deed not having so far been executed, the appellants and the other Schedule B creditors were still unsecured creditors and therefore could not claim any priority over the rest of the unsecured creditors. [894 H 895 C] Bank of Scotland vs Macleod ; at 317, 318; Tulsidas Jasrai Parekh vs The Industrial Bank of Western India 32 Bombay Law Reporter 953 at 967; Re Anglo Oriental Carpet Manufacturing Company , referred to. The principle that no act of a court should be permitted to harm a litigant who has acted on the faith of such an act cannot be invoked for the purpose of completion of rights where such ' rights are incomplete at the date when a winding up order is made. There was no question of the appellants having done something on the faith of an act of the court, the appellants and the other Schedule B creditors having agreed to a postponement of repayment to them in consideration of an agreement between them and the company providing for a second mortgage in their favour. [892 D] Premila Devi vs Peaples Bank of Northern India Ltd., ; Re Garner Motors Ltd., ; Jang Singh vs Brijlal, ; ; Jai Behram vs Kedar Nath Marwari, 49 I.A. 351 at 356; Re Downing (T.H.) & Co. ; also Buckley on the Companies Acts (13th Ed.) 411 referred to.

To regulate the allotment of indigenous art silk yarn, the Government of India constituted the Art Silk Yarn Distribution Committee which issued allotment cards to individual weavers. Under the terms of the card without waiting for the allottee to approach the manufacturer the manufacturer had to offer the allottee art silk yarn within seven days of the date of allocation of the card and within a period of 21 days from the date of allocation of the card, a firm contract for the supply of yarn was to be completed. The appellant, a manufacturer of art silk yarn with its factory in the State of Tamil Nadu, supplied yarn to cardholders in the States of Maharshtra and Gujarat by delivering the goods at Bombay through its selling agent at that place. On the question of exigibility of the goods to Central Sales tax the appellant claimed that since the goods were despatched to Bombay at the request of the agent and not as a result of any sale in favour of the purchaser the sale had taken place at Bombay, and secondly since the movement of goods from the State of Tamil Nadu to Bombay was not connected with the sales the sales were not inter State sales within the meaning of section 3 (a) of the Central Sales Tax Act. This claim was rejected by the Joint Commercial Tax Officer and his order was upheld at the different stages of appeal. The High Court dismissed the appellant 's revision petitions. On the question whether the sales were inter State sales, the Court ^ HELD: The goods having been despatched from one State to another pursuant to a contract of sale that came into existence directly between the buyer and seller within a few days after the date of the allocation card, the sale was an inter State sale. To constitute an inter State sale within the meaning of section 3(a) of the Central Sales Tax Act there must co exist a sale of the goods and movement of 45 goods from one State to another under the contract of sale. Where there is a link between a contract of sale and movement of goods from one State to another pursuant to the contract of sale, interposition of an agent ought not to alter the inter State character of the sale. [49 F] In the instant case the card contemplated a contract of sale to be completed within 21 days of the date of its issue. The agent requested the appellant to despatch certain number of cases to a purchaser and that was done. These facts cumulatively suggest that the goods had been 'transported from the factory in Tamil Nadu to Bombay for being delivered to the purchaser as a result of contract of sale established in accordance with the terms of the allocation card. [49 G 50 B;E] The fact that actual sale pursuant to the said contract had taken place subsequently does not militate against the transaction being treated as an inter State sale under section 3(a) because the movement of goods delivered to the buyer was occasioned by the contract of sale brought into existence under the terms of the allocation card. [51 E] The authorities below have found, on the basis of the terms of the allocation card and other material on record, that there was a contract of sale within the stipulated time between the parties. [51 G] English Electric Company of India Ltd. vs The Deputy Commercial Tax Officer & Ors., (1976) 38 S.T.C. 475, followed. Tata Engineering and Locomotive Co. Ltd. vs Assistant Commissioner of Commercial Taxes. Jamshedpur & Anr. (1970) 26 S.T.C. 354 and Kelvinator of India Ltd. vs State of Haryana (1973) 32 S.T.C. 629, held inapplicable.

In pursuance of its policy of reorganising its business by concentrating more on manufacturing side than agency business, the appellant company gave up more than half of its agencies in Calcutta and some agencies in other places including Madras. The Union representing the workmen wrote to the Labour Commissioner to intervene stating that due to the company 's said policy it feared retrenchment. The company served notices on some of the employees for retrenchment to take effect two days thereafter. Also notice was given to the Labour Commissioner and the Conciliation Officer as required under section 25F (c) of the Industrial Disputes Act. On reference of the dispute to the Industrial Tribunal, the company justified the retrenchment and the Manager of the Calcutta branch gave evidence that retrenchment was done in pursuance of the said policy decision taken by the company. The Tribunal held that a good case for retrenchment was not made out and ordered reinstatement. The Tribunal did not accept the manager 's evidence holding that the development on the manufacturing side of the company 's business should have been contemporaneous with the surrender of agencies in Calcutta. The Tribunal also held that the policy decision was actuated by parochial considerations for transferring the company 's resources from Calcutta to Madras, that there was overload of work on the remaining employees; that the retrenchment could have been avoided by transferring the retrenched employees to other branches specially as their conditions of service included the liability of being transferred; and that the retrenchment was in breach of a. 25F(c) as the notice of retrenchment was two days prior to the date of the retrenchment and not with immediate effect, the proviso to r. 77(1) of the West Bengal/ndustrial Disputes Rules, 1958, did not apply and a notice of one month, as required by sub el. (1) of that rule, was necessary. The company filed a petition for a writ of certiorari. The Single Judge of the High Court set aside the. award and remanded the case to the Tribunal only for enforcing the retrenchment according to the principle of "last come first go". The Division Bench of the High Court in appeal, agreed with the findings of the Tribunal and held that the Single Judge was not competent to interfere with those findings. In appeal this Court, HELD: Some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence. The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in a writ petition for certiorari. (i) A writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction. It is available, in those cases 977 where a tribunal though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure 0r violates the principles of natural justice where no particular procedure is prescribed. But a mere wrong decision cannot be corrected by a writ of certiorari as float would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected. [985] Basappa vs Nagappa, ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra, [1957] S.C.R. 152 and Andhra Pradesh & Ors. vs Sree Ram Rao, ; , followed. (ii) The Tribunal wrongly rejected the company 's evidence on the ground that the policy decision being the function of the Board of Directors, the Manager was not competent to depose about it and that if the company, wanted to establish it, it should have produced a resolution of the Board. In its letter to the Labour Commissioner and also during conciliation proceedings the union had assumed that the company had taken the said decision, that consequently, retrenchment was apprehended and that therefore that officer should intervene. In these circumstances, the finding that the company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid. [987 D F] 1. K. Iron and Steel Co. vs Iron and Steel Mazdoor Union, , followed. (iii) It is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent for a tribunal to question its propriety. If a scheme for such reorganisation results in surplusage of employees, no employer is expected to carry the burden of such economic tribuanaldead weight and retrenchment has to be accepted as inevitable. however unfortunate it is. The Legislature therefore, provided by section 25F compensation to soften the blow of hardship resulting from 'an employee being thrown out of employment through no fault of his. The Tribunal having come to the conclusion that the said policy was not actuated by any motive of victimisation or unfair labour practice and therefore was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous. It is not the function of the Tribunal, to go into the question whether such 'a scheme is profitable or not and whether it should have been adopted by the employer. So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the 'conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision. The fact that in the earlier year some temporary appointments were made or that the Union 's Secretary deposed that work had accumulated would not mean that the surplus age calculated by the manager was unjustified. Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there Was no surplusage. [987 G, 989 D F] (iv) While reorganising its business, it is not incumbent on a company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time. These considerations which the Tribunal took into account were 978 totally extraneous to the issue beore it and the Tribunal ought not to have allowed its mind to be influenced by such consideration and thereby disabling itself from viewing the issue from proper perspective. The finding that the policy decision was actuated by parochial considerations, namely, for transferring the company 's resources from Calcutta to Madras at the cost of the former, was without evidence and was entirely speculative. Even assuming that the company decided to concentrate its activity in Madras there is nothing in the Industrial Law to compel it to continue its business in Calcutta. [988 D, G] D. Marcropollo & Co. vs Their Employees Union , Ghatge & Patil Concern 's Employee 's Union vs Ghatge & Patil (Transport) (P) Ltd. [1968] 1 S.C.R. 300, and Workmen of Subong Tea Estate vs The Outgoing Management of Subong Tea Estate, ; , followed. (v) The liability of an employee to be transferred and the right of the company to transfer him did not mean that there was a corresponding obligation on the company to transfer the employee to another branch. No evidence was led by the Union to show that if transferred, these men could have been absorbed at other places, or that there were vacancies or that the work there was the same as was done by them at Calcutta. There was no evidence whether wage scales, dearness allowance and other conditions of service were the same in Madras and other centres. It is true that the company had started developing its manufacturing business in Madras but the Tribunal made_ no enquiry whether these employees could have been fitted in the manufacturing work when they had done only administrative and 'other duties connected with the agency business, yet the Tribunal drew the conclusion that because the company failed to transfer these employees to other centres retrenchment was not justified. [989 G 990 A] (vi) Rule 77(1) of the West Bengal Industrial Disputes Rules, provides that when an employer finds it necessary to retrench any workmen he shall, at least _one month before the date of actual retrenchment, give notice thereof to the Labour Commissioner and the Conciliation Officer. The proviso to it states that where an employer retrenches any workman with immediate effect by paying him wages in lieu of notice he shall immediately after such retrenchment give notice thereof to the said officers. Though the notice of retrenchment was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso to r. 77(1). The object of the proviso clearly is that where it is not possible for an employer to give one months notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment. instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out. So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place. [990 C]

H & S filed a suit against the appellant for recovery of money and during the pendency of the suit a document was executed on the 7th February, 1949, whereby H & S transferred to the respondents all book and other debts due to them together with all securities for the debts and all other property to which they were entitled in connection with their business in Bombay. One of the book debts was the subject matter of the suit, but there was no mention in that document of the suit or the decree to be passed in the suit. The respondents did not take any steps under Order XXII, rule 10, of the Code of Civil Procedure to get themselves substituted as plaintiffs in the place of H & S, but allowed the suit to be continued in the name of the original plaintiffs, and on the 15th December, 1949, a decree was passed in favour of H & S against the appellant. On the 25th April, 1951, the respondents filed in the City Civil Court, Bombay, an application for execution of the decree under Order XXI, rule 11 of the Code, and a notice under Order XXI, rule 16 was issued by the Court calling upon H & S and the appellant to show cause why the decree should not be executed by the transferees, the respondents. The appellant contended inter alia that as the respondents were only the assignees of the debt which was the subject: matter of the suit and not of the decree itself they were not entitled to execute the decree. Held, that the respondents as the transferees of the debt which was the subject matter of the suit were entitled to make an application for execution of the decree under section 146 of the Code of Civil Procedure as persons claiming under the decree holder. The effect of the expression " save as otherwise provided in this Code" contained in section 146 is that a person cannot make an application under section 146 if other provisions of the Code are applicable to it. Per DAs and IMAM JJ., BHAGWATI J. dissenting. Order XXI, rule 16, by the first alternative, contemplates the actual transfer by an assignment in writing of a decree after it is passed and while a transfer of or an agreement to transfer a decree that may be passed in future may, in equity, entitle the transferee to claim the beneficial interest in the decree after it is passed, such 1370 equitable transfer does not render the transferee a transferee of the decree by assignment in writing within the meaning of Order XXI, rule 16. Per DAS J. The transfer in writing of a property which is the subject matter of a suit without in terms transferring the decree passed or to be passed in the suit does not entitle the transferee to apply for execution of the decree under Order XXI, rule 16, as a transferee of the decree by an assignment in writing. If by reason of any provision of law, statutory or otherwise, interest in property passes from one person to another, there is a transfer of the property by operation of law. There is no warrant for confining transfers "by operation of law" to the three cases of death, devolution or succession or to transfers by operation of statutory laws only. If the document in question could be construed to be a transfer of or an agreement to transfer the decree to be passed in future, then on the decree being passed, by operation of equity, the respondents would become the transferees of the decree by operation of law within the meaning of Order XXI, rule 16. Per BHAGWATI J. Section 5 of the Transfer of Property Act defines a "transfer of property" as an act by which the transferor conveys property in present or in future to the transferee or transferees. The words "in present or in future" qualify the word "conveys" and not the word "property" in the section. A transfer of property that is not in existence operates as a contract to be performed in the future which may be specifically enforced as soon as the property comes into existence. It is only by the operation of this equitable principle that as soon as the property comes into existence and is capable of being identified, equity taking as done that which ought to be done, fastens upon the property and the contract to assign becomes a complete equitable assignment. There is nothing in the provisions of the Code of Civil Procedure or any other law which prevents the operation of this equitable principle, and an assignment in writing of a decree to be passed in future would become a complete equitable assignment on the decree being passed and would fall within the "assignment in writing" contemplated by Order XXI, rule 16 of the Code. A mere transfer of property as such does not by itself spell out a transfer of a decree which has been passed or may be passed in respect of that property and it would require an assignment of such decree in order to effectuate the transfer. But where the property is an actionable claim within the meaning of the definition in section 3 of the Transfer of Property Act and is transferred by means of an instrument in writing, the transferee could by virtue of section 130 of the Transfer of Property Act step into the shoes of the transferor and claim to be the transferee of the decree and apply for execution of the decree under Order XXI, rule 16 of the Code of Civil Procedure. Per IMAM J. There must be a decree in existence which is transferred before the transferee can benefit from the provisions 1371 of rule 16. The ordinary and natural meaning of the words of rule 16 can carry no other interpretation and the question of a strict and narrow interpretation of its provisions does not arise. Case law reviewed.

The appellant company carried on the business of manu facture and sale of paper. It claimed exemption from payment of excise on paper core which, accordingly to the appellant, was used in the manufacture of paper. The case of the appel lant was that the paper cores used in the manufacture of paper constituted "component parts" within the meaning of Notification No. 201/79 dated June 4, 1979 as amended. The case of the respondent on the other hand was that the paper cores were really used by the appellant as packing material after the paper had already been manufactured for taking it to the market and did not constitute "component parts" of paper. The Assistant Collector, Central Excise, rejected the claim of the appellant but its claim on appeal as regards exemption from duty on paper cores was allowed by the Appel late Collector. The Customs, Excise and Gold (Control) Appellate Tribunal however allowed the appeal of the Reve nue. Partly allowing the appeal, this Court, HELD: 1. Even though the term "component parts" has not been defined either by the Act or by the Notification, the term "manufacture" has been defined in section 2(f) of the . This definition contem plates that "manufacture" includes any process, incidental or ancillary to the completion of a manufactured product. [895D] 2. In the absence of any definition of the term "compo nent partS" it is permissible to refer to the dictionary meaning of the word "component". Accordingly to the diction ary meaning, the word "component" inter alia means a con stituent part. [895F] 3. If the use of paper core is necessary in "any process incidental 893 or ancillary to the completion of" paper as marketable goods and it would consequently be commercially inexpedient to sell paper without the use of paper core, it would certainly be a constituent part of paper and would thus fall within the purview of the term "component parts" used in the Noti fication. [896F] M/s J.K. Cotton Spinning & Weaving Mills vs Sales Tax Officer, Nagpur and another, [1965] 1 S.C.R. Page 900 and Bhor Industries Ltd. Bombay vs Collector of Central Excise, Bombay, ; , referred to. Paper is made (1) in the form of rolls and (2) in the form of sheets and the paper which is sold in the form of sheets is cut in desired sizes. Even though rewinding has to be done both for manufacturing roll paper as well as sheet paper, use of paper core in rewinding is necessary only with regard to manufacture of roll paper, inasmuch as it is the paper as rolled on paper core which is delivered to the customer in the form of rolls and unless in the process of rewinding paper core is used, paper cannot come out of the machine in rolls so as to be sold as a marketable commodity known as roll paper. The use of paper core, however, is not necessary for the manufacture of paper sheets. [897E, 899G 900A] 5. Use of paper core would come within the purview of the expression "any process incidental or ancillary to the completion of manufactured products" used in the definition of the term "manufacture" in section 2(f) of the Act and for the same reason paper core would also be constituent part of paper and would thus fail within the term "component parts" used in the Notification in so far as manufacture of paper in rolls is concerned. Paper core, however, cannot be said to be used in the manufacture of paper in sheets as compo nent parts. [900E F]

One Maganlal Parbhudas who was a Director of the assessee company held 6,344 shares out of a total of 10,000 shares of the company and he made a gift of 1000 shares to each of his five sons. During the accounting period the company had eight Directors including the said Maganlal Parbhudas and two of his sons and they held 4695 shares as between themselves. Out of the balance of the shares 4754 shares were held by the relatives of some of the Directors. Three sons of Maganlal Parbhudas were Directors of the Managing Company. The Income tax Officer applied section 23A of the Income tax Act as it stood prior to its amendment by the Finance Act, 1955 to the company holding that this was not a company in which the public were substantially interested. The order of the Income Tax Officer was confirmed on appeal both by the Assistant Commissioner and the Tribunal. The High Court remitted the case to the Tribunal for a statement whether the Directors were exercising de facto control over any of the other shareholders. The Tribunal thereupon gave the finding that the Directors, particularly the three sons of Maganlal Parbhudas who formed the Directors of the Managing Company were under the de facto control of their father. The High Court agreed with the finding of the tribunal and held that on the facts and circumstances of the case the shares held by the three sons of Maganlal Parbhudas could not be considered to be shares held by the members of the public within the meaning of the Explanation to the third proviso to section 23A of the Income Tax Act. On appeal by the assessee company, Held, that in the Explanation the word "public" is used in contradistinction to one or more persons who act in unison and among whom the voting power constitutes a block. If such a block exists and possesses more than seventy five per cent of the voting power, then the company cannot be said to be one in which the public are substantially interested. Sardar Baldev Singh vs Commissioner of Income tax, Delhi and Ajmer, ; , considered. The test is first to find out whether there is an individual or a group which controls the voting power as a block. If there is such a block the shares held by it cannot be said to be held 979 "unconditionally" or "beneficially" by the public. Only those shares which are "unconditionally" and "beneficially" held by the public uncontrolled by the controlling group can be treated as shares held by the public under the Explanation. The group may be composed of Directors or their nominees or relations in different combinations, but none can be said to belong to that c group, be he a Director or a relative unless he does not hold the shares unconditionally and beneficially for himself. It is only such a person who can fall properly outside the word "public". The view that Directors merely by reason of their being Directors stand outside the "public" is erroneous. Commissioner of Income tax vs H. Bjordal, , followed. Mere relationship is of no consequence unless it is proved that the voting power of one relative is controlled by another relative. Tatem Steam Navigation Co. vs Commissioner of Inland Reve nue, , followed.

Appeals Nos. 321 and 322 of 1956. Appeals by special leave from the judgment and decree dated September 21. 1951, of the Mysore High Court in Regular Appeals Nos. 3,24,13 and 25 of 1948. 49, arising gut of the judgment and decree dated 85 664 January 9, 1948, of the Principal DistriCt Judge, Bangalore, in Original Suits Nos. 55 of 1946 47 and 117 of 1945 46 respectively. section K. Venkataranga Aiyangar and section K. Aiyangar, for the appellant. B. K. B. Naidu, for the respondents. February 1. The Judgment of the Court was delivered by SHAH, J. V. R. Subramanyam, the appellant herein is the owner of plot No. 29, Subedar Chattram Road in the town of Bangalore. B. Thayappa respondent is a building contractor. The appellant entrusted the respondent with the work of constructing a house and shops on the plot, on terms and conditions set out in a written agreement dated October 1, 1942, which was slightly modified on October 6, 1942. By the agreement the respondent was to construct for the appellant on the plot six shops abutting a public road, the main building at the rear of the shops, an out house and a garage according to a site plan. The respondent was to be remunerated at rates specified in the agreement: for constructions with R. C. C. roofing, the rate stipulated was Rs. 4 2 0 per square foot and for " tiled construction " it was Rs. 3 2 0 per square foot. The Municipality of Bangalore did not sanction the plan as proposed by the appellant. The plan was altered and it was sanctioned, subject to those alterations. By the alterations the shops were deleted from the plan, the area of the out house was increased, and a puja room on the ground floor and an extra room on the first floor were added to the plan. A compound wall was also to be constructed. The respondent carried out a substantial part of the construction work according to plan and the appellant paid to him diverse sums of money and delivered building materials. The aggregate amount accordingly received by the respondent was Rs. 20,200. But before the work could be completed disputes arose between the appellant and the respondent about the work done by the latter. The appellant claimed that the work done was defective and that he was entitled to compensation for effecting 665 repairs necessary to rectify the defects. The respondent claimed compensation at certain rates set up by him for work done for the appellant for which no express provision was made in the written agreement. Each party set up an oral agreement about the remuneration to be paid to the respondent for the extra work which was not included in the original agreement. The appellant filed a suit in the court of the Subordinate Judge, Bangalore, against the respondent which was later transferred to the court of the Principal District Judge, Bangalore, and numbered O. section 54 of 1946 47, for a decree for Rs. 8,515 4 0 being the amount of compensation which the appellant claimed he was entitled to receive from the respondent for defective work and for delay in completion of the construction. The respondent filed a suit against the appellant which was later transferred to the Court of the Principal District Judge, Bangalore, and numbered 55 of 1946 47. By this suit, the respondent claimed a decree for Rs. 5,988 12 0 being the remuneration due to him for the work done in constructing the house less Rs. 20,200 received from the appellant. The respondent filed another suit No. 117 of 1945 46 for a decree for Rs. 15,001 10 9 with interest and notice charges being the amount due to him for the construction of the out house, godown, first floor room and flight of steps and the value of some building materials which the respondent claimed he had left in the premises of the appellant and which the latter had wrongfully removed. The trial court granted to the appellant a decree for Rs. 3,000 in suit No. 54 of 1946 47. To the respondent, he granted a decree for Rs. 2,989 6 0 in suit No. 55 of 1946 47 and in suit No. 117 of 1945 46, he granted a decree for Rs. 13,329 10 9. Both the parties felt themselves aggrieved by the decrees passed in the three suits and six appeals were preferred to the High Court of Judicature of Mysore at Bangalore against those decrees. The High Court reversed the decree passed in suit No. 54 of 1946 47 and dismissed the appellant 's claim in its entirety. The decrees 666 passed in suit Nos. 55 of 1946 47 and 117 of 1945 46 were also set aside and proceedings were remanded to the District Court with a direction that a qualified engineer be appointed as Commissioner to determine the amounts payable to the respondent for work done in addition to the work agreed to be done under the written contract. The High Court ordered that the same be determined " in accordance with the directions " given in the judgment. The appellant has appealed to this court against the decrees in suits Nos. 55 of 1946 47 and 117 of 1945 46 with special leave under article 136 of the Constitution and he challenges the directions given in the order of remand. The dispute between the parties related to the construction of the out house, garage, puja room, the room on the first floor, the stair case 'leading to the upper floor room and the compound wall. In respect of these constructions (except for the compound wall) the District Judge awarded compensation to the respondents at the rate of Rs. 4 2 0 per square foot and in respect of the compound wall he awarded compensation at the rate of Rs. 5 per running foot, and certain additional charges. The High Court held that the respondent was entitled to receive compensation at the prevailing market rate for constructions which were not covered by the agreements dated October 1, 1942 and October 6, 1942. The High Court negatived the plea of the respondent that the appellant had agreed to pay him at " extra rates for deviations and additions not specifically contained in the original agreement. " The High Court then held that for the construction of the out house,puja room and the upper floor room, the respondent was entitled to receive compensation at the rate of Rs. 4 2 0 and for the out house he was entitled to receive " some extra amount for the additional constructions. " In these items, according to the High Court, there was no material deviation from the original plan. The High Court further directed that for the flight of stairs compensation be paid either "by way of a lump sum or on cubical content whichever was more practicable or common according to the rates which they proposed to indicate for such 667 additional work. " The High Court however held that there was substantial variation from the original contract in the construction of the garage, and therefore the garage could " not be covered by the contracted rate" and must be paid for at the rates current at the end of the year 1943. The High Court also directed that " if the extra items not covered by Exs. VII and VII(a) have been constructed or supplied by the defendants as claimed in his bills Exs. XXI, XXII and XXIII are to be paid for in addition to the flat rate, the basis on which they should be paid for may. . be fixed in accordance with the rates contained in exhibit II. " Counsel for the appellant submitted that as in the view of the High Court the respondent failed to prove the oral agreement pleaded by him, the suit should have been dismissed, and they should not have awarded compensation quantum meruit which was not claimed. it was urged that the respondent must succeed or fail ' on the case pleaded by him, and not on a cause of action not pleaded. In our view, there is no substance in this contention. As we have already observed, in respect of the additional work done by the respondent, both the parties set up conflicting oral agreements. These were not accepted by the High Court. If a party to a contract has rendered service to the other not intending to do so gratuitously and the other person has obtained some benefit, the former is entitled :to compensation for the value of the services rendered by him ' Evidently, the respondent made additional constructions to the building and they were not done gratuitously. He was therefore entitled to receive compensation for the work done which was not covered by the agreement. The respondent claimed under an oral agreement compensation at prevailing market rates for work done by him: even if he failed to prove an express agreement in that behalf, the court may still award him compensation under section 70 of the Contract Act. By awarding a decree for compensation under the Statute and not under the oral contract pleaded, there was in the circumstances of this case no 668 substantial departure from the claim made by the respondent. It was then urged that the High Court was in error in directing assessment of compensation for the additional work " in accordance with the rates mentioned in exhibit II. " The plaintiff 's witness T. section Narayana Rao had admitted that the rates in exhibit II were the current market rates for building construction work similar to the appellant 's building. In the view of the High Court, the rates set out in that bill were not excessive. If with a view to restrict the scope of the enquiry, the learned judges of the High Court gave a direction to the Commissioner for assessing compensation on the basis of rates which were approved by the plaintiff 's witness, it cannot be said that any serious error was committed in incorporating that direction which would justify our interference. Finally it was urged that the appellant was entitled to claim the loss suffered by him on account of defective work by way of an equitable set off in the claim made by the respondent in suits Nos. 55 of 1946 47 and 117 of 1945 46. But the appellant made a claim in a substantive suit for compensation for loss suffered by him because of the alleged defective work done by the respondent. That suit was dismissed by the High Court and it is not open to the appellant thereafter to seek to reagitate the same question in the companion suits when no appeal has been preferred against the decree in suit No. 54 of 1946 47. and no plea of equitable set off has been raised in the written statements in the companion suits. In our view, there is no substance in any of the contentions raised. The appeals therefore fail and are dismissed with costs. One hearing fee. Appeals dismissed.

The appellant entered into an agreement with the respondent who was a building contractor entrusting him with the work of constructing a house and shops. The respondent undertook the work but before it could be completed disputes arose between them and the appellant claimed compensation for effecting repairs to rectify defective work done by the respondent, and the respondent claimed compensation at certain rates set up by him for work for which there was no express provision in the written agreement. Suits based on their respective claims were filed by the appellant and the respondent which were partly decreed by the trial court. The High Court dismissed the appellant 's suit in its. entirety and remanded the respondent 's suit directing the appointment of a qualified engineer for determining, according to the directions given in the judgment, the amount payable to the respondent for work done in addition to the agreed work under the contract. The appellant contended that the respondent having failed to prove the oral agreement pleaded the respondents ' suit should have been dismissed and compensation quantum meruit which was not claimed should not have been awarded. Held, that if a party to a contract rendered service to the other not intending to do so gratuitously and the other party had obtained some benefit, the former was entitled to compensation for the value of the services rendered by him. The respondent not intending to do gratuitous work was entitled to compensation for additional work not covered by the written agreement. Even if the respondent failed to prove his claim for compensation at the prevailing market rate under an oral agreement the court had jurisdiction to award compensation for work done under section 70 of the Contract Act. The appellant 's suit having been dismissed by the High Court and no appeal having been preferred against it, it was not open to him to reagitate the same question of compensation in the companion suits in which no equitable set off was claimed.

The appellants, one a Sub Divisional Officer and the other a Naib Tehsildar, were entrusted with the duty of allotting land to displaced persons. The first respondent forcibly occupied the land allotted to B. On May 9, 1958, the first appellant ordered that B and other allottees similarly situated would be given possession of lands allotted to them on May 20, 1958. On May 16, 1958. the first respondent and others threatened with dispossession filed petitions in the High Court under article 226 of the constitution and obtained interim stay of delivery of possession till May 19, 1958, when the petitions would come up before the Division Bench for admission. On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958. The notice of the first stay order reached the appellants on May 19, 1958, but no notice of the second order was officially communicated to them till May 21, 1958. It was alleged that on May 20, 1938, the appellants, although informed of the second stay order by certain interested persons and the Advocate for one of the parties, formally dispossessed the respondent in disobedience of the Court 's order and handed over possession of the land to B. On the complaint of the respondent the High Court field that the .appellants were guilty of contempt of Court and, instead of committing them for contempt, administrated a warning as the appellants honestly believed that they were not bound to stay delivery of possession in absence of an official communication. The appellants appealed by special leave. Held, (per Das and Subba Rao, JJ.)that in a case of contempt for disobedience of a prohibitive order, as distinguished from an order of affirmative nature, it was not necessary to show that notice of the prohibitory order was served upon the party against whom it was granted. It would be sufficient if it was proved that the party had notice of it aliunde. N.Baksi vs O. K. (Thosh, A. T. R. (19.)7) Patn. 528, referred to. 128 There may be circumstances where officials entrusted with the carrying out of a legal order might have valid reasons to doubt The authenticity of the order conveyed to them by interested parties. But in the present case there could hardly be any such reasons. The appellants had really no justification for doubting the authenticity of an order communicated to them by an Advocate. Held, further. that in a matter relating to contempt of court, there cannot be both justification and apology. shareef vs The Hon 'ble Judges of the High Court of Nagpur; , , referred to. Although the appellants might have honestly believed that they were not bound to bold their band in absence of an official communication, that would be no defence to the charge of contempt of court, but only a relevant consideration in awarding the sentence. Per Daval, J. Contempt proceedings are criminal or quasi criminal in nature and it is essential that before any action can be taken the accusation must be specified in character. In the instant case, the respondent did not state that he was formally dispossessed. This would 'be for some reason if actual posssssion had been delivered. He could not be said to have come to court with clean hands. Further, the finding of the High Court that the appellants delivered possession honestly believing that they were not bound not to do so in the absence or the official communication meant that there was no defiance of the High Court 's order. There could be no willful disobedience since there was no belief in the existence of the order. It may not be necessary that the party against whom a prohibitory order was made must be served with the order, but it should have notice of the order before it could be expected to obey. Such notice must be from sources connected with the court passing the order. The alleged knowledge of the party cannot be made, to depend on the veracity of the witnesses examined by the party praying for action. In re Bryant L.R (1987 6) In Ex Parte Langly, Exparte Smith. In re Bishop L. R. and The Seraglio. L. R. , discussed.

The respondents plaintiffs gave a lease of an open plot lo the appellant defendant for a period of 10 years for the purpose of running a flour mill after making necessary construction thereon at a yearly rent. In the lease deed there was a clause for the renewal of the term, and also that if it was not renewed, the lessors were given the right to recover vacant possession on removal of construction at the expiry of the initial term. There was no renewal of the term on the expiry of 10 years lease period and the appellant defendant was permitted to bold over. Later by a notice nuder section 106 of the Transfer of Property Act the respondent called upon the appellant defendant to vacate and hand over vacant possession As the notice was not complied with a suit in ejectment was filed against the a appellant defendant The trial court negatived all the daffiness that were raised by the appellant defendant and decreed the suit for ejectment in favour of the respondents plaintiffs. The appellant defendant challenged the decres by an appeal to the District Court and while the appeal was pending the State by a Notification dated 26th March, 1980 applied Part II of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 to the village where the suit premises were situated. The appellant defendant with the permission of the court raised the contention in the appeal that he was entitled to the protection of Part II of the Act and since none of the grounds on which eviction could have been made under Part II had been made out by the respondents plaintiffs they were not entitled to recover possession. This contention was refuted ml behalf of The respondents plaintiffs on the ground that in view of the proviso to s 50 of the Act and particularly the latter part thereof Part II of the Act had no retrospective operation so far as 1052 pending appeals were concerned and such appeals had to be disposed of as if Part II of the Act was not applicable. The Assistant Judge took the view that the proviso to section 50 read with the latter part thereof expressly enacted that pending appeals arising out of decrees or orders passed before the coming into operation of the Act had to be disposed of as if the Act had not been passed and therefore the appellant defendant was not entitled to any protection as claimed by him and the respondents plaintiffs were entitled to the decree for possession and dismissed the appeal. The second appeal of the appellant defendant to the High Court was summarily dismissed. In the appeal to this Court on the question: whether a pending appeal would be governed by the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1947 Upon the Part II of the Act being made applicable in the area in which the suit premises were situated during its pendency . Dismissing the Appeal, ^ HELD: 1. Having regard to the two decisions in Chandrasingh Manibhai and others vs Surjit lal Ladhamal Chhaabda and others, and Shah Bhojraj Kuverji Oil Mills and ginning factory v, Subhash Chandra Yograj Sinha; , it is clear that sub secs. (2) and (3) of section 12 are prospective but sub sec. (1) thereof is retrospective in operation. [1056B] 2. By the Bombay Act 3 of 1949 three changes were made by the legislature, (i) it deleted the words other than execution proceedings and appeals" appearing in brackets from the proviso and inserted a new para graph at the end of that proviso dealing separately with execution proceedings and appeals, (ii) it inserted the words 'or shall be continued in such Courts as the case may be" in that proviso, and (iii) it deleted the word "thereupon" from the proviso. the object of amendments made at (ii) and (iii) was to remove the judicial confusion caused by Courts taking conducting views on the question whether the Act (1947 Act) applied only to transferred cases and not others. By the amendment made at i i) what war there in the body of the proviso was relegated to a new separate paragraph and no change was effected except that the effect of the wide expression ' all suits and proceedings" was re emphsised and further clarified by using the words "execution proceedings and appeals arising out orders, passed before the coming into operation of this Act" in the new paragraph. [1060G H; 1061B C] 3. (i) The substantive part of section 50, the proviso thereto and the new paragraph added at the end of the proviso has to be read as a whole to know the true nature and scope of the proviso. [1059B] (ii) Under the substantive part of section 50 on the coming into force of 11 the Act (the 1947 Act) the two earlier enactments (the 1939 Act and the 1053 1944 Act) stand repealed. If nothing more was said then section 7 of the A Bombay General Clauses Act, 1904 would have come into play and would have had the effect of saving the legal proceedings or remedies in respect of any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactments. In other words, all suits and proceedings including execution proceedings and appeals arising therefrom which were pending on the relevant date and which were governed by the provisions of the repealed Acts would have been saved and the rights and obligations of the parties thereto would have been worked out under the relevant provisions of the repealed Acts. But the proviso which provides for special savings clearly indicates that pending suits and original proceedings in which decrees and orders have not been passed alone should be governed by the provisions of the Act and not execution proceedings and appeals arising out of such decrees and orders passed before the coming into operation of the Act. [1061E G; 1062A B] (iii) The proviso was and has been enacted to provide for special savings which suggests that it has not been introduced merely with a view to qualify or create exceptions to what is contained in the substantive part of section 50. Secondly, it does appear that the Legislature while framing the Act (the 1947 Act) was enacting certain provisions for the benefit of tenants which conferred larger benefits on them than were in fact conferred by the earlier enactments which were repealed, this is clear if regard be had to the wider definition of the expression tenant ' adopted in section S (II) and therefore, the Legislature thought it advisable that in regard to pending suits and original proceedings of the description or categories specified therein, in which the decrees and orders were not passed the provisions of the Act should be made applicable. It is with this intention that the proviso to section 50 has been enacted in the manner it has been done. [1062C E] (iv) While extending the larger benefits of the 1947 Act to tenants the Legislature has used a very wide expression, namely, "all suits and proceedings between a landlord and tenant" so as to include within that category suits and proceedings filed under the repealed Acts as also under the general law or Transfer of Property Act [1062F] (v) The proviso read with the separate paragraph added thereto will have to be regarded as an independent provision enacting a substantive law of its own by way of providing for special savings. [1062G] Shankarlal Ramrotan vs Pandharinath Vishnu, 53 Bom. L. R. 319, approved. In the instant case, an appeal (arising out of a decree passed in a suit filed under the Transfer of Property Act) was pending when Part II of the Act was made applicable to village Kalwada, (where the suit property was situated) would be directly covered by the proviso read with the separate paragraph added there(o and the appeal was liable to be decided and disposed of as if the 1941 Act had not been passed, that is it had to 1054 be disposed of in accordance with the law that was then applicable to it. The Assistant Judge as well as the High Court were therefore right in coming to the conclusion that the appellant defendant was not entitled to any protection of the 1947 Act as claimed by him. [1063B Dl

The appellant company owns several estates wherein tea is grown and it was assessed to sales tax by the Sales Tax Officer in respect of the tea sold by it during the years 1954 55 and 1955 56. An appeal filed by the appellant was rejected by the, Appellate Assistant commissioner on the ground that the tea when sold was admittedly in godowns in the State of Travancore Cochin and that consequently the sales must be deemed to have taken place within the State of Travancore Cochin and hence liable to be included in the taxable turn over. When a further appeal was taken to the Sales Tax Appellate Tribunal, it was held that the property in the goods sold passed at Fort Cochin in Madras State on the fall of the hammer at the auction and hence the same was not taxable. The State filed a revision petition to the High Court. While the High Court accepted the finding of the Tribunal that the property in the goods sold passed at Fort. Cochin on the fall of the hammer at the auction, it differed from the Tribunal as regards the effect of the circumstance that the tea sold was, at the point of sale, physically in godowns situated in the State of Travancore Cochin and held the sales to be taxable. The appellant came to this Court after obtaining a certificate of fitness from the High Court. The only question argued before this court was whether a sale of tea effected by the appellant by auction at Fort Cochin in Madras State was a sale outside the State of Travancore Cochin orinside it and whether the same was taxable or not. Accepting.the appeal. HELD: No sales tax was to be levied in this case as the sales took place outside the State of Travancore Cochin. The test for determining whether a sale is inside or outside a State is where the property in the goods passed and in the present case the property in the goods passed in Fort Cochin in Madras State on the fall of the hammer at the auction. The point about the property not having passed in the Madras State was not argued before the High Court and was also not urged in the statement of case filed by respondent and hence the same was not allowed to be argued in the Supreme Court. Per Shah. The property in the goods passed at Fort Cochin in Madras State and as the goods were delivered not for the purpose of consumption in any particular State, the sales were not inside Travancore Cochin but were outside the 392 State and were as held by this Court in A. V. Thomas & Co. vs Deputy Commissioner of Agricultural Income tax and Sales Tax Trivandrum, 14 S.T.C. 363, not liable to be taxed under the Travancore Cochin General Sales Tax Act, 1950. The doctrine of territorial nexus had full play in sales tax legislation under the Government of India, Act, 1935 and was not abrogated by the enactment of Art, 286 of the Constitution. It continued to be in operation in the interregnum between the promulgation of the Constitution and the amendment of article 286 by the Constitution (Sixth Amendment) Act, 1956. It also applies now subject to certain modifications. Parliament has been given the power to formulate principles for determining when a sale or purchase of goods takes place outside the State or in the course of the import of the goods into or export of the goods out of the territory of India. Exercising the power under cl. (2) Parliament has enacted the and by section 4(2) the doctrine of territorial nexus has been given legislative recognition though in somewhat limited form. Deputy Commissioner of Agricultural Income tax and Salestax, Trivandrum vs A.V. Thomas & Co., I.L.R. 1960 Kerala 1395; India Copper Corporation Limited vs State of Bihar, ; ; A. V. Thomas & Co. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum 1953 Supp. 2 S.C.R. 608 363; Poppat Lal Shah vs The State of Madras, ; ; and the Tata Iron & Steel Company Ltd. vs The State of Bihar , referred to.

In pursuance of its policy of reorganising its business by concentrating more on manufacturing side than agency business, the appellant company gave up more than half of its agencies in Calcutta and some agencies in other places including Madras. The Union representing the workmen wrote to the Labour Commissioner to intervene stating that due to the company 's said policy it feared retrenchment. The company served notices on some of the employees for retrenchment to take effect two days thereafter. Also notice was given to the Labour Commissioner and the Conciliation Officer as required under section 25F (c) of the Industrial Disputes Act. On reference of the dispute to the Industrial Tribunal, the company justified the retrenchment and the Manager of the Calcutta branch gave evidence that retrenchment was done in pursuance of the said policy decision taken by the company. The Tribunal held that a good case for retrenchment was not made out and ordered reinstatement. The Tribunal did not accept the manager 's evidence holding that the development on the manufacturing side of the company 's business should have been contemporaneous with the surrender of agencies in Calcutta. The Tribunal also held that the policy decision was actuated by parochial considerations for transferring the company 's resources from Calcutta to Madras, that there was overload of work on the remaining employees; that the retrenchment could have been avoided by transferring the retrenched employees to other branches specially as their conditions of service included the liability of being transferred; and that the retrenchment was in breach of a. 25F(c) as the notice of retrenchment was two days prior to the date of the retrenchment and not with immediate effect, the proviso to r. 77(1) of the West Bengal/ndustrial Disputes Rules, 1958, did not apply and a notice of one month, as required by sub el. (1) of that rule, was necessary. The company filed a petition for a writ of certiorari. The Single Judge of the High Court set aside the. award and remanded the case to the Tribunal only for enforcing the retrenchment according to the principle of "last come first go". The Division Bench of the High Court in appeal, agreed with the findings of the Tribunal and held that the Single Judge was not competent to interfere with those findings. In appeal this Court, HELD: Some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence. The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in a writ petition for certiorari. (i) A writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction. It is available, in those cases 977 where a tribunal though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure 0r violates the principles of natural justice where no particular procedure is prescribed. But a mere wrong decision cannot be corrected by a writ of certiorari as float would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected. [985] Basappa vs Nagappa, ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra, [1957] S.C.R. 152 and Andhra Pradesh & Ors. vs Sree Ram Rao, ; , followed. (ii) The Tribunal wrongly rejected the company 's evidence on the ground that the policy decision being the function of the Board of Directors, the Manager was not competent to depose about it and that if the company, wanted to establish it, it should have produced a resolution of the Board. In its letter to the Labour Commissioner and also during conciliation proceedings the union had assumed that the company had taken the said decision, that consequently, retrenchment was apprehended and that therefore that officer should intervene. In these circumstances, the finding that the company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid. [987 D F] 1. K. Iron and Steel Co. vs Iron and Steel Mazdoor Union, , followed. (iii) It is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent for a tribunal to question its propriety. If a scheme for such reorganisation results in surplusage of employees, no employer is expected to carry the burden of such economic tribuanaldead weight and retrenchment has to be accepted as inevitable. however unfortunate it is. The Legislature therefore, provided by section 25F compensation to soften the blow of hardship resulting from 'an employee being thrown out of employment through no fault of his. The Tribunal having come to the conclusion that the said policy was not actuated by any motive of victimisation or unfair labour practice and therefore was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous. It is not the function of the Tribunal, to go into the question whether such 'a scheme is profitable or not and whether it should have been adopted by the employer. So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the 'conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision. The fact that in the earlier year some temporary appointments were made or that the Union 's Secretary deposed that work had accumulated would not mean that the surplus age calculated by the manager was unjustified. Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there Was no surplusage. [987 G, 989 D F] (iv) While reorganising its business, it is not incumbent on a company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time. These considerations which the Tribunal took into account were 978 totally extraneous to the issue beore it and the Tribunal ought not to have allowed its mind to be influenced by such consideration and thereby disabling itself from viewing the issue from proper perspective. The finding that the policy decision was actuated by parochial considerations, namely, for transferring the company 's resources from Calcutta to Madras at the cost of the former, was without evidence and was entirely speculative. Even assuming that the company decided to concentrate its activity in Madras there is nothing in the Industrial Law to compel it to continue its business in Calcutta. [988 D, G] D. Marcropollo & Co. vs Their Employees Union , Ghatge & Patil Concern 's Employee 's Union vs Ghatge & Patil (Transport) (P) Ltd. [1968] 1 S.C.R. 300, and Workmen of Subong Tea Estate vs The Outgoing Management of Subong Tea Estate, ; , followed. (v) The liability of an employee to be transferred and the right of the company to transfer him did not mean that there was a corresponding obligation on the company to transfer the employee to another branch. No evidence was led by the Union to show that if transferred, these men could have been absorbed at other places, or that there were vacancies or that the work there was the same as was done by them at Calcutta. There was no evidence whether wage scales, dearness allowance and other conditions of service were the same in Madras and other centres. It is true that the company had started developing its manufacturing business in Madras but the Tribunal made_ no enquiry whether these employees could have been fitted in the manufacturing work when they had done only administrative and 'other duties connected with the agency business, yet the Tribunal drew the conclusion that because the company failed to transfer these employees to other centres retrenchment was not justified. [989 G 990 A] (vi) Rule 77(1) of the West Bengal Industrial Disputes Rules, provides that when an employer finds it necessary to retrench any workmen he shall, at least _one month before the date of actual retrenchment, give notice thereof to the Labour Commissioner and the Conciliation Officer. The proviso to it states that where an employer retrenches any workman with immediate effect by paying him wages in lieu of notice he shall immediately after such retrenchment give notice thereof to the said officers. Though the notice of retrenchment was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso to r. 77(1). The object of the proviso clearly is that where it is not possible for an employer to give one months notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment. instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out. So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place. [990 C]

An application by the respondent for permission to build a cinema on a site within the City of Bombay was rejected by the Commissioner of Police, Bombay. The respondent applied for reconsideration of his application and the Commissioner, acting on the advice of the Cinema Advisory Committee, granted the application on the 16th July, 1947, though he indicated in an affidavit flied later that but for this advice he would have refused the application again. Subse quently, under instructions from Government the Commissioner sent the following communication to the respondent: "I am directed by Government to inform you that the permission to erect a cinema at the above site granted to you under the office letter dated 16th July, 1947, is hereby canceled. " The respondent applied to the High Court of Bombay for an order under section 45 of the Specific Relief Act directing the Commissioner of Police, Bombay, to withdraw the cancellation and to grant permission for the erection of the cinema, and the High Court directed the Commissioner of Police "to withdraw the order of cancellation passed by him." The Commissioner of Police appealed to the Supreme Court. Held, (i) that there was nothing in the letter dated 16th July, 1947, to indicate that the decision was not that of the Commissioner himself given in the bona fide exercise of the discretion vested in him. The sanction was not conse quently invalid merely because the Commissioner decided to accept the advice of the Cinema Advisory Committee even though without that advice he would not have granted the permission. (ii) There was no valid cancellation of the license because (a), the order of cancellation communicated to the respondent 'was one made by the Government of Bombay and not by the Commissioner on his own authority;he acted in the matter only as a transmitting agent; (b), under the rules framed under 136 section 22 (1) (f), (1) (g) and (n) of the City of Bombay Police Act 1902 the Government of Bombay had no power to cancel of license once issued. The only person vested with authority to grant or refuse a license for the erection of a building to be used for purposes of public amusement is the Commissioner of Police. (iii) The relief sought by the respondent of an injunction to direct the Commissioner of Police to grant permission for the erection of a cinema could not be granted because he had already granted permission and there was no valid order of cancellation. (iv) The other relief asking for an injunction directing the commissioner to withdraw the cancellation also could not be granted because Rule 250 vests the Commissioner with an absolute discretion in the matter. (v) Though there was no specific provision of law compel ling the Commissioner to exercise the discretion vested in him under Rule 250, inasmuch as the enabling power vested by Rule 250 was vested in the Commissioner for the welfare of the public at large it was coupled with a duty to exercise it when the circumstances so demanded. The Commissioner could consequently be ordered under section 45 of the Specific Relief Act to exercise his discretion and decide whether the licence should or should not be cancelled. (vi) The words "any law" in section 45 do not mean statutory law alone but embrace all kinds of law whether referable to a statutory provision or otherwise. Therefore the perform ance of duties under the rules can be compelled under the provi sions of section 45. (vii) There was no other specific and adequate legal remedy open to the respondent within the meaning of section 45 for though the respondent could have ignored the so called order of cancellation , he could only have done so. at his peril as it purported to emanate from the State Government and was served by a public officer. The remedy of injunction was not a proper and adequate remedy in the circumstances of the present case. (viii) The petition was not incompetent under section 46 of the Specific Relief Act as there had been a demand of justice and a denial thereof within the meaning of the section in the circumstances of the case. (ix) Public orders, publicly made, in exercise of a statu tory authority cannot be construed in the light of explana tions subsequently given by the officer making the order of what he meant or of what was in his mind, or what he intend ed to do. As such orders are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed ' they must be construed objec tively with reference to the language used in the order itself. 137 Julius vs Lord Bishop of Oxford (5 App. Cas, 214), Alcock, Ashdown & Co vs Chief Revenue Authority (50 I .A. 227) referred to.

In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree. Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr. and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89. Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit. Neither provision has any effect on the other as to time. [489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled. Nalinakaya Bysack vs Shyam Sunder Haldar & Ors. , ; at 545; Mersey Docks vs Henderson, [1988] 13 App. 595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors. vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors. vs Madhavan, AIR 1982 Kerala 126, referred to.

The Government of Karnataka issued an order dated the 30th June, 1969, sanctioning in centives and concessions in the matter of sales tax to the entrepreneurs for starting new industries in the Mysore State. On the 12th January, 1977, the Government issued another order, presecribing ceiling limits on the quantum of the sales tax or concession to be granted. Thereupon several persons filed writ petitions before the High Court, claiming that they had started new industries in the State because of the concessions granted to them under the order dated the 30th June, 1969 and they could not be deprived of the concessions given to them by the former order as the said grant of concessions constituted a promissory estoppel against the Government and the Government was not entitled to go back on the promise. The High Court upheld the contention of the petitioners and allowed the writ petitions. Against the decision of the High Court, these appeals were filed in this Court by the Assistant Commissioner of Commercial Taxes and others. Dismissing the appeals, the Court, ^ HELD: The contention of the appellants that the doctrine of Promissory Estoppel was not applicable in this case because the concessions granted under the order dated 30th June, 1969 were being misused, could not be accepted. There was nothing to show that any misuse was made of the concessions. A recital in the order dated 12th January, 1977, regarding misuse of the concessions, could not by itself establish that the concessions were misused. [949F G] There was no substance in the appellants ' contention that the 947 concessions granted by the order dated 30th June, 1969, were of no legal effect of the contention that the said order was ultra vires and bad in law, as there was no provision in the Kranataka Sales Tax Act ("the said Act") under which any refund could be granted, and the State Government had no authority to provide for refunds. Though the benefit regarding sales tax granted to the new industries was by way of refunds of sales tax paid to the extent provided in the order, in effect, the benefit granted was in the nature of an exemption from the payment of the sales tax or reduction in the sales tax liability to the extent stated in the Order. The mere fact that the order of 30th June, 1969 did not specify the power under which it was issued would make no difference because such a power was there in Section 8A of the said Act. Where the source of power under which an order is issued is not stated in the order but can be found on the examination of the relevant Act, the exercise of the power must be attributed to that source. The appeals were dismissed. [951C E] Union of India vs M/s Indo Afghan Agencies Limited, ; ; Century Spinning and Manufacturing Company Limited & Anr. vs The Ulhasnagar Municipal Council and Anr., [1970] 3 S.C.R. 854; M s Motilal Padampat Sugar Mills Company Pvt. Ltd. vs State of Uttar Pradesh and Ors., A.I.R. 1979 S.C.621 and State of Bihar and Anr. vs Usha Martin Industries Ltd., [1987] 65 STC 430, referred to.

Appeals Nos. 396 to 398 and 419 to 421 of 1959, and 152 of 1960. Appeals by special leave from the judgment and order dated November 5, 1958, of the Punjab High Court in First Appeals from Orders Nos. 42 to 44, 60 to 62 and 55 of 1955 respectively. M. C. Setalvad, Attorney General for India, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellants (in C. As. 396 to 398 of 59) and Respondent No. 2 (in C. As. 419 to 421 of 59 and 152 of 60). A. V. Viswanatha Sastri and G. C. Mathur, for the appellant (In C. As. 419 to 421 of 59), Respondent No. 1 (In C. As. 396 to 398 of 59) and Respondent No. 3 (In C. A. No. 152 of 60). G. C. Mathur, for the appellant (In C. A. No. 1.52 of 60). Gopal Singh and D. Gupta, for Respondent No. 2 (In C. As. 396 to 398 of 59) and Respondent No. 1 (In C. As. 419 of 59 and 152 of 60). February 2. The Judgment of the Court was delivered by 679 GAJEMDRAGADKAR, J. This is a group of seven appeals all of which arise from the same land acquisition proceedings in respect of which the Punjab Government originally issued a notification under section 4 of the Land Acquisition Act, 1894, on March 23, 1948. By this notification the State Government declared its intention to acquire land in the Ambala District for the construction of the new Capital for East Pun ab. No action was, however, taken in pursuance of this notification. Meanwhile the Punjab Legislature passed the East Punjab Requisition of Immovable Property (Temporary Powers) Act, 48 of 1948. Under the provisions of this Act the Government requisitioned the land in question for the purpose of resettling the persons who were likely to be evicted from their fands as a result of the construction of the new Capital. The said land was actually acquired on May 20,1951. This land forms part of a Jagir known as "Singh Purian " and comprises the areas of villages Mataur, Dhirpur, Saneta and Giddarpur in the District of Ambala. It appears that these villages originally formed part of the area covered by the Cls Sutlej States. section Amrao Singh was entered as owner of the land thus acquired. His wife is Sardarani Gurdial Kaur and his son is Satinder Singh. The estate of Amrao Singh was at the relevant time being managed by the Court of Wards. Pursuant to the provisions of the Act compensation was assessed by the estate officer and was accordingly offered by the State Government to the Court of Wards. The Court of Wards agreed to the amount of compensation thus offered and Amrao Singh himself did not object to it. Satinder Singh, however, was not willing to accept the said compensation and he raised several objections contending that it was wholly inadequate. He also objected to the compensation being paid either to the Court of Wards or to his father Amrao Singh, and in support of this contention he urged that since the estate once formed part of Cis Sutlej States, Amrao Singh was entitled only to its usufruct for his life and had no right to alienate or otherwise deal with its corpus. Satinder Singh 's plea was that after the 87 680 amount of compensation was finally determined it should be deposited in Government Securities or alternatively a part of it should be paid to him as compensation for the land of his reversionary rights. This plea applied to the three villages of Mataur, Saneta and Giddarpur. In regard to the village of Dhirpur, Amrao Singh 's wife Sardarani Gurdial Kaur claimed that she was in possession of the said village as it was charged for the payment of her maintenance by a compromise decree passed in her favour and against her husband Amrao Singh. She therefore claimed for herself the entire amount of compensation. Thus the contest about the apportionment of the compensation amount took a triangular form. At this stage it would be convenient to refer to the relevant provisions of the statute under which the present proceedings have been taken. In 1948 the relevant Punjab statute was East Punjab Act, 48 of 1948. Section 2 of the said Act deals with the requisitioning of property, and section 3 empowers the State Government to acquire requisitioned properties. Section 5 prescribes the principles according to which compensation had to be paid in regard to acquired properties. Section 5(e) provides that the arbitrator, in making his award, shall have regard to the provisions of sub section (1) of section 23 of the Land Acquisition Act, 1894 (1 of 1894) so far as the same can be made applicable. This Act was followed by the Punjab Requisitioning of Immovable Property (Amendment and Validation) Act, 1951 (President 's Act No. 2 of 1951). By section 5 of this Act section 5 of the earlier Act was amended, inter alia, by adding one provision. This provision provides that where any property is acquired in connection with the new Capital of the State of Punjab compensation may be paid whether by agreement or by award of the arbitrator, either in money or in kind or partly in money and partly in kind, and where there is no person competent to alienate the property, or there is a person with limited interest in such property, or there is any dispute as to the persons entitled to receive the compensation or as to the apportionment thereof, the arbitrator shall make an award in such a manner or 681 make an arrangement in such a way as may be equitable having regard to. the interests of the persons concerned; in other words, the principle of equitable apportionment which had been recognised by section 32 of the Land Acquisition Act of 1894 has in effect been added by this amending Act. In 1953 the Punjab Requisitioning and Acquisition of Immovable Property Act, 1953 (XI of 1953), came into force. Section 24 of this Act repeals the two earlier Acts of 1948 and 1951, and after this Act came into force it was the provisions of this Act that governed the proceedings relating to the requisitioning, and acquisition of immovable properties in Punjab. The equitable principle which was inserted in the Act of 1948 by the amending Act of 1951 has been retained in the present Act under section 8 (3). Section 23 (1) of this Act validates requisitions and acquisitions of properties there specified, while sub section (2) of the said section provides, inter alia, that acquisition of immovable property purporting to have been made before the commencement of this Act shall be deemed for all purposes to have been validly made as if the provisions of the said enactment or order had been included and enacted in this section, and this section had beenin force on and from the date of the acquisition. It has been held by a Full Bench of the Punjab High Court in Colonel His Highness Raja Sir Harindar Singh Brar Bans Bahadur, Ruler, Faridkot State vs The State of Punjab (1) that compensation for property acquired under the Land Acquisition Act, 1894 or under the Punjab Act of 1948 must be paid in accordance with the principles set out in those Acts and not in accordance with the principles set out in the later Act of 1953. This position is not disputed by either party in the present proceedings. Thus it is common ground that for determining the amount of compensation and its apportionment amongst the rival claimants the provisions of the relevant Act of 1948 are applicable though the proceedings were held under the relevant provisions of the later Act of 1953. In fact, the appointment of the arbitrator who conducted the proceedings (1) 682 in the present case was made by the State Government under section 8(1)(b) of the Act of 1953. We have already noticed that the provisions of section 8 (3) of this Act were included by an amendment in the earlier Act of 1948 by the amending Act of 1951. Before the arbitrator the acquisition proceedings were dealt with in four different cases, each one being related to the lands in one of the four villages in question. On the contentions raised by the parties the arbitrator first considered two preliminary issues. They were: (1) Is Satinder Singh competent to object to the amount of compensation awarded in the case, and (2) Is the appointment of the arbitrator invalid on account of the agreement between the State and the Court of Wards about the amount of compensation payable by the State to the Court of Wards. It appears that Amrao Singh contended that his son Satinder Singh had no locus standi in the matter, and that since he and the Court of Wards had agreed to the amount of compensation offered by the State the arbitrator had no jurisdiction to hold any enquiry on the claim put forward by Satinder Singh. The arbitrator, however, rejected Amrao Singh 's pleas, and held that he was entitled and bound to hold the proceedings and to consider the merits of the pleas raised by Satinder Singh. The arbitrator then proceeded to examine the merits of the rival contentions. He found that the property in suit was a part of Cis Sutlej States and so Amrao Singh had only a limited interest in it and had no right to alienate it. As a result of this conclusion the arbitrator held that Satinder Singh, who was the next heir, was entitled to contest the amount of compensation and was also entitled to claim a share in the distribution of the amount. In regard to Dhirpur land he held that Sardarani Gurdial Kaur was entitled to retain the possession of the village for her maintenance under a compromise decree and that both Amrao Singh and Satinder Singh were bound by the said decree. In the result the arbitrator determined the amount of compensation and directed that the entire amount of compensation in regard to Dhirpur 683 should be invested in Government Securities in the name of the holder of Manauli Estate with a charge in favour of Gurdial Kaur which would entitle her to its annual profits in lieu of maintenance. He also directed that on the death of Gurdial Kaur the amount should be divided half and half between the then holder of the Estate and the next heir or heirs taken together. In regard to the lands in the three other villages the arbitrator directed that the amount of compensation determined by him should be paid in cash, 3/4ths to Amrao Singh and 1/4th to the next sole heir Satinder Singh. The amount originally offered by the Government and ultimately awarded by the arbitrator were as follows: Village Govt. Offer Award Mataur (Plus Rs. 93,309.00 Rs. 1,82,813.00 15% acquisi tion charges) Saneta Rs. 42,179.00 Rs. 55,377.00 Giddarpur Rs. 15,726.00 Rs. 27,640.00 Dhirpur Rs. 1,17,912.00Rs. 2,27,860.00 It would thus be seen that the contest made by Satinder Singh in respect of the amount of compensation originally offered by the Government substantially succeeded inasmuch as the total amount offered was increased by the arbitrator by Rs. 2,24,564/ . The order thus passed by the arbitrator was recorded by him in the four cases tried before him in respect of the four villages. These orders became the subject matter of several appeals in the Punjab High Court. The State of Punjab preferred four appeals 67 to 70 of 1955; Satinder Singh preferred three appeals 42 to 44 of 1955; Amrao Singh preferred four appeals 59 to 62 of 1955; and Sardarani Gurdial Kaur preferred Appeal No. 55 of 1955. In its appeal the State urged before the High Court that Satinder Singh was not competent to object to the compensation offered by the State and so the proceedings held before the arbitrator were invalid. It was also urged alternatively that Amrao Singh and Sardarani Gurdial Kaur were not entitled to compensation at the higher rates directed by the arbitrator, and that the benefit 684 of the award should be available only to Satinder Singh, and it was contended that the amount of compensation fixed by the arbitrator was excessive. All these contentions have been rejected by the High Court and the appeals preferred by the State have been dismissed. The State has not challenged the correctness of the decision of the High Court, and so we are not concerned in the present appeals with the merits of the pleas raised by the State before the High Court. In the appeals preferred by Satinder Singh the High Court rejected his plea that the valuation fixed by the arbitrator in respect of certain properties was inadequate. It also rejected his plea that the amount of compensation ordered to be divided between him and his father Amrao Singh should be deposited in Government Securities. The High Court held that though equitable considerations would be relevant in deciding the question of apportionment, it would be inexpedient to direct that the amount should be deposited in Government Securities because in that case no one will ever be absolutely entitled to it. The High Court also thought that since the State in whose favour the estate may finally lapse owing to escheat did not object to the apportionment made by the arbitrator there was no reason to interfere with the actual order. as to apportionment between father and son which the arbitrator thought was reasonable. In dealing with this question the High Court took the view that the alleged reckless extravagance of the father on which the son relied was not relevant. In the result the three appeals filed by Satinder Singh were dismissed. The High Court then dealt with the appeal preferred by Amrao Singh, and it confirmed the finding of the arbitrator that the property acquired originally formed part of Cis Sutlej States and that in regard to the said States the rule is now well settled that the Jagirs large or small in Cis Sutlej States are non transferable and are even exempt from attachment as political pensions, the holder for the time being having only life interest in the estate, the corpus of which is to be 685 kept intact so that it may pass from heir to heir and lapse in favour of the Government in the absence of any legal heir. The High Court also held that even if the character of the property was considered from the angle of the general custom of Punjab the same conclusion followed because the property in question was undoubtedly ancestral immovable property in the hands of the father qua his son and as such the father had no right to alienate it to the prejudice of his son without legal necessity or any other compelling reason. That is how the principal point urged by the father against the claim set up by his son was rejected and his appeals were dismissed. The appeal preferred by Sardarani Gurdial Kaur also met the same fate and was dismissed. It appears that all the three claimants urged before the High Court that they were entitled to interest at a reasonable rate on the amount of compensation from the time that the property was acquired and they lost possession of it. This contention was likewise rejected by the High Court, and it was held that under the relevant Act of 1948, it was not permissible to award interest on the amount of compensation, The result was that the decision of the arbitrator was fully confirmed and all the appeals preferred before the High Court were dismissed. This decision of the High Court is challenged by special leave by the three claimants Amrao Singh, Satinder Singh and Sardarani Gurdial Kaur respectively. The appeals preferred by Satinder Singh are Civil Appeals Nos. 396 to 398 of 1959; Amrao Singh 's appeals are Civil Appeals Nos. 419 to 421 of 1959, whereas Sardarani Gurdial Kaur 's appeal is Civil Appeal No. 152 of 1960. That is how this group of seven appeals arises from the same land acquisition proceedings taken by the State of Punjab in respect of the lands situated in the four villages already mentioned. We would hereafter refer to Satinder Singh as the appellant, Amrao Singh as respondent 1, the State of Punjab as respondents, and Sardarani Gurdial Kaur as Sardarani. Logically then the first point which we must consider is the nature of the property and the title of 686 respondent 1 in relation to it. That is the principal point which Mr. Viswanatha Sastri sought to raise before us in the appeal filed by respondent 1. This question has been considered both by the arbitrator and the High Court elaborately and they have concurred in making a finding against respondent 1. As the judgment of the High Court points out the fact that the lands in question originally formed part of the domain of section Budh Singh or of the Cis Sutlej States was not seriously disputed before the High Court. This implied concession naturally makes Mr. Sastri 's task very difficult. Besides, we are not satisfied that there is any substance in the plea which Mr. Sastri has raised before us on this point. The history of the property has been considered by the arbitrator, and the arbitrator as well as the High Court have placed considerable reliance on the relevant statements made in the Punjab Land Administration Manual compiled by Sir James Mac. Douie and revised in 1931. Reliance has also been placed on the relevant statements in the compilation known as the " Chiefs and Families of Note in the Punjab " published by the Punjab Government in 1940. The pedigree table of the Singh Purian family given in this publication shows that the family was founded by section Kapur Singh who held the title of Nawab. section Budh Singh was his grandson and he was the head of the family in 1809. Amrao Singh is a descendant of Gopal Singh who was one of the seven sons of Budh Singh. The large Jagirs owned by the families are situated in Kharar and Rupar Tehsils of Ambala District and they formed part of the area formerly known as Cis Sutlej States. Paragraphs 100, 101 and 102 of Douie 's Land Administration Manual give a detailed account of the families and the in properties. The same is also briefly mentioned in the Punjab Gazetteer dealing with Ambala, District. It appears from this material that the Sardars in the Cis Sutlej States were independent Rulers whose ancestors ultimately came under the protection of the British Government in about 1809. Between 1809 to 1847 the British Government tried to enforce good 687 government amongst the semi independent States; in order to achieve this object the British Government gradually strengthened its hold and tightened the reins with a view to enforce good government. It appears that the Government exercised the right of escheat very freely and whenever there was lapse of heirs it G. took up the management and government of the area in its own hands. After 1846 Government began to introduce sweeping measures of reform and with that object Government reduced the privileges and rights of the petty chieftains. In 1849 the chieftains lost their sovereign powers and were deprived of their criminal, civil and fiscal jurisdiction so that they became no more than Jagirdars. Their rights in the lands held by them were, however, left untouched. Rules regarding succession to these Jagirs were framed by the Central Government from time to time and family custom was respected within reasonable limits. One of these rules is to be found in paragraph III of Douie 's Manual. Clause (c) of this paragraph laid down " that alienations by a Jagirdar or pattidar of portions of his holding, whether to his relations or strangers, shall neither be officially recognised nor officially recorded. " Similarly paragraph 164 emphasised the inalienable character of the Jagirs and referred to the opinion expressed by the Court of Directors whereby the said character was clearly and unambiguously notified. " We should have supposed ", said the Court of Directors, " that there could be no necessity for notifying this as a rule, since it follows from the very nature of a Jagir, which cannot be alienated and can only be attached for the life of the holder. " There is thus no doubt that the statements in the authorised publications to which we have just referred and on which the High Court and the arbitrator have relied conclusively show that the holder of property which was a part of Cis Sutlej States did not own the property absolutely but held it as a limited owner. The Kaiflat Taluka of Singh Purian family which has been produced in these proceedings supports the same conclusion. 688 Mr. Sastri, however, wanted to contend that the evidence on the record was insufficient to justify the conclusion that the lands under acquisition formed part of the original estate of section Budh Singh; but he fairly conceded that respondent 1 had not gone into the witness box and had not purported to justify his plea that any of the lands in dispute have been acquired either by him or by his ancestors in such manner that they could be treated as the absolute properties of the holder. The circular issued by the Office of the Commissioner and Superintendent of Cis Sutlej States on February 26, 1857, unambiguously shows that " all proprietary right to any part of the lands forming a part of the Jagir which may be held by the Jagirdar will be considered as pertaining to the Jagir and will go to the holder of the Jagir for the time being." This principle was applicable even to houses and other buildings standing on the Jagir which are in the nature of forts and may be considered to appertain to the estate. The only exception made was in regard to the shops built or acquired by the Jagirdar in a town apart from his place of residence. Therefore, on the material as it stands it is difficult to sustain the plea that the concurrent findings made by the arbitrator and the High Court on the question about the character of the property and the nature of the title held by the holder of the said property are wrong. Incidentally it may be added that the same conclusion has been reached by the High Court on the ground of the customary law prevailing in the Punjab. We must accordingly proceed to deal with the rest of the dispute between the parties on the basis that the respondent 1 is not the absolute owner of the property and that the appellant is entitled to represent the reversionary interest in the present proceedings. That takes us to the pleas raised by the appellant in his appeals. On his behalf it has been urged by the learned Attorney General that the whole amount of compensation in respect of the three villages Matsur, Sunets and Giddarpur should be appropriately invested Pond both he and respondent 1 should 689 be allowed to enjoy the income coming from the said investment in the share which may ultimately be fixed between them. In support of this contention he relies on the provisions of section 32 (1) (b) of the Land Acquisition Act 1 of 1894. This provision empowers the Court to direct that the compensation amount payable to the owners should be invested either in Government or approved securities and the payment of interest or other proceedings arising from such interest should be directed to the person or persons who would for the time being have been entitled to the possession of the lands under acquisition. The argument is that since respondent 1 was not entitled to alienate the property and was under an obligation to keep the corpus in tact for the benefit of the reversioners the compensation amount payable in respect of the acquisition of the said property should be similarly treated and saved for the benefit of the reversioners; in other words, it is urged that the compensation amount should be treated as a conversion of the corpus of lands and the same should not be distributed as directed by the High Court. Section 32 deals with cases where the land acquired belonged to any person who had no power to alienate the same; and since respondent 1 was not entitled to alienate the property the principle enunciated by section 32(1) (b) is pressed into service as an equitable principle which should be applied to the present case. In support of this argument the learned Attorney General has relied on decisions of different High Courts where this principle has been extended to watan property (Shri Somashekhar Swami vs Bapusaheb Narayanrao Patil (1) ), to the property belonging to an idol (K. C. Bannerjee, Official Receiver, In re (2) ), to the property held by a widow (Mt. Gangi vs Santu & Others (3)), or to land belonging to an impartible estate (Special Deputy Collector, Ramnad vs Rajah of Ramnad (4) ). This contention, however, ignores that the provisions of section 32 (1) (b) are intended to be applied only provisionally and for a short period. The scheme of (1) A.I.R. 1948 Bom. (2) A.I.R. 1928 Cal 402. (3) A.I.R. 1929 Lah. (4) A.I.R. 1935 Mad. 690 section 32 is that in cases to which the said section applies the Court shall order the compensation amount to be invested in the purchase of other lands which would be held under the right, title and conditions of ownership as the land in respect of which the compensation amount has been deposited. That is the plain effect of section 32(1)(a). Section 32 (1) (b) comes into operation if such purchase cannot be effected forthwith; and it has to remain in operation until such purchase is made. In other words, if the compensation amount cannot be immediately invested in the purchase of other lands, as an interim measure the said amount may be invested in the prescribed securities and income thereof distributed to those who were entitled to it. Therefore, even if the principle underlying section 32 is extended to the present case on equitable considerations it would not justify the appellant 's claim that the compensation amount should itself be treated as corresponding to the corpus of lands acquired and should be permanently invested in suitable securities leaving to the parties concerned the right to enjoy only its income. Such a course is plainly inconsistent with the principle recognised by section 32(1)(a). Therefore, we are not prepared to accede to the argument that the compensation amount should not be divided between the parties and should be permanently deposited in the fund set apart in proper investments. If the said amount must, therefore, be divided between the appellant and respondent 1 how should it be divided? That is the next question which calls for our decision. The appellant contends that the fairest way to distribute this amount would be to divide it half and half between him and respondent 1. We are inclined to hold that this contention is well founded. As the High Court has observed, it is not at all easy to estimate the relative value of the two interests represented by the appellant and respondent 1. The High Court thought that the ratio may be 2/3 and 1/3 or 3/4 and 1/4 there being little to choose between the two; and so it confirmed the apportionment made by the arbitrator. This decision, however, suffers from one serious infirmity. The High Court thought that 691 the conduct of respondent 1 which was characterized by the appellant as the conduct of a reckless spend. thrift and squanderer was wholly irrelevant in determining the shares to which the appellant and, respondent 1 were respectively entitled. In our opinion, in deciding the question of apportionment on equitable grounds it is relevant and material to take, into account the grievance made by the appellant that the money which would be left with respondent 1 would be frittered away by him and no part of it would reach the reversioner. In support of this contention, the appellant relied on the past conduct of respondent 1. Several alienations made by him are cited and attention is invited to the fact that after respondent 1 became a major his estate has been taken over by the Court of Wards for management under section 5(2) (b) of the Court of Wards Act, 1903, from 1928 to 1938, 1939 to 1947, 1948 to 1954. It has also been urged that since 1954 respondent 1 has made several unauthorised alienations. We do not propose to consider the validity of each one of these allegations but we have no hesitation in holding that on the material available on the record it would be difficult to reject as unfounded the apprehensions which the appellant entertains in regard to the fate of the amount which may be given to respondent 1. Besides, we are also inclined to take into account the fact that the appellant himself has a son and in apportioning the amount we have to bear in mind the fact that the amount is being paid in respect of the lands which respondent 1 holds as a limited owner and the reversionary interest in respect of which has to be safeguarded. We would, therefore, direct that the amount of compensation in respect of the three villages should be divided between the appellant and respondent 1 half and half. It is significant that the amount of compensation in respect of the fourth village which is at present charged for the maintenance of Sardarani has been ordered to be divided half and half. Therefore, we would uphold the contention raised by the learned Attorney General on behalf of the appellant and direct that the said amount should be divided not as 692 2/3 and 1/3 but half and half between the father and son. The next point which the learned Attorney General wanted to urge was that the increase in the amount of compensation directed by the arbitrator should be paid to him exclusively. His case was that the Court of Wards and respondent 1 had accepted the amount offered by the State Government, and it was because he raised contentions that the proceedings were referred to the arbitrator whose award ultimately enhanced the compensation amount to a very large extent. This contention was not raised either before the arbitrator or before the High Court, and we have therefore not allowed the appellant to raise it before us. That takes us to the question of interest which has been urged before us by all the three claimants alike. The argument is that the amount of compensation awarded should carry a reasonable rate of interest from the date of acquisition when the claimants lost possession of their properties. This argument has been rejected by the High Court principally on the ground that the relevant Act of 1948 makes no provision for payment of interest and omission to make such a provision amounts in law to an intention not to award interest in regard to compensation amount determined under it. In support of this conclusion the High Court has referred to the fact that section 5(e) of the Act specifically makes applicable the provisions of section 23(1) of the Land Acquisition Act of 1894, and that, it is said, inevitably leads to the inference that sections 28 and 34 of the Act which deal with the payment of interest are not intended to apply to the proceedings under it. In our opinion, this conclusion is not wellfounded. It would be legitimate to hold that by the application of section 23(1) in terms the provisions of section 23(2) are by necessary implication excluded. If the Legislature has provided that only one part of section 23 should be applied it would be reasonable to hold that the other part of section 23 was not intended to be applied; but we do not see how it would be reasonable to hold 693 that by the application of section 23(1) the principles under lying the provisions of sections 28 and 34 are also excluded. Therefore, it is necessary to examine this question on general grounds and principles without assuming that the application of these general considerations is excluded by any of the provisions of the Act. What then is the contention raised by the claimants? They contend that their immovable property has been acquired by the State and the State has taken possession of it. Thus they have been deprived of the right to receive the income from the property and there is a time lag between the taking of the possession by the State and the payment ' of compensation by it to the claimants. During this period they have been deprived of the income of the property and they have not been able to receive interest from the amount of compensation. Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State. This question has been considered on several occasions and the general principle on which the contention is raised by the claimants has been upheld. In Swift & Co. vs Board of Trade (1) it has been held by the House of Lords that " on a contract for the sale and purchase of land it is the practice of the Court of Chancery to require the purchaser to pay interest on his purchase money from the date when he took, or might safely have taken, possession of the land. " This principle has been recognised ever since the decision in Birch vs Joy (2). In his speech, Viscount Cave, L.C., added that " this practice rests upon the view that the act of taking possession is an implied agreement to pay interest ", and he points out that the said rule has been extended to cases of compulsory purchase under the Lands Clauses Consolidation Act, 1845. In this connection distinction is drawn between acquisition or sales of land and requisition of goods by the State. In regard to cases falling under the latter category this rule would not apply. (1) 532. (2) ; , 694 In Inglewood Pulp and Paper Co. Ltd. vs New Brunswick Electric Power Commission (1), it was held by the Privy Council that " upon the expropriation of land under statutory power, whether for the purpose of private gain or of good to the public at large, the owner is entitled to interest upon the principal sum awarded from the date when possession was taken, unless the statute clearly shows a contrary intention. " Dealing with the argument that the expropriation with which the Privy Council was concerned was not effected for private gain, but for the good of the public at large, it observed " but for all that, the owner is deprived of his property in this case as much as in the other, and the rule has long been accepted in the inter pretation of statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The right to receive the interest takes the place of the right to retain possession and is within the rule. " It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it he is entitled to claim interest in place of right to retain possession. The question which we have to consider is whether the application of this rule is intended to be excluded by the Act of 1948, and as we have already observed, the mere fact that section 5(3) of the Act makes section 23(1) of the Land Acquisition Act of 1894 applicable we cannot reasonably infer that the Act intends to exclude the application of this general rule in the matter of the payment of interest. That is the view which the Punjab High Court has taken in Surjan Singh vs The East Punjab Government (2), and we think rightly. It is, however, urged by Mr. Gopal Singh for respondent 2 that what the claimants are entitled to receive is compensation, and since the word " compensation " is used by section 5(1) both in respect of requisition as well as acquisition it would not be fair to import the general rule about the payment of interest where property is acquired. Compensation, it is urged, should represent the price of the property and there is no (1) , (2) A.I.R. 1957 Punj. 265, 695 justification for adding to the said price any amount by way of damages. We are not impressed by this argument. When a claim for payment of interest is made by a person whose immovable property has been acquired compulsorily he is not making claim for damages properly or technically so called; he is basing his claim on the general rule that if he is deprived of his land he should be put in possession of compensation immediately; if not, in lieu of possession taken by compulsory acquisition interest should be paid to him on the said amount of compensation. In our opinion, therefore, the fact that section 5(1) deals with compensation both for requisition and acquisition cannot serve to exclude the application of the general rule to which we have just referred. Mr. Gopal Singh then relied on some observations made by this Court in Seth Thawardas Pherumal vs The Union of India (1). Bose, J., who spoke for the Court has set out four conditions which must be fulfilled before interest can be awarded under Interest Act of 1839, and observed that not one of those was present in the case with which the Court was concerned. That is why it was held that the arbitrator had erred in law in thinking that he had the power to allow interest simply because he thought the demand was reason able. Having come to this conclusion the learned Judge proceeded to make certain observations in respect of the applicability of section 34 of the Code of Civil Procedure. He added that section 34 does not apply because the arbitrator is not a Court within the meaning of the Code, nor does the Code apply to arbitrators, and but for section 34 even a Court would not have the power to give interest after the suit. These observations were considered by this Court in Nachiappa Chettiar vs Subramaniam Chettiar (2), and it was pointed out that they were obviously not intended to lay down any broad and unqualified proposition like the one which is urged before us by Mr. Gopal Singh in the present appeal. In this connection we may incidentally refer to Interest Act, 1839 (XXXII of 1839). Section 2 of this (1) (2) ; 696 Act confers power on the Court to allow interest in cases specified therein, but the proviso to the said section makes it clear that interest shall be payable in all cases in which it is now payable by law. In other words, the operative provisions of section 1 of the said Act do not mean that where interest was otherwise payable by law Court 's power to award such interest is taken away. The power to award interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to section 1. This question was considered by the Privy Council in Bengal Nagpur Railway Co. Ltd. vs Buttanji Ramji (1). Referring to the proviso to section 1 of the Act the Privy Council,observed " this proviso applies to cases in which the Court of equity exercises its jurisdiction to allow interest. " We have already seen that the right to receive interest in lieu of possession of immovable property taken away either by private treaty or by compulsory acquisition is generally regarded by judicial decisions as an equitable right; and so, the proviso to section 1 of the Interest Act saves the said right. We must accordingly hold that the High Court was in error in rejecting the claimants ' case for the payment of interest compensation amount, and so we direct that the said amount should carry interest at 4% per annum from the date when respondent 2 took possession of the claimants ' lands to the date on which it deposited or paid the amount of compensation to them. In the appeal preferred by the Sardarani, Mr. Mathur attempted to challenge the propriety of the order passed by the High Court directing that the amount of compensation in respect of Dhirpur lands should be .invested and that the Sardarani should receive her maintenance from the interest accruing from such investment. Apart from the fact that the order made in that behalf is fair and just, it is clear that the learned counsel for the Sardarani himself had suggested that such an order should be passed. Therefore, we cannot allow Mr. Mathur to raise any contention against the said order in the present appeal. (1) (1938) L.R. 65 I.A. 66, 697 Mr. Mathur further contended that if we were to award interest on the amount of compensation his client would be entitled to receive the whole of the interest on the compensation amount ordered to be paid in respect of the lands in Dhirpur village. That no doubt is true, and indeed Mr. Mathur 's claim in that behalf is not disputed either by the appellant or by respondent 1. We would accordingly modify the decree passed by the High Court by directing that the amount of compensation payable in respect of the lands in Mathur, Saneta and Giddarpur may be divided half and half between the appellant and respondent 1, and that interest should be paid on all the items of compensation determined by the High Court at 4% per annum. The interest in regard to the compensation payable for Dhirpur lands should be paid to the Sardarani, whereas the interest in regard to the lands in the three other villages should be paid half and half to the appellant and respondent 1. In making the payments of compensation amounts to the respective parties whatever amounts may have been withdrawn by or on their behalf should be taken into account and their claims should be properly adjusted in that behalf. In the circumstances of this case we direct that the appellant should get half his costs from respondent 1 and the other half from respondent 2 in his three appeals. There will be only one set of hearing costs. The costs in the remaining four appeals should be borne by the parties. C. A. Nos. 396 to 398 of 1959 and C. A. No. 152 of 1960 allowed in part. C.A. Nos. 419 to 421 of 1959, dismissed.

Lands in four villages forming part of the Cis Sutlej jagir were compulsorily acquired under the East Punjab Acquisition and Requisition of"Immovable Property (Temporary Powers) Act, 1948. At the time of the acquisition A was the holder of the jagir. Possession over one of the villages had been given to 677 A 's wife G in lieu of maintenance under a consent decree. The matter of payment of compensation was referred to an arbitrator. A claimed that he was entitled to the entire compensation amount as he was the present holder of the jagir. A 's son S claimed that the lands, acquired were inalienable, that A merely had a life interest therein and that the compensation money should be deposited out of which A should get only the interest for his life. G claimed that she was entitled to the entire compensation in respect of the lands over which she was in possession. All the claimants claimed interest on the compensation amount from the date of taking of possession to the date of payment of compensation. The arbitrator held: (i) the acquired lands were inalienable and A merely had a life interest thereiq, (ii) S was entitled to a share in the compensation awarded, (iii) the amount of compensation for the first three villages should not be deposited but should be divided between A and S in the proportion of 3/4th to 1/4th, (iv) the compensation for the fourth village should be deposited and the interest thereof be paid to G and after the death of G the amount be divided between A and S half and half, and (v) the claimants were not entitled to any interest on the amount of compensation. On appeal the High Court confirmed the awards in toto. The claimants appealed to the Supreme Court by special leave. Held, that the acquired lands formed part of a Cis Sutlej Jagir which was inalienable, that A was merely a limited owner thereof and was not entitled to the entire amount of compensation and that the reversioners were also entitled to a share therein. The compensation amount could not be permanently deposited leaving the parties the right to enjoy only its income. Even if the equitable principle of section 32, Land Acquisition Act, 1894, was applied it would not justify the permanent investment of the compensation amount. Section 32(1)(b) was intended to be applied provisionally for short periods, where other lands had to be purchased out of the compensation money but were not immediately available and the money had to be invested as an interim measure till such lands were available. It was fair to divide the compensation money in respect of the first three villages half and half between A and section In deciding the question of apportionment on equitable grounds it was relevant and material to take into account the facts that no part of the amount paid to A would reach the reversioners, that S himself had a son and that the reversionary interest had to be safeguarded. Shri Somashekhar Swami vs Bapusaheb Narayanrao Patil A.I.R. , K. C., Banerjee, Official Receive?, In re: A.I.R. 1928 Cal. 402, Mt. Gangi vs Santu A.I.R. 1929 Lah. 736 and Special Deputy Collector, Ramnad vs Rajah of Ramnad A.I.R. 1935 Mad. 215, referred to. Held, further, that the claimants were entitled to interest at 4% per annum on the compensation amount from the date when possession was taken by the State to the (late on which it deposited 678 or paid the amount of compensation to the claimants ' The provision in section 5(e) of the 1048 Act which made section 23(1) of the Land Acquisition Act, 1894, applicable did not exclude the application of SS. 28 and 34 of the latter Act which dealt with the payment of interest. On general principles, the act of taking possession of immovable property generally implied an agreement to pay interest on the value of the property ; the right to receive interest took the place of the right to retain possession. The application of this rule was not excluded by section 5 of the 1948 Act. Even under the Interest Act, 1839, the power to award interest on equitable grounds was expressly saved by the proviso to section 1. Swift & Co. vs Board of Trade , Birch vs joy ; and Inglewood Pulp and Paper Co. Ltd. vs New Brunswick Electric Power Commission , applied. Surjan Singh vs The East Punjab Government A.I.R. 1957 Punj. 265, approved. Seth Thawardas Pherumal vs The Union of India and Nachiappa Chettiar vs Subramaniain Chettiar ; , referred to.

The appellants purchased certain lands in the State of Punjab and the respondents filed a suit claiming a right of preemption thereon. Under a scheme of consolidation, however, the appellants had before the filing of the suit, been allotted some other lands in lieu of the lands purchased by them, and they contended that the right of pre emption claimed by the respondents did not extend to these lands. The trial court and the High Court decreed the respondents ' suit holding on the oasis of section 24 of the Patiala and East Punjab States Union Holdings (Consolidation and Prevention of Fragmentation) Act 5 of 2007 BK that it was open to pre emptor to follow the land which had been given to the vendees in consolidation proceedings in lieu of the land which was the subject matter of the sale deed. The appellants came to this Court by special leave. HELD : Section 24 when it says that the landowner or the tenant at will shall have the same right in the land allotted to him as he bad in his original holding or tenancy clearly preserves the obligation that may be on the land in the nature of a disability. The consequence therefore is that the ordinary law of pre emption under which the pre emptor his the right to follow the land which is the subject matter of the sale deed becomes expanded and the land allotted to the landlord and tenant at will in lieu of the land which may have been subject to pre emption also becomes subject to pre emption in the same way as the original holding or the tenancy. This inference is not negatived by the special provisions of section 25 in respect of leases and mortgages or other encumbrances. [866 G; 867 D E] Shri Audh Behari Singh vs Gajadhar Jaipuria, [1955] 1 S.C.R. 70, Bishan Singh vs Khazan Singh, ; relied on.

The appellant was a protected lessee or tenant of the agricultural land in dispute, under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The respond ent became the landlady of the land on June 29, 1959 when her father effected a partition of his ancestral lands between himself, on the one hand, and his wife and his two minor daughters, including the respondent, on the other. This was the third partition effected by the respondent 's father, who had earlier also twice partitioned the same lands. Sometime in 1962, the respondent initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default. The Tehsildar dismissed the application holding that the respondent was not a landlady since the partition in question was illegal. The Deputy Collector in appeal confirmed this decision, and the Maha rashtra Revenue Tribunal rejected the respondent 's revision. In the Writ Petition filed before the High Court under Article 227 of the Constitution against the above decision of the three authorities below, the High Court remanded the matter to the Tehsildar for investigation into the validity of the partition. On remand, the Tehsildar held that the partition effected on June 29, 1959 was bogus. Thereafter, in a different proceeding the Maharashtra Revenue Tribunal had held that the said partition was bind ing. Therefore, in the appeal against the decision of the Tehsildar, the Deputy Collector following the said decision of the Revenue Tribunal, held the partition valid and al lowed the respondent 's application for eviction. The Revenue Tribunal, in revision, confirmed this order of the Deputy Collector. 67 The appellant preferred a writ petition before the High Court. It was, inter alia, contended before the High Court that: (1) the partition was contrary to the provisions of Hindu Law; and (2)even assuming that the partition deed of June 29, 1959 was a valid document, the same had to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of section 38(7) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The High Court however dis missed the petition holding that what was produced before the courts below was a family settlement. Allowing the appeal, this Court, HELD: (1) A partition of the property can only be among the parties who have a pre existing right to the property. Under the Hindu Law, a female, major or minor has no share in the ancestral property. A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparce nary property after the property is partitioned. There cannot, therefore, be a partition and hence a family settle ment with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter. [70C D] (2) The position that obtain under section 38(7) after the Amending Act of 1963, is that any transfer of land effected after 1st August 1953 whether by way of partition or otherwise, has no effect of conferring on the transferee a right to terminate the tenancy of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition. This amendment is admittedly retrospective in operation. [71G H; 72A] (3) The appellant was tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961. Hence he became a statutory owner under section 46 of the Act on and from April 1, 1961. Any proceedings for evicting him on the ground that he was a tenant and, there fore, had fallen in arrears of rent could not have, there fore, been adopted in 1962. [72C D]

Certain lands situated on the outskirts of a large city were acquired by the respondent State after issuing prelimi nary notification under section 4(1) of the Land Acquisition Act, 1894 on August 6, 1956 for construction of an industrial estate. The appellants claimed compensation at the rate of Rs.3 per sq. yard and cited in support thereof an agreement of sale dated January 21,1957 and a conveyance dated April 2, 1957 pertaining to a piece of land adjoining the acquired land showing the sale price at the rate of Rs.3 per sq. yard. The respondent State relied on an auction sale dated February 23, 1953 at about 41p. per sq. yard, evidenced by exhibit 112, and the instance evidenced by exhibit 118 pertaining to sale to a minor, transacted by his father. The Land Acquisition Officer classified the land as superior agricultural land and awarded the compensation at the rate of Rs.2200 per acre, i.e., about 45p. per sq. yard. In the reference, the Civil Judge did not rely upon any of the instances proved before him, but considering the general situation of the land and its considerable building potentiality fixed the rate of compensation at Rs.4400 per acre, i.e., about 90p. per sq. yard. Dismissing the appeal, the High Court took the view that the valuation fixed by the Civil Judge was justified. It held that a postacquisition sale could not be regarded as a comparable instance at all, since the acquisition for con struction of the industrial estate was bound to have pushed up the prices in the surrounding area. It placed reliance on the evidence furnished by the instance at exhibit 112, over a year prior to 744 the date of section 4 notification, but discarded the instance evidence by exhibit 118 relied on by the State. Allowing the claimants ' appeal by special leave, the Court, HELD: The market value of a piece of property for pur poses of section 23 of the Land Acquisition Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arm 's length. Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual and, indeed, the best, evidence of market value. [747C] Administrator General of West Bengal vs Collector, Varanasi, ; , referred to. In the instant case, the instance evidenced by exhibit 112 pertaining_ to sale of land in government auction relied on by the High Court was a distress sale. There were execution proceedings pending against the vendor. It could, thus, hardly furnish any reliable evidence for estimating the market value of the land in question. The instance evidenced by exhibit 118 was rightly discarded by the High Court. Only a certified copy of the sale deed pertaining thereto was produced in. the trial court. The evidence of the purchaser, who was minor at the time when the sale deed was executed, had no evidentiary value as he had no personal information regarding the sale. No other person conversant with the sale was examined by the State. [748AB, CF] The only comparable instance on the basis of which the market value at the time of the section 4 notification in respect of the acquired land could be determined was, therefore, the sale proved by the sale deed dated April 2, 1957 and the preceding agreement of sale dated January 21, 1957. Though entered into about five months alter the notification it could be fairly regarded as reasonably proximate to the acquisition. The price fixed under the said agreement was Rs.3 per sq. yard. However, there seem to have been some rise in the price of land on account of the acquisition of the land in question for purposes of constructing the indus trial estate. Further, the land proposed to be purchased under the agreement was adjoining the land of the purchaser and the purchaser might have paid some extra amount for the convenience of getting the neighbouring land. These factors have to be taken into account and appropriate deductions made from the rate disclosed in the agreement in estimating the market value. Considering these together with 745 the situation and potentialities of the acquired land, it would be proper to fix its market value at Rs.8800 per acre, which comes to about Rs. 1.80p. per sq. yard. The decree passed by the Civil Judge to be amended accordingly. [748G, 747E]

Notification under Section 4 of the Land Acquisition Act, 1894 was issued in respect of certain lands including the lands belonging to the appellant foundation situated at two different places. The appellant Foundation filed objections. Subsequently notifications under Sections 6 and Notices under Sections 9 and 10 were also issued. The appellant Foundation challenged the notifications in respect of the land situated at one of the two places, by way of a Writ Petition before the High Court and the same was dismissed as withdrawn with liberty to the petitioner to agitate the matter in a suit. Thereupon, the appellant Foundation filed a suit and the same was dismissed by a Single Judge of the High Court. The Letters Patent Appeal filed against that decision is pending. In respect of the land situated at the other place, a Writ Petition was filed by the appellant before the High Court, which came to be dismissed as withdrawn. Thereafter, another Writ Petition was filed by the appellant Foundation before the High Court challenging the notifications. The High Court having dismissed the Writ Petition, the appellant Foundation preferred the present appeal. On behalf of the appellants, it was contended that they filed their objections under Section 5A of the Act, but the same were rejected without affording any opportunity of personal hearing, and the denial of such opportunity invalidated the notifications; and that the land of the appellants being wakf property it ought to have been excluded on the basis of the notification under Section 4 of the Act. Alternatively it was contended that the appellant has been running several educational institutions on the very land and that if the exemption for wakf property is not applicable to such educational and charitable institutions run by Hindus or non Muslims, then such a notification would be violative of Article 14 of the Constitution. The Respondents contested the appeal on grounds of delay, laches and acquiescence in fling the Writ Petition challenging the acquisition proceedings. It was also stated that the appellants were given opportunity of personal hearing. Dismissing the appeal, this Court, HELD: 1. The conduct of the appellants in raising the plea that no opportunity of personal hearing was given to the appellants in respect of the objections filed under Section 5A of the Land Acquisition Act, 1894 was totally baseless and factually incorrect and such conduct is reprehensible. It is well settled that a person invoking an equitable extraordinary jurisdiction of the Court under article 226 of the Constitution is required to come with clean hands and should not conceal the material facts. [431 F, G] Farid Ahmed Abdul Samad & Anr. vs Municipal Corporation of the City of Ahmedabad & Anr., [1977] 1 SCR 71, referred to. 2. The challenge to the acquisition proceedings was mainly based on the ground that in the notification dated 13.11.1959 issued under Section 4 of the Act the lands of wakf property were excluded and the lands of the appellants being also used for educational and charitable purposes the same were also liable to be excluded. At a later stage a ground was also taken that if wakf property in the aforesaid notification under Section 4 of the Act meant only wakf properties of the Mohammedans, then such notification was discriminatory and violative under article 14 of the Constitution as there was no reasonable ground to discriminate such properties of Hindus or non Muslims meant for charitable purposes. Thus the challenge was in respect of notifications under Sections 4 and 6 of the Act alone and though in the prayer clause relief has been sought to quash the notification under Sections 9 and 10 of the Act also which were issued in 1972, no ground whatsoever has been pleaded in the writ petition nor raised in the present appeal as to how the notifications under Sections 9 and 10 had any concern for explaining the delay in respect of the Challenge to notification under Sections 4 and 6 of the Act, Admittedly the notices under sections 9 and 10 issued appellants in 1972 were in respect of a portion of the land. The challenge on the other Land in the writ petition is in respect of notifications under Sections 4 and 6 covering the entire land. There is no justification at all in explaining the delay on the ground that no award has been passed nor the appellants have been dispossessed so far. This cannot be an explanation for not challenging the notifications under Sections 4 and 6 of the Act and in the present case the appellants had themselves sought stay from this Court as early as 15.11.1978 for not making and declaring the award and not to dispossess the appellants. Thus there is no justification at all for the delay in not challenging the notification issued under Section 4 on 13.11.1959 till 1973. Even notifications under Section 6 of the Act were issued in 1968 and 1969 but not challenged till 1973. [435 H; 436 A G] Aflatoon & Ors. vs Lt. Governor Delhi & Ors., [2975] 1 SCR 802, relied on.

The respondents, a joint Hindu family and evacuees from Pakistan, were allotted certain lands by the Custodian of Evacuee Property. A draft scheme for consolidation of holdings was framed and published by the Consolidation Officer in pursuance of a notification by the State Government under section 14 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948. The scheme under the directions of the State Government and contrary to the Act substituted lands of a lesser value for those already allotted to the respondents. Objections filed by the respondents were rejected by the Consolidation Officer and the scheme was confirmed by the Settlement Commissioner. Before the confirmation, the Central Govern ment by a notification under section 12 of the , acquired all evacuee properties and after the said confirmation issued a sand conferring proprietary rights of the said lands on the respondents. The respondents bad moved the High Court under article 226 of the Constitution before the issue of the sanad but the matter was finally disposed of by the High Court thereafter by setting aside the said scheme and directing the Consolidation Officer to dispose of the matter according to law. Held, that the notification issued by the Central Government under section 12 of the , did not put an end to the rights the respondents had in the lands originally allotted to them by the Custodian and they had the right to move the High Court under article 226 of the Constitution. Sections 10 and 12 of the said Act read with r. 14(6) of the Rules framed under the , made it amply clear that the respondents held a quasi permanent tenure in the said lands and as such had a valuable right therein. Such right continued while they remained in possession and the lands remained vested in the Central Government and with the grant of the sanad the limited right they had in the lands became a full fledged right of property. Amar Singh vs Custodian, Evacuee Property, Punjab, [1957] S.C.R. 801, referred to. The East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, did not empower the Consolidation Officer to take away an allottee 's lands without giving him other lands of equal value or paying compensation nor did the Act empower the State Government either to do so in any way or to direct the Consolidation Officer as to how he should exercise his powers thereunder. Since, in the instant case, the respondents ' lands had admittedly been substituted by lands of less value and no compensation had been paid to them, the High Court was right in setting aside the order confirming the scheme. 713

The applicant purchased certain agricultural lands from a Muslim evacuee. The sale deed was executed, registered and possession was delivered to the applicant in September, 1947, before the East Punjab Evacuees ' (Administration of Property) Act of 1947 came into operation on the 12th of December, 1947. By subsequent amendments a new section, section 5 A, was inserted into the Act with retrospective effect from the 15th of August, 1947, rendering transactions in respect of evacuee property ineffective unless confirmed by the Custodian. The applicant applied for confirmation. The Assistant Custodian recommended such confirmation but the Additional Custodian, acting in terms of a circular issued by the Custodian General enunciating a policy of non confirmation with regard to agricultural lands, refused to confirm the applicant 's purchase and this order was affirmed by the Assistant Custodian General in revision, It was contended on behalf of the applicant, inter alia, that the retrospective operation of section 5 A of the Act was in effect a deprivation of property without compensation and was hit by article 31 of the Constitution. Held that 9. 5 A of the East Punjab Evacuees ' (Administration of Property) Act though retrospective in operation does not amount to deprivation of property in respect of past transactions and is valid. , In respect of future transactions the requirement of con 1114 firmation is clearly a restriction and not a deprivation. Such restriction was also reasonable having regard to the purpose and policy of the Evacuee Property Law. The requirement of confirmation being thus in essence only a restriction and not a deprivation, retrospectivity in the operation of that restriction does not make it deprivation. That the applicant 's loss was occasioned not by any unconstitutional law but by a quasi judicial order of the Custodian refusing confirmation and, consequently, his contention that any fundamental right had been violated must be rejected. That even if the contention that the order was itself illegal being based on irrelevant material be correct, that did not by itself raise any question of violation of any fundamental right and would be no ground for an application under article 32 of the Constitution.

By a notification under section 4 of the Land Acquisition Act, 1894, the State of Bombay (now Maharashtra) sought to acquire certain lands, including those of the petitioner, which were likely to be needed by a company, manufacturing steel bars and rods, for its factory and buildings and appointed a Special Land Acquisition Officer to function as a Collector under section 5A of the Act. The petitioner by an objection filed before the said officer denied that the lands were required for a public purpose and prayed that the proceedings be quashed. By his petition to this Court under article 32 of the Constitution the petitioner challenged the legality of the notification under section 4 of the Act on the ground that it did not in terms say that the acquisition was for a public purpose, and that the acquisition proceedings infringed articles 19 and 31 of the Constitution. Held, that it is not essential that a notification under section 4 of the Land Acquisition Act, 1894, should expressly state that 129 the land sought to be acquired is needed for a public purpose. Where the land is required for a company, the requirement of the law will be sufficiently met if the appropriate Government is satisfied on a report under section 5A(2) or by an enquiry under section 40 of the Act that the purpose of the acquisition is the same as contemplated by section 40 of the Act. It is apparent from the definitions of the expressions com pany ' and 'public purpose ' contained in section 3 of the Act that the former is used in a very comprehensive sense and the latter is used in its generic sense including any purpose which may benefit even a fraction of the community and such purposes as are mentioned in section 40 of the Act must fall within its ambit. State of Bombay vs Bhanji Munji, [1955] 1 S.C.R. 777, referred to. A notification under section 4 of the Act envisages a preliminary investigation and it is only under section 6 that the Government makes a firm declaration. It is not, therefore, correct to say that a defect in the notification can be fatal to the acquisition proceedings and particularly where the acquisition is for a company and investigation has to be made under section 5A or section 40 after the issue of the notification. In this view of the matter the present application must be premature. Clause (6) of the article 31 has obviously no application to the Land Acquisition Act, 1894, and so it is saved by article 31(5)(a) of the Constitution even if it contemplates acquisition for a company which may or may not be for a public purpose. Lilavati Bai vs State of Bombay, ; , referred to. The attack under article 19(i)(f) of the Constitution must also fail in view of the decision of this Court in State of Bombay vs Bhanji Munji, [1955] 1 S.C.R. 777.

Appeal No. 240 of 1955. 732 Appeal by special leave from the judgment and order dated September 3, 1953, of the Bombay High Court in Income tax Reference No. 15 of 1953. Hardayal Hardy and D. Gupta, for the appellant. G. section Pathak, section P. Mehta, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent. February 3. The Judgment of Gajendragadkar and Wanohoo, JJ. was delivered by WANCHOO, J. In this matter by our order made on April 24, 1958, we had referred the case back to the Tribunal to submit a further statement of case on certain questions. That statement of case has now been drawn up by the Tribunal and sent to this Court. The matter is now ready for decision. This is an appeal by the Commissioner of Incometax, Bombay, against the judgment of the High Court at Bombay given on a reference under section 60(2) of the Income tax Act answering the question referred, in the negative. That question was, " Whether, in any event, on the facts found by the Tribunal, there was any remittance by the petitioner to Bombay within the meaning of and assessable under section 4(1) (b) (iii) of the Income tax Act,. " The assessment year concerned was 1948 49, the accounting year being 2003 Sambat. The facts found may now be stated. At the relevant time, Bhavnagar was a ruling State and therefore outside British India. There was a mill there which we shall, for brevity, call the Bhavnagar Mills. The assessee and his brother Gordhandas had large sums in deposit with the Bhavnagar Mills. These sums were profits earlier earned by the assessee and his brother in Bhavnagar. The amounts deposited belonged to the assessee and his brother in equal shares, The Bhavnagar Mills kept an account of these deposits. This account showed that on April 7, 1947, a sum of Rs. 50,000/ had been paid out to Harkisondas Ratilal and another sum of the same amount to Dilipkumar Trikamlal. There is another mill in Bombay which we shall call the Bombay Mills. The account of the Bombay Mills showed that on April 3, 733 1947, Rs. 50,000/ had been received from each of Harkisondas Ratilal and Dilipkumar Trikamlal. Harkisondas Ratilal and Dilipkumar Trikamlal were the benamidars for the assessee and his brother and the entries indicated that the moneys had been withdrawn from the Bhavnagar Mills by the assessee and his brother and advanced to the Bombay Mills. The assessee and his brother were in full control of both the Bhavnagar Mills and the Bombay Mills. On these facts the Tribunal had come to the conclusion that there had been a remittance of the assessee 's profits from Bhavnagar to Bombay, namely, Rs. 50,000/ being half of the amounts mentioned above, on account of his share and such remittance was taxable tinder section 4(1) (b) (iii). The assessee raised the question with which we are concerned in view of this decision. The High Court held that under the section income is taxable only when it is brought into or received in the taxable territory by the assessee himself and not when it is so brought into or received on behalf of the assessee and that all that the facts found by the Tribunal showed was that the assessee disposed of his accumulated income in Bhavnagar by directing his debtor, the Bhavnagar Mills, to pay an amount not to himself but to a third party, namely, the Bombay Mills. According to the High Court, , " The result was that only one debtor was substituted for another. This did not amount to a receipt of the money by the assessee himself in Bombay or to a bringing of it into Bombay by him. " In this view of the matter, the High Court answered the question referred in the negative. When the appeal was heard by us on the earlier occasion, the learned Advocate for the appellant contended that even on the basis on which the High Court had proceeded, namely, that there was only a substitution of one debtor for another, it has to be said that the money was received by the assessee himself in Bombay. The contention was that the respondent could not become a creditor of the Bombay Mills unless he advanced the moneys to them. 734 His point was that even assuming that the receipt of the cheque by the Bombay Mills drawn in its favour by the Bhavnagar Mills did not amount to receipt of moneys by the respondent, as soon as the Bombay Mills credited the amount of it to the respondent, there was nationally a receipt of the money by the assessee and an advance of it by him to the Bombay Mills to create the debt. The learned advocate for the assessee said in answer to this contention that there was nothing to show that the agreement for the advance of the money by the assessee to the Bombay Mills had not been made at Bhavnagar. He also said that there was nothing to show as to how the money or the cheque came from Bhavnagar to Bombay and that it might have been that it was agreed between the assessee and the Bombay Mills at Bhavnagar that the money would be deposited in the Bombay Mills to the credit of the assessee and the cheque or the money might have been delivered to the Bombay Mills or its agent at Bhavnagar. His contention was that if such was the case and on the evidence it could not be said that it was not then the notional receipt of the money by the assessee and its advance by him to the Bombay Mills, if any, would have taken place in Bhavnagar and when the money was thereafter brought to Bombay, it was the Bombay Mills ' own money. In this view of the matter, according to the learned advocate for the assessee, the moneys could not be subject to tax under the section. In this position of the arguments then advanced, we observed as follows : " It seems to us that this contention of the learned advocate for the respondent has to be dealt with before this appeal can be finally disposed of. We therefore think it fit to refer the case back to thaT Tribunal to submit a further statement of case, after taking such evidence as may be necessary, as to show how the cheque was brought from Bhavnagar to Bombay and what agreement had been made between the parties concerned as a result of which the amount of the cheque was credited in the names 735 of Harkison Ratilal and Dilipkumar Trikamlal in the accounts of the Bombay Mills. The Tribunal will submit its report within four months. In view of this order we refrain from expressing any opinion on any of the points argued at the bar. " It is pursuant to this order that the further statement of case has been submitted by the Tribunal. In its statement of case now submitted the Tribunal found the following facts: The Bhavnagar Mills had an account in the Bank of India Limited at one of its Bombay Branches. A cheque book in respect of this account was with the assessee who had power to operate it on behalf of the Bhavnagar Mills. The assessee acting on behalf of the Bhavnagar Mills drew a cheque on the Bhavnagar Mills aforesaid account in the Bank of India Limited on April 3, 1947, in favour of self. This was done in Bombay. This cheque was handed over by the assessee to the Bombay Mills in Bombay for being credited in the account of the Bombay Mills in the names of Harkison Ratilal and Dilipkumar Trikamlal which were really the benami names of the assessee and his brother. The Bombay Mills on the same date presented this cheque to another branch of the Bank of India Ltd. in Bombay where they had an account, for deposit in that account. The actual entries in the books of the different branches of the Bank were made on April 5, 1947. The Bombay Mills also made entries in their own books crediting the moneys received on the cheque, to Harkison Ratilal and Dilipkumar Trikamlal. The assessee in his turn instructed the Bhavnagar Mills to debit the joint account of himself and his brother with it in the sum of Rs. 1 lac as having been paid to Harkison Ratilal and Dilipkumar Trikamlal. This entry was actually made a little later, namely on April 7, 1947. The facts now found would show that nothing had been done at Bhavnagar. It was also found that as the Bombay Mills needed moneys and the assessee had money with the Bhavnagar Mills, he utilised these latter moneys for an advance being made by him out of it to the Bombay Mills, 94 736 As will appear from our earlier order hereinbefore set out, none of the points arising in the appeal had been decided by us on that occasion. The question that we have to decide is whether on these facts it can be said that income had been brought into or received in Bombay by the assessee. The relevant portion of the section is in these terms : " 4. (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a). are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b). if such person is resident in the taxable territories during such year, (i). accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or (ii) accrue or arise to him without the taxable territories during such year, or (iii).having accrued or arisen to him without the taxable.territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or (c). if such person is not resident in the taxable, territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year. " In the present case we are concerned with cl. In order however to understand what the words " brought into or received in the taxable territories by him " mean we have to consider the whole scheme of this subjection. The subjection mainly deals with the total income of any previous year which is chargeable to income tax under section 3 of the Act. It is divided into three parts. The first part, which is el. (a) provides that all income, profits and gains received or deemed to be received in the taxable territories in such year by or on behalf of such person will be included in the taxable income. So far as el. (a) is 737 concerned, it is immaterial whether the person is resident in the taxable territories or is not resident therein; as long as income etc. is received in the taxable territories by or on behalf of such person in the previous year, it is liable to be included in the computation of total income. Under this clause therefore it is the receipt in the previous year that is material and the residence of the person to be taxed is immaterial. It has been held under this clause that receipt must be the first receipt in the taxable territories and if income etc. has been received elsewhere in the same year and is then brought into the taxable territories it should not be considered to be income etc. received in such year in the taxable territories: (see Keshav Mills Ltd. vs Commissioner of Income tax The basis of this decision obviously is that cl. (a) is dealing with the receipt of income etc. in the taxable territories in the year in which it has accrued or arisen and in those circumstances it is the first receipt of such income in the taxable territories that gives rise to liability of the charge of income tax. If such income etc. accruing or arising in the previous year has already been received outside the taxable territories it cannot be said to be received again as such in the taxable territories, if it is brought from the place where it was received as such into the taxable territories. The second part which is cl. (b) deals with the case of a person Who is resident in the taxable territories during such year. In his case all income which accrues or arises or is deemed to accrue or arise to him in the taxable territories during such year is chargeable to income tax; besides, all income etc. which accrues or arises to him without the taxable territories during such year is also chargeable to income tax. Then comes the part with which we are directly concerned and which provides that all income etc. which having accrued or arisen to such person without the taxable territories before the beginning of such year and after the first day of April 1933 is brought (1) ; 738 into or received in the taxable territories by him during such year will be chargeable to income tax. This is a special provision relating to income etc. which has accrued or arisen not in the previous 'year but in years previous to that though after April 1, 1933. This special provision relating to a person resident in the taxable territories must be distinguished from the provision in el. (a) in connection with which it has been held that the receipt there meant must be the first receipt, for cl. (a) applies irrespective of whether the person is resident in the territories or not to income etc. of the previous year received in the taxable territories in the same year. Clause (b)(iii) on the other hand refers to income etc. which accrued before the previous year and is brought into or received in the taxable territories in such year by a person resident therein, and obviously the considerations which led this Court to hold in Keshav Mills case(1) that the receipt in el. (a) means the first receipt would not apply to this special provision in cl. (b)(iii). Mr. Pathak for the respondent however argues that the words in cl. (b)(iii) are the same as in cl. (a), namely, " are received " and therefore the receipt in cl. (b)(iii) must also be the first receipt. These words however are not terms of art and in our opinion their meaning must receive colour from the context in which they are used. In the context of cl. (a) these words could only refer to the first receipt; but it does not follow from this that in the context of el. (b)(iii) also they refer only to the first receipt. Let us see what el. (b)(iii) is meant to provide for. It will be noticed that el. (a), cl. (b)(i) and (ii) and cl. (c) deal only with income etc. which has arisen in the previous year while el. (b)(iii) deals with a special class of cases where a person resident within the taxable territories had income etc. accruing or arising to him without the taxable territories and which he did not bring in the taxable territories as and when it arose but does so many years later. In such a case it stands to reason that the income etc. having arisen to such person, may be years before the previous year, must (1) ; 739 have been received by him outside the taxable territories ; but it is urged that cl. (b)(iii) does not speak of receipt outside the taxable territories but only speaks of income etc. having accrued or arisen to him without the taxable territories and that it is possible that though the income etc. might have accrued long ago it might not have been received even outside the taxable territories. This is theoretically possible; but in our opinion it is clear that when el. (b)(iii) speaks of income etc. having accrued or arisen, without the taxable territories it is implicit in it further that such income etc. having accrued or arisen without the taxable territories had already been received there. Considering that el. (b)(iii) applies to all income having accrued or arisen after the first day of April 1933 (that is more than 27 years ago now) it does not seem reasonable to hold that the words " having accrued or arisen " used in that clause have no reference to its receipt also outside the taxable territories. It seems to us therefore that what cl. (b)(iii) provides is that if any income etc. had arisen or accrued outside the taxable territories and had been received there sometime before the previous year and if such income etc. is brought into or received in the taxable territories by such person in the previous year it will be liable to be charged under section 3. In the circumstances, looking to the special pro. vision of el. (b)(iii) it would be reasonable to infer that what it contemplates is bringing into or receipt in the taxable territories in the previous year of income etc. which had already accrued or arisen without the tax. able territories earlier than the previous year and may have also been received there. Any other interpretation would really make that part of cl. (b)(iii) which refers to," received in the taxable territories " more or less useless, for it is not likely that income having accrued or arisen outside the taxable territories before the previous year should not have been received also outside the taxable territories. Therefore, the reason. able interpretation of el. (b)(iii) is that if a person resident in the taxable territories has already received without the taxable territories any income etc. accruing or arising to him without the taxable territories 740 before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income tax under section 3. Therefore, for the purpose of cl. (b)(iii) the receiving in the taxable territories need not be the first receipt. We shall later consider what will be the effect of this interpretation on the facts of this case. Then there is cl. (c), which deals with the case of a person resident outside the taxable territories to whom income etc. has accrued or arisen or is deemed to have accrued or arisen in the taxable territories during the previous year. It will thus be seen that cl. (a) deals with a person who may or may not be a resident in the taxable territories and makes the income etc. accruing or arising to him in the previous year liable to income tax if it is received or deemed to be received by him in the taxable territories also within the same year ; cl. (b) deals with the case of a person who is resident in the taxable territories and gives a wider definition of the total income and cl. (c) deals with a person not resident in the taxable territories and makes only such of his income as accrues or arises or is deemed to accrue or arise in the previous year in the taxable territories liable to income tax in addition to what is provided in el. Let us now see on the facts of this case whether the respondent can be said to have received this sum of Rs. 50,000/ in the taxable territories during the previous year. The statement of the case shows that this sum was income etc. of the respondent which accrued to him outside the taxable territories and had been received by him there and deposited in the Bhavnagar Mills in his account. It is also clear from the facts which we have set out already that this money which was lying to the credit of the respondent in the Bhavnagar Mills was received by him by means of a cheque on the Bank of India Ltd., Bombay, in which the Bhavnagar Mills had an account and on which the respondent had the authority to draw. Having thus drawn the money by a cheque on the said bank, the respondent advanced it to the Bombay Mills and the cheque was cashed by the Bombay Mills and the 741 money was credited into the account of the respondent 's benamidars in the Bombay Mills. There was thus clearly receipt in the previous year of income etc. which had accrued to the respondent outside the taxable territories before the previous year and he would therefore be chargeable under section 3 of the Act with respect to this amount. The High Court has held that the income would be taxable only when it is brought into or received in the taxable territories by the assessee himself and not when it was so brought or received on behalf of the assessee. The relevant words of el. (b)(iii) with which we are concerned are these: "are brought into or received in the taxable territories by him during such year. " We have held that this is a case of receipt by the respondent in the taxable territories; it is therefore unnecessary to consider in the present case whether the words " brought into the taxable territories by him " mean that the income must be brought in by the person himself as held by the High Court. This being a case of receipt, there can be no doubt that income etc. was received by the respondent and the indirect, method employed in this case for receiving the money would none the less make it a receipt by the respondent himself Reference in this connection may be made to Bipin Lal Kuthiala vs Commissioner of Income tax, Punjab (1), where it was held that the money was received by the assessee even though in fact what bad happened there was that the assessee directed his debtor in Jubbal which was outside the taxable territories to pay money to his creditor in British India. It was held that in the circumstances there was receipt of income in British India, though the method employed was indirect. We are therefore of opinion that the respondent is liable to pay incometax on the sum of Rs. 50,000/ under section 4(1)(b)(iii) of the Act and the question framed therefore must be answered in the affirmative. The result is that the appeal is allowed and the order of the High Court set aside. The appellant will get the costs of this appeal and in the court below. (1) A.I.R. 1956 S.C. 634. 742 SARKAR, J. The facts necessary for this appeal are few and simple. The assessee, who is the respondent in this appeal, was a resident of Bombay. He had certain in come in Bhavnagar, a place without the taxable territories, which he had kept in deposit with a concern there. This concern had an account in a bank in Bombay. The assessee, presumably as one of the officers of the concern, could operate this account. He drew, in Bombay, a cheque on this account which cheque eventually found its way into the account of a. concern in Bombay in a bank there and was credited in that account. The Bombay concern thereafter made entries in its own books of account in respect of the amount of the cheque in favour of two persons of the names of Harkison Ratilal and Dilipkumar Trikamlal. The Bhavnagar concern, in its turn, a few days later debited the account that the assessee had with it in respect of the deposits, with the amount of the cheque as moneys paid to these two persons. These two persons however were only benamidars for the assessee. The transactions, therefore, showed that the assessee had withdrawn the money from the concern at Bhavnagar out of its accumulated income and advanced it to the concern in Bombay. The Tribunal found it as a fact that the assessee had utilised in Bombay his income lying at Bhavnagar for making an advance in Bombay. These transactions took place in April 1947. I have simplified the facts a little for clarity. Actually the account in the concern at Bhavnagar was in the joint names of the assessee and his brother and the advance to the concern in Bombay was really in their joint names. The assessee 's share was half of the amount of the cheque and with that share alone we are concerned in this case. On these facts half the amount of the cheque as representing the assessee 's share of the accumulated income, was included in his total income, for assessment to income tax for the year 1948 49 under section 4(1)(b)(iii) of the Income tax Act, 1922. That section so fair as is material is in these terms 743 section .4. (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a). are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b). if such person is resident in the taxable territories during such year, (iii).having accrued or arisen to him without the taxable territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or The only question is whether the assessee can be said to have " brought into " or " received " this income in Bombay within the meaning of sub cl. (iii) of section 4(1)(b). No other objection to the assessment was raised. The respondent first contends that he cannot be said to have " received " the income in Bombay. He contends that on the facts found it must be held that he had already " received " the income in Bhavnagar and he could not " receive " it again in Bombay or anywhere else. It seems to me that this contention is well founded. This Court has held that " Once an amount is received as income, any remittance or transmission of the amount to another place does not result in I receipt ', within the meaning of this clause, at the other place ": Keshav Mills Ltd. vs Commissioner of Income tax, Bombay (1). No doubt, the observation was made with regard to el. (a) of section 4(1). But I am unable to find any reason why the word should have a different meaning in sub cl. (iii) of a. 4(1)(b). On the contrary, the words " brought into " in subel. (iii) would furnish a reason, if one was necessary, for the view that the word " ' received " there means received for the first time. I venture to think that this Court did not in Keshav Mills case (1), hold that that word in section 4(1)(a) meant, (1) , 962, 95 744 " the first receipt after the accrual of the income ", because of anything in the context in which the word occurred but because, in the nature of things, income can be " received " only once and not more than once, and a subsequent dealing with income after it has been received, can never be a " receipt " of income. It seems to me that what was said in connection with the Act as it then stood, in Board of Revenue vs Ripon Press(1), namely, "that you cannot receive the same sum of money qua income twice over, once outside British India and once inside it " expresses the inherent nature of receipt of income and still holds good and unless the context compels a different meaning, which I do not find the present context to do, income can be received only once. As, in the present case, it seems fairly clear that the assessee had received the income in Bhavnagar, I do not think he can be taxed on it on the basis that he " received " it in Bombay over again. If, however, the assessee did not " receive " the income in Bombay, it seems clear to me that he "brought into" Bombay that income. He got in Bombay an amount which he had earlier received in Bhavnagar as income, for he advanced it to a concern in Bombay and this he could not do if he had not got it. The getting of the income in Bombay may not have been the receipt of it but how could he got it if he did not bring it in ? After the assessee received the income in Bhavnagar, it remained all the time under his control and that is why he could not receive it again: see Sundar Das vs Collector of Gujrat (2). An assessee might however, change the shape of the income received. Section 4(1) (b)(iii) does not require that in order that income may be brought into the taxable territories it is necessary, that the shape of the income should not have been changed since it was first received. Indeed, it has not been contended to the contrary. Sub clause (iii) of section 4(1)(b) would have completely defeated itself if it required that the income had to be kept in the same ,shape in which it had been received. Whatever shape (1) Mad. 706 711. (2) Lah. 745 the income had assumed, the assessee had it with him all the time as income and for the purpose of sub cl. (iii) it could be brought into the taxable territories in that shape. Now what the assessee had done with the income in this case was to put it with a party in Bhavnagar. The income then took the shape of a debt due to him. It became a right to receive money or moneys worth. When he had that debt discharged in Bombay, he must have had it brought into Bombay. Therefore he had brought the income into Bombay. Suppose he had received the income in the shape of coins and had kept it in his safe at Bhavnagar and brought the coins into Bombay. There would have been no doubt that he had brought the income into Bombay. Suppose again, he had put the income originally received by him at Bhavnagar in a bank there and then he obtained a draft from the bank payable in Bombay and brought the draft from Bhavnagar to Bombay and cashed it there. Again, there would be little doubt that he had, by this process, brought the income into Bombay. It is well known that though income in income tax law is generally contemplated in terms of money, it may be conceived in other forms. In fact anything which represents and produces money and is treated as such by businessmen, would be income: see per Lord Lindley in Gresham Life Assurance Society Ltd. vs Bishop (1) and per Lord Halsbury L.C. in Tennant vs Smith (2). If the bringing of the bank draft would be bringing of income, I am unable to see why the bringing of a right to receive the money would not be bringing of income when that right has been exercised and turned into moneys worth. Such a right would be based on a promise by the debtor to pay and though verbal, would be considered by businessmen to represent money. The assessee in Bombay used that right and obtained moneys worth. He accepted the Bhavnagar concern 's cheque in Bombay, gave it a pro tanto discharge for the debt owing by it to him. He used the cheque in acquiring a new asset, namely, a promise by the (1) ; 296, (2) ; , 156. 746 Bombay concern to pay money. Therefore, in my view, the respondent assessee was liable under section 4(1)(a), (b)(iii) to be taxed ON the amount of the cheque as income which he had brought into the taxable territories. I would hence allow the appeal and answer the question referred, in the affirmative. Appeal allowed.

The assessee, resident in British India, had some money in deposit with a concern in Bhavnagar, outside British India. On April 7, 1947, he transferred part of it to a concern in Bombay. He was assessed to tax on this amount under section 4(i)(b)(iii) of the Income tax Act. The assessee contended that to attract the application of section 4(i)(b)(iii) the receipt in the taxable territory must be the first receipt of income. Held, that the assessee was liable to tax on this amount. Per Gajendragadkar and Wanchoo, JJ. Where a person, resident in the taxable territories, has already received, outside the taxable territories, any income etc. accruing or arising to him outside the taxable territories before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income tax thereon. Though for the purposes of cl. (a) of section 4 the receipt must be the first receipt of income in the taxable territories, for the purposes of cl. (b)(iii) the receiving in the taxable territories need not be the first receipt. Keshav Mills Ltd. vs Commissioner of Income tax ; , referred to. Per Sarkar, J. The income could not be said to have been "received" in the taxable territory within the meaning of cl. (b)(iii) as income could be received only once. But it is clear that the assessee " brought into " Bombay that income. It was immaterial in what shape he received the income in Bhavnagar and in what shape he brought it in Bombay. Keshav Mills Ltd. vs Commissioner of Income tax ; , Board of Revenue vs Ripon Press Mad. 706 and Sundar Das vs Collector of Gujrat (1922) I.L.R. , applied. Gresham Life Assurance Society Ltd. vs Bishop [1902] A.C. 287 and Tennant vs Smith ; , referred to.

The Income tax Officer issued a notice to the respondent on January 5, 1962 under section 34(1) (a) of the Indian income tax Act, 1922, seeking to reopen his assessment for the assessment year 1945 47. The respondent challenged the validity of that notice. The High Court quashed the impugned notice by its order dated March 6, 1963 on the ground that the notice was issued beyond the time prescribed by law. On April 1, 1962 the Indian Income tax Act, 1961, came into 'force. Under section 297(2) (d) (ii) of this Act if "any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may . be issued with respect to that assessment year. " The Income tax Officer again issued a notice under section 148 of the New Act in respect of the assessment which he earlier unsuccessfully sought to reopen by means of notice under section 34(1) (a) of the 1922 Act. The respondent again challenged the validity of the notice. The High Court quashed that notice on the ground that the Income tax Officer was not competent to issue that notice. In appeal to this Court it was contended that the notice under section 34(1) (a) being an invalid notice on the ground that it was barred by limitation the proceedings initiated on the basis of the notice should be considered as not pending when the new Act came into force. Dismissing the appeal, HELD : What section 297(2)(d)(ii) requires is the factual pendency of a proceeding under section 34 of the repealed Act. Whether that proceeding was barred by limitation or not is irrelevant. The proceedings pending before a competent authority cannot be said to be not pending merely because no relief can he granted in that proceedings because of the bar of limitation. The proceedings in the present case were initiated by a competent authority and those proceedings were quashed for the reason that the notice was issued beyond the time prescribed by law. Hence it cannot be said that no proceedings under section 34 of the 1922 Act, either factually or legally, was pending at the time when the new Act came into force. [617 D]

The appellants, who were dealers in Cotton yarn, obtained a license under the Madras General Sales Tax Act, 1939 (IX of 1939). Section 5 of that Act exempted such dealers from pay ment of sales tax under section 3 of the Act subject to such restrictions and conditions as might be prescribed, including the conditions as to licenses and license fees. Section 13 required a licensee to keep and maintain true and correct accounts of the value of the goods sold and paid by him. Rule 5 of the General Sales Tax Rules provided that any person seeking exemption under section 5 of the Act must apply for license in Form 1 which made the license subject to the provisions of the Act and the rules made thereunder. The appellants on surprise inspection were found to maintain two separate sets of accounts, on the basis of one of which they submitted their returns and the other 737 showed black market activities. The question for determination in the appeal was whether the appellants who had been refused exemption and were assessed to tax, could claim exemption under the Act. Held, that the question must be answered in the negative. Section 5 of the Madras General Sales Tax Act, 1939, pro perly construed, leaves no manner of doubt that an exemption from assessment thereunder is clearly conditional upon the observance by the assessee of the conditions and restrictions imposed by the Act, either in the rules or in the license itself, and the words 'subject to ' used by the section means "conditional upon". It was not correct to say that licensee was exempt from assessment so long as he held the license notwithstanding any breach of the provision of the law and that the only penalty he could be subjected to was the cancellation of his license or criminal prosecution.

These Civil appeals and special leave petitions centred round one point, namely, the validity of the Bombay Motor Vehicles Tax Act, 1958 as amended by Section 3 of the Maharashtra Act XIV of 1987 and Section 6 of the said Act as amended by Maharashtra Act XXXIII of 1987 and the Maharashtra Act IX of 1988. Section 3 of the said Act XIV of 1987 added sub section (IC) to provide for the levy of one time tax at 15 times the annual rate on all motor cycles in the State. The said provisions further provided that in the case of motor cycles owned by a company or other commercial organisation, the one time tax was to be levied at thrice the rate. Section 6 of the said Act XIV of 1987 added sub section (6) to section 9, enabling a registered owner of a motor cycle or tricycle to obtain refund of `Lone_time tax" under certain conditions. Petitions were filed in the High Court by the respondents in the appeals and petitioners in the special leave petitions, challenging the amended provisions of the principal Act. The High Court held that (i) the levy of the one time tax was beyond the legislative competence of the State Legislature and also beyond Entry 57 of List II of the Seventh Schedule, and (ii) the provision for imposition of levy at thrice the rates on the vehicles owned by a firm or company, were neither discriminatory nor arbitrary. The High Court struck down Act XIV of 1987. The appeals by leave were filed by the State and the special leave petitions were fixed by the petitioners in this Court against the decision of the High Court. In the meanwhile, the Maharashtra Legislature enacted Maharashtra Act XXXIII of 1987, which deleted Section 3(4) of the principal Act as amended by the PG NO 482 PG NO 483 Maharashtra Act XIV of 1987, whereby the existing provisions of refund for temporary non user were made inapplicable in cases of motor cycles and tricycles, restricting the right of refund to Section 9(6) in the contingencies mentioned therein. It also introduced sub section (7) to section 9 conferring the right of refund in respect of motor cycles and tricycles in accordance with the rates specified in the Fifth Schedule. But the said schedule did not prescribe a separate rate of refund for the company owned vehicles. Therefore, the refund in respect of the company owned vehicles was the same as that payable to individual owned vehicles even though the tax paid on former class of vehicles was three times. Soon thereafter, the Maharashtra Legislature enacted Act IX of 1988, whereby the only relevant change for the present purpose was that the rate of refund was enhanced to three times in respect of the company owned vehicles. Before this Court, the appellant State submitted that the amendments enacted by the Maharashtra Acts XXXllI of 1987 and IX of 1988 had brought the principal Act as amended by the Maharashtra Act XIV of 1987 within the constitutional requirements of making one time tax 's regulatory and compensatory tax and that it was not necessary to decide if the Act as it stood when it was challenged before the High Court? was beyond the legislative competence of the State Legislature. The respondents in the appeals and the petitioners in the special leave petitions urged that as even after the amendment no refund was available in respect of a vehicle which had been registered for more than 13 years? the effect of that was that no refund al all was available in respect. of the tax paid for a vehicle for the 14th and 15th years. The impugned levy of tax ceased to be compensatory or regulatory and was void under Entry 57 of List II and was violative of Article 301 of the Constitution. Disposing of the appeals and dismissing the special leave petitions the Court. HELD: The tax imposed on the motor vehicles or a class of motor cycles would not be valid unless it is compensatory or regulatory or does not have any nexus with the vehicles using the roads. In such a case. the levy would be Section of the said Act XIV of 1987 added sub section (IC) to provide for the levy of one time tax at 15 times the annual rate on all motor cycles in the State. The said provisions further provided that in the case of motor cycles owned by a company or other commercial organisation, the one time tax was to be levied at thrice the rate. The fact that the act, as at present, did not provide for refund in the 14th and 15th years, did no make the law outside the competence of the State Legislature. he concept PG NO 484 of "regulatory and compensatory" tax does no imply mathematical precision of quid pro quo. [489E] After the amendment, the Act came with in the constitutional requirements of making he one time tax a regulatory and compensatory tax. It was true that the Act has no provided for refund in the 14h and 15h years but that does no make he law out sides the competence of the State Legislature. It is no mathematical precision that is necessary nor can it be. there is in the provisions as amended, as amended, a discernible and an identifiable object behind the levy and a nexus between the subject and the object of the levy, [491E F] Two principles have to be emphasised, firstly, that the tax must be regulatory and compenstaory and secondly, there must be no discrimination. A taxation law cannot claim immunity from the equality clause in Article 14 of the Constitution, but in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerable wide discretion and latitude in the matter of classification for taxation purpose is permissible. The life of Motor cycles and tricycles normally exceeds 25 years. Non refund for certain period is no conclusive of the matter. Even if mathematical provision is no possible, it cannot be said that it is wholly unmathematical. The collection of ax for a period of 15 ears at one point of time is a convenient method enabling the owner o use he vehicle for more than 25 years without having to pay the tax periodically and pay the enhanced tax at may be levied during the 25 years of life of the vehicle. Regulatory and compensatory tax can be levied to the extent e State is required to pay for rendering the services. [491G;492A C] The Act, as at present, is not violative of Article 145 of the Constitution. The fact that the company owned vehicles are taxed that three times the rate payable by individuals, does not make the legislation violatvie of Article 14. Histrocially, the company owned vehicles are always been taxed at a rate higher that the individually owned vehicles. he legislature has he power to distribute tax burden in a flexible manner and the Court would no interfere with the same. It could not be said that there was differentiation without any basis and as such there was discrimination. [492E H] In view of the principles applicable to the taxation laws and various other factors, the Maharashtra Act as amended from time to time does not suffer from any vice of being not regulatory or compensatory taxation nor from the vice of being violative of Article 14 of the Constitution, and the challenge to the provisions of the Act as amended PG NO 485 after the judgment of the High Court could not be maintained. [494G ;495A] After the amendments afore mentioned the Act does no suffer from the vice mentioned in the judgment of the High Court . The appeals were allowed thus, and the challenge made in the special leave petitions was dismissed. [495] The taxes would be realised in accordance with the Act and the necessary adjustments would be made accordingly. [495C] Bolani Ors. Ltd. vs State of Orissa. ; ; G.K. Krishnan vs The State of Tamil Nadu & Anr., [1975] 2 S.C.R. 715; Malwa Bus Service (P) Ld. vs State of Punjab and Ors. , ; ' International ouris Corporation vs State of Haryana & Ors., ; ; Income tax Officer, shillong & Anr. vs N. Takim Roy Rymbai, etc., ; Mrs. Meenakshi & Ors. vs, State of Karnataka & Ors., AIR 1983 SC 1283; Anant Mills Co. Ltd. vs State of Gujarat and Ors., [1975] 3 S>.C.R. 220; Khandige Sham Bhat & Ors. vs The Agricultural Income tax Officer; , and State of Karnataka vs K. Gopalakrishna Shenoy and Another, ; , refered to.

The appellant, assessee in an Abkari contractor. It filed a return of its income for the assessment year 1959 60, disclosing a total turnover of Rs. 10,92,132/ and an income of Rs. 7,704/ . The Income Tax Officer did not accept the correctness of the return. He found that on 12th December, 1957 and 16th January, 1958 the excess of expenditure over the disclosed available cash was Rs. 17,726/ and Rs. 65,066 respectively. He also noticed several deposits, totalling Rs. 28,200, entered in the names of certain Sendhi shopkeepers. The Income Tax Officer rejected the account books of the assessee and his explanations for the discrepancies thereof and estimated the assessee 's income on an overall figure of Rs. 5,00,018. In appeal before the Appellate Assistant Commissioner and thereafter before the Income Tax Appellate Tribunal the assessee succeeded in getting the assessed income reduced to Rs. 1,30,000 in addition to the books profits. Penalty proceedings were taken against the assessee and the case was referred to the Inspecting Assistant Commissioner, who imposed a penalty of Rs. 75,000 under section 271(1)(c) of the Income Tax Act, 1961. On appeal by the assessee, the Appellate Tribunal held that there was no positive material to establish that the cash deposits represented concealed income. In regard to the cash deficits, the Appellate Tribunal noticed that for the assessment year 1957 58 an addition of Rs. 2,00,000 had been made to the book profits, and it observed that some part of that amount could have been ploughed back into the business. It held that an amount of Rs. 90,000 representing unledgerised cash credits of that year could be said to have been introduced in that year. Allowing the appeal, the Appellate Tribunal set aside the penalty order made by the Inspecting Assistant Commissioner. On a reference to the High Court, at the instance of the Commissioner of Income Tax, the High Court held that the Appellate Tribunal was not justified in holding that no penalty was leviable. Hence the appeal by special leave. Directing the Appellate Tribunal to take up the appeal under section 260(1) of the Income Tax Act, the Court ^ HELD: An order imposing a penalty is the result of quasi criminal proceedings. The burden of proof lies on the Revenue to establish that the disputed amount represents income and that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars. It is for the Revenue to prove these ingredients before a penalty can be imposed. [622B C] 619 Since the burden of proof in a penalty proceeding varies from that involved in an assessment proceedings a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted as a finding to that effect in the penalty proceeding. In the penalty proceeding the taxing authority is bound to consider the matter afresh on the material before it and, in the light of the burden to prove resting on the Revenue, to ascertain whether a particular amount is a revenue receipt. No doubt, the fact that the assessment order contained a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. Before a penalty can be imposed the entirety of the circumstances must be taken into account and must point to the conclusion that the disputed amount represents income and that the assessee has consciously concealed particulars of his income or deliberately furnished inaccurate particulars. The mere falsity of the explanation given by the assessee is insufficient without there being in addition cogent material or evidence from which the necessary conclusion attracting a penalty could be drawn. [622C G] Commissioner of Income Tax, West Bengal and Anr. vs Anwar Ali ; Commissioner of Income Tax, Madras vs Khoday Eswara and Sons, ; applied. When an 'intangible ' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee. That income although commonly described as 'intangible ', is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. It could be available to the assessee as the book profits could be. [623A B] 3. Secret profits or undisclosed income of an assessee earned in an earlier assessment year may constitute a fund, even though concealed, from which the assessee may draw subsequently for meeting expenditure or introducing amounts in his account books. Any part of that fund need not necessarily be regarded as the source of unexplained expenditure incurred or of cash credits recorded during a subsequent assessment year. The mere availability of such a fund cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year It is a matter for consideration by the taxing authority, in each case, whether the unexplained cash deficits and the cash credits can be reasonably attributed to a pre existing fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year. In each case the true nature of the cash deficit and the cash credit must be ascertained from an overall consideration of the particular facts and circumstances of the case. Evidence may exist to show that reliance cannot be placed completely on the availability of a previously earned undisclosed. income. A number of circumstances of vital significance may point to the conclusion that the cash deficit or cash credit cannot reasonably be related to the amount covered by the intangible addition but must be regarded as pointing to the receipt of undisclosed income earned during the assessment year under consideration. It is open to the Revenue to rely on all the circumstances pointing to that conclusion. What those several circumstances can be is difficult to enumerate and indeed, from the nature of the enquiry, it is almost impossible to do so. However, they must be such as can lead to the firm conclusion that 620 the assessee has concealed the particulars of his income or has deliberately furnished inaccurate particulars. [623C H, 624A] Lagadapti Subha Ramiah vs Commissioner of Income Tax, Madras, ; section Kuppuswami Mudaliar vs Commissioner of Income Tax, Madras, ; approved. In an income tax reference, a High Court should confine itself to deciding the question of law referred to it on facts found by the Appellate Tribunal. It is the Appellate Tribunal which has been entrusted with the authority to find facts. [624D E]

In 1956 a notice was issued to the respondent under section 34(1)(a) of the Indian Income tax Act, calling upon him to make a return on the ground that his income had escaped assessment for the year ending 31st March, 1949 The respondent contended that notice under section 34 of the Act could not be issued to him because of the lapse of eight years from the end of the accounting year. This contention was not accepted by the Income Tax officer. The assessee then filed an application under article 226 of the Constitution. The High Court held on a construction of section 34 of the Act, that the words 'any year ' as used in section 34(1)(a) mean. not the assessment year but the accounting year. The Income tax officer appealed The contention was that the words 'any year ' in cl. (a) refer to the assessment year. ^ Held, that the correct way of interpreting section 34(1)(a) of the Indian Income tax Act, 1922, read with the provisions of the Indian Finance Act, 1948, is that the words 'for any year ' mean for any assessment year and not for any accounting year because the assessment is for the assessment year although of the income which accrued in the previous year (year of account) The Previous year for different heads of income falling under different sections of the Indian Income tax Act may vary but does not give different starting points of limitation for different sources of income. Panna Lal Nand Lal Bhandari vs Commmissioner of Income Tax, Bombay City, ; , referred to. C. W. Spencer vs Income tax officer, Madras, , approved.

A large sum of Rs. 30 lakhs in cash having been recovered from the respondent in pursuance to a search by the Income Tax officials his assessments for the years 1962 63 to 1972 73 were reopened by the Department. The total tax burden on the respondent was over Rs. 30 lakhs and an additional sum of Rs. 35 lakhs was assessed for the year 1973 74. The respondent was also prosecuted under s 277 of the Income Tax Act. Appeals by the respondent to the Appellate Assistant Commissioner brought down the assessable income by about Rs. 10 lakhs. The respondent and the department both appealed to the Income Tax Appellate Tribunal, the former filing 12 appeals and the latter 10 appeals. The respondent moved the Settlement Commission for composition under section 245M. The assessee withdrew his appeals and the revenue declared their assessments and appeals 'weak ' and withdrew them. The Settlement Commission on receipt of the application under section 245C acted under section 24SD(l) and called for a report from the appellant. The appellant reported that prosecution proceedings for concealment of income and also false verification in the return by the respondent were pending against the respondent in the Magistrate 's Court and that it was not a fit case to be proceeded with by the Commission. The Settlement Commission after some correspondence with the respondent and without giving a hearing informed him that as the appellant had objected under section 245D ( I ), the Settlement Commission did not allow the application to be proceeded with. The appellant thereupon moved the Income Tax Appellate Tribunal for restoration of its appeals although no specific provision enable such a restoration, the asssessee being entitled to apply for restoration under section 245M. The respondent urged the Settlement Commission to review its order as no hearing as such was given to him. The Settlement Commission yielded to his 1134 submission, reached the reverse conclusion that the appellant 's opposition to the composition notwithstanding, the application for settlement be considered on merits. The core controversy in the appeals to this Court were whether in view of the withdrawal of the departmental appeals before the Income Tax Appellate Tribunal, the Commissioner is estopped from making a report under section 245D(1) proviso 2 to the Settlment Commission objecting to the application from being proceeded with. On behalf of the appellant it was contended that (a) there was no power of review for the Commission, since it had declined to proceed with the application for settlement and consequently the re opening of the Settlement proceedings was invalid, (b) even though the C.T.T. had withdrawn his appeals and thus facilitated the filing of an application under section 245C no bar of estoppel could be spelt out to forbid the Commissioner from exercising his statutory power of withholding consent to the settlement proceedings and (c) the C.l. T 's veto was not subject to review or invalidation by the Settlement Commission Allowing the appeals: ^ HELD 1. The Settlement Commission should be inhibited from proceeding with the application of the assessee and the appeals by the assessee before the Income Tax Appellate Tribunal must be revived and disposed of expeditiously. [1164F1 2. The departmental appeals, having been admitted by the Commissioner of Income Tax himself to be very weak and frivolous, should not be revived as it will be only a waste of public time and money. [iy] 3. If the Department files an appeal which it drops to enable an application before the Commission, then the proviso to section 245M(1) does not debar the motion for settlement. [1156C] 4. Functionally speaking, Chapter XIXA in the Income Tax Act, 1961, enacted by the Taxation Laws (Amendment) Act, 1975, engrafted in partial implementation of the Wanchoo Committee Report, provides for settlement of huge tax disputes and immunity from criminal proceeding by a Commission to be constituted by the Central Government when approached without objection from the Tax Department. [1138E] 5. Fiscal philosophy and interpretation technology must be on the same wavelength if legislative policy is to find fulfilment in the enacted text. [1138 H] 6. The mechanics of section 245D provides that the application for settlement, when filed, shall be forwarded to the Commissioner for a report and is only on the basis of the material contained in such report that the Settlement Commission may allow the application to be proceeded with or reject the application. To reject an application is to refuse relief outright and affect the applicant adversely. So it is provided "that an application shall not be rejected unless an opportunity has been given to the applicant of being heard. " An applicant before the settlement Commission is therefore entitled to a hearing before his application for composition is rejected [1146G H] 1135 7. The rule of fairplay incorporated in the first proviso to section 245D(l) A obligates the Commission to hear the applicant before rejection. Even apart from any specific provision, it is legal fairplay not to hurt any party without hearing him unless the Act expressly excludes it. Nothing is lost by hearing a petitioner whose application for settlement is being rejected and much may be gained by such hearing in properly processing the application in the spirit of Chapter XIXA. S 245D ( 1 ) does. not negate natural justice and in the absence of an express exclusion of the rule of audi alteram partem, it is fair, indeed fundamental, that no man is prejudiced by action without opportunity to show to the contrary. Law leans in favour of natural justice where statutory interdict does not forbid it. [1147A D, F] Mohinder Singh Gill v Chief Election Commissioner, ; ; Maneka Gandhi vs Union of India, [1978] 1 SCC 248 referred to. In the instant case, the Settlement Commission in the first instance rejected the application because the Commissioner of Income Tax objected to it. The rule of fairplay incorporated in the first proviso to section 245(1) obligates the Commission to hear. the applicant, before rejection. The Settlement Commission 's decision to re hear and pass a de novo order cannot, therefore, be said to be illegal. [1147E] 8. The second proviso to section 245D ( 1 ) is compulsive in tune and import, for it mandates "that an application shall not be proceeded with under this sub section if the Commissioner objects to the application being proceeded with on the ground that concealment of particulars of income on the part of the applicant or perpetration of fraud by him for evading any tax. has been established or is likely to be established by any income tax authority, in ' relation to the case. " There is little diffculty in holding that the application for settlement, having been rejected by the Commissioner, could not be proceeded with. The veto of the Commissioner was the Waterloo of the application. [1147G 1148A, D] 9. Section 245H is of great moment from the angle of public interest and public morals at it immunises white collar offenders against criminal prosecutions and, in unscrupulous circumstances, becomes a suspect instrument of negotiable corruption. More than the prospect of monetary liability and mounting penalty is the dread of traumatic prison tenancy that a tax dodging F tycoon is worried about. And if he can purchase freedom from criminal prosecution and incarceratory sentence he may settle with the Commission, and towards this end, try to lay those who remotely control the departmental echelons whose veto or green signal, opens the prosecutions. Thus, section 245H, which clothes the Commission with the power to grant immunity from prosecution for "any offence under this Act or under the Indian Penal Code or under any other Central Act. " is a magnet which attracts large tax dodgers and offers, indirectly an opportunity to the highest departmental and political authorities a suspect power to bargain. [1150C E] 1O Section 245M enables certain persons who have filed appeals to the Appellate Tribunal to make applications to the Settlement Commission. The section (a) enables withdrawal of appeals before tribunals by assessee as condition precedent to applications for composition by the Settlement Commission, (b) applies, by a legal fiction, Section 245C and to such applications, and (c) where the proceedings before the Commission is not entertained, allows revival of the withdrawn appeals thus restoring the Status quo ante. 1136 The proviso to section 245M(l) places an embargo on the right of the assessee to move the Commission where the income tax officer has preferred an appeal under sub s.(2) of section 253 against the order to which the assessee 's appeal relates. The proviso interdicts entertainment of a settlement application if departmental appeals are filed. [IISOF, 1151G, 1152C, 1153F] 11. Purposefully interpreted preferring an appeal means. more than formally filing it but effectively pursuing it. If a party retreats before the contest begins it is as good as not having entered the fray. After all, Chapter XIXA is geared to promotion of settlement and creation of road blocs in reasonable composition. The teleological method of interpretation leads to the view that early withdrawal of the I.T.O 's appeal removed the bar of the proviso. [1153C D] 12. The purpose of substituting the method of investigative negotiation, just settlement and early exigibility by a high powered Commission for a tier upon tier of long protracted litigation, where victory may be phyrrhic and futile, is ill served by keeping out cases solely for the reasons that departmental appeals have been filed. [1153H 1154A] 13. The obvious object of the clause, "the assessee shall not be deemed to have withdrawn the appeal from the appellate tribunal," is to restore the parties to status quo ante, and in fairness, must apply to the Department as to the assessee. This non discriminatory import can be reasonably read into the clause if we construe the expression "the assessee in wider way so as to include all parties affected by the subject matter of the assessment. In that case, the clause may mean that no one who is aggrieved by the assessment shall be deemed to have withdrawn the appeal from the appellate tribunal. " An equitable and purpose oriented construction of the clause means that the assessee will be put back in the same position vis a vis his appeals and if, to facilitate his moving the Commission the I.T.O. has withdrawn the depart mental appeals, the Commission 's rejection of the application shall not pre judice the Revenue. Actus curie neminem gravabit is the principle of wider import and is a tool of construction too. This perhaps may be making up for a lacuna by a restructuring of the clause so as to work out justice to the Department. [1154E G] 14. The scheme of section 253(4) contemplates filing of memorandum of cross objections by the ITO on receipt of notice of the appeal by the assessee. So much so it is also possible, alternatively to read into section 245 (7) the right of the department to file an appeal de novo on receipt of notice of the revival of the assessee 's appeal, within the period specified in section 253 (4) . This does not do violence to the language of section 245M(7) and affords equitable relief to the Department by enabling it to bring its appeal back to life notwithstanding the earlier withdrawal, when the assesses 's appeal reincarnates section 245M(7). [1154H ll55B] 15. The judicial process does not stand helpless. with folded hands but engineers its way to discern meaning when a new construction with a view to rationlisation is needed. [1155C] Seaford Court Estates Ltd. vs Asher, , referred to. A casual perusal of Chapter XIXA convinces the discerning eye that the Settlement Commission exercises many powers which affect, for good or otherwise, the rights of the parties before it And vests in it power to grant 1137 immunity from prosecution and penalty, to investigate into any matters and to A enjoy conclusiveness regarding its orders or settlement. Section 245L declares all proceedings before the Settlement Commission to be judicial proceedings. Settlement Commission are therefore tribunals. [ll57D E, ll56E] Associated Cement Companies Ltd. vs P. N. Sharma and another ; referred to. The Commissioner has a duty to the public Revenue and more importantly, a duty to object to any assessee who is prima facie guilty of grave criminal conduct in the shape of concealment of income or perpetration of fraud getting away with it by invoking chapter XIXA. The gravity of this public policy cannot be undermined by interpretative softness of second puroviso to section 245D(l). To whittle down the imperative nature of this veto power is to undo the expectations of the Wanchoo Committee and amounts to stultify the rule of law, an integral part of which is that the law shall not let the greater felon loose. [1158E; 1158H 1159A] 18 Section 245D by the 2nd Proviso, casts a public duty on the Commissioner of Income Tax to consider in the light of the case made out in the assessee s application whether "concealment of particulars of income on the part of the applicant or prepetration of fraud by him for evading any tax or other sum chargeable or imposable under the Indian Income Tax Act, 1922 (11 of 1922). Or under this act, has been established or is likely to be established by any Income Tax authority, in relation to the case," and exercise his veto power to prevent escape of macro criminals prima facie guilty of grave economic crimes. He cannot bargain over this interdict in advance or barter away a legal mandate in anticipation. He may permit or even assist the filing of a. conciliation motion of the assesse 'e but when the Commission intimates him under section 245D(l) he shall, with statutory seriousness. exercise his discretion. He cannot enter into a 'deal ' over this power without betraying the statutory trust. The plea that the Commissioner of Income Tax, by conduct and understanding has 'irredeemably mortgaged ' his statutory duty to object if the case deserves such objection has to be negatived. Estoppel then is both odious and omnius and discretion the door to corruption [1160D G] 19. In the instant case, the CIT withdrew the appeals but it is not correct that he made representations to the assessee to act in a particular manner with a provision of doing something to his advantage leading to the assessee in turn acting to his own prejudice by withdrawing his appeals His withdrawal of the appeals was independently decided upon by him so that he could move the Commission. Thereafter he moved the department to withdraw its appeals so as to entitle him to make an application to the Commission. The canons that govern the application of the principle of estoppel contradict its 'extension to a. situation like the present. The plea of estoppel which has found favour with the Commission has therefore to be over ruled. The objection raised by the CIT is a potent interdict on the jurisdiction of the Commission. [1163H 1164A, C] 20. The policy of the law as. disclosed in Chapter XIXA is not to provide a rescue shelter for big tax dodgers who indulge in criminal activities by approaching the Settlement Commission The Settlement Commission will certainly take due note of the gravity of economic offences on the wealth of the nation which the Wanchoo Committee has emphasised and will exercise 1138 its power of immunisation against criminal prosecutions by using its power only sparingly and in deserving cases, otherwise such orders may become vulnerable if properly challenged. [1164 E]

The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short). On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act. The Assistant Collector dismissed the application. The respondents appealed to the Additional Commissioner. The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal. The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries. The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal. Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land. The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits. On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession. This application and the subsequent appeals were rejected by the authorities. Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities. Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act. The Assistant Collector decreed the suit. The Additional Commissioner allowed the appeal filed by the respondents. The Board of Revenue dismissed the appellants ' second appeal. The appellants filed a writ petition in the High Court. A single Judge of the High Court dismissed the writ petition. A Division Bench of the High Court dismissed the special appeal filed by the appellants. Hence this appeal. The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act. Dismissing the appeal, ^ HELD. 1. The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2. The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '. So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '. The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding. The proceeding may as well fail for some other defect. Not all such defects can be said to be analogous to defect of jurisdiction. Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '. Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits. Such defect could be said to be of the like nature ' as defect of jurisdiction. Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14. [300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to. In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered. In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree. [298C D; E] 4. In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied. It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence. But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding. The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue. The cause of action was the reversal of the order of the Additional Commissioner. When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act. It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession. It had nothing to do with the order of the Additional Commissioner. Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution. [301B; 299A; 298G H; 299A] 5. Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act. [301G] 6. In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49. [302A B] 7. The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force. Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land. Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act. The respondents did move such an application which ultimately was accepted by the Additional Commissioner. Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants. [294H; 296D G] 290

Appeal No. 237 of 1956. Appeal by special leave from the judgment and order dated December 13, 1954, of the Calcutta High Court in Appeal from Original Order No. 117 of 1954. B. Sen, P. K. Chatterjee and section N. Mukherjee, for the appellant. B. C. Mitter and D. Mukherjee, for respondent No. 1. 1961. February 6. The Judgment of the Court was delivered by HIDAYATULLAH, J. This appeal is as much without substance, as it was unnecessary. Hazrat Syed Mastershid Ali Al Quadari (the appellant) is the eldest son of one Hazrat Sahib Syed Shah Mastershid Ali Al Quadari (shortly, Hazrat Sahib), the first Mutawalli of a wakf created on August 9, 1931, for the maintenance of the shrine of a Muslim Pir in the town of Midnapur. After the death of Hazrat Sahib, the appellant, claiming to succeed to his father as Sajjadanashin, being his eldest son, made an application To the Commissioner under the Bengal Wakf Act. His younger brother, Syed Shah Rushaid Ali Al Quadari, opposed his claim, the ground being that he was nominated as the succes sor by Hazrat Sahib. While this controversy was afoot, the Commissioner, acting under section 40 of the Bengal Wakf Act, appointed Syed Shah Rasheed Ali Al Quadari (the third son of Hazrat Sahib) as a temporary Mutawalli. The appellant then moved a petition in the Calcutta High Court under article 226 of the Constitution against the appointment, which was allowed by Sinha, J. and the order of the Commissioner was set aside. On appeal to the Divisional Bench, consisting of Chakravarti, C. J. and Lahiri, J. (as he then 761 was), the order of Sinha, J. was reversed, and the petition was dismissed. This appeal has been filed with special leave. It is contended in this appeal that the order of the Commissioner appointing a temporary Mutawalli was illegal, because under the Rules framed by the Government, only the Board constituted under the Bengal Wakf Act could make the appointment. This argument, in our opinion, is wholly unsound. The learned Chief Justice of the High Court examined the matter at great length in reaching his conclusion; but, in our opinion, the reasons can be stated within a narrow compass. We are concerned with sections 40 and 29 of the Bengal Wakf Act. Section 40 reads as follows: " In the case of any Wakf of which there is no Mutwalli or where there appears to the Board to be an impediment to the appointment of amutwalli the Board, subject to any order of a competent Court, may appoint for such period as it thinks fit a person to act as Mutwalli. " Section 29 provides: "The Board may, from time to time, authorize the Commissioner to exercise and perform, subject to the control of the Board, any of the powers and duties conferred or imposed on the Board by or under this Act." On April 24, 1936, the Board adopted the following resolution : " (2). In exercise of the powers vested in them under Section 29 of the Act this Board resolve that the Commissioner of Wakfs be authorised to exercise and perform, subject to the control and approval of this Board, the following powers and duties conferred or imposed on this Board by the sections of the Act mentioned against each case: (c). The powers of this Board under section 40 to appoint a temporary mutwalli. " These two provisions of the Act show only too plainly that a temporary Mutawalli can be appointed either by the Board, or, if the powers and duties be 762 delegated to the Commissioner, by the Commissioner. The appellant contends that the Commissioner can only make a report to the Board, and the Board alone can make the appointment, and refers to two Rules framed by Government. These Rules are: "1. If it appears to the Commissioner that there is no mutwalli, in the case of any wakf, or that a a vacancy in the office of the mutwalli has been caused by death, resignation, retirement or removal of th e former mutwalli, and a dispute has arisen between two or more rival claimants to the vacancy, and such dispute is likely to affect the interests of the Wakf, he may institute an enquiry and report the result thereof to the Board with his recommendation. 2. .On receipt of the report and the recommendation from the Commissioner, or on its own motion, the Board may appoint a mutwalli under section 40 of the Act. " It is argued that under the second Rule the Commissioner was bound to make his report and recommendation, but the Board alone was empowered to appoint a temporary Mutawalli under section 40. The last words of the second Rule, it is said, are clear. This is, no doubt, true of those cases where the Board has not delegated its functions under section 40 to the Commissioner. Once that delegation has been made, the Commissioner acts for and on behalf of the Board, and the Rules cease to apply. The Rules cannot affect the power of the Board to delegate its functions under section 29, and harmonious construction requires that the Rules should give way, when there is a delegation of the powers of the Board. The Commissioner was thus competent to make the appointment. Mr. Sen, however, contends that the appointment of a temporary Mutawalli could only be made if there was an " impediment " to the appointment of a permanent Mutawalli, and that there was no impediment to such an appointment but " a challenge to the appellant as a candidate. " The word " impediment " means hindrance or obstruction, and there was certainly an obstruction to the appointment of a permanent 763 Mutawalli, while the dispute remained undecided. This point has no force whatever. The question which seemed to have largely engaged ' attention in the High Court, namely, whether the delegation was only of powers or also of duties of the Board, was not argued before us, though it formed the subject of considerable discussion in the statements of the case. It is without substance. Where powers and duties are interconnected and it is not possible to separate one from the other in such wise that powers may be delegated while duties are retained and vice versa, the delegation of powers takes with it the duties. The proposition hardly needs authority; but if one were necessary, reference may be made to Mungoni vs Attomey General of Northern Rhodesia (1). In our opinion, the appeal has no force whatever. The appellant chose the extraordinary course of dragging the respondents twice to the High Court and again to this Court merely to challenge an order of temporary duration, while the main controversy remained outstanding for years and could have been decided by now. The appeal fails, and is dismissed. The appellant shall pay the costs of the respondents, who have entered appearance. Appeal dismissed.

During controversy between two brothers each of whom claimed to be appointed Mutawalli, the Commissioner of Wakfs appointed a third brother as a temporary Mutawalli under section 40 of the Bengal Wakf Act, which appointment was challenged on the ground that the order of the Commissioner appointing a temporary Mutawalli was illegal because under the rules framed by the Government of West Bengal the Board constituted under Bengal Wakf Act could alone make the appointment and the Commissioner could only make a report and recommendation to the Board. Held, that under the provisions of section 40 read with section 29 of the Bengal Wakf Act, a temporary Mutawalli can be appointed by the Commissioner to whom the powers and duties have been 760 delegated by the Board. The Rules cannot affect the powers of the Board to delegate its functions under section 29 of the Act to the Commissioner, and once the delegation is made the rules cease to apply. Held, further, that where power and duty are interconnected and it is not possible to separate one from the other in such wise that power can be delegated while duty is retained and vice versa, the delegation of powers takes with it the duties.

N owned agricultural lands in Bahawalpur State now forming part of Pakistan and also owned some property in Punjab in India. He died in June 1947 while on a visit to India in the normal course of business, leaving behind three sons, the respondents in the appeal. On the partition of India, the land in Pakistan originally owned by N and after his death by his sons, had to be abandoned. After migrating to India, the three respondents filed separate claims as displaced persons and were allotted an area of land in Punjab. Thereafter a complaint was filed before the Managing Officer that these respondents had received double allotments. The Managing Officer, held this allegation was not substantiated but came to the conclusion that N, although he had died before the partition, must be treated as a displaced land holder for the purpose of allotment of land as his name continued to be shown in the Jamabandi as the owner of the abandoned land in Pakistan. In consequence of this finding a large portion of the land allotted to the three respondents was cancelled by an order of the Managing Officer dated September 18, 1961. Appeals made by the respondents to the Assistant Settlement Commissioner as well as revision petitions before the Chief Settlement Commissioner Punjab, were dismissed. In dismissing the revision petitions, the Chief Settlement Commissioner relied on para. 17 of "Tarlok Singh 's Land Resettlement Manual" 1952 edition Page 180, to the effect that "Even where a displaced land holder in whose name the land stands in the records received from West Punjab has died, the allotment is made in the name of the deceased". He therefore upheld the view 4 at the land could only be allotted in the name of N. The respondents then filed a writ petition against the orders of the Chief Settlement Commissioner which was allowed. On appeal to this Court, HELD:Dismissing the appeal, The definition of a "displaced person" in para 2(e) of the Notification of July 8, 1949, issued by the Custodian in accordance with provisions of the East Punjab Evacuees (Administration of Property) Act 1947, and the Rules made thereunder, or of a "Refugee" in Section 2(d) of the East Punjab Refugees (Registration of Land Claims) Act 12 of 656 1948, show that these expressions have been used in the relevant enactments with reference to a person who has migrated to India as a result of disturbances or fear of disturbances or the partition of the country. Therefore if a person had died before the disturbances took place or he had never migrated to India as a result of the disturbances and he died before such migration, he could not come within the meaning of the expression "displaced person" or the word "refugee" under the relevant statutory enactments. N died in June, 1947, long before the partition of the country and he did not abandon or was not made to abandon his land in Bahawalpur on account of the civil disturbances or the fear of such disturbances or the partition of the country. [660 A D] There was no force in the contention that even though N never became a refugee or a displaced land holder, the allotment had to be made in his name because he was shown in the revenue records received from West Punjab as the owner of the land and there had been no mutation of the names of the respondents in the revenue records. The rule in para 17 of "Tarlok Singh 's Manual" consistently with the statutory enactments, would be applicable only to such persons who were land holders 'it the time of their becoming displaced persons or refugees and who died afterwards before allotment could be made in their favour. It does not apply to a person like N who was not a displaced land holder at the time of his death. [661 D F]

The appellant was selected for and appointed in a temporary vacancy of Inspector of Central Excise, as he was found to be a "sportsman who has represented the Universities in the Inter University Tournament conducted by the Inter University Sports Board". He joined duty and continued therein. On 30 4 1976 the Assistant Collector (Head Quarters) Central Excise called for the original sports certificate on the ground that only attested copies were furnished by the appellant earlier. The appellant furnished the original documents on 5 7 76. After a year, he was directed to supply the details of the tournament at which he had represented the University. On 27 2 78, the appellant referred to the sports certificate dated 28th July 1975 issued by the Deputy Registrar of Mithila University, Darbhanga. The appellant explained that he had qualified and was selected, to represent the Mithila University in the Inter University Tournament to be held at the Banaras Hindu University, Varanasi, in the year 1972 but that a serious illness had intervened and prevented him from actually participating in the tournament. He pointed out that this had been made clear by him during the interview for selection before the Appointments Committee and that as he had been discharging his duties to the satisfaction of his superior officers ever since December, 1975 and had, in fact, captained the sports team on behalf of the Excise Department at Calcutta for two years, he was astonished that the question should be raised later. Another fourteen months thereafter, on 16th June, 1979, the Assistant Collector (Headquarters) made an order purporting to be under the proviso to sub rule (1) of Rule 5 of the Central Civil Service (Temporary Service) Rules 1965, terminating the services of the appellant. The appellant then applied for relief under Article 226 of the Constitution to the High Court against the order, but the High Court has summarily dismissed the writ petition. Allowing the appeal on special leave, the Court ^ HELD: The terms and conditions of service are intended to be construed reasonably, and too technical a view can defeat the essential spirit and intent embodied in them. The intention was to appoint meritorious sportsmen to the posts, and that object is served if a person who had qualified and was selected for representing his university in an Inter University Tournament conducted by the Inter University Sports Board is appointed, notwithstanding that he was actually prevented from participating because of reasons beyond his control. [733 A C] In the instant case, the respondents have proceeded on a technical view of the matter wholly unjustified by the intent behind the condition of eligibility. 731 The condition required that the applicant should have been a sportsman who had represented his university in an Inter University Tournament conducted by the Inter University Sports Board. The appellant did qualify, and was selected, for representing the Mithila University in the Inter University Tournament at the Banaras Hindu University in the year 1972. All that remained was that he should have participated in the tournament. Unfortunately, for him, he fell ill and was unable to do so. The fact that he fell ill, and for that reason was unable to represent his university, is not disputed. There is nothing to show that but for that illness he would not have actually taken part in the tournament. On a reasonable view of the facts the appellant should be taken to have fulfilled the conditions of eligibility. [732 G H, 733 A]

The respondent, a company incorporated in the former State of Bhopal, presented a petition in August 1960 under article 226 of the Constitution in the High Court of Madhya Pradesh for a writ restraining the State of Madhya Pradesh from enforcing the Bhopal State Agricultural Income tax Act, 1953, claiming that the Act contravened the respondent 's right under article 14 of the Constitution. By the the territory of the State of Bhopal was 847 incorporated from November 1, 1956 into the newly formed State of Madhya Pradesh. The by section 119 continued the operation of the laws in force in the territories in which they were previously in force until the competent legislature or authority amended, altered or modified these laws. Shortly after the reorganisation. the Madhya Pradesh Adaptation of Laws Order, 1956 was issued so as to make certain laws applicable uniformly to the entire State and later the Legislature by the Madhya Pradesh Extension of Laws Act, 1958 made other alterations in the laws applicable to the State. But Bhopal Act 11 of 1953 remained unamended or unaltered: nor was its operation extended to the other areas or regions in the State with the result that Agricultural Income tax was levied within the territory of the former State of Bhopal and not in the rest of the territory of the State of Madhya Pradesh. The High Court held that the provisions of Bhopal Act 11 of 1953 contravened article 14 of the Constitution and observed that though the State had removed diversity in some of the laws of the component regions, no attempt was made to remove discrimination between the territory of the former Bhopal State and the rest of the territories of the State of Madhya Pradesh with respect to this law. Held: (i) Where application of unequal laws is reasonably justified for historical reasons, a geographical classification founded on those historical reasons would be upheld. The legislature has always the power to make special laws to attain particular objects and for that purpose has authority to select or classify persons, objects or transactions upon which the law is intended to operate. Differential treatment becomes unlawful only when it is arbitrary or not supported by a rational relation with the object of the statute. Bhaiyalal Shukla vs State of Madhya Pradesh, [1962] Supp. 2 S.C.R. 257, The State of Madhya Pradesh vs The Gwalior Sugar Co., , Maharaj Kumar Prithivi Rai vs State of Rajasthan, C.A. Nos. 327 328, dated 2 11 1960 and Anand Prasad Lakshminivas Ganeriwal vs State of Andhra Pradesh, A.I.R. 1953 S.C. 853. relied on. State of Rajasthan vs Rao Manohar Singhji, [1954] S.C.R. 996, explained. (ii) It would be impossible to lay down any definite time limit within which the State had to make necessary adjustments so as to effectuate the equality clause of the Constitution. It cannot be said that because a certain number of years have elapsed or that the State has made other laws uniform, the State has acted improperly in con tinuing an impost which operates upon a class of citizens more harshly than upon others. (iii) To make out a case of denial of the equal protection of laws under article 14, a plea of differential treatment is by itself not sufficient. An applicant pleading such denial must make out that not only he 848 had been treated differently from others but he has been so treated from persons similarly circumstanced without any reasonable basis, and such differential treatment is Unjustifiably made.

The appellant who was working as an investigator in the office of the Chief Controller of Imports and Exports was charged, found guilty and convicted and sentenced to suffer rigorous imprisonment for 18 months on each count for an offence under Sections 5(1) (d) and 5(2) of the Prevention OF Corruption Act, 1947 and section 161 I.P.C. and a fine of Rs. 200/ or in default to undergo further rigorous imprisonment under section 5(2) of the Act. His appeal to the High Court was dismissed and the conviction and sentence were confirmed. Special leave was granted by the Supreme Court limited to the question. Of validity of sanction accord under section 6 of the Prevention of Corruption Act, 1947. The appellant died during the pendency of the appeal and his near relatives were granted permission to continue the appeal. Dismissing the appeal, the. Court ^ HELD 1. The preliminary objection of the State as to the abatement of the appeal because of the death of the appellant taking into account preparedness to conclude that the sentence might he set aside must be negatived. [352D] (a) As per the proviso to section 394(2) of the Criminal Procedure Code, 1973, where the appeal is against the conviction and sentence of imprisonment and the appellant dies during the pendency of the appeal, any of his near relatives may, within the time prescribed therein, apply to the appellate Court before which the appeal is pending for leave to continue the appeal and if the leave is granted the appeal shall not abate. [352A B] (b) The appellant, in the, instant case, has preferred the appeal against his conviction and sentence of imprisonment and also sentence of fine. After his death his near relatives as contemplated in the Explanation to sub section (2) of section 394 Crl. P.C., applied to continue the appeal and were granted leave to continue the appeal. Therefore, the near relations of the deceased can continue the appeal and even if the respondent State concedes that the sentence of fine be set aside yet the appeal would not abate if leave is granted o the near relation of the deceased to continue the appeal. [352C D] 349 2. 'The sanction accorded, for prosecution of the appellant under section 6 of the Prevention of Corruption Act, 1947 by the Joint Chief Controller of Imports and Exports is valid in law: [355H, 356A] (a) The instant case is governed by Central Civil Services (Classification, Control & Appeal) Rules, 1965 and in view of S.R.O. 631 issued by the President, in exercise of the power conferred by sub rule (2) of rule 11, clause (b) of sub rule (2) of rule 14, and sub rule (2) of rules 23 of the Central Civil Services (Classification, Control & Appeal) Rules, 1957, which order was saved by rule 34 of the 1965 Rules. [353C D] (b) Rule 12(1) and (2) of 1965 Rules is in pari materia with rule 14 of 1957 Rules. Rule 2 of 1965 Rules confers power on the President to impose any of the penalties specified in rule 11 on any Government servant. Sub rule (2) (b) provides that any person appointed to a Central Civil Post included in the General Central Service by the authority specified in this behalf by a general or special order of the President or where no such order has been issued, by the appointing authority specified in the Schedule in this behalf, may impose any of the penalties specified in rule 11 which includes the penalty of removal from service. Therefore, the President has the power to issue any general or special order to confer power to impose penalties as specified in rule 11 on any authority other than the one specified in the Schedule in this behalf. If the order issued by the President. S.R.O. 631 under corresponding rule 11 and the relevant rules bearing on the subject of 1957 Rules is not shown to be inconsistent with any of the Rules included in 1965 Rules, obviously such order would be saved under rule 34. There being no inconsistency as contemplated by Rule 34, indisputably the order issued by the President S.R.O. 631 along with the schedule would be saved. Once S.R.O. 631 is saved, the relevant entry in the schedule in respect of the origination of C.C.I.E. would be saved. Accordingly the entry in the order issued by the President would supplant the corresponding entry in 1965 Rules and would have to be substituted for the entries in the relevant item in the Schedule. The necessary consequence would be that in the case of the organization of The C.C.I.E. for all posts in Headquarters office, lt. C.C.I.E. would be both the appointing and the disciplinary authority having tho power to remove from service such persons belonging to Class III services. Now, the appellant was indisputably holding a post in Class III service in the Headquarters office of the organisation of C.C.I.E. He was at the relevant time holding the post of Investigator which is admittedly a Civil Post in Class III service in the office of C.C.I.E. Indisputably, therefore. C.C.I.E. would be both the appointing and disciplinary authority with power to remove him from service. Therefore, Jt. C.C.I.E. would be competent to accord sanction as envisaged by section 6(1)(c) of the Act. [355B H] The fact that the administrative department in respect of the office of C.C.I.E. is the Ministry of Foreign Trade & Supply does not make any difference because C.C.I.E. is a separate office with its own establishment.[1354A] R. J. Singh Ahluwalia vs State of Delhi, A.L.R. ; distinguished.

The appellants were the respective mutawallis of two wakfs, in which either the ultimate benefit to the charity was postponed till after the exhaustion of the wakif 's family and descendents, or the income from the wakf estate was applied for the maintenance of the family side by side with expenditure for charitable or religious purposes. Notices were issued by the Collector under the West Bengal Estates Acquisition Act, 1953, to the appellants, calling upon them to hand over possession of the wakf estates, on the ground that under section 4 of the Act, there was an extinction and cesser of the estate and the rights of the appellants, and that their divested estates and rights vested in the State. The appellants claimed that they were protected by section 6(1)(i)of the Act, because, they were holding the properties exclusively for purposes which were charitable or religious or both. The claim was rejected by the Collector, by the Commissioner on appeal, and by the High Court under article 226 of the Constitution. In the appeal to the Supreme Court, HELD: The purposes described in the deeds were not covered by the expression "religious purpose", and they were not exclusively for charitable purposes. Mingled with those purposes were some which were secular and some, which were family endowments, of a very substantial character. As the provisions about the family had not become inoperative by the exhaustion of the beneficiaries, the deeds. as they stood, could not be said to come within exemption claimed. [317 F H]. The provisions of the Act apply notwithstanding anything to the contrary contained in any other law or in any instrument and notwithstanding any usage or custom to the contrary. The Act must, therefore, be construed on its actual words and the exemption cannot be enlarged beyond what is granted there. No doubt, the definition of "Charitable purpose" is not exhaustive like that of "religious purpose" but the expression "public utility" in the definition of "charitable purpose" gives a guidance to the meaning and purpose of the exemption. It leaves scope for addition but it does not make for enlargement in directions which cannot be described as "charitable". A provision for the family of the wakif or for himself cannot be regarded as "relief of poor", "medical relief" or "the advancement of education" under the definition. It cannot also be regarded as an expenditure on an object of general public utility. It is true that after the passing of the Mussalman waqf validating Act, 1937, wakfs, in which the object was the aggrandisement of the families of wakifs without any pretence of charity in the ordinary sense, became valid and operative. But, the intention was not to give a new meaning to the word "Charity" which in common parlance is a word denoting a giving to someone in necessitous circumstances and in law, a giving for public good. A private gift to one 's own self or kith and kin may be meritorious and pious, but is not a charity in the legal sense and Courts in India have never regarded such gifts as for religious or charitable purposes, even under the Mahomedan Law. A; 316 F H; 317 D].

One C a tenant of a Chawl belonging to the Municipal Corporation of Bombay died, and his widow on whom the tenancy devolved, took in a boarder. Proceedings by the Corporation under Chapter VI A of the Municipal Corporation Act for their ejectment were initiated by an officer to whom the commissioner had delegated his powers under section 68 of the Act. After due enquiry the officer passed an order evicting C 's widow and her boarder. In an appeal filed under section 105F of the Act before the Bombay City Civil Court it was held that the delegation of the Commissioner 's power was not proper inasmuch as the judicial functions of the Com missioner under sections 105B to 105E had been delegated to be exercised under the Commissioner 's control and subject to his revision, and consequently the order of ejectment was without jurisdiction. The Corporation appealed, by special leave, to the Supreme Court. No question as to the validity of the law was raised. It was only contended that judicial power was delegated with administrative control over the delegates decision. HELD :(i) Section 68 was originally intended to cover very different matters because Chapter VI A could not then have been in contemplation. When Chapter VI A was added and a reference to sections 105B to 105E was included in section 68, the wording of that section became applicable to the powers exercisable under sections 105B to 105E, even though that wording, taken literally, is somewhat inapt to cover delegation of judicial power. [932 D] (ii) To the delegation of judicial power as such there can be no objection when the law either expressly or by necessary implication permits it. In the present case the amendment of section 68 by inclusion of the delegation of the function of the Commissioner under sections 105B to 105E does indicate the intention that the judicial and quasi judicial powers contained in Chapter VI A were expressly intended to be delegated. The words "the Commissioner 's control" and "subject to his revision" in section 68, as well as in order of delegation, are really appropriate to a delegation of administrative functions. They must be reasonably construed. In respect of judicial or quasi judicial functions these words cannot bear the meaning which they bear in the delegation of administrative functions. When the Commissioner stated that his functions were delegated subject to his control and revision it did not mean that he reserved to himself the right to intervene to impose his own decision upon his delegate. The control envisaged was not control over the decision as such but over the administrative aspects of cases and their disposal and the delegation was valid. [932 F 933 B] The order of the Bombay City Civil Court could not therefore be sustained.

The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act, 1950, was ultra vires, void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer, pending the hearing of the suit. More than a year thereafter, the State made an application under 0. 39, r. 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court. Before that application could, however, be heard, the State of Bihar, on May 19, 1952 issued a notification under section 3(1) of the Act, authenticated by the Additional Secretary to the Government, declaring that, amongst others, the respondent 's estate had vested in the State of Bihar under the provisions of the Act. Thereupon the respondent moved the trial Court for taking action against the State under 0. 39, r. 2(3) of the Code. The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court. The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant 's property to the value of Rs. 5,000 and the High Court on appeal affirmed that decision. Held, that the courts below took the correct view of the matter and that the appeal must be dismissed. The procedure laid down by 0. 39, r. 2(3) of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0. 39, r. 2(1) and is available against the State although the provision for detention may not apply to it. It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation. District Board of Bhagalpur vs Province of Bihar, A.I.R. 1954 729 Pat. 529 and Tarafatullah vs section N. Maitra, A.I.R. 1952 Cal. gig, distinguished. There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0. 39, r. 2(3). The word 'person ' used by it, properly construed, includes the defendant against whom the order of injunction is primarily issued as also the defendant 's agents, servants and workmen. Since the court 's power to issue an order of temporary injunction against the State under 0. 39, r. 2(1) cannot be in doubt, disobedience of such an order when issued necessarily attracts 0. 39, r. 2(3) of the Code. Director of Rationing & Distribution vs Corporation of Calcutta, ; , held inapplicable. Held, further, that when once an order is passed which the Court has jurisdiction to pass, it is the duty of the State no less than any private party to obey it so long as it stands, and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0. 39, r. 2(3) was made and persisted in till the end must be disapproved.

iminal Appeal No. 32 of 1956. Appeal from the judgment and order dated October 7 and 10, 1955, of the Bombay High Court in Criminal Appeal No. 817 of 1955. Porus A. Mehta, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. N. section Bindra, R. H. Dhebar and T. M. Sen, for the respondent. January 27. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. This is an appeal by special Rag leave by Ardeshir H. Bhiwandiwala against the order of the High Court of Bombay allowing an appeal 594 by the State against the acquittal of the appellant of an offence under section 92 of the (Act LXIII of 1948), hereinafter called the Act, for his working the Wadia Mahal Salt Works situate at Wadala, Bombay, without obtaining a licence under section 6 of the said Act read with r. 4 of the rules framed under the Act. The main question for determination in this appeal is whether these Salt Works come within the definition of the word " factory " under cl. (m) of section 2 of the Act. The answer to this question depends on the meaning of the word " premises " in the definition of the word "factory " and on the determination whether what is done at this Salt Works in connection with the conversion of sea water into crystals of salt comes within the definition of the expression " manufacturing process " in cl. (k) of section 2 of the Act. The Salt Works extend over an area of about two hundred and fifty acres. Some of the other salt works, however, have even larger areas. The only buildings on this land consist of temporary shelters constructed for the resident labour and for an office. At a few places, pucca platforms exist for fixing the water pump when required to pump water from the sea. When not required, this pump is kept in the office. With the exception of the constructions already mentioned, the entire area of the Salt Works is open. On the sea side, it has bunds in order to prevent sea water flooding the salt pans. Clause (m) of section 2 of the Act reads: factory ' means any premises including the precincts thereof (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, 595 but does not include a mine subject to the operation of the , or a railway running shed. " The relevant portion of the definition of " manufacturing process " in cl. (k) of section 2, reads : " manufacturing process ' means any process for(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting, any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) pumping oil, water or sewage; or. . . It is contended for the appellant that the expres. sion "premises" in the definition of the word "factory" means " buildings " and that "mere open land " is not covered by the word " premises " and as there are no buildings except temporary sheds on the Salt Works, the Salt Works cannot be said to be a " factory ". We do not agree with this contention. The word "premises " has now come to refer to either land or buildings or to both, depending on the context. The meanings of the word " premises " in various lexicons and dictionaries are given below: a) Wharton 's Law Lexicon: " Premises " is often used as meaning " land or houses ". (b) Cochran 's Law Lexicon, IV Edition: " Premises " means " houses or lands (c) Black, H.C., Law Dictionary, IV Edition: " Premises " as used in the estates means (i) lands and tenements; an estate; land and buildings thereon; the subject matter of the conveyance; (ii) a distinct and definite locality and may mean a room, especially building or other definite area; (d) Earl Jowitt, Dictionary of English Law:" Premises. . from this use of the word, " premises " has gradually acquired the popular sense of land or buildings. Originally, it was only used in this sense by laymen, and it was never so used in well drawn instruments, but it is now 596 frequently found in instruments and in Acts of Parliament as meaning land or houses, e.g., the Public Health Act, 1875, section 4, where "premises" includes messuages, buildings, lands, easements, tenements and hereditaments of any tenure. (e) Ballentine, J.A., Law Dictionary with Pronunciation, II Edition: " Premises " as applied to land, Webster 's New International Dictionary defines the word as follows: The property conveyed in a deed; hence, in general, a piece of land or, real estate ; sometimes, especially in fire insurance papers, a building or buildings on land; the premises insured. It is therefore clear that the word " premises " is a; generic term meaning open land or land with buildings or buildings alone. The expression" premises including precincts" it has been urged, clearly indicates that in the context of the definition of the word " factory ", premises meant only buildings as buildings alone can have precints and there can be no precincts of any open land. This expression " premises including precincts" does not necessarily mean that the premises must always have precincts. Even buildings need not have any precincts. The word " including " is not a term restricting the meaning of the word " premises " but is a term which enlarges the scope of the word " premises ". We are therefore of opinion that even this contention is not sound and does not lead to the only conclusion that the word " premises " must be restricted to mean buildings and be not taken to cover open land as well. Sub cl. (bb) of el. (1) of section 7 of the Act requires the occupier of a factory to mention in the written notice to be sent to the Chief Inspector before his occupying or using any premises as a factory, the name and address of the owner of the premises or building including the precincts thereof referred to in section 93. This sufficiently indicates that the word " premises " is not restricted in scope to buildings alone. of course, the building referred to in this clause is the 597 building which is referred to in section 93 of the Act. Sub section (1) of section 93 reads: " Where in any premises separate buildings are leased to different occupier,% for use as separate factories, the owner of the premises shall be responsible for the provision and maintenance of common facilities and services, such as approach roads, drainage, water supply, lighting and sanitation. " This again makes it clear that " premises " refer to an entire area which may have within it several separate buildings. Further, section 85 empowers the State Government to declare that all or any of the provisions of the Act shall apply to any place wherein a manufacturing 'process is carried on with or without the aid of power or is so ordinarily carried on notwithstanding certain matters mentioned in the section. The word " place" is again a general word which is applicable to both open land and to buildings and its use in this section indicates that the Act can be applied to works carrying on a manufacturing process on open land. There is thus internal evidence in the Act itself to show that the word " premises " is not to be confined in its meaning to buildings alone. The High Court has rightly pointed out that the Act is for the welfare of the workers and deals with matters connected with the health, safety, welfare, working hours of the workers, employment of young persons and leave to be granted to workers and that, therefore, the legislature could not have intended to discriminate between the workers who are engaged in a manufacturing process in a building and those who 'are engaged in such a process on open land. It is contended for the appellant that the various provisions of the Act cannot be applicable to salt works where the process of converting sea water into salt is carried on in the open. This is true as regards some of the provisions, but then there is nothing in the Act which makes it uniformly compulsory for every occupier of a factory to comply with every requirement of the Act, An occupier is to comply 598 with such provisions of the Act which apply to the factory he is working. It is admitted that the workers have at times to work at night; that some women workers are employed; that workers have to take rest; that they have to take food at about mid day; that they do require drinking water and that first aid 'things are kept in the office room. It may be that the occupier has made adequate arrangements for such purposes but this does not mean that the provisions of the Act concerning such amenities shall not be applicable to salt works. Further, the Act has sufficient provisions empowering the State to exempt the occupiers from complying with certain I provisions as a special case. Section 6 of the Act empowers the State Government to make rules requiring the previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated and for the construction or extension of any factory or class or description of factories. This provision of the Act together with the relevant rules framed in that connection, does not mean that every factory must have a building and that necessary permission for its construction or extension is to be obtained. Of course, every factory must have a site and previous permission of the State Government or the Chief Inspector may be necessary before the site is to be used for the purposes of a factory. Further, there is nothing in the definition of manufacturing process " which would make it necessary that this process be carried on in a building. This definition really deals with the nature of the work done and not with where that work is to be done. The work can be done both in the building or in the open. Lastly, learned counsel for the appellant relied on certain cases which are detailed below: In Kent vs Astley (1) it was held that a slate quarry, a large open space extending over an area of 400 acres, the works of which were carried on in the open (1) 599 air, the only buildings being sheds, was not a "factory" within the meaning of 30 & 31 Viet. c. 103 (Factory Acts Extension Act, 1867), section 3, sub section Cockburn, C.J., said at page 23: " Therefore, if this work had been carried on within a building, I think that it would have fallen within the scope of the statute, and that the justices ' ought to have convicted. . and I do not think that in using the word I premises ' the legislature intended to include sheds erected in the quarry merely as a protection against the weather; they are only accessories to the quarry and the quarrying processes; and the legislature has not yet declared that open air works shall be within the scope of the Factory Acts. But, except in cases which have been specially provided for, it has not as yet included works carried on in the open air, because they are less exposed to the evils incident to manufactures carried on in buildings. " Mellor, J., said at page 24: " The legislature has from time to time extended the Factory Acts to different trades and businesses. Numerous slate quarries exist, and a large number of persons are employed in them: if the legislature intended to apply the Factory Acts to them, it would have been done by special enactment. " Hannen, J., said: " I agree with my Brother Mellor, that if the legislature had intended to apply the Factory Acts to quarries, they would have been expressly mentioned, and this omission leads strongly to the conclusion that it was not intended to interfere with persons employed in quarries. " It is not clear from these observations alone why the slate quarries where work was carried on in the open air and not in building, was not held to be "a factory" on that account. This is, however, apparent when one considers that the Factory Act of 1833 was enacted to regulate the labour of children and young persons in the mills and factories of the United Kingdom and applied only to cotton, woollen, worsted, hemp, flax, tow, linen or silk mill or factory wherein 77 600 steam or water or any other mechanical power was used to propel or work the machinery in such mill or factory. The other subsequent Acts simply extended the scope of the Factory Act of 1833. The Act of 1844 was to amend the law relating to labour in ,,factories and provided by section LXXIII that "the Factory Act as amended by this Act and this Act " would be construed together as one Act. The relevant portion of the definition of the word " factory " in this Act reads: "The word I factory ' notwithstanding any Provision or Exemption in the Factory Act shall be taken to mean all Buildings and Premises situated within any part of the United Kingdom of Great Britain and Ireland wherein or within the, Close or Curtilage of which Steam, Water, or any other mechanical Power shall be used to move or work any Machinery employed in preparing, manufacturing, or finishing, or in any Process incident to the Manufacture of Cotton. , Wool, Hair, Silk, Flax, Hemp, Jute, or Tow, either separately or mixed together, or mixed with any other Material or any Fabric made thereof. " This indicates that is premises " need not consist of buildings and that they mean something different from buildings The Act of 1850 was for the regulation of the employment of children in factories and provided that that Act would be construed together with the previous Acts as one Act. There is nothing particular in the Factory Act of 1856 to refer to. The Act of 1860 dealt with the employment of women, young persons and children in bleaching works and dyeing works under the regulations of the ; section VII, which defines the words " Bleaching Works " and " Dyeing Works " reads, with regard to its relevant portion, thus: " In the Construction of this Act the words Bleaching Works ' and Dyeing Works ' shall be understood respectively to mean any Building. Buildings, or Premises in which Females, Young 601 Persons and Children, or any of them, are employed, and in One or more of which Buildings or Premises any Process previous to packing is carried on. " Section IX gives the exemptions and its relevant portion is: " Nothing in this Act contained shall extend or apply to . or to any Premises, either open, inclosed, ' or covered, used or to be used bona fide exclusively for the purposes of carrying on. . This makes it clear that " Premises " can consist of open areas. The 1867 Act is described as " Factory Acts Extension Act, 1867 ", and according to section 3, " factory means: . . . . . . . 7. Any premises, whether adjoining or separate, in the same occupation, situate in the same City, Town, Parish, or Place, and constituting One Trade Establishment, in, on or within the Precincts of which Fifty or more Persons are employed in any manufacturing Process; . . . . . . . ." It is clear from the series of legislation up to the decision in Kent 's case that the Parliament specifically enacted with respect to the places which were to be controlled by the respective Factory Acts and that it was therefore that it was said that if the legislature had intended to apply the Factory Act to the slate quarries, it would have extended the Act to them. As the various Factories and Mills which were covered by the Factory Act of 1833 were such which could function only in buildings, the conception grew that nothing would come within the expression " factory " unless it had a building and unless the Factory Act definitely provided for the application of the Act to it. The next case relied on is Redgrave vs Lee (2 ). The earlier decision was just followed in this. The next case cited for the appellant is Nash vs Hollin shead (3). This case too is distinguishable as the farm on which the workman was employed to drive a movable steam engine for the purpose of working a (1) (2) (3) 602 mill for grinding meal intended to be used for food for stock on the farm and not for sale, was held to be not a factory in view of the fact that the meal which was ground was not intended for the purpose of sale but was meant only for feeding the stock from the farm. It was also observed that the consequences of holding a farm to be a factory " would really produce a ludicrous result ". It is on the basis of this observation that the trial Court, in the present case, held that the application of the provisions of the Act to the Salt Works would lead to " ludicrous results ". We have already stated that such is not the result of the application of the relevant provisions of the to the Salt Works. There is nothing useful for the present case, for our purpose, in Weston vs London County Council (1) and in Wood vs London County Council (2). It may now be mentioned that the Factories Act, 1937 (I Edw. 8 & 1 Geo. 6, c. 67) specifically provides in sub section (7) of section 151 that " premises shall not be excluded from the definition of a factory by reason only that they are open air premises ". Various clauses of sub section (1) of section 151 define " factory " to mean " any premises in which certain type of work is carried on by way of trade or for purposes of gain. " These provisions support the interpretation we are putting on the word " premises " in cl. (m) of section 2 of the Act. We therefore hold that the Salt Works would come within the meaning of the expression " premises " in the definition of the word " factory " and would be a factory if the work carried on there comes within the definition of " manufacturing process ". The second contention for the appellant is that the process of converting sea water into salt does not amount to " 'manufacturing process " as no process for making, altering, packing, cleaning or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal is carried on. It is also urged that no other process mentioned in cl. (k) of section 2 is carried on in the Salt Works, that it is just the force of gravity and the solar energy which (1) (2) 603 do the necessary work for the occupiers of the Salt Works to convert sea water into salt and that no human agency is employed in such conversion. This contention found favour with the trial Court. The High Court, however, did not agree with it and stated: "In our opinion it is a travesty of language to say that although 47 workmen are working on these works, salt is made without the assistance of human agency. . Now, in this case there is no doubt that the workmen employed on these salt works are dealing with the sea water in a particular manner and but for the dealing with it in that manner, salt as made on these works would not be made. We agree with the High Court that the conversion of sea water into salt is not due merely to natural forces, but is due to human efforts aided by natural forces. The sea water in the sea never becomes salt merely on account of the play of sun 's rays on it. The natural force of gravity is utilised for carrying sea water from the sea to the reservoirs, thence to the tapavanis and from there to the crystallizing pans which are specially prepared by thumping the mud and making the layer of tile ground hard and water tight. The solar energy is utilised in evaporating the water in the brine. The human agency is employed for other processes carried on in the Salt Works. The process of making salt is described in the letter dated July 12, 1949, included in Exhibit 1, from the President, Salt Merchants and Shilotires Association, Bombay, to the Secretary, Department of Industry and Supply, Government of India, New Delhi, thus: "A salt work mainly consists of an open marshy area, surrounded by mud embankment, the height of which is above the highest tide water mark in that locality to prevent inundation. In this embankment, sluice gates are provided with suitable places to take in and discharge the sea water and the waste water respectively. The inner enclosed area is divided into compartments for the storage of sea brine of different densities. When the salt is formed, it is stored on the platform by the laborers engaged in the manufacture. It is then weighed, bagged and 604 carried to Railway Station or to a port of shipment. For said production the sea water is taken into the Reservoirs at high water tide twice during a month. The high tides take place on about nine or ten days in a month, five days during day time and four times at night. Some of the labourers are detained for this work but they are also not required to be present the whole time, when the evaporation is going on. Once the brine is let into the crystallising beds, its surface is not to be disturbed for four or five days. After this, the labourer has to be careful to see that the density does not exceed a certain limit and that the other kinds of salt contained in the brine are not deposited, thus contaminating the sodium chloride (common salt) already formed. This they learn by experience. Sifting and storing then begins. The labourer has also to refill the crystallizing beds with fresh, brine. Thus the labourers work is intermittent and not continuous for any fixed hours. " It is clear therefore that labourers are employed for (i) admitting sea water to the reservoirs by working sluice gates, sometimes at night also, or the pump; (ii) filling crystallizing beds; (iii) watching the density of brine in the crystallizing beds; (iv) seeing that the density does not exceed certain limits and that salts other than sodium chloride (common salt) are not formed; (v) scraping and collecting salt crystals (vi) grading the salt crystals by " sieving " and (vii) putting salt into gunny bags. It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water. The, processes carried out in the Salt Works and described above, come within the definition of " manufacturing process " inasmuch as salt can be said to have been manufactured from sea water by the process of treatment and adaptation of sea water into salt. The sea water, a non commercial article, has been adapted to salt, a commercial article. The observations in Sedgwick vs Watney Combe, Reid & Company, Limited(1) at page 463, support the (1) , 605 view that the process undergone at the Salt Works is the process of treatment 'of sea water for the purpose of converting it into salt. The hereditament, the subject of controversy in the case, was used in connection with the manufacture of " bottled beer " by the respondent. Brewed beer, which was not in a drinkable condition, and therefore not saleable as draught ' beer, was brought to the premises in tank wagons and pumped into large tanks. Carbonic acid gas was put into it. It was then filtered and put into bottles which were corked and labelled. The bottles were then packed and removed for delivery. The question for decision was whether the hereditament was occupied and used for the purpose of distributive wholesale business. In that connection it was said: " But the point is whether the treatment that the beer undergoes in these premises is a mere prelude to distribution. I am clearly of opinion that it is not. The finished article that is being prepared for distribution is bottled beer. It undergoes treatment, a treatment which changes its quality and makes it from an unpotable and unmarketable article into a potable and marketable one. " In the present case, in the Salt Works, the finished article is " salt ". It does not enter the Salt Works as " salt ". It enters as brine which, under the process carried out, changes its quality, and becomes salt, a marketable article. The observations in Grove vs Lloyds British Testing Co. Ltd.(1) at page 467 support the view that the conversion of sea water into salt amounts to adapting it for sale. It is stated there : "I think ' adapting for sale ' points clearly to something being done to the article in question which, in some way, makes it in itself a little different from what it was before." In Kaye vs Burrows & Others and Hines vs Eastern Counties Farmers ' Co operative Association Ltd. (2) it was said at page 484: " The test is just as it was in the bottled beer case. You must look at what is the finished article ' (1) , (2) 606 to be turned out. If that finished article is only put into the condition of a finished article by the processes to which it has been subjected in the hereditament, then the processes will fall within the expression altering or adaptation for sale '. In both the cases of the rags and the seeds the finished article is different from the article in bulk which enters the hereditament, and that is, in our opinion, an adaptation for sale." In The State of Kerala vs V. M. Patel (1) this Court held the treatment of pepper and ginger to be a " manufacturing process " where the work which was carried on in the premises of the firm was described thus :" It consisted of winnowing, cleaning, washing and drying pepper on concrete floor. A similar process was also being applied to ginger, which was dipped in lime and laid out to dry in a warehouse on the premises. " The case reported as In re: Chinniah, Manager, Sangu Soap Works (2) is of no help to the appellant as there nothing definite was held about the process carried out to be a manufacturing process or not and what was stated was in connection with the word I( manufacture" in general and not with reference to " manufacturing process. " Similarly the case reported as Paterson vs Hunt is not of much help. It simply held that mere sorting of rags will not amount to adapting for sale. In this case reference was made to it being held in Law vs Graham (4) that washing the bottles before the beer was put into them was not adapting the beer, or adapting the bottles or adapting the bottled beer for the purpose of sale and in Hoare vs Truman, Hanbury, Buxton & Co. (5) that it was a case of adapting for sale when gas was used to force carbonic acid at high pressure into the beer for charging it with the acid and mixing it and so aerating the beer. The case is (1) Crl. 42 of 1959. decided on October 12, 1960. (2) A.I.R. 1957 Mad. 755. (3) (4) (5) 607 distinguishable as sorting of rags brought about no change in particular rags sorted out. They were just separated from other things with which they were mixed and therefore the rags were in no way adapted to some different article. This cannot be said in connection with the conversion of sea water into salt. The decisions in McNicol vs Pinch (1), State vs Chrestien Mica Industries Ltd. (2) and G. R. Kulkarni vs The State (3) are of no help in determining the point under consideration as there the word " manufacture " was interpreted according to the dictionary meaning and the context. In the present case, we are considering the definition of the expression " manufacturing process " and no dictionary meaning of the word " manufacture " and no interpretation of what constitutes " manufacture " for the purposes of other Acts can be of any guide. It may, however, be noted that even according to the meaning given to the word " manufacture ", the conversion of brine into salt would amount to manufacture of salt as " the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made " vide McNicol vs Pinch(4) page 361. We are therefore of opinion that the process of converting sea water into salt carried on on the appellant 's Salt Works comes within the definition of manufacturing process " in el. (k) of section 2 of the Act. Reference was made to the expression of opinion by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner, Bombay, in support of the appellant 's contention that salt works as such do not come within the definition of the word " factory ". It was stated in this letter that originally salt pans were considered to be amenable to the Factories Act and as such salt pan occupiers were informed to get the pans registered and licensed. However, as some doubt was felt, the question was re examined and it had been found that salt pans would not be factories except where they were equipped with a building used (1) (2) [1956] Pat. 660, (3) I.L.R. [1937] M. P. 13. 608 in connection with the manufacture of salt. The Deputy Commissioner for Salt was not satisfied with this view and in his reply dated September 13, 1952, stated, after referring to the provisions of cl. (m) of section 2 of the Act, that " by premises is meant building and its adjuncts ". No further correspondence between these authorities has been brought on the record and we do not know what had been the final view taken by the authorities in this connection. Further, such a view expressed by any authority is of no help in deciding the questions before us. It may also be mentioned that the representation made by the President of the Salt Merchants and Shilotires Association on July 12, 1949, to the Secretary to Government of India, Department of Industries & Supply, did not raise the contention that the salt works did not come within the definition of the word " factory " and merely represented that the provisions of the Act be not applied to the salt works in view of the matters mentioned in that representation. Even the reply by the appellant 's firm to the Inspector of Factories dated April 9, 1952, did not state that the salt works did not come within the definition of the word " factory " and simply stated that the provisions of the Indian Factories Act were considered redundant for which their Bombay Salt Association had already made a suitable representation to the Government of India. It was for the first time, in the written statement filed by the appellant in the trial Court, that it was contended that the Salt Works would not come within the word " factory " in the Act. Omission of the accused or the Association of salt merchants to contend, at an earlier stage, that the salt works do not come within the definition of the word " factory " is also not of any relevance for our considering the questions before us. We have made reference to it only in view of the reference made by the appellants to an opinion expressed by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner dated September 13, 1952. In view of the above,, we are of opinion that the appellant 's Salt Works do come within the definition 609 of the word ',factory" and that the appellant has been rightly convicted of the offence of working the factory without obtaining a licence. We therefore dismiss the appeal. Appeal dismissed.

The appellant was convicted of an offence under section 92 of the , for working a salt works without obtaining a licence. The salt works extended over an area of about 250 acres ' The only buildings on this land were temporary shelters for the resident labour and for an office ; at some places ,there where pucca platforms for fixing the water pump where 593 required to pump water from the sea. The appellant contend ed (i) that the salt works was not a factory as defined in section 2(m) of the Act, (ii) that the word " premises " in the definition of factory did not include open land, and (iii) that in converting sea water into salt the appellant was not carrying on any manufacturing process as defined in section 2(k). Held, that the salt works was a factory within the definition given in the Act and that the appellant was rightly convicted for working it without a licence. The word " premises " is a generic term meaning open land or land with buildings or buildings alone; the salt works came within the expression "premises" in the definition of the word " factory ". The extraction of salt from sea water was not due merely to natural forces but was due to human efforts aided by natural forces. The process of conversion of sea water into salt was a " manufacturing process " as defined in cl. (k) of section 2, inasmuch as salt was manufactured from sea water by a process of treatment and adaptation. By this process sea water, a non commercial article, was converted into a different thing salt, a commercial article. Kent vs Astley, , Redgrave vs Lee, and Nash vs Hollinshead, [1901] 1 K.B. 700, distinguished. Sedgwick vs Watney, Combe, Reid & Co. Ltd. , Grove vs Lloyds British Testing Co. Ltd. , Kaye vs Burrows & Ors. and Hines vs Eastern Counties Farmers ' Co operative Association Ltd. , The State of Kerala vs V. M. Patel, Cr. 42 of 1959, decided on 12 10 1960, In re: Chinniah, Manager, Sangu Soap Works, A.I.R. 1957 Mad. 755. Paterson vs Hunt , Law vs Graham, , Hoare vs Truman, Hanbury, Buxton & CO. , and McNicol vs Pinch, , referred to.

The appellants had Fried separate writ petitions in the High Court challenging the basis for determination of 'irr igated land ' under section 4A of the U.P. Imposition of Ceiling on Land Holdings Act, 1960. In view of conflicting interpretations given earlier by Single Judges of that High Court, a reference was made to the Division Bench in the case of the petitioner/appellant Kallu Following the ratio laid down by the Division Bench in Kallu vs State of U.P., the writ petitions were dismissed. Before this Court, the appellants disputed the correct ness of the view taken by the Division Bench, and contended that in order to classify a land as irrigated land, there should be evidence of 'assured irrigation ' and, secondly, that the two crops in a Fasli year should have been raised on the entire extent of the land and not in a portion of land alone. Dismissing the appeals, this Court, HELD: (1) The Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 is a piece of social legislation for achieving the several objectives set out in the preamble. In order to give greater thrust to the objects underlying the Act, the Legislature has changed the basis for reckoning the ceiling area from that of 'fair quality land ' to that of 'assured irrigation facilities ' available to a land. [574C D] (2) On a reading of section 4A, it may be seen that the Legislature has prescribed different kinds of tests on the basis of which the authorities have to determine whether a land is irrigated or not for the purpose of determining the ceiling area of a tenure holder. The two broad tests are (1) availability of irrigation facilities and (2) the factum of raising or the capability of the soil raising at least two crops in an agricultural year. [573F G] 568 (3) There is no merit in the contention that in addition to the materials and records set out in the section there must be independent evidence of assured irrigation facility before ever a Prescribed Authority can form an opinion about a land having assured irrigation facility. [574F] (4) Sub clause (b) of section 4 A cannot be read so as to mean that two crops should have been grown on the entire extent of a land having irrigation facility for classifying the land as 'irrigated land ' as it would have the effect of limiting the operation of the sub clause contrary to the legislative intent. [575A] (5) The classification has to be made with reference to the potentiality of the land to yield two crops in one Fasli year and not on the basis of the actual raising of two crops on the entire extent of the land. [574H] (6) The raising of two crops even on a portion of the land will prove in the absence of material to show poor quality of soil in portions of the land due to salinity etc. the uniform nature and content of the soil of the entire land. [575D]

The appellants/petitioners were tenants in the premises belonging to the respondent Banks/Life Insurance Corporation of India. Their tenancy had expired or had been terminated by the respondents and eviction proceedings initiated against them under the provisions of the . Writ peti tions under Article 226 were filled by the appellants in the High Court challenging the orders of eviction passed against them, which were dismissed; hence these appeals. The writ petitioners moved this Court directly under Article 32 of the Constitution against the notices of termination of tenancy issued to them. The Public Premises Act of 1971 was preceded by two enactments the Government Premises (Eviction) Act 1950, and the Public Premises (eviction of unauthorised occupants) Act, 1958 which were declared unconstitutional by different High Courts. Jagu Singh vs M. Shaukat Ali, ; Satish Chander & Anr. vs Delhi Improvement Trust, AIR 1958 Punjab 1; Brigade Commander, Meerut Sub Area vs Ganga Pra sad, ; P.L. Mehar etc. vs D.R. Khanna, etc., AIR 1971 Delhi 1 and Northern India Caterers Private Ltd. vs State of Punjab & Anr. , ; 650 This led to the enactment of the Public Premises Act in 1971. The validity of this act was upheld by this Court in Hari Singh vs The Military Estate Officer, ; Before this Court, the contentions were advanced by the parties mainly on two questions (i) whether the provisions of the Public Premises Act were applicable to the Premises belonging to a nationalised bank; and (ii) whether the provisions of the Public Premises Act override the provi sions of the Delhi Rent Control Act. In regard to the applicability of the Public Premises act, it was inter alia contended that the premises belonging to a nationalised bank or insurance company did not fall within the ambit of the definition of 'Public Premises ' contained in Section 2(e) of the Public Premises Act for the reason that the nationalised bank was not a company as defined in Section 3 of the and it was also not a corporation established by or under a Central Act. On the other hand, it was contended that the respond ents being nationalised bank, was a corporation established by a Central Act, viz., the Bank Nationalisation Act, and the premises belonging to a nationalised bank were 'public premises ' under section 2(e)(2)(ii) of the Public Premises Act. In regard to the second question, each side claimed that the enactment relied upon by it was a special statute and the other enactment was general, and also invoked the not obstante clause contained in the enactment relied upon. In this connection, it was argued on behalf of the respondents that the Public Premises Act having been enacted by Parlia ment in exercise of legislative power under Article 246(1) of the Constitution in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers under Article 246(4) in respect of matters enumerated in the concurrent list. Dismissing the appeals and the writ petition, this Court, HELD: (1) The provisions of the Public Premises Act, to the extent they cover premises failing within the ambit of the Rent Control Act, override the provisions of the Rent Control Act, and a person in unauthorised occupation of public premises under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act. [694D E] (2) After the second world war there has been develop ment of a new pattern of public corporation in England as an instrument of plan 651 ning in the mixed economy. The general characteristics of such a public corporation is that it is normally created by a special statute; it has no shares and no share holders, either private or public, and its share holder, in the symbolic sense, is the nation represented through Government and Parliament; and it has the legal status of a corporate body with independent legal personality. There has been a similar growth of this type of public corporation in other. countries. This trend is also evident in our country. since Independence and a number of such public corporations have been constituted by Acts of Parliament. [668A C] (3) The expression 'Corporation ' in Section 2(e)(2)(ii) of the Public Premises Act would include public corporations of the new pattern constituted under the Central Acts where in the entire paid up capital vests in the Central Govern ment. [670G] S.S. Dhanoa vs Municipal Corporation, Delhi, ; , distinguished. (4) In order to constitute a corporation it is not necessary that there should be shareholders or members and that in the new pattern of public corporation that has developed there are no shareholders or members. [671G] Bank of New South Wales & Ors. vs The Common wealth, ; and R.C. Cooper vs Union of India, ; , referred to. Oriental Bank of Commerce vs Delhi Development Authori ty, , overruled. (5) Provisions of the Banks Nationalisation Act show that the nationalised Bank has been constituted as a dis tinct juristic person by the Act and it is owned by the Central Government. They further indicate that the nationa lised bank has all the attributes of the new pattern of public corporation. [667B] (6) The object of the legislation in enlarging the definition of 'public premises ' in Section 2(e) of the Public Premises Act is to make available the machinery of the Act for evicting unauthorised occupants not only from the premises belonging to the Central Government but also from premises belonging to Companies, Corporation and statu tory bodies in which the Central Government has a substan tial interest. [670D E] 652 (7) Under Section 2(e)(2)(i) premises belonging to a company incorporated under the , in which not less than fifty one percent of the paid up capital is held by the Central Government, are to be treated as public enterprises. It could not be the intention of Parliament that premises belonging to public corporations whose entire paid up capital vests in the Central Government and who are the instrumentalities of State would be excluded from the ambit of the definition of 'public premises '. [670E G] (8) Keeping in view the provisions of the Banks Nation alisation Act the nationalised bank is a corporation estab lished by a Central Act and it is owned and controlled by the Central Government. The premises belonging to a nationa lised bank are public premises under Section 2(e)(2)(ii) of the Public Premises Act. [671 H; 672A] (9) There is no warrant for confining the scope of the definition of 'public premises ' contained in section 2(e) to premises used for residential purposes only and to exclude premises used for commercial purposes from its ambit. [672D] Hari Singh vs Military Estate Officer, ; , referred to. (10) No distinction can be made between premises used for residential purposes and premises used for commercial purposes in the matter of eviction of unauthorised occupants of public premises and the consideration which necessitate providing a speedy machinery for eviction of persons in unauthorised occupation of public premises apply equally to both the types of public premises. [673B C] (11) The definition of the expression 'unauthorised occupation ' contained in Section 2(g) of the Public Premises Act is in two parts. The second part of the definition is inclusive in nature and expressly covers continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoev er. The words "whether by way of grant or any other mode of transfer" in this part of the definition are wide in ampli tude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act. [673F; G H; 674B] Brigadier K.K. Verma vs Union of India, AIR 1954 Bom 358, distinguished. 653 Lallu Yeshwant Singh vs Rao Jagdish Singh & Ors., ; , and Express Newspapers Pvt. Ltd. & Ors. vs Union of India & Ors. , [1985] Suppl. 3 SCR 302, referred to. (12) It is true that there is no requirement in the Public Premises Act that the Estate Officer must be a person well versed in law. But, that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorised occupation of persons who obtained possession of the said premises under a lease when the Public Premises Act and the Rules framed thereunder provide for a right of appeal of the District Judge against an order of the Estate Officer. which shows that the final order that is passed is by a judicial officer. [675F H] Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors., ; , referred to. (13) As regards rent control legislations enacted by the State legislatures, the position is well settled that such legislation fail within the ambit of entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution. [682E] Indu Bhushan Bose vs Rama Sundari Devi & Anr. , ; ; V. Dhanpal Chettiar 's vs Yesodai Ammal, ; ; Jai Singh Jairam Tyagi Etc. vs Mamanchand Ratilal Agarwal & Ors., ; ; Accountant and Secretari al Services Pvt. Ltd. & Anr. vs Union of India & Ors. , ; , referred to. (14) The Rent Control Act has been enacted by Parliament in relation to the Union Territory of Delhi in exercise of the legislative power conferred under Article 246(4) of the Constitution which empowers Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. [682G] (15) The Public Premises Act deals with Government property as well as property belonging to other legal enti ties mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act. In so far as it relates to eviction of unauthorised occupants from premises belonging to or taken on lease or requisitioned by or on behalf of the Central Government, the Public Premises Act would fail within entry 32 of List I being law with respect to a property of the Union. The property belonging to the various legal entities mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act cannot be regarded as property of 654 the Union and the Public Premises Act cannot be held to have been enacted under entry 32 of List I in respect of the said properties. In so far as it deals with a lessee or licensee of premises other than premises belonging to the Central Govt; the Public Premises Act has been enacted in exercising the legislative power in respect of matters enumerated in the concurrent list. [682H; 683A C] (16) Both the statutes, viz. the Public Premises Act and the Rent Control Act, have been enacted by the same legisla ture, Parliament, in exercise of the legislative powers in respect of the matters enumerated in the Concurrent List. [684C] Accountant and Secretarial Services Pvt. Ltd. vs Union of India And Ors., ; ; Smt. Saiyada Mossarrat vs Hindustan Steel Ltd.; , and L.S. Nair vs Hindustan Steel Ltd., AIR 1980 MP. 106, referred to. (17) The Rent Control Act makes a departure from the general law regulating the relationship of landlord and tenant contained in the Transfer of Property Act inasmuch as it makes provision for determination of standard rent, it specifies the grounds on which a landlord can seek the eviction of a tenant, it prescribes the forum for adjudica tion of disputes between landlords and tenants and the procedure which has to be followed in such proceedings. The Rent Control Act can, therefore, be said to be a special statute regulating the relationship of landlord and tenant in the Union Territory of Delhi. [686D F] (18) The Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises. [689E] Jain Ink Manufacturing Company vs Life Insurance Corpo ration of India & Anr., ; , referred to. (19) Both the enactments, namely, the Rent Control Act and the Public Premises Act, are special statutes in rela tion to the matters dealt with therein. Therefore, the exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act. [686H; 687A] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh, ; ; U.P. State Elec tricity Board vs Hari 655 Shankar Jain; , and Life Insurance Corpora tion vs D.J. Bahadur; , , referred to. (20) In the case of inconsistency between the provisions of two enactments, both of which can be regarded as Special in nature. the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein. [688G] Shri Ram Narain vs The Simla Banking and Industrial Co. Ltd.; , ; Kumaon Motor Owners ' Union Ltd. vs The State of Uttar Pradesh, ; and Sarwan Singh vs Kasturi Lal; , , referred to. (21) Keeping in view the object and purpose underlying both the enactments viz., the Rent Control Act and the Public Premises Act, the provisions of the Public Premises have to be construed as overriding the provisions contained in the Rent Control Act. [690H] The Parliament was aware of the non obstante clauses contained in Section 14 and 22 and the provisions contained in Sections 50 and 54 of the Rent Control Act when it enact ed the Public Premises Act containing a specific provision in Section 15 barring jurisdiction of all courts (which would include the Rent Controller under the Rent Control Act). This indicates that Parliament intended that the provisions of the Public Premises Act would prevail over the provisions of the Rent Control Act inspite of the above mentioned provisions contained in the Rent Control Act. [691A B] (23) The scope of the provisions of the Public Premises Act cannot be cut down on the basis of an apprehension that the corporations may be induced to earn profits by purchas ing property in possession of tenants at a low price and after buying such property evict the tenants after terminat ing their tenancy and thereafter sell the said property at a much higher value. Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public inter est. [693F; E G] M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay, ; , referred to.

The appellant defendant was in occupation of a flat as its tenant in a storeyed building comprised of a large number of flats occupied by different tenants. When the owner of that building mortgaged with possession the said building in favour of respondents plaintiffs, the appellant defendant and other tenants in different flats of that building became tenants under respondents plaintiffs (usufructuary mortgagees) and continued as such tenants on payment of monthly rents to them. But by a quit notice dated July 3, 1967 the respondents plaintiffs determined the monthly tenancy of the appellant respecting the premises in his occupation and sought to recover from him the possession of the premises by instituting a suit in the court of Small Causes at Bombay on the very ground on which his tenancy was terminated, that is, that the defendant had been guilty of conduct which was a nuisance or annoyance to the adjoining or neighbouring occupiers, under clause (c) of sub section (1) of Section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act. The trial court, on an appraisal of the oral and documentary evidence adduced by the parties, recorded its findings on issues in favour 471 472 of the respondents plaintiffs. Consequently it decreed the suit of the respondent plaintiffs for recovery of possession of the premises. The appellate court before which the decree of the trial court was appealed against by the appellant defendant, on its re appraisal of the evidence, affirmed the findings of the trial court and dismissed the appeal. The findings as to the acts of nuisance and annoyance attributable to the appellant and the persons who were residing in the premises are (i) that the appellant erected a Textile Printing Mill on the terrace of the storeyed building and ran it during nights so as to make the occupiers of the adjoining and neighbouring tenements suffer the vibrations and noise in the building arising on account of the running of the Mill and loose their quiet and sleep during nights; (ii) that he unauthorisedly utilised the water stored. in the common over head tanks on the terrace, meant for domestic use of all the occupiers of the tenements in the building, for running his Mill a non domestic purpose; (iii) that the appellant and the persons residing with him in the premises had often removed the radio aerials and T.V. antenas of the occupiers of the adjoining and neighbouring tenaments which had been fixed above the common terrace of the building , (iv) that they were wrongly preventing the respondents plaintiffs and their workers in reaching the common terrace for repairs of radio aerials, T.V. antenas, telephone lines and the like of the occupiers of the neighbouring tenaments in the building by blocking its staircase. Feeling aggrieved by the decree of the trial court and its affirmation by the appellate court, the defendant impugned the same by filing a writ petition under Article 227 of the Constitution before the High Court of Bombay, but that writ petition was rejected in limine. In appeal to this Court it was contended on behalf of the appellants (a) that an usufructuary mortgage of tenanted premises cannot rile a suit for recovery of its possession from the tenant under section 13(1) (c) of the Act; (b) the findings of the appellate court recorded respecting acts of nuisance and annoyance not having been based on the evidence on record, become unsustainable; (c) the acts found to have been committed by the appellant defendant and the persons residing with him in the premises, even if are true, they could not have been regarded as acts amounting to nuisance or annoyance under section 13(1) (c) of the Act. Dismissing the appeal, this Court, 473 HELD 1. The expression 'landlord ' in sub section (1) of section 13 of ' the Act includes an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage. Section 13(1) contains nothing repugnant in its subject or context which would disentitle an usufructuary mortgagee, as a landlord of the tenanted premises to recover its possession from the tenant on the ground envisaged under clause (c). [482A, 480B] S.B. Abdul Azeez (By Lrs.) vs M. Maniyappa Setty and Ors., ; , relied on. V. Dhanapal Chettiar vs Yesodal Ammal, A.I.R. 1979 S.C. 1745, referred to. Nanalal Girdharlal and Anr. vs Gulamnabi Jamalbhai Motorwala and Ors., 1972 (13) Gujrat law Reporter 880, referred to as no longer good law. 1.1 Under the definition of 'usufructuary mortgage ' in clause (d) of Section 58 of the an usufructuary mortgagee is a transfer of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property. When a lessor of a leased property creates an usufructuary mortgage in respect of such property what he transfers under Section 109 of the T.P. Act as a mortgagor in favour of the usufructuary mortgagee includes his right to possession of such property and the right to receive the rents and profits accruing from it. Thus Section 109 of the T.P. Act entitles the usufructuary mortgagee from the lessor, as against the lessee, for all rights which the lessor had against such lessee. From this, it follows that tenanted premises, if is mortgaged by the landlord by way of usufructuary mortgage, the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account. [479E G] 2. It cannot be said that the findings of the lower appellate court are not supported by the evidence on record of the case. In fact, some of the findings are, to a great extent, based on the facts which were admitted by the appellant himself. Besides, the findings receive support from the evidence given in the case by the occupiers of the adjoining and neighbouring tenaments of the same building. Therefore, as seen from the judgment of the appellate court, its findings in relation to the acts of the appellant 474 and persons residing with him in the premises are based on appreciation of ample evidence that was on record and the same cannot be said to have been based on no evidence, or even improper appreciation of evidence. Thus, there is no justification to interfere with such findings of facts recorded by the appellate court virtually affirming the findings of fact recorded by the trial court. [484D, G H, 485A] 3. There are no statutory definitions of 'nuisance ' or 'annoyance ' which under section 13(1) (c) of the Act constitute a ground for recovery of possession by landlord of a premises in the occupation of a tenant. However, the acts of the appellant or persons residing with him in the tenanted premises which are found as acts causing nuisance or annoyance to adjoining or neighbouring occupiers, cannot fall short of being acts of nuisance or annoyance if regard is had to their nature, intensity and duration and the consequential ill effects which might have been produced by them on the normal living of such occupiers. They cannot make the Court to think that they were not clear acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act. Therefore, the courts below have rightly found them as acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act. [485D G] Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta, 1975 (16) Gujarat Law Reporter 824; Gaurishanker @ Babulal Govindji vs Bhikhalal Chhaganlal & Ors., 1977 (18) Gujarat Law Reporter, 805, held inapplicable. Even otherwise, the acts, said to have been committed by the defendant and persons residing with him in the premises when are, as stated, found by the fact finding courts to have amounted to acts of nuisance or annoyance entitling the plaintiff under section 13(1) (c) of the Act to recover possession of the premises from the defendant and when the High Court has refused to interfere with such finding in exercise of its writ jurisdiction there could be no justification whatever for this Court to interfere with the same in appeal under Article 136 of the Constitution. [485H, 486A B]

The controversy that requires determination in this appeal is whether piece rated workers are entitled to over time wages for work done beyond the normal hours of 44 3/4 hours and upto 48 hours in a week, i.e. for 3 1/4 hours in a week and the rate at which they should be paid the overtime wages for those hours. The workers of the Clothing Factory are divided into two categories viz., (i) day workers and (ii) piece rated work ers. Whereas the day workers are paid wages in the scale of Rs.260 400, on the basis of their actual attendance the piece rated workers are paid on actual output or production calculated on the basis of time required for making the item at an hourly rate to be arrived at in accordance with the formula prescribed for the purpose. According to the appel lants, the piece rate system was introduced sometime in 1963 and since then the piece rate workers were paid overtime wages accordingly for work done beyond the normal working hours i.e. 44 3/4 hours (8 hours per day other than Satur days when the working hours are 4 3/4 hours), but the same was abruptly stopped from 1983 so much so that they were even denied the wage at the normal rate for work done beyond normal hours and upto 48 hours. Being dissatisfied, the appellant Union filed a writ petition in the High Court of Madras praying for a suitable direction to the respondents to pay the piece rate workers extra or overtime wages at the rate prescribed by section 59(1) of the Factories Act if the total working hours of any workman exceeded 44 3/4 hours in a week. The learned Single Judge of the High Court by his order dated 6th December 1983, dismissed the writ petition. An appeal was preferred by the appellant Union but whilst the said appeal was yet pending disposal by the High Court, the appellant Union filed yet another writ 618 petition in the same High Court, which was later transferred to the Central Administrative Tribunal and which has been disposed of by the Tribunal by the impugned order. Hence this appeal by the Union after obtaining special leave. The appeal preferred against the order of the learned single Judge of the High Court was later dismissed for default. The workers claim that they are entitled to extra wages for these 3 1/4 hours at double the normal rate in accord ance with section 59(1) of the Factories Act whereas the Union denies such liability. Dismissing the appeal, this Court, HELD: There is no dispute that the workers are paid overtime wages for work done in excess of 9 hours on any day or 48 hours in any week in accordance with section 59 of the Factories Act. This section does not provide for overtime wages for work done in excess of the normal working hours and upto 48 hours. [624C] Under the Presidential order of 1st September, 1959, overtime wage was payable for work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week at the rate prescribed in the departmental rules. By the subsequent Presidential Order of 13th February, 1963, the method of calculation and payment of overtime wage to piece workers was outlined. Under these orders the day workers are allowed overtime wages for working beyond the normal working hours whereas piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week. [625A B] In the instant case, the grant of overtime wages for the period in excess of the normal working hours of 44 3/4 per week and upto 48 hours is governed by the relevant depart mental rules and Section 59(1) of the Factories Act comes into play only if a piece worker has worked beyond 9 hours in a day or 48 hours in a week and not otherwise. Further, piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week. [625G H] Union of India vs G.H. Kokil, , distinguished.

The cement factory in question which is in the State of Bihar belonged to the appellant company and a limestone quarry owned by the same company As situate about a mile and a half from the factory. Limestone being the principal rawmaterial for the manufacture of cement, the factory depended exclusively for the supply of limestone on the said quarry. On behalf of the labourers in the limestone quarry certain demands were made on the management of the company but as they were rejected they went on strike; and on account of the non supply of limestone due to the strike, the management had to close down certain sections of the factory and to lay off the workers not required during the period of closure of the sections concerned. Subsequently, after the dispute between the management and the workers of the limestone quarry was settled and the strike came to an end, a demand was made on behalf of the workers of the factory who had been laid off during the strike, for payment of lay off compensation under section 25C of the , but the management refused the demand relying on cl. (iii) to section 25E of the Act, which provided that " no compensation shall be paid to a workman who had been laid off. . . if such laying off is due to strike. . on the part of workmen in another part of the establishment ". The Industrial Tribunal took the view that the limestone quarry was not part of the establishment of the cement factory and that the workmen in the latter were not disentitled to lay off compensation by reason of Cl. (iii) of section 25E of the Act. The appellant company appealed by special leave to the Supreme Court and contended that the decision of the Tribunal was erroneous because the facts of the case showed (a) that in respect of both the factory and the limestone quarry there was unity of ownership, unity of management, supervision and control, unity of finance and employment, unity 704 of labour and conditions of service of workmen, functional integrality, general unity of purpose and geographical proximity, and (b) that the strike was decided on by the same Workers ' Union which consisted of the workmen at the factory and the quarry. It was contended for the respondents inter alia (1) that the conclusion of the Industrial Tribunal that the factory and the limestone quarry are not parts of one establishment is a finding of fact which should not be disturbed in an appeal by special leave, (2) that the effect of the Explanation to section 25A of the Act is to negative the idea of a factory and a mine forming parts of one establishment, and (3) that since in the matter of reference of industrial disputes, the Act gives jurisdiction to two distinct authorities, the Central Government in respect of the limestone quarry and the State Government in respect of the factory, the two units, the factory and mine, cannot be treated as one establishment. Held: (1) that the question whether the factory and the limestone quarry form one establishment depends upon the true scope and effect of the expression "in another part of the establishment" in cl.(iii)of section 25E of the , and involves a consideration of the tests which should be applied in determining whether a particular unit is part of a bigger establishment, and though for that purpose certain preliminary facts must be found, the final conclusion to be drawn therefrom is not a mere question of fact ; (2) that the true scope and effect of the Explanation to section 25A of the Act is that it explains what categories, factory, mine or plantation, come within the meaning of the expression " industrial establishment "; it does not deal with the question as to what constitutes one establishment and lays down no tests for determining that question; (3) that existence of two jurisdictions does not necessarily imply that for all purposes of the Act, and particularly for payment of unemployment compensation, the factory and quarry must be treated as separate establishments ; and, (4) that on the facts of the present case the limestone quarry and the factory constituted one establishment within the meaning of cl. (iii) of section 25E of the Act and that the workmen at the factory were not entitled to claim lay off compensation.

The respondent was appointed as a temporary clerk in an engineering division of the Government. The attempt of another clerk to impersonate and appear for him in a depart mental examination was detected. The Executive Engineer obtained explanations from both the clerks and reported the matter to the Superintending Engineer, who brought the matter to the notice of the ChiefEngineer. The Chief Engi neer wrote to the Superintending Engineer to award suitable punishment. The Superintending Engineer passed the order that the respondent a "temporary clerk is hereby served with one month 's notice to the effect that his services shall not be required after one month from the date of receipt of this notice. " The respondent filed a suit challenging the order on the ground that the termination was one passed by way of punishment and therefore attracted Art 311 of the constitution;. and since the provisions of the Article had not been complied had not been complied with the order was void. The Trial Court and the First Appellate Court dismissed the suit. But the High Court went,through the official correspondence preceding the passing of the impugned order, and observing that a close scrutiny of the facts on record showed that the order was passed by way of punishment on the basis of the enquiry proceeding and as a result of the recommendation by the Executive Engineer followed by the direction issued by Chief Engineer, allowed the second appeal. Allowing the appeal to this Court, HELD :(1) It is no longer open to any one to urge that the constitutional position in regard to cases of the present nature is not clear. An examination of the deci sions of this Court shows that there is no real conflict in their ratio decidendi. Even if there is a conflict, the proper course for a High Court is to find out and follow the opinion expressed by larger benches of this Court in preference to those expressed by smaller benches of this Court. This practice is followed by those Court itself and has hardened into a rule of law. [475B C] Union of India & Anr. K.S. Subramanian; , , followed. State of U.P. & Ors vs Sughar Singh [1974] 2 .S.C.R. 335: ; , The State of Punjab vs P.S. Cheema A.I.R. 1975 S.C. 1096, Satish Chandra Anand vs The Union of India ; , Shyam Lal vs State of U.P. ; , Parshotam Lal Dhingra vs Union of India ; , Gopi Kishore Prasad vs Union of India AIR. , The State of Orissa & ,Anr. vs Ram Narayan Das ; , Madan Gopal vs State of Punjab [1963] 3 S.C.R. 716, Rajendra Chandra Banerjee vs Union of India ; , Champakal Chimanlal Shah vs The Union of. India , Jagdish Mitter vs Union of India A.I.R. 1964 S.C. 449, State of Punjab & Anr. vs Shri Sukh Raj Bahadur ; , Union Of India 463 & Ors. R.S. Dhaba , State of Bihar & Ors. vs Shiva Bhikshuk Mishra R.S. Sial vs The State of U.P. & Ors. , Shamsher Singh & Anr. vs State of Punjab ; and The Regional Manager & Anr. vs Pawan Kumar Dubey [1976] 3 S.C.R. 540 referred to. (2) Before it is held that an order terminating the services of a Government servant amounts to punishment the Court must hold that either of the two tests,namely, (a) that the servant had a right to the post or (b) that he had been visited with evil consequences such as forfeiture of pay etc., is satisfied. Therefore, an order terminating the services of a temporary servant or probationer under the Rules of employment and without anything more will not attract article 311. Where a departmental enquiry is contem plated but an enquiry is not in fact proceeded with, article 311 will not be attracted unless it can be shown that the order, though. unexceptionable in form, is made following a report based on misconduct. Even though misconduct, negli gence, inefficiency or other disqualification may be the motive for the order of termination, if a right exists under the contract or the rules to terminate his services, then article 311(2) is not attracted unless the misconduct or negli gence is the very foundation of the order. Where there are no express words in the impugned order itself ' which throw a stigma on the Government servant, the Court would not delve into secretariat files to discover whether some kind of stigma could be inferred on such research. [469 A B; 473 C; 471 H; 475 F] Parshotam Lal Dhingra vs Union of India [1958] S.C.R. 828, R.S. Sial vs The State of U.P. & Ors. [1974] 3 S.C.R. 754, Shamsher Singh & Ant. vs State of Punjab ; and 1. N. Saksena vs State of Madhya Pradesh ; followed. (3) The respondent was a temporary hand and had no right to the post. Under the contract of service and the service rules applicable to him the State had the right to terminate his services by giving him one month 's notice. The order ex facie is an order of termination of service sim pliciter. It does not cast any stigma on the respondent nor does it visit him with evil consequences, nor is it founded on misconduct. Therefore, the respondent could not invite the Court to go into the motive behind the order and claim the protection of article 311(2) of the Constitution. [475 D E] (4) The High Court failed to appreciate the true legal .and constitutional position and upset the concurrent findings of fact arrived at by the Courts below, ignoring the well settled principle of law that a second appeal cannot be entertained on the ground of erroneous findings of fact, however, gross the error might seem to be. [475 G H] Paras Nath Thakur vs Smt. Mohani Das & Ors. [1960] 1 S.C.R. 271. Sri Ramanuja Jeer & Ors. vs Sri. Ranga Ramanuja Jeer & Anr. ; , P. Ramachandra Ayyar vs Ramalingam ; and Madamanchi Ramappa & . Anr. vs Muthaluru Bojappa ; , referred to.

The petitioners were convicted under section 302 read with section 34 I.P.C. and were sentenced to death on November 26, 1977. The High Court upheld the conviction and sentence on July 18, 1978. The petitioners ' Special Leave Petition against the judgment of the High Court was dismissed on March 5, 1979 and the Review Petition against the dismissal of the Special Leave Petition was also dismissed on March 27, 1981. The petitioners ' successive writ petitions challenging the validity of sections 302 and 34 I.P.C. were dismissed on January 20, 1981 and August 24, 1981 respectively. The present writ petitions were filed on March 2, 1983 on the basis of the decision in T.V. Vatheeswaran vs State of Tamil Nadu which was rendered on February 16, 1983. The contention on behalf of the petitioners was that more than two years had elapsed since they were sentenced to death by the trial court and therefore they were entitled in terms of the ruling in vatheeswaran to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment. ^ HELD : Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed. But no hard and fast rule that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke article 21 and demand the quashing of the sentence of death" can be laid down as has been done in Vatheeswaran. [594 E F] (i) No absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the 583 sentence must be substituted by the sentence of life imprisonment. There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated. A convict is entitled to pursue all remedies lawfully open to him and get rid of the sentence of death imposed upon him and his taking recourse to them to ask for the commutation of his sentence even after it is finally confirmed by this Court is understandable. But, it is, at least, relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice. It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification. Stay orders are obtained in those proceedings and then, at the end of it all, comes the argument that there has been prolonged delay in implementing the judgment or order. The Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it. If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation. Further, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition if the death sentence is vacated, re matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed. The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum." [595 D H; 596 AE] T.V. Vatheeswaran vs State of Tamil Nadu. overruled. (ii) The period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve. " It is not possible to agree with this part of the judgment in that case. The fixation of the time limit of two years does not accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive. A period far exceeding two years is generally taken by the High Court and this Court together for the disposal of matters involving even the death sentence. Very often four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by this Court in that matter. This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed under article 72 or article 161 of the Constitution or the time which the Government takes to dispose of application filed under sections 432 and 433 of the Code of Criminal Procedure. [594 F H; 595 AC] (iii) Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, 584 that sentence must necessarily be commuted to life imprisonment. In that case the Federal Court commuted the sentence of death to sentence of transportation for life for reasons other than that a long delay had intervened after the death sentence was imposed. In Ediga Anamma, Piare Dusadh was regarded as a leading case on the point. In the other judgments of this Court referred to in Vatheeswaran, this Court was hearing appeals against judgments of High Courts confirming the sentence of death. However, the Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence. In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence. [589 B D H; 590 A D] Piare Dusadh, [1944] F.C.R. Vol.6 61; Ediga Anamma; , ; Sunil Batra vs Delhi Administration, ; ; Maneka Gandhi [1978] 2 S.C.R. 621; Bachan Singh, , Hussainara Khatoon; , ; Hoskot; , ; Bhuvan Mohan Patnaik; , ; and Prabhakar Pandurang Sangzgiri; , referred to. (iv) Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution. The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable. It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment. It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair. A prisoner who has experienced living death for years on end is entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed. That is the true implication of article 21 of the Constitution. [593 B G] Bhuvan Mohan Patnaik; , ; Prabhakar Pandurang Sangzgiri; , ; and Sunil Batra vs Delhi Administration; , referred to. (v) Traditionally, subsequent events are taken into account in the area of civil law. There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable. Principles analogous to res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already. That final decision is not a decision on new facts. Courts are never powerless to do justice, that 585 is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship. That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court. [590 E H] In the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court and this Court cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence. Counsel for the petitioners have been asked to argue upon the reasons why, apart from the delay caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time. The question will be decided after hearing the parties. [596 G H; 597 A B] 2. Petitions filed under articles 72 and 161 of the Constitution and under sections 432 and 433, Cr. P.C. must be disposed of expeditiously. A self imposed rule should be followed by the executive authorities that every such petition shall be disposed of within a period of three months from the date on which it is received. [597 C]

Appeals Nos. 448 and 449 of 1957. Appeals from the judgment and order dated September 27, 1956, of the Mysore High Court in Writ Petitions Nos. 44 and 45 of 1955. N. C. Chatterjee, D. N. Mukherjee and B. N. Ghose, for the appellant in C. A. No. 448 of 1957. V. L. Narasimhamoorthy, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant in C. A. No. 449 of 1957. G. R. Ethiraiulu Naidu, Advocate General, Mysore,, B. R. G. K. Achar and K. R. Choudhuri, for the respondent. February 3. The Judgment of the Court was delivered by KAPUR, J. These are two appeals brought against two judgments and orders of the High Court of Mysore which arise out of two petitions filed by the appellants under article 226 challenging the legality of the imposition of octroi on wool and cotton under section 98 of the City of Bangalore Municipal Corporation Act (Act LXIX of 1949), which for the sake of convenience, will be termed the " Act ". On March 31, 1954, a resolution was passed purporting to be under section 98(1) of the Act by which it was 700 resolved to levy an octroi on cotton and wool as follows : Name of the Articles Rate of duty 1. Raw cotton and wool (this includes both loose Rs. 1/9/ per and compressed, made in cent. ad valorem India or foreign) 2. . This was notified in the Mysore Gazette on April 3, 1954, and was also published as required by section 98(1) of the Act. Objections were invited and it is admitted that both the appellants filed their objections. Final resolution under section 98(2) was passed on December 21, 1954, and the resolution in regard to octroi came into force as from January 1, 1955. It may be mentioned that the final resolution passed under section 98 (2) of the Act was not published in the Official Gazette but was published in the local newspapers and a notice dated December 23,1954, was also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy an octroi on the goods at the rate already notified. The appellant in C.A. 448/57, filed a petition in the High Court on March 15, 1955, under article 226 challenging the validity of the imposition of the octroi on the grounds: (1) that the tax was in contravention of section 98(2) of the Act in so far as a notice was not published in the Official Gazette; (2) that the tax was in contravention of section 130 of the Act and (3) that there was excessive delegation. The appellant in C. A. 449/57, filed its petition on March 17, 1955, in which besides challenging the validity of the imposition of the tax on grounds above set out, it also challenged the vires of the imposition on the grounds : , 1. that the levy of the octroi was in contravention of article 276(2) of the Constitution by which a tax on trade exceeding Rs. 250/ per annum could not be imposed 701 2. that it was a contravention of article 301 which guaranteed freedom of inter State trade and commerce, and 3. that it was in contravention of article 19(1)(g) of the Constitution. The High Court rejected all these objections and the appellant has come to this court on a certificate of the High Court under article 133(1) of the Constitution. In order to decide the question of the legality of the tax it is necessary to refer to the relevant provisions of the Act. Section 97 enumerates the taxes and duties which the Corporation is empowered to levy under the Act. Section 97(e) provides: " 97. The Corporation may levy (e)an octroi on animals or goods or both brought within the octroi limits for consumption or use therein. " Section 98 which deals with the powers. of control of Government and the procedure for the levying of the Municipal taxes provides: Section 98 (1). " Before the Corporation passes any resolution imposing a tax or duty for the first time it shall direct the Commissioner to publish a notice in the Official Gazette and in the local news. papers of its intention and fix a reasonable period not being less than one month from the date of publication of such notice in the Official Gazette for submission of objections. The Corporation, may, after considering the objections, if any, received within the period specified, determine by resolution to levy the tax or duty. Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied. (2) When the Corporation shall have determined to levy any tax or duty for the first time or at a new rate, the Commissioner shall forthwith publish a notice in the manner laid down in sub section (1) specifying the date from which, the rate at which and the period of levy, if any, for which such tax or duty shall be levied. " 702 It was argued that instead of passing a resolution Imposing the octroi duty, the Corporation should have 'first published its " resolution " to impose the tax and that the Corporation could not at once pass " a resolution " by which it imposed the tax. It published that resolution in the Official Gazette and also in accordance with other provisions of section 98(1) and invited objections which were filed. The only defect, if defect it can be called at all, was that instead of saying that it " intended " to impose a tax, the notice which was published said the tax "had been resolved to be levied. " This is a technicality and is of no substance. The next objection raised was that after the Corporation adopted the resolution imposing the tax which was after considering all the objections the publication was only in local newspapers and there was no publication in the Government Gazette and this, it was submitted, was such a serious defect as to make the imposition illegal and ultra vires. In support counsel for the appellants relied on certain judgments where publication in the Official Gazette was held to be a condition precedent to the legality of the imposition of the tax. These cases are Krishna Jute & Cotton Mills vs The Municipal Council, Vizianagram (1); Municipal Council, Rajamundry vs Nidamarti Jaladurga Prasadarayudu (2). Reference was made also to The Municipal Council, Anantapur vs Sangali Vasudeva Rao (3) ; Manak Chand vs Municipal Council(4) and State of Kerala vs P. J. Joseph (5 ). This question we are not considering as we are referring this case to a larger Bench on certain constitutional points and shall refer this question also in the sequel. The second objection raised was that there was no compliance with section 130 of the Act. That section is as follows : Section 130. " If the corporation by a resolution determines that an octroi should be levied on animals or goods brought within the octroi limits of (1) A.I.R. 1926 Mad. (2) A.I.R. 1926 Mad. (3) Mad. (4) A.I.R. 1951 Raj. (5) A.I.R. 1958 S.C. 296, 299. 703 the city, such octroi shall be levied on such articles or goods specified in Part V Schedule III at such rates not exceeding those laid down in the said ' Part in such manner as may be determined by the corporation. " That is not a charging section but it imposes a limitation on the power of the Municipality as to the rate at which a tax can be imposed. It was further argued that before a resolution under section 98(1) could be passed the goods sought to be taxed had to be specified under section 130 read with Schedule 111, Part V of the Act. Clause 18 of that Schedule provides that octroi on animals and goods shall be levied at the rates not exceeding the following. Classes I to VII specify articles on which octroi can be levied at the maximum rate. Class VIII was as follows: Octroi Maximum rate "Other articles which are not speci fied above and which may be Rs.2 0 0 per cent. approved by the Corporation ad valorem" by an order in this behalf That class empowers the Municipal Council to impose octroi duty on other articles which are not specified but which may be approved by the Corporation. In other words the Corporation can choose other articles upon which tax can be imposed and the respondent Corporation in the present case did resolve to impose tax on raw cotton and wool and also fixed the rate at Rs. 1 9 0 per cent. ad valorem. The submission that as a result of the operation of section 130 first a resolution had to be passed specifying raw cotton and wool as goods on which octroi duty would be levied and then the procedure under section 98(1) and (2) had to be gone through is without substance. What the Corporation did was that it passed a resolution choosing these goods to be goods on which octroi duty was to be levied and by the same resolution it resolved that the goods therein specified be taxed at the rate therein specified. There is no contravention of section 130 even if the contention of the appellants was to be taken most strictly, The goods were specified; the 704 rate of tax to be levied on the goods was also specified; the resolution was passed to that effect and the other procedure laid down in section 98(1) was then followed. In our opinion it is not necessary that first a resolution should be passed specifying the goods and then another resolution should be passed showing the intention of the Municipality to tax those goods. What has been done substantially complies with the provisions of the Act. It was next argued that the words of Class VIII in Part V of Schedule III where the ' words used are " other articles which are not specified above " and which may be approved by the Corporation by order in this behalf meant that the goods must be precisely defined and included by name in the Schedule and that the use of the word in this behalf " meant adding to the list of articles in Schedule III. Reliance was placed on the interpretation of the word " in this behalf " as given by this Court in Bijay Cotton Mills Ltd. vs Their Workmen (1). But that case has no application to the facts of the present case because the resolution was, as a matter of fact, passed for the purpose of imposing an octroi duty on the goods in dispute. The words used in Bijay Cotton Mills Ltd. vs Their Workmen(2) were in another context and ' even there all that was said was that a notification had to issue making the Central Government the appropriate Government. As we have said above in the present case there was a resolution which sought to include these goods in the Schedule for the purpose of imposing the tax. The excessive nature of delegation under Class VIII in Part V of Schedule III was also urged but this was not a question which was raised in the High Court nor is there any substance in the matter. The argument raised was that the power of the Municipal Corporation to specify goods under Class VIII was excessive delegation which was both uncanalised and uncontrolled and reliance was placed on a judgment of this Court in Hamdard Dawakhana vs Union of India("); but that case has no application to the facts (1) ; (2) ; , 705 of the present case. In the present case the Legislature has laid down the powers of the Municipality to tax various goods. It has enumerated certain articles and animals and Class VIII read with section 97(e) of the Act has authorised the Municipality to impose tax on other articles and goods. This power is more in the nature of conditional delegation as was held in Baxter vs Ah Way(1) where it was hold that under a. 52 (g) of the (Australian) Customs Act, 1901, a power given to prohibit by proclamation the importation of certain articles was not a delegation of legislative power but conditional legislation because the prohibition of importation was a legislative abet of Parliament itself and the effect of sub section (g) of section 52 was only to confer upon the Governor General in Council the discretion to determine to which class of goods other than those specified in the section and under what conditions the prohibition shall apply. All that the Legislature has done in the present case is that it has specified certain articles on which octroi duty can be imposed and it has also given to the Municipal Corporation the discretion to determine on what other goods and under what conditions the tax should be levied. That, in our opinion, is not a case which falls under the rule laid down by this Court in Hamdard Dawakhana vs Union of India (2). It was contended in C. A. 449/57 that the imposition of duty on raw cotton could not cover processed cotton that is cotton which had been ginned, combed and pressed. The High Court held that the cotton by being ginned or pressed in bales does not cease to be raw cotton and was to be regarded as raw for the purpose of the Act. The same would apply to wool. The notification levying the tax specifically stated that raw cotton and wool included both loose and compressed, i.e., compressed cotton and wool whether it was Indian cotton or foreign cotton. It will not, in our opinion, be a correct meaning to give to the notification if it were " interpreted to apply only to cotton which had been gathered from the fields and had neither been ginned nor pressed. " We agree with (1) ; (2) ; 706 the High Court that this resolution covers the articles which the appellants in the two cases were importing into the limits of the Corporation of Bangalore. I The learned Advocate General appearing for the respondent also relied on section 38 of the Act which provides : Section 38 (1). " No act done, or proceeding taken under this Act shall be questioned merely on the ground (a) . . . . . . . . (b) of any defect or irregularity in such act or proceeding, not affecting the merit of the case. " This section validates all defects and irregularities in in any act or proceedings which do not affect the merit; of the case. It was submitted that this section is in another chapter, i.e., chapter 2 dealing with provisions common to the Corporation and the Standing Committees. It may be that it is in another chapter but the language of the section is wide and applies to all defects or irregularities in any act or proceeding done not affecting the merits of the case. In our opinion the following points should be heard by the Constitution Bench*: (1) Whether the imposition in the present case offends article 276 or 301 of the Constitution ? (2) Whether the failure to notify the final resolution of the imposition of the tax in the Government Gazette is fatal to the tax ? If the answer to these questions or any of them is in the affirmative the appeal will have to be allowed. But if the two questions are answered against the appellants the appeals will fail as all other points have been decided by us against the appellants. The costs will follow the event unless the Bench hearing the reference makes other order. Referred to Constitution Bench final disposal. *The decision of the Constitution Bench is reported infra.

The City of Bangalore Municipal Corporation resolved to levy octroi on cotton and wool and the resolution was notified in the Official Gazette as required by section 98(1) of the City of Bangalore Municipal Corporation Act. Objections were invited and the appellants filed their objections to the tax. Final resolution in regard to the tax was passed under section 98(2) of the Act which was published in local newspapers but not in the Official Gazette. Notices were also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy octroi on the goods at the rate already notified. The appellants then filed applications in the High Court under article 226 of the Constitution challenging the legality of the levy of octroi but the High Court dismissed the applications. On appeal with a certificate of the High Court: Held, that publication of the resolution in the Official Gazette and invitation of objections under section 98(1) which were filed, were sufficient compliance with the provisions of the Act. The notice stating that the tax had been resolved to be levied instead of stating that it was intended to be levied was at the most only technically defective but all such defects were validated by section 38 of the Act. It was not necessary first to pass a resolution specifying the goods and then another resolution showing the intention of the Municipality to tax those goods. The goods and the rate of tax were specified and the resolution, was passed after following the procedure laid down in section 98(1). This amounted to substantial compliance with the provisions of the Act. The legislature has laid down the powers of the Municipality to tax various goods and enumerated certain goods; Class VIII in Part V of Schedule III read with section 97(e) of the Act authorised the Municipality to impose tax on other articles and goods. In 699 the present case there was a resolution which sought to include the goods in dispute in the Schedule for the purpose of imposing the tax. Bijay Colton Mills Ltd. vs Their Workmen [1960] 2 S.C.R. 982, distinguished. The conferment of power upon the Municipality to specify goods under Class VIII is in the nature of conditional delegation and does not amount to excessive delegation. Baxter vs Ah Way ; , followed. Hamdard Dawakhana vs Union of India ; , held not applicable. The High Court was right in holding that Cotton and Wool do not cease to be raw materials for the purposes of the Act, merely because they are ginned and pressed in bales. The resolution in the present case covered the articles imported by the appellants into the limits of the Corporation of Bangalore.

The appellant was appointed as a non official member of the State Sales Tax Appellate Tribunal for a period of two years from 17.7.1958, under sub section(2) of Section 4 of the Mysore Sales Tax Act, 1957. The appointment was extended from time to time and continued upto 8.2.1972. By a letter dated 8.2.1972, the respondent intimated the appellant that he had been granted 52 days Earned Leave as terminal leave from 9th February, 1972. The appellant represented for grant of superannuation pension. This was rejected by the Govern ment on the ground that he was not eligible for pension. The appellant 's writ petition was dismissed by a single Judge of the High Court who held that rule 64 of the Karna taka Sales Tax Rules, 1957 was applicable to him, and that he was not eligible to claim superannuation pension. This was upheld by the Division Bench. In the appeal before this Court, on behalf of the appellant it was contended that as a non official member of the Tribunal, he was a government servant, and as such, like other Government servants, he was entitled to grant of pension in accordance with Mysore Civil Service Rules, that he was retired from service after reaching the age of super annuation, that his appointment was not a contract appoint ment, that he was paid traveling allowance under the Mysore Civil Service Rules, and that Rule 64(6) of Mysore Sales Tax Rules inserted in 1964, and substituted in 1971, not being in existence at the time of his appointment, could not be made applicable to him as to deprive him of the benefit of superannuation pension as provided in the Mysore Civil Service Rules. 208 Dismissing the appeal, this Court, HELD: 1. The terms and conditions of service of the appellant who was appointed as a non official member in the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of Karnataka Sales Tax Act, 1957 and was given last extension of the period of service under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957, will be governed by the Mysore Sales Tax Rules and not by the provisions of Mysore Civil Services Rules. Since sub rule (6) of rule 64 of Mysore Sales Tax Rules was substitut ed in place of original subrule (6) before the appellant retired from service on expiry of his period of service, this rule applies to him, and he is not entitled to get any superannuation pension. [211D E; G] 2.1 Sub rule (2) of Rule 2 of Mysore Civil Service Rules 1957, clearly says that in cases where special provisions have been made by or under any law for the time being in force, the Mysore Service Rules do not apply. Furthermore, Rule 283 of the said Rules states that a superannuation pension is granted to a Government Servant who is compelled by Rule to retire at a particular age. Rule 95 provides that the date of compulsory retirement of a Government servant is the date on which he attains the age of 55 years, and the Government servant may be retained upto 60 years of age with the sanction of Government, but not after the age of 60 years. [212C; E F] 2.2 Rule 64(6).of the Mysore Sales Tax Rules, 1957 clearly says that the non official member of the Sales Tax Tribunal will become ineligible for any pension. Hence,provisions relating to pension as provided in Mysore Civil Service Rules, 1957 will not apply to a non official member. [212D E] 2.3 In the instant case, the appellant was appointed as a member of the Tribunal for a period of two years initial ly, and thereafter his tenure was extended periodically and he left the service as non official member of the Tribunal after he crossed the age of 61 years. There was no specific order that the appellant was due to retire at the age of 55 years. There is no rule for a non official member to retire at a particular age. Moreover, the Government sanctioned certain terms and conditions of his appointment. It is periodical and not upto a maximum age, nor it is a whole time service but a part time one and the appellant was permitted to take up audit of any person, firm, institution etc. on certain restrictions. A Government servant has to render whole time service. Therefore, the Mysore Civil Service Rules, 1957 do not apply to the 209 appellant, and he is not eligible for superannuation pen sion. [212F G; 213C D]

The appellant the Improvement Trust framed a develop ment scheme under the Punjab Town Improvement Act, 1922 and notices under Section 36 of the Act were published in the Daily Tribune on May 31, 1977, June 7, 1977 and June 14, 1977 and in the local Daily Ajit on May 30, 1977, June 6, 1977 and June 13, 1977 and in the Punjab Government Gazette on June 17, 1977, June 24, 1977 and July 1977, respectively. A notification as required under Section 42 of the Act was published on June 30, 1980 sanctioning the development scheme. The notification was challenged by the Respondents in a writ petition in the High Court on the ground that the notification was not issued within the stipulated period of three years from the first publications of the notice. The Single Judge of the High Court allowed the writ application and the Division Bench of the High Court dis missed the Letters Patent Appeal, against which the present petition has been filed by the Improvement Trust, contending that the time limit of three years for the issue of the notification under section 42 of the Act was not prescribed under the Act; that the first proviso to section 6 of the Land Acquisition Act, 1894, was not applicable to the scheme in question, and; that the provisions of Section 6 of the Land Acquisition Act were 929 incorporated in the Act from the very time of its enactment and hence, any amendment to the said section after that date would not be applicable to acquisitions under Act. Dismissing the appeal, this Court, HELD: 1. In a case where a statute is incorporated by a reference into another statute, an amendment of the statute so incorporated after the date of incorporation does not affect the second statute and the provisions of the latter statute remain the same as they were at the time of incorpo ration. [934F G] 2. Where one statute is referred to in another, it may be merely by way of reference or by way of incorporation of the same. This depends on the language used in the latter statute and other relevant circumstances. [934G] 3. In the present case, there is no question of incorpo ration of any of the provisions of the Land Acquisition Act into the Punjab Improvement Act 1922 at all as the latter Act does not deal with acquisition of land for the purposes of a scheme as contemplated under the Act. The acquisition of such land for the purposes of the scheme is left to the general law of the land in that connection, namely, the Land Acquisition Act, which has to be resorted to for the pur poses of acquisition of land for the purposes of a scheme as contemplated under the Punjab Town Improvement Act. The only difference is that some of the provisions of the Land Acqui sition Act, as referred to in the relevant sections of the Act, are given effect to as amended by the relevant sections of the Act. In these circumstances, it cannot be held that any provisions of the Land Acquisition Act have been incor porated into the Act and the provisions of the Land Acquisi tion Act which have to be applied, are the provisions as they stood at the relevant time, namely, at the time of acquisition, in the absence of a contrary intention. [934G C] 4. The notification under Section 42 should have been published within the period of three years of the date of publication of the notification under Section 4(1) of the Land Acquisition Act, as required under the first proviso to Section 6 of the Land Acquisition Act. Under sub clause (1) of Clause (2) of the Schedule to the said Act, the first publication of a notice of any improvement scheme under section 36 of the said Act, is 930 substituted for and has the same effect as the publication in the Government Gazette of a notification under sub sec tion (1) of Section 4 of the Land Acquisition Act. The notice under section 36 of the said Act is required to he published, inter alia, in a newspaper or newspapers as set out in section 36(2)(a) of the said Act. In the present case, such a notice was first published in the daily 'Ajit ' on May 30, 1977, and hence, the notification under Section 42 of the said Act should have been published on or before May 30, 1980. In fact, the notification under Section 42 of the said Act, admittedly, was published on June 30, 1980 and hence, was clearly beyond time. [935C F] Mahindra and Mahindra Ltd. vs Union of India and Anoth er; , and Secretary of State for India in Council vs Hindustan Cooperative Insurance Society Ltd., [1958] IA 259 at 267, referred to.

These three groups of special leave petitions/appeals/writ petitions concern the policy and legality of the levy of Court fees under the Provisions of the Karnataka Court Fees and Suits valuation Act, 1958, the PG NO 155 PG NO 156 Rajasthan Court Fees and Suits Valuation Act, 1961 and the Bombay Court Fees Act, 1959. The petitioners from Rajasthan had challenged before the High Court the constitutional validity of the provisions of section 20 read with Article 1 Schedule 1 of the Rajasthan Act which prescribed and authorised the levy of court fees on an uniform ad valorem basis without the prescription of any upper limit. the High Court upheld the constitutionality of the impugned provision. The appeal and the special leave petitions from Karnataka are directed against the common order of the Karnataka High Court upholding the validity of the corresponding provision of the Karnataka Act which similarly imposed an ad valorem court fee without prescribing any upper limit. The writ petitions have challenged the provision directly in this Court. So far as the Bombay Act is concerned, the State of Maharashtra has come up in appeal against the judgment of the Division Bench of the Bombay High Court affirming the order of the learned Single Judge striking down the provisions of section 29(1) read with entry 10 of Schedule I of the Act in so far as they purport to prescribe an ad valorem court fee, without any upper limit, on grants of probate, letters of administrative etc., while in respect of all other suits, appeal and proceedings an upper limit of court fee of Rs.15,000 is prescribed. The High Court held this prescription of ad valorem court fee without any upper limit on this class of proceedings alone was constitutionally impermissible in that it sought to single out this class of litigants. It was contended on behalf of the petitioners/appellants that (i) the imposition of court fees at nearly 10% of the value of the subject matter in each of the courts through which the case sojourns before it reaches a finally would seriously detract from fairness and justness of the system; (11) the exaction of ad valorem fee uniformly at a certain percentage of the subject matter without an upper limit or without the tapering down after a certain stage onwards would negate the concept of e fee and part take of the character of a tax outside the boundaries of the State 's power; (111) the ad valorem yardstick, which is relevant and appropriate to taxation, is wholly inappropriate because the principle or basis of distribution in the case of a fee should be the proportionate cost of services inter se amongst the beneficiaries; (iv) in the very nature of the Judicial process, a stage is reached beyond which there could be no proportionate or progressive increase in the services rendered to a litigant either qualitatively or PG NO 157 quantitatively; (v) in the process of `adjudication of disputes before courts, judicial time and the machinery of justice are not utilised in direct proportion to the value or the amount of the subject matter of the controversy; (vi) a recognition of the outermost limit of the possible services and a prescription of a corresponding upper limit of court fee should be made, lest the levy, in excess of that conceptual limit, becomes a tax; and (vii) though India is a federal polity, the judicial system, however, is an integrated one and that therefore different standards of court fee in different States would be unconstitutional . The contentions of the State were that (i) as long as their power to raise the funds to meet the expenses of administration of civil justice was not disputed and as long as the funds raised show a correlation to such expenses, the States should have sufficient play at the joints to work out the incidents of the levy in some reasonable and practical way; (ii) it would, quite obviously, be impracticable to measure out the levy directly in proportion to the actual judicial time consumed in each individual case, hence the need to tailor some rough and ready workable basis which, though may not be an ideal or the most perfect one, would at least be the least hostile; (iii) if an upper limit is fixed and the collection fell short of what the Government intends and is entitled to collect, this would eventually result in the enhancement of the general rates of court fee for all categories; (iv) if the value of the subject matter is a relevant factor in proportioning the burden of the court fee. where the line should be drawn in applying the principle it is more a matter of legislative wisdom and preference than of the strict judicial evaluation and adjudication; and (v) courts cannot compel the State to bring forth any legislation to implement and effectuate a Directive Principle. Dismissing the appeals, writ petitions and the special leave petition, this Court, HELD: ( I) All civilised Governments recognise the need for access to justice being free. Whether the whole of the expenses of administration of civil justice also in addition to those of criminal justice should be free and met entirely by public revenue or whether the litigants should contribute and if so, to what extent, are matters of policy. [170G] (2) A fee is a charge for the special service rendered to a class of citizens by Government or Government agencies and is generally based on the expenses incurred in rendering the services. [174B] PG NO 158 The Commissioner, Hindu Religious Endowments, Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt., [1954] SCR (1) 1005 and Om Prakash Agarwal vs Guni Ray, AIR 1986 (SC) 726 referred to. (3) It is for the governmental agencies imposing the fee to justify its impost and its quantum as a return for some special services. (4) Once a broad correlation between the totality of the expenses on the services, conceived as a whole, on the one hand and the totality of the funds raised by way of the fee, on the other, is established, it would be no part of the legitimate exercise in the examination of the constitutionality of the concept of the impost to embark its effect in individual cases. Such a grievance would be one of disproportionate nature of the distribution of the fees amongst those liable to contribute and not one touching the conceptual nature of the fee. [184A B] (5) The test is one of the comprehensive level of the value of the totality of the services, set off against the totality of the receipts. If the character of the `fee ' is thus established, the vagaries in its Distribution amongst the Class, do not detract from the concept of a `fee ' as such, though a wholly arbitrary distribution of the burden might violate other constitutional limitations. [185G] Municipal Corporation of Delhi & Ors. vs Mohd . Yasin. , ; H.H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitahle Endowments., [1963] Supp. 2 SCR 302; Sreenivasa General Traders & Ors. vs Andhra Pradesh & Ors., ; State of ' Maharashtra & Ors. vs The Salvation Army, Western India Territorv ; Kewal Krishan Puri & Anr. vs State of Punjab & Ors. ; Secretary. Government of ' Madras, Home Department & Anr. vs Zenith Lamp & Anr. vs State of Kanataka, AI 1979 (SC) 119; The Commissioner Hindu Religious Endowments Madras vs Sri Lakshmindra Thirtha Swantiar of Sri Shirur Mutt., ; ; Om Prakash Agarwal vs Giri Raj Kishori, 730; N.M. Desai vs The Teesteels Ltd. & Anr., AIR 1980 (2) SC 2125; Lady Tanumuti Girijaprasad & Anr. vs Special Rent Acquisition Officer, Western Railway Special Civil Application No. 979 of 1970 with Special Civil Application 287 of 1967; The City Corporation of Calicut vs Thachambalath Sadasvian & Ors., , referred to. Indian Organic Chemicals vs Chemtax Fibres, Secretary, Government of Madras Home Department vs Zenith Lamp & Electrial Ltd., ILR 1968 (Madras) 247 overruled. PG NO 159 (6) Though legislative measures dealing with economic regulation are not outside article 14, it is well recognised that the State enjoys the widest latitude where measures of economic regulation are,concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment and balancing of various conflicting social and economic values and interests. It is for the State to decide what economic and social policy it should pursue and what discriminations advance those social and economic policies. In view of the inherent complexity of these fiscal adjustments, courts give a larger discretion to the Legislature in the matter of its preferences of economic and social policies and effectuate the chosen system in all possible and reasonable ways. [187G H; 188A B] East India Tobacoo Co. vs State of Andhra Pradesh, ; The State of Gujarat & Anr. vs Shri Ambica Mills Ltd. Ahmedabad, referred to. (7) The lack of perfection in a legislative measure does not necessarily imply its unconstitutionality. It is rightly said that no economic measure has yet been devised which is free from all discriminatory impact and that is such a complex arena in which no perfect alternatives exist, the court does well not to impose too rigorous a standard of criticism. under the equal protection clause. reviewing fiscal services. [189F G ] G.K. Krishnan etc. vs The Slate of Tamil Nadu [1975] 2 SCR 715 730; San Antonic Independent School Districf vs Bodriguer. 411 U.S.I. at p. 41. Income Tax Officer, Shillong & Anr. vs N. Takim Roy Rymbai etc. ; , referred to. It is trite that for purposes of testing a law enacted by one State in exercise of its own independent legishtive powers for its alleged violation of Article 14 it cannot be contrasted with laws enacted by other States. [192C] The State of Madhya Pradesh vs G.C. Mandawar, ; , referred to. (9) Having regard to the nature and complexity of this matter It is, perhaps, difficult to say that the ad valorem principle which may not be an ideal basis for distribution of a fee can at the same time be said to be so irrational PG NO 160 as to incur any unconstitutional infirmity. The presumption of constitutionality of laws requires that any doubt as to the constitutionality of a law has to be resolved in favour of constitutionality. Though the scheme cannot be upheld, at the same time, it cannot be struck down either. [192E F] (10) The State is in theory entitled to raise the totality of the expenses by way of fee. Any interference with the present yardstick for sharing the burden might in turn produce a yardstick less advantageous to litigants at lower levels. [192G] (11) The High Court has struck down the provisions of section 29(1) read with entry 10 of Schedule I of the Bombay Court Fees Act, 1959 on the ground that the levy of court fee on proceedings for grant of probate and letters of administration ad valorem without the upper limit prescribed for all other litigants is discriminatory. If in respect of all other suits of whatever nature and complexity an upper limit of Rs.15,000 on the court fee is fixed, there is no logical justification for singling out this proceeding for an ad valorem impost without the benefit of some upper limit prescribed by the same statute respecting all other litigants. [193A B; F] (12) The Directive Principles of State Policy though not strictly enforceable in courts of law, are yet fundamental in the governance in the country. They constitute fons juris in a Welfare State. [194E] U.B.S.E. Board vs Hari Shanker, AIR 1979 SC 69 referred to. (13) The power to raise funds through the fiscal tool of a `fee ' is not to be confused with a compulsion to do so.

% In a batch of Writ Petitions filed in this Court the petitioners challenged the imposition of sales tax and surcharge on bread, rusk and bun under the A.P. Sales Tax Act, 1957 as illegal, contending that bread and biscuits belonged to one homogeneous class but had been treated differently for purposes of taxation under Schedule 1, Item No. 117 and Item No. 129 of the Act, that the purchasers and sellers of bread and biscuits had been differently taxed, and that the multiple point tax violated Article 19(1)(g) of the Constitution. Dismissing the writ petitions, ^ HELD: The economic wisdom of a tax or lack of it are within the exclusive domain of the legislature. The only question for the Court to consider is whether there is rationality in that behalf of the legislature that capacity to pay the tax increased by and large with the increase of receipts. From any point of view, there is rationality in this proposition. It is sound commonsense and is in consonance with social justice. Therefore, the challenge to the imposition, under Article 14 as well as Article 19(1)(g) of the Constitution is not sustainable. [9D F] State of Andhra Pradesh & Anr. vs Nalla Raja Reddy & Ors. ; ; New Menek Chowk Spinning and Weaving Mills Co. 8 Ltd. and Ors. vs Municipal Corporation of the City of Ahmedabad and others. ; , ; Annapurna Biscuit (Mfg.) Co. and Another vs The State of U.P. and Another, [1975] 35 S.T.C 127 and Hoechst Pharmaceuticals Ltd. and Another Etc. vs State of Bihar and others, , referred to.

On September 7, 1955, the appellant company entered into a contract with the respondents for the purchase of certain bales of jute cuttings to be delivered by the respondents in equal installments every month in October, November and December, 1955. Under cl. 3 of the agreement the sellers were entitled to receive the price only on their delivering to the buyers the full set of shipping documents. Clause 8 conferred on the sellers certain rights against the buyers such as the right to resell if the latter refused to accept the documents. Clause 14 provided that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. As the respondents failed to deliver the goods as agreed the appellants applied to the Bengal Chamber of Commerce for arbitration. The respondents appeared before the arbitrators and contested the claim, but an award was made in. favour of the appellant. Thereupon the respondents filed an application in the High Court of Calcutta under section 33 of the , 184 challenging the validity of the award on the ground that the contract dated September 7, 1955, was illegal as it was in contravention of the notification of the Central Government dated October 29, 1953, issued under section 17 of the Forward Contracts (Regulation) Act, 1952, which declared that no person shall enter into any forward contract other than a nontransferrable specific delivery contract for the sale or purchase of raw jute in any form. . . The appellant pleaded (1) that on the terms of the arbitration clause the question whether the contract dated September 7, 1955, was illegal was one for the arbitrator to decide and that it was not open to the respondents to raise the same in proceedings under section 33 of the ; (2 ) that the respondents were estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators ; and (3) that, in any case, the contract was a nontransferrable specific delivery contract within section 2 (f ) of the Forward Contracts (Regulation) Act and was not hit by the notification dated October 29, 1933. Held, that : (1) the dispute as to the validity of the contract dated September 7, 1955, was not one which the arbitrators were competent to decide under cl. 14 and that in consequence the respondents were entitled to maintain the application under section 33 of the . When an agreement is invalid every part of it including the clause as to arbitration contained therein must also be invalid. Leyman vs Darwins Lid. , , Union of India vs Kighorilal Gupta and Brothers, ; , Tolaram vs Birla Jute Manufacturing Company Lid., I. L. R. , relied on. (2)the respondents were not estopped by their conduct from questioning the validity of the award. Ex parte Wyld, (1861) 30 Law J. Rep. (N. section) Bank. 10, explained. (3)on the true construction of the contract dated Sep tember 7, 1955, read with the terms of the import licence in favour of the appellant, the agreement between the parties was that the contract was not to be transferred. In construing a contract it would be legitimate to take into account surrounding circumstances and, therefore, on the whether there was an agreement between the parties 185 that the contract was to be non transferable, the absence of a specific clause forbidding transfer was not conclusive. Virjee Daya & Co. vs Ramakrishna Rice & Oil Mills, A. 1. R. , approved. British Waggon Co. vs Lea, , dist inguished. Accordingly, the contract in question was not hit by the notification dated October 29, 1953.

The petitioning creditor in an insolvency proceeding sought annullment of two mortgages, one for Rs. 15,000/ in favour of the appellant in C.A. 845 and another for Rs. 10,000/ in favour the appellant in C.A. 846. The mortgages were dated November 4, 1950 and were registered on November 6, 1950. The insolvency Court held that the mortgages were not supported by consideration and were executed with a view to screening some of the properties of the insolvents 'from their creditors. It therefore, annulled the mortgages under section 53 of the . The District Judge, in appeal, reversed the findings of the trial court but the High Court, acting under the first proviso of section 75(1) of the Act, set aside the judgment of the District Judge and restored that of the Insolvency Court. in an appeal to this Court by special leave, it was contended on behalf of the appellants (i) that the High Court while acting under the first proviso of section 75(1) to satisfy itself "that an order made in any appeal decided by the District Court was according to law" had no power to disturb the findings of fact reached by the appellate court; the jurisdiction of the High Court is a very limited one and not more than that conferred on it by sub section 100(1) C.P.C.; and (ii) that the conclusions of the High Court were unsustainable on the evidence on record. HELD: (i) The legislature did not confer on the High Court 'under the first proviso to section 75(1) of the Act an appellate power nor did it confer on if a jurisdiction to reappreciate the evidence on record. While exercising that power the High Court is by and large bound by the findings of fact reached by the District Court. If the legislature intended to confer power on it to reexamine both questions of law and fact it would have conveyed its intention by appropriate words as has been done under various other statutes. A wrong decision on facts by a competent court is also a decision according to law. [701 D] A decision being "contrary to law" as provided in section 100(1)(a) of the Code of Civil Procedure is not the same thing as a decision being not "according to law" as prescribed in the first proviso of section 75(1) of the Act. The latter expression is wider in ambit than the former. It is neither desirable not possible to give an exhaustive definition of the expression "according to law". The power given to the High Court under the first proviso to section 75(1) of the Act is similar to that given to it under section 25 of the Provincial Small Causes Courts Act. [701 F] Bell & Co. Ltd. vs Waman Hemraj, ; Hari Shankar vs Rao Girdhari Lai Chowdhury, [1962] 1, supp. S.C.R. 399; 699 Official Receiver, Kanpur and Anr. vs Abdul Shakur ; ; referred to and explained. (ii) On the evidence, the findings of the District Court on the payment of consideration were correct findings of fact and the High Court could not have interfered with the same. However, one payment in respect of the mortgage in C.A. 845 was not proved and the mortgage was therefore only valid to the extent of Rs. 10,5001 .

In Vijay Textile Mills vs Union of India reported in (1979) 4 E.L.T.J. 181, the Gujarat High Court by its decision dated 21 1.1979 held that cotton fabrics subjected to bleaching, dyeing and printing could not be subjected to excise duty under Item 19 (1) (b) of the First Schedule to the is at twenty per cent ad valorem these activities not being taxable event in the light of section 3 read with 2(d) of the Act. The Gujarat High Court proceeded on the footing that the processes of bleaching, dyeing and printing were manufacturing processes and held that excise duty would at least be leviable under residuary Item No. 68 of the First Schedule and therefore, liable to levy at eight per cent ad valorem, the High Court directed the "Excise authorities to calculate the ad valorem excise duty during the period of three years immediately preceding the institution of each petition before the Court and calculate the excise duty payable by each of these petitioners under Item 68 only in respect of the value added by each of the petitioners by the processing of the fabric concerned. The excise duty paid in excess of such ad valorem duty under Item 68 during the period of three years immediately preceding the institution of the respective Special Application is ordered to be refunded to the petitioners concerned in each of their petitions." In Real Honest Textiles and Ors. vs Union of India (now in appeal) the Gujarat High Court passed similar directions after declaring that the levy and collection of excise duty and additional duty on processed man made fabrics 293 under Tariff ' Item 22(1) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 was ultra vires. Since the decisions of the Gujarat High A Court on 24.1.1979 in these two cases, the petitioners and the processing houses like the petitioners have been claiming refund. The President of India promulgated an Ordinance being Central ordinance No. 12 of 1979 called the Central Excises and Salt and Additional Duties of Excise (Amendment) Ordinance 1979. The said Ordinance was replaced by the Act VI of 1980 called the Central Excises and Salt and Additional Duties of Excise (Amendment) Act, 1980, giving retrospective effect to the Act from 24th February 1979. By section 2 of the Act, section 2(f) of the Excise Duty Act was amended by adding three sub items in the definition "manufacture" so as to include the activities like bleaching, dyeing, printing etc. covered by the two decisions of the Gujarat High Court. Similar amendments were made in items 19(1), 21 (1) and 22 (1) of the First Schedule with retrospective effect. Section 5(2) (b) of the Amending Act provided "no suit or other proceedings shall be maintained or continued in any other Court for the refund of the duty collected and no enforcement shall be made by any Court of any decree or order directing the refund of such duties of excise which have been collected and which may have been collected." as if the provisions of section 5 of the Act VI of 1980 had been in force on and from the appointed day as defined in the Act VI of 1980. After the Act VI of 1980 was passed, the same was challenged before the Bombay High Court by several writ petitions. Dismissing W.P. 623/1979 titled New Shakti Dye Works Pvt. and Mahalakshmi Dyeing and Printing Works vs Union of India along with 24 other writ petitions on 16117 June, 1983, the Bombay High Court upheld the Constitutional validity of the impugned Act as well as the levy of duty on certain goods. Special Leave was granted in this case as in the two earlier Gujarat High Court 's cases. Empire Industries Limited also filed a petition under Article 226 of the cases though Indian Textile Processor Association withdrew it from the file of the Bombay High Court and by the writ petition under Article 32 of the Constitution has challenged the Constitutional validity of the Act VI of 1980 and the validity of the levy of excise duty under section 4 of the Act. Some other petitioners similarly situated have also filed their petitions under Article 32 of the Constitution. In these petitions and appeals the following main points fell for consideration: 1. Whether cotton fabrics subjected to the process of bleaching, mercerising, dyeing, printing, water proofing etc. specially the processes conducted and carried out by the petitioner company in respect of cotton fabrics and woolen fabrics/man made fabrics as mentioned under Items 19 or 22 of the Schedule to the amount to 'manufacture ' as the Act stood prior to the impugned Act of 1980. In other words whether these various processes carried out by the petitioners 294 company amount to bringing into existence different and distinct goods, A commercially known as such, to attract levy of duty under section 4 of the . 2. Whether and in any event after the impugned Act, the levy is valid. In connection with the said contention it has to be examined whether the impugned Act is intra vires entry 84 of List I of the Seventh Schedule to the Constitution and if not, whether the said impugned Act can be said to be valid in any event under entry 97 of List I of the Seventh Schedule to the Constitution. Whether the impugned Act violates Article 14 or Article 19(1)(g) of the Constitution. Allowing the Revenue appeals in C.A. Nos. 586 to 592 of 1979 and dismissing all the petitions and other appeals, the Court, ^ HELD: 1. In view of the amendments made in section 2(f) of the by Amending Act VI of 1980 as well as the substitution of new Item 19(1) and 22(1) in Excise Tariff in place of the original items, the activities of the petitioner company, namely, as an independent processing unit engaged in job activities of dyeing, printing and finishing of man made/cotton fabrics attract the exigibility to excise duties under section 3 and 4 of the Act. Excise duty will be charged on processed printed material. [328 D E] Section 3 of the clearly indicates that the object of the entries in the First Schedule is firstly excisable goods and secondly to specify rates at which excise duty will be levied. Under sub rule 2 of Rule 56A, a manufacturer will be given credit of the duty which is already paid on the articles used in the manufacture, subject to certain conditions. Therefore, the processors will be entitled to credit for the duty already paid on the grey cloth by the manufacturers of the grey cloth. [328 E P] New Shakti Dye Works (Pvt.) Ltd vs Mahalakshmi Dyeing and Printing Works vs Union of India & Anr. (W.P. Nos. 622 and 623 of 1979 dated 16 and 17 June 1983 Bombay) approved. 2.1 Excise duty is a duty on the manufacture of goods and not on sale. Manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change. If a new substance is brought into existence or if a new or different article having a distinctive name, character or use result from particular processes, such process or processes would amount to manufacture. Therefore, the taxable event under the Excise Law is `manufacture '. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes `manufacture ' takes place and liability to duty under section 4 is attracted. [312 C D; 316 B C] 295 Union of India vs Delhi Cloth & General Mills, [1963] 1 Supp. S.C.R. 586; Union of India vs H.U.F. Business known as Ramlal Mansukhnai, Rewari &; Anr. A ; Allenburry Engineers vs Ramakrishna Dalmia & Ors., 11933] 2 S.C.R. 257; Deputy Commissioner, Sales Tax (Law) Board of Revenue (Taxes) Ernakulam vs Pio Food Packets, ; and Chowgule and Co. Pvt. Ltd. and Anr. vs Union of India and Ors. 11981] I S.C.C. 653 referred lo. Commissioner of Sales Tax, U.P. Lucknow vs Harbilas Rai and Sons [1968] S.T.C. Vol. 21 p. 17 (S.C.) followed. Hiralal Jitmal vs Commissioner of Sales Tax, [1957] S.T.C. Vol. VIII 325 (MP); East India Cotton Manufacturing Company Pvt. Ltd. vs The Assessing Authority cum Excise and Taxation Officer, Gurgaon and Anr., [1972] S.T.C. Vol. 30 p. 489 (Punjab and Haryana); Kores (India) Ltd vs Union of India and Ors., [19821 E.L.T. Vol. 10, p. 253 and K. Venkataraman and Company and Ors. vs Deputy Commercial Tax Officer, Coimbatore IV and Ors., [1972] S.T.C. Vol. 10 p. 57 (Mad) approved. Extrusion Process Pvt. Ltd. vs N.R. Jadhav, Superintendent of Central Excise, 119791 4 F. L.T. J. 380 (Gujarat); Swastik Products, Baroda vs Superintendent of Central Excise, and Kailash Nath and Anr. vs The State of U.P. and Ors., [1957] S.T.C. Vol. VIII p. 358 (SC) distinguished. Mc Nicol and Anr. vs Pinch, quoted with approval. 2.2 Etymologically the word "Manufacture" properly construed would doubtless cover the transformation. Here, in the light of several decision of the Supreme Court and the High Courts and on the construction of the expression, the process of bleaching, dyeing and printing etymologically means manufacturing process. The processes of the type which have been incorporated by the Act VI of 1980 were not so alien or foreign to the concept of `manufacture ' that these could not come within that concept covered by entry 84, of List I of the Seventh Schedule. After the Act VI of 1980 was passed these processes indubitably fall within the expression `manufacture '. [323A,E H] 2.3 The question whether the impugned Act is covered by entry 84 can be looked from another point of view namely the actual contents of entry 84. The word `produced ' appearing in entry No. 84 of List I of the Seventh Schedule is used in juxtaposition with the word `manufactured ' and used in connection with the duty of excise and consequently it contemplates same expenditure of human skill in bringing the goods concerned into the condition which would attract the duty. It was not required that the goods would be manufactured in the sense that raw material should be used to turn out something altogether different. It would still require that these should be produced in the sense that some human activity and energy should be spent on them and these should be subjected to some processes in order that these might be brought to the state in which they might become fit for consumption. Here, expenditure 296 of human skill and material have been used in the processing and it may not be that the raw material was first transformed but over the transformed material, further transformation was done by the human labour and skill making this fit for human consumption. In any event under entry 97 of List I of the Seventh Schedule this would apply if it is not under entry 84. [324 A, G] Aluminium Corporation of India Ltd. vs Coal Board AIR 1959 Cal. 222, approved. The King vs Caledonian Collieries, Ltd. referred to. 2.4 To contend that if the legislation was sought to be defended on the ground that it is a tax on activity like processing and would be covered by the a powers enumerated under entry 97 of List I of the Seventh Schedule there was no charging section for such an activity and as such the charge must fail and there cannot be any levy is wrong and misconceived. The charging section is the charging section 3 of the . It stipulates the levy and charge of duty of excise on all excisable goods produced or manufactured. `Manufactured ' under the Act after the amendment would be the 'manufacture ' as amended in section 2(f) and Tariff Item 19(1) and 22 and the charge would be on that basis. [324 ;325 A B] 3.1 Imposition of tax by legislation makes the subjects pay taxes. It is well recognised that (i) tax may be imposed retrospectively; and that by itself would not be unreasonable restriction on the right to carry on business and (ii) the Parliament has powers to make retrospective legislation including fiscal legislation and such legislation per se is not unreasonable. [326 D F] 3.2 Here there is no particular feature of this legislation which can be said to create any unreasonable restriction upon the petitioners. The concept of process being embodied in certain situation in the idea of manufacture, the impugned legislation is only making 'small repairs ' and that is permissible mode of legislation. [326 E F] 3.3 Nor does the impugned legislation act harshly nor there is any scope for arbitrariness or discrimination. It is clear from the objects and reasons wherein it was stated that the Central Excise Duty was levied for the first time on cotton fabrics in 1969, on man made fabrics (rayon of artificial silk fabrics) in 1954 and on woolen fabrics in 1955. From the very early stages of the textile tariff, with a view to achieving progression in the rate structure and to aligning excise control with the demands of different producing sectors duties has been levied not only on grey fabrics but also at the stage of processing such as bleaching, dyeing and printing. The Judgment of the Gujarat High Court in Real Honest Textiles and Ors. vs Union of India (under appeal) according to the statement of objects and reasons of the Act VI of 1980 had upset the arrangements regarding levy of excise duties of textile fabrics. The judgment also had the effect of disturbing the balance evolved between different sectors of the textile industry. Furthermore, it was made clear that in so far as past assessments were concerned, refund of excise duties to manufactu 297 rers as ordered by the High Court would have only meant a fortuitous windfall so as to benefit such persons without any relief to the ultimate consumers A who had purchased the fabrics and had borne the burden of the duties. In order to avoid this, the Act was passed. [325 E H; 326 B C; 327 C] Krishnamurthi & Co. etc. vs State of Madras & Anr., , referred to. 3.4 Where for the purpose of calculating assessable profits, a notional and conventional sum is laid down by the legislature to be arrived at on a certain basis, it is not permissible for the courts to engraft into it any other deduction or allowance or addition or read it down on the score that the said deduction or allowance or addition was authorised elsewhere in the Act or in the Rules. A conventional charge should be measured by its own computation and not by facts relating to other method of computation. The circumstances that thereby the benefit of any exemption granted by the legislation may be lost and that in some cases hardship might result are not matters which would influence courts on the construction of the statute. A tax payer subject is entitled only to such benefit as is granted by the legislature. Taxation under the Act is the rule and benefit and exemption, the exception. And in this case there is no hardship. [327 E G] D 3.5 When the textile fabrics are subjected to the processes like bleaching, dyeing and printing etc. by independent processes, whether on their own account or on job charges basis, the value of the purposes of assessment under section 4 of the Central Excise Act will not be the processing charges alone but the intrinsic value of the processed fabrics which is the price at which such fabrics are sold for the first time in the wholesale market. That is the effect of section 4 of the Act. The value would naturally include the value of grey fabrics supplied to the independent processors for the processing. However excise duty, if any, paid on the grey fabrics will be given proforma credit to the independent processors to be utilised for the payment on the processed fabrics in accordance with the Rules 56 A or 96 of the Central Excise Rules, as the case may be. [327 G H; 328 A B] F 3.6 Read in that context and in the context of the prevalent practice followed so long until the decision of the Gujarat High Court in Real Honest case, there is no hardship and no injustice to the petitioners or the manufacturers of grey fabrics. The fact that the petitioners are not the owners of the end product is irrelevant. Taxable events is manufacture not ownership. [328 B D] G 4. Documentary evidence not produced earlier cannot be admitted at the late stage of final hearing of the case by the Supreme Court [308 E] (Per majority Varadarajan J. dissenting). Different Courts sometimes pass different interim orders as the courts think fit. The interim orders passed by particular courts on certain considerations arc not precedents for other cases may be on similar facts. To contend 298 that once an interim order has been passed by the Supreme Court on certain A factors specially in fiscal matters, in subsequent matters on more or less similar facts, there should not be a different order passed nor should there by any variation with that kind of interim order passed. In as much as that such variance creates discrimination is an unfortunate approach. [329C E ] 2. Every bench hearing a matter on the facts and circumstances of each case should have the right to grant interim orders on such terms as it considers fit and proper and if it had granted interim order at one stage, it should have right to vary or alter such interim orders. The court made the following suggestions (i) A consensus, however, should be developed in matters of interim orders in fiscal matters specially in cases involving indirect taxes where normally taxes have been realised from the consumers but have not been paid over to the exchequer or where taxes are to be realised from consumers by the dealers or others who are parties before the court, interim orders staying the payment of such taxes until final disposal of the matters should not be passed. It is a matter of balance of public convenience Large amounts of taxes are involved in these types of litigations Final disposal of matters unfortunately in the present state of affairs in our courts takes enormously long time and non realisation of taxes for long time creates an upsetting effect on industry and economic life ceasing great inconvenience to ordinary people. Governments are run on public funds and if large amounts all over the country are held up during the pendency of litigations, it becomes difficult for the governments to run and become oppressive to the people. Government 's expenditures cannot be made on bank guarantees or securities. In that view of the matter the Supreme Court shall refrain from passing any interim orders staying the realisations of indirect taxes or passing such orders which have the effect of non realisation of indirect taxes. This will be healthy for the country and for the courts. [329 E H; 330 A C]

Appeal No. 216 of 1956. Appeal by special leave from the judgment and decree dated August 28, 1950, of the Punjab High Court in Civil Regular First Appeal No. 343 of 1944. L.K. Jha, K. P. Bhandari and Harbans Singh, for the appellants. Darya Datt Chawla for respondent Nos. 1(i) to (iii). February 9. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from a partition suit filed by Baij Nath against his other coparceners. Baij Nath is the son of Behari Lal and he had four brothers Kidar Nath, Raghunath Sahai, Jagan Nath and Badri Nath. Kidar Nath was dead at the time of the suit, and his branch was represented by his five sons Ghansham Lal, Shri Ram, Hari Ram, Tirath Ram and Murari Lal, who were impleaded as defendants 1 to 5 respectively. On the death of Ghansham Lal pending the Suit his two minor sons Jai Pal and Chandar Mohan were brought on the record as his legal representatives and their mother Mst. Kaushalya was appointed guardian ad item. The two minors are the appellants before us. Chuni Lal, the son of Raghunath Sahai was defendant 6, Bal Kishan and Hari Kishan the two sons of Jagan Nath were defendants 7 and 8, and Badri Nath was defend. ant 9. Baij Nath 's case was that the family was undivided and he wanted a partition of his share in the family properties, and so in his plaint he claimed appropriate reliefs in that behalf. The several defendants made out pleas in respect of the claims made by Baij Nath, but for the purpose of this appeal it is unnecessary to refer to the said pleas. The suit wail instituted on Juno 11, 1941, 771 It appears that by consent of parties a preliminary decree was drawn by the trial court on October 30, 1941, but the validity of this decree was successfully challenged by an appeal to the Lahore High Court. It was held by the High Court that all parties had not joined in the compromise and so the preliminary decree could not be sustained. In the result the said decree was set aside and the case was remanded for trial. It further appears that after remand parties again came together and by consent requested the court to pass a preliminary decree once again. This was done on October 15, 1943. This preliminary decree specified the shares of the respective parties and left three outstanding issues to be determined by Chuni Lal, defendant 6, who it was agreed should be appointed Commissioner in that behalf. Pursuant to this preliminary decree the Commissioner submitted his interim report on November 19,1943, and his final report on November 29, 1943. On receipt of the reports the trial court gave time to the parties to consider the said report which had been explained to them. Parties wanted time and so the case was adjourned. Since the property in dispute was valuable and the parties were unable to make up their minds about the said reports further time was granted to them by the court to consider the matter. Ultimately, when parties did not appear to come to any settlement about the reports the case was adjourned to December 17, 1943, for objections to be filed by the parties. Tirath Ram, defend ant 4 alone filed objections; nobody else did. The said objections were considered by the court in the light of the evidence which had been led and a final decree was drawn on June 21, 1944. Against this decree an appeal was preferred by the appellants before the High Court of Punjab, and it was urged on their behalf that the preliminary decree was invalid in that at the time of passing the said decree the court had failed to comply with the mandatory provisions of 0. 32, r. 7 of the Code of Civil Procedure. The High Court did not allow the appellants to raise, this point because it held that their 99 772 failure to make an appeal against the preliminary decree precluded them from challenging its correctness or validity under section 97 of the Code. Certain other minor objections were raised by the appellants on the merits but they were also rejected. In the result the appeal failed and was dismissed, but in view of the circumstances of the case the parties were directed to bear their own costs. It is this decree that is challenged by the appellants in their present appeal by special leave; and the only point which has been urged by Mr. Jha on their behalf is that the High Court was in error in disallowing the appellants to challenge the validity of the preliminary decree in their appeal before it. Mr. Jha contends that in dealing with the question about the competence of the plea raised by the appellants the High Court has misjudged the effect of the provisions of 0. 32, r. 7. It is common ground that at the time when the preliminary decree was passed by consent and the appellants ' guardian Kaushalya Devi agreed to the passing of such a preliminary decree and to the appointment of Chuni Lal as Commissioner the appellants were minors and that leave had not been obtained as required by 0. 32, r. 7. Order 32, r. 7(1) provides that no next friend or guardian for the suit shall without the leave of the court expressly recorded in the proceedings enter into any agreement or compromise on behalf of the minor with reference to the suit in which he acts as next friend or guardian. It is also not disputed that the agreement which resulted in the drawing up of the preliminary decree and the appointment of Chuni Lal as Commissioner fell within the scope of this rule and that sanction required by the rule had not been recorded in the proceedings. The argument is that the failure to comply with this mandatory provision of the rule makes the agreement and the preliminary decree void, and if that is so section 97 of the Code of Civil Procedure would be no bar in the way of the appellants challenging the validity of the decree at the appellate stage. The effect of the failure to comply with 0. 32, r. 7(1) is specifically provided by 0, 32, r. 7(2) which says 773 that any such agreement or compromise entered into without the leave of the court so recorded shall be voidable against all parties other than the minor. Mr. Jha reads this provision as meaning that the impugned agreement is voidable against the parties to it who are major and is void in respect of the minor; in other words, he contends that the effect of this provision is that the major parties to it can avoid it and the minor need not avoid it at all because it is a nullity so far as he is concerned. In our opinion this contention is clearly inconsistent with the plain meaning of the rule. What the rule really means is that the impugned agreement can be avoided by the minor against the parties who are major, and that it cannot be avoided by the parties who are major against the minor. It is voidable and not void. It is voidable at the instance of the minor and not at the instance of any other party. It is voidable against the parties that are major but not against a minor. This provision has been made for the protection of minors, and it means nothing more than this that the failure to comply with the requirements of 0. 32, r. 7(1) will entitle a minor to avoid the agreement and its consequences. If he avoids the said agreement it would be set aside but in no case can the infirmity in the agreement be used by other parties for the purpose of avoiding it in their own interest. The protection of the minors ' interest requires that he should be given liberty to avoid it. No such consideration arises in respect of the other parties to the agreement and they can make no grievance or complaint against the agreement on the ground that it has not complied with 0. 32, r. 7(1). The non observance of the condition laid down by r. 1 does not make the agreement or decree void for it does not affect the jurisdiction of the court at all. The non observance of the said condition makes the agreement or decree only voidable at the instance of the minor. That, in our opinion, is the effect of the provision of 0. 32, r. 7(1) and (2). The question as to the procedure which the minor should adopt in avoiding such an agreement or decree has been the subject matter of several decisions, and 774 it has been held that a compromise decree may be avoided by the minor either by a regular suit or by an application for review by the court which passed the said decree. The decision in Manohar Lal vs Jadu Nath Singh (1), is an illustration of a suit filed by the minor for declaration that the impugned decree did not bind him. It is, however, not necessary for us to deal with this aspect of the matter in the present appeal any further. In support of his argument that the failure to comply with the requirements of 0. 32, r. 7(1) makes the decree a nullity Mr. Jha has very strongly relied on the decision of the Privy Council in Chhabba Lal vs Kallu Lal (2). In that case an objection to the validity of a reference to arbitration was taken by a party in an appeal against the decree passed on an award; and one of the points raised for the decision before the Privy Council was whether an appeal lay against the decree in question. Under Schedule 2, paragraph 16(2) of the Code which was then in force it was provided that upon the judgment pronounced according to the award a decree shall follow and no appeal shall lie from such decree except in so far as it is in excess of or not in accordance with the award. The argument urged against the competence of the appeal was that the objection against the validity of the reference and the award could and should have been raised under paragraph 15(1)(c) of the said Sche dule, and since such an objection had not been so raised and a decree was drawn in accordance with the award under paragraph 16, r. 1 no contention could be raised against the validity of the decree outside the terms of paragraph 16(2). This argument was repelled by the Privy Council. It was held that the objection against the validity of the reference based on the ground that the requirements of 0. 32, r. 7(1) had not been complied with did not fall within the purview of paragraph 15(1)(c). The said paragraph specified the grounds on which an award could be challenged. It provided that the award could be set aside if it was made after the issue of an order by the (1) (1906) L.R. 33 I A. 128. (2) (1946) L.R. 73 I.A. 52. 775 court superseding arbitration and proceeding with the suit or if it was made after the expiration of the period allowed by the court, or if it was otherwise invalid. It is on the last clause in paragraph 15(1)(c) that reliance was placed in support of the contention that the challenge to the validity of the reference should have been made under the said clause. The Privy Council did not uphold this argument. " In their opinion," observed Sir John Beaumont, who spoke for the Board, " all the powers conferred on the court in relation to an award on a reference made in a suit presuppose a valid reference on which an award has been made which may be open to question. If there is no valid reference the purported award is a nullity, and can be challenged in any appropriate proceeding. " It is on this last observation that Mr. Jha has naturally relied; but, in our opinion, the observation in question does not purport to be a decision on the interpretation of 0. 32, r. 7(2). The context shows that the said observation was made in support of the decision that the challenge to the validity of the arbitration and the award could not have been made under paragraph 15(1)(c) and nothing more. We are not prepared to extend this observation to cases like the present where the point in dispute is in regard to the interpretation of 0. 32, r. 7. It is significant that while describing the award as a nullity the Privy Council has also added that it can be challenged in any appropriate proceeding which postulates the adoption of necessary proceedings to avoid the award. The point for consideration by the Privy Council was whether a proceeding under paragraph 15(1)(c) was indicated or whether an appeal could be regarded as an appropriate proceeding; but it was assumed that a proceeding had to be adopted to challenge the award. The decision of the Privy Council was that the validity of the award could be challenged by an appeal because it could not have been challenged under paragraph 15(1)(c). Since it could not be challenged under paragraph 15(1)(c), according to the Privy Council paragraph 16(2) could not be invoked against the competence of the appeal. It is unnecessary 776 for us to examine the merits of the said decision in the present appeal. All that we are concerned to point out is that the observation in the judgment on which Mr. Jha relies cannot be treated as a decision on the interpretation of 0. 32, r. 7(2). That question did not directly arise before the Privy Council and should not be treated as concluded by the observation in question. As we have already pointed out, the words used in 0. 32, r. 7(2) are plain and unambiguous and they do not lend any support to the argument that non compliance with 0. 32, r. 7(1) would make the impugned decree a nullity. Mr. Jha has also relied upon another decision of the Privy Council in Jamna Bai vs Vasanta Rao (1). In that case two defendants of whom one was a minor compromised a suit pending against them, and in doing so entered into a bond by which they jointly agreed to pay a certain sum to the plaintiff at a future date. The leave of the court was Dot obtained on behalf of the minor as required by section 462 of the Code of Civil Procedure, 1882, which was then in force. When a claim was made on the said bond it was held that the bond was not enforceable against the minor but it was enforceable for the full amount against the joint contractor. We do not see how this case assists the appellants. It appears that Jamna Bai who was the joint contractor on the bond advanced the plea that one of the two promisers can plead the minority and consequent immunity of the other as a bar to the promise 's claim against him. This plea was rejected by the Privy Council, and that would show that the bond which was executed in pursuance of a compro mise agreement was not treated as null and void but as being unenforceable against the minor ' alone. In ,that connection the Privy Council observed that the minor 's liability could not be enforced in view of the fact that the requirements of section 462 of the Code had not been complied with. Indeed, in the judgment an observation has been made that the Privy Council was not expressing any opinion as to whether the bond could be enforceable against a minor even if section 462 had (1) (1916) L.R.43 I.A.99. 777 been complied with. Thus this decision is of no assistance to the appellants. Similarly, the decision of the Privy Council in Khiarajmal vs Daim (1), can also be of no help to the appellants, because in that case all that the Privy Council decided was that a court has no jurisdiction to sell an equity of redemption unless the mortgagors are parties to the decree or the proceedings which lead to it, or are properly represented on the record. In other words, if a minor is not properly represented on the record no order passed in the proceedings can bind him. We are unable to see how this proposition has any relevance to the point which we are called upon to decide in the present appeal. If the preliminary decree passed in the present proceedings without Complying with the provisions of 0.32, r. 7(1) is not a nullity but is only voidable at the instance of the appellants, the question is: can they seek to avoid it by preferring an appeal against the final decree ? It is in dealing with this point that the bar of section 97 of the Code is urged against the appellants. Section 97, which has been added in the Code of Civil Procedure, 1908, for the first time provides that where any party aggrieved by a preliminary decree passed after the commencement of the Code does not appeal from such decree he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree. It is urged for the appellants that an appeal is a continuation of the suit and so the appellants would be entitled to challenge the impugned preliminary decree as much by an application made in the suit itself as by an appeal preferred against the final decree passed in the said suit. It is true that the proceedings in appeal can be regarded as a continuation of the proceedings in suit; but the decision of the question as to whether the appellants can challenge the said preliminary decree in their appeal against the final decree must in the present case be governed by the provisions of section 97 of the Code. The whole object of enacting section 97 was to make it clear that any party (1) (1904) L.R. 32 I.A. 23. 778 feeling aggrieved by a preliminary decree must appeal against that decree; if he fails to appeal against such a decree the correctness of such a decree cannot be challenged by way of an appeal against the final decree, which means that the preliminary decree would be taken to have been correctly passed. When section 97 provides that the correctness of the preliminary decree cannot be challenged if no appeal is preferred against it, it clearly provides that if it is not challenged in appeal it would be treated as correct and binding on the parties. In such a case an appeal against the final decree would inevitably be limited to the points arising from proceedings taken subsequent to the preliminary decree and the same would be dealt with on the basis that the preliminary decree was correct and is beyond challenge. It would be idle to contend that what is prohibited is a challenge to the factual correctness of the decree on the merits, because if the said decree is voidable, as in the present case, the very point as to its voidable character is a part of the merits of the dispute between the parties. Whether or not 0. 32, r. 7(1) applies to the case would certainly be a matter of dispute in such a case and the object of section 97 is precisely to disallow any such dispute being raised if the preliminary decree is not challenged by appeal. The whole object which section 97 intends to achieve would be frustrated if it is held that only the factual correctness of the decree cannot be challenged but its legal validity can be even though an appeal against the preliminary decree has not been filed. Therefore, in our opinion, the High Court was right in coming to the conclusion that it was not open to the appellants to challenge the validity of the preliminary decree in the appeal which they had preferred against the final decree before the said High Court.

Order 32, r. 7(2) of the Code of Civil Procedure, which is intended to protect the interest of the minor, really means that an agreement or compromise entered into on behalf of the minor in contravention of 0. 32, r. 7(1) is voidable only at the instance of the minor and not at the instance of any other party to it. Such contravention does not render the agreement or decree a nullity and the same has to be avoided in an appropriate proceeding. Manohar Lal vs jadu Nath Singh (1906) L.R. 33 I.A. 128, referred to. Chhabba Lal vs Kallu Lal (1946) L.R. 73 I.A. 52, jamna Bai vs Vasanta Rao (1916) L.R. 43 I.A. 99 and Khiarajmal vs Daim (1904) L.R. 32 I.A. 23, held inapplicable. Where a preliminary decree is passed in non compliance with the provision of 0. 32, r. 7(1), the remedy of the minor is by way of an appeal against that decree and not against the final decree since section 97 of the Code is a bar to the challenging of the preliminary decree in an appeal against the final decree. Consequently, in a suit for the partition where preliminary decree by consent was passed against the minor in contravention of 0. 32, r. 7(i) and that decree having been sought to be set aside in an appeal from the final decree the High Court held that section 97 of the Code precluded the appellant from doing so. Held, that the decision of the High Court was correct and must be ashamed, 770 Held, further, that the object section 97 of the Code was intended to achieve would be wholly frustrated if it were to be held that the section merely prohibited a challenge to the factual correctness of the decree and not its legal validity.

K, H and M filed four suits each against four sets of defendants in respect of different sets of plots under section 175 U. P. Tenancy Act, 1939. Since similar points were involved the twelve suits were tried together and were disposed of by a common judgment decreeing them. Twelve decrees were prepared and the defendants preferred twelve appeals to the Additional Commissioner. Three appeals by one set of the defendants B were dismissed for default and the remaining nine were dismissed on merits. Against the dismissal of the nine appeals on merits the three sets of defendants preferred nine second appeals before the Board of Revenue but they were dismissed as barred by res judicata on May 7, 1954. In November, 1954, the appellants filed petitions for special leave before the Supreme Court and on April 18, 1955, special leave was granted. In July 1954, the villages in Which the lands in suit were situate came under consolidation operations under the U. P. Consolidation of Holdings Act, 1953, and the operations were completed by the publication of a notification 218 under section 52 of the Act on October 17, 1953. The appellants did not file any objections before the consolidation authorities. The respondent contended that in view of the consolidation operations the appeals before the Supreme Court had become infructuous. Held, that the appeals had not become infructuous. There was nothing in the U. P. Consolidation of Holdings Act, 1953, as it stood during the period the village in suit was under consolidation operations which could have in any way affected these appeals, during or after the consolidation operations. The subsequent Amending Acts did not affect the appeals as they were prospective in operation and applied only to cases where the consolidation operations were started after the Amending Acts had come into force. Held, further that the appeals before the Board of Revenue were not barred by resjudicata. It was essential for the bar of res judicata that the previous and judication must have been between the same parties. The three suits in which judgments had become final were against one B and not against any of the appellants . The matter in issue in those three suits was different from that in the other nine suits as each of the suits related to different plots. The common judgment was really twelve judgments in the twelve suits. Badri Narayan Singh vs Kamdeo Prasad Singh, (1962) 3. section C. R. 759 referred to.

The appellant, who was less than 20 years was convicted for an offence under section 7(1) of the , and was ordered to furnish a bond under section 4 of the . The High Court revised the sentence, because section 16 of the Prescribed a minimum sentence of imprisonment for 6 months and a fine of Rs. 1000. Allowing the appeal to this Court, HELD : Section 4(1) of the contains the non obstante clause notwithstanding anything contained in any other law for the time being in force, and hence the section would have overriding effect and shall prevail if its other conditions are fulfilled; especially when the was enacted in 1958 subsequent to the enactment in 1954 of the . [317 A C; 318 D E] According to section 18 of the , that Act shall not affect section 5(2) of the Prevention of Corruption Act which also prescribes a minimum sentence of imprisonment. The fact that only one offence for which a minimum sentence of imprisonment is prescribed, has been specified shows that in the case of other such offenses, the provisions of the can be invoked [317H; 318 A C] Assuming there is some ambiguity, the principle to be applied in construing a penal statute is that such doubt should be resolved in favour of the person who would be liable to the penalty. [318 D] Adulteration of food is a menace to public health and the has been enacted to eradicate the evil. Therefore, courts should not lightly resort to the provisions of the probation of Offenders Act in the case of persons above 21 years of age; but the Act makes a distinction between offenders below 21 years and those above that age. As regards person under 21 years, the policy of the law is that such a person, even in the case of conviction under the , should not be deprived of the advantage of the which is a beneficent measure and reflects and incorporates the modern approach and latest trend in penology. [318 G H; 319 A C] As the object of the is to avoid imprisonment of a person covered by its provision, ,, that object cannot be set at naught by imposing a sentence of fine which would entail imprisonment in case of default. [319 D] Rattan Lal vs State of Punjab ; and Ramji Missir vs State of Bihar [1962] Supp. 2 S.C.R. 745, referred to. 313

The appellant was elected to the House of the People from a constituency in the State of Madhya Pradesh. The respondents were the ,other contesting candidates. Respondent No. 1 filed an election petition challenging the election of the appellant. That election petition was dismissed by the Election Tribunal. Against the order of the TribunaL the first respondent preferred an appeal to the High Court under section 116 A 134 159 S.C. 9. 130 of the Representation of the People Act, 1951. Admittedly, the appeal was filed more than 30 days after the order of the Election Tribunal. If the time requisite for obtaining a copy of the order of the Tribunal was excluded, the appeal was filed within 30 days. However, if that was not 'done, the appeal was out of time. The contention of the appellant before the High Court was that the respondent No. 1 was not entitled in law to exclude the time taken by him in obtaining the copy of the order of the Tribunal. That contention was rejected by the High Court. The High Court also found that the appellant was guilty of two, corrupt practices and hence his election was set aside. The appellant came to this Court by special leave. The only question raised before this Court was whether for 'the purpose of computing the period of 30 days prescribed under section 116 A(3) of the Act, the provisions of section 12 of the Limitation Act could be invoked or not. Dismissing the appeal, Held: (per B. P. Sinha, C.J., K. Subba Rao, Raghubar Dayal and N. Rajagopala Ayyangar JJ.) (i) The exclusion of time provided for by section 12 is permissible in computing the period of limitation for filing.the appeal in the High Court. Per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.) (ii) Though the right of appeal is conferred by section 116 A of the Representation of the People Act, 1951, and it is by virtue thereof that the appeal was filed by respondent in the High Court, it is still an appeal " under the Code of Civil Procedure, 1908, to the High Court". To attract article 156 of the First Schedule to the Limitation Act, it is not necessary for an appeal to be an "appeal under the Code of Civil Procedure" that the right to prefer the appeal should be conferred by the Code of Civil Procedure. It is sufficient if the procedure for the filing of the appeal and the power of the Court for dealing with the appeal, when filed, are governed by the Code. Per Raghubar Dayal and Mudholkar JJ. There is no warrant for holding that an appeal which is not given by the Code of Civil Procedure is still an appeal under the Code merely because its procedural provisions govern its course. Where a right of appeal is given by some other law, the appeal must be regarded as one udder that law and not under the Code of Civil Procedure. There is no reason for construing the words "under the Code of Civil Procedure" as meaning "governed in the matter of procedure by the Code of Civil Procedure". Held:(iii) (per B. P. Sinha, C.J., N. Rajagopala Ayyangar and Raghubar Dayal JJ.) The entire sub section (2) of section 29 of the Limitation. Act has to be read as an integrated provision and the conjunction "and" connects the two parts and makes it necessary for attracting cl. (a) that the conditions laid down by the opening words of sub section (2) should be satisfied. 131 Per Subba Rao and Mudholkar JJ. The second limb of sub section (2) of section 29 is wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule. Per Subba Rao J. The use of the word "any" clearly shows that the second part of sub section (2) of section 29 does not depend on the first part or vice versa. The second part of sub section (2) is an independent provision providing for that category of proceedings to which the first part does not apply. Held: (i) that section 116 A does not provide an exhaustive and exclusive code of limitation for the purpose of appeals against orders of Tribunals and also does not exclude the general provisions of the Limitation Act. Section 29(2)(a) of the Limitation Act speaks of express exclusion and there is no express exclusion in section 116 A(3) of the Representation of the People Act, 1951. Moreover, the proviso to section 116 A(3) from which an implied exclusion is sought to be drawn does not lead to any such necessary implication. The proviso only restores the power denied to the Court under section 29(2)(b) of the Limitation Act. If this proviso had not been there, section 29(2)(b) would have excluded the operation of section 5 of the Limitation Act with the result that even if a sufficient cause for the delay existed, the High Court would have been helpless to excuse the delay. (ii)S. 12(2) of the Limitation Act applies to an appeal to the High Court against the order of the Tribunal. An order made under section 98 of the Representation of the People Act, 1951, if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order and thereby attracting the relevant provisions of section 12 of the Limitation Act. Section 12(2) does not say that the order mentioned therein shall be only such order as is defined in the Civil Procedure Code. If a statute provides for the making of an order and confers a right of appeal to an aggrieved party against that order within a prescribed time, the time requisite for obtaining a copy of the order can be excluded. The Act of 1951 empowers the Tribunal to make an order and gives a right of appeal against that order to the High Court and therefore section 12(2) is directly attracted without any recourse to the definition of an order in the Code of Civil Procedure. Per Mudholkar J. The first limb of section 29(2) is concerned only with the proceedings under special or local law for which a period of limitation is prescribed in the First Schedule to the Limitation Act. If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law, certain consequences will follow under the provision. No inconvenience is to be caused by giving a literal and natural interpretation to the expression used by the legislature in the first portion of sub section (2) of section 29 because cases of other kind can easily come under the second portion thereof. Case Law referred to. 132

S, the owner of some land in a village in Punjab, died leaving a widow and the respondent, his daughter by another wife. The widow sold a part of the land in February 1958 to the appellants, whereupon the respondent filed a suit for possession by pre emption of the land sold. The trial court decreed the suit and a first appeal was dismissed. A single bench of the High Court allowed the second appeal on the view that the respondent not being the widow 's daughter, had no right of pre emption under section 15(2) of the Punjab Pre emption Act, 1913, as amended by the Punjab Pre emption Amendment Act, 1960. However, a division bench in a Letters Patent appeal, relying on an amendment made by the PUnjab Preemption Amendment Act, 1964 in section 15(2)(b), reversed the judgment of the single bench and decreed the suit. It was contended in appeal to this Court that there is no indication in the Amendment Act of 1964 that it is to have retrospective operation and the amendment made by it should be deemed to be only prospective. HELD: The Amendment Act of 1964 was merely of a clarificatory or declaratory nature. Even in the absence of words which were inserted by the Amendment Act of 1964 under section 15(2)(b) the only possible interpretation and meaning of the words "in the son or daughter of such female" could have reference to and cover the son or daughter of the husband of the 'female. The entire scheme of section 15(2) is that the right of pre emption has been confined to the issues of the last male holder from whom the property which has been sold came by inheritance. [805 H] Under section 15(2)(b) the right of pre emption would vest firstly in the son or daughter of the husband of the female meaning thereby either her own off springs from the husband whom she had succeeded or the son or daughter of that husband even from another wife. [806 G] In the present case the respondent was entitled to exercise her right of pre emption under paragraph First of clause (b) of section 15(2) even before the Amendment of 1964. Whatever doubts existed they were removed by that Act which must be given retrospective operation. [807 E F] Ram Sarup vs Munshi & Ors, ; and Mota Singh vs Prem Parkash Kaur & Ors., I.L.R. [1961] Punj. 614, 627; referred to.

The question involved in this appeal was whether under the customary law of the Punjab a sister was a preferential heir in respect of her brother 's self acquired property, to a collateral. The respondent, the sister, relied on a custom, which she termed a special custom, and on that basis claimed her brother 's property, and the appellant, a collateral of the 8th degree of her brother, resisted her claim relying solely on a general custom stated in paragraph 24 Of the Rattigan 's Digest of the Customary Laws of the Punjab to the effect that sisters were excluded by collaterals in the matter of inheritance to non ancestral property. The Subordinate judge, and the District judge on appeal, held in favour of the appellant but the High Court reversed their decisions holding that, there was no such general custom as recorded by Rattigan and that it was in any event for the appellants to prove that custom and this he had failed to do. The High Court also held that the respondent had succeeded in proving the custom set up by her. It was contended on behalf of the appellant that the High Court was in error in placing the onus of proving the custom on him since the custom was a general custom as stated by Rattigan. Held, that no distinction could be made between a general custom or other customs so far as the need of proof was con cerned and the ordinary rule was that all customs, general or otherwise, had to be proved unless by repeated recognition by the courts a custom had become entitled to judicial notice under section 57(1) of the Evidence Act. Raja Rama Rao vs Raja of Pittapur, (1918) L.R. 45 I.A. 148, relied on. Although there could be no doubt that Rattigan 's Digest was of the highest authority on questions of custom of the Pun jab, it was not possible, regard being had to the formidable array of conflicting decisions of the courts as to its existence, to take judicial notice of the custom mentioned in paragraph 24 of the Digest, without further proof. Case law reviewed. Although the respondent had in the plaint relied on a custom and termed it a special custom, that could not amount to an 782 admission which would obviate the necessity of proof of the general customs or its terms by the appellant. Even supposing that the High Court was not correct in its finding that the respondent had proved the custom entitling her to succeed, as the custom set up by the appellant had not also been established, section 5 Of the , applied and the case had to be decided by the personal law of the parties. The respondent was entitled to base her claim on the personal law although in her plaint she had relied on a custom. The personal law of the parties was the Hindu law and the respondent was entitled to succeed under that law also. Daya Ram vs Sohel Singh, 110 P.R. 1906, Abdul Hussein Khan vs Bibi Sona Dero, (1917) L.R. 45 I.A. 10 and Mst. Fatima Bibi vs Shah Nawaz, Lah. 98, relied on.

This appeal was against the order of the Deputy Registrar directing the present case to be registered as nine appeals and requiring the appellant to pay nine sets of court fees. The case originated out of one petition under article 226 of the Constition challenging the validity of various assessment orders. The High Court passed one order on the petition and one appeal was filed in this Court. 886 Held that the appellant should pay only one set of court fee and other charges as in a single appeal. It could not be said that there were as many proceedings as there were assessment orders as the appellant had by a single petition challenged them all together. Lajwanti Sial 's case, Petition for special leave No. 673 of 1959 and Kishinchand Chellaram 's case, C.A. Nos. 462 to 465 of 1960, referred to.

The appellant who was a minor filed an application by his mother as his guardian under section 488 of the Code of Criminal Procedure in the Court of the City Magistrate, Allahabad, praying for an order against the respondent, for maintenance alleging that he was his putative father. The Magistrate summarily dismissed the appellant 's application without issuing notice to the respondent as required by s.488, Criminal Procedure Code. The Court of Session in revision against the Magistrate 's order came to the conclusion that it was a fit case in which the Magistrate ought to have issued summons to the respondent and submitted the record to the High Court recommending that the order passed by the Magistrate be set aside and that the Magistrate be ordered to proceed with the application in accordance with law. TheHighCourtrejectedtheSessionsCourt preference and refused to certify that the case was a fit one for appeal to the Supreme Court. On appeal by special leave : Held, that the appellant was not given full opportunity to establish his case in the manner prescribed by law. 432 Section 488 of the Code of Criminal Procedure does not contemplate a preliminary enquiry before issuing a notice but lays down that all evidence under that section should be taken in the presence of the respondent or his pleader indicating thereby that one enquiry only should be held after notice. Sub section (6) of section 488 is mandatory in form and in clear terms it prescribes the procedure to be followed by the Magistrate. It is the duty of the Court, before making the order, to find definitely, though in a summary manner, the paternity of child. Chapter XXXVI of the Code of Criminal Procedure is a self contained one and the relief given under it is essentially of a civil nature. It prescribes a summary procedure for compelling a man to maintain his wife or children. The findings of a Magistrate under this chapter are not final and the parties can legitimately agitate their rights in a civil court.

Appeals Nos. 110 and 111 of 1951. Appeals from the Judgment and Decree dated May 6, 1946, of the High Court of Judicature at Calcutta (Biswas and Chakravartti JJ.) in Original Decree No. 43 of 1942 with Civil Rule 399 of 1945, arising out of Judgment and Decree dated June 30, 1941,, of the Second Court of Additional Subordinate Judge, 24 Parganas, in Title Suit No. 63 of 1938. N. C. Chatterjee (Saroj Kumar Chatterjee and A. N. Sinha, with him) for the appellants in Civil Appeal No. 110. Panchanan Ghose (section N. Mukherjee and Benoyendra Prasad Bagehi, with him) for Respondents Nos. I (a) and 1 (b) in Civil Appeal No. 110 and the appellants in Civil Appeal No. I I I. Ram Krishna Pal (guardian ad litem) for responded No. 5 (3) in Civil Appeal No. 110 and No.4 (3) in Civil Appeal No. 111, 156 1952. October27. The Judgment of the court wag delivered by MAHAJAN J. These two connected apeals from the judgment and decree of the High Court of Judicature at Calcutta in appeal from Original Decree No. 43 of 1942 dated the 6th May, 1946, arise out of Title Suit No. 63 of 1938, instituted the 21st September, 1938, in the Court of the Second Additional Subordinate Judge of Alipore, by Rajlakshmi against the Sens and the Dasses for possession of the properties which represent a four anna share of the estate once held by one Raj Ballav Seal. the 8th June, 1870, two days before his death, Raj Ballav Seal, a Hindu inhabitant of the town of Calcutta governed by the Bengal School of Hindu law, executed a will giving authority to his widow Mati Dassi to adopt a son and appointed her and three other persons as executors and trustees of the estate and gave them elaborate directions for the administration and distribution of his extensive properties. Raj Ballav was one of those persons who believe 0in leaving detailed instructions about their property and the manner in which it is to be managed and taken after their death and expect their wishes to be dutifully carried out by those who survive them. How his wishes have been respected by his descendants is now a matter of history. Since the year 1890 this is the eighth or ninth litigation concerning the construction of the testament he made that fateful &ay, and if by any means Raj Ballav could be informed of the result of these litigations and was told that it had been held that he had died intestate, he would surely rise out of the ashes and lodge an emphatic protest against what has happened. Raj Ballav died the 10th June, 1870, leaving him surviving his widow Mati Dassi and three grandsons, who were sons of a predeceased daughter by another wife and one of whom died in 1880 unmarried. The grandsons ' line will be referred to in this judgment as the Sens. On Raj Ballav 's death, Mati Dassi entered 157 into possession of the estate and adopted one Jogendra Nath Seal in 1873 under ' the authority conferred her. Jogendra married Katyayani, and Rajlakshmi, the plaintiff in the suit out of which these appeals arise, is their only child. She was less than one year old when Jogendra died in 1886. Shortly after the death of Jogendra, Mati Dassi adopted Amulya Charan, a brother of Katyayani in further exercise of the authority conferred her. Mati Dassi died in 1899 and the Sens then appeared to have taken possesion of the estate. During the lifetime of Mati Dassi, the two grandsons commenced a suit 22nd July, 1890, against Mati Dassi and the other executors then living, Amulya and Katyayani, for a declaration of the rights of the parties under the will, administration of the estate, accounts and a declaration ' as regardit their quarter share of the net income. Trevelyan J. declared that the grandsons were entitled to an onefourth share of the estate absolutely and directed accounts to be taken. This declaration was granted against Mati Dassi alone, the suit having been dismissed against the other defendants. The two grandsons having taken possession of the whole estate after the death of Mati Dassi, Amulya brought a suit the 9th October, 1901, against them and Katyayani for construction of the will and a declaration that he was the duly adopted son and heir of Raj Ballav and that as such, he was entitled to a three fourth share of the estate and the Sens were entitled only to the remaining one fourth share. By a judgment dated 5th January, 1903, the trial court dismissed the suit the view that under the will the first adopted son had acquired an absolute right, Pitle and interest.in the share of the estate left by the will of his adoptive father and he having left a widow and a daughter, Mati Dassi had no authority to make a second adoption. This decision was affirmed appeal. [Amitlya Charan Seal vs Kalidas Sen(1)]. 13th January, 1903, eight days after the decision of the trial, court dismissing Amulya 's suit, (I) Cal. 361 158 Katyayani commenced suit No. 11 of 1903 against the Sens, Amulya and the receiver appointed in Amulya 's suit, for construction of the will, declaration of title, partition and accounts. In, the plaint as originally filed, Katyayani admitted the title of the Sens to an one fourth share of the estate and claimed only a three fourth share for herself as the widow of Jogendra. The Sens claimed the whole estate for themselves as the heirs of Raj Ballav. They pleaded that the will was not genuine and that even if it was genuine, the bequests in favour of the adopted son and for the worship of the deity were invalid and that even if they were valid, Jogendra having died before attaining the age of 20 years had taken nothing under the will. During the pendency of this suit, the 25th September, 1903, the Sens mortgaged the whole sixteen annas of the estate to one Shib Krishna Das in order to secure a loan of Rs. 7,000. The mortgagee and his representatives in interest will be described in this judgment as the Dasses. Amulya 's appeal against the judgment of the trial court dated 5th January, 1903, was decided in 1905, during the pendency of Katyayani 's suit No. 1 1 of 1903 instituted the 13th January, 1903, and after the Dasses as mortgagees had entered into possession. the 26th September, 1905, after the decision of the High Court in Amulya 's suit, Katyayani applied for an amendment of the plaint so as to include a claim for the whole estate in accordance with that decision. This application was allowed. To this amended plaint no further written statement was filed by the Sens. By a judgment dated 21st December, 1905, the trial Judge decreed the claim of Katyayani for,the whole of Raj Ballav 's estate and a decree for recovery of possession of the whole estate was passed in her favour. It was held that the whole of the corpus of the estate had vested in Jogendra and the provisions of the will whereby a fourth share had been bequeathed to the grandsons were void and ineffectual. The plea of adverse possession and limitation taken by the Sens was abandoned at the trial, 159 Against this decision an appeal was taken to the District Judge. The mortgagee Shib Krishna Das was also added as a party in the appeal. The appeal was compromised and under the compromise Katyayani was to get a six anna share in absolute right in the estate, Kanai, her father, was to get another six anna share for his supposed troubles and expenses in connection with the litigation and each of the Sons a two anna share, their shares to be subject to the mortgage. charge. The compromise decree was passed 9th January, 1907, and the suit was remanded to the trial court in order that a partition might be effected and a final decree passed. A partition was made in due course and final decree was passed 10th September, 1907. On the 18th April, 1907, after the consent decree had been made by the appellate court in Katyayani 's suit, Rajlakshmi, daughter of Katyayani and the next reversioner to the estate of Jogendra, commenced suit No. 59 of 1907 'against the parties to the compromise for a declaration that the compromise and the consent decree were void and inoperative and that they were not binding her. The trial court held that the compromise was binding Rajalakshmi but that she was entitled to a declaration that Katyayani had taken only a widow 's estate 'in the six annas share given to her. appeal by Rajlakshmi, the High Court 8th August, 1910, reversed the trial court 's decree and declared that the consent decree was void and inoperative as against Rajlakshmi and that she was in no way bound by the partition proceedings which had taken place in execution thereof. The appeal was not contested by the Sons but was contested by the representatives of their mortgagees (the Dasses) who asserted the title of their mortgagors to an one fourth share of the estate both under the compromise decree and the will. (Bajlakshmi Dassee vs Katyayani Dassee(1). In the year 1919, two cross suits were commenced by the grandsons and by Katyayani and Rajlakshmi (I) Cal. 160 for recovery of the twelve annas share and the four annas share respectively in the possession of the respective parties. Katyayani brought suit No. 115 of 1919 for recovery of the four anna share against the Sens and the Dasses, while the Sens brought suit No. 112 of 1919 for recovery of the twelve annas share of the estate against Katyayani and Rajlakshmi. Both these suits were dismissed by the trial judge and his decision was affirmed appeal 21st July, 1925. Before the commencement of this suit, the Dasses had brought a suit the foot of their mortgage and had obtained a mortgage decree which was made final 23rd November, 1918. The property described as 2, Deb Lane, Calcutta, forming part of Raj Ballav 's estate and which had ' been allotted under the compromise to the share of the Sens was notified by a declaration under the Land Acquisition Act for acquisition the 16th January, 1921. the 27th April, 1928, Ajit Nath Das, mortgagee, made an application ' claiming the entire amount of compensation money and contended that the mortgagee decree holders were entitled to the whole of it. Rajlakshmi claimed the entire amount as owner of the sixteen anna share of Raj Ballav 's estate. the 7th July, 1928, a joint award was made in favour of 'all the claimants. Rajalakshmi asked for a reference to the court the point of apportionment of compensation by a petition made by her the 18th July, 1928. She asserted that the Sens and the Dasses were not entitled to any portion of the compensation money. Ajit Nath Das, mortgagee, also made an application for reference the 18th August, 1928. A similar petition was made by Jogender Mohan Das. Bholanath Sen filed a statement of the claim 8th June, 1929. A special judge was appointed under the Land Acquisition Act to try the matter. He disallowed Rajlakshmi 's claim and held that the Sens were entitled to the entire compensation money. Both the Sens and the Dasses were represented by their respective counsel and made common cause against Rajlaksbmi. 161 Rajlakshmi appealed to the High Court against the decision of the special judge but without any success. Her appeal was dismissed 8th March, 1935. She preferred an appeal to the Privy Council. This was allowed and Rajlakshmi was declared entitled to the entire compensation money. (Rajlakshmi vs Bholanath Sen) (1). Within two months of the decision of the Privy Council, the suit out of which these appeals &rise was commenced, as already stated, by Rajlakshmi 21st September, 1938, against the Sens and the Dsses for possession of the properties which represented the four anna share of the estate allotted to the Sens, and possession of which was delivered to them in pursuance of the terms of the final decree in suit No. 11 of 1903. A portion of these had since then been purchased by the Dasses in execution of the mortgage decree. This suit was dismissed by the trial judge. Rajlakshmi appealed to the High Court against the dismissal of her suit. The High Court allowed the appeal in part, the judgment and, decree of the trial court in so far as they dismissed the plaintiff 's suit as against the Sens were set aside and the suit was decreed against them and the plaintiff 's title to the properties in suit was declared as against them. It was ordered that she should recover possession from them, as also from defendant 14 as receiver but that her title and possession were subject to the rights of the defendants respondents 3 to 13 (Dasses) to proceed against the properties in execution of their mortgage decree the basis that these properties were in the possession of and dealt with by defendantsrespondents 1 and 2 as representing the four anna share of the estate to which they had title. An enquiry was also ordered as to the amount of the mesne profits. The appeal was dismissed as against respondents 3 to 13, the Dasses. The correctness of this decision has been impugned before us in these appeals by the respective parties to the extent that it goes against them. (I) (1938) 65 I.A. 365. 162 In order to appreciate the contentions raised in the two appeals it is necessary to determine the true scope and effect of the decision of the Privy Council in the land acquisition case of 1928 (Rajlakshmi vs Bholanath Sen) (1). The premises acquired in those proceedings admittedly formed Part of the estate of Raj Ballav Seal, which under the compromise decree of 1907 had by partition fallen to the four anna share allotted to the Sens. There was a triangular contest about the award of the compensation and a joint award was made in their favour after notice to all the parties interested in the property acquired including the mortgagees. That the mortgagees were within the definition of the phrase " person interested" is plain from the language of section 10 of the Act and perhaps it would have been unnecessary to mention this elementary fact by reference to the provisions of the Act had not the High Court thought otherwise. As already stated, the Sens, the Dasses and Rajlakshmi required the question of apportionment of compensation to be referred to the determination of the court and they stated the grounds which their claims were based. The dispute that arose between the parties is apparent the face of those proceedings and in the words of Lord Thankerton who delivered the decision of the Board, the matter in controversy was whether Rajlakshmi was entitled to the compensation money awarded in respect of the acquisition of part of the premises, 2 Deb Lane, in the town of Calcutta as successor to the estate of Raj Ballav Seal of which the said premises formed part. The claim to compensation made by the respective parties was founded the assertion of their respective titles in that part of Raj Ballav 's estate which under the partition decree of 1607 had been allotted to the Sens subject to the charge of the Dasses, and the decision the question of apportionment depended the determination of that title. The land acquisition court had thus jurisdiction to decide the question of title of the parties in the property (I) (1938) 65 I.A. 365. 163 acquired and that title could not be decided except by deciding the controversy between the parties about the ownership of the four anna share claimed by the Sens and Rajlakshmi. The Land Acquisition Court and the High Court appeal held the title of the four annas share proved in the Sens. But their Lordships of the Privy Council held otherwise and found that the Sens had no such title, and that Rajlakshmi alone was entitled to the whole of the estate of Raj Ballav Seat including the four anna share that was in possession of the Sens and which their mortgagees had a charge. This is how their Lordships settled the matter in controversy: "It is important to get a clear view of the position of the estate after the decision of the High Court of 8th August, 1910, the effect of which (inter alia) was to annul the consent decree of the District Court in No. 11 of 1903, and to leave the decree of the Subordinate Judge, dated December 21, 1905, which has been already quoted, as final and binding. This decree declaring Katyayani 's title to the whole estate, was clearly a decree in Katyayani 's favour as representing the whole interests in the estate, and it has rightly been so regarded by both the courts below in the present case; and it formed res judicata in any I question with the Sens. As regards possession of the estate, while the decree made an order for recovery of possession, the possession given under the partition of 1907 continued, the Sens being in possession of the four annas. It seems clear that possession under an agreement which was not binding the reversionary heirs could not avail the Sens in a question with a reversionary heir, whose right to possess could not arise until the succession opened to such heir. " The above is a clear determination of the question of title between the Sens and Rajlakshmi in regard to the four anna share. It was argued behalf of the Sens before the Privy Council that in any case 164 the decision in suit No. 115 of 1919instituted by Katyayani against the Sens and their mortgagees for recovery of the four anna share operated as res judicata the claim of Rajlakshmi. This plea was Inegatived and it was held that the decree in suit No. 115 of 1919 could not and did not affect Rajlakshmi 's right to possession. There can thus be no doubt that the determination of the question of title to this part of Raj Ballav 's estate was within the scope of the land acquisition proceedings and the title was finally determined in those proceedings. In order successfully to establish a plea of res judicaia or estoppel by record it is necessary to show that in a previous case a court, having jurisdiction to try the question, came to a decision necessarily and substantially involving the determination of the matter in issue in the later case. It was at one time a matter of doubt whether the determination of a court to which a matter had been referred by the collector was such a decision and that doubt was resolved by the judgment of the Privy Council in Bamachandra Bao vs Ramachandra Rao(1), which decided that where a dispute as to the title to receive the compensation had been referred to the court, a decree thereon not Appealed from renders the question of title resjudicata in a suit between the parties to the dispute. In that case it was observed as follows: "The High Court appear only to have regarded the matter as concluded to the extent of the co 'mpensation money, but that is not the true view of what occurred, for, as pointed in Badar Bee vs Habib Merican Noordin(2) it is not competent for the court, in the case of the same question arising between the same parties, to review a previous decision no longer open to appeal, given by another court having jurisdiction to try the second case. If the decision was wrong, it ought to have been appealed from in due time. Nor in such circumstances can the interested parties be heard to say that the value of the subject matter (1) (1922) 49 I.A. 129. (2) 165 which the former decision was pronounced was comparatively so trifling that it was not worth their while to appeal from it. If such a plea were admissible, there would be no finality in litigation. The importance of a judicial decision is not to be measured by the pecuniary value of the particular item in dispute. It has been suggested that the decision was not in a former suit, but whether this were so or not makes no difference, for it has been recently pointed out by this Board in Hook vs Administrator General of Bengal(1) that the principle which prevents the same matter being twice litigated is of general application, and is not limited by the specific words of the Code in this respect." In Bhagwati vs Bam Kali(1) an issue was decided in favour of B in a land acquisition proceeding that she was entitled to the whole of the compensation money. In a subsequent suit by another widow, who was also a claimant in the land acquisit ion proceedings, for a declaration that she was entitled to a half share in the estate inherited by her husband and his brothers, it was held that her suit was barred by the rule of res judicata, the District Judge having in the previous proceeding decided that she had no title to the land. In that case part of the property in dispute was, acquired under the Land Acquisition Act and the Collector by his award apportioned the compensation between the widows in equal shares. Both the widows raised the question of title to the compensation. The objections were referred under the Act to the District Judge and the District Judge the issue as to whether Bhagwati was entitled to the entire compensation or whether Ram Kali was entitled to a half, found in favour of Bhagwati. Ram Kali then brought a suit ' against Bhagwati for a declaration of her right to a half share of the whole of the property inherited by the brothers and their mother. The Subordinate Judge held that the suit was barred by res judicala by the decision of the District Judge in the reference under the Land Acquisition Act. The High Court (1) (1921) 48 I.A. 187. (2) (1939) 66 I.A. 145. 166 reversed this decision holding that Ram Kali 's title ,was not the subject matter of the reforence to the ;District Judge and he was not therefore competent to try it. The Privy Council reversed this decision and held that the District Judge did determine the question of the ownership and his decision was binding upon the parties and the matter was res judicata. These two decisions, in our opinion, are conclusive the point of resjudicata raised in the present case and in these circumstances it has to be hold that the question of title to the four anna share was necessarily and substantially involved in the land acquisition proceedings and was finally decided by a court having jurisdiction to try it and that decision(thus operates as res judicata and estops the Sens @ and the mortgagees from re agitating that matter in this suit. We are not now concerned with the question whether the Privy Council was right or wrong. The High Court held that there can be no question that this decision is binding the Sens and concludes them the question of their title as against Rajlakshmi and that there could be no question also that it is binding the mortagees who were parties to the proceeding. In the concluding part of the judgment they observed as follows "Our conclusion, therefore, is that there is nothing in the decision of the Privy Council which can operate as res judicata against the Dasses, either directly or constructively, the question of the title of the Sens to the mortgaged properties. They are bound by the decision so far as it goes: just as the Sens can no longer say that the decision in suit No. 11 ,is not res judicata against them in a question with the plaintiff, both as regards title and the right to possession,so cannot the Dasses say that the decision is not res judicata against the Sens. But their own right to prove the title of the Sens against the plaint iff is in no way affected. This may look anomalous, 'but such anomaly is inherent in the doctrine of res judicata which does not create or destroy title but is only a rule of estoppel," 167 With great respect it seems to us that the, conclusion reached as regards the mortgagees is neither illuminating nor sound. The anomalous result arrived at is account of a wrong approach to the solution of the problem and is not the result of any anomaly inherent in the doctrine of res judicata. The learned Judges posed certain questions and then attempted to answer them in view of the limited provisions of section 11, Civil Procedure Code, which in terms apply only to suits, forgetting for the moment, if we may say so with respect, that the doctrine of res judicata is based general principles of jurisprudence. The questions were: (1) Did the judgment of the Privy Council in the 1928 land acquisition proceedings decide any question as to the right of the mortgagees to hold from the Sens a mortgage of the four anna share, or their right to prove the title of their mortgagors in a question between themselves and the reversioners to Jogendra 's estate ? (2) Could the mortgagees have raised these questions in the land acquisi tion proceedings and even if they could have, are the questions such that they ought to have been raised? It is difficult to appreciate how both these questions were germane to the issue to be decided in the case. Here it is worthwhile repeating what was said by Sir Lawrence Jenkins in delivering the judgment of the Board in Sheoparsan Singh vs Ramnandan Singh(1):" `` In view of the arguments addressed to them, their Lordships desire to emphasize that the rule of res judicata while founded ancient precedent, is dictated by a wisdom which is for all time. 'It hath been well said ' declared Lord Coke, 'interest reipublicaeut sit finis litium otherwise, great oppression might be done under colour and pretence of law ' ; Though the rule of the Code May be traced to an English source, it embodies a doctrine in no way opposed to the spirit of the law as expounded by the Hindu commentators. Vijnaneswara and Nilakantha include the plea of a former judgment among those allowed by law, each citing for this purpose the text of (i) (1916) 43 I.A. 91 at p. 98 168 Katyayana who describes the plea thus: If a person, though defeated at law, sue again, he should be answered, "you were defeated formerly". This is called the ple a of former judgment. And so the application of the rule by the courts in India should , ',be influenced by no technical considerations of form, but by matter of substance within the limits allowed by law. " The binding force of a judgment delivered under the Land Acquisition Act depends general principles of law and not upon section 11 of the Act. If it were not binding, there would be no end to litigation, The mortgagees had been fighting about the title of the mortgagors from the year 1910. When Rajakshmi lost her suit instituted 18th April, 1917, to contest the compromise decree in suit No. 59 of 1907 and preferred an appeal to the High Court, that appeal was not contested by the Sens at all, but was contested by the representatives of their mortgagee who asserted the title of the mortgagors to one fourth share of the estate both under the compromise decree and under the will. In the year 1919 when the two cross suits above mentioned wore commenced, the mortgagees were impleaded as parties and took an active interest in the cases. When the proceedings under the Land Acquisition Act were commenced in the year 1928 a joint award was made in their favour along with the Sens and Rajlaksmi. As parties interested in the property acquired they asked for a reference and gotit. They were represented by counsel before the land acquisition court and got a decision the question of title as to the four anna share of the estate of the late Raj Ballav in favourofthemortgagorsandthemselves. They were impleaded as parties in the appeal preferred by Rajlakshmi to the High Court and before that court also they were represented by counsel and were successful in defending that appeal. They were again impleaded as parties by Rajlakshmi in the appeal preferred by her to the Privy Council. They took active part in the proceedings for leave to appeal and in 169 having the papers prepared for the use of the Privy Council. As a matter of fact, they paid part of the printing cost. Their non appearance before the Privy Council at the time of hearing cannot thus relieve them of the consequence of an adverse decision given against them by, the Privy Council. They had every, right in those proceedings to defend the title of their, mortgagors to the four anna share and they fully exercised their right except that at the last stage, possibly having won in the two courts below, they assumed that the decision in the final court would also be favourable to them and did not appear before the Privy Council. It had been held in a number of cases prior to the amendment made in section 73 of the Transfer of Property Act by Act XX of 1929 that where the property acquired forms part of an estate which is mortgaged for an amount larger than the amount awarded as compensation, the mortgagee is entitled to the whole of the compensation in liqcuidation of the mortgage debt. This view was accepted by the legislature when it added sub sections (2) and (3) to section 73. Sub section (2) is in these terms "Where the mortgaged property or any part thereof or any interest therein is acquired under the Land ' Acquisition Act, 1894, or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgagemoney, in whole or in part, out of the amount due to the mortgagor as compensation. " In view of the provisions of sections 9, 10, 18 and 30 of the Land Acquisition Act, it is evident that if the mortgagee actually intervenes in the land acquisition proceedings and makes a claim for the compensation, and any question of title arises about the right of the mortgagor in respect to the land acquired which affects the claim for compensation, he has every right to protect that title. In the proceedings commenced in 1928 for the acquisition of 2, Deb Lane, Calcutta, as already stated, the mortgagees actually 170 intervened and defended the title of their martgagors but without success. In those circumstances the view taken by the High Court that they had no locus standi to make the claim, as it was not based their own title cannot be sustained because a mortgagee has no other title than the title of his mortgagor. The judgment of the High Court when it says that the Dasses claimed it the footing that they being; creditors of the Sens, with a lien the property, were entitled to receive the money towards the satisfaction of their debt and their claim therefore was not a claim of title, but only a claim to receive the compensation money, is clearly erroneous as the claim could be established only by proving the title of their mortgagors as against Rajlakshmi. We have further not been able to follow the judgment of the High Court when it says that the and acquisition court must be presumed to have dismissed the mortgagees ' claim the proper and legal ground that the mortgagees being mere mortgagees had no locus standi to lay claim for the compensation money. It would have been more accurate if it was said that the land acquisition court having held the title of the Sens proved to the premises acquired, presumed that the compensation money to which the Sons were entitled would be paid in due course to their mortgagees as both of them were sailing together and had a common cause against Rajlakshmi. The High Court further observed that the mortgagees were bound by the decision of the Privy Council so far as it goes against them. We are not able to see to which part of the decision this remark relates. The only decision that the Privy Council gave was the question of the title of the Sens. The award of compensation to Rajlakshmi was a mere consequence of it, and if the Sens had no title in the four anna share of Raj Ballav 's estate, the mortgagees obviously can have no lien any part of the property included in that share. The strangest part of the judgment of the High Court is when it says that the right of the Dasses to prove the title of the Sens against the plaintiff was in no way affected by the Privy Council decision. 171 ,It seems to have lost sight of the fact that that right was advanced by the Dasses more than once. It was exercised by them in the litigation of the year 1907 which ended in the decision of the High Court in 1910. It was exercised by them in the 1919 litigation and was again exercised by them in the land acquisition proceedings of 1928. In these circumstances it appears to us that they had no further right left to establish the title of their mortgagors in the four anna share of Raj Ballav 's estate claimed by them. It may be pointed out that the mortgagees having got a decision in their favour from the High Court, absented themselves before us. One of the representatives of the original mortgagees, Ram Krishen Das, is a minor and was represented by a guardian ad litem appointed for the suit in the court below. He appeared and contested the appeal and urged that the mortgagees had no interest whatever in the property acquired and that they were interested only in realising their debt. This contention is directly opposed to the provisions of section 58 of the Transfer of Property Act and the clear provisions of section 73 which only states the law that prevailed even before then. The result is that we are of the opinion that the High Court was in error in holding that the decision of the Privy Council in the land acquisition case of 1928. was not binding the mortgagees the question of the title of the Sens to the four anna share of Raj Ballav 'section estate as against Rajlakshmi. Mr. Panchanan Ghose for the. Sens made a valiant effort to escape from the effect of the Privy Council judgment in Rajalakshmi vs Bholanath Sen(1) a number of grounds. None of his arguments, however, was convincing and might well have been summarily ,rejected but we think that it is due to Mr. Ghose and ,his long standing at the Bar that the arguments are noticed and met. The first contention raised by :him was that the judgment of the Privy Council could not operate as (i) [1938] 65 I.A. 365. 172 res judicata against the present contention of the Sens and the mortgagees,about the title to the four anna share of Raj Ballav 's estate, because the subject matter of those proceedings was the compensation money, a sum of Rs. 900, and not the property that is the subject matter of the present suit. He argued that when the plea of res judicata is founded general principles of law, that plea can only prevail provided the subject matter in the two cases is identical. It was conceded that such contention could not be sustained under the provisions of section 11 of the Code. In our opinion this argument is untenable and was negatived by their Lordships of the Privy Council in Bhagwati vs Bam Kali(1), cited above, in clear and emphatic terms. In that case, in a regular suit which concerned the rest of the property the plea of res judicata was upheld by reason of the decision in the land acquisition case which concerned another part of the property which had been acquired and for which compensation was payable. The quotation already cited earlier from this decision brings out that point clearly. The test of res judicata is the identity of title in the two litigations and not the identity of the actual property involved in the two cases. It was then argued by Mr. Ghose that the judge who decided the apportionment issue in the land acquisition proceedings of 1928 was a special judge appointed under the Land Acquisition Act and not being a District Judge, the two decisions of the Privy Council. , i.e., Bamachandra Bao vs Bamachandra Rao(2) and Bhagwati vs Bam Kali(1), had no application, as the special judge had no jurisdiction to hear the present suit, while the District Judge in those cases would have jurisdiction to hear the regular suits. It was urged that to substantiate the plea of resjudicata even general principles of law it was necessary that the court that heard and decided the former case should be a court competent to hear the subsequent case. This contention was based the language of (I) [1939] 66 I. A. 145. (2) [1922] 49 I.A. 129. 173 section 11. The condition regarding the competency of the former court to try the subsequent suit is one of the limitations engrafted the general rule of res judicata by section 11 of the Code and has application to suits alone. When a plea of res judicata is founded general principles of law, all that is necessary to establish is that the court that heard and decided the former case was a court of competent jurisdiction. It does not seem necessary in such cases to further prove that it has jurisdiction to hear the later suit. A plea of res judicata general principles can be successfully taken in respect of judgments of courts of exclusive jurisdiction, like revenue courts, land acquisition courts, administration courts, etc. It is obvious that these courts are not entitled to try a regular suit and they only exercise special jurisdiction conferred them by the statute. We have not been able to appreciate the distinction sought to be made out by Mr. Ghose that had this matter been decided by a District Judge, then the decision of the Privy Council would have been res judicata but as it was decided by a special judge the effect was different. The District Judge when exercising powers of a court under the Land Acquisition Act, in that capacity is not entitled to try a regular suit and his jurisdiction under the Land Acquisition Act is quite different from the jurisdiction he exercises the regular civil side. Next it was urged that the decision given by the Privy Council was ex parte, and it had not the force of res judicata unless the subject matter of the two proceedings was identical. Reliance for this proposition was placed certain observations contained in the decision of the House of Lords in NeW Brunswick Rly. Co. vs British,* French Trust Corporation(1). in that case a view was expressed that in the case of a judgment in default of appearance, a defendant is only estopped from setting up in a subsequent action a defence which was necessarily, and with complete precision, decided by the previous judgment, and it (I) (1939] A.C. I. 23 174 was said that if a Writ is issued for a small claim, the defendant may well think it is better to let judgment ,go by default rather than incur the trouble and expense of contesting it and that in such cases the default judgment one bond cannot be used as governing the construction of 992 other bonds even if identical in tenor as it would involve a great hardship were the defendat precluded from contesting the later case. These observations have no apposite. application to the circumstances of the present case where the judgments of the first two courts were given after full contest and then a party defaulted in appearing before the Privy Council after having obtained judgment in his favour in the courts below. A now point was taken for the first time before us which had not been taken in express terms in the written statement and which had not been argued either before the Subordinate Judge or before the High Court. The point was that the present suit of Rajlakshmi was barred by section 47, Civil Procedure Code, inasmuch as she obtained a decree for possession of the whole estate including the four anna share now in dispute in her suit No. II of 1903 and having obtained a decree for possession, her remedy to recover possession of that share along with the twelve anna share was by executing that decree and not by a separate suit. , The plea has no substance in it. The decree given in suit No. 11 of 1903 became unexecutable by reason of the compromise arrived at in appeal in that case in 1907, which compromise was given full effect by actual partition of the property. When that, decree was declared null and void at the instance of Rajlakshmi, it still remained binding inter partes during the lifetime of Katyayani and that was the reason why Katyayani 's suit brought in 1919 for recovery of possession of the four anna share was dismissed. That suit, however, was held to have been instituted by Katyayani for protection of her personal rights and not as a representative of Jogendra 's estate. It was for this reason that the Privy Council in, the 1928 land acquisition case held that it 175 had not the effect of res judicata Rajlakshmis suit claiming title in the four anna share of Raj Ballav 's estate which under the partition decree had gone to the Sens. Katyayani in view of the compromise decree had no right to execute the decree as a different situation had arisen after the decree had been passed. She had a fresh cause of action ' to bring a new suit for possession by setting aside the compromise. This she did but failed. As against Raj lakshmi the plea of section 47 in these circumstances can have no validity. Even as against Katyayani it was untenable and it seems it was for this reason that this plea was never taken either in the earlier suit of 1919 or in the present suit. For the reasons given above this contention of Mr. Ghose also fails. Mr. Ghose raised a question of limitation and urged that Rajlakshmi 's suit was barred by time inasmuch as the cause of action to sue for possession of the four anna share accrued to Jogendra and he having failed to file a suit, both Katyayani and Rajlakshmi must be taken to have lost the title to the part of the property in the possession of the Sens. The premises which this contention is based is erroneous. Jogendra died long before the Sens took possession of the property and therefore Jogendra before his death had no cause of action against the Sens to eject them as they were not in possession. the other hand, the trustees were holding the property his behalf. The pleas of limitation and adverse possession were abandoned by the Sens a former occasion, as already stated in the earlier part of this judgment, and they were negatived by the Privy Council in the land acquisition proceedings. It is evident that the possession of the Sens during the lifetime of Katyayani could not confer any title them as against Rajlakshmi, the next reversioner, whose title to the estate could only arise the death of Katyayani. For the reasons given above we hold that the appeal (No. 111 of 1951) preferred behalf of the 176 Sens has no merits and must fail. It is accordingly dismissed with costs. The appeal preferred by Rajlakshmi against the mortgagees '(No. 110 of 1951) is allowed with costs in all the courts and her title to the property in suit and for possession of the f same is decreed and it is directed that the defendants do deliver Possession of the suit properties to the plaintiff. It is further declared that the plaintiff is entitled to mesne profits from the defendants. An enquiry will be made as to the amount of mesne profits due prior and subsequent to the institution of the suit and there will be a decree for the amount so determined. In conclusion we do express the hope that this judgment will finally conclude the ruinous litigations which have been going in courts since the last 62 years in respect of Raj Ballav 's estate and ingenuity of counsel will no longer be pressed into service to again reopen questions which must now be taken as finally settled. Appeal No. 110 allowed. Appeal No. 111 dismissed. Agent for the appellants in C. A. No. 110 and respondent No. 1 in C.A. No. Ill section C. Bannerjee. Agent for respondents Nos. 1 (a) and (b) in C.A. No. 110 and appellants in C. A. No. Ill: Sukumar Ghose.

Where the right to receive compensation for property acquired in land acquisition proceedings as between rival claimants depends the title to the property acquired and the dispute as to title is raised by the parties and is decided by the Land Acquisition Judge after contest, this decision as to title operates as res judicata in a subsequent suit between the same parties the question of title. The binding force of a judgment delivered under the Land Acquisition Act depends general principles of law and not section 11 of the Civil Procedure Code, and the decision of a Land Acquisition Judge would operate as res judicata even though he was not competent to try the subsequent suit. If a mortgagee intervenes in land acquisition proceedings and makes a claim for compensation, and any question of title arises about the title of the mortgagor in respect to the land acquired which affects the claim for compensation, he has every right to protect that title and if he defends that title and the issue is decided against his mortgagor, the decision would operate as res judicata even as against the mortgagee. Certain premises which formed part of the estate of a de ceased person were acquired in land acquisition proceedings. There was a triangular contest about the right to the compensation money between A and B, two rival claimants to a four annas 155 share in the estate of the deceased, and C, a mortgagee from one of the claimants. The three parties required the question of apportionment to be referred to the Court and a Special Judge who was appointed decided the question of title to the four annas share upon which the right to receive the compensation depended and made an award. The Land Acquisition Judge and High Court found the title in favour of B after due contest between the parties but the Privy Council reversed the decision and decided the question of title in favour of A. In a subsequent suit between the same parties the question of title was again raised:, Held (i) that the decision of the Privy Council the ques tion of title in the land acquisition proceedings operated as res judicata as against B &a well as C, even though the Land Acquisition Judge was a Special Judge who would have had no juris diction to try the subsequent suit; (ii)that the rule of res judicata was applicable even though the subject matter of dispute in the land acquisition proceedings was the compensation money and not the property which was in dispute in the subsequent suit ; (iii)the fact that the mortgagee did not appear at the hearing before the Privy Council was immaterial as the judgments in the first two courts were given after full contest. Ramachandra Rao vs Ramachandra Rao [1922] 49 I.A. 129, and Bhagwati vs Ram Kali [1939] 66 I.A. 14 applied.

Dismissing the defendant 's appeal and affirming the decree in favour of the plaintiffs, the Court. ^ HELD: A presumption of truth attaches to the entries in the Jamabandi for the year 1959 60 showing the defendant respondents as a tenant, in view of the provisions of Section 44 of the Punjab Land Revenue Act. That presumption is no doubt rebuttable, but, in the instant case, no attempt has been made to displace it. [407C D] Further, once that presumption is raised, still another comes to the aid of respondent No. 1 by reason of the rule contained in Section 109 of the Indian Evidence Act, namely, that when two persons have been shown to stand to each other in the relationship of landlord and tenant, the burden of proving that such relationship has ceased, is on the party who so asserts. It may, therefore, be legitimately presumed that the plaintiff continued to possess the land as a tenant till the institution of the suit. [407D E]

The appellants filed three suits (the earliest of the three suits was filed on December 18, 1945) for possession of lands claiming that K, the last owner of the lands died on August 15, 1945. Those suits were dismissed on August 3, 1951, as premature on the ground that the fact of the death of K had not been established. The appellants again instituted three suits in October 1952, December 1952 and May 1953 for the same relief as in the previous suits alleging that the right to sue had ac crued after August 16, 1952, that is, after a period of seven years, under section 108 of Evidence Act; that K died three years before the date. of the filing of the suits; and that they were within time under article 2(b) of the. Schedule annexed to the Punjab Limitation (Customs) Act, 1920 which provides that the period of limitation for a suit for pos session of ancestral immovable property which has been alienated, is three years, if a declatory decree has been obtained, and that period commences from the date on which the right to sue accrues. On appeal, a single Judge of the High Court decreed the suits holding that K having been treated as alive by the High Court when it passed the previous decree in 1951, the conclusion of the lower courts that he had been dead for seven. years before the institution of the suits could not be sustained and also excluded the time spent on the previ ous litigation from 1945 to 1951 under section 14(1) of the Limitation Act. On Letters Patent appeal, the Division Bench held: (1) that the single Judge was in error in ex cluding the time spent on the previous litigation by apply ing section 14(1) of the Limitation Act; (ii) that the words "or other cause of a like nature" occurring in section 14(1) had to be read ejusdem generis with the preceding words "relating to the defects of jurisdiction" and that it was not possible to give the benefit of that provision to the plaintiffs. Dismissing the appeal to this Court (per A.N. Ray, C.J. and Jaswant Singh, J) HELD: (1) Under article 2(b) of the Schedule to the Punjab Limitation (Customs) Act, 1920 in order to be able to succeed the plaintiffs must bring their suits within three years of the accrual of the right to sue (which ac cording to well settled judicial opinion means the accrual of the right to seek relief), namely within three years of the death of K. They had to prove affirmatively that the death of K took place within three years of the institution of the suits. Granting that K has to be presumed to be dead, it cannot be overlooked that under section 108 of the Evidence Act, the precise time of the death is not a matter of presumption but of evidence and the onus of proving that the death took place at any particular time within seven years lies upon the person who claims the right for the establishment of which the proof of that fact is essential. The plaintiffs had not only, therefore, to prove that K had not been heard of for a period of seven years and was to be taken to be dead, but it also lay heavily on them to prove the particular point of time within seven years when K 's death occurred. This they have failed to prove. In the absence of such proof, it cannot be held that the present suits had not been brought within three years of the accrual of the right to sue. [263 D G] 251 Nepean vs Doe D. Knight ; ; , Jayawant Jivarao Deshpande vs Ramachandra Narayan Joshi (A.1.R. 1916 Born. 300), Lalchand Marwari vs Ramrup. Gir (LIII I.A.24; A.I.R. 1926 P.C. 9), Jiwan Singh vs Kuar Reoti Singh & Anr. (A.I.R. 1930 All. 427), Kottappalli Venkates warla vs Kottapalli Bapayya & Ors. (A.I.R. 1957 A.P. 380), Punjab and Ors. vs Natha & Ors. (A.I.R. and Ram Kali & Ors. vs Narain Singh (A.I.R. 1934 Oudh 298 F.B.) referred to. (2) If K had died beyond three years, from the date of the suits, the suits would be barred by limitation because the appellants cannot claim the benefit of section 14 of the Limitation Act 1908. The three important requirements of the section are: (1) that the plaintiff must have prosecuted the earlier civil proceeding with due diligence; (2) the former proceeding must have been prosecuted in good faith in a court which from defect of jurisdiction or other cause of a like nature was unable to entertain it and (3) the earlier proceeding and the later proceeding must be based on the same cause of action. [265 D] (3) The contention that the appeals had been rendered untenable as a result of the amendment made to section 7 of the Punjab Customs Power to Contest) Act 1920 by the Amending Act 12 of 1973 has no force and must be rejected. Section 4 of the Act provides that the Act shall not affect any right to contest any alienation or appointment of an heir made before the Act came into force. This section has been left untouched by the Amending Act of 1973. In the instant case, the alienation was made before the 1920 Act came into force and was not affected by that Act. [261 F H] (4) The words "or other cause of a like nature" in section 14(1) take their colour from the preceding words "defect of jurisdiction" according to the rule of ejusdem generis. Therefore, the defect must be of a character analogous to jurisdiction barring the Court from entertaining the previ ous suit. In the instant case, the Court which tried and dismissed the previous suits as premature did not suffer from inability or incapacity to entertain the suits on the ground of lack of jurisdiction or any other ground analogous to the defect of jurisdiction. The exclusion of the period during which the previous suits were pending, could not, therefore, be allowed to the plaintiffs while computing the period of limitation. [265 E; I 1; 266 A] Bhai lai Kishan Singh vs People Bank of Northern India, I.L.R. , Dwarkanath Chakravarti vs Atul Chan dra Chakravarti (I.L.R. and Palla Pattabhira mayya & Ors. vs Velga Narayana Rao (A.I.R. referred to. [Obiter: The causes of action in the previous suits and in the present suits are also different. And hence the appellants cannot press section 14 into service.] Beg, .J. (Dissenting) The Division Bench of the High Court was wrong in ignor ing the effect of the finding of the single Judge that a new cause of action had arisen within three years before the filing of the plaintiffs ' suits. [281 C] The question of time bar or its removal by resorting to section 14(1) of Limitation Act postulates that a point of time from which limitation could run had been ascertained. As that point could not be the date of the death of K, which was unknown the suits could not be dismisses on that ground. [281 D] (1) The single Judge had sufficiently indicated that the cause of action in the previous litigation was different from the one in the later inasmuch as the facts proved in the later case showing that K must be presumed to be dead could not be and were not set up in the earlier suits. The cause of action had not accrued in 1945. The effect of the judgment in the former suits was that these suits were premature, which is not the case in the suits in appeal. The plaints in the later cases set out the case founded on new facts not in existence at the time of the earlier liti gation and expressly stated why the plaintiffs rely on the presumption of death of K. If the previous suits were dismissed on the ground that they were premature, the cause of action could only, be said to have accrued after their institution. [268 G; 269 C] 252 The findings of the single Judge showed that the. plain tiffs were entitled to the benefit of the presumption laid down by section 108 of the Evidence Act. He found that till August 3, 1951 when the judgment of the High Court in the previous suits was delivered, the position was that the death of K had not been established. This meant that on new facts asserted and proved, K could be presumed dead when the subsequent suits were instituted in 1952 and 1953. This presumption of death having become available to the plain tiffs within. three years of the suits and not before, no occasion for applying section 14 of the Limitation Act could arise. The evidence sought to be given in the previous suits was that K had died on a particular date but the evidence in the subsequent suit was not that he had died on a particular date but that he had not been heard of from August 5, 1945 upto the time of filing of the subsequent suits. [269 H; 270 H] Modi Khalil Khan vs Mahboob Ali Mian, A.I.R. 1949 PC 78 at 86 referred to. (2) (a) If causes of action differ from suit to suit, the accrual of the cause of action can also not be tied down to a particular kind of fact such as the date of actual death of the holder of the property. Once it is held that the causes of action differ for purposes of their accrual, their accrual could not be made to depend on facts of one type only. Facts denoting their accrual must differ from case to case. Proof of date of actual death is conclusive. But, where the basis of the right to sue is presumption of death, the. date; of accrual of the right is the date on which that presumption matures. [271 C] Indian Electric Works Ltd. vs James Montosh & ,Anr. ; followed. Rante Surno Moyee vs Shooshee Mokhee Burmonia & Ors. 12 Moore 's I.A. 244, State of Madras V.P. Agencies & Anr. AIR 1960 SC 1309 at 1310 and Mst. Chand Kour vs Partap Singh, , referred to. (b) The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circum stances which constitute either the infringement or the basis of a right and no more. In a wider and more compre hensive sense it has been used to denote the whole bundle of material facts which a plaintiff must prove in order to succeed. These are all those essential facts without the proof of which the plaintiff must fail in his suit. [272 G] (c) Applying these tests, in the instant case, the causes of action in the earlier and later litigations would be materially different. No cause of action had arisen at all if it is assumed that K had not died at all. K 's death was an essential part of the cause of action. It had to be proved to enable the plaintiffs to put forward their claims to succeed. But proof of the date of death was not essen tial or indispensable for that purpose. It could only become material in deciding whether the right accrued had been extinguished by the law of limitation. Both the narrow and wider sense of the term "cause of action ' would include all those facts and circumstances on the strength of which the plaintiffs urged that they were entitled to the benefit of the obligatory presumption of law contained in section 108 of the Evidence Act. As these were not available to the plain tiffs before the expiry of seven years from August 5, 1945, it was not possible to urge that this cause of action had arisen more than three years before the filing of the suits. Therefore, the date of its accrual could not lie a day earlier than seven years after August 5, 1945 when K was last heard of. [272 G H; 273 A B] (d) It was for the defendants to establish that K was either alive or had died more than three years before the suits were filed. The presumption under section 107 of the Evidence Act could not come to the aid of the defendants when the plaintiffs had established facts necessary to raise the presumption under section 108 of the Evidence Act. [273 E] (e) The suits are not barred by limitation. The plaintiffs discharged their burden as to when the accrual of their cause of action was within the prescribed period of limita tion. If the "media" upon which the plaintiffs rest their cases 253 are different in the previous and subsequent litigations, the causes of action are different. If the alleged date of death of K was the date of accrual of the previous cause of action, the date of accrual of the second could only be something other than the date of death of K, it could not possibly be the same. The other date of accrual could only be subsequent to August 5, 1945 because it was held in the previous suit that the suit was premature on the ground that seven years since K was last heard of had not elapsed then. Since the evidence was that he was last heard of on August 5, 1945, the only possible date of accrual of the subsequent cause of action could be seven years after the date. The suits were filed within three years of that date. [273 H; 274 A C] (3)(a) The term 'right to sue ' occurring in article 2 of Schedule to the Punjab Limitation (Customs) Act 1 of 1920 must be equated with cause of action. " The "date of death" cannot be substituted for the date of accrual of the "right to use". In the Limitation Act the accrual when intended to be tied to the date of some event is specified as the date of that event. In this case, it is not so. It cannot be held that the date of accrual in both sets of suits is one and the same, that is to say, the actual date. of death. [274 D] (b) Wherever the accrual of a right or commencement of a period of limitation, within which a suit must be shown by the plaintiffs to have been brought, could only be estab lished by proving the date of a person 's death, that duty must be discharged by the plaintiffs or the suit will fail. But to carry the doctrine beyond that and to lay down that the date of death must invariably be proved, whenever the question of limitation is raised in such cases must result in stultifying or defeating legal right and wiping out the effects of a statutory presumption. The accrual of a cause of action based on untraceability of the owner could not be said to depend at all on proof of either actual death or the date of actual death of the owner. It accrues as soon as death can be presumed and not a day earlier. [278 D F] (c) It is not in every suit for possession that the com mencement of the date of dispossession must be established by the plaintiffs. It is only in a suit for possession based on the allegation by the plaintiff of his own dispos session that the burden is governed by Art, 142 of the Limi tation Act. [274 G] (d) In the instant ease, the plaintiffs were never in pos session and, therefore,there was no question of their dis possession. It was a pure and simple suit for possession on the basis of title against which the defendants had not even alleged adverse possession. Therefore, there is no need to bring in the actual date of death constructively, as the date of the presumed dispossession or adverse possession has not been asserted anywhere. [275 B] (e) The plaintiffs have asserted and proved that the period of seven years when K was last heard of by those who would in the natural course of events have heard of or about him if he was alive, had elapsed and that their cause of action matured within three years of their suits. Assuming that the concept of adverse possession of the defendants was to be introduced, the legal position is that possession of defendants could not be adverse to K 's reversioners even before K could be presumed to be dead. The defendants them selves had set up. the plea that he must be still deemed to be alive. The plaintiffs could only be required to prove K 's death but not the date of his death or the date of the plaintiffs ' dispossession. Neither cases dealing with recov ery of possession on the plaintiffs ' allegation of their own dispossession nor those where proof of date of death was a necessary statutory duty for showing that the suit was within time; are applicable in these cases. [275 E F] Nepean vs Doe D. Knight (English Reports 150 Exchequer p. 1021), Jayawant Jivanrao Deshpande vs Ramachandra Narayan Joshi, AIR 1916 Bom. 300 & 301. , Lal Chand Marwari vs Mahant Ramrup Git & Anr. AIR 1926 PC 9, Jiwan Singh vs Kuar Reoti Singh & Anr. AIR 1930 All. 427, Kottapalli Venkateswarlu vs Kottapalli Bapayya & Ors. AIR 1957 AP 380 Punjab v Natha AIR 1931 Lab. 582 (FB) & Ram Kali & Ors vs Naraian Singh AIR 1934 Oudh 298 & 299 300, refrered to. 254 (f) It is neither a part of the case of any plaintiff in these cases nor necessary for the success of his case to prove that K died on a particular date or that K died before or after somebody else. The plaintiffs cannot be saddled with the responsibility to prove this date. [279 ,B] (4) The suits were not barred by limitation because the causes of action in the previous litigation and the litiga tion now are different and the subsequent cause of action has arisen within three years before the filing of the suits. Assuming that the suits were filed beyond the period of limitation on the actual basis of their claims the plaintiffs are entitled to succeed because this is a fit case in which section 14(1) Limitation Act could come to the aid of the appellants. They had been asserting repeatedly that the basis of their claim was that although the actual date of death of K could not be proved, yet, he has not been heard of for seven years. That basis having emerged within three years before the filing of the suits, their suits could not be barred by time. If the causes of action did not arise no question of its exceeding by the law of limitation, could emerge. [280 G] The previous suits did not fail for want of jurisdic tion. The delay in bringing the present suits was due to the fact that no court could decree the claim before the cause of action matured. Therefore, the cause of action of a "like nature" to a defect of jurisdiction is present in these cases, since the provision has to be liberally con strued. The defect revealed by the evidence in the latter litigation was that the suits did not lie at all as they were premature. This was a defect reasonably comparable to a want of jurisdiction. [280 A C] India Electric Works Ltd. vs James Mantosh & Anr. ; , followed. (5)(a) If no cause of action could accrue at all unless and until the date of actual death of K was established, there could be no commencement of a period of limitation. The only possible point from which limitation could start framing in these, cases is the date on which seven years expired from the date on which K was last heard of. This was within three years before filing of the suits. [280 D] (b) The issue in the earlier litigation was whether K was actually shown to have died on a particular date. This was quite different from the issue decided now, which was whether K 's whereabouts had remained unknown for seven years so that he could be presumed to be dead. [280 F] ARGUMENTS For the appeliants: The legal presumption under Section 108 was not sought to be raised in the prior suits. It was for the first time raised in the subsequent group of suits instituted in Octo ber, 1952 based on the allegation that Kishan Singh was not heard of since 15th August, 1945. This submission opens the questions (i) when is the presumption of death to be raised and (ii) whether for the purpose of proceedings in which it is raised or any prior proceedings. The presumption is to be raised in the pro ceedings where the question has been raised i.e. the second group of suit. However, there is no presumption as to the time of death of the person whose death is accepted as a result of presumption. The two are distinct matters (i) the legal presumption of death and (ii) the time of death preceding the period when presumption is drawn. The death may be at any time during the preceding period of 7 years the period that has enabled the court to draw presumption of death. The law requires that if one has to establish the pre cise period during these 7 years at which such person died he must do so by evidence. 255 The conclusion of the court of presumption of death based upon disappear ance from 15th August, 1945 cannot be ignored. Death at any time on or after 15th August, 1945 does not in any manner adversely affect the case of the appellants, inasmuch as the parties had instituted suits (of course premature) on 18th December 1945 (other suits some time later decided by a common judgment). If the parties are held entitled to the benefit of deduction of time from 18th December 1945 to 3rd August, 1951, the death of Kishan Singh even if it took place between 15th August, 1945 to any date before 3rd August, 1951 the suit are not barred by limita tion. On the pleading of the parties it cannot be assumed that the presumption of death would justify acceptance of date of death, any time prior to 15th August, 1945. The period of limitation for the suit for possession was 3 years The defendants had not pleaded in the prior suit that the suit was. barred by limitation as instituted. In other words it was not alleged that he had died at any time 3 years prior to the institution of the suit (18th December, 1945). Actually death has not been admitted even on 15th August, 1945. The trial Court and the District Judge held the suit to be time barred not on the ground that his death had taken place at a period exceeding 3 years from the date of the institution of the first suit. They have apparently not ignored the possibility of death having taken place during the period between 18th December, 1945 to 3rd August., 1951. They have held the. suit to be time barred because it was considered that the appellants are not entitled to deduct the stated period spent in the prior suits. Even if it is considered that death had taken place during this period or any time after 15th August, 1945 or during the 3rd August to 31st October, 1952 the suits are not time barred. Preliminary objection was raised by the respondents as to the effect of the Punjab Customs (Power to Contest) Amendment Act, 1973 (Punjab Act 12 of 1973). It was urged that the Act had come into force on 23rd January, 1973, it has retrospective operation and bars all suits to contest alienation also including the suits for possession of the property following a declaratory decree. It was urged that the appeals are barred as a consequence of repeal of the provisions of Punjab Act II of 1920. The contention as to the effect of Act 12 of 1973 is not correct. The previous law on the subject of right to contest alienation of immovable property and the limitation of suits relating to alienation of ancestral immovable property is regulated by two Acts. (1) Punjab Act II of 1920 Described an Act to restrict the powers of the descendents or collaterals to contest an alienation of immovable property; and (2) Punjab Act I of 1920 Described as an Act to amend and consolidicate the law govern ing the limitation of suits relating to alien ations of ancestral immovable property etc. The present Act 12 of 1973 repeals section 6 of Act II of 1920. It also amends section 7 of the aforesaid Act. Effect of the repeal of section 6 and amendment of section 7 merely is that the right to. contest vesting in the collaterals upto 5th degree has been done away with and the suit to contest alienation of ancestral property has been taken away. Under the previous existing law an alienation of non ances tral property could not be contested. Act I of 1920 has also not been repealed. The limitation provided for a suit for possession i.e. 3 years is still an existing provision of the Act. It is obvious that the legislature has retained 256 Act I of 1920 unrepealed so that the benefit of the decrees may be available to all persons under section 8 of the Act and the period of limitation may be retained as before. The effect of the declaratory decree in that the alienation is not binding against the inheritance. The succession never remains in abeyance. A person entitled to succeed to the last male holder is entitled to sue for possession on the basis of right to succession to the property. For the respondent: The principle of res judicata would be immediately attracted if the plaintiffs allege the "same cause of ac tion" and seek the exclusion of the time because the earlier suit was tried on merits by a competent court having jurisdiction and was dismissed holding that 'plaintiff failed to prove that Kishan Singh died on 15th August, 1945. This finding would be binding between the parties in the subsequent suits as they have been given after recording the evidence and a full trial by, the competent court having jurisdiction. Therefore, the plaintiff is barred by principles of res judicata from alleging the accrual of right to sue before the filing of the earlier suits as the same would be res judicata. The plaintiff is estopped from alleging the accrual of same cause of action, therefore, no question of exclusion of time inasmuch as the principle of section 14 of exclusion of time arises only if the cause of action is the same. Section 14 uses the words "the proceeding is founded upon the same cause of action". The language of section 14 of the Limitation Act by using the words "same cause of action" makes it very clear that time can be excluded for the same cause of action only if the earlier suit is dismissed be cause of defect of jurisdiction or other cause of a like nature. On the interpretation of section 14 also the time cannot be excluded for the reason that the earlier suit was dis missed as premature and the new suit was filed on a new cause of action, namely, Alla Singh and his line became extinct on the death of Kishan Singh on 15th of August, 1952 i.e. after the expiry of ' seven years from 15th August, 1945. Since a new cause of action was alleged after the dismissal of previous suit, section 14 cannot be attracted. The words "is unable to entertain it" mean that it is not able to admit the matter for consideration on merits i.e. the. inability is of a formal nature but it does not mean inability to grant relief. From the decisions one principle is deducible that section 14 of the Limitation Act has to be construed harmoniously with section 11 C.P.C. Section 11 C.P.C. bars the filing of a fresh suit on the same cause of action whereas section 14 of Limitation Act allows time to be. excluded in the previous litiga tions was "founded on the same cause of action ' '. Section 12 says that if plaintiff is barred under section 11 C.P.C. to file suit for any cause of action then plaintiff cannot file suit for a such cause of action in any court to which C.P.C. applies. If both. section 14 of Limitation Act and principles of res judicata are to operate then, it should be held that to apply section 14 the earlier suit had been dismissed on a technical ground of jurisdiction, or other cause of a similar nature, court is unable to entertain it without going into the merits of the case. In the present case earlier suits were dismissed because the plaintiff failed to prove the death of Kishan Singh and the extinction of line of Alia. The words used by the High Court at page 302 line 37 are: "The suit had been rightly dismissed as premature" do not mean that Kishan Singh was alive but it means that plaintiffs have not proved the accrual oj cause of action namely the extinction of line of Alia. In these circumstances it is submitted that the suits were not dis missed on the ground of defect of jurisdiction or other cause of similar nature. for which the court was unable to entertain it. Section 14 of the Limitation Act does not apply. Plaintiffs have failed to prove the date of death of Kishan Singh and the extinction of line of Alla within 3 years of the filing of the suit. Suits are therefore time barred. 257 Sections 107 and 108 of the Evidence Act do not help the appellants. Rule of evidence in section 107 is that it is for the plaintiff to prove the death of a person if he was alive within 30 years and section 108 says that burden of proving that a man was ,dive is on the person who alleges he is alive if it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had even alive. In this case the plaintiffs appellants have alleged that Kishan Singh was last heard of on 15th August, 1915 and singe then he is not heard of. The onus is, there fore, on the plaintiff appellant under section 107 of Evidence Act 10 prove as to when Kishan Singh died. It is; Submit ted that Kishan Singh may have died on any date either before 15th August, 1945 or immediately theereafter. There is no presumption that he died on the expiry of 7 years from the date he was last heard. The date of death is thus required to prove by the plaintiff like any other fact. The suits are, therefore, barred by time and should be dismissed plaintiffs ' failure to prove death of Kishan Singh within three years of the filing of suits.

In an ejectment suit under the Delhi & Ajmer Rent Control Act, 1952, the trial Judge decreed the suit and on appeal under s.34 of the Act the Additional District Judge confirmed 934 the decision. The Act did not provide for a second appeal, and under section 35 (1) a revision was filed against the Order of the Additional District Judge The single Judge of the Punjab High Court following a previous decision of the same High Court, was of opinion that in assessment as all the evidence was not considered it was competent for him to reconsider the concurrent findings of the courts below. The question is whether the High Court in exercise of its revisional powers is entitled to re assess the value of the evidence and to substitute its own conclusions of facts in place of those reached by the courts below. ^ Held, (per Sinha, C. J., Hidayatullah and shah, JJ, that though section 35 of the Delhi and Ajmer Rent Control Act is worded in general terms, but it does not create a right to have the case re heard. The distinction between an appeal and revision is a real one. A right to appeal carries with it right of re hearing on law as well as fact, unless the statute conferring the right to appeal limits the re hearing in some way. The power to hear a revision is generally given to a superior court so that it may satisfy, itself that a particular case decided according to law. The phrase "according to law" in section 35 of the Act refers to the decision as a whole, and is not to be equated to errors of law or of fact simplicitor. All that the High Court can see is that these has been no miscarriage of justice and that the decision is according to law in the sense mentioned. per Kapur, J. The power under section 35 (1) of the Act of interference by the High Court, is not restricted to a 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 when in the question of the High Court the decision is erroneous on a question of law which affects the merits of the case or decision is manifestly unjust the High Court is entitled to interfere. Bell and Co. Ltd. vs Waman Hemraj approved.

By a notification dated November 2, 1864, a piece of land forming part of the Panchannagram Estate which was permanently settled under Regulation 1 of 1793, was acquired by the Government of Bengal at the instance of the justices of the Peace for the Town of Calcutta, which was a corporation established under the provisions of the Calcutta Municipal Act, 1863, and the justices were required to pay the compensation payable to the proprietor of the Estate. After the acquisition, the proprietor of the Estate was granted abatement of land revenue assessed on the Estate to the extent of Rs. 386 7 1, being the proportionate land revenue on the land acquired. On October 27, i865, the Government called upon the justices to pay a sum of Rs. 7,728 13 8, which represented the amount capitalised at 20 years ' purchase of land revenue attributed to the area acquired. On December 5, i870, the Secretary of State executed in favour of the justices of the Peace a conveyance of the land acquired, which stated, inter alia, that it was "ever free and clear and for ever discharged from all Government land revenue whatever or any payment or charge in the nature thereof to the end and intent that the said land may be used for a public purpose, namely, for the conservancy of the town." On January 23, 1880, a lease of the land was granted by the Justices to the predecessors in title of the appellant, under which the lessee had the right to carry on cultivation with the aid of sewage. Before the income tax authorities the appellant claimed that the agricultural income derived by him from the land was not liable to income tax, but the claim was rejected on the ground that on the payment of a lump sum in 1865 the liability to pay land revenue was redeemed and no land revenue was demanded thereafter; consequently, the income derived from the land was not agricultural income within the meaning of section 2(1) of the Indian Income tax Act, 1922, and was not, therefore, exempt from tax. The appellant 's contention was that the redemption only saved the justices from liability for payment but did not affect the assessability of the land to revenue under Regulation 1 of 1793. 599 Held, that by the down payment of a lump sum in 1865 the entire land revenue to be recovered from the land was redeemed and the land became free from land revenue assessment in perpetuity, as completely as if there was no assessment. Thereafter, the land could not be said to be assessed to land revenue within the meaning of section 2(1) of the Indian Income tax Act, 1922, and, consequently, the income derived therefrom could not be considered to be agricultural income under that section. The Collector of Bombay vs Nusserwanji Rattanji Mistri and others; , , distinguished.

The respondents were the successful bidders at an auction of forest coupes in the State of Bihar. As they defaulted in making the security deposit in respect of three coupes, the agreements with them were determined by the Conservator of Forests. The respondents thereupon filed a writ petition in the Calcutta High Court instead of in the Patna High Court and followed it up with several applications one after another both in the Calcutta and Patna High Courts towards the forest department from preventing unauthorised removal of forest produce by the respondents. Vexed by the manner in which the respondent was filing repeated applications and procuring orders of a learned single judge of the High Court necessitating the filing of as many appeals to the Division Bench, the State of Bihar moved an application for committing the respondents for contempt of court, alleging that, by their conduct the respondents were obstructing the administration of justice and interfering with the due course of judicial proceedings. The Patna High Court held that the respondent 's conduct was most unscrupulous and that there was gross abuse of the process of the Court, which could in certain circumstances amount to contempt of Court. However, the High Court dismissed the application on the ground that it was barred by limitation as it was filed beyond the period of one year prescribed by section 20 of the Contempt of Courts Act. The High Court held, on a reading of the contempt application that the material allegation in regard to the contempt committed by the respondents was that relating to the filing of the application dated April 7, 1971 before the single judge of the Calcutta High Court to circumvent and nullify the order dated March 29, 1971 of the Division Bench of the Patna High Court. As the contempt application dated 18 7 73 in OCM 7/73 was filed more than a year later, it was timeshared. In regard to the allegation relating to the filing of the petition dated December 14, 1972, the High Court observed that there was no specific allegation that any contempt of court was committed by the filing of this application. Though the respondents tendered an unconditional apology, its acceptance was not considered as the application was found to be beyond time. Hence the appeal under section 19 of the . Allowing the State appeal, the Court ^ HELD: 1. Every abuse of process of the court may not necessarily amount to contempt of Court. Abuse of process of the Court calculated to hamper the due course of a judicial proceeding or the orderly administration of justice is a contempt of Court. [1178A B] 2. It may be that certain minor abuses of the process of the court may be suitably dealt with as between the parties by striking out pleadings under the 1173 provisions of order 6, Rule 16 C.P.C. or in some other manner. But on the other hand, it may be necessary to punish as a contempt, a course of conduct which abuses and makes a mockery of the judicial process and which thus extends its pernicious influence beyond the parties to the action and affects the interest of the public in the administration of Justice. [1178B C] 3. The public have an interest, an abiding and a real interest and a vital stake, in the effective and orderly administration of justice, because, unless justice is so administered, there is the peril of all rights and liberties perishing. The Court has the duty of protecting the interest of the public in the administration of justice and, so, it is entrusted with the power to commit for contempt of Court, not in order to protect the dignity of the Court against insult or injury as the expression "Contempt of Court" may seem to suggest, but to protect and to vindicate the right of the public that administration of justice shall not be prevented, prejudiced, obstructed or interfered with. [1178C E] Offutt vs U.S.p.11, quoted with approval. It is not necessary that every allegation made should be followed then and there by the statement that the allegation established a contempt of Court Paragraph 29 of the application to commit the respondents for Contempt expressly referred to the application dated December 14, 1972 and paragraph 31 state that all the facts and circumstances enumerated in the petition established that the respondents were obstructing and interfering with the due course of administration of justice. [1180F H] In the instant case: (a) the respondents began the "game" by filing an application under article 226 of the Constitution of India in the Calcutta High Court, whereas in the normal course one would expect such an application to be filed in the Patna High Court within whose jurisdiction the subject matter of dispute was situate. A justifiable prima facie inference from this circumstance may be that the application was not bonafide but intended to harass and oppress the opposite party. [1179C E] (b) Thereafter application after application was filed before the learned single Judge, everyone of them designed to circumvent, defect or nullify the effect of the orders of the Division Benches of the Calcutta High Court and Patna High Court. The order of the Division Bench of the Calcutta High Court directing the respondents to furnish security in a sum of Rs. 1,55,000/ was never complied with. The order of the Division Bench of the Patna High Court directing the respondents to furnish security of immovable property in a sum of Rs. 75,000/ and to deposit in cash or furnish bank guarantee in a sum of Rs. 50,000/ was also never complied with. Instead, an order was obtained from the single Judge of the Calcutta High Court restraining the State of Bihar from continuing the money suit in the Court of the Subordinate Judge, Palamau. When this order was set aside by the Division Bench, an attempt was made to circumvent all earlier orders by obtaining an order of the single Judge that they may be allowed to deposit a sum of Rs. 60,000/ in cash and permitted to remove the stock from the forest Coupes. When the State of Bihar moved the learned Subordinate Judge, Palamau for a direction to auction the attached stock, the respondents moved an application on December 14, 1972, and obtained an order from the Single Judge of the Calcutta High Court staying the proceedings in the 1174 money suit in the Court of the Subordinate Judge, Palamau. In considering the question whether the filing of the application dated December 14, 1972, amounts to a Contempt of Court, the Court must take into account the whole course of the continuing contumacious conduct of the respondents from the beginning of the 'game '. Clearly, not a single application made to the Single Judge was bonafide. Every application was a daring 'raid ' on the Court and each was an abuse of the process of the Court. The application dated December 14, 1972 praying that the proceedings in the money suit in the Court of the Subordinate Judge should be stayed was made despite the fact that earlier, on January 10, 1972 the Division Bench of the Calcutta High Court had expressly permitted the proceedings in the money suit to go on. The application of the respondents clearly showed that they were intent upon obstructing the due course of the proceedings in the money suit in the Court of the Subordinate Judge, Palamau and to obstruct the administration of justice by abusing the process of the Court. [1179GH, 1180A E] (c) The application dated December 14, 1972 was an abuse of process of the Court, calculated to obstruct the due course of a judicial proceeding and the administration of justice and was therefore, a criminal contempt of Court; [1180H, 1181A] (d) though the respondents had expressed an unconditional apology to the Patna High Court, the conduct of the respondents is so reprehensible as to warrant condemnation by the imposition of a sentence. [1181A]

The respondent 's father, W, who owned the suit property died in 1933. His widow, who succeeded to the estate, gifted the property to her daughter, the respondent. The appellants filed a suit as reversioners of W questioning the gift. The "it 'as decreed and the decree was confirmed on appeal. After coming into force of the on 17 6 1956, the widow again made a gift of the same, lands to the respondent. She died in 1963. The appellants then filed the suit, out of which this appeal arose, for possession of the lands. alleging that the second gift was void. The trial court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as in the High Court on second appeal. On appeal by special leave to this Court, Dismissing the appeal, HELD (1) Following the decisions of the Privy Council in Moniram Kolita vs Keri Kolitani, I.L.R. 5 Calcutta 776 at 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, (infra) the words "dying intestate in Sec. 8 of the Act must be interpreted as merely meaning "in the case of intestacy of a Hindu male" and to place this interpretation on the Act is not to give retrospective effect to its provisions. The reference is only to the fact of 'intestacy. The material point of time is the date when the succession opens, namely, the death of the widow. Thus this propositions follow (i) Succession opens on the death of the limited owner, and (ii) the law then in force would govern the succession. [532D G] Moniram Kolita vs Keri Kolitani, I.L.R. 5, Calcutta 776 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, followed. Eramma vs Verritpatina, , explained and distinguished. Banso vs Charan Singh, A.I.R. 1961, Punjab 45 and Kuldip Sing vs Karnail Singh, A.I.R. 1961, Punjab, 573, approved. Kempiah vs Giriganima, A.I.R. , overruled. Renuka Bala vs Aswini Kumar A.I.R. 1961, Patna 498 and Sam pathkumari N. Lakshmi Ammal, A.I.R. 1963 Madras, 50, distinguished. (ii)Succession to W 's estate in the present cage opened when his widow died and it would have to be decided on the basis that W died in 1963 when his widow died. in that case succession to his estate would have to be decided on the basis of section 8 of the . The accepted position under the Hindu law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day. If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of the death of the limited owner it is only the law in force at the time of the death of the limited owner that should govern the case. To hold that the old Hindu law applies to such a case is to allow your imagination to boggle. [533 A C, G H] Eastend Dwellings Co. Ltd. vs Finsbury Borough Council, , 132, per Lord Acsquit and Venka tachalam vs Bombay Dyeing & Mfg. Co. Ltd., ; , referred to. The reversioners ' right being a mere spes successions there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from 529 the fact that it does not amount to giving retrospective operation to section 8. Of course,, if the property had already vested in a person under the old Hindu Law, it cannot be divested. We can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Act. In the view we have taken it is section 8 of the Act that applies and not the Customary Law.[534C D,E F.535G]

The respondent was the Ruler of the erstwhile State of Khandapara which merged in the State of Orissa on August 1, 1949. Article 3 of the Agreement of Merger guaranteed that "the Raja shall be entitled to full ownership, use and enjoyment of all his private properties". The Orissa Merged States ' (Laws) Act, 1950 extended the Orissa Tenant 's Protection Act, 1948 to the merged areas. In 1951 the respondents evicted certain tenants. The tenants applied to the Revenue Officer under the 1948 Act for being restored to possession on the allegations that the respondent was their landlord and that he had unlawfully evicted them. The Revenue Officer allowed the applications and directed restoration of possession. The respondent filed a petition under article 226 of the Constitution in the High Court for quashing the orders of the Revenue Officer contending, (1) that the application of the provisions of the 1948 Act to his private properties violated the guarantee given under the Agreement, (2) that article 363 Of the Constitution barred the Court from dealing with any dispute arising out of the Agreement, and (3) that the 1948 Act did not apply to him as he was not a landlord. The High Court accepted these contentions and quashed the proceedings taken under the 1948 Act: Held, that the extension of the 1948 Act did not affect the full ownership, use and enjoyment of his properties guaranteed to the respondent under the Agreement. The provisions of the Agreement only protected his rights to the properties declared to be his private properties so that they could not be claimed at anytime thereafter as State properties. The guarantee given under the Agreement could not be absolute but could only be co extensive with the right to acquire, hold and dispose of property which is guaranteed to all citizens under article 19(1)(f) of the Constitution. State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of 136 1068 Darbhanga, and Visheshwar Rao vs The State of Madhya Pradesh, , followed. Held, that the jurisdiction of the Courts to entertain the applications under the 1948 Act, was not barred by article 363 Of the Constitution. The dispute between the appellants and respondent was not a dispute which arose out of the Agreement of Merger, and so was not covered by article 363. Held further, that the respondent was a landlord to whom the provisions of the 1948 Act applied. Whatever may have been the definition of the terms landlord and tenant in SS. 2(C) and (g) of the 1948 Act the definitions contained in section 7(a) of the 1950 Act, made the appellants 'the tenants ' and the respondent 'the landlord ' in regard to the lands in question.

Appeal No. 263 of 1956. Appeal from the judgment and decree dated January 6, 1953, of the Madras High Court in A. section Appeal No. 7 of 1949. M. C. Setalvad, Attorney General of India and Naunit Lal, for the appellants. 100 780 A. V. Vimanatha Sastri and B. K. B.Naidu, for respondent No. 1. M. B. K. Pillai, for respondent No. 2. 1961. February 9. The Judgment of the Court was delivered by GAJENDRAGADKAR,J. This appeal has been brought to this Court with a certificate granted by the Madras High Court and it arises from a suit filed by the appellants Mallesappa and Chenna Basappa against their uncle Mallappa, respondent 1 and granduncle Honnappa, respondent 2, for partition. According to the plaint, the family of the appellants and respondent 1 was an undivided Hindu family until the date of the suit, and respondent 1 was its manager. The ancestor of the family was Desai Mallappa. He had three sons, Kari Ramappa who died in 1933, Virupakshappa who died long ago and Honnappa, respondent 2. Kari Ramappa had four sons Guru shantappa (died 1913), Bandappa (died 1931), Mallappa (respondent 1) and Veerabhadrappa (died 1927). Gurushantappa married Parvathamma; the two appellants are the sons of Bandappa, their mother being Neelamma. They were born in 1926 and 1929 respectively. Their case was that respondent 1 who has been the manager of the family for many years has been trying to deprive them of their legitimate share in the property and refused their request for partition, and so they had to file the present suit. According to them, in the property of the family they and respondent 1 were entitled to half share each. To the plaint were attached the schedules describing the several items of property. Schedule A consisted of items 1 to 163 which included houses and lands at Jonnagiri. Schedule B described the movables while Schedule C included items 1 to 35 all of which had been acquired by the family under a document exhibit B 32. It is in respect of all these properties that the appellants claimed their half share and asked for a partition in that behalf. This claim was resisted by respondent 1 principally on the ground that in 1929 Ramappa, the father of 781 respondent 1 and the grandfather of the appellants had effected a partition of the joint family properties between respondent 1 and his elder brother Bandappa who is the appellants ' father. That is how, according to respondent 1, the appellants ' claim for partition was untenable. In this way he pleaded separate title to all the properties in suit. On these pleadings the learned District Judge, who tried the suit, framed eight issues; two of these related to the question regarding the status of the family. He found that the plea of partition made by respondent 1 was not proved, and accordingly he declared that the appellants were entitled to half share in the properties of the family and passed a preliminary decree for partition. According to the learned judge, the appellants were entitled to their half share in the items of property described in Schedule A excluding items 63, 64, 65, 86 and 151 and items in paragraph 14(d) of the written statement of respondent 1 as well as items of property described in Schedules B and C. This decree was passed on November 22, 1948. The said decree was challenged by respondent 1 by his appeal before the Madras High Court. He urged that the trial court 's finding as to the status of the family was erroneous, and he pleaded that in any case the appellants were not entitled to any share in the properties at Jonnagiri, items 4 to 61, as well as the properties acquired under exhibit B 32. The first argument was rejected by the High Court, but the second was upheld. In the result the decree passed by the trial court was confirmed except in regard to the said two categories of properties. It is this appellate decree which is challenged before us by the learned Attorney General on behalf of the appellants. In order to appreciate the contentions raised before us it would be necessary to recapitulate briefly the findings concurrently recorded by the courts below in respect of the plea of partition set up by respondent 1. These findings afford a background in the light of which the pleas raised before us would have to be considered. It appears that respondent 1 relied on several documents in support of his plea that there 782 was a partition effected by Ramappa in 1929. The trial court repelled this argument and observed that from 1937 respondent began to do mischief. The transfer of patta in 1937 on which respondent 1 relied was entirely his work and the appellants ' mother Neelamma had not been consulted and had given no consent to it. In the opinion of the trial court respondent 1 through his agents whom he examined as witnesses in the suit (D. Ws. 2 and 14) managed the family lands, arranged to pay cist for them and manipulated entries in the revenue record purporting to show that Neelamma had paid the said cist as pattadar. Neelamma was an illiterate and Gosha woman and it appeared that a certain amount of coercion had been practised on her as well as deception in persuading her to execute the original of exhibit B 10 which contained the recital that the house there described had fallen to the share of Neelamma 's husband at a prior partition. The trial court was satisfied that the said recital had been fraudulently made and the 'document had not been read to Neelamma at all. The demeanour of respondent 1 in the witness box was also criticised by the trial judge when he observed that he did not impress the trial judge as a truthful witness, and in his opinion he was a powerful and influential man in the village who was able to do a number of things as he wished and so it was not surprising that he was able to get a number of witnesses to speak to separate enjoyment of a few items of land by the appellants ' mother. When the question of status of the family was reagitated before the High Court it felt no hesitation in confirming the conclusions of the trial court in regard to the general conduct of respondent 1, the documents brought into existence by him, and the unfair manner in which he had dealt with the appellants ' mother. For the reasons set out by the High Court in its judgment " and also for the various reasons put forward by the learned District Judge in his exhaustive judgment " the High Court agreed with the learned judge that the alleged partition of 1929 had not been proved. Thus the dispute between the parties has to be considered 783 on the basis that until the date of the institution of the suit the family was an undivided Hindu family with respondent I as its manager. The first point which has been raised before us by the learned Attorney General relates to items 4 to 61 at Jonnagiri. These properties originally belonged to Karnam Channappa. He died in 1904, and in due ' course the said property devolved upon his widow Bassamma who died in 1920. Bassamma left behind her three daughters Channamma, Nagamma and Veeramma. Channamma married Ramappa, and as we have already indicated the couple had four sons including the appellants father Bandappa and the first respondent Mallappa. It is common ground that the properties at Jonnagiri had been obtained by Channamma by succession from her father and were held by her as a limited owner. The appellants ' case was that after Channamma obtained these properties by ,succession she allowed the said properties to be thrown into the common stock of other properties belonging to her husband 's family, and so by virtue of blending her properties acquired the character of the properties belonging to her husband 's family; in other words, the appellants ' claim in respect of this property is based on the principle of blending or throwing into the com mon stock which is recognised by Hindu law. The trial court relied on some transactions adduced by the appellants and upheld the plea that Channamma 's properties had become joint family properties in which the appellants had a half share. The High Court has reversed this finding, and it has held that the transactions on which the appellants relied do not prove blending as known to Hindu law. That is why the appellants ' claim to these properties has been rejected by the High Court. Before considering the appellants ' case in regard to ,/these properties it is necessary to enquire whether the doctrine of blending can be invoked in such a case. Is this doctrine based on any Sanskrit Text of Hindu Law? According to the decision of the Privy Council in Shiba Prasad Singh vs Rani Prayag Kumari Debi (1). (1) (1932) L.R. 59 I.A. 331. 784 this doctrine is based on the text of Yagnavalkya and the commentary of Mitakshara; the text of Yagnavalkya reads thus: " In cases where the common stock undergoes an increase, an equal division is obtained " (1). In his commentary on this text Vijnyaneshwara has observed as follows: " Among unseparated brothers, if the common stock be improved or augmented by any one of them through agriculture, commerce or similar means, an equal distribution nevertheless takes place; and a double share is not allotted to the acquirer " (2). Sir Dinshah Mulla, who delivered the judgment of the Privy Council in the case of Shiba Prasad Singh (3) has observed that the words of Yagnavalkya mean that " if a member of a joint family augments joint property, whatever may be the mode of augmentation, the property which goes to augment the joint family property becomes part of the joint family property, and he is entitled on a partition to an equal share with the other members of the family, and not to a double share, as in some other cases dealt with in the preceding verses. This is the placitum on which the whole doctrine of merger of estates by the blending of income is founded " (p. 349). It would thus be seen that according to this decision the doctrine of blending or throwing into the common stock is based on the text just quoted. With very great respect, however, the text of Yagnavalkya and the comments made by Vijnyaneshwara on it do not appear to have any relation to the doctrine of blending as it has been judicially evolved. The context of the discussion both in the text of Yagnavalkya and in the commentary clearly shows that what is being discussed is the acquisition of property by a coparcener with the use of the family stock; in other words, taking the benefit of the family stock and making its use if a coparcener through trade, agriculture or any other means augments the initial or original family stock, the augmentation thus made is treated as forming part of the original stock and an accretion to it, and in this augmentation the acquirer is not given any extra share for his special exertions. (1) Ch. 1, sect. 4, 30. (2) Mitakshara, ch. 1. sect. (3) (1932) L.R. 59 I.A. 331. 785 This position is clarified by the comments made by Sulapani. Says Sulapani: " that an equal division is here specifically ordained; for in a partnership with a common stock, the difference in the gains of each individual member is not to be taken into account at the time of partition. " Vijnyaneshwara observes that this text is intended to be an exception to the text of Vasishtha which allows two shares to the acquirer and which is cited in the Mayukha (1). It would thus be clear that the relevant text and the commentary are not dealing with a case where the separate property of a coparcener independently acquired by him is thrown into the common stock with the deliberate intention of extinguishing its separate character and impressing upon it the character of the joint family property. The subject matter of the discussion is addition to the common stock made by the efforts of a coparcener with the assistance of the common stock itself. Therefore, in our opinion, the said text cannot be treated as the basis for the doctrine of blending as it has been judicially evolved. It is, we think, unnecessary to investigate whether any other text can be treated as the foundation of the said doctrine since the said doctrine has been recognised in several decisions and has now become a part of Hindu law. In Rajani Kanta Pal vs Jaga Mohan Pal (2) the Privy Council held that " Where a member of a joint Hindu family blends his self acquired property with property of the joint family, either by bringing his self acquired property into a joint family account, or by bringing joint family property into his separate account, the effect is that all the property so blended becomes a joint family property." The question which falls for our decision is: Does this principle apply in regard to a property held by a Hindu female as a limited owner? In our opinion, it, is difficult to answer this question in favour of the; appellants. The rule of blending postulates that a;, coparcener who is interested in the coparcenary property and who owns separate property of his own may, (1) The Vyavahara Mayukha, Pt. 1, by Vishvanath Narayan Mandlik, 215. (2)(1923) L.R. 50 I.A. 173. 786 by deliberate and intentional conduct treat his separate property as forming part of the coparcenary property. If it appears that property which is separately acquired has been deliberately and voluntarily thrown by the owner into the joint stock with the clear intention of abandoning his claim on the said property and with the object of assimilating it to the joint family property, then the said property becomes a part of the joint family estate ; in other words, the separate property of a coparcener loses its separate character by reason of the owner 's conduct and get thrown into the common stock of which it becomes a part. This doctrine therefore inevitably postulates that the owner of the separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property. There can be no doubt that the conduct on which a plea of blending is based must clearly and unequivocally show the intention of the owner of the separate property to convert his property into an item of joint family property. A mere intention to benefit the members of the family by allowing them the use of the income coming from the said property may not necessarily be enough to justify an inference of blending; but the basis of the doctrine is the existence of coparcenary and coparcenary property as well as the existence of the separate property of a coparcener. How this doctrine can be applied to the case of a Hindu female who has acquired immovable property from her father as a limited owner it is difficult to understand. Such a Hindu female is not a coparcener and as such has no interest in coparcenary property. She holds the property as a limited owner, and on her death the property has to devolve on the next reversioner. Under Hindu law it is open to a limited owner like a Hindu female succeeding to her mother 's estate as in Madras, or a Hindu widow succeeding to her husband 's estate, to efface herself and accelerate the reversion by surrender; but, as is well known, surrender has to be effected according to the rules recognised in that behalf. A Hindu female owning a limited estate cannot circumvent the rules of surrender 787 and allow the members of her husband 's family to treat her limited estate as part of the joint property belonging to the said family. On first principles such a result would be inconsistent with the basic notion of blending and the basic character of a limited owners ' title to the property held, by her. This aspect of the matter has apparently not been argued before the courts below and has not been considered by them. Thus, if the doctrine of blending cannot be invoked in regard to the property held by Channamma, the appellants ' claim in respect of the said property can and must be rejected on this preliminary ground alone. However, we will briefly indicate the nature of the evidence on which the plea of blending was sought to be supported. It appears that in 1921 a deed of maintenance was executed in favour of Gurushantappa 's widow Parvathamma by the three surviving brothers of Gurushantappa. This deed was attested by their father Kari Ramappa. It is clear that this deed includes some of the lands which Channamma had acquired by succession to her father (exhibit A 10). Subsequently, on July 5, 1923, some additional properties belonging to Channamma were charged to the said maintenance (exhibit A 11). It also appears that pattas in respect of the same lands belonging to Channamma were obtained in the names of the members of the family; and consequently, the said pattas were shown in the relevant revenue papers. Broadly stated, that is the nature of the evidence on which the plea of blending rests. It is obvious that even if the doctrine of blending were applicable it would be impossible to hold that the transactions on which it is sought to be supported can lead to the inference that Channamma did any act from which her deliberate intention to give up her title over the properties in favour of the members of her husband 's family can be inferred. It is not difficult to imagine Channamma 's position in the family. If her husband and her sons dealt with her property as they thought fit to do Channamma may not know about it, and even if she knew about it, may not think it necessary to object 788 because she would not be averse to giving some income from her property to her sons or to her widowed daughter in law. As we have already pointed out, the conduct of the owner on which the plea of merger can be invoked must be clear and unequivocal, and the evidence about it must be of such a strong character as to justify an inference that the owner wanted to extinguish his title over the property and impress upon it the character of the joint family property. Besides, as we will later point out, Channamma executed a deed of surrender in 1938 and the said document is wholly inconsistent with the plea that she intended to give up her title to the property in favour of her husband 's joint family. However, this discussion is purely academic since we have already held that the principle of blending cannot be invoked in respect of the limited estate held by Channamma. Therefore, we must hold that the High Court was right in rejecting the appellants ' claim in respect of the properties in Jonnagiri. That takes us to the properties in Schedule C in respect of which the trial court had decreed the appellants ' claim and the High Court has rejected it. This property has been obtained by respondent 1 as a result of the decree passed in O. section No. 5 of 1940. The property originally belonged to Virupakshappa, and in O. section No. 5 of 1940 respondents 2 and 1 claimed a declaration against the two widows of Virupakshappa, their daughter and certain alienees. The declaration claimed was that the wills of Virupakshappa therein specified were invalid and inoperative and that the respondents had reversionery right to Virupakshappa 's estate after the lifetime of his widows and daughter. A further declaration was also claimed that alienations and gifts specified in the plaint were invalid beyond the lifetime of the widows and the daughter of Virupakshapna. This suit ended in a compromise decree, and it is common ground that the properties in Schedule C came to the share of respondent 1 by this compromise decree. The question which has been argued before us in respect of these properties is whether or not the appellants 789 are entitled to a share in these properties. The appellants contend that respondent 1 had joined respondent 2 in the said suit as representing their undivided family and the properties acquired by him under the compromise decree passed in the said suit has been allotted to him as representing the whole of the family. On the other hand, respondent 1 contends that he joined respondent 2 in his individual character and the decree must inure for his individual benefit. It is clear that at the time when the said suit was filed respondent 2 was a presumptive reversioner and not respondent 1 ; but it appears that respondent 2 wanted the help of respondent 1 to fight the litigation, and both of them joined in bringing the said suit. It is common ground that respondent 2 asked Neelamma whether she would like to join the litigation. Respondent 2 has stated in his evidence that Neelamma was not willing to join the said litigation and respondent 1 has supported this version. The High Court thought that the evidence of Neelamma was also consistent with the story set up by respondent 1. That is one of the main reasons why the High Court held that the decree passed in the said suit did not enure for the benefit of the family. In assuming that Neelamma supported the version of respondent 1 the High Court has obviously misread her evidence. This is what Neelamma has stated in her evidence: " Defendants 1 and 2 came to me at the time of filing their suit and said that the expenses are likely to be heavy and that minors ' properties would not be wasted. 1 said 1 had no objection and gave my consent." The High Court has read her evidence to mean that she was not prepared to waste the properties of her minor sons and so she refused to join the adventure, and in doing so it thought that the statement of respondent 2 was that the minors ' properties should not be wasted, whereas according to the witness the said statement was that the minors ' properties "would" not be wasted. It would be noticed that it makes substantial difference whether the words used were " would not " or " should not. " 790 We have no doubt that on the evidence as it stands the inference is wholly unjustified that Neelamma refused to join respondents 1 and 2. Besides, as we have already pointed out, the evidence of respondents 1 and 2 have been disbelieved by both the courts, and in fact the conduct of respondent 1 whereby he wanted to defeat the claims of his nephews has been very strongly criticized by both the courts. Therefore, we feel no hesitation in holding that the trial court was right in coming to the conclusion that respondents 1 and 2 consulted Neelamma and with her consent the suit was filed and was intended to be fought by the two respondents not for themselves individually but with the knowledge that respondent 1 represented the undivided family of which he was the manager. If that be so, then it must follow that the decree which was passed in favour of respondent 1 was not for his personal benefit but for the benefit of the whole family. In this connection it is necessary to bear in mind that respondent 1 has not shown by any reliable evidence that the expenses for the said litigation were borne by him out of his pocket. It is true that both the courts have found that respondent 1 purchased certain properties for Rs. 600/ in 1925 (exhibit B 4). We do not know what the income of the said properties was; obviously it could not be of any significant order; but, in our opinion, there is no doubt that where a manager claims that any immovable property has been acquired by him with his own separate funds and not with the help of the joint family funds of which he was in possession and charge, it is for him to prove by clear and satisfactory evidence his plea that the purchase money proceeded from his separate fund. The onus of proof must in such a case be placed on the manager and not on his coparceners. But,, apart from the question of onus, the evidence given by respondent 1 in this case has been disbelieved, and in the absence of any satisfactory material to show that respondent 1 had any means of his own it would be idle to contend that the expenses incurred for the litigation in question were not borne by the joint 791 family income. Therefore, apart from the fact that Neelamma was consulted and agreed to join the adventure on behalf of her sons, it is clear that the expenses for the litigation were borne by the whole family from its own joint funds. This fact also shows that the property acquired by respondent 1 under the compromise decree was acquired by him as representing the family of which be was the manager. The result is that the view taken by the High Court in respect of the properties in Schedule C must be reversed and that of the trial court restored. That leaves a minor point about three items of property, Serial Nos. 63, 64 and 65, in Schedule A. These items of property form part of Jonnagiri property, and we have already held that the appellants cannot make any claim to the whole of this property. It appears that though the trial judge passed a decree in favour of the appellants in respect of Serial Nos. 4 to 61 in Schedule A, he did not recognise the appellants ' share in the three serial numbers in question because he held that they were not part of the joint family property but belonged exclusively to respondent 1. It also appears that these properties originally belonged to the joint family of the parties but they were sold by Kari Ramappa and his two brothers to Channappa as long ago as 1898. That is how they formed part of Channappa 's estate. Both the courts have found that the sale deed in question was a real and genuine transaction, and they have rejected the appellants ' case to the contrary. Respondent 1 claims these items under a deed of surrender executed in his favour by Channamma (exhibit B. 3) on December 5, 1938. This document is accepted as genuine by both the courts and it is not disputed that the surrender effected by it is valid under Hindu law. Indeed this document is wholly inconsistent with the appellants ' case that Channamma wanted to convert her separate properties into properties of the joint family of her husband. Therefore, there is no substance in the appellants ' argument that they should be given a share in these three items of property. 792 The result is the appeal is partly allowed and the decree passed by the High Court is modified by giving the appellants their half share in the properties described in Schedule C. The rest of the decree passed by the High Court is confirmed. In the circumstances of this case the parties should bear their own costs. ' Appeal allowed in part.

The rule of blending in Hindu Law as evolved by judicial decisions can have no application to a property held by a Hindu female as a limited owner. That rule postulates a coparcener deliberately and intentionally throwing his independently acquired property into the joint family stock so as to form a part of it. Although it is unnecessary now to investigate whether there is any other text on which that rule could be founded, it is quite clear that the text of Yagnavalkya in a different context and the commentary thereupon by Vijnyaneshwara, relied on by the Privy Council in this connection, can have no relation to the said rule. Shiba Prasad Singh vs Rani Prayag Kumari Debi (1932) L.R. 59 I.A. 331, disapproved. Rajanikanta Pal vs Jaga Mohan Pal (1923) L.R. 50 I.A. 173, relied on. Consequently, where in a partition suit certain immovable properties acquired by a Hindu female from her father as a limited owner were claimed to form part of the joint family property of her husband by virtue of the said rule: Held, that the claim must fail. Held, further, that a Hindu female owning a limited estate cannot circumvent the rules of surrender and allow the members of her husband 's family to treat her limited estate as part of the joint family property of her husband. Before the said rule can be invoked, it must be shown that the owner wanted to extinguish his title to the property in question and impress upon it the character of joint family property.

A decree dated September 2, 1938, in a suit for partition of joint Hindu family property awarded a house to the share of one J and his four minor sons. J failed to execute the decree. On November 23, 1949, an application was made by the appellants, the four sons of J, for execution of the decree stating that three of them had been minors till then and one of them was still a minor and so no question of limitation arose. The respondent objected that the application was barred under section 7 of the Indian Limitation Act. The appellants contended that section 7 did not apply to a partition decree and that section 7 was no bar as j could not have given a valid discharge of the liability under the decree in view of the provisions of 0. 32 of the Code of Civil Procedure. Held, that the application for execution was barred by limitation. J, the managing member of the family could have given a discharge of the liability under the partition decree by accepting possession on behalf of his minor sons without their consent and so time ran against them under section 7 from the date of the decree. Order 32, rr. 6 and 7 were no bar to j giving a discharge of the liability under the decree as it was neither a case of receipt of any money or movable property nor was there any question of entering into an agreement or compromise on behalf of the minors. Ganesha Row vs Tuljaram Row (1913) L.R. 40 1.A. 132, Parmeshwari Singh vs Ranjit Singh, A.I.R. 1939 Pat. 33 and Letchmatsa Chetty vs Subbiah Chotty, Mad. 920, referred to. 876

Respondents, predecessor Behara Venkataramanayya Patro executed two deeds dated 30 8 1939 and 25 8 1942 in favour of one Sambangi Thavitinaidue, who was then a sitting tenant of the property. In 1951 the mortgagor filed a suit for redemption of the mortgages and obtained a preliminary decree on 31 12 1952. Subsequently, the mortgagor died and the present respondents were brought on record as his legal representatives. On 21 10 1963 the respondent filed an application for passing a final decree by way of ascertainment of the amount due and for delivery of possession upon deposit of entire dues so ascertained. The application was resisted by the appellants on several grounds. According to them, on redemption, relationship of landlord and tenant would revive which needed to be protected and the delivery should be of symbolical possession only. The learned trial judge allowed the application but on an appeal preferred, the Additional District Judge Srikakulam took a contrary view relying upon Varada Bangar Raju 's case AIR (1965) A.P. 86 The respondents, therefore, preferred a second appeal and the learned Single Judge of the A.P. High Court relying upon a subsequent decision in P. Satyanarayana 's case ILR set aside the decision of the first Appellate Court. Letters Patent Appeal preferred by the tenant mortgagees to the Division Bench of the High Court failed and hence this appeal by Special Leave to this Court. Allowing the appeal, the Court ^ HELD:1: 1 There can be no merger of a lease and a mortgage, even where the two transactions are in respect of the same property. [655C] 1:2 It is well settled that for a merger to arise, it is necessary that lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain 652 outstanding. In the case of a lease, the estate that is outstanding in the lessor is the reversion, in the case of a mortgage, the estate that is outstanding is the equity of redemption of the mortgagor. Accordingly, there cannot be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. Even, if the rights of the lessee and the rights of the mortgagee in respect of a property were to be united in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage, would be outstanding in the owner of the property and accordingly, there would not be a complete fusion of all the rights of ownership in one person. [655D F] Shah Mathurdas Maganial & Co, vs Naogappa Shankarappa & ors A.I.R followed. Narayana Dogra Shetty vs Ramchandra Shivram Hingne , approved. Whether upon redemption of usufructuary mortgage a tenant mortgagee could be directed to deliver actual or physical possession of the mortgaged property to the lessor mortgagor and whether the original relationship of landlord and tenant would revive upon redemption of usufructuary mortgage by a tenant mortgagee in possession of the mortgaged property by delivering possession to the lessor mortgagor, will depend upon whether there was an implied surrender of the lessee 's right when the usufructuary mortgage was executed which in turn depends upon what was the intention of the parties at the time of the execution of the mortgage deed in favour of the sitting tenant to be gathered from the terms of and conditions of the mortgage transaction in light of the surrounding circumstance of the case. [656C D 655G H; 656A] 2:2 In the instant case, the only effect of the execution of usufractutary mortgage deeds was that the lessee 's right were kept in abeyance and they revive upon redemption of the mortgage. [658E] The mortgage deed does not mention whether on redemption physical possession is, to be delivered or symbolical possession is to be delivered to the mortgagor. [657H] During the currency of the mortgage the liability to pay rent to the lessor mortgagor (albeit to be discharged by adjustment) is kept alive. If any thing such a term clearly runs counter to any implied surrender of the lessee 's right. There is no term fixed for redemption of mortgage property which mean that it was open to the mortgagor to redeem the mortgagor at any time that is to say even within a very short time and if that be so a sitting tenant cultivating the lands under a lease, who has obliged his lessor by advancing monies to him to tide over his financial difficulties would not give up his right as a lessee no sooner redemption takes place, coupled with a fact that the mortgage deed keeps alive the lessee 's liability to pay rent during the currency of the mortgage clearly suggests that no implied surrender was intended by the parties.

The members of the family of the plaintiff who belonged to the Saurashtra community had constructed a Mandapam on land of which they were the owners. There were a Garbha Griha in front of the mandapam, stone idols called Dwarabalakas on either side and implements necessary for offering puja in the mandapam. But there were no Dwajasthamba, Balipeeda or Gopuram. The authorities under the Madras Hindu Religious Endowments Act, 1927, held that the mandapam was a public temple within the meaning of the Act. A suit filed for a declaration that it was a private temple was decreed by the trial court, but in appeal, the High Court held that it was a public temple, on the grounds that, the members of the public had been worshipping at the shrine without let or hindrance, and that the temple was being run only by contributions and by benefactions obtained from members of the public. Allowing the appeal to this Court, HELD : (1) According to the definition in the Act a public temple is a place by whatever designation known used as a place of public religious worship and dedicated or used as of right by the Hindu community or a section thereof as a place religious worship. [592C] The Saurashtra community maintained a tradition of having private temples. in the present case, the management and control over the mandapam was at all times with some or other members of the plaintiff 's family. The trial court rightly approached the evidence, oral as well as documentary on the principle that once the private character of the temple was established stronger proof was necessary to hold that the temple was subsequently dedicated to the public. The evidence produced by the parties was carefully considered and analysed, and, in discussing the evidence, the trial court gave detailed reasons for accepting or rejecting the evidence of a particular witness. [587C E; 590F] The trial court held that thee was no satisfactory evidence that any donations had ever been collected from members of the public; that there was no evidence to establish that the deity was ever taken out in procession or that any person who was not a member of the 'family had ever performed any religious festival in the temple; and that the case set out by the defendant in the pleadings that there had been user of the temple by members of the Saurashtra community was inconsistent with the evidence produced on their behalf to the effect that any member of public, whether a Saurashtra or non Saurashtra, had a right to worship therein. [587H; 588A C] (2)The High Court was in error in reversing the findings of the trial Court. No attempt whatsoever was made by the High Court to discuss the reasons which the trial court had given for not accepting the evidence of the defence witnesses. In the matter of appreciation of evidence if the 585 trial court had given cogent and detailed reasons for not accepting the testimony of a witness, the appellate court, in all fairness to it, ought to deal with those reasons before proceeding to form a contrary opinion. Apart from this, the High Court did not consider the evidence produced by the plaintiff (appellant) without which matters could not be properly appreciated or explained. The conclusions of the trial court receive support from the entire material on record, and this Court is not in a position to know on what grounds the High Court disagreed with the reasons which prevailed with the trial court for not relying on the evidence of the witnesses produced by the respondents. [589F H; 590A] (3) The High Court also erred in not attaching importance to the following matters : (a) the origin of the temple had been proved to be private, (b) the management had remained throughout in the members of the appellant 's family, (c) the absence of any endowed property and (d) the absence of Dwajauthamba or Nagara bell or Hundial in the temple. [592H; 593A B] (4) The origin of the temple, the manner in which its affairs were managed, the nature and extent of the gifts received by it, the rights exercised by devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors which go to establish whether a temple is public or private. In the present case,the mandapam had somephysical characteristics and persons which are generally found in a public temple. It was also published that persons who did not belong to appellant 's family used to worship at the temple and make offerings therein. There were also some jewels and other articles in the temple. But the determination of the question whether the temple was public or private did not depend on some facts or set of facts alone. The entire evidence, both documentary and oral, had to be considered as a whole. [573B E] Babu Bhagwan Din & Others vs Gir Har Saroop & Ors. 67 I.A. 1, applied. Goswami Shri Mahalaxmi Vahuji vs Rannchboddas Kalidas & ors. ; , , followed. Mundancheri Koman vs Achuthan Nai & Ors., 61 I.A. 405 and Mad. ras Hindu Religious Endowments Board vs V. N. D. Ammal, , referred to.

M, a Hindu belonging to the Brahmin community in the Amritsar District of Punjab, instituted a suit for the possession of a half share in the property left by his natural paternal grandfather. His father had predeceased him, but another son of his grandfather was alive. He had been adopted away in a different family but he claimed that according to the custom of his community in the district he was entitled to get his share in the estate of his natural grandfather. The based his claim on the principle of representation that he, stepped into the shoes of his natural father. Held, that under section 5 of the , the law applicable to Hindus in Punjab in respect of questions regarding succession and other matters referred to in that section, is Hindu law in the first instance, but where a custom different from Hindu law is proved then the rights of the parties would be governed by that custom; and whosoever asserts a custom at variance with Hindu law has to prove it, though the quantum of proof required in support of the custom which is general and well recognised may be small while in other cases of what are called special customs the quantum may be larger. Held, further, that in the Amritsar district of Punjab amongst Brahmins and Khatri s, a son given away in adoption can succeed to the property of his natural father if there is no other son of the natural father, but if there is another son he cannot succeed. Held, also, that in the present case neither under Hindu law nor under the customary law of Punjab could M succeed to the property of his natural grandfather.

In a suit for partition of immovable property filed in the Court of Munsiff Parappanangadi in the year 1938 that Court passed a preliminary decree for partition on the 18th February, 1940. The parties to the suit took no further interest in the matter for more than two decades. In the meantime according to the order of the High Court of Kerala dated December 22, 1956 refining the territorial limits of the Courts of Munsiffs functioning in district Calicut, of which the Court of Munsiff at Parappanangadi was one, the suit property came under the territorial jurisdiction of the Munsiff 's Court at Manjeri. The plaintiff on the 18th January, 1966 filed an application praying that a final decree the suit be passed. Defendant No. 12 immediately took an objection that the Manjeri Court had no territorial jurisdiction to hear the application and that the matter should have been agitated in the Court of Munsiff at Parappanagadi. The objection was overruled by the Manjeri Court which proceeded to partition the property metes and bounds and ultimately passed a final decree in that behalf on 9th July, 1968. An appeal filed against the final decree by defendant No. 12 failed, but he succeeded before learned single Judge of the Kerala High Court who ruled that it was only the Parappanangadi Court that had the territorial jurisdiction to entertain the application and the final decree was set aside. Hence the appeal by special leave. Allowing the appeal, the Court ^ HELD: 1:1. In order that an objection to the place of suing may be entertained by any appellate or revisional Court, the fulfilment of the following three conditions is essential, according to the provisions contained in sub section (1) of section 21 of the Code of Civil Procedure: (i) The objection was taken in the Court of first instance; (ii) it was taken at the earliest possible opportunity and in case where issues are settled, at or before such settlement; (iii) there has been a consequent failure of justice. [185 F G] 1:2. In the present case conditions Nos. 1 and 2 are no doubt fully satisfied; but before the two appellate Courts below could allow the objection to be taken, it was further necessary that a case of failure of justice on account of the place suing having been wrongly selected was made out. Since the respondents failed to point out even before this Court that a failure of justice had occurred by reason 184 of Manjeri having been chosen as the place of suing, the provisions of sub section (1) of section 21 of the Code of Civil Procedure made it imperative for the District Court and the High Court not to entertain the objection, whether or not it was otherwise well founded. [185 H, 186 A C]

As per the decree in a partition suit dated August, 18, 1909 Motabhai and two sons of Mohanbhai being two predecessors in interest of the plaintiffs respondents were burdened with the responsibility of paying an yearly maintenance allowance of Rs. 42/ to Bai Vajia appellant on Magsher Sud 2 of every year. The decree further provided that in the event of default in payment of such allowance continuing for a period of a month after the due date, Bai Vajia would be entitled to take possession of the land allotted to them under the decree viz. Survey Nos. 31, 403, 591, 611, 288 and 659/3 in lieu of the maintenance awarded to her and would enjoy the income thereof without however being competent to sell, mortgage, bequeath, gift or otherwise transfer the same. The decree declared that any alienation made by Bai Vajia in contravention of the direction given by the decree in that behalf would be void. By clause 8 of the decree Motabhai and sons of Mohanbhai were also deprived of the right of alienation of the land during the lifetime of Bai Vajia. Default having been made in the payment of maintenance to her according to the terms of the decree, the appellant, took out execution and obtained possession of the lands in question, which she continued to enjoy till October 21, 1963 when she made a sale of Survey No. 31 in favour of one D. P. Desai. The sale was challenged by the plaintiffs in Civil Suit No. 110/66 which was decreed by the trial Court. The District Court in first appeal confirmed it and the High Court in second appeal upheld the decree of Bai Vajia. Allowing the appeal of the Legal Representative by special leave. the Court. ^ HELD: 1. A combined reading of sub sections (1) and (2) of Section 14 of the and the Explanation following sub section (1) makes it clear, that sub section (2) does not operate to take property acquired by a Hindu female in lieu of maintenance or arrears of maintenance (which is property specifically included in the enumeration contained in this Explanation) out of the purview of sub section (1). [311 D E] 2. For the applicability of sub section (1) of Section 14 two conditions must coexist namely. (1) the concerned female Hindu must be possessed of property; and 292 (2) such property must be possessed by her as a "limited owner". If these two conditions are fulfilled, the sub section gives her the right to hold the property as a full owner irrespective of the fact whether she acquired it before or after the commencement of the Act. [309 D F] The Explanation declares that the property mentioned in sub section (1) includes both movable and immovable property and then proceeds to enumerate the modes of acquisition of various kinds of property which the sub section would embrace. Two such modes are "in lieu of maintenance or arrears of maintenance", and "any such property held by her as Stridhana" immediately before the commencement of the Act. It, therefore, follows that the Legislature in its wisdom took pains to specify all kinds of "Stridhana" in the Explanation and declared that the same would form "property" within the meaning of that word as used in sub section (i). This was done "to achieve a social purpose by bringing about change in the social and economic position of women in Hindu Society". It was a step in the direction of practical recognition of equality of the sexes and was meant to elevate women from a subservient position in the economic field to a pedestal where they could exercise full powers of enjoyment and disposal of the property held by them as owners, untrammelled by artificial limitations placed on their right of ownership by a society in which the will of the dominant male prevailed to bring about a subjugation of the opposite sex. It was also a step calculated to ensure uniformity in the law relating to the nature of ownership of 'Stridhana '. This dual purpose underlying the Explanation must be borne in mind and given effect to when the section is subjected to analysis and interpretation, and sub section (2) is not to be given a meaning which would defeat that purpose and negative the legislative intent, if the language used so warrants. A D] 3. It is true that it is only some kind of "limited ownership" that would get enlarged into full ownership and that where no ownership at all vested in the concerned Hindu Female, no question of the applicability of subsection (1) of section 14 of the Act, would arise. [306 B C] 4. A plain reading of sub section (1) of section 14 of the Act makes it clear that the concerned Hindu female must have limited ownership in property, which limited ownership would get enlarged by the operation of that sub section. If it was intended to enlarge any sort of a right which could in no sense be described as ownership, the expression "and not as a limited owners", would not have been used at all and becomes redundant, which is against the well known principle of interpretation of statutes that the Legislature does not employ meaningless language. [306 H, 307 A] Eramma vs Veerappanna and Ors., ; Mangal Singh and Ors. vs Srimati Rattno & Anr., ; ; reiterated. Limited ownership in the concerned Hindu female is thus a sine qua non for the applicability of sub section (1) of section 14 of the Act. In a case where this condition is fulfilled the Hindu female represents the estate completely and the reversioners of her husband have only a spes succession is i.e. a mere chance of 293 succession which is not a vested interest and a transfer of which is a nullity. The widow is competent to protect the property from all kinds of trespass and to sue and be sued for all purposes in relation thereto so long as she is alive. Ownership in the fullest sense is a sum total of all the rights which may possibly flow from title to property, while limited ownership in its very nature must be a bundle of rights constituting in their totality not full ownership but something less. [308 E H] When a widow holds the property for her enjoyment as long as she lives, nobody is entitled to deprive her of it or to deal with the property in any manner to her detriment. The property is for the time being beneficially vested in her and she has the occupation, control and usufruct of it to the exclusion of all others. Such a relationship to property falls squarely within the meaning of the expression "limited owner" as used in sub section (1) of Section 14 of the Act. [308 H, 309A] 6. In the instant case: Bai Vajia became a full owner of the land in dispute under the provisions of sub section (1) of section 14 of the Act and that sub section (2) thereof has no application to her case, the land having been given to her as a limited owner and in recognition of her pre existing right against property. So long as she lived, she was to have full enjoyment of and complete control over the land, barring any right to alienate it. Such a right was also taken away from Motabhai and two sons of Mohanbhai. The arrangement meant that whatever rights existed in relation to the land during the life time of Bai Vajia were exercisable by her alone and by nobody else. Not even the said three persons could deal with the land in any manner whatsoever, and if they did, Bai Vajia had the right to have their acts declared null and void during her life time. After the land was made over to her she became its owner for life although with a limited right and therefore only as a limited owner. Under the decree the land vested in Motabhai and sons of Mohanbhai only so long as they were not dispossessed of it at the instance of Bai Vajia in accordance with the terms stated therein. As soon as Bai Vajia took possession of the land, no rights of any kind whatsoever in relation thereto remained with them and thus they ceased to be the owners for the span of Bai Vajia 's life. [311 G H, 312 A D] V. Tulasamma and Ors. vs Sesha Reddy, [1977] 3 S.C.R. 261; discussed in extenso and followed.

Under Section 4 of the Land Acquisition Act, 1894 a notification was issued by the petitioners proposing to acquire the land of the respondents for construction of houses by the Tamil Nadu Housing Board, constituted under section 3 of the Madras State Housing Board Act, 1961. The respondents challenged the impugned notification in a writ petition, which was allowed by the Single Judge of the High Court holding that the public purpose mentioned in the notification was too vague in absence of details relat ing to the scheme for which the acquisition was sought to be made, and consequently the land owners could not effectively avail of the benefits under section 5A of the Land Acquisi tion Act by filing objection. This order was affirmed by the Division Bench of the High Court. The State the petitioners filed this Special Leave Petition contending that the notification had adequately described the nature of the public purpose by mentioning the proposed construction of residential buildings and the respondents ought to have filed their objections under section 5 A instead of filing the writ petition; that the procedure in regard to the preparation of the scheme has to await the conclusion of the land acquisition proceeding; that the land acquisition proceeding should not be condemned as pre mature on the ground that the scheme has not been framed. The respondents contended that in view of the provi sions of the Housing Board Act a proceeding for land acqui sition can be commenced only after a scheme under the Act is framed, which has not been done in the present case. The land acquisition proceeding, being pre mature has been rightly quashed. 376 On the question whether the acquisition proceeding could De initiated only after the framing, of the proposed scheme and not earlier, dismissing the Special Leave Peti tion of the State, this Court, HELD: 1.01. The procedure prescribed for preparation of a scheme indicates that before it can be finalised, full publicity has to be given inviting objections; and in case of objections, the same have to be duly considered before granting sanction. Further, if anybody is still aggrieved, he has a right of appeal to the State Government. It is only after this stage is over that the scheme becomes final and enforceable. [378F] 1.02. Section 39 of the Madras State Housing Act, 1961 while enumerating the matters to be included in the scheme, specifically mentions acquisition of land in clause (a). If the acquisition is contemplated as a subject matter of the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included. [379F] 1.03. The acquisition of the land is a part of the execution of the scheme itself. Since the acquisition is included in the scheme the process of execution of the scheme starts immediately when steps for acquisition are taken. [381A B] 1.04. If the notification under section 4 under the Land Acquisition Act is published without waiting for the scheme, it will not be possible for the land owners to object to the proposed acquisition on the ground that the land is not suitable for the scheme at all, and therefore does not serve any public purpose, or that another piece of land in the area concerned, is far more suitable, leading to the possi ble conclusion that the proposed acquisition is mala fide. The provisions of the Housing Board Act also suggest the same. [381 DF] 1.05. It will be practical and consistent with common sense to have the scheme finalised before starting an acqui sition proceeding. A proceeding ' under the Land Acquisition Act read with section 70 of the Madras Housing Board Act, can be commenced only after framing the scheme for which the land is required. The notification issued under section 4 hi the present case must, therefore, be held to be pre mature, and it was rightly quashed by the High Court. [381G 382A] 1.06. Although the initiation of the proceeding for acquisition has to await framing of a scheme, it does not mean that the concluded acquisition proceeding can be con demned as void so as to be ignored 377 later. A ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision. [382C D] Babu Barkya Thakur vs The State of Bombay and Others, , distinguished.

minal Appeal No. 131 of 1959. Appeal by special leave from the judgment and order dated November 21, 1958, of the Patna High Court in M. J. C. No. 805 of 1958. G. section Pathak, section C. Banerjee and P. K. Chatterjee, for the appellant. R. Ganapathy Iyer and B. H. Dhebar, for the respondents. February 10. The Judgment of the Court was delivered by DAs GUPTA, J. On February 20, 1958, there occurred in the Central Bhowra Colliery, in Dhanbad in Bihar an accident as a result of which 23 persons lost their lives. After an inquiry under. a. 24 of the , into the causes of and the circumstances attending the accident, and the publication of the report of the inquiry, a complains was prepared by the Regional Inspector of Mines, (Dhanbad, under the direction of the Chief Inspector of Mines, Dhanbad, before the Sub Divisional Officer, Dhanbad, against the appellant for an offence under section 74 of the , for contravention of regulations 107 and 127 of the Coal Mines Regulations, 1957. The Central 35 Bhowra Colliery belongs, and belonged at the relevant date to a private company, viz., M/s. Central Bhowra Colliery Co., Private Limited. The appellant is and was a shareholder and a director of this company. After the Sub Divisional Officer took cognizance of the complaint and issued processes against him, the appellant made an application to the Patna High Court under article 226 of the Constitution, for the issue of an appropriate writ for quashing the criminal proceedings. This application was summarily dismissed. It if; against that order of dismissal that this appeal has been filed by special leave obtained from this Court. The two main grounds on which the prayer for quashing the proceedings was based were: (1) that section 76 of the , in pursuance of which the appellant, who was not himself the owner of the colliery company, but only one of the directors and shareholders has been prosecuted, is void as it violates article 14 of the Constitution; (2) the Coal Mines Regulations, 1957, are invalid having been framed in contravention of a. 59(3) of the . These two contentions were also urged before us in appeal. The first contention is based on an assumption that the word "any one" in section 76 means only "one of the directors, and only one of the shareholders". This question as regards the interpretation of the word "any one" in section 76 was raised in Criminal Appeals Nos. 98 to 106 of 1959 (Chief Inspector of Mines etc.) (1) and it has been decided there that the word "any one" should be interpreted there as "every one". Thus under section 76 every one of the shareholders of a private company owning the mine, and every one of the directors of a public company owning the mine is liable to prosecution. No question of violation of article 14 therefore arises. As regards the other contention that the regulations are invalid the appellant 's argument is that the provisions of section 12 and section 59 of the , are mandatory. Section 12 provides: "(1) The Central Government may constitute for any part of the territories to which this. Act extends, (1) ; 36 or for any group or class of mines, a Mining Board consisting of (a) a person in the service of the Government, not being the Chief Inspector or an Inspector, appointed by the Central Government to act as Chairman; (b) the Chief Inspector or an Inspector appointed by the Central Government; (c) a person, not being the Chief Inspector or an Inspector, appointed by the Central Government; (d) two persons nominated by owners of mines or their representatives in such manner as may be prescribed; (e) two persons to represent the interest of miners, who shall be nominated in accordance with provisions laid down in the section. " Section 59 empowers the Central Government to 'make regulations consistent with the Act for all or any of the purposes mentioned therein, while section 58 empowers the Central Government to make rules consistent with the Act for all or any of the purposes mentioned therein. Section 59 after providing in its first sub section that the power to make regulations and rules conferred by sections 57 and 58 is subject to the condition of the regulations and rules being made after previous publication provides in its third sub. section further conditions as regards the making of regulations. This sub section runs thus: "Before the draft of any regulation if; published under this section it shall be referred to every Mining Board which is, in the opinion of the Central Government concerned with the subject dealt with by the regulation, and the regulation shall not be so published until each such Board has had a reasonable opportunity, of reporting as to the expediency of making the same and as to the suitability of its provisions. " A similar provision was made in the fourth sub section as regards the making of rules. By an amendment made in 1959 these two subsections have been combined into one. It was not disputed before us that when the Regulations were framed, no Board as required under section 12 37 had been constituted, and so, necessarily there had been no reference to any Board as required under section 59. The question raised is whether the omission to make such a reference make the rules invalid. As has been recognised again and again by the courts, no general rule can be laid down for deciding whether any particular provision in a statute is mandatory, meaning thereby that non observance thereof involves the consequence of invalidity or only directory, i.e., a direction the non observance of which does not entail the consequence of invalidity, whatever other consequences may occur. But in each case the court has to decide the legislative intent. Did the legislature intend in making the statutory provisions that nonobservance of this would entail invalidity or did it not? To decide this we have to consider not only the actual words used but the scheme of the statute, the intended benefit to public of what is enjoined by the visions and the material danger to the public by pro the contravention of the same. In the present case we have to determine therefore on a consideration of all these matters whether the legislature intended that the provisions as regards the reference to the Mines Board could be contravened only on pain of invalidity of the regulation. Looking at the language of the section, we find, the legislature, after saying in the first part of sub section (3), that before any regulation is published, it "shall be" referred to every Mining Board which is, in the opinion of the Central Government concerned with the subject, and goes on to say in the latter part, that the regulation "shall not" be published until each Board has had a reasonable opportunity of reporting as to the expediency and suitability of the provisions. While it is true that language is only one of the many considerations which have to be taken into account in deciding whether a requirement is directory or mandatory, it is legitimate to note that the language used in this case is emphatic and appears to be designed to express an anxiety of the legislature that the publication of the regulation, which is condition precedent to the making of the regulations, should 38 itself be subject to two conditions precedent first, a reference to the Mining Boards concerned, and secondly, that sufficient opportunity to the Board to make a report as regards the expediency and suitability of the proposed regulations. The cause of this anxiety becomes patent, when one examines the matters on which regulations can be made, Even a cursory examination of the purposes set out in the 27 clauses of section 57 shows that most Of them impinge heavily on the actual working of the mines. To mention only a few of these, viz., cl. (c) under which regulations may be made for prescribing the duties of owners, agents and managers of mines and of persons acting under them; (g) for determining the circumstances 'in which and the conditions subject to which it shall be lawful for more mines than one to be under a single manager; (j) for prohibiting, restricting or regulating the employment of adolescents and women in mines; (k) for providing for the safety of the persons employed in a mine; (m) for providing for the safety of the roads and working places in mines; (n) for the inspection of workings and sealed off fire areas in a mine; (o) far providing for the ventilation of mines; (r) for providing for proper lighting of mines and regulating the use of safety amps therein; are sufficient to show that the very purpose of the Act may well be defeated unless suitable and practical regulations are framed to help the achievement of this purpose, Arbitrary and haphazard regulations without full consideration of their practicability and ultimate effect on the efficient working of the mines, would, apart from, often defeating the purpose of the Act, affect injuriously the general economy of the country. That we are entitled to presume, is the reason behind the legislature 's anxiety that Mining Boards should have an opportunity of examining regulations, and expressing their opinion before they are finalised. As has been already mentioned section 12 which deals with the formation of boards provides for representation thereupon of two persons nominated by owners of mines or their representatives and two persons to re. present the interests of persons employed in mines, in 39 addition to three persons representing the Government. The constitution is calculated to ensure that all aspects including on the one hand the need for securing the safety and welfare of labour and on the other hand the practicability of the provisions proposed from the point of, view of the likely expense and other considerations can be thoroughly examined. It is certainly to the public benefit that Boards thus constituted should have an opportunity of examining regulations proposed in the first place, by an administrative department of the government and of express ing their opinion. It is true that the law does not require concurrence of the Board with the regulations proposed. It is reasonable to expect however that when a Board has expressed an opinion in favour of the rejection or modification of a proposed regulation, the department would not treat it lightly. But, even where the opinion expressed by the Board is not accepted the very fact that there has been such an examination by the Board, and a consequent re. examination by the department is likely to minimise the risks to public welfare. There can be little doubt therefore that generally speaking strict obedience of the command in sub section 3 of section 59 regarding consultation with the Mining Board is likely to promote public welfare. Let us now examine the matter from another aspect and ask ourselves the question: what risk there is to the public welfare of an insistence in all cases that the omission of consultation as enjoined in section 59 would invalidate a regulation. Emergencies may arise, when in order that the public may not suffer. regulations must be framed with the least possible de lay; and much valuable time may be lost if a reference must be made to all the Mining Boards concerned and opportunity given to them to express their opinion before regulations are made. In such cases, public interest may well be endangered if regulations, in order to be valid have to conform,to the requirements of previous consultation with, the Mining Boards. We find however that such cases of emergency have been specially dealt with in a. 60 of the Act, the operative portion of which runs thus: 40 "Notwithstanding anything contained in subsec tions (1), (2) and (3) of section 59, regulations under clause (1) and clauses (k) to (a) excluding clause (1) of section 57 may be made without previous publication and without previous reference to Mining Boards, if the Central Government is satisfied that for the prevention of apprehended danger or the speedy remedy of conditions likely to cause danger it is necessary in making such regulations to dispense with the delay that would result from such publication and reference". Thus, the apprehended danger to public interest from requiring as a condition of the validity of regulations previous consultation with the Mining Board is averted. An examination of all the relevant circumstances, viz., the language used, the scheme of the legislation, the benefit to the public on insisting on strict compliance as well as the risks to public interest on insistence on such compliance leads us to the conclusion that the legislative intent was to insist on these provisions for consultation with the Mining Board as a prerequisite for the validity of the regulations. This conclusion is strengthened by the fact that in section 60 when providing for the framing of regulations in certain cases without following the procedure enjoined in section 59, the legislature took care to add by a proviso that any regulation so made "shall not remain in force for more than two years from the making thereof". By an amendment made in 1959 the period has been changed to one year. It is not unreasonable to read this proviso as ex. pressing by implication the legislature 's intention that when the special circumstances mentioned in section 60 do not exist and there is no scope for the application of that section no regulation made in contravention of s.59 will be valid for a single day. Strew was laid on behalf of the respondent on the fact that section 59 does not require that regulations must have the concurrence of the Mining Boards; and it was pointed out that this Court in State of U. P. vs Manbodhan Lal Srivastava (2) in holding that article 320(3) (2) ; 41 of the Constitution was not mandatory, relied, inter alia, on the fact that "the requirement of the consultation with the Commission does not extend to making the advice of the Commission, on these matters, binding on the government". While it is true that this Court did attach weight to this circumstance, we have to remember that this was the only one of the several circumstances, on the total consideration of which, the court decided that the provision for consultation in article 320(3) was not mandatory. One of these circumstances was that article 320(3) contained a proviso, which gave a clear indication "of the intention of the Constitution makers that they did envisage certain cases or class of cases in Which the Commission need not be consulted". "If the provisions of article 320(3) were of a mandatory character", observed Sinha, J., (as he then was), while delivering the judgment of the Court, "the Constitution would not have left it to the discretion of the head of the executive government to undo these provisions by making regulations to the contrary". It has to be noticed, as pointed out above, that section 60 of the , also lays down clear provisions where the consultation as required in section 59 need not take place. Here, however, the legislature has not left it to the discretion of the executive government "to undo these provisions by making regulations to the contrary". The legislature itself has given clear guidance as to the cases where such consultation need not be made by the Government. What is more, the legislature has laid down that regulations made without such consultation would have a limited life. In Srivastava 's Case (1) this Court quoted with approval the following observations of the Privy Council in Montreal Sirgeet Railway Company vs Nor. mandin ("): "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, (1) ; (2) ; , 175. 42 or injustice to persons who have no control over those entrusted with the duty, and at the same time would not 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, not affecting the validity of the acts done." and applied the principle thus laid down to the case before it. There is however no scope in the present case of applying this principle in support of the directory nature of section 59(3). As we have pointed out above, the inconvenience that might be caused by holding regulations made in contravention of section 59(3) invalid is removed by the provisions of section 60; and on the other hand to hold that regulations may be validly made without following the procedure laid down in section 59even in cases not falling within section 60 is likely to be harmful to public interest, and to cause general incon venience. It is really a converse case of what the Privy Council had to consider in Montreal Street Railway Company 's Case (1) and this Court considered in Srivastava 's Case (2). For all the reasons given above, we are of opinion that the provisions in section 59(3) of the , are mandatory. There remains for consideration the question whether these provisions were complied with before the Coal Mines Regulations, 1957, were I framed. As has been pointed out above, it was not disputed before us that at the time when the regulations were framed no new Mining Board had been constituted under the , and consequently no consultation with any Mining Board constituted under the 1952 Act took place. It has been stated before us however on behalf of the respondents that the Mining Boards constituted under section 10 of the Mines Act, 1923, were continuing to operate at the time these regulations were framed and that there was full consultation with these Mining Boards before these regulations were framed. (1) ; , 175. (2) ; 43 If in fact there was such consultation the further question would arise whether consultation with the Mining Boards constituted under the provisions of the Mining Act, 1923, would be sufficient compliance with the provisions of section 59(3) of the present Act. Before these questions are decided it is not possible to come to a definite conclusion whether the Coal Mines Regulations, 1957, are valid or not. As there is not sufficient material before us to decide the question, whether in fact the Mining Boards constituted under section 10 of the 1923 Act were functioning at the date when these regulations were made and whether these Boards were consulted before the regulations were framed, we have not thought fit to consider here the further question whether if such consultation had taken place that would be sufficient compliance with section 59(3) of the 1952 Act. In the circumstances, the proper course, in our opinion, is to direct that the criminal proceedings pending in the court of the sub divisional magistrate be disposed of by him or any other magistrate to whom the case may be transferred in accordance with law, after deciding the question whether there was consultation with Mining Boards constituted under section 10 of the Mines Act, 1923, before the regulations were framed and, if so, whether such consultation amounted to sufficient compliance with section 59. If his conclusion is that there has not been compliance with the provisions of section 59 the regulations must be held to be invalid and the accused would be entitled to an acquittal; if, on the other hand, he holds that there has been sufficient compliance with the provisions of section 59 he should dispose of the case after coming to a conclusion on the evidence as regards the allegations made against the appellant in the petition of complaint. The appeal is disposed of accordingly. Appeal allowed. Case remanded.

Section 76 of the , provides that where the owner of a mine is a private company any one of the shareholders thereof may be prosecuted and punished under this Act for any offence for which the owner of the mine is punishable. The appellant who was a shareholder and a director of a private company owning a colliery, was prosecuted for an offence under section 74 Of the Act for contravention of Regulations 107 and 127 Of the Coal Mines Regulations, 1957. He challenged the validity of the prosecution on the grounds (1) that section 76 of the Act in pur suance of which he who was not himself the owner of the colliery but only one of the directors and shareholders had been prosecuted, was void as it violated article 14 of 'the Constitution of India, and (2) that the Coal Mines Regulations, 1957, were invalid as they had been framed in contravention of section 59 (3) of the Act, inasmuch as there was no consultation with a Mining Board before they were published as required by that sub section. It was not disputed that when the Regulations were framed, no Mining Board as required under section 12 Of the Act had been con stituted. and so there had been no reference to any such Board, 34 but it was alleged that there was consultation with the Mining Board constituted under section 10 of the Mines Act, 1923. Held: (1) that the words "any one" in section 76 of the , should be interpreted as "every one" and that under that section every one of the shareholders of a private company owning the mine was liable to prosecution. Accordingly, section 76 did not contravene article 14 Of the Con stitution. Chief Inspector of Mines vs Lala Karam Chand Thapar, , followed. (2) that compliance with the provisions in section 59 (3) Of the Act was mandatory. State of U. P. vs Manbodhan Lai Srivastava, [1958] section C. R. 533, distinguished. Quaere, whether consultation with the Mining Boards con stituted under the provisions of the Mines Act, 1923, would be sufficient compliance with section 59 (3) Of the .

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

The father of respondent No. 1, who was the Zamindar, filed a suit for the eviction of Ramprasad, the father of appell ants, from certain plots of land. The suit was decreed and the Zamindar took possession of the land. Ramprasad filed an appeal before the Additional Commissioner but the same was dismissed . He preferred a second appeal before the Board of Revenue during the pendency of which the matter was compromised whereunder he was recognised as tenant of the land in dispute and the order of eviction was; thus nullified. He applied for restitution of possession under section 144 of the Code of Civil Procedure. The application was resisted by Dataram and others who had been inducted as tenants on these plots of land during the pendency of the appeals. The trial court allowed the application but its order was reversed by the Additional Commissioner who held that the newly inducted tenants could not be dispossessed. Its order was affirmed by the Board of Revenue in revision. Thereafter fie filed a petition under article 226 of the Constitution in the High Court challenging the decision of the Board of Revenue, but that petition was dismissed on merits. No appeal was attempted to be filed against the order of the High Court either by applying for a certificate or moving this Court for special leave under article 136. The appellants have instead come to this Court in appeal by special leave against the order of the Board of Revenue. A preliminary objection was raised on behalf of of the respondent that the appeal was not maintainable as it was barred by res judicata. Held, that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings. 829 Daryao vs State of U. P., [19621 1 section C. R. 574 and Indian Aluminium Co. Ltd. V. The Commissioner of Income tax, West Bengal, (1961) 43 , relied on. Chandi Prasad Chokhani vs State of Bihar, [1962] 2 section C. R. 276, explained.

% This Criminal Appeal against the judgment and order of the Gujarat High Court and the connected Special Leave Petitions against the orders of the various Designated Courts in the State constituted under the Terrorist & Disruptive Activities (Prevention) Act, 1987, raised common questions for consideration. It was enough to set out the facts in the appeal. There was an armed clash involving the appellants, as a result whereof the police apprehended the appellants and produced them before the Designated Court. The appellants moved an application for bail which was rejected by the Designated Court. The appellants moved the High Court under section 439 read with section 482 of the Code. The High Court rejected the bail application on the ground that it had no jurisdiction to entertain such an application under section 439 of the Code or by recourse to its inherent powers under section 482. Aggrieved by the decision of the High Court, the appellants appealed to this Court for relief by special leave. On the view the Court took as to the nature of the function of the Designated Courts in dealing with the bail applications within the constraints of section 20(8), it was not necessary to deal with the facts of the connected special leave petitions directed against the orders of the different Designated Courts, rejecting the bail applications. Allowing, the appeal and the special leave petitions partly, the Court, ^ HELD: These cases mainly raised two questions of substantial 226 importance. The first was as to the jurisdiction and powers of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by recourse to its inherent powers under section 482 to a person held in custody for an offence under sections 3 and 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such a person in view of the limitations placed on such power under section 20(8) of the Act. [246G H] The Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482. Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person for an offence punishable under the Act or any rule made thereunder. There is contrariety between the provisions of the Act and the Code. Under the Code, the High Court is invested with the various functions and duties in relation to any judgment or order passed by a criminal court subordinate to it. The Act creates a new class of offences called terrorist acts and disruptive activities and provides for a special procedure for the trial of such offences. The jurisdiction and power of a Designated Court are derived from the Act and it is the Act that must primarily be looked to in deciding the question before the Court. Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code. [239B C; 240A,D] No doubt, the legislature has, by the use of the words 'as if it were ' in section 14(3) of the Act, vested a Designated Court with the status of a Court of Session, but the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, in so far as applicable. [240D F] Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person for an offence punishable under the Act or any rule thereunder, yet that result must, by necessary implication, follow. The source of power of a Designated Court to grant bail is not section 20(8) of the Act, as it only places limitations on such power, but it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code. The 227 Designated Court is a 'court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code. The exercise of the power to grant bail by a Designated Court is not only subject to the limitations placed by section 20(9) which in terms provides that the limitations on grant of bail specified in section 20(8) are in addition to the limitations under the Code or any other law for the time being in force on the grant of bail. It, therefore, follows that the power derived by a Designated Court to grant bail to a person for an offence under the Act is derived from the Code and not section 20(8) of the Act. The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act. [241B E] In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court. It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an inter locutory order, of a Designated Court. While it is true that Chapter XXXIII of the Code is still preserved, as otherwise the Designated Court would have no power to grant bail, still the source of power is not section 439 of the Code but section 437, being a court other than the High Court or the Court of Session. Any other view would lead to an anomalous situation. If it were to be held that the power of a Designated Court to grant bail was relatable to section 439, it would imply that not only the High Court but also the Court of Session would be entitled to grant bail. The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437. It would run counter to the express prohibition contained in section 20(8) of the Act. The Court upheld the view of the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code. [243G H; 244A B,D] As regards the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8), the sub section in terms places fetters on the power of a Designated Court on the grant of bail and limitations specified therein are in addition to the limitations under the Code. In view of these more stringent conditions, a Designated Court should carefully examine every case before it for finding out whether the provisions of the Act apply or not. A prayer for bail ought not to be rejected in a mechanical manner. [244E G] The Designated Courts had not in these cases carefully considered the facts and circumstances and had rejected the bail applications mechanically. In the criminal appeal, the facts were already set out. In 228 the special leave petitions Nos. 2369 and 2469 of 1967, the prosecution had been started at the instance of the management of a textile mill. The other cases had arisen out of communal riots. Normally, such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out. The Designated Courts are under a duty to examine the circumstances closely from this angle. That had not been done. It was, therefore desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration. [246D F] The appeal and the special leave petitions partly succeeded. While upholding the judgment and order of the High Court, dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973, the Court granted leave and set aside the impugned orders passed by the various Designated Courts in the State, dismissing the applications for bail, and directed them to consider each particular case on merits as to whether it fell within the purview of section 3 and/or section 4 of the Act, and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act. Where the Designated Courts find that the acts alleged in the police report or complaint of facts under section 14(1) do not fall within the purview of section 3 and/or section 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts. The accused persons, enlarged on bail by this Court, should continue to remain on bail until their applications for bail were dealt with by the Designated Courts with advertence to the observations made above. [246F H; 247A B] In Re the Special Courts Bill, 1978, [1979] 2 S.C.R. 476; Balchand Jain vs State of Madhya Pradesh, ; ; Ishwar Chand vs State of Himachal Pradesh, I.L.R. (1975) H.P. 569 and V.C. Shukla vs State through C.B.I., , referred to.

The appellant Co operative Housing Society Ltd. made some unauthorised constructions in a 36 storeyed building. The Bombay Municipal Corporation issued a show cause notice calling upon the society to show cause as to why the upper eight floors of the building should not be demolished so as to limit the development to the permissible Floor Space Index (F.S.I.) since the additional Floor Space Index to the extent of 2773 sq. was gained by the appellant. The appellants submitted a reply to the show cause notice. The Administrator of the Municipal Corporation made an order on 21st Septmber, 1984 requiring the appellant to demolish 24,000 sq. on the eight upper floors of the building on the basis of 3000 sq. on each floor. The Administrator as well as the State Government dismissed the representation and appeal by the appellant. So the appellant filed a writ petition in the High Court which also dismissed with the observation that the appellant be given a choice to reduce the construction upto permissible limit by any alternative proposal within the four corners of the rules and regulations within one month from 28th October 1985 the Municipality may consider. The appellant made application to the Municipal Corporation giving several alternative proposals on 21st November 1985. But it also preferred a special leave petition before this court against the High Court Judgment. The special leave petition leave petition was dismissed on January 17, 1986. The appellants alleged that they submitted another proposal to the Municipal Corporation on 17th February, 1986 and a meeting for hearing alternative proposals was fixed up by the Municipal commissioner and put forward its case in support of the new proposals and the Municipal Commissioner said he would consider the proposals and take decision. On 27th December 1988 the appellant wrote a letter to the Municipal Commissioner to consider the alternative proposal i.e. of 746 vertical demolition of the building instead of demolishing the eight upper floors. In January, 1989 the officers of the corporation agreed that demolition can be made vertically so as to bring the entire construction within the permissible Floor Space Index where as the work of demolition of upper eight floors of the building were entrusted to a company by the Municipal Commissioner. So the appellant again filed a writ in the High Court. It was dismissed by the Single Judge as well as by the Division Bench dated 5th March, 1990. The appellants came by Special Leave Petition in this Court; The main grievance of the appellant being that vertical demolition proposal was not considered. Inspite of orders of this Court in this regard to the Municipal Corporation no agreeable solution could fructify. The proposal was examined by the Municipal Commissioner but rejected on 13th November, 1990 and submitted the detailed report to this Court. Dismissing the petition the Court HELD: The appellant had made illegal constructions in violation of Floor Space Index to the extent of more than 24000 sq. The decision taken by the Municipal Commissioner does not suffer from any want of jurisdiction nor is violative of any law or rules. It is well settled that the High Court under Article 226 of the Constitution is not an appellate Court on the administrative decision taken by the authorities. Since the tendency of raising unlawful constructions and unauthorised encroachments is increasing in the entire country and such activities are required to be dealt with by firm hands. Such unlawful constructions are against public interest and hazardous to the safety of occupiers and residents of the multistoreyed buildings. [749F, 750B, E F] This case should be a pointer to all the builders that making of unauthorised construction never pays and is against the interest of the society at large. The rules, regulations and by laws are made by the corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the citizens of obey and follow such rules which are made for their own benefits. [750H 715B]

Prior to January 18, 1944 six companies including M/s. Lakshmiratan. Cotton Mills Co. Ltd. (the appellant company) and the Aluminium Corporation of India Ltd. (respondent corporation) were jointly managed by two groups known as the Singhania and Gupta groups. As a result of disputes between the two groups there was a reference to arbitration. After January 18, 1944, the date of the award, the aforesaid six concerns were brought under the management and control of one or the other of the two groups The Corporation came under the control and management of the Singhania group. In cl. 9 of the award it was said that the award did not cover the advances which either party or their separate firms may have made to all or any of them or their moneys which may be in deposit with them and that they would be payable and paid in their usual course. After the award the appellant Company sent a statement of account in respect of advances made to the respondent corporation, and expenditure incurred on its behalf. The statement was objected to. on the ground that the appellant company had not properly maintained its accounts during the period of joint management. Efforts at reconciliation of accounts having faded the appellants filed two suits claiming Rs. 3,56,207.9.6 and Rs. 72,595.4.6 from the Corporation, being suits Nos. 63 and 65 of 1949. In suit No. 63 of 1949 it was claimed that the suit was within time as after adjustment of several items in 1946 and 1947 a sum of Rs. 2,96,110. 11.6 was found due to the appellant company and that in any event the suit was saved from being barred by limitation by a letter (exhibit 1) dated April 16, 1946 addressed by s the Secretarycum Chief Accountant of the Corporation, thereby acknowledging the liability of the Corporation to pay the amount which would be found due and payable under the said accounts. Similar averments were made in, Suit No. 65 of 1949. The written statements filed on behalf of the Corporation inter alia pleaded that the said claim was barred by limitation, that the said letter didnot amount to an acknowledgement within the meaning of section 19 of theLimitation Act, 1908 which was then applicable to the suits, and lastly,that even if the said letter did amount to an acknowledgement, it wasnot binding on the Corporation. The trial court decreed the suits but theHigh Court dismissed them as being time barred. In appeals to this Courtthe questions that fell for consideration were (i) whether the letter in question amounted to an acknowledgment;(ii) whether it was an acknowledgement by the corporation, and if not (iii) whethe 'r the Secretary cum Chief Accountant had authority express or implied. to acknowledge liability on behalf of the Corporation so as, to bind that corporation. Allowing the appeals, HELD: (1) (a) From the provisions of section 19(1) of the Limitation Act, 1908 it is clear that the statement on which the plea of acknowledgement is founded must relate to a subsisting liability as the section requires 624 that it must be made before the expiration of the period prescribed by the Act. It need not, however, amount to a promise to pay, for an acknowledgement does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the partes such as, for instance, that of a debtor and a creditor and the intention to admit such a jural relationship Such an intention need not be in express terms and can be inferred by implication or the nature of the admission and the surrounding circumstances. Generally speaking a liberal construction of the statement in question should be given. That of course does not mean that where a statement is made without intending to admit the existence of a particular jural relationship, such an intention should be fastened on the person making the statement by an involved or a far fetched reasoning. [629 C E] Khan Bchadur Shapoor Freedoom Mazda vs Durga Prosad Chamaria, , Tilak Ram vs Nathu, A.I.R. , 938, 939, Green vs Humphreva, [1884] 26 Ch. D. 474, 481, Tajpal Saraogi vs Lallanjee Jain, C.A. No. 766/62 dt. 8 2 1965 and Abdul Rahim Oosman & Co. vs Ojamshee Prushottamdas & Co., Cal. 6,39, referred to. (b) From the correspondence between the parties and the surrounding circumstances it must follow that there was a subsisting account in the name of the appellannt company in the books of the Corporation in which interest on the balance shown therein from time to time was being credited and in which amounts in respect of items passed during the course of reconciliation were also duly credited. The statement in the letter exhibit 1 that "after all the above adjustments the position will be as per statement attached", that is to say, that there 'was a balance of Rs. 107447/13/11 due and payable to the appellant company must clearly amount to acknowledgement within the meaning of section 19(1). If the letter be looked at in the background of the controversy between the parties which controversy was limited to the question as to the correct ness of the amount claimed by the appellant company as also the correspondence which ensued in regard to it, it would be impossible to say that the letter and the statement of account enclosed therewith were merely explanatory and did not amount to an admission of the jural reship of debtor and creditor and of the liability to pay the amount found due at the foot of the account on finalisation. [635 D F] The mere fact that letter called for confirmation of the amount of the balance mentioned therein and the fact that the appellant company failed to confirm it, could not lead to a conclusion that the admission of liability was conditional and therefore could not operate as an acknow ledgement. The confirmation sought in the letter was not a condition to the admission as to the existence of a subsisting account and the liability to pay when accounts were finalised but to the specific amount which according to the corporation would be the amount payable by it according to its calculation. 'There was no condition subject to which the admission was to be made which remained unperformed. [635 G; 636 F G; 637 B] Maniram vs Rupchand, L.R. 33 I.A. 165, Raja Kayali Arunachella Row Bahadur vs Sri Rajah Rangiah Appa Row Bahadur, Mad. 519 and Ballapragada Ramamurthy vs Thammana Gopayya, Mad. 701, distinguished. 625 LAXMIRATAN COTTON MILLS V. ALUMINIUM CORP. (Shelat, J.) In re River Steamer Co. vs Mitchell, , 828, referred to. , (ii) The plea that the letter exhibit I should be regarded as an acknowledgement by the corporation itself was not included among the issues formulated before the courts below. It could not be allowed to be raised for the first time in this Court. [628 B] (iii) If the correspondence between the parties together with the statements of accounts enclosed therewith was closely examined it became clear that S was authorised to scrutinise the claim made by the appellant company, the various items for which the appellant _company claimed credit and to reject the same and, what is important, to allow others. That he had such an authority was clear from the fact that in respect of such of the items which he allowed, credit was given to the appellant and necessary entries to the credit of the appellant company were posted in the account maintained by the Corporation in its books of account. It was impossible to say that in the course of finalising the accounts, S accorded his assent to various items claimed by the appellant company without having been authorised so to do. Nor was it possible to say that on his passing those items necessary entries were made in the books of accounts of the corporation without his having so authorised. Further, he could not have sent to the appellant company statements of account showing the balance due to it "as per the ledger" unless he was authorised to finalise the accounts and arrive at the amount due and payable to, the company. [637 E F; 638 B C] Uma Shankar vs Govind Narain, I.L.R. 46 All. 982, referred to.

The appellant has its factory at jamshedpur. It manu factures cast iron sleepers, pipes, etc., in the said factory. The raw materials mainly required for the manufacture of sleepers are pig iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers, and the sleepers are manufactured only on receipt of orders from the said Board and not otherwise. Inspite of its best efforts to secure the raw materials in 1959, the appellant failed to secure the same. As the appellant found that the manufacture of sleepers could not be carried on, it issued a notice and laid off the workers of the sleeper factory. The lay off continued from December 15, 1959 to September 11, 1960. On September 12, 1960, the appellant closed the Sleeper Foundry Department and issued notice of retrenchment. Retrenchment compensation was also paid to the workmen retrenched. The appellant paid the respondents the, statutory compensation for the lay off period as prescribed by section 25C of the . However, the respondents contended that the lay off was not justified, The dispute between the parties was referred for adjudication by the Government of Bihar to the Industrial Tribunal. The Tribunal found that the appellant was in financial difficulties at the relevant time, the appellant was not actuated by any malafide intentions and the lay off was not the result of any ulterior motive. However, it held that if the affairs of the appellant had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay off could have been avoided. Under the circumstances, the Tribunal held that the lay off could not be held to be altogether justified, and awarded compensation to the respondents in excess of the amount fixed by the statute 796 Held, that the lay off was justified as raw materials were not available to the appellant at the relevant time. The only relief to which the workmen were entitled was the statutory relief prescribed by section 25C. If the lay off is malafide in the sense that the employer has deliberately and malaciously brought about a situation where lay off becomes necessary, it is not a lay off which in justified tinder section 2(kkk) and the relief provided under section 25C is not the only relief to which the workmen are en titled. The malafides of the employer in declaring lay off really means that no lay off has in law taken place and a finding as to the malafide of the employer in declaring a layoff takes the lay off out of the definition of section 2(kkk).If lay off is declared in order to victimise workmen or for some, ulterior purpose, the position in the same.

The appellant, R.S. Nayak, filed a complaint against the respondent, A.R. Antualy, a public servant being the Chief Minister of Maharashtra State under sections 161, 165 I.P.C. and section 5 of the Prevention of Corruption Act, 1947 (1947 Act) alleging abuse of office of Chief Minister. The complaint was rejected on account of absence of necessary sanction of the Governor of Maharashtra State under section 6 of the 1947 Act to prosecute the respondent. After the Governor issued necessary sanction, the appellant filed a fresh complaint in the Court of Special Judge against the respondent on the same grounds. However, on the date of filing fresh complaint the respondent had already resigned as Chief Minister. The respondent contended that the Special Judge had no jurisdiction to try him under section 7 of the Criminal Law Amendment Act, 1952 and that no cognizance could be taken on private complaint. The Special Judge rejected both the contentions. In the meantime the State Government issued a notification under section 7(2) of the Criminal Law Amendment Act, 1752 under which the case was transferred to another Special Judge. In a criminal revision application filed by the respondent against the order of earlier 496 Special Judge, a Division Bench of the High Court held that the Social Judge had jurisdiction to try the respondent and that the private complaint was maintainable. When the latter Special Judge proceeded with the case the respondent filed an application for his discharge on the grounds that the charge against him was baseless and that he being a Member of legislative Assembly (M.L.A) requisite sanction under section 6 of the 1947 Act was necessary. The Special Judge discharged the respondent holding that the respondent being M.L.A was a public servant within section 21 (12)(a) of I.P.C. and hl the absence of the sanction of the Legislative Assembly he could not take cognizance of offence. The Special Judge also held that. the material date for deciding the applicability of section 6 of the 1947 Act was the date on which the Court was asked to take cognizance of the offence. The appellant challenged the order of the Special Judge in this Appeal. The questions which arose for consideration were: (a) That is the relevant date with reference to which a valid sanction is a pre requisite for the prosecution of a public servant for offences enumerated in section 6 of the 1947 Act ? (b) If the accuse holds several offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged, or is it implicit in section 6 of the 1947 Act that sanction of that competent authority alone is necessary which is entitled to remove the public servant from the office which is alleged to have been abused or misused for corrupt motives ? (c) Is M.L.A. a public. servant within the meaning of the expression in clauses 12(a), 3 and 7 of section 21 I.P.C. ? (d) Is sanction as contemplated by section 6 of the 1947 Act necessary for prosecution of M.L.A. and if so, which is the sanctioning authority competent to remove M.L.A. from the office of Member or the Legislative Assembly ? Allowing the appeal. ^ HELD: The provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it. If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provisions. In the event of an ambiguity of the plain meaning of the words used in the statute being self defeating, the court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute. Whenever a question of construction arises upon ambiguity or where two views are possible of a Provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act. [521 A C] The basic purpose underlying all canons of construction is the ascertainment 497 with reasonable certainty of the intention of Parliament in enacting the legislation. A For this purpose why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation. Such denial would deprive the court of a substantial and illuminating aid to construction. Therefore, departing from the earlier English decisions, the reports of the committee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee report of a commission set up for collecting information leading to the enactment are permissible external aids to construction. [527 A; D E] In construing a statute more especially the ancient statute, the court may look at the surrounding circumstances when the statute was enacted. The construction of ancient statutes may be eludicated by what in the language of the courts is called contemporanea expositio, that is, by seeing how they were understood at the time when they were passed. [528F G] Standard dictionaries as a rule give in respect of each word as many meanings in which the word has either been used or it is likely to be used in different contexts and connections. While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in common parlance, the well known cannon of construction should not even for a minute be overlooked that the meaning to the words and expressions used in a statute ordinarily take their colour from the context in which they appear. [539F G] Deputy Chief Controller of Imports & Exports New Delhi vs K.T. Kosalram Ors., ; at 517; and State Bank of India vs N. Sundara Money, ; , referred to. Section 6 of the Prevention of Corruption Act, 1947 bars the courts from taking cognizance of the offences therein enumerated alleged to have been committed by a public servant except with the previous sanction of the competent authority empowered to grant the requisite sanction. Therefore, when the court is called upon to take cognizance of such offences, it. must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been committed by him as public servant. Undoubtedly the accused must be a public servant when he is alleged to have committed the offence of which he is accused because sections 161, 164, 165 I.P.C. and section 5(2) of. the 1947 Act clearly spell out that the offences there in defined can be committed by a public servant. A trial without a valid sanction where one is necessary under section 6 would be a trial without jurisdiction by the court. It is well settled that the relevant date with reference to valid which a valid sanction is sine qua non for taking cognizance of an offence committed by a public servant as required by section 6 is the date when the court is called upon to take cognizance of the offence of which he is accused. If, therefore, when the offence is alleged to have been committed, the accused was a public servant but by the time the court is called upon to take cognizance of the offence committed by him as public servant, he has cased to be a public servant, section 6 will not be attracted and no sanction would be necessary for taking cognizance of the offence against him. This approach is in accord with the policy underlying s.6 in that a public servant is not to be exposed to harassment of a frivolous or speculative prosecution. If he has ceased to be a public 498 servant in the meantime, this vital consideration ceases to exist. [512D; H; 513 A E]. C.R. Bansi vs State of Maharashtra, [1971] 3 S.C.R. 236; R.R. Chari vs State of U.P., ; ; S.N. Bose vs State of Bihar, [1968] 3 S.C.R. Venkataraman vs The State. ; at 1052; K.S. Dharmaatan vs Central Government & Ors., ; , referred to. In the instant case, long before the date on which the cognizance was taken by the Special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant in his capacity as Chief Minister. A fortiori no sanction as contemplated by section 6 was necessary before cognizance of the offence could be taken against the accused for offences alleged to have been committed in his former capacity as public servant. [514 D E] The submission that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, under section 6 sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the competent authorities fails or declines to grant sanction, the court is precluded or prohibited from taking cognizance of the offence with which the public servant is charged is not acceptable. Such an interpretation of s.6 would render it as a shield to an unscrupulous public servant. Someone interested in protecting may shift him from one office of public servant to another and there by defeat the process of law. Such an interpretation is contrary to all cannons of construction and leads to an absurd end product which of necessity must be avoided. [520G; 518F C] The State (S.P.E. Hyderabad) vs Anr Commodore Kailash Chand, ; , referred to and partly dissented from. The expression 'office ' in the three sub clauses of s 6(1) clearly denotes that office which the public servant misused or abused for corrupt motives for which he is to be prosecuted and in respect of which a sanction lo prosecute him is necessary by the competent authority entitled to remove him from that office which he has abused. The sanction to prosecute a public servant can be given by an authority competent to remove him from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and not some rank outsider. The authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction. A grant of sanction is not an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly complied with before any prosecution could be launched against public servants. Therefore, it is implicit in s.6 that sanction of that competent authority alone would be necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motive and for which a prosecution is intended to be launched against him. [516H; 517A D] Mohd. Iqbal Ahmed vs State of A. P., [1979] 2 S.C.R. 1007, referred to. 499 The finding of the Special Judge that the respondent being M.L.A. was a public servant within clauses (12)(a) (3) and (7) of s.21 I.P.C. and sanction of the Legislative Assembly to prosecute him was necessary, is not correct. A person would be a public servant under clause (12)(a) of section 21 I.P.C. if he falls under any of the following three categories: (i) if he is in the service of the Government; or (ii) if he is hl the pay of the Government; or (iii) if he is remunerated by fees or commission for the performance of any public duty, by the Government. Looking into the history and evolution of s.21 I.P.C. as traced and adopted as an external aid to construction, it is clear that M.L.A. was not and is not a 'public servant ' within the meaning of expression in any of the clauses of section 21 I.P.C. Assuming that it would not be legally sound or correct according to well accepted cannon of construction of a statue of construe section 21(12)(a) by mere historical evolution of the section, the constitutionally valid approach would be to look at the language employed in the section to ascertain whether M.L.A. is a public servant within the meaning of the expression in that section. Depending upon the context, 'or '. The use of the expression 'or ' in the context in which it is used in cl.(12) (a) does appear to be a disjunctive. Therefore, those would be a public servant. The question is whether M.L.A. falls in under any of the above three categories? It was concerned that M.L.A. is not the service of the Government but it was contended that M.L.A. is in the pay of the Government. Undoubtedly, M.L.A. receives a salary and allowances his capacity as M.L.A. under the relevant statute. But does it make him a person 'in the pay of the Government '? The word 'pay ' standing by itself is open to various shades of meaning and when the word is used in a phrase in the pay of ' it is more likely to have a different connotation than when standing by itself. The phrase "in the pay of ' would ordinarily import the element of employment or paid employment or employed and paid by the employer. The phrase does not import of necessity a master servant relationship between the person receiving the pay and the Government as payer. Next what does the expression 'Government ' in cl. (12)(a) of section 21 I.P.C. connote ? Section 17 I.P.C. provides that the word "Government ' denotes the Central Government or the Government of a State. 71 I.P.C. provides that 'every expression which is explained in any part of the Code, is used in every part of the Code in conformity with the explanation '. Let it be noted that unlike the modern statute s.7 does not provide unless the context otherwise indicate ', a phrase that prefaces the dictionary clauses of a modern statute. Therefore, the expression "Government ' in section 21(12)(a) must either mean the Central Government or the Government of a State. The Central Government being out of considering the question is whether M.L.A. is the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State. Even though M.L.A. receives pay and allowances, he is not in the pay of he state Government because legislature of a State cannot be comprehended in the expression 'State Government '. This conclusion would govern also the third part of c. (12)(a) i.e. 'remunerated by fees for performance of any public duty by the Government. Therefore, if M.L.A. is not in the pay of the Government in the sense of executive government or is not remunerated by fees for performance of any public duty by the exe 500 cutive government, certainly, he would not be comprehended in the expression 'public servant ' within the meaning sf the expression in cl. (12)(a). He is thus not a public servant within the meaning of the expression in cl. (12)(a). This conclusion rein forces the earlier conclusion reached after examining the historical evolution of cl. (12)(a): [537 A B; 536G; E; H; 537 H;E; 539 E; 541 A; D F; 543 E; 551 A B] Evolution of Parliamentary Privileges by section K. Nag ; Legislative Bodies Corrupt Practices Act, 1925; Prevention of Corruption Act 1947 by Sethi and Anand P.60; Santhanam Committee Report dt. 31 3 1964; Lok Sabha Debates (Third Series Vol. 35, Cls. 729 and 731; The Anti Corruption Laws (Amendment) Bill, 1964 (enacted as Act 40 of 1964); G.A. Monerop vs The State of Ajmer, ; The State of Ajmer vs Shivji Lal [1959] supp. 2 S.C.R. 739; Prabhashanker Dwivedi and Anr. vs The State of Gujarat, AIR 1970 Gujart, AIR 1970 Gujarat 97; State of Gujart vs Manshanker Prabhashanker Dwivedi, ; Green vs Premier Glynrohonwy State Co. Ltd, at 568; Babi Manmohan Das Shah & Ors. vs Bishnu Das, ; at 839; Kamta Prasad Aggarwal etc. Executive Engineer, Ballabgarh & Anr., ; ; M. Karunanidhi vs Union of India, ; ; Costituent Assembly debates, Vol. VII p. 984; Rai Shib Ram jawaya Kapur & Ors. vs The State of Punjab [1975] 1 S.C.R. 225 at p. 236; Shamsher Singh & Anr. vs State of Punjab, ; Sardari Lalv. Union of India & Ors. ; ; His Majesty the King vs Boston 7 Ors., [1923 24] 33 Commonwealth Law Report 386. .82; Earskine May Parhamentary Practice 20 edition, p. 149, referred to The Submission that the accused would be a public servant within the meaning of the expression any person empowered by law to discharge any adjudicatory functions, in cl. (3) of s.21 I.P.C. must be rejected. Participation in a debate on a motion of breach of privilege or for taking action for contempt of the House and voting thereon in a constitutional function discharged by the members and therefore, it cannot be said that such adjudicatory functions if it can be so styled, constitutes adjudicatory function undertaken by M.L.A. as empowered by law. [554 E F] Special Ref. No. 1 of 1966; , at pages 490, 491 and 472; I.C. Golaknath vs State of Punajab, ; Sripadangalavaru vs State of Kerala and Anr.; [1973] Supp. S.C.R 1 referred to. The submission that M.L.A. would be a public servant within cl. (7) of s.21 I.P.C. must be rejected. (7) takes within its ambit 'every person who holds any office by virtue of which he is empowered to place or keep any person in confinement. Broadly stated the expression comprehends police and prison authorities or those under an obligation by law or by virtue of office to take into custody and keep in confinement any person. To say that M.L.A. by virtue of his office is performing 'policing or prison officers ' duties would be apart from doing violence to language lowering him in status. Additionally cl.(7) does not speak of any adjudicatory function. lt appears to comprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a Person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in confinement. [554G, 555 F H] In view of the finding that M.L.A. is not a public servant under clauses (12)(a), (3) and (7) of s.21 I.P.C. and no sanction under s.6 of the Prevention of Corruption is necessary to prosecute him. it is not necessary to ascertain which would be the authority competent to sanction prosecution of M.L.A. [557 C] In the instant case, the allegations in the complaint are all to the effect that the accused misused or abused his office as Chief Minister for corrupt motives. By the time the Court was called upon to take cognizance of those offences, the accused had ceased to hold the office of Chief Minister. The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect is irrelevant for concluding that no sanction was necessary to prosecute him under s.6 on the offences alleged to have been committed by the accused. Assuming that as M.L.A. the accused would be a public servant under s.21, in the absence of any allegation that he misused or abused his office as M.L.A. that aspect becomes immaterial. Further s.6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under section 161, 164, 165 I.P.C. and s.5 of the 1947 Act, if they are alleged to have been committed by a public servant. In view of the finding that M.L.A. is not a public servant within the meaning of the expression in s.21 I.P.C., no sanction under s.6 is necessary to prosecute him for the offences alleged to have been committed by him. [556 G; 557 A B]

241 and 242 of 1960. Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights. P. B. DaS, K. Choudhoury, Balbhadra Prasad Singh and I. N. Shroff, for the petitioners. M. C. Setalvad, Attorney General of India, B. Sen and R. H. Dhebar, for the respondents. February 10. The Judgment of the Court was delivered by MUDHOLKAR, J. The petitioner in W. P. 241 of 1960, Messrs. Burrakur Coal Co., Ltd., and the petitioner in W. P. 242 of 1960, Messrs. East India Coal Co., Ltd., claim to have acquired mining rights in two blocks in Mouza Sudamdih and Mouza Sutikdih respectively situated in Dhanbad district in the State of Bihar. On July 28, 1960, the Central Government published a notification bearing No. section 0. 1927 under section 4 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (No. 20 of 1957), stating its intention to prospect for coal in an area approximately five sq. miles which includes Sudamdih colliery aud Sutikdih colliery. The petitioners have stated in their respective petitions that in consequence of the issue of the aforesaid notification they are precluded from carrying on any mining operations in the respective collieries and that the Central Government is entitled to acquire mining rights in the area covered by the notification within a period of two years from the date of notification or within such further period not exceeding one year as the Central Government may specify by notification in the Official Gazette. The petitioners have come up to this Court under article 32 of the Constitution contending that the aforesaid notification is ultra vires and illegal inasmuch as it interfere,% with their fundamental right to own property and to carry on business. Assuming that an incorporated company is a citizen we may point out that the East India Coal Co., Ltd. is incorporated in the United Kingdom while the Burrakur Coal Co., Ltd. is 47 incorporated in India. Therefore, in so far as the rights conferred by article 19 are concerned it may only be the latter which is entitled to the protection of the Constitution but not the former company. Both the petitioners, however, contend that the right conferred by article 31(2) of the Constitution is also infringed by the aforesaid notification and if their contention is correct they will be entitled to protection in respect of that right inasmuch as it is not limited to the citizens of India as is the case with regard to the rights enumerated in article 19. Both the petitions were argued together though the arguments were addressed mainly with reference to the case of Burrakur Coal Co., Ltd. and, therefore, it is that case with which we will deal fully. After dealing with the arguments advanced with reference to that case we will deal briefly with the other case. The challenge to the notification rests on two grounds, firstly that the notification is ultra vire8 the Act and secondly that the Act is itself ultra vires the Constitution. The petitioner 's learned counsel Mr. P. R. Das contends that the Act applies to "unworked" coal mines which according to him, mean virgin lands and not to those which are being worked at present or which were worked in the past. In support of this contention he strongly relies upon the preamble to the Act. The preamble runs thus: "An Act to establish in the economic interest of India greater public control over the coal mining industry and its development by providing for the acquisition by the State of unworked land containing or likely to contain, coal deposits or of rights in or over such land, for the extinguishment, or modification of such rights accruing by virtue of any agreement, lease, licence or otherwise. and for matters connected therewith. " His argument proceeds to the length of saying that even abandoned mines are not touched by the Act. According to him, however, the Sudamdih colliery was not an abandoned mine nor could it be regarded as abandoned because, though it was not actually worked 48 between the year 1932 and the month of May. 1960. the petitioner had purchased it for a large consideration amounting to over Rs. 1,46,000 and thereafter it paid annually the minimum rent and royalty which totals upto over Rs. 1,23,000 from May 1, 1939, to June 30, 1960. According to the petitioner the mine was not actually worked during this period because in the petitioner 's opinion it was uneconomical to work it. The petitioner in fact made ' an application on December 3, 1959, to the Coal Board as required by the provisions of the Coal Mines (Conservation and Safety) Act, 1952 (XII of 1952), for permission to reopen the colliery but it did not receive any reply from the Coal Board. Even so, the petitioner commenced drilling operations in the beginning of May, 1960 and carried them on till August 12, 1960, during which a depth of 235 ft. was reached at one point. The petitioner, however, stopped these operations consequent upon the publication of the impugned notification in the Gazette of August 6, 1960. We are mentioning. these facts because on their basis a further argument is raised by Mr. Das to the effect that prior to the issue of the notification the mine was being actually worked. Before, however, we deal with that argument we must consider the main contention of Mr. Das which is to the effect that the Act applies only to virgin land. Mr. Das contended that the preamble to an Act is a key to understanding the provisions of the Act and referred us in this connection to the advisory opinion of this Court in re the Kerala Education Bill, 1957 In that case Das, C. J., who delivered the opinion of the Court has observed: "The long title of the said Bill (The Kerala Education Bill, 1957) describes it as A Bill to provide for the better organisation and development of educational institutions in the State '. Its preamble recites thus: 'Whereas it is deemed necessary to provide for the better organisation and development of educational institutions in the State provid ing a varied and comprehensive educational service (1) [1959] S.C.R. 995, 1022. 49 throughout the State '. We must, therefore, approach the substantive provisions of the said Bill in the light of the policy and purpose deducible from the terms of the aforesaid long title and the preamble and so construe the clauses of the said Bill as will subserve the said policy and purpose". While. holding that it is permissible to look at the preamble for understanding the import of the various clauses contained in the Bill this Court has not said that full effect should not be given to the express provisions of the Bill even though they appear to go beyond the terms of the preamble. It is one of the cardinal principles of construction that where the language of an Act is clear, the preamble must be disregarded. Though, where the object or meaning of an enactment is not clear, the preamble may be resorted to explain it. Again, where very general language is used in an enactment which, it is clear must be intended to have a limited application, the preamble may be used to indicate to what particular instances the enactment is intended to apply (1). We cannot, therefore, start with the preamble for construing the provisions of an Act, though we would be justified in resorting to it, nay, we will be required to do so, if we find that the language used by Parliament is ambiguous or is too general though in point of fact Parliament intended that it should have a limited application. Mr. Das then contended that the various provisions of the Act clearly show that Parliament intended the Act to apply only to virgin land. In support of this contention he referred to the provisions of as. 4,5,6, 7 and 8 of the Act. He pointed out that whenever it appears to the Central Government that coal is likely to be obtained from land in any locality it is empowered by sub a. (1) of section 4 to give notice of its intention to prospect for coal therein. According to him, where a mine has been worked at some time in the past all the necessary information would be available in the working plan of the mine, and, by way of illustration pointed out that the fullest information (1) Craies Interprotation of Statutes, 5th Edn., pp. 188, 189. 50 was available in the working plan, Annexure B1 of the Sudamdih colliery. He further pointed out that this information was in fact in the possession of the Government as would appear from Annexure B which was appended to the notification of July 20, 1960. We may point out that this annexure sets out that this is a statement of percentage of worked and unworked areas in different coal mines and. after setting out the various seams which have been proved, the percentages of worked and unworked areas have been specified therein. Prospecting, according to Mr. Das, would be necessary only if nothing is known about an area and therefore there can possibly be no need for prospecting when a mine has been worked. Admittedly, sub section (1) of a. 4 does not specifically say that it applies to unworked land. All the same, according to Mr. Das, it must be so construed as to apply to unworked land only; for, there would be no need for the Government to undertake prospecting for coal in worked land on which there is a colliery. We cannot accept the argument of Mr. Das. The bulk of the coal in a mine is underground and even though the existence of some seems may have been proved in particular areas it is impossible to say that the information obtained when it was prospected once or when it was being worked, as to the quality and quantity of coal or the dimensions of the seams is complete. The seams are not necessarily horizontal and more often are inclined and sometimes even folded. Then again there may be faulting in the strata of coal as a result of which an impression may be created that a seam has disappeared at a particular place though further borings or drilling may show that even. beyond that point but at greater depths the same seam reappears. So where a mine was worked in the past but mining operations therein were stopped either because the coal therein was thought to have been exhausted or because it was not thought to be of a sufficiently good quality such as to make the working of the mine economic, further prospecting may well reveal the existence of additional coal bearing strata or of a better type of coal than that found 51 earlier. On the plain language of sub a. (1) of section 4 the Central Government has been empowered to issue a notification with reference to its intention of prospecting any land in a locality and not only such land as is virgin in the sense in which Mr. Das uses that expression. Then Mr. Das referred sub section (3) of a. 4 and said that the whole of the country has been subjected to a geological survey of a very detailed kind and all known coal fields are mentioned in one report or the other of the department of Geological Survey of India. Collieries which have been worked at some time in the past must have been mentioned in one of these reports and. , therefore, it would be wholly unnecessary for the legislature to confer upon the Government the power as is done by cl. (a) of sub section (3) of section 4 to enter upon and survey any land in the locality in which such colliery is situate. The very fact that power has been given to the Central Government to enter upon and survey land for ' the purpose of ascertaining whether there is any coal in that land shows that the legislature had in mind only that land which has not been mentioned as coal bearing in any of the reports of the Geological Survey of India. Here again we may point out that the object of survey of land is to enable the Government to satisfy itself not merely about the fact that any coal exists in that land but also about the quality and quantity of coal therein and whether it would be an economical proposition to work the mines already existing on that land. Indeed a perusal of the provisions of sub a. (4) of section 4 would show that the Act is not restricted to unworked lands only but applies equally to those lands on which there are existing mines but those mines are not being worked. That sub.section reads as follows: "In issuing a notification under this section the Central Government shall exclude therefrom that portion of any land in which coal mining operations are actually being carried on in conformity with the provisions of any enactment, rule or order for the time being in force or any premises on which any process ancillary to the getting, dressing or 52 preparation for sale of coal obtained as a result of such operations is being carried on are situate". Under this provision the Central Government is required to exclude that portion of any land in which coal mining operations are being carried on "in conformity with any enactment, rule or order". This would indicate that the language of sub section (1) of section 4 was understood as applying also to that land in which coal mining operations were actually being carried on. Unless we hold so, the whole of sub section (4) would be rendered otiose. Mr. Das, however, says that sub section (4) enacts a "rule of exclusion" and that it had been enacted by way of abundant caution. We cannot accede to this argument for the simple reason that if the language of sub section (1) of section 4 is capable of being interpreted as applying to any land in which coal mining operations are actually being carried on, then there is all the greater reason why that provision should be held also to apply to land in which coal mining operations were carried on in the past, though they are not being carried on at present. If Parliament was cautious enough to exclude land in which coal mining operations are actually being carried on why did it stop there and not exercise the same caution with respect to land in which coal mining operations were once being carried on but have now ceased? For, on the plain meaning of the word "unworked" such lands would more readily fall within the terms of sub section (1) of section 4 than land in which coal mining operations were actually being carried on, that is to say, "worked lands". Then Mr. Das referred to cl. (b) of section 5 which runs thus: "any mining lease in so far as it authorises the lessee or any person claiming through him to undertake any operation in the laid, shall cease to have effect for so long as the notification under that sub. section is in force". He contended that what this provision prohibits is the undertaking of any operation in the land and not carrying on of an operation. Undertaking of an operation, according to himself 'relates to the initial 53 working of the mine and riot to the resumption of work on the mine after work thereon had stopped nor to carrying on work on a mine the working of which had not been stopped. As a consequence of the issue of a notification under sub section (1) or section 4 what the lessee of a mining lease is prohibited from doing is undertaking any operation on land on which no operations were being carried on. But he is not prohibited from continuing to carry on operations which he was carrying on at the date of the notification. We cannot, however, accede to the contention that the resumption of mining operations on a land is outside the bar created by this pro vision. The words used in the section are "to undertake any operations in the land" which, according to the Concise Oxford Dictionary mean "to enter upon (work, enterprise, responsibility)". The meaning of the provision, therefore, is that what the lessee is prohibited from doing is something which he was not doing at the date of the notification though he was authorised to do it under his lease. Thus if a colliery was not functioning at the date of the notification then by virtue of the provisions of a. 5(b) he would not be permitted to work it. Undoubtedly the provision has to be interpreted reasonably and it does not mean that if the notification came into force on the Monday and the mine was not worked on Sunday because of a holiday, the lessee was prohibited by the notification from working it. The resumption of working of a mine after a casual closure or a closure in the ordinary course of working a mine would not fall within the bar created by section 5(b). In this connection we may refer to r. 7 of the Coal Mines Regulations of 1957, which provides that when it is intended to reopen a mine after abandonment for a period exceeding 60 days not less than 30 days notice before resumption of mining operations must be given to certain authorities. The Coal Mines Regulations of 1957 have been framed under section 57 of the Mines Act of 1952, section 16 of which provides for the giving of notice before commencement of mining operations. It is in the light of these provisions that we must interpret the provisions of section 5(b) of the Act. So what must be said to have 54 been prohibited would be the undertaking of an operation on land not for the first time only but also the resumption of an operation which had been abandoned or discontinued. Mr. Das then contended that a mining area is always extensive and it is not possible to work on every bit of it simultaneously and, therefore, if work is carried on at one point in a colliery the whole colliery must be deemed to be working, that is to say, coal mining operations must be deemed to have been carried on over the entire area on which the colliery is situate. In support of his contention he relied upon the decision of the Privy Council in Nageswar Bux Roy vs Bengal Coal Co., Ltd. (1), and upon a passage in Halsbury 's Laws of England(2). Both the decision of the Privy Council as well as the passage in Halsbury deal with the question of possession and state the law to be that a person can be said to be in possession of minerals contained in a well defined mining area even though his actual physical possession is confined to a small portion, that is, to the mine which is being actually worked. The decision of the Privy Council as well as the passage in Halsbury are nus not in point. Further it is difficult to see how an exemption under section 4(4) is admissible in the case of the Sudamdih colliery or Sutkidih colliery unless it is shown that they were actually being worked at the date of the notification in conformity with the provisions of "any enactment, rule or order for the time being in force". It is an admitted fact that though a notice was given under section 16 of the , by the Sutkidih Colliery, the petitioners in W.P. 242 of 1960, it aid not actually start working the colliery in view of the impugned notification. As we have al. ready pointed out the Burrakur Coal Co., Ltd. did commence working the Sudamdih Colliery in May, 1960, even though it had not obtained the permission of the appropriate authorities. We must, therefore, examine here the argument of Mr. Das that every colliery must be held to be exempted under sub section (4) of section 4. We have already referred (1) (1930) L.R. 58 I A. 29. (2). 3rd Edn., Vol. 26, p. 630. 55 to section 16 of the , and regulation 7 of Mining Regulations, 1957. In addition, there is Regulation 3 of 1957 which requires that the notice contemplated by section 16 should be submitted in Form I. No doubt the petitioner had given notice as required by these provisions. No doubt also that it was necessary for the authorities concerned to take appropriate action on the notice. But it is difficult to say that the inaction of the authorities can be availed of by the petitioner. We must give effect to the plain lan guage of sub section (4) of section 4. That provision in clear terms makes an exclusion or exemption only with regard to that portion of the land in which coal mining operations are actually being carried on in conformity with the provisions of any enactment, rule or order. Therefore, it is clear that Parliament was exempting only such collieries as were being worked in consonance 'with the provisions of law. Mr. Das 's argument, however, is that the Act prescribes penal ties for the breach of its provisions and of those of the regulations and so the petitioner could well be visited with an appropriate penalty but that its right to run the mine could not be affected. We are not here concerned with the question whether the failure of the petitioner to comply with the requirements of the Coal or of the Regulations of 1957 precludes the petitioner under that Act or under those regulations from carrying on mining operations. We are concerned here only with one point, and that is whether the petitioner could be said in point of fact to have been carrying on mining operations in accord ance with law. That the petitioner was not doing so is not even denied by Mr. Das and in the circumstances it is clear that the petitioner is not entitled to the benefit of sub section (4) of section 4. We should have dealt with this part of Mr. Das 's argument elsewhere but in order to avoid repetition we have thought it convenient to deal with it here. Adverting to section 6(1) of the. Act which deals with compensation for any necessary damage done under section 4 of the Act, learned counsel contended that Parliament plainly intended the Act to apply to virgin land. 56 If the section was intended to apply to worked mines there would have been provision, according to learned counsel, for payment of compensation to the owner or lessee of the mine, for being deprived of his right to work the mine consequent upon the . issue of the notification. It is sufficient to point out that section 4 does not contemplate entering upon any land which is actually being worked and there will thus be no deprivation in fact of the owner 's or lessee 's right of working the mine. The Act applies only to "unworked lands". This expression would include not only virgin lands but also lands on which mines may have been opened and worked sometime in the past but working on those mines was either discontinued or abandoned. Of course, it is possible to say that the action of the Government would interfere with the potential right of the owner or the lessee to work the mines and this would interfere with his right to hold property and carry on his business. When we deal with the other part of Mr. Das 's argument we shall deal with this question. It was next contended that section 7 which deals with the power of the Central Government to acquire land or rights in or over land notified under section 4 also indicates the limited operation of the Act. Sub section (1) of section 7 runs thus: "If the Central Government is satisfied that coal is obtainable in the whole or any part of the land notified under sub section (1) o f section 4, it may, within a period of two years from the date of the said notification or within such further period not exceeding one year in the aggregate as the Central Government may specify in this behalf, by notification in the official Gazette, give notice of its intention to acquire the whole or any part of the land or of any rights in or over such land, as the case may be". The argument was that in respect of mines which have already been worked at some time in the past all the relevant material would be at the disposal of the Government even previous to the issuing of a notification under sub section (1) of section 4 and, therefore, there 57 could be no necessity for the Government to enter on and prospect the land for being satisfied that coal is obtainable therefrom. Therefore, the argument proceeds, the provision could not have been intended to apply to land other than virgin land. This is really a repetition of the argument which was addressed to us in connection with sub. (1) of section 4 and what we have said with regard to that sub section would equally apply here. Sub section (1) of section 7 provides for a period of two years within which a notice of acquisition could be given by the Central Government. It is argued that this period is too long for keeping out an owner or lessee of land, the mines on which had been worked in the past and that Parliament could not have intended this effect. Therefore, the argument proceeds, this provision also points to the conclusion that the word "land" wherever it occurs in the Act should be read as virgin land. Prospecting operations are necessarily prolonged because what lies under the surface of land cannot be easily ascertained except by undertaking drilling or other appropriate operations at a number of places. Such operations are bound to be prolonged. Parliament apparently thought that it would be reasonable to allow a period of two years to the Government for carrying on the necessary operations and for, making up its mind. The mere length of the period so allowed to the Government cannot be regarded as indicative of the intention of Parliament to give to the word 'land ' the meaning 'virgin land '. Reliance was placed on the explanation to sub a. (1) of section 8. That sub section and the explanation are as follows: "Any person interested in any land in respect of which a notification under section 7 has been issued may, within ' thirty days of the issue of the notification, object to the acquisition of the whole or any part of the land or of any rights in or over such land. Explanation. It shall not be an objection within the meaning of this section for any person to say 58 that he himself desires to undertake mining operations in the land for the production of coal and that such operations should not be undertaken by the Central Government or by any other person". It was argued that in the explanation the words used are "to undertake mining operations" and not "to carry on mining operations" and therefore the Act could not be intended to apply to worked mines. Here again the argument is similar to that advanced on the basis of cl. (b) of section 5 and what we have said regarding it would equally apply here. Adverting to section 13 of the Act which deals with compensation for prospecting licences ceasing to have effect and rights under mining leases being acquired, it was contended that as there is no provision for compensation in respect of the minerals lying underground, Parliament could not be deemed to have enacted this law for the purpose of acquiring mines which have been worked in the past. According to Mr. Das if we have understood him right, when a person has acquired land either as an owner or as a lessee carrying with it the rights to win minerals and has opened in that land mines which he worked for sometime, there takes place a severance between the right to the surface and right to the minerals and that consequently such person will thereafter be holding the minerals as separate tenement, that is, something apart from the land demised and this separate tenement cannot be acquired under the terms of the present Act or, if it can be so acquired, it has to be specifically compensated for. Reference to the several provisions of the Act and in particular to those of section 13 indicates, according to learned counsel, the limited scope of the Act. It is difficult to appreciate the contention that merely because the owner or the lessee of a land had opened mines on that land, a severance is effected between the surface and the underground minerals. It may be that a trespasser by adverse possession for the statutory period can acquire rights to underground minerals. It may also be that if that happens the surface rights would become severed from the mineral rights as a result of which the 59 minerals underground would form a separate tenement. It is, however, difficult to see how the owner or the lessee of land who has right to win minerals can effect such a severance between the mineral rights and surface rights by opening and operating the mines of that land. For, even while he is carrying on mining operations he continues to enjoy the surface rights also. We cannot, therefore, accept the contention that there was any severance of the mineral rights and surface rights in either of these two cases. It is no doubt true that section 13 does not make any specific provision for compensation in respect of minerals, but on the other hand it provides in the explanation to el. (a) of sub section (5) that the value of minerals lying in the land shall not be taken into consideration in assessing compensation. Whether the absence of a provision for compensation ' would make the Act ultra vire8 in so far as it contemplates acquisition of land will be considered presently. We may, however, point out that the Act does not make provision for compensation for minerals in respect of even virgin land and the argument of Mr. Das would equally apply to such land. Therefore, no point can be made from the absence of a provision for compensation for minerals that the Act was applicable only to virgin lands. For all these reasons it is clear that the notification is not ultra vires the Act because, in our view the Act applies not only to virgin lands but also to dormant collieries or unworked lands. To sum up, in our view, the preamble of this Act need not be resolved to for construing its provisions and in particular for understanding the meaning of the word "land" used in the Act; that even if the preamble is taken into consideration the expression "unworked land" occurring in the preamble should be given its ordinary meaning, that is to say, land which was not being worked at the time of the notification issued under the Act, which would include dormant mines; that the provisions of the Act and in particular those of sub section (4) of section 4 and section 5(b) clearly militate against the contention that the Act was intended to apply only to virgin lands, to the exclusion of land on 60 which there are dormant mines, and that the absence of a provision in section 13 of the Act providing for compensation for mineral rights cannot by itself justify the conclusion that the Act was intended to apply to virgin land only. Now we come to the second part of the argument. It is contended that sections 4, 5 and 6 invade the fundamental rights of the petitioner under article 19(1)(g) of the Constitution because under section 5, a mining lease ceases to have effect for two years and possibly for three years. Mr. Das concedes that reasonable restrictions can be placed by the State upon the rights enumerated in this article in the interests of the general public but he contends that the period of two to three years is too long and, therefore, the restrictions cannot be regarded as reasonable. We have already indicated that prospecting operations, in their very nature, must take a long time to complete and presumably Parliament had fixed this period after bearing in mind this factor and also on the basis of expert advice. Of course, there are no pleadings to that effect in the affidavit of the State. But in our opinion the petitioner cannot be permitted to complain of the absence of pleadings because it has not itself stated in the petition what would be reasonable time for conducting prospecting operations. We are, therefore, unable to accede to the argument. The next attack, and that is a more formidable one, is based upon the ground that the Act does not contain any provision for compensation for the deprivation of the petitioners right to carry on its business for two to three years and that consequently one of its fundamental rights is infringed. It is no doubt true that in a. 13(4) which deals with the question of compensation there is no provision for payment of compensation for the deprivation of the right of a mine owner or a lessee to carry on his business for a period of two or three years, but the petitioner cannot complain about it. In article 31A, cl. (1), sub el. (e), of the Constitution, which was inserted by the Constitution First Amendment Act, 1951, it is provided that "notwithstanding anything contained in article 13, no 61 law providing for. . . the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on :the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or Art 31. " Then follows a proviso with which we are not concerned. The effect of a notification under section 4(1) of the Act read with section 5(b) is to prevent an owner or lessee of a mine from working his mine far a certain period of time. His rights are thus modified by the notification. According to Mr. Das, however, the effect of the notification is to suspend the rights of a mine owner or lessee of the mine for a certain period and that such suspension is not modification. In this connection he relied upon the observations of Mahajan, J., (as he then was), in Thakur Raghbir Singh vs Court of Wards, Ajmer (1). That was a case where, in connection with a notification issued under the Court of Wards Act, the learned Judge observed that the word "modification" used in the aforesaid provision of the Constitution does not include suspension of a right. The observations made in that case fell for consideration by this Court in Sri Ram Ram Narain Medhi vs The State of Bombay (2) and Atma Ram vs The State of Punjab and Ors. Explaining them this Court observed in the latter case: "Those observations must be strictly limited to the facts of the case, and cannot possibly be extended to the provisions of Acts wholly dissimilar to those of the Ajmer Tenancy and Land Records Act, XLII of 1950, which was the subject matter of the challenge in the case then before this Court. This Court held, on a construction of the provision of that Act, that they only suspended the right of management but did not amount to any extinguishment or modification of any proprietary rights (1) ; ,1053. (2) [1959] Supp. S.C.R. 489, 519 (3) [1959] SUPP. S.C.R. 748, 767. 62 in an estate. The provisions of the Act then under consideration of this Court, have absolutely no resemblance to those of the Act now before us, and it is impossible to put a similar interpretation on these provisions. In the recent decision of this Court (not yet reported) this Court had been invited to apply the observations of this Court referred t o above, to the provisions of the Bombay Act. It was pointed out in that case that those observations of Mahajan, J., (as he then was), must be read as limited to an Act which only brings about a suspension of the right of management of an estate, and could not be extended to the provisions of an Act which either extinguishes or modifies certain rights of a proprietor in an estate or a portion thereof". This Court did not intend to lay down as law in Thakur Raghbir Singh vs Court of Wards, Ajmer (1) that article 1A(i)(e) is inapplicable to a case where the property rights of a person are kept in abeyance for a certain period. The meaning of the word "modify" fell to be considered, in re The As pointed out in the opinion of Kania, C. J., the word "modify" means, according to Oxford Dictionary, to limit, restrain, to assuage, to make less severe, rigorous, or decisive; to tone down". It also means "to make partial changes in; to alter without radical transformation". In Rowland Burrows" 'Words and Phrases ', the word "modify" has, however, been defined as meaning "vary, extend or enlarge, limit or restrict". According to the learned Chief Justice "It has been held that modification implies an alteration. it may narrow or enlarge the provisions of the former Act". Bearing in mind the principle that a constitutional enactment must be construed liberally we would be right in according the dictionary meaning to the word " modification" occurring in the aforesaid provision. Mr. Das, however, contends that for a thing to amount to a modification of a right it must be of a permanent character and not of a temporary duration. We see no ground whatsoever for holding that for a (1) ; ,1053. (2) 63 thing to be a modification it must be of a permanent duration. A right may well be modified for all time or for a limited duration and in either case the right must be regarded as having been modified. For these reasons we hold that the provisions of article 31A, cl. (1)(e), debar the petitioners from challenging the validity of sections 4 and 5 of the Act on the ground that they infringe the provisions of article 31(2) of the Constitution. What remains to be considered is whether the provisions permitting acquisition of land are ultra vires the Constitution because they offend article 31(2) of the Constitution. According to the learned Attorney General the petitioners have no present grievance on that score because the notification in question empowers the State only to prospect for coal in the petitioner 's land and not to acquire it. We cannot accept this contention. The whole object of Parliament in enacting the law was to empower the State to acquire coal bearing lands. Prospecting on a piece of land for coal is merely a stage preceding the actual acquisition of that land. If, therefore, those provisions of the law which deal with the question 'of acquisition are unconstitutional the whole Act will be rendered unconstitutional. Article 31(2) of the Constitution, as amended by the Fourth Amendment Act, 1955, runs thus: "No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate". Mr. Das pointed out that section 13 of the Act, though it deals with the payment of compensation, does not contain any provision for payment of compensation for mineral rights. Not only that, but the explanation to cl. (a) of section 5 clearly lays down that in computing the 64 compensation for the land the value of minerals will not be taken into account. The acquisition of mineral rights would, therefore, according to him, be impermissible under article 31(2) without payment of compensation. The learned Attorney General quite rightly pointed out that section 13 deals with the whole subject of payment of compensation to the owner or lessee of the mine for his entire interest in the land including the rights to minerals and even though that section specifically says that the value of the minerals cannot be taken into account in determining the amount of compensation, the concluding words of article 31(2) preclude the petitioners from challenging the law. Mr. Das pointed out that the only ground on which the Central Government in their affidavit have tried to sustain the validity of the provisions relating to the acquisition of land under the Act is that a challenge to the validity of the law is barred by the provisions of article 3lA(1)(e) and that it is not now open to the Central Government to say that the law can be sustained on another ground. We cannot accept this contention. Where the validity of a law made by a competent legislature is challenged in a Court of law that Court is bound to presume in favour of its validity. Further, while considering the validity of the law the court will not consider itself restricted to the pleadings of the State and would be free to satisfy itself whether under any provision of the Constitution the law can be sustained. There is no doubt that the entire Act cannot be sustained by resorting only to article 31A(1)(e) or to article 31(2A) of the Constitution because these provisions do not deal with the question of acquisition and the Attorney General fairly admitted that it could not be so sustained. The opening words of sub section (2) of section 13 read thus: "Where the rights under a mining lease are acquired under this Act, there shall be paid to the person interested compensation, the amount of which shall be a sum made up of the following items, namely. . Then follow the items which have to be added up Undoubtedly they are items of expenditure and 65 interest on such expenditure. Sub section (3) deals with the procedure to be adopted where the rights acquired under section 9 relate only to part of the land covered by the mining lease. Sub section (4) deals with the compensation to be paid where the mining lease ceases to have effect for any period under cl. (b) of section 5. Subsection (5) provides for payment of compensation for any land acquired under section 9 and lays down the principles to be followed in computing the compensation. Sub section (6) provides for payment of com pensation for damage done to the surface of any land or any works thereon and in respect whereof no provision for compensation is made elsewhere in the Act. Sub section (7) deals with the question of compensation for maps, charts and other documents. Section 14 of the Act deals with the method of determining the compensation. It will be clear from these provisions that the Act specifies the principles on which and the manner in which the compensation should be determined and given. This is all that is required of a law relating to the acquisition of property by article 31(2) of the Constitution. Where provisions of this kind exist in a law that Article lays down that such law cannot be called in question in any court on the ground that the compensation provided by that law is not adequate. Here compensation is specifically provided for the land which is to be acquired under the Act. The land includes all that lies beneath the surface or, as Mr. Das put it, all that is "locked up " in the land. Parliament has laid down in sub B. (5) of section 13 how the value of this land is to be calculated. The contention that the provisions made by Parliament for computing the amount of compensation for the land do not take into account the value of the minerals is in effect a challenge to the adequacy of the compensation payable under the Act. The concluding words of article 31(2) preclude such a challenge being made. But Mr. Das contended that the minerals are separate tenement and have to be separately compensated for. We have already dealt with the contention of Mr. Das that the minerals underlying the surface are a separate tenement and we need not repeat here all 66 that we have said before. In our opinion the minerals cannot be regarded as a separate tenement except perhaps in a case of a trespass and, therefore, there is no question of the law providing for a separate compensation for them. Apart from that if minerals have become a separate tenement then the present Act may not apply to such a tenement at all. As we have pointed out the coal contained in the two collieries in question is not held by the respective petitioners as a tenement separate from the surface. In the circumstances the challenge to the validity of the Act on the ground that it offends article 31(4) of the Constitution fails, and we dismiss the petition with costs. We must say a few words about W. P. 242 of 1960. Out of 737 bighas of land held by the petitioner in that writ petition, we are informed that 321 bighas have been worked. The working,of this mine was closed in the year 1928 on the ground that the mine was flooded. An application Was made by the petitioner for reopening the mine on June 5, 1957. Repeated reminders were sent subsequently but there was no reply to any of them either. In its application the petitioner, it may be stated, did not apply for opening new mines. Since the necessary permission was not received, it did not commence any operations. We are informed that over a million tons of coal was extracted by the petitioner from its colliery in the past. Even so, we do not think that any different considerations could apply to the petitioner 's case from those which apply to the case of the Burrakar Coal Co. The petitioner 's colliery was also dormant for too long a period and was thus an "unworked mine". The impugned Act and the notification made thereunder both apply to it in the same way as they apply to the Sudamdih colliery belonging to Burrakur Coal, Co., Ltd. The writ petition thus fails and is dismissed with costs. Cost of the hearing be paid half and half by the two petitioners. There will be only one hearing fee, to be divided equally between the two petitioners. Petitions dismissed.

The Coal Bearing Areas (Acquisition and Development) Act, 1957, was enacted, as indicated in the preamble, for providing for the acquisition by the State of unworked land containing or likely to contain coal deposits, and under section 4(1) of the Act, the Central Government was empowered to issue a notification with reference to its intention to prospect for coal from land in any locality. By section 5(b) any mining lease granted to a person and in respect of which a notification had been issued shall cease to have effect, and under section 7 the Central Government was entitled to acquire the mining rights within a period of two or three years from the date of the notification. On July 29, 1960, the Central Government published a notification under s, 4(1) of the Act in respect of an area included in the colliery in which the petitioners had acquired mining rights. Between the year 1932 and the month of May, 1960, the colliery was not worked because it was uneconomical to work it, but the petitioners made an application on December 3, 1959, to the Coal Board for permission to reopen the Colliery and though no reply was received from the Board, the petitioners commenced drilling operations in May, 1960, but discontinued them from August 12, 1960, in view of the notification. The petitioners challenged the validity of the notification on the ground that the preamble of the Act and sections 4, 5, 6, 7 and 8 show that the Act was applicable only to unworked mines which must mean virgin lands,, and not to those which were being worked at the time of notification or which were worked in the past, whereas the petitioners ' coal field had been worked and the working had ceased for some time only due to the unremunerative market for the produce. The petitioners also contended that the Act contravened articles 19(1)(g) and 31(2) of the Constitution of India on the grounds (1) that the effect of a notification under the Act was to prevent an owner or lessee of a mine from working for two or three years, which was too long a period and, therefore, the restrictions could not be regarded as 45 reasonable, (2) that the Act did not contain any provision for compensation for the deprivation of the petitioners ' right to carry on their business for two or three years, and (3) that section 13 of the Act, though it dealt with the payment of compensation, did not provide for compensation for mineral rights. Held: (1) that the expression "unworked land" occurring in the preamble of the Coal Bearing Areas (Acquisition and Development) Act, 1957, means land which was not being worked at the time of the notification issued under the Act and includes dormant mines. Where the object or meaning of a enactment is not clear, the preamble may be resorted to to explain it. In re the Kerala Educatiion Bill, 1957, [1959] S.C.R. 995. referred. (2) that the Act is applicable not only to virgin lands but also to dormant collieries or unworked lands, including mines which were worked in the past but mining operations therein are not being carried on at present. (3) that the expression "to undertake any operation in the land" in section 5(b) of the Act refers to the undertaking of an operation on land not for the first time only but at the resumption of an operation which had been abandoned or discontinued. The resumption of the working of a mine after a casual closure or a closure in the ordinary course of the working of a mine would not fall within the bar created by section 5(b). (4) that the restrictions imposed upon an owner or lessee of a mine by which he is prevented from working his mine for a certain period of time under ss.4 and 5 of the Act are not unreasonable and that the Act does not contravene article 19(1)(g) of the Constitution. (5) that such restrictions amount to a modification of his rights within the meaning of article 31A(1)(e) of the Constitution; and that the validity Of sections 4 and 5 Of the Act cannot be challenged on the ground that they infringe article 31(2) in view of the provisions of article 31A(1)(e). Thakur Raghbir. Singh vs Court of Wards, Ajmer, ; , explained. Sri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp. 1 section C. R. 489, Atma Ram vs The State of Punjab, [1959] Supp. r S.C.R. 748 and In re , [1951] S.C.R. 793, relied on. (6) that the Act cannot be challenged on the ground that sections 5(a) and 13 do not provide for payment of compensation for mineral rights, because sections 13 and 14 lay down the principles on which compensation is to be determined, and under Art 31(2) such a law cannot be called in question on the ground of the inadequacy of the compensation provided.

Where the High Court dismisses a writ petition under article 226 of the Constitution after hearing the matter on the merits on the ground that no fundamental right was proved or contravened or that its contravention was constitutionally justified, a subsequent petition to the Supreme Court under article 32 of the Constitution on the same facts and for the same reliefs filed by the same party would be barred by the general principle of res judicata. There is no substance in the plea that the judgment of the High Court cannot be treated as res judicata because it cannot 575 under article 226 entertain a petition under article 32 of the Constitution. Citizens have ordinarily the right to invoke article 32 for appropriate relief if their fundamental rights are illegally on unconstitutionally violated and it is incorrect to say that article 32 merely gives this Court a discretionary power as article 226 does to the High Court. Basheshar Noth vs Commissioner of Income tax, Delhi and Rajasthan, [1959] SUPP. 1 S.C.R. 528, referred to. Laxmanappa Hanumantappa jamkhandi vs The Union of India; , , and Diwan Bahadur Seth Gopal Das Mohla vs The Union of India, ; , considered. The right given to the citizens to move this Court under article 32 is itself a fundamental right and cannot be circumscribed or curtailed except as provided by the Constitution. The expression "appropriate proceedings" in article 32,(1), properly construed, must mean such proceedings as may be appropriate to the nature of the order, direction or writ the petitioner seeks from this Court and not appropriate to the nature of the case. Romesh Thappar vs The State of Madras, ; , referred to, Even so the general principle of res judicata, which has it. ; foundation on considerations of public policy, namely, (1) that binding decisions of courts of competent jurisdiction should be final and (2) that no person should be made to face the same kind of litigation twice over, is not a mere technical rule that cannot be applied to petitions under article 32 of the Constitution, Duchess of Kingston 's case, 2 Smith Lead. 13th E d. 644, referred to. The binding character of judgments of courts of competent jurisdiction is in essence a part of the rule of law on which the administration of justice, so much emphasised by the Constitution, is founded and a judgment of the High Court under article 226 passed after a hearing on merits as aforesaid must bind the parties till set aside in appeal as provided by the Constitution and cannot be circumvented by a petition under article 32. Pandit M. section M. Sharma vs Dr. Shree Krishna Sinha, and Raj Lakshmi Dasi vs Banamali Sen, [1053] S.C.R. 154, relied on. Janardan Reddy vs The State of Hyderabad, ; , Syed Qasion Rezvi vs The State of Hyderabad, [1953] S.C.R. 589 and Bhagubhai Dullabhabhai Bhandari vs The District magistrate, Thana; , , referred to. It was not correct to say that since remedies under article 226 and article 32 were in the nature of alternate remedies the adoption of one could not bar the adoption of the other, Mussammat Gulab Koer vs Badshah Bahadur, (1909) 13 1197 held inapplicable. 576 Consequently, (1) where the petition under article 226 is considered on the merits as a contested matter and dismissed by the High Court, the decision pronounced is binding on the parties unless modified or reversed by appeal or other appropriate proceedings under the Constitution; (2) Where the petition under article 226 is dismissed I not on the merits but because of laches of the party applying for the writ or because an alternative remedy is available to him, such dismissal is no bar to a subsequent petition under article 32 except in cases where the facts found by the High Court may themselves be relevant even under article 32; (3) Where the writ petition is dismissed in limine and an order is pronounced, whether or not such dismissal is a bar must depend on the nature of the order; (4) if the petition is dismissed in limine without a speaking order, or as withdrawn, there can be no bar of res judicata.

The Punjab Government issued notification under sections 4 and 6 of the Land Acquisition Act, 1894, and started proceedings for acquisition of lands for the construction of a labour colony under the Government sponsored Housing Scheme for the workers of the Thapar Industrial Workers ' Co operative Hous ing Society Ltd. The appellants challenged the acquisition proceedings under article 226 of the Constitution on the ground, inter alia, that the procedure prescribed by Part VII of the said Act had not been admittedly complied with. The Division Bench in affirming the order of dismissal passed by the trial judge held that although article 31 of the Constitution by prohibiting compulsory acquisition of property except for a public purpose had made Part VII of the Act redundant, the present proceedings were saved since the acquisition was for a public purpose. Held, that the High Court was in error in holding that the Constitution had rendered Part VII of the Land Acquisition Act, 1894, redundant or null and void, although it was right in dismissing the appeal. That Act, as an existing Act, was saved by article 31(5)(a) from being affected by article 31(2) of the Constitution. Acquisition of building sites for residential houses for industrial labour is for a public purpose even apart from section 17(2) 460 (b)of the Act as amended by ':the Land Acquisition (Punjab Amendment) Act of 1953. Babu Barkava Thakur vs The State of Bombay [1961] 1 S.C.R. 128, referred to. Although in the case of an acquisition for a company simpliciter, no declaration under section 6 of the Act can be made without complying with the provisions of Part VII of the Act, it is not correct to say that no acquisition for a company for a public purpose can be made except under Part VII of the Act. If the cost of the acquisition is borne either wholly or partially by the Government, the purpose would be a public purpose within the meaning of the Act. But if the cost is entirely borne by the company it would be an acquisition for the company simpliciter and Part VII would apply. Since in the instant case a part of the compensation was to be borne by the Government, it was not necessary to comply with the provisions of Part VII of the Act.

The petitioner, a resident of Pondicherry, was an applicant for a stage carriage permit,. before the State Transport authority pondicherry, alongwith 14 other persons. The Permit was granted to one Perumal Padayatchi taking into account the fact that he was a native of Pondicherry along with other facts. The petitioner, whose application for the permit was rejected, went in appeal to the Appellate Authority who dismissed the appeal . The petitioner filed a writ petition under article 32 in this Court and contended that preference on the ground of place of birth is violative of article 15 of the Constitution. On the dates of the orders sought to be impugned, Pondicherry was not yet part of the territory of India, but when the petition was heard it had become part of the territory of India. It was contended on behalf of the respondent that in view of the observations in the decision in N. Masthan Sahib vs Chief Commissioner, [1962] Supp. 1 section C. R. 981, the writ petition was not maintainable. Held, that in article 12 the words "under the control of the Government of India" qualify the word "authorities" and not the word "territory" and article 12 gives an iaclusive definition of the word "State". Held, further, that if no writ could be issued at the time . when the order was passed for the reason that Pondicherry was not part of India at that time, no such writ could be issued in respect of past acts after Pondicherry had become part of India 657 as that would be giving retrospective operation to the Constitution. Janardan Reddy vs The State, ; referred to. Held, also, that judicial or quasi judicial authorities out side the territory of India but under the administration of the Government of India cannot be said to be 'under the control of the Government of India ' as the expression "control" connotes power to issue directions regarding how a thing may be done by a superior authority to an inferior authority, and in the case of a quasi judicial authority no such directions or orders could be issued. It is only in the case of executive action that a superior authority may direct that a particular thing may be done in a particular way by the subordinate authority. In the very nature of things where rule of law prevails it is not open to a Government, be it the Government of India or the Government of a State, to direct a quasi judicial or judicial authority to decide Any particular matters before it in a particular manner. N. Masthan Sahib vs Chief Commissioner, [1962] Supp. 1 section C. R. 981, referred to. Held, also, that the Chief Commissioner who is the Appellate Authority in the case, fell outside the definition of 'State ', he being a quasi judicial authority not under the control of the Government of India and, therefore, article 15 of the Constitution did not apply to him and no protection under article 15 was available against the Chief Commissioner at the time the impugned order was made.

The appellant framed bye laws for the regulation and control of flour, rice and oil mills under which a licence had to be obtained on payment of licence fee for running a mill. The bye laws were framed under section 174 of the U. P. District Boards Act, 1922. The respondent contended that the bye laws were ultra vires and void as the District Boards had been divested of their powers to regulate and control trade under the District Boards Act on account of section III of the P. P. Panchayat Raj Act, 1947, which operated in the same field. Held, that the bye laws had been validly made and that the District Boards were not divested of their powers to regu late and control trade under the District Boards Act, 1922, by the provisions of U. P. Panchayat Raj Act, 1947. Section 91(q) of the District Boards Act cast a duty on the District Boards to make provisions for regulating offensive, dangerous or obnoxious trades, callings or practices and section 174(2)(k) specifically empowered District Boards to make bye laws in this respect. There was no similar duty or power conferred upon Village Panchayats under the Panchayat Raj Act and consequently the question of the later enactment prevailing over the former did 82 not arise. The reference to "sanitation" in section 15(c) of the Panchayat Raj Act did not cover regulation and control of trade. Though the word " sanitation " in its widest connotation was capable of including this, it was not used in its widest sense in section 15(c) but only in its ordinary sense in relation to conservancy, drainage and the like. Section III of the Panchayat Raj Act was in general terms, but bye laws could be framed under it only in respect of the functions and duties imposed upon a Gram Panchayat under sections 15 and 16. Held, further, that the licence fee charged by the District Board could not be struck down on account of fees being charged from the respondent in respect of his mills under the U. P. Rice and Dal Mills Control Order, 1948, and the U. P. Pure Food Act. The licence fee charged by the District Board was for the regulation of obnoxious trades and the purpose of this regulation was different from the purpose for which fee was charged from the respondent under the Essential Supplies Act and the Pure Food Act.

The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act, 1950, was ultra vires, void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer, pending the hearing of the suit. More than a year thereafter, the State made an application under 0. 39, r. 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court. Before that application could, however, be heard, the State of Bihar, on May 19, 1952 issued a notification under section 3(1) of the Act, authenticated by the Additional Secretary to the Government, declaring that, amongst others, the respondent 's estate had vested in the State of Bihar under the provisions of the Act. Thereupon the respondent moved the trial Court for taking action against the State under 0. 39, r. 2(3) of the Code. The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court. The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant 's property to the value of Rs. 5,000 and the High Court on appeal affirmed that decision. Held, that the courts below took the correct view of the matter and that the appeal must be dismissed. The procedure laid down by 0. 39, r. 2(3) of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0. 39, r. 2(1) and is available against the State although the provision for detention may not apply to it. It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation. District Board of Bhagalpur vs Province of Bihar, A.I.R. 1954 729 Pat. 529 and Tarafatullah vs section N. Maitra, A.I.R. 1952 Cal. gig, distinguished. There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0. 39, r. 2(3). The word 'person ' used by it, properly construed, includes the defendant against whom the order of injunction is primarily issued as also the defendant 's agents, servants and workmen. Since the court 's power to issue an order of temporary injunction against the State under 0. 39, r. 2(1) cannot be in doubt, disobedience of such an order when issued necessarily attracts 0. 39, r. 2(3) of the Code. Director of Rationing & Distribution vs Corporation of Calcutta, ; , held inapplicable. Held, further, that when once an order is passed which the Court has jurisdiction to pass, it is the duty of the State no less than any private party to obey it so long as it stands, and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0. 39, r. 2(3) was made and persisted in till the end must be disapproved.

Pursuant to a policy decision arrived at an All India Conference on Co operative Societies, various State Legislatures, roughly at about the same lime introduced enactments providing for amalgamation of co operative societies. The vires of the provisions, contained in sub sections 8 to 11 of section 13 of the Punjab Co operative Societies Act, 1961 providing for compulsory amalgamation of cooperative societies if it is necessary in the interests cooperative societies, is challenged in these appeals by special leave aud other special leave petitions. Dismissing the appeals and petitions, the Cource, ^ HELD 1. The vires of legislation is not to be decided on the basis of affidavits of underlings of the executive who can hardly be described as authorised to speak for the legislature. As usual in these and such cases, 581 the Counter affidavits , where they have been filed , leave much to be desired and arc least helpful to the Court. [584F G 585A] A 2.1 The law providing for amalgamation of co operative societies , in view of the constitutional bar contained in Article 31 A (1) (c) cannot be struck down as violative of the provisions of Article 19 (1) (c) of the Constitution , the right of a citizen to form a society or to be a member of a certain cooperative society is not interfered with if the society of which he has become a member is amalgamated with another society consisting of members with whom he may not be willing to be associated [588D G] In the cases here , the cooperative societies are governed by statute from their inception. They are created by statute , they are controlled by statute and so there can be no objection to statutory interference with their composition on the ground of contravention of the individual right of freedom of association. j 594C D] Damyanti Naranga vs Union of India , [1971] 3 S.C.R. 840 , explained and distinguished. 2.2 The expression "Corporations" occurring in Article 31 A (I) (c) of the Constitution cannot be given such a limited or narrow interpretations so as not to comprehend cooperative societies in its expanse. 011 the other hand , the very requirement of the Corporation mentioned in Article 31 A (I) (c) requires the expression to be given a broad interpretation since there can been higher interest than the public interest.[589C D] 2.3 Section 30 of the Punjab Cooperative Societies Act , 1961 confers every registered co operative society the status of a body corporate having perpetual succession and a common seal , with power to hold property enter into contracts , institute and defend suits and other legal proceedings and to do all things necessary the purposes for which it is constituted Therefore , co operative society is a corporation as commonly understood [591G H , 592A] Board of Trustees , Ayurvedic , and Unani Tibia College , Delhi vs The State of Delhi , [1962] Suppl. 1 SCR 156 applied. 2.4 The scheme of the Constitution as enjoined in Entries 43 and 44 of List I of the Seventh Schedule an Entry 32 of List 11 does not make any difference either. The mention of co operative societies both in Entry 43 of List I and Entry 32 of List II along with other corporations give an indication that the Constitution makers were of the view that co operative societies were of the same genus as other corporations and all were corporations. In fact the very express exclusion; of co operative societies from Entry 43 of List I is indicative of the view that but for such exclusion , co operative societies would be comprehended within the expression "corporations".[592A , 592F G] 2.5 The statement of Objects and Reasons of the Constitution (4th) 582 amendment) Act and the report of the Joint Select Committee relating thereto , do now show that initially it was proposed to give protection to legislation pertaining to amalgamation of companies only but later it was thought fit to extend the protection to statutory corporations also and therefore , the expression "corporations" was substituted in the Act in the place of the expression "companies ' which had been mentioned in the Bill. It was obviously thought by the Parliament that the protection should not be confined to companies only but should extend to all corporations which would naturally include Statutory Corporations. The more generic expression "corporation" was used so that all companies statutory corporations and the like may be brought in. There is no indication that notwithstanding the use of the generic expression "corporations" , the expression was intended to exclude corporations other than companies and statutory corporations. Parliament apparently chose the broader expression not with a view to limit the protection of the legislation relating to amalgamation to any class of corporations but with a view to protect legislation pertaining to amalgamation of all classes of corporations. [592H , 593D G] 2.6 The very philosophy and concept of the cooperative movement is impregnated with the public interest and the amalgamation of co operative societies when such amalgamation is in the interest of the co operative societies is certainly in the public interest or can only be to secure the proper management of the societies. Therefore , it cannot be said that the protection of Art , 31 A(l) (c) was not available to section 13 (8) of the Punjab Co operative Societies Act , as the interest of a co operative society may not necessarily be in the public interest or for the proper management of the society. [594D G] 2.7 Notice to individual members of a co operative society , is opposed to the very status of a cooperative society as a body corporate and is , therefore , unnecessary. Once a person becomes a member of a co operative society he loses his individuality qua the society and he has no independent rights except those given to him by the statute and the bye laws He must act and speak through the society or rather , the society alone can act and speak for qua rights or duties of the society as a body. So if the statute which authorises compulsory amalgamation of cooperative societies provides for notice to the societies concerned , the requirement of natural justice is fully satisfied. The notice to the society will be deemed as notice to all its members. That is why section 13 (9) (a) provides for the issue of notice to the societies and not to individual members. Section 13 (9) (b) , however , provides the members also with an opportunity to be heard if they desire to be heard Further a member who objects to the proposed amalgamation within the prescribed time is given , by section 31 (11) the option , to walk out , as it were , by withdrawing his share , deposits or loans as the case may be. [595A , C A] 2,8 A fresh notification would not be necessary where the Assistant Registrar even initially was authorised generally to perform all the functions of a Registrar. A fresh notification would probably be necessary where the Assistant Registrar was authorised to perform certain specified functions only of the Registrar. That is not claimed to be the situation here. [596A B] 583 2.9 It cannot be said that the dignity of a human being is even remotedly affected by the amalgamation of a co operative society of which an individual is member with another co operative society. Therefore the contention that both Article 31 A(l)(c) of the Constitution and section 13(8) of the Punjab Cooperative Societies Act , offended the basic structure of the Constitution and therefore were void is misplaced. OBSERVATION: [The Counsel appearing in the Supreme Court , particularly , when they appear before the Constitution Bench must avoid advancing totally unsustainable propositions. The time of the Supreme Court is public time and as the mountainous arrears show that time is becoming increasingly dear and precious. The counsel must carefully examine with a greater sense of responsibility the submissions which they propose to make before actually advancing them in the Court]. [596G H 593A B] 3. It is not unusual for parties and counsel to raise innumerable grounds in the petitions and memoranda of appeal etc. but , later , confine themselves , in the course of argument to a few only of those grounds , obviously because the rest of the grounds are considered even by them to be untenable. No party or counsel is thereafter entitled to make a grievance that the grounds not argued were not considered. If indeed any ground which was argued was not considered it should be open to the party aggrieved to draw the attention of the Court making the order to it by filing a proper application for review or clarification. The time of the superior Courts is not to be wasted in inquiring into the question whether a certain ground to Which no reference is found in the judgment of the subordinate court was argued before that court or not .[596D E]

Allowing the Writ Petition, the Court ^ HELD: Under clauses 4 and 5 of Article 22 of the Constitution the detenu has a dual right viz. (i) to have the representation, irrespective of the length of detention, considered by the appropriate Government; and (ii) to have the representation considered by the Board duly constituted under the concerned Act. [870 E F] Further, the constitutional right to file a representation to the Government carries with it impliedly a right that the representation must be disposed of as quickly as possible and any unexplained delay would amount to a violation of constitutional guarantee contained in Article 22(5). [870 F G] The obligation of the appropriate detaining authority to take a decision on the representation filed by the detenu is quite apart and distinct from its obligation to constitute a Board and to send the representation to it. The detaining authority is not entitled to wait for the opinion of the Board but has to take its decision without the least possible delay. [870 G H, 871 A] Pankaj Kumar Chakraborty & Ors. vs State of West Bengal ; and Narendra Purushotam Umrao etc. vs B. B. Gujral and Ors., ; relied on.

Appeal No. 512 of 1957. Appeal by special leave from the judgment and decree dated August 29 ' 1952, of the Madras High Court in Second Appeal No. 2349 of 1946. Azizuddin and K. R. Choudhury , for the appellant. Shaukat Hussain and P.C. Agarwala, for respondents Nos. 1 and 2. 1961. February 14. The Judgment of the Court was delivered by SHAH J. There is in the village of Cavelong, District Chiugleput in the State of Madras an ancient Durgah to which is appurtenant a Masjid. The Nawab of Carnatic had granted two villages in inam for the maintenance of the Durgah and the Masjid. Offerings from the devotees who visited the Durgah and the Maajid were also received. The income of the institution after disbursing the expenses of "Sandal", and "Urs" and of feeding the poor has since long been shared by descendants in four families in equal shares. By 'Custom females and persons claiming through females were excluded from receiving a share of the income and the income was distributed amongst the males descended 'in the male fine. In original suit No. 27 of 1940 of the file of the Subordi nate Judge, Chingleput, a scheme was framed for administration of the Durgah and the Masjid and a Board of trustees was appointed for that purpose. By the scheme, provision was. made for distribution of the surplus income amongst the members of the four families. 69 Fakruddin, in the following genealogy, belonged to one of the four families which received the income. Sheik Mohammad Fakir Mohammad Sheik Miran Giasuddin Nismat Ulla Khamruddin Nayeem Uddir Fakir Mohammad Fakruddin=Sulai Niama Ulla Abdul Safi man Bi Wahid Ulla (2nd plaintiff) (1st deft.) Nayeemuddin (died unmarried) Ramat Syed Un Unnissa (2nd nissa (Ist defendant) plaintiff) As a descendant of Sheik Mohammad, Fakruddin received a 1/8th share of. the income. He was also by arrangement with others entitled to perform the "Urs" ceremony once in eight years. Fakruddin died in 1921 leaving him surviving his wife Sulaiman Bi and two daughters Rahmat Unnissa and Syed Unnissa. Sulaiman Bi is plaintiff No. 2 and Rahmat Unnissa and Syed Unnissa are respectively defendant No. 2 and plaintiff No. 1 in suit No. 156 of 1937 out of which this appeal arises. In the year 1926, it was the turn of Fakruddin to perform the "Urs" and it is claimed by the plaintiffs that it was performed on behalf of the widow and daughters of Fakruddin by their deputies. The next turn was in the year 1934, but in the performance of the "Urs", the plaintiffs and defendant No. 2 were obstructed by Abdul Wahid son of Nayeem Uddin belonging to the other branch in Sheik Mohammad 's family. Plaintiffs 1 and 2 then filed suit No. 156 of 70 1937 in the court of the District Munsif at Chingleput .For a declaration that they were entitled to enjoy the properties described in the schedule annexed to the plaint and to manage the Durgah, perform the "Urs" festival and receive all "incomes, endowments and perquisites thereof once in every eight years" since 1934 according to their turn. They also claimed an injunction restraining Abdul Wahib from interfering with their rights in that behalf. Rahmat Unnissa the eldest daughter of Fakruddin was impleaded as defendant No. 2. Abdul Wahid defendant No. 1 died during the pendency of the suit and defendants 4 to 10 who were brought on record on their own application as heirs and legal representatives to the exclusion of the daughter of Abdul Wahid defended the suit. They denied the right of the plaintiffs to a share in the income contending that lay custom in the family, females were excluded from inheritance, that the office of "Peshimam", "Khatib" and "Mujavar" could only be held by males and that females were excluded from those offices, that the plaintiffs ' claim was barred by the law of limitation and that in any event the suit for a mere declaration was not maintainable. The Trial Judge held and the appellate court agreed with him that there was an immemorial custom governing the institutions precluding the plaintiffs from performing services or sharing the income, emoluments and perquisites and therefore the plaintiffs were not entitled to perform those services and enjoy the surplus income, and accordingly they were not entitled to the declaration of an injunction prayed for. In second appeal, the High Court at Madras held that by virtue of the Shariat Act, 1937, the income received from the institution had to be shared according to the per sonal law of the parties and that the plaintiffs ' claim was not barred by the law of limitation nor was the suit open to the objection that it was as framed not maintainable. Against the decree passed by the High Court, this appeal with special leave under article 136 of the Constitution is preferred. In our view, the suit as framed was maintainable. The management of the institution is vested in the 71 trustees. The four families, it is true, are by tradition entitled to perform and officiate at certain ceremonies and also to share in the income. A suit for declaration with a consequential relief for injunction, is not a suit for declaration simpliciter; it is a suit for declaration with further relief. Whether the further relief claimed in a particular case as consequential upon a,declaration is adequate must always depend upon the facts and circumstances of each case. In Kunj Behari Prasadji Purshottam Prasadji vs Keshavlal Hiralal (1), it was held that section 42 of the Specific Relief Act does not empower the court to dismiss a suit for a declaration and injunction and that an injunction is a further relief within the meaning of section 42 of the Specific Relief Act. In that case, the plaintiff had claimed that a certain will was null and void and that being a close relative of the last holder of a gadi, he was entitled to be the Acharya in the place of that last holder and for an injunction restraining the defendants from offering any obstruction to his occupation of the gadi. It was held that such a suit was maintainable. The surplus income .of the institution is distributed by the trustees and the plaintiffs are seeking a declaration of the right to receive the income and also an injunction restraining the defendants from interfering with the exercise of their right. The High Court hold that plaintiff No. 1 was at the date of the suit 19 years of age and was entitled to file a suit for enforcement of her right even if the period of limitation had expired during her minority within three years from the date on which she attained majority by virtue of sections 6 and 8 of the Indian Limitation Act. Apart from this ground which saves the claim of the first plaintiff alone, a suit for a declaration of a right and an injunction restraining the defendants from interfering with the exercise of that right is governed by article 120. of the Limitation Act and in such a suit the right to sue arises when the cause of action accrues. The plaintiffs claiming under Fakruddin sued to obtain a declaration of their rights in the institution which (1) I.L.R. (1904) XXVIII Bom. 72 was and is in the management of the trustees. The trial judge hold that the plaintiffs were not "in enjoyment of the share" of Fakruddin since 1921 and the suit filed by the plaintiffs more than 12 years from the date of Fakruddin 's death must be held barred, but he did not refer to any specific article in the first schedule of the Limitation Act which barred the suit. It is not shown that the trustees have ever denied or are interested to deny the right of the plaintiffs and defendant No. 2; and if the trustees do not deny their rights, in our view, the suit for declaration of the rights of the heirs of Fakruddin will not be barred under article 120 of the Limitation Act merely because the contesting defendant did not recognize that right. The period of six years prescribed by article 120 has to be computed from the date when the right to sue accrues and there could be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right. If the trustees were willing to give a share and on the record of the case it must be assumed that they being trustees appointed under a scheme would be willing to allow the plaintiffs their legitimate rights including a share in the income if under the law they were entitled thereto, mere denial by the defendants of the rights of the plaintiffs and defendant No '. 2 will not set the period of limitation running against them. The trial court as well as the first appellate court held on an exhaustive review of the evidence that there was an immemorial custom governing the institutions whereby the plaintiffs were not entitled to perform service or share the income, emoluments and perquisites. But since the enactment of the Shariat lot 26 of 1937, this custom must be deemed inapplicable to the members of the family. By section 2 of the Act, it was enacted as follows: "Notwitlwtanding any customs or usage to the contrary in all questions (save questions relating to agricultural lands) regarding intestate succession, ,special property of females, including personal property inherited or obtained under contract or gift or 73 any other provision of Personal Law, marriage, dissolution of marriage, including talaq, ila, zihar, lian, khula and mubarrat, maintenance, dower, guardian. ship, gifts, trusts and trust properties, and wakfs (other than charities and charitable institutions and charitable and religious endowments) the rule of decision in cases where the parties are Muslims shall be the Muslim Personal Law (Shariat). " Under the Shariat Act,, 1937, as framed, in questions relating to charities and charitable institutions and charitable and religious endowments, the custom or usage would prevail. But the Act enacted by the Central Legislature was amended by Madras Act 18 of 1949 and a. 2 as amended provides: "Notwithstanding any custom or usage to the contrary, in all questions regarding intestate succession, special property of females including personal property inherited or obtained under contract, or gift or arty other provision of personal law, marriage, dissolution of marriage, including Tallaq, ila, zihar, lian, Khula and Mubarrat, maintenance, dower, guardianship, gifts, trusts and trust proper. ties and wakfs the rule of decision in cases where the parties are Muslims shall be the Muslim Personal Law (Shariat). " Manifestly by this act ' "the rule of decision" in all questions relating to intestate succession and other specified matters including wakfs where the parties to the dispute are Muslims is the Muslim Personal Law. The, terms of the Act as amended are explicit. Normally statute which takes away or impairs vested rights under existing laws is presumed not to have retrospective operation. Where vested rights are affected and the question is not one of procedure, there is a presumption that it was not the intention of the legislature to alter vested rights. But the question is always one of intention of the legislature to be gathered from the language used in the statute. In construing an enactment, the court starts with a presumption against retrospectivity if the enactment seeks to affect vested rights: but such a presumption 74 may be deemed rebutted by the amplitude of the language used by the Legislature. It is expressly enacted in the Shariat Act as amended that in all questions relating to the matters specified, "the rule of decision" in cases where the parties are Muslims shall be the Muslim Personal Law. The injunction is one directed against the court: it is enjoined to apply the Muslim Personal Law in all cases relating to the matters specified notwithstanding any custom or usage to the contrary. The intention of the legislature appears to be clear; the Act applies to all suits and proceedings which were pending on the date when the Act came into operation as well as to suits and proceedings filed after that date. It is true that suits and proceedings which have been finally decided would not be affected by the enactment of the Shariat Act, but if a suit or proceeding be pending even in appeal on the date when the Act was brought into operation, the law applicable for decision would be the Muslim Personal Law if the other conditions prescribed by the Act are fulfilled. In our view, the High Court was right in holding that it was bound to apply the provisions of the Shariat Act as amended by Madras Act 18 of 1949 to the suit filed by the plaintiffs. We are unable to agree with the view of the Lahore High Court in Syed Roshan Ali vs Mt. Behmat Bibi (1) that a right acquired before 1937 (the date on which the Shariat Act was brought into operation) to bring a suit for a declaration that the alienation by the widow of the last holder who had by custom succeeded to the limited estate left by her husband was not binding upon the reversioner, was not taken away by the enactment of the . It may be observed that the court proceeded merely upon the general presumption against retrospectivity and their attention, it appears, was not directed to the phraseology used by the legislature to give section 2 a retrospective operation. The plea raised by counsel for. the contesting defendants that even under the Muslim Personal Law, females are excluded from performing the duties of (1) A.I.R. 1943 Lah. 219. 75 the offices of "Peshimam", "Khatib" and "Mujavar" and that they cannot carry out the duties of those offices even through deputies is one which was not raised before the High Court. The trial court has found that the duties of those offices could be performed through deputies. The first appellate court did not express any opinion on that question and before the High Court, this question was not mooted. We do not think that we would be justified in allowing the contesting defendants to argue this question in this appeal. In any event, if the income was being distributed amongst the four families, the plaintiffs and defendant No. 2 claiming under Fakruddin would, by virtue of the provisions of the Shariat Act, be entitled to receive that income. There is nothing on the record to suggest that the right to receive the income is conditional upon the performance of the duties of the offices of "Peshimam", "Khatib" and "Mujavar". In that view of the case, this appeal fails and is dismissed with costs. Appeal dismissed.

Under a scheme a Board of Trustees was appointed for administration of the Durga and a Masjid for the maintenance of which the Nawab of Carnatic had granted two villages in Inam. The income of the institution after disbursing the expenses had since long been shared by the descendants in four families in equal shares. The scheme also provided that the surplus income was to be distributed amongst the members of the said four families. One of the descendants died leaving him surviving his wife and two daughters who were obstructed in the performance of the "Urs" by the appellant 's father. The said Muslim female members filed a suit for declaration that they were entitled to enjoy the properties and to manage the Durga, perform the "Urs" festival and receive all incomes, endowments and perquisites thereof once in every eight years according to their turn. The right to a share in the income was denied by the appellant contending that by custom in the family, females were excluded from inheritance and that the claim was barred by the law of limitation and that, in any event, the suit for mere declaration was not maintainable. Held, that a suit for declaration of rights with a consequential relief for injunction was not a suit for declaration simpliciter; it was a suit for declaration with further relief and was not barred under article 120 Of the Indian Limitation Act merely because the contesting defendant did not recognise the right. The period of six years prescribed by article 120 is to be computed from the date when the right to sue accrued and there could be no right to sue until there was an accrual of the right asserted in the suit and its infringement or at least a clear and unequi vocal threat to infringe that right. If under the law a person was entitled to any legitimate right, the mere denial of the right will not set the period of limitation running against the person entitled to such right. 68 Held, further, that on the enactment of the Shariat Act 26 Of 1937, as amended by the ' Madras Act r8 Of 1949, the Muslim Personal Law applies in all cases relating to the matters specified notwithstanding any customer usage to the contrary even at the stage of appeals, if other conditions prescribed under the Act are fulfilled. Kunj Behari Prasadji Purshottam Prasadji vs Keshavld Hiralal. 567, discussed. Syed Roshan Ali vs Mt. Rehmat Bibi and Others, A.I.R. 1943 Lah. 219, disapproved.

A writ petition was filed in the Orissa, High Court by the father of the appellant challenging the validity of Shri Jagannath Temple Act, 1954. The petition was dismissed by High Court which held that the Act was valid and constitutional except section 28(2)(f). The High Court struck down that provision and upheld the constitutionality of the rest of the Act. The appellant came to this Court after obtaining a certificate of fitness to appeal to Supreme Court. The contentions raised before this Court were that the Act was discriminatory as the Jagannath Temple alone had been singled out for special treatment as compared to other temples in the State of Orissa. The Act took away the sole management of the Temple which had so far been vested in the appellant or his ancestors. section 15 (1) of the Act interfered with the religious affairs of the temple. The validity of sections 11, 19, 21, 21A and 30 of the Act was also attacked. Dismissing the appeal, Held: There is no violation of article 14 of the Constitution. The Jagannath Temple occupies a unique position in the State of Orissa, and is a temple of national importance and no other temple in that State can compare with it. It stands in a class by itself and considering the fact that it attracts pilgrims from all over India in large numbers, it could be the subject of special consideration by the State Government. A law may be constitutional even though it related to a single individual if on account of special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself. (ii) There was no violation of article 19(1) (f) or article 31 (2) of the Constitution. All that the Act has done is that it has taken away the sole right of the appellant to manage the property of the Temple and another body has been set up in its place with the appellant as its Chairman. Such a process cannot be said to constitute the acquisition of the extinguished office or of the vesting of the rights in the person holding that office. The appellant occupied a dual position as Superintendent and Adya Sevak. His position as Superintendent hers gone and in that place he has become the Chairman of the Committee set up under section 6. The position of the applicant as Adya Sevak is safeguarded by section 8 of the Act inasmuch as the rights and privileges in respect of Gajapati Maharaja Seva axe protected even though he may cease to be Chairman on account of his minority or on account of some other reason. (iii) section 15(1) of the Act does not interfere with the religious, affairs of the Temple. Sevapuja of the Temple has two aspects. One aspect is the provision of materials and that is a secular, 33 function. The second aspect is the performance of the Sevapuja and other rights as required by religion. section 15(1) has nothing to do with the second aspect which is the religious aspect of Seva Raj puja. While section 15(1) imposes a duty on the committee to look after the secular aspect of the Sevapuja, it leave the religious part entirely untouched. (iv) Ss. 11, 19 and 21 were valid provisions and could not be attacked sections 5 and 6 constituting the committee in place of the Raja, were valid. 21A and 30 were also valid. articles 27 and. 28 had nothing to do with the matter dealt with under Act. It was not open to the appellant to argue that the Act was bad as it was hit by article 26(d). No such contention was _properly raised in the High Court. Tilkayat, Shri Govindlal ji vs State of Rajasthan, A.I.R. , referred to.

The appellant sought a declaration that certain premises belonged to his family as private property and did not constitute a temple within the meaning of the Madras Hindu Religious and Charitable Endowments Act (19 of 1951). The District Court decreed the suit but the High Court found that the property in question was a temple. The appellant then filed a petition for leave to appeal to this Court under article 133(1) (a) and (b) of the Constitution and submitted that the property was more than Rs. 20000 in value. The High Court dismissed the application on the ground, inter alia, that the subject matter of the dispute whether as a private or a public temple was incapable of valuation as it could have in either case no market value. The appellant by special leave came to this Court. HELD:The High Court was not right in assuming that whether the property was a private or a public temple, it was incapable of valuation. The subject matter of the dispute had to be ascertained with reference to the claim made by the plaintiff in his plaint and since according to the plaint the property was the private property of the appellant 's family capable of alienation, the High Court ought to have valued the property accordingly. [157 A, B]

The appellants and the respondent were collaterals and belonged to the same branch of a Hindu undivided family. The said family had four branches. Two branches filed in 1923 a joint suit for partition of the family estate impleading the other two branches as defendants. In 1924 the court passed a preliminary decree in which not only tile shares of the branches but also the shares inter se of the members of the branches were separately shown. The two branches to which the plaintiffs belonged were jointly allotted a share of eight annas while the other two branches to one of which the appellants and the respondent belonged were given four annas each. The shares of the appellants and the respondent were mentioned as two annas each. In 1936 the respondent came of age and in 1942 he filed a suit claiming partition of his share from that of the appellants. He alleged that the appellants taking advantage of his minority had purchased properties out of family funds in their own names as well as benami, and that these properties were also liable to be partitioned. The appellants denied that the said properties were purchased from family funds. They further contended that the respondent was holding his share of the property separately and that the family property of the branch already stood partitioned as a result of specification of shares in the preliminary decree of 1924. The trial court decreed the respondent 's suit. The High Court confirmed the decree with some modifications. The appellants came to this Court with certificate, The main contention on behalf of the appellants were : (i) that the specification of shares of the appellants and the respondent in the preliminary decree resulted in partition between them and (ii) that the suit in respect of alleged benami property was barred by section 66(1) of the Code of Civil Procedure. HELD: Specification by the decree of the shares of the appellants on the one hand and of the respondent on the other did not by itself constitute severance of the appellants from the respondent. [98 F G] Partition may ordinarily be effected by institution of a suit, by submitting the dispute as to division of the properties to arbitrators, by a demand for a share in the properties, or by conduct which evinces an intention to sever the joint family; it may also be effected by agreement to divide the property. But in each case the conduct must evidence unequivocally intention to sever the joint family status. Merely because one member of the family severs his relation, there is no presumption that there is severance between the other members : The question whether there is severance between the other members is one of fact to be determined on a review of all the attendant circumstances. [98 B] 94 Palani Ammal vs Muthuvenkatacharla Moniagar & Ors. L.R. 52 I.A. 83, relied on. In the present case the partition suit of 1923 and the preliminary decree therein making three allotments of the property led to severance of status of the plaintiffs as well as the other two branches of the larger family. But severance between the members of the branches inter se may not in the absence of expression of unequivocal intention be inferred. There was no evidence of expression of any such intention either by the appellants or the respondent. (ii) The respondent 's claim was that the properties belonged to the joint family, because they were purchased by the appellants with the aid of joint family funds benami in the name of a third party. Such a claim does not fall within the terms of section 66(1). [103 B] Addanki Venkatasubbaiah vs Chilakamerthi Kotaiah, C.A. No. 120 of 1964 dated 12 8 1965, relied on. (iii) It was not necessary for the respondent to mention in his plaint that the recital in the preliminary decree showing severance of status between the appellants and the respondent was an interpolation. The question whether evidence in support of a party 's case is reliable may be raised by the other party without incorporating the contention relating thereto in his pleading. [101 B D] (iv) It is not the duty of the appellate court when it agrees with the view of the trial court on the evidence either to restate the effect of the evidence or to reiterate the reasons given by the trial court. EXpression of general agreement with reasons given by the court decision of which is under appeal would ordinarily suffice. [101 F G] (v) A claim for rendition of account is not a personal claim. It is not extinguished because the party who claims an account or the party who is called upon to account dies. The maxim "actio personal moritur cum persona" does not apply to such cases. [103 G]

The respondent plaintiffs filed a suit for partition and allotment of one half share of the suit house and the move able properties. One Faqir Chand had 3 sons, Nathubhai, Lallubhai and Nanabhai. Nanabhai was the defendant in the suit whose legal representatives are appellants. Lallub hai 's heirs are the plaintiffs. According to the plain tiffs the three brothers were members of a Joint Undivided Hindu Family. According to the respondents the properties were never partitioned though the three brothers were stay ing and messing separately and each branch carried on its business separately. The respondents also challenged the validity of the sale deed executed by Bai Kashi the widow of Nathubhai in favour of the appellants on the ground that the sale was not for legal necessity. The appellants contended that the three brothers were separate and each branch used to do its business separately. That as far as the suit house was concerned it was divided though not by metes and bounds and that the brothers lived in separate portions of the house. The appellants claimed that they were entitled to 2/3 share on the house. The Trial Court found that the 3 brothers had separated before the deaths of Nathubhai and Lallubhai. It also found that the defendant and his broth ers had separated and the suit house was also divided as alleged by the defendant. It came to the conclusion that the defendant had failed to prove that there was any legal necessity for Bai Kashi to sell the share in the suit house and that after Bai Kashi 's death the respondent was entitled to one half share in the suit house. The Trial Court found that Bai Kashi became entitled to one ' half share of her husband in the suit house under the Hindu Women 's Rights to Property Act, 1937. As her interest was only a limited interest known as Hindu Women 's Estate when Bai Kashi died in January 1956, she had not become the full owner of the share under the . The court was of the view that on the death of Bai Kashi her share would go to the reversioners. The court held that the parties were governed by Mayukh school which over rules the Mitakshara school and, therefore, after the death of Bai Kashi the defendant and plaintiff No. 1 would inherit together to the share of Nathubhai. The court held that the claim of the plaintiff for one half share should be decreed though there was no specific claim on the plea of separation and heir ship. The High Court dismissed the appeal and confirmed the findings of the Trial Court. In an appeal by Special Leave the appellants contended that the respondents ' plea that the 3 brothers were joint and the share of Bai Kashi was inherited by the remaining two branches by survivorship having been negatived by the courts below the suit ought to have been dismissed and that the court erred in making out a new case of succession to the property of Bai Kashi without necessary pleadings. Allowing the appeal partly, HELD: 1. On the question whether the respondents are entitled to one half share on her death has not been dealt with by the High Court. This Court agreed with the concur rent findings of the Trial Court and the High Court that the family was separate and that the sale deed by Bai Kashi in favour of the appellants was not for legal necessity. However, the claim of the respondent for partition and allotment of 1/3 share by metes and bounds 921 cannot be resisted. Though the brothers became separate admittedly there was no division by metes and bounds. There is also no dispute that the respondents are entitled to 1/3 share in the house. [924 A C] 2. The High Court did not deal satisfactorily with the contention of the defendant that the Trial Judge erred in saying that Bai Kashi had only a widow 's estate when she died in the absence of any issue as to who were heirs of the deceased Bai Kashi. On the question whether respondents are entitled to succeed to Bai Kashis 1/2 share, the Court remitted the matter to the High Court for consideration. [924 C D]

The main question involved in both the appeals was whether the marriage of Bangaru Ammal was in Asura form or in Brahma form. The contention of the appellant was that it was not in Asura form. Except a bare allegation in the plaint that the said marriage was held in Asura form, the plaintiffs did not give any particulars or set up any custom in the community to which the parties to the marriage belonged. They had given evidence that 'a sum of Rs. 1000 was paid as 'Parisam ' to the father of bride but that evidence had been rejected by both the courts. Respondents pointed out to the giving of Kambu by bridegroom 's party to the bride 's party at the time of betrothal and expenditure of Rs. 300/ by bridegroom 's party in connection with the marriage of Bangaru Ammal and maintained that it was Asura marriage. Held, that the marriage of Bangaru Ammal was not in Asura form but in Brahma form. There was nothing to show that there was a practice in the family to give Kambu as 'Parisam for the bride or Kambu was paid as 'parisam ' at the time of the betrothal ceremony in connection with the marriage of Bangaru Ammal. The father of the bride had spent large amounts and the bridegroom 's party had spent only about Rs. 300/ in connection with the said marriage. The expenditure incurred by the bridegroom 's party was not and could not have been the consideration for the father giving his daughter in marriage. There is a presumption in Hindu Law that every Hindu marriage is in Brahma form and that pre sumption has not been rebutted in this case. The court was entitled to presume that the necessary ceremony of Kanyadan must have been performed. As no consideration passed from the bridegroom to the father of the bride, the father must be held to have made a gift of the girl to the bridegroom. 245 The essence of the Asura marriage is the sale of a bride for a price and it is one of the unapproved forms of marriage prohibited by Manu for all the four castes of Hindu society. The vice of the said marriage lies in the receipt of the price by the bride 's father or other persons entitled to give away the bride as a consideration for the bride. If the amount paid or the ornament given is not the consideration for taking the bride but only given to the bride or even to the bride 's father out of affection or in token of respect to them or to comply with a traditional or ritualistic form, such payment does not make the marriage an Asura marriage. There is also nothing in the texts to indicate that the bearing of the expenditure wholly or in part by the bridegroom or his parents is a condition or a criterion of such a marriage, for in such a case the bride 's father or others entitled to give her in marriage do not take any consideration for the marriage, or in any way benefit thereunder. The fact that the bridgeroom 's party bears the expenditure may be due to varied circumstances. Prestige, vanity, social custom, the poverty or the disinclination of the bride 's father or some of them may be the reasons for the incurring of expenditure by bridegroom 's father on the marriage but the money so spent is not the price or consideration for the bride. Even in a case where the bride 's father, though rich, is disinclined to spend a large amount on the marriage functions and allows the bridegroom to incur the whole or part of it, it cannot be said that he has received any consideration or price for the bride. Though in such a case if the bridegroom 's father had not incurred the said expenditure in whole or in part, the bride 's father might have to spend some money on that account, such an indirect result could not be described as price or consideration for giving the bride. Asura marriage is a marriage where the bride 's father or any other person entitled to give away the bride takes Sulka or price for giving the bride in marriage. The test is two fold. There shall not only be a benefit to the father, but that benefit shall form a consideration for the sale of the bride. When this element of consideration is absent, such a marriage cannot be described as Asura marriage. Jaikisondas Gopaldas vs Harikisandas Hulleshandas Born. 9, Vijarangam vs Lakshman, (1871) 8 Born. H. C. Report. 244, Muthu Aiyar vs Chidambara Aiyar, , Chunilal vs Surajram, (1909) I. L.R. 33 Born. 433, section Authikesayulu Chetty vs section Ramanvjan Chetty" (1909) 1. L. R. , Gabrielnathaswami vs Valliammai Ammal, A. 1. R. , Ratnathanni vs Somasundara 246 Mudaliar, , Samu Asari vs Anachi Ammal, ; Kailasanath Mudaliar vs Parasakthti Vadivanni, Mad. 488, Sivangalingam Pillai vs K. V. Ambalayana Pillai, A. 1. R. ; V. section Velavutha Pandaram vs section Suryamurthi Pillai (1941) 2 M. L. J. 770 and Vedakummapprath Pillai vs Kulathinkai Kuppan, , referred to.

The lands in question owned by a Trust, of which the appellant was the Managing Trustee, were leased to respond ent. On his failure to pay rent the Trust filed a suit for his ejectment. The District Munsiff passed the decree on condition that the appellant would pay the respondent, costs of the building or superstructure, which had been built by the respondent 's predecessor in interest, and which the respondent had purchased from him. The litigation went upto High Court, which ultimately upheld the decree. During the pendency of second appeal, the respondent filed before the District Munsiff an application under Section 9 of the Tamil Nadu Tenants ' Protection Act, 1921 as amended by Act XIX of 1955 and Tamil Nadu Adaptation of Laws Order, 1969. The provisions of the said Act were extended to the town in which the lands were situated. In the said application he prayed for the issue of a direction to the appellant to sell to the respondent the said property, the land adjoining the building, as it was necessary for the beneficial enjoyment of the building. The application was rejected on the ground that such a prayer had been rejected earlier. The respond ent 's first appeal was allowed by the Subordinate Judge. The respondent had not surrendered the possession of the proper ty despite the deposit of the compensation amount by the appellant and the execution proceedings had remained stayed. Hence the appellant filed an appeal in .the High Court which, however, held that the respondent was entitled to file the application under Section 9 of the Act during the pendency of the execution proceedings, and the right of the respondent had not been affected by the deposit of the compensation amount. In the appeal before this Court, on behalf of the appel lant Managing Trustee, it was contended that the respondent was not entitled to exercise his right to purchase the land immediately adjoining the superstructure as might be re quired for the beneficial enjoyment of the said structure as the 22 said structure had not been put up by him, and 'that al though the respondent might have been in possession at the relevant time, he had lost the possession thereafter and hence he had lost his right under Section 9. Dismissing the appeal, this Court, HELD: 1.1 Under Section 9 of the Tamil Nadu Tenants ' Protection Act, 1921, any tenant, as defined in Section 2(4)(ii)(a), who is entitled to compensation under Section 3, and against whom a suit in ejectment has been instituted or proceedings under Section 41 of the , taken by the landlord may, within one month from the date of the Madras City Tenants ' Protec tion (Amendment) Act, 1955, coming into force, or the date with effect from which this Act is extended to the municipal town or village in which the land is situated, or within one month after the service on him of summons, apply to the Court for an order that the landlord be directed to sell for a price to be fixed by the court, the whole or part of the extent of land specified in the application. Section 10 of the Act makes the provisions under Section 9 applicable to cases where decree for ejectment has not been executed before the date from which the provisions of the Act are extended to the area in question. [25 C E] 1.2 In the instant case, although the decree for eject ment was passed against the respondent, as he had continued to remain in possession of the property and the decree had remained unexecuted till the date on which the provisions of the said Act had been extended to the area in question, the right of the respondent under Section 9 was not lost. [25 F] 1.3 As regards the superstructure, it was put up by the predecessor in interest from whom the respondent had pur chased. Thus, the High Court was entitled to take the view that it was put up by a predecessor in interest of the re spondent. [25 G] 1.4 In these circumstances, the respondent was certainly a tenant, within the meaning of Section 2(4)(ii)(a) of the Act, which takes within its ambit a tenant whose tenancy has been determined but continues to remain in possession, entitled to compensation under Section 3 of the Act and was, therefore, entitled to make an application under Section 9 of the Act. [25 H, 25 B] 23 2. The plea that although the respondent might have been in possession at the relevant time, but since he lost it thereafter, he lost his right under Section 9 cannot be allowed to be raised in this Court since this has not been pleaded in or considered in any of the courts below. [26 A B]

N, a coparcener of the Hindu undivided family of G, carrying on business in Kathiwar, then outside British India, entered into a partnership with strangers in Bombay in 1944. A total sum of Rs. 1,,50,000 was remitted to N from the undivided family 621 funds and utilised as capital in the partnership business. N 's brother joined the partnership in Bombay. The partnership started another firm in Banaras and a third brother of N joined the firm. For the year of assessment 1945 46 the Income tax Officer held that the Hindu undivided family of G was resident in the taxable territories and included the said sum in the income of the family under section 4(1)(b)(iii) of the Indian Income tax Act, 1922, as having been brought into or received in British India in the relevant year and made the assessment on that basis. On appeal by the assessee the Appellate Assistant Commissioner affirmed the assessment but the Income tax Appellate Tribunal holding that in the year of assessment the family was not resident in the taxable territories deleted the said sum from the assessed income. The decision of the Appellate Tribunal was upheld by the High Court in a reference under section 66(1) of the Act made at the instance of the appellant: Held (per section K. Das and J. L. Kapur, jj.), that the expres sion 'control and management ' occurring in section 4A(b) of the Indian Income tax Act means de facto control and management and the word " affairs " means the affairs of the Hindu un divided family capable of being controlled and managed by the said family as such. It is well settled that a Hindu undivided family cannot exercise any controlling power of management of a partnership entered into by a coparcener with strangers either under the , or under the Hindu law. The partnerships in the instant case could not, therefore, constitute affairs of the Hindu undivided family within the meaning of section 4A(b) of the Act, although the incomes from the said partnerships might belong to the said family, and could not determine its residence. The place of accrual of income of a Hindu undivided family and the place of its residence need not necessarily be the same under the Indian Income tax Act, 1922. V.V. R. N. M. Subbayya Chettiar vs Commissioner of Incometax, Madras, ; , Kshetra Mohan Sannyasi Charan Sadhukhan vs Commissioner of Excess Profits Tax, West Bengal, and B. R. Naik vs Commissioner of Income. tax, , referred to. Per Hidayatullah, J. Under section 4A(b) of the Indian Incometax Act, what are really affairs of the Hindu undivided family must be decided in the light of the Hindu law, and not the law of Partnership. It is well settled that a coparcener of a Hindu undivided family cannot claim any item of property or share of his own and, consequently, where certain coparceners enter into partnerships with strangers by investing capital from out of the undivided family funds, as in the instant case, the income from the business must belong to the undivided family. Where the Hindu undivided family enters into a business activity in the taxable territories through its coparceners, invests money and earns income, even though the partnership which results may not be an 81 622 " affair " of the family, there is still a business activity resulting in the partnership and the partnership is the evidence of that business activity. This activity of a permanent character is sufficient for purposes of income tax law to constitute an ,,affair" of the family within the meaning of section 4A(b) of the Indian Income tax Act. Approvier vs Rama Subba Aiyan, [1866] 11 M.I.A. 75, Katama Natchiar vs Rajah of Shivaganga, , Mangalchand Mohanlal, Inre, , Murugappa Chetty & Sons vs Commissioner of Income tax, and Kaniram Hazarimull vs Commissioner of Income tax, , referred to. V.V. R. N. M. Subbayya Chettiar vs Commissioner of Income tax, Madras, ; , considered. Control and management, in the case of a Hindu undivided family, can be exercised by one or more of its coparceners, even though partly, and if such coparceners reside in the taxable territories and manage its affairs, the family must be treated as resident in such territory.

Appeal No.371 of 1956. Appeal from the Judgment and decree dated August 28, 1953, of the Madras High Court in A.S. No. 262 of 1949. A. V. Viswanatha Sastri, R. Sundaralingam and B. K. B. Naidu, for the appellant. Ganapathy Iyer, V. A. Seyid Muhamad and T. M. Sen, for the respondent No. 1. 1961. February 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal has been brought with a certificate issued by the Madras High Court and it arises out of a suit filed by the Managing Trustee of the appellant Sri Vedaraneeswararswamy Devasthanam against respondents 1 and 2 the Dominion of India and the Province of Madras respectively. In this suit the appellant claimed a declaration that the properties in suit belong to the appellant and asked for a direction against respondent 1 to put the appellant in possession of the same. A further direction was claimed against the said respondent calling upon it to account for and pay to the appellant mesne profits past and future and an alternative plea was also made by which the court was requested to determine the proper rent payable by the said respondent to the appellant. This claim has been rejected by the learned Subordinate Judge of Mayuram who tried the case and an appeal preferred by the appellant against the 89 trial court 's decision has likewise failed. That is why the appellant has come to this Court. According to the appellant the suit properties which admeasure about 2,400 acres are situated in the village of Agastiyampalli and the said village was granted in inam absolutely to the appellant by the Tanjore Rajas several centuries ago. From the time of the said grant the appellant was in exclusive possession and enjoyment of the said properties, and its trustees and managers used to look after them and collect their profits for the use and benefit of the appellant. In 1806 an agreement was reached between the East India Company and the appellant, under which the Company took possession of the appellant 's properties in suit and in return promised to pay a sum of 1848 Pagodas annually. Out of this amount 1200 Pagodas represented the rent of the property. Pursuant to this agreement the Company took possession of the said property and was paying the agreed rent until 1858. In that year respondent 2 which succeeded the Company entered into possession of the property on the same terms and was making the annual payment of the said sum until 1937. Thereafter respondent 1 took over the salt revenue administration and as such the properties came into its possession. Respondent 1 has been paying the appellant the agreed amount from year to year. The appellant 's case was that the true legal relationship between the parties was that of a lessor and lessee and that the lease itself was not of a permanent character but was one in the nature of annual or yearly lease which was continued from year to year. It is on this basis that the appellant made the two alternative claims specified above. Respondent 1 disputed this claim. , It denied that it held the properties under an annual or yearly lease. Its case was that when the suit lands, were taken over by the Company compensation was fixed once for all, the average income of the appellant from the manufacture of salt carried on by the appellant during the previous ten years having been taken as the basis for the purpose of calculating the said compensation. 90 The properties came under the possession and control of the Company as a result of the proceedings taken under Regulation 1 of 1805 and the amount of Rs. 4,200/ corresponding to 1848 Pagodas represents the compensation annually payable to the appellant. Respondent 1 made certain other pleas on the merits Of and urged a bar of limitation. On these pleadings the trial court framed ten issues. On the principal point of dispute between the parties it held that a reading of the relevant documents clearly showed that "at the time when the Company took possession whatever the idea may then have been it must have been only to take over the properties permanently from the plaintiff Devasthanam and not to place themselves at the mercy of the trustees who might evict them at any time". According to the trial court the arrangement evidenced by the said documents was a permanent arrangement and that being so, the appellant was not entitled to claim possession. The trial court also held that even if the relationship between the parties could be said to be that of a lessor and lessee the lease in question was a permanent lease subject only to the payment of a fixed rent of Rs. 4,200/ per annum. On these findings the trial court dismissed the appellant 's suit. The appellant then took its case before the Madras High Court. The High Court in substance agreed with the conclusions of the trial court. It considered the whole of the documentary evidence and came to the conclusion that the trial judge was right in holding that the documentary evidence showed that the arrangement by which the Company took possession of the appellant 's properties was a permanent arrangement and that if it was held to be a lease it must be regarded as a permanent lease. According to the High Court the appellant 's claim was also barred by limitation under article 134(B) of the Limitation Act. The High Court therefore confirmed the trial court 's decree and dismissed the appeal preferred by the appellant. In the present appeal the principal question which has been raised before us by Mr. Viswanatha Sastri 91 for the appellant is about the true nature of the relationship between the parties in respect of the properties in suit. He contends that the principal document exhibit A. 1 on which reliance is placed by respondent 1 should be construed not as a permanent but as an annual lease; and according to him the contrary view taken by the High Court is not supported by the tenor of the document, and he also argues that in construing the said document the High Court has( not borne in mind relevant principles of law governing the powers of the manager of a Hindu religious institution. Let us then briefly consider the relevant documents bearing on the point. The principal document is exhibit A. 1. It purports to be a copy of the order passed by Mr. Wallace on December 31, 1806. It is addressed to the manager of the temple and it reads thus: "As the Government have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai, belonging to the above temple, the sum of 1848 Pagodas shall be given to the temple annually in cash from the treasury being calculated on the average amount of 10 years ' revenue besides which every possible assistance will be given to the temple. " It would be noticed that there is no duration specified in the document, and prima facie it reads as if the Government had taken charge of the salt pans and Sea Customs permanently promising in return to pay to the temple the amount specified annually from year to year. In construing this document reference may be made to the previous correspondence that passed between the Collector and the Members of the Board of Revenue. It is not disputed that this correspondence can be considered for the purpose of construing the effect of the terms of exhibit A. 1. On July 17, 1806, a letter was addressed to the President and Members of the Board of Revenue in which the idea of acquiring this property was fully explained. In this letter in was stated that "it would be better to grant to the temple commutation in land because that would be more certain and permanent than ready money payment". In computing the compensation which may be paid to 92 the temple the accounts of the pagoda were examined. ,It was found that the pagoda enjoyed revenue from the duties levied at ports at Thopputhurai and Kodikarai. Ten years ' account showed that the average annual income in that behalf was. 283 Pagodas. To this amount was added the amount of magama or charitable and litigious fees and the total worked out at an average of 532 Pagodas. From this was deducted 46 Pagodas which was the average of charges and expenses incurred in collecting the port duties. Thus the net annual average revenue was 486 Pagodas. Then an account was made of the income received by the temple from salt manufacture in the salt pans and it was ascertained that an average income in that behalf would be Star Pagodas 1362. That is how the whole annual income was found to be 1848 Pagodas. It would thus be seen that elaborate calculations were made to determine the amount of compensation which should be legitimately paid to the temple for depriving the temple of the possession of its properties in question. It was then considered whether the commutation for the amount :.should be in land or in money, and, as we have already pointed out, a recommendation was made that payment of commutation in the form of land would be more certain and permanent. Thus the perusal of this document leaves no doubt that the property was intended to be acquired permanently for the purpose of manufacturing salt. It is on that basis that calculations were made and the amount of compensation determined. It appears that this proposal made by the Collector was not approved by the Government at Fort St. George. In the letter written by the Secretary to the Government on October 28, 1806, it was recommended that a payment should be made from the public treasury of a compensation for the loss which the pagoda had sustained by the introduction of salt monopoly in the Province of Tanjore not exceeding Star Pagodas 1848 per annum. The proposal thus made by the Government was accepted by the Board and its decision was communicated by the letter of November 17, 1806. It is in the background of this correspondence 93 that we have to decide the effect of the terms contained in exhibit A. 1. Thus considered there can be little doubt that though 'the property was not purchased outright it was taken charge of on a permanent basis for the purpose of manufacturing salt and compensation was determined on the same basis but made payable annually at the rate of 1848 Pagodas. There are, however, some other documents on which Mr. Sastri relies. An extract from the inam register prepared on November 27, 1862 (exhibit A. 18) has been pressed into service by the appellant. The main argument is that the relevant columns 16 to 20 which give particulars regarding the owners do not refer to the Company 's right under this permanent arrangement. If the transaction was a permanent lease, it is urged, the lessee 's rights would have been specified in the relevant columns. We are satisfied that this argument is not well founded. The main column deals with particulars regarding the owners. It also provides that if the inam was sub divided the name etc. of each sharer shall be entered in its columns. We are, therefore, not satisfied that the name of the permanent lessee was expected to be shown in this column. It is true that in determining the additional assessment on excess area payable by the temple the whole of the property is assumed to belong to the temple; but that is not inconsistent with the temple continuing to be the lessor of the suit property at all. There is no doubt that if the Company had become the lessee of the said suit property by a document duly executed in that behalf entries made in the inam register cannot change or affect the character of the said right. Therefore, in our opinion, there is nothing in exhibit A. 18 which militates against the case set up by respondent 1. Then Mr. Sastri has relied on exhibit A. 2 which is a title deed issued by the Inam Commissioner is favour of the temple. In this document the temple 's title to the Devadayam or pagoda inam village of Agastiyampalli is recognised and specific mention has been made of the porambokes in the said village. It is stated that the whole of the property is held for the support 94 of the pagoda in the village of Vedaranyam. What we have said about the extract from the Inam Register applies with equal force to this document. It appears that from 1806 when the Company took possession of the property until 1941 the appellant has allowed the Company and its successors to be in quiet enjoyment of the property on receipt of an annual compensation paid from year to year. In 1941 the factory officer wrote to the trustee of the appellant to let him know the name or the names of the revenue villages to which the area covered by the. salt factory was originally attached prior to the acquisition, and he enquired whether any compensation amount had been paid to the temple for the said acquisition. It is this letter which presumably started the appellant 's present claim. Soon after receiving this letter the appellant wrote to the factory officer on April 8, 1941 alleging that the property had been leased out to Government for the manufacture of salt for a monthly lease of Rs ' 350 or annually Rs. 4,200. The appellant thus set up a relationship of lessor and lessee between itself and respondent 1. Then the appellant moved the relevant authorities for appropriate relief on one ground or another. All its efforts to obtain possession of the property or even to have the amount of compensation enhanced failed and that led to the present dispute. The main argument which has been urged before us by Mr. Sastri is that in construing exhibit A. 1 we ought to bear in mind the limitations on the powers of the manager of the temple at the relevant time. Mr. Sastri has relied on the fact that the manager of a temple could not have entered into a transaction of permanent lease unless there was a compelling necessity so to do. A permanent lease amounts to an alienation of the property and would have to be justified as such. An annual lease, on the order hand, can be executed by the manager in his capacity as the manager and the same is treated as an act of prudent management. That, however, is not true about a permanent lease, and so in construing the document we should attribute to the manager the desire and intention to act within 95 his powers and not without them. In support of this argument Mr. Sastri has referred us to the decisions of the Privy Council in Maharanee Shibessouree Debia vs Mothooranath Acharjo (1), Nainapillai Marakayar vs Ramanathan Chettiar (2), and Palaniappa Chetty vs Deivasikamony Pandara (3). The argument is that a fair and reasonable rule of construction would be to treat the document as executed in pursuance of the legitimate authority available to the manager of the temple and not as one which is executed in breach of the said authority. This position cannot be and is not disputed. In the application of this rule to the present case, however, two relevant facts cannot be ignored. The first important fact is that after the execution of the document more than a century has elapsed; and so, as observed by the Privy Council in Bawa Magniram Sitaram vs Kasturbai Manibhai (4), "where the validity of a permanent lease granted by a shebait comes in question a long time (in the present case nearly 100 years) after the grant, so that it is not possible to ascertain what were the circumstances in which it was made, the Court should assume that the grant was made for necessity so as to be valid beyond the life of the grantor". In the present case more than a century has elapsed after the grant A as made, and so the principle laid down by the Privy Council in that case can well be invoked by respondent 1. Besides, it is common ground that under the relevant provisions of Regulation 1 of 1805 the manufacture and sale of salt was made subject to the immediate direction and control of the general agent appointed by the Government, and the said manufacture and sale as well as transit, export and import of salt, whether by Bear or by land, in the territory subject to the Presidency of Fort 'St. George was prohibited except on account of Government or with their express sanction. It was also provided that all salt manufactured, sold, conveyed, exported or imported, directly (1) (1869) 13 Moo. I.A. 270, 273, 275 (2) (1923) L. R. 51 I.A. 83, 97, 98. (3) (1917) L.R. 44 I.A. 147,155, 156. (4) (1921) L.R. 49 I.A. 54. 96 or indirectly, otherwise than is provided for in the said Regulation, shall be liable to seizure and confiscation. In other words, part of this property belonging to the temple on which salt was being manufactured became absolutely useless for that purpose as the temple could no longer manufacture, or permit the manufacture of, salt. Faced with this situation it is not at all unlikely that the manager of the temple was compelled to enter into an arrangement with the Company and secure for the benefit of the temple a sub stantial permanent income accruing from year to year. It is common ground that the whole of the property was marshy and the only use to which it could be profitably put was for the manufacture of salt, and that could no longer be done after Regulation 1 of 1805 was passed. That is why we think that even the test of the rule of construction on which Mr. Sastri relies can be said to be satisfied in the present case. Circumstanced as he was the then manager or trustee had no option but to enter into an agreement like the one which was evidenced by exhibit A. 1; thereby the manager provided for a recurring income to the temple and thus arranged for the upkeep of the temple, the worship of the idol and discharge his duties as trustee. We have already seen how the previous correspondence which preceded the execution of the document unambiguously shows that the intention of the Company was to take possession of the property on a permanent footing, and realising the limitations imposed by the Regulation the manager of the temple would also have wanted to give the property to the Company permanently and thereby create a permanent source of income for the temple. The subsequent conduct of the temple for over a century is consistent with the view that the temple knew that the property has been permanently given to the Company and is inconsistent with the present case that the lease is an annual lease. The payment and acceptance of the same uniform rent for over a century when so many political and other changes took place also support the same conclusion. The pleas set up by the appellant from stage 97 to stage in respect of its relationship with respondent in regard to the possession of this land have changed from time to time and that shows that the appellant was at paying to put forward a basis on which it could claim either possession or enhanced rent. The fact that respondent 1 is making large profits out of this property may explain the appellant 's desire to get some more share in the said income but that cannot assist the appellant if it has parted with the property permanently as early as 1805 oil the terms and conditions specified in exhibit A. 1. In our opinion, the High Court was right in coming to the conclusion that the transaction evidenced by exhibit A. 1 is a permanent lease and that respondent 1 is entitled to retain possession of the whole of the property on the terms and conditions specified in the said document. We must accordingly hold that the appellant 's claim either for possession or for enhancement of rent has been properly rejected by the courts below. In the result the appeal fails but there will be no order as to costs. Appeal dismissed.

The appellant Devasthanam had certain properties, granted to it in inam by the Rajas of Tanjore centuries ago, which com prised salt pans. After the passing of Regulation 1 of 1805 which prohibited manufacture of salt except on account of the Government or with their express sanction, the East India Company in 1806 took over possession of those properties and the agreement between the parties as recorded in the order passed on behalf of the Board of Revenue, was as follows, "As the Government have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai, belonging to the above temple, the sum of 1848 Pagodas shall be given to the temple annually in cash from the treasury being calculated on the average amount of 10 years ' revenue besides which every possible assistance will be given to the temple." The previous correspondence between the Collector and the Board of Revenue showed that the properties were intended to be acquired permanently for the purpose of manufacturing salt and compensation was determined on that basis. From 1886 till 1941 the appellant allowed the company and its successors, the respondents 1 and 2, to be in quiet possession of the properties in dispute on receipt of the said annual compensation. Its case, negatived both by the trial Court as well as the High Court in appeal, was that the agreement represented a lease from year to year and it was contended on its behalf in this Court that in construing the document regard must be had to the limited powers of a manager of a Hindu Temple to alienate trust property and he must be held to have intended to act within his powers and not beyond them. Held, that the transaction in question was a permanent lease and the appeal must fail. Although it is indisputable that in construing a document executed by the manager of a Hindu temple the fair and reasonable rule would be to treat it as executed in pursuance of his legitimate authority and not in breach of it, that rule could have no application in the instant case, for the facts that more than a century had admittedly elapsed since the document in question had been executed and, further, that the then manager, 88 faced by the prohibition of the manufacture of salt by Regulation 1 of 1805, had no option, in the interest of the Devasthanam itself, but to enter into the agreement in order that he could provide for a recurring income to the temple, could not be ignored. Bawa Magniram Sitaram vs Kasturbai Manibhai, (1921) L.R.49 I.A. 54, applied. Maharanee Shibessouree Debta vs Mothoranath Acharjo, (1809) L.R. 13 Moo. I.A. 270, Nainapillai Marakayar vs Ramanathan Chettiar, (1923) L.R. 51. I.A. 83 and Palaniappa Chetty vs Deivasikamony Pandara, (1917) L.R. 44 I.A. 147, referred to.

The appellant runs a tile factory and an engineering works at Quilon. These two industries are indepedent of each other, but they arc carried on by the same company and on the same premises. The tile factory was started in 1943 and the engineering works in 1950. The engineering industry was included in Schedule I of the Act and it employed only 24 workers, whereas the tile industry employed more than 50. The license issued to the appellant under the , was for the entire premises. The appellant moved a writ petition in the High Court in which he alleged that its factory did not attract the provisions of section 1 (3) (a) of the Employees ' Provident Funds Act 1952. The 'writ petition was dismissed with costs. It is against this order that the appellant has come to this Court. Held (i) that a factory is an "establishment" within the meaning of section 1 (3) (a) of the Act if it satisfies the requirements of the section, namely, (1) that its one or all industries fall under Schedule I of the Act, (2) that it satisfies the numerical strength as prescribed under the section. (ii)that the character of the dominant or primary industry will determine the question of the application of section I (3) (a) if a factory carries on both the dominant and subsidiary industries. (iii)That if the factory runs more industries than one an of 'which are independent of each other, section I (3) (a) will 906 apply to the factory even if one or more, but not all, of the industries run by it fall under Shedule I. (iv)that neither the tile industry was dominant nor the engineering industry was subsidiary; rather both the industries were independent of each other. (v)that the factory of the appellant will be deemed to be a composite factory and the provisions of section 1 (3) (a) will be attracted as one of its industries i. e. engineering industry, falls under Schedule I. The Regional Provident Fund Commissioner, Bombay vs Shree Krishna Metal Manufacturing Co. Bhandara [1962] Supp.3 section C. R. 815, approved.

On October 10, 1953, the respondents filed suits under section 232 read with section 20 of the U. P. Zamindari Abolition, and Land Reforms Act, 1950 against the appellant before the Sub Divisional Officer. Before the coming into operation of the Abolition Act the appellant (Amba Prasad) was Zamindar of the disputed land. The names of the respondents were recorded in column 23 (miscellaneous) in the Khasra for the year 1356 Fasli as persons in possession of the disputed land. The respondents claimed adhivasi rights under section 20 of the Abolition Act because they were recorded as occupants of the fields in dispute in the Khasra for 1356 Fasli. The common case of the respondents was: (i) that they were in possession of the suit land (ii) that they were dispossessed after June 30, 1948 by the appellant, (iii) that as they were recorded occupants in 1356F they were not required to prove actual possession. The case of the appellant was that the entry was fraudulently made after July 1, 1949. These suits were dismissed by the Sub Divisional officer. On appeal, the Additional Commissioner held that the respondents had acquired the adhivasi fights. Against this order Amba Prasad (the appellant) appealed to the Board of Revenue. The Board of Revenue dismissed the appeals. The appellant then filed appeals in this Court. Held:(i) Under section 20 of the Abolition Act (U. P. Zamindari Abolition and Land Reforms Act) a person continues as an adhivasi after July 1, 1952. provided he is in possession or was evicted after June 30, 1948. If he was evicted after June 30, 1948 he is entitled to regain possession in spite of any order or decree to the contrary. (ii)The words "recorded as occupants" in section 20 of the Abo lition Act mean persons recorded as occupants in the Khasra or Khatauni for 1356 Fasli (1 7 48 to 30 6 49). Such persons do not include an intermediary. The word "occupant" must mean a person holding the land in possession or actual enjoyment. Mediate possession (except where he immediate possessor holds on behalf of the mediate possessor) is of no consequence. (iii)The appellant was not entitled to raise the plea of the correctness of the entry in Khasra because the entry was not corrected before the date of vesting (1 7 52) as required by Explanation (ii) to section 20 of the Abolition Act. (iv)The title to possession as adhiwasi depends on the entries in the Khasra or Khatauni for the year 1356 Fasli. Section 20 of the Abolition Act does not require the proof of actual possession. Therefore, section 20 eliminates inquiries into disputed possession by accepting the record in the Khasra or Khatauni of 1356F. or its correction before July 1, 1952. 801 The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rehman, ; , referred to. Lala Nanak Chand vs Board of Revenue, U. P., 1955 A.L.J. 408, Ram Dular Singh vs Babu Sukh Ram, , Bhal Singh vs Bhop and Anr., and Sugriva vs Mukhi etc., , approved.

This appeal raised a short question as to the interpretation of sub section (4)(a) of section 4 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 ("the Bombay Rent Act"). The appellants were the sub tenants of the respondent No. 1 Firm in respect of the premises called Gala No. 4 in a godown. Respondent No. 1 Firm were the tenants of the said godown, having taken a lease of the building from the Bombay Port Trust. The appellants were in occupation of the said Gala under written agreements executed from time to time for one year each. The last such agreement expired on 19th October, 1971. The respondent No. 1 Firm served a notice on the appellants on 13th January, 1972 to hand over possession of the said gala on the ground that the period of lease had expired. By notice dated February 3, 1972, the respondent No. 1 Firm terminated the tenancy of appellants and then filed a suit in the City Civil Court against the appellants to recover possession of the premises in dispute inter alia on the ground that the period of lease had expired. The appellants took up the contention that they were not liable to be evicted as they were entitled to protection under the provisions of the Bombay Rent Act. The City Civil Court decreed the suit. On appeal by the appellants, the High Court (Single Judge,) holding that the notice of termination of tenancy dated 3rd February, 1972, was a valid notice and the provisions of the Bombay Rent Act did not apply to the premises in question, upheld the decree of eviction passed by the City Civil Court. Letters Patent appeal against this judgment was dismissed by a Division Bench of the High Court. The appellants then moved this Court for relief by special leave. Dismissing the appeal, the Court, 907 ^ HELD: The only submission made by the appellants before the Court was that the said premises, viz, Gala No. 4, were entitled to the protection of the provisions of the Bombay Rent Act and the respondent No. 1 Firm was not entitled to a decree for eviction as no grounds for eviction under the Act had been made out. [910G] The question raised was whether the protection of the sub section (4)(a) of section 4 of the Bombay Rent Act was available to the sub lessee in a building leased by the lessee from the Government or a local authority or put up by a lessee of the land belonging to the Government or a local authority but not under any building lease or pursuant to any obligation imposed on the lessee to put up a building. In this case, the entire building in which the premises in question, namely, Gala No. 4 were situated, belonged to the Bombay Port Trust. It was nowhere contended at any stage by the appellants that the building in which the said premises were situated was put up by the respondent No. 1 Firm. The Court was, therefore, not directly concerned with the position of a sub lessee in a building put up by a lessee of the land taken from the Government or a local authority without being under any obligation to do so. [913D F] A plain reading of sub section (1) of section 4 of the Bombay Rent Act makes it clear that the provisions of the Bombay Rent Act are not applicable to premises belonging to the Government or a local authority. Sub section (4)(a) only takes out from the scope of the exemption conferred by section 4(1) "a building erected on any land held by any person from the Government or a local authority under an agreement, lease, licence or other grant, although having regard to the provisions of such agreement, lease, licence or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be". If this provision were to be as including any building put up or erected on land held by any person from the Government or a local authority, the result would be that such protection would be available even against the Government or a local authority and the provision of sub section (1) of section 4 may be rendered largely nugatory. The provisions of sub section (4)(a) were never intended to take away the immunity conferred upon the premises belonging to the Government or a local authority, and if the provisions of section 4(4)(a) were to be construed as urged by the appellants, this immunity would be rendered practically nugatory. A plain reading of the provisions of sub section (4)(a) in the context clearly shows that there is no intention therein to take a building put up by the Government or a local authority from the scope of the exemption conferred by sub section (1) of section 908 4. The language of sub section (4)(a) and sub section (1) of section 4 of the Bombay Rent Act, read together, suggests that it was only in respect of a building put up by the lessee on the Government land or the land belonging to a local authority under a building agreement that the sub lessees were taken out of the exemption contained in sub section (1) of section 4 and allowed the benefit of the provisions of the Bombay Rent Act. It was significant that the exemption granted under the earlier part of sub section (1) of section 4 is in respect of the premises and not in respect of the relationship. In order to confer the protection of the provisions of the Bombay Rent Act on the sub lessees occupying the premises in any building erected on the government land or the land belonging to a local authority irrespective of the question who has put up the building as against the lessees of the land but without affecting the immunity conferred on the government or local authorities as contemplated by sub section (1) of section 4 of the Bombay Rent Act, the Court would have to practically rewrite the provisions of section 4, and it was not open to the Court to do that. The argument of the appellants, therefore, could not be accepted. The learned Judge of the High Court was right in coming to the conclusion that the premises in question were not entitled to the benefit of the provisions of the Bombay Rent Act. [914A H;915A] The decision of this Court in Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461 cited by the appellants was of no assistance to the case before the Court, and the decision of this Court in Maneklal and Sons vs Trustees of Port of Bombay and Others, cited by the appellants, far from supporting the submission of the appellants, militated against it. [916D] There was no merit in the appeal and it must fail. Taking the facts and circumstances of the case into consideration, the Court directed that the appellants would not be evicted from the premises in question until December 31, 1988. [916E] The Court observed that if the intention of the legislature was that the protection should be given to the sub lessee against the lessee in a building taken on lease by the lessee from the government or a local authority, it was for the legislature concerned to make appropriate amendments in the Bombay Rent Act and it was not open for the Court to re write the provisions of sub section (4)(a) of section 4 of the Bombay Rent Act on the ground of any such intention as suggested by Dr. Chitale counsel for the appellants. [916F] 909 Bhatia Co operative Housing Society Ltd. vs D.C. Patel, ; Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461; Maneklal and Sons vs Trustees of Port of Bombay and Others, and Ram Bhagwandas vs Municipal Corporation of the City of Bombay, , referred to.

The appellant mortgaged his property bearing No. 162A West Masi Street Madurai Town for a sum of Rs. 45,000 with the respondent Bank on October 14, 1950. In January 1952 the appellant and his wife borrowed Rs. 25,000 and jointly executed a pronote. The wife deposited her title deeds relating to premises No. 162 West Masi Street On June 25, 1952 the appellant and his wife created a mortgage of their respective properties Nos. 162A and 162 West Masi Street to secure repayment of a sum of Rs. 8,850. All the three mortgages were in favour of the respondent Bank. In 1953 the Bank instituted a suit on the foot of the last two mortgages and obtained a decree against the appellant and his wife. This decree was satisfied. In April 1958 the Bank filed a suit on the foot of the mortgage dated October 14, 1950. The main defence of the appellant, who was the sole mortgagor, was that the suit was not maintainable in view of the provisions of s, 67A of the Transfer of Property Act and that the stipulation of interest was penal and in contravention of the provisions of the . The trial court decreed the suit and the High Court dismissed the appeal. By special leave appeal was filed in this Court. HELD : If a mortgagor has made two or more mortgages of the same property or of different properties to the same mortgagee the mortgagor may redeem each separately but the mortgagee must enforce all or none. To attract the applicability of section 67A it is essential that the mortgagor must be the same and he should have executed two or more mortgages in respect of each of which he has a right to obtain the same kind of decree under section 67. In the present case it was not possible to hold that the mortgagor in the suit on the foot of the mortgage dated October 14, 1950 was the same as the mortgagor in the previous suit which was filed on the foot of the mortgages in favour of the appellant and his wife. In the other two mortgages there were two mortgagors one the appellant and the other, his wife. There is no statutory provision or rule or principle by which the wife and the husband could be treated as one entity for the purpose of the mortgage. Each was owner of a separate and distinct property and both joined in mortgaging their respective properties. The bar of section 67A therefore could not possibly come in the way of the institution of the ' present suit. [429 B F] Moro Raghunath vs Balaji, I.L.R , approved & applied. (ii)In the light of the provisions of the mortgage deed and all the circumstances the interest rate of 12% was unfair and penal. Rate suitably Reduced. [429 G]

The Petitioner landlord filed a suit No. 213 of 1970 for eviction against the first respondent and four others in the court of Civil Judge, Senior Division, Thane. The suit was decreed by the Trial Court. The first respondent alone filed an appeal before the District Court. The appeal was dis missed confirming the eviction. Thereafter the first re spondent filed a Writ Petition in the High Court of Bombay which was also dismissed. The first respondent then filed Civil Appeal No. 2628 of 1980 in this Court which was dis missed by this Court on 18.8.1987. However at the request of the appellant this Court had allowed him to continue to be in possession and carry on the business till 31.3.89 subject to the appellant and all his employees in the business filing an usual undertaking in the Court that they will hand over and deliver vacant possession of the premises on the expiry of the period mentioned above and will go on deposit ing the mesne profits until possession is delivered. In pursuance of this order an undertaking was filed by the first respondent as also by persons shown as his employees and staying in the premises. Sometime in the beginning of 1989 one Raghuram A. Shetty Second respondent in this Petition filed Civil Suit No. 306 of 1989 in the Thane Civil Court for a declaration that the decree for eviction obtained in respect of the premises in question in civil suit No. 213 of 1970 cannot be executed against him and for a permanent injunction against the Petitioner herein. He also moved an application for a tempo rary injunction from executing the said decree. The Thane Civil Court granted a temporary injunction as prayed. That is how the Petitioner herein filed this contempt petition both against the original tenant K.M.M. Shetty and the second respondent the Plaintiff in Civil Suit No. 306 of 1989. After discussing in detail the various developments of the case 562 brought about by the first respondent as well as by the 2nd respondent herein, this Court directed that the order grant ing injunction against the Petitioner from executing the eviction decree against the 2nd respondent shall not be operative and that the Petitioner is entitled to execute the decree for eviction against all persons who are in posses sion of the property. While holding the first respondent guilty of committing contempt by wilful disobedience of the undertaking given by him in this court, the Court, HELD: Breach of an injuction or breach of any undertak ing given to a Court by a person in civil proceedings on the faith of which the Court sanctions a particular course of action is misconduct amounting to contempt. [568F] The remedy in such circumstances may be in the form of a direction to the contemnor to purge the contempt or a sen tence of imprisonment or time or all of them. [568F] When a court accepts an undertaking given by one of the parties and passes an order based on such undertaking, the order amounts in substance to an injunction restraining that party from acting in breach thereof. [568D] The breach of an undertaking given to the Court by or on behalf of a party to a civil proceeding is, therefore, regarded as tantamount to a breach of injunction although the remedies were not always identical. For the purpose of enforcing an undertaking that undertaking is treated as an order so that an undertaking, if broken, would involve the same consequences on the persons breaking that undertaking as would their disobedience to an order for an injunction. [568D E] In the light of this Court 's finding in the instant case, that there was a breach of the undertaking mere impo sition of imprisonment or fine will not meet the ends of justice. There will have to be an order to purge the con tempt by directing the first respondent contemnor to deliver vacant possession immediately and issuing necessary further and consequential directions for enforcing the same. [568G]

The defendant was a tenant of the plaintiffs. The defendant was in arrears of rent for one year to the extent of Rs. 1,020. On April 11, 1959 the plaintiffs served a notice on the defendant requiring him to remit to them Rs. 1,020 within one month from the date of service of notice, failing which suit for ejectment would be filed. This notice was received by the defendant on April 16, 1959. On June 25, 1959 the defendant sent a reply to the notice enclosing with it a cheque for Rs. 1,320. This amount consisted of the rental arrears as well as the rent due right up to June 30, 1959. The plaintiffs accepted the cheque and cashed it and gave a fresh notice on July 9, 1959 requiring the defendant to vacate the premises by the end of the month of July. The defendant did not vacate the premises. Then the plaintiffs filed a suit to eject the defendant upon the ground that the latter was in arrears of rent for one year and had failed to pay the arrears within one month of the service of the notice dated April 11, 1959 upon him. From the undisputed facts it was clear that the defendant was in fact in arrears of rent and had failed to pay it within the time prescribed by cl. (a) of section 4 of the Madhya Pradesh Accommodation Control Act, 1953. Held:(i) Though the notice dated April 11, 1959 could be construed to be composite notice under section 4(a) of the accommodation Act and section 106 of the it was ineffective 240 under section 106 of the because it was not a notice of 15 clear days. In the present case, the defendant had only 14 clear days ' notice. Subadini vs Durga Charan Lal, I.L.R. and Gobind Chandra Saha vs Dwarka Nath Patita, A.I.R. 1915 Cal. 313, approved. Harihar Banerji vs Ramsashi Roy, L.R. 45 I.A. 222, dis tinguished. (ii)The suit was actually based upon the notice dated July 9, 1959 which gave more than 15 days ' clear notice to the defendant to vacate the premises. This notice was a valid notice under section 106 of the . (iii)The contention that a suit under cl. (a) of section 4 of the Act is not maintainable unless a tenant is in arrears on the date of the suit, cannot be sustained. If this contention had to be accepted it would be virtually rewriting the section by saying "that the tenant was in arrears of rent at the date of suit" in place of that the "tenant has failed to make payment etc. " It is certainly not open to a court to usurp the functions of a legislature. Nor again, is there scope for placing an unnatural interpretation on the language used by the legislature and impute to it an intention which cannot be inferred from the language used by it by basing ourselves on ideas derived from other laws intended to give protection to the tenants from eviction by landlords. (iv)The ground set out in cl. (a) of section 4 need not be shown by the landlord to exist at the date of institution of the suit. All that is necessary for him to establish is that the tenant was in fact in arrears, that he was given one month 's notice to pay up the arrears and that in spite of this he failed to pay these arrears within one month of service of notice on him. (v)The effect of cl. (a) of section 4 is merely to remove the bar created by the opening words of section 4 on the right which a landlord has under section 106 of the to terminate a tenancy of a tenant from month to month by giving a notice terminating his tenancy. The character of the tenancy as one from month to month remains; but to it is added a condition that the unfettered right to terminate the tenancy conferred by section 106 will be exercisable only if one of the grounds set out in section 4 of the Accommodation Act is shown to exist. (vi)By cashing the cheque for Rs. 1,320 the plaintiffs did not waive all rights which accrued to them under the notice dated April 11, 1959. No right under section 106 of the had accrued to them because of the ineffectiveness of the notice in so far as the termination of tenancy was concerned and, therefore, no question of waiver with respect to that part of the notice arises. So far as the right accruing under section 4(a) of the Accommodation Act is concerned, the defendant having been under liability to pay rent even after the giving of notice the acceptance of the rent by the plaintiffs would not by itself of operate as waiver.

Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960(for short, the Tamil Nadu Act) deals with the eviction of tenants and postulates that a tenant shall not be evicted whether in acquisition of a decree or otherwise except in accordance with the provisions of s.10 or sections 14 16 Section 10(2)(i) of the Tamil Nadu Act provides for the eviction of a tenant on the ground of non payment of rent. It lays down that where the Controller is satisfied that the tenant has not paid or tendered the rent within 15 days after the expiry of the time fixed in the Agreement y f tenancy or in the absence of any such Agreement, by the last date of the month next following that for which the rent is payable, he (tenant) undoubtedly commits a default The proviso to sub s.2 provides that in any case falling in clause (i), if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in s.11, give the tenant a reasonable time, not exceeding 15 days to pay or tender the rent due by him to the landlord upto the date of such payment or tender and on such payment or tender the application shall be rejected. The Explanation which was added by Act 23 of 1973 to the said proviso stipulates that for the purpose of sub s 2 of s 10, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months notice by the landlord claiming the rent. In Civil Appeals Nos. 1178 of 1984, 1992 of 1982, 2246 of 1982 and 1659 of 1982, the respondents landlords issued notices to the appellants tenants demanding the amount of rent in arrears and thereafter filed eviction petitions against the appellants tenants, inter alia, on the ground of "wilful default". All the appellants tenants complied with the notices issued by their respective landlords except the appellant tenant in Civil Appeal No. 1659 of ]982 where he made part payment only. However in Civil Appeal 3668 of 1982 and 4012 of 1982 the respondents landlords had filed eviction petitions against the appellantstenants without issuing such notices before filing of eviction petitions. In all the 644 appeals, the Madras High Court passed and/or confirmed, as the case may be, the orders of eviction holding that the ground of`willful ' default mentioned in section 10(2)(i) had been proved against the tenants. Hence these appeals by special leave. The common question of law involved in these appeals was as to what is the interpretation of the term "wilful default" in the Explanation to the Proviso of sub s.2 of section 10 of the Tamil Nadu Act. Counsel for the appellants tenants contended (i) that despite the explanation it is open to the court on an appraisement of the circumstances of each case to determine whether or not the default]t was wilful and in doing so it cannot be guided wholly and solely by the Explanation which is merely clarificatory in nature and (ii) that mere non payment of arrears of rent after issue of two months ' notice cannot in all circumstances automatically amount to a wilful default if the non payment does not fulfil the various ingredients of the term "wilful default". On the other hand it was argued by counsel for the respondents landlords (i) that the very purpose of the Explanation is to bring about uniformity in court decisions by laying down a conclusive yardstick in the shape of the Explanation and once it is proved that after issue of two months ' notice if the tenant does not pay the arrears within the stipulated period of two months, he is liable to be ejected straightaway. On the question of interpretation of the terms`wilful default ' appearing in the proviso to s.l0(2) of the Tamil Nadu Act coupled with the Explanation, the Court, ^ HELD: Per Fazal Ali and A. Varadarajan JJ. (majority) 1. Though the Court is concerned mainly with the Tamil Nadu Act, yet in order to understand the contextual background of the words `wilful default ' and its proper setting, it Will be useful to refer to those Acts which contain the term wilful default ' either in a negative or in positive form. These Acts are (l) A P. Buildings (Lease, Rent and Eviction) Control Act of 1960, the Orissa House Rent Control Act 1967 and the Pondichery Buildings Lease and Rent Control Act 1969, (hereinafter referred to as the A.P. Act, Orissa Act and Pondicherry Act respectively). Although the default contemplated by these Acts is wilful yet it has been put in a negative. Form which undoubtenly gives sufficient leeway to the tenant to get out of the rigors of the statutory provision the relevant provisions of these Acts relating to eviction of tenants on the ground of 'wilful default ' in payment of rent contemplate that a default simpliciter would not be sufficient to evict the tenant but it must further be shown that the default was not wilful. These Acts are however, silent on the mode and the manner in which a court may decide as to what is wilful and what is wilful. Thus these Acts have left it to the courts to decide this question. So far as the Tamil Nadu Act is concerned, it makes a marked improvement by broadening the ambit of 'wilful default ' in the proviso to section 10(2) which is further clarified by an Explanation added to it subsequently. Before coming to any conclusion it may be necessary to examine the exact meaning of the words 'wilful default ' as also the interpretation and the scope of the Proviso and the Explanation. [657H; 658A] 2. The words 'wilful default ' would mean a deliberate and intentional default knowing fully well the legal consequences thereof. A consensus of the 645 meaning of the words `wilful default ' appears to indicate that default in order to A be wilful must be intenional, deliberated and calculated and conscious, with full knowledge of legal consequences flowing therefrom. [660B; 661A B] `A Dictionary of Low ' by L.B. Co zon, page 361; Words and Phrases volume 11 A (Permanent Edition) page 268; Words and Phrases Vol. 45, pages 296. Webster 's Third New International Dictionary Vol. III page 2617 and Volume I page 590 and Black 's Law Dictionary(4th Edn.) page 1773 referred to. The well established rule of interpretation of a proviso is that a proviso may have three e . rate functions. Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted the in which but for the proviso would b. within the purview of the enactment. In other words, a proviso cannot be ton apart from the main enactment nor can it be use, to nullify or set at naught the real object of the main enactment. Whil interpreting a proviso sure be taken that it is used to remove special cases from the general enactment and provide for them separately In short, generally speaking a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself. To Sum up, a proviso may serve four different purposes: 1. qualifying or excepting certain provisions from the main enactment; 2. it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; 3. it may be embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and 4. it may be used merely to act as an optional addenda to the enactment with the sale object of explaining the real intendment of the statutory provision. [661D E; 664C D; 665H; 666A C ] Craies in `Statute Law ' (7th Edn.) Page 218, Odgers in 'Construction of Deeds and Statutes ' (Fifth Edn.) 317, 318. Sarathi in Interpretation of Statutes ' page 294 2951. referred to. Local Government Board vs South Stoneham Union Ishverlal Thakorelal Almala vs Motiobhai Nagjibhai [1966] I SCR 367. Madras and Southern Maharatta Railway Co. Ltd. vs Bezwada Municipality. AIR 1944 C71. West Derby vs Metropolitan Life Assurance Co. Rhodda Urban district Council v Taff Vale Railway Co. and Jennings and Another v KellY referred to. Commissioner of Income Tax, Mysore, etc vs Indo Mercantile Bank Ltd. [1959] Z Supp. SCR 256, Shah Bhojraj Kuverji Oil Mills and Ginning Factory vs Subhash Chandra Yograj Sinha ; State of Rajasthan 646 vs Leela Jain [1965] I SCR 276, Sales Tax officer, Circle 1, Jabalpur vs Hanuman Prasad [1967] I SCR 831, commisioner of Commercial Taxes and Ors. vs R.S. Jhaver and Ors. [1968] I SCR 148, Dwarka Prasad v Dwarka Das Saraf [19761 1 SCC 128 and Hiralal Rattanlal etc. vs State of U.P. and Anr. etc. [19731 I SCC 216 relied upon. The next question is as to what is the impact of the Explanation on the Proviso which deals with the question of wilful default It is now well settled that an explanation added to a statutory provision is not a substantive proviso,o in any sense of the term but as the plain meaning of the word itself shows, it is merely meant to explain or qualify certain ambiguities which may have crept in the statutory provision. From a conspectus of the authorities, it is manifest that the object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself; (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful; (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the court in interpreting the true purport and intendment of the enactment; and (e) it cannot, however, take away a statutory right with which any person , under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same. [666F G ; 668G H; 669A C] Sarathi in Interpretation of Statutes, p. 329; Swarup in Legislation and Interpretation ' pages 297 298 and Bindra in 'Interpretation of Statutes ' (5th Edn.) page 67, referred to. Burmah Shell Oil Storage and Distributing Co. Of India Ltd. and Anr. vs Commercial Tax Officer and Ors. [1961] I SCR 902, Bihta Cooperative Development Cane Marketing Uaion Ltd. and Anr. vs The Bank of Bihar and Ors. ; and Dattatraya Govind Mahajan and Ors vs State of Mahararashtra and Anr ; relied upon. Although almost every State has its own Rent Act, neither the Explanation nor the statutory clause concerning the term 'wilful default ' is mentioned therein. These Acts seem to proceed only on the simple word default ' and perhaps to buttress their intention they have laid down certain guidelines to indicate the grounds of ejectment wherever a default takes place. Looking generally at such Acts, they seem to have first provided statutorily a particular date or time when the tenant on being inducted under the contract of tenancy, is to pay the rent. Such a provision may or may not be against the contract of the tenancy 647 and if it is to that extent, it overrides the contract, This, therefore, gives sufficient notice to any tenant inducted in any premises that he must pay the lent according to the yardstick set out by the Act, failing which he runs the risk of being evicted for default. Some Acts, however, have provided a particular number of defaults to enable the Rent Controller or Court to find out whether such a default would entitle the landlord to get an order of eviction There are some other Acts which have made rather ingenious and, apt provisions for expediting the process of eviction in case of default by providing that whenever a suit for eviction is filed against a tenant on the ground of default, the tenant in order to show his bona fides must first deposit the entire rent, arrears and cost in the court of the Rent Controller where the action is field on the very first date of hearing, failing which the court or the authority concerned would be fully justified in striking down the defence and passing an order of eviction then and there. The dominant object of such a procedure is to put the tenants on their guard. It is true that such provisions are rather harsh but if a tenant goes on defaulting then there can be no other remedy but to make him pay the rent punctually unless some drastic step is taken. These Acts, therefore, strike a just balance between the rights of a landlord and those of a tenant. For deciding the present cases, it is not necessary to go either into the ethics or philosophy of such a provision because the Court is concerned with statutes having different kinds of provisions. The relevant provisions of the A.P., Orissa and Pondichery Acts are almost in pari materia the proviso to Section 10(2) of the Tamil Nadu Act. The only difference between the Tamil Nadu Act and the other Acts is that whereas an Explanation is added to the proviso to s.l0(2) of the Tamil Nadu Act, no such Explanation has been added to the provisions of the other three Acts. Hence the Court has to consider the combined effect of the proviso taken in conjunction with the Explanation. From an analysis of the various concomitants of the Explanation, the position seems to be that (a) there should be a default to pay or tender lent; E (b) the default should continue even after the landlord has issued two months ' notice claiming the arrears of rent; and (c) if, despite notice, the arrears are not paid the tenant is said to have committed a wilful default and consequently liable to be evicted forthwith. [669E H; 670A D, F G] F 5 (ii) The Explanation, does not at all take away the mandatory duty cast on the Controller in the Proviso to decide if a default is wilful or not. Indeed if the landlord chooses to give two months notice to his tenant and he does not pay the rent, then, in the absence of substantial and compelling reasons, the Controller or the court can certainly presume that the default is wilful and order his eviction straightaway. There is no force in the view that whether two months notice for payment of rent is given or not, it will always be open to the Controller under the Proviso to determine the question of 'wilful default ' because that would render the very object of explanation otiose and nugatory. [673D E] 6. Two factors mentioned in s.10(2)(i) seem to give a clear notice to a tenant as to the mode of payment as also the last date by which he is legally supposed to pay the rent. This, however, does not put the matter beyond controversy because before passing an order of eviction under the proviso, it must also be 648 proved that the default was wilful and if the Controller is of the opinion that the default in the circumstances and facts of the case was not wilful, in the sense that it did not contain any of the qualities or attributes of a wilful default as indicated, he may give the tenant a reasonable time, not exceeding 15 days, to pay the entire rent and if this is complied with, the application for ejectment would stand rejected. The difficulty, however . is created by the Explanation which says that once a landlord gives a Iwo months ' notice to his tenant for paying the arrears of rent but the tenant continues in default even thereafter, then he is liable to be evicted. There is a good deal of force in this argument which has its own advantages. In the first place, it protects the court from going into the intricate question as to what is a wilful default and whether or not the conditions of a wilful default have been satisfied which, if permitted would differ from case to case and court to court. But the difficulty is that if such a blanket ban is put on the court for not examining the question of wilful default once the conditions laid down in the Explanation are satisfied then it would undoubtedly lead to serious injustice to the tenant. A subsidiary consequence of such an interpretation would be that even though the tenant, after receipt of the notice, may be wanting to pay the arrears of rent but is unable to do so because of unforeseen circumstances like, death, accident, robbery, etc. which prevent him from paying the arrears, yet under the Explanation he has lo be evicted. Another difficulty in accepting the first view, viz., if two month 's notice is not given, the tenant must not be presumed to be a wilful defaulter, is that in such a case each landlord would has to maintain a separate office so that after every default a two months ' notice should be given and if no notice is given no action can be taken against a tenant. The correct view in the matter is in the following terms. (i) Where no notice is given by the landlord in terms of the Explanation, the Controller. having regard to the four conditions spelt out in this judgment has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful, If he feels that any of the conditions mentioned is lacking or that the default was due to some unforeseen .circumstances, he may give the tenant a chance of locus paenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected. (ii) If the landlord chooses to give two months ' notice to the tenant to clear up the dues and the tenant does not pay the dues within the stipulated time of the notice then the Controller would have no discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or circumstances beyond his control in honouring the notice sent by the landlord. [671G H; 672A D; F; 673F H; 674A B] N. Ramaswami Reddiar vs S.N. Periamuthu Nadar, 1980 Law Weekly (vol. 93) p. 577 and Khivaraj Chordia vs C. Maniklal Bhattad AIR 1966 Madras 67 approved. Rajeswari vs Vasumal Lalchand AIR 1983 Madras 97, referred to. In the light of the above principles and tests to be applied by courts in deciding the question of wilful default, the Court allowed Civil Appeals Nos. 1178 of 1984, 1992 of 1982 and 2246 of 1982 and dismissed rest of the appeals. [678B] 649 Per Mukharji.j. (dissenting) A l(i) Default has been construed in various ways depending upon the context. ' Default ' would seem to embrace every failure to perform part of one 's contract or bargain. It is a purely relative term like negligence. It means nothing more, nothing less. than not doing what is reasonable under the circumstances not doing something which you ought to do. having regard to the transaction. Similarly, default in payment imports something wrongful, the omission to do some act which, as between the parties, ought to have been done by one of them. It simply means non payment, failure or omission to pay. Default happens in payment of rents under various contingencies and situations. Whether the default is wilful or not is also a question of fact to be proved from evidence, direct and circumstantial drawing inferences from certain conduct. If the Courts are free to decide from varying circumstances whether default was wilful or not, then divergence of conclusions are likely to arise one judicial authority coming to the conclusion from certain circumstances that the default was wilful, another judicial authority coming to a contrary conclusion from more or less same circumstances. That creates anomalies. In order to obviate such anomalies and bring about a uniform standard that Explanation explains the expression, wilful" and according to the Explanation added, a default to pay or tender rent small be construed", as wilful if the default by the tenant n th payment of rent continues after issue of two months ' notice by the landlord claiming the rent. If that is the position, in a case where the landlord his given notice to the tenant claiming the rent and the tenant has not paid the same for two months, then the same must be construed as wilful default, whatever may be the cause for non payment. Whether in a particular case default is wilful or not, must be considered in accordance with the definition provided in the Explanation to Proviso to sub section (2) of section 10 of the Act. If it was intended that the courts would be free to judge whether in a particular set up of facts, the default was wilful or not where no notice has been given, then in such a case there was no necessity of adding this Explanation to the Proviso which is a step to the making of the findings under clause (l) of sub section (2) of section 10 of the Tamil Nadu Act. It is well settled that Legislature does not act without purpose or in futility. [680E G; 681B E; 682E F] _ . _ Stroud 's Judicial Dictionary Vol. 1. Third Edition. page 757, Prem 's Judicial Dictionary. 1 196 t page 483. The Dictionary of English Law page 597 Fakir Chander Datt and Other vs Ram Kumar Chatterji Indian Appeals. Vol XXXI. p. l9 n referred to, I(ii) If a definition is provided of an expression, then the courts are not free to construe the expression otherwise unless it is so warranted by the use of the expression such as "except otherwise provided or except if the context otherwise indicates. " There is no such expression in the instant case. There may be in certain circumstances intrinsic evidence indicating otherwise. Here there is none. [682C D] 2(i) The expression "shall be construed" would have the effect of providing a definition of wilful default in the proviso to sub section (2) of section 10. According to the explanation, a default to pay or tender rent "shall be construed", 650 as wilful if the default by the tenant in the payment of rent continues after issue of two months ' notice by the landlord claiming the rent. If that is the position, in a case where the landlord has given notice to the tenant claiming the rent and the tenant has not paid the same for two month 's, then the same must be construed as wilful default, whatever may be the cause for non payment. The Legislature has chosen to use the expression "shall be construed as wilful" if after a notice by the landlord for two months ' failure to pay or tender rent on the part of the tenant continues, and if it is wilful then under sub section(2) clause (1) read with the proviso as explained by the Explanation, the Controller must be satisfied and give an order for eviction. The Legislature has provided an absolute and clear definition of 'wilful default ' Other circumstances cannot be considered as wilful default. It is true that Legislature has not chosen to use language to indicate that in no other cases, the default could be considered to be wilful except one default case which has been indicated in the Explanation. But it is not so necessary be cause Legislature has defined 'wilful default by the expression that default to pay or tender rent shall be construed ' meaning thereby that it will mean only this and no other. Therefore, a default will be construed as wilful, only where the landlord has given notice and two months have expired without payment of such rent. [682 B R C; H; 681 D F; 683A] 2(ii)Statutory provisions must be construed, if it is possible, that absuridity and mischief may be avoided. Where the plain and literal interpretation of a statutory provision produces a manifestly absurd and unjust result, the court might modify the language used by the Legislature or even ( 'o some violence to it so as to achieve the obvious intention Or the Legislature and produce rational construction and just results. Ironing out the creases is possible but not rewriting the language to serve a notion of public Policy held by the judges [683C: 684B] 2(iii) Where two constructions are possible, one which avoids anomalies and creates reasonable results should be preferred but where the language is clear and where there is a purpose that can be understood and appreciated for construing in one particular manner, that is to say, avoidance of divergence of judicial opinions in construing wilful default and thereby avoiding anomalies for different tenants, it would not be proper in such a situation to say that this definition of wilful default was only illustrative and not exhaustive. The Proviso to sub section (2) of section 10 cannot be cons trued as illustrative when the Legislature has chosen to use the expression "shall be construed". [683D F] In the aforesaid view ot the matter, the individual appeals are disposed of accordinglY. that is to saY. OnlY those appeals of tenants are dismissed where eviction orders were passed after two months ' notice had been given and there was continuance of default, and the rest of the appeals are allowed. 1685B C] Seaford Court Estates Ltd. vs Asher [1949] 2 All E.R. 155 at pages 164 (CA), Regina vs Barnet London Borough Council Ex parte Nilish Saah, 1983 (2) Weakly Law Reports p. 16 at p. 30., Carrington and others vs Therm a Stor Ltd. 1983 (1) Weakly Law Reports p. 138 at p. 142. referred to. 651

il Appeals Nos. 469, 470,506, 507 and 529 to 534 of 1962. Appeals by special leave from the judgment and order dated December 18, 1961, of the Madhya Pradesh High Court in Misc. Petition Nos. 24, 29, 42, to 45, 58, 70, 95 and 213 of 1960. WITH Petitions Nos. 70 and 71 of 1962. Petition under article 32 of the Constitution of India for enforcement of Fundamental rights. Sachin Chaudhri, B. Sen, J. B. Dada chanji, O. C. Mathur and Ravinder Narain, for the appellants (in C. As. 469 and 470/62) and the Petitioners (in Petitions. Nos. 70 and 71 of 62). A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan, for the respondent (in C. As. 469 470, 506 and 507 of 62), Respondents Nos. 1 and 3 (in C. As. 529 to 534/62) and Respondent No. 1 (in Petn. Nos. 70 and 71/62). B. Sen and I. N. Shroff, for the appellants (in C. As. 506 and 507/62). 175 N. C. Chatterjee, Y. section Dharmadhikaree and M. section Gupta, for the appellants (in C. As. 529 to 534 of 62). I. N. Shroff, for the respondents Nos. 2 and 4 (in C. As. 529 to 534 of 62). September 24. The judgment of the Court was delivered by GAJENDRAGADKAR, J. These ten appeals and two writ petitions have been placed for hearing together in a group, because they raise common questions of law. The appellants in these matters are all colliers holding mining leases under the Government of Madhya Pradesh for the extraction of coal from collieries situated in the Chhindwara District. The respondent, Janapada Sabha, Chhindwara, has issued notices against them calling upon them to pay coal tax " 'for coal manufactured at the mines, sold for export by rail or sold otherwise than for export by rail within the jurisdiction of the original Independent Mining Board for the said area It appears that the mining area in question was within the territorial limits of the Independent Mining Local Board which had the status and powers of a District Council under the Central Provinces Local Self Government Act, 1920 (hereinafter called the Act). The respondent Sabha is the successor of the said Mining Board and, therefore, claims to be entitled to continue the levy and recover the tax in question. On March 12, 1935, the Mining Board exercising its powers under section 51 of the Act, resolved to levy coal tax, and accordingly, the first imposition made by it received the sanction of the local Government on December 16, 1935, as per Notification No. 8700 2253 D VIII. This notification came 'into force from January 1, 1936. On December 16, 1935, the local Government notified the rules for the assessment and 176 collection of the tax which it had framed in exercise of the powers conferred on it by section 79 (1), clauses (xv), (xix) and (xxx). Rule 2 of these Rules provided that the tax shall be payable by every person, firm or company holding a mining lease for coal within the limits of the Independent Mining Local Board 's jurisdiction. Rule 3 provided that the tax shall be levied @ three pies per ton on coal, coal dust or coke manufactured at the mines, sold for export by rail or sold otherwise than for export by rail within the territorial jurisdiction of the Independent Mining Local Board. In 1943, the words " 'coke manufactured at the mines" were deleted from Rule 3 and the tax was confined to coal and coal dust. The rate thus prescribed was increased from time to time. On December 22, 1943, the rate was made 4 pies per ton; on July 29, 1946, it was made 7 Pies, per ton; and on July 1. 9, 1947, it was made 9 pies. The Mining Board continued to recover the tax at the said rates until the Act was repealed in 1948 and in its place was enacted the Central Provinces and Berar Local Self Government Act, 1948 (No. 38 of 1948). The respondent Sabha has now taken the place of the said Mining Board and has issued the notices against the several appellants, calling upon them to pay the coal tax for the different periods mentioned in the said notices. The appellants in Civil Appeals Nos. 469 and 470 of 1962 are : The Amalgamated Coalfields Ltd. and The Pench Valley Coal Co. Ltd. They are companies in operated under the Indian Companies Act, 1913, andor both have Shaw Wallace & Co., Ltd., as their Managing Agents. On August 23, 1958, notices were served on the two appellants calling upon them to pay Rs. 21,898/ 64 np and Rs. 11,838/9 np respectively as tax assessed @ 9 pies per ton from ,,January 1, 1958, to June 30, 1958: This tax was claimed in respect of coal which included coal despatched by the appellants outside the State of 177 Madhya Pradesh. The validity of these notices was challenged by the appellants in this Court by their Writ Petition 'No. 31 of 1959. On February 10, 1961, the said writ petition was dismissed by this Court and it was held that the notices served on them were valid (Vide The Amalgamated Coalfields Ltd. vs The Janapada Sabha, Chhindwara(1). On September 13, 1960 and March 2, 1961, two notices of demand were served on the appellants calling upon them to pay Rs. 1,16,776/25 nP. and Rs. 65,261/19 nP. respectively in regard to the tax assessed @ nine pies per ton on all coal despatched by the appellants from their collieries for the half years ending June 30, 1958. December 31, 1958, June 30), 1959, December 31 1959, June 30, 1960 and December 31, 1960. The appellants challenged the validity of these notices by a Writ Petition filed by them in the High Court of Madhya Pradesh on April 1.2, 1961 (No. 95 of 1961). Whilst the said writ petition was pending before the High Court, the appellants filed another writ Petition in the same High Court (No. 213 of 1961). By this writ petition, the appellants challenged the validity of notices issued against them on June 9, 1959, by which coal tax was demanded from them for a period between April 1, 1951 to December 31, 1957. This tax was levied in respect of coal despatched by the appellants outside the State of Madhya Pradesh. The amounts demanded were Rs. 1,92,144/66 nP. and Rs. 68,319/36 nP. respectively. These two petitions along with eight others were heard together by the High Court. So far as the appellants ' petitions were concerned, the High Court has held that the appellants ' claims were barred by res judicata by reason of the earlier decision of this Court in the case of the Amalgamated Coalfields Ltd. (1). The appellants then applied for and obtained special leave from (1) ; 178 this Court on April 23, 1962 and it is by special leave thus granted to them that they have come to this Court in Civil Appeals 469 & 470 of 1962. The appellants have also filed two Writ Petitions Nos. 70 & 71/1962 under article 32 of the Constitution. By these writ petitions, the two appellants challenged the validity of the notices served on them on Julie 9, 1959 as well as on September 13, 1960. The appellants ' case is that these notices are illegal and without jurisdiction and so, they want them to be quashed by an appropriate writ or order issued against the respondent in that behalf. Thus, the two appellants, the Amalgamated Coalfields Ltd., and the Pench Valley Coal Co. Ltd.,, arc concerned with the two appeals Nos 469 & 470/1962) and Writ Petitions 70 & 71/1962. The other appeals arise from the writ petitions filed in the High Court of Madhya Pradesh by the respective appellants which were tried along with the writ petitions filed by the Amalgamated Coalfields Ltd. & Anr. In dealing with these writ petitions, High Court has held that the decision of this Court is the case of Amalgamated Coalfields Ltd.(1) concludes the points raised by them in challenging the validity of the notices, and so, following the said decision, the High Court has dismissed all the said petitions. The appellants applied for and obtained special leave to come to this Court against the said decisions and it is with the special leave thus granted to them that these appellants have come before us. Civil Appeal No. 506 arises from the decision of the High Court of 'Madhya Pradesh dismissing the writ petition filed before it by the appellant, the Central Provinces Syndicate (P) Ltd. By its writ petition the appellant had challenged the validity of the notice served by the respondent calling upon it to pay arrears of the tax amounting to Rs. 20,776/88 nP. being arrears from April 1, 1951 to June 30, 1959. (1) ; 179 It appears that for the said period, the appellant had been taxed by the respondent, but the said tax was not imposed on coal which had been transported by the appellant outside the limits of the State of Madhya Pradesh. The respondent now sought to reopen the assessment levied against the appellant for that period by including a claim for tax in respect of coal sold by the appellant outside the limits of the State. The High Court has rejected the Writ Petition and that decision 'has given rise to Civil Appeal No. 506 of 1962. Civil Appeal No. 507 of 1962 arises from a writ petition filed by the appellants M/s. Kanhan Valley Coal Co. (Private) Ltd., in the High Court of Madhya Pradesh in which the validity of the notice issued by the respondent calling upon the appellants to pay the coal tax amounting to Rs. 10,970/ as arrears from April 1, 1951 to June 30, 1959 has been challenged. The High Court has dismissed the writ petition, and so, the appellants have come to this Court by their Appeal No. 507/1962. Civil Appeals Nos. 529 to 534 of 1962 similarly arise out of six writ petitions filed by the appellants M/s. Newton Chickli Collieries (P) Ltd. & five others in the High Court of Madhya Pradesh challenging the validity of the notices of demand served on them to recover by way of arrears coal tax for the periods mentioned in the notices in regard to coal sent by them outside the State of Madhya Pradesh for export. These writ petitions were dismissed by the High Court, and the appellants have, therefore, come to this Court by appeals Nos. 529 534/1962. That, in brief, is the genesis of the ten appeals and two writ petitions which have been grouped together for hearing in this Court. It will thus be seen that Civil Appeals Nos. 469 & 470/1962 and Writ Petitions Nos. 70 & 71/1962 raise a preliminary question about the applicability 180 of the doctrine of res judicata to writ petitions filed under article 226 or to petitions under article 32, whereas the said appeals and writ petitions as well as the other appeals raise an additional question about the validity of the notices issued against the respective appellants. We would, therefore, deal with civil appeals Nos. 469 and 4 70/1962 and Writ Petitions Nos. 70 and 71/1962. Our decision in these matters will govern the other appeals in this group. The first point which falls for our decision, in these appeals is one of res judicata. The High Court has held that the challenge made by the appellants against the validity of the demand notices issued against them by the respondent is barred by res judicata by virtue of the decision of this Court in the earlier case brought by the appellants themselves before this Court. The Amalgamated Coalfields Ltd.(1) Before dealing with this point it is necessary to refer to the said decision. In that case, the validity of the impugned notices was challenged on two grounds ; it was urged that the levy of the tax by the Independent Mining Board was invalid at the date of its initial imposition in 1935 and so, the respondent Sabha which was the successor of the said Mining Board could claim no authority to continue the said tax. This contention was based on the assumption that before the power conferred by section 51 of the Act could be exercised,, the previous sanction of the Governor General had to be obtained, or that there should be fresh legislation in that behalf. This Court held that the Act having received the assent of the Governor General, its validity cannot be challenged in view of the saving clauses in the proviso to section 80A (3) and section 84(2) of the Government of India Act, 1915. That being so, it was not open to any party to suggest that any subsequent amendments of the Government of India Act could affect the continued validity and operation of the Act. The second contention raised was one of construction. It was urged (1) ; 181 that on a fair construction of section 51, the coal tax was excluded from the purview of the local authority. The This argument was based on the opening clause of section 51 which provided that its provisions would operate subject to the provision of any law or enactment for the time being in force. It was suggested that this clause took in the provisions of section 80A(3) of the Government of India Act read with the Scheduled Taxes Rules framed under that section, but this argument was also rejected. It appears that at the hearing of the petition, the appellants also attempted to take an additional point against the validity of the. impugned notices on the ground that the rate of tax which had been increased from 3 pies to 9 pies per ton was invalid. The appellants ' case was that this increase was effected after the commencement of the Government of India Act, and so, it was invalid. This argument was not considered by the Court, because it was not even hinted in the petition filed by the appellants and the Court thought that it would not be proper to permit the appellants to raise that point at that stage. That is how the appellants ' challenge to the validity of the impugned notices served on them on August 23, 1958 was repelled and the writ petition filed by them in that behalf was dismissed. It appears that the authority of the Janapada Sabha to levy the impost under s.51 of the Act was challenged on another ground in the case of Ram Krishna Ram Nath v, Janapad Sabha (1). This time the attack against the competence of the janapad Sabha proceeded on the ground that in repealing the Act of 1920, the subsequent Act of 1948 had not provided for the continuance of the said power in the janapad Sabhas which were the successors of the Independent Mining Boards. Section 192(c) purported to provide that all rates, taxes and cesses due to the District Council, Local Board or Independent Local Board shall be deemed to be due to the Sabha to (1) [1962] Supp. 3 S.C.R. 70. 182 whose area they pertain. But it was obvious that this clause could apply to, and save, only rates, taxes and cesses already due; it did not authorise the imposition of fresh cesses, taxes or rates in future. Having realised that the relevant provision did not save future imposts, an amending Act was passed in 1949 by which the said saving was extended to include the right of the janapad Sabhas to continue the levy of the impugned tax and this amendment was made retrospective f from June 11, 1948, when the parent Act had come into force. In the case of Ram Krishna (1) the validity and effectiveness of this amendment of 1949 was challenged. It was thus a basic challenge to the power of the janapad Sabhas to levy any impost on the ground that the subsequent amendment was invalid. This Court repelled the said challenge and held that the retrospective operation of the amendment was valid. According to this decision, the Provincial Legislature was competent to legislate for the continuance of the tax, provided the relevant conditions of s.143(2) of the Government of India Act 1935 were satisfied. These conditions required that the tax should be one which was lawfully levied by a local authority for the purposes of a local area at the commencement of Part III of the Government of India Act; that the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which it is to be utilised continue to be the same, and that the rate of the tax is not enhanced nor is its incidence materially altered, so that, in substance, it continues to be the same tax. Since these tests were satisfied by the impost levied by the janapad Sabha, it was held that the impost was valid and that the retrospective amendment of s.192 was effective. The present proceedings constitute a third challenge to the validity of the notices issued by the janapad Sabha, and as we have already seen, the (1) [1962] Supp. 3 S.C.R. 70. 183 challenge made by the appellants by their writ petitions before the High Court has been repelled on the preliminary ground that it is barred by res judicata. In that connection, the first question to consider is whether the general principle of res judicata applies to writ petitions filed under article 32 of the Constitution. This question has been considered by a special Bench of this Court in the case of Pandit M. section M. Sharms vs Dr. Shree Krishna Sinha (1). Chief justice Sinha, who delivered the unanimous opinion of the Court, has answered this question in the affirmative. In that connection, the learned Chief justice has referred to an earlier decision of this court in Raj Lakshmi Dasi vs Banamali Sen, (2) where it has been laid down that the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full ' contest, even though the first Tribunal which decided the matter may have no jurisdiction to try the subsequent suit and even though the subject matter of the dispute was not exactly the same in the two proceedings. It ought to be added that the Tribunal which had tried the first dispute in that case was a Tribunal of exclusive jurisdiction. Then the points raised on behalf of the petitioner Sharma were considered and it was noticed that, in substance, they were the same points which had been agitated before this Court on an earlier occasion and had been rejected. "In our opinion", said the judgment, "the questions determined by the previous decision of this Court cannot be reopened in the present case and must govern the rights and obligations of the parties which as indicated above, are substantially the same. " Thus, this decision shows that even petitions filed under article 32 are subject to the general principle of res judicata. The question about the applicability of the doctrine of res judicata to the petitions filed under (1) (2) ; 184 article 32 came before this Court in another form in Daryao vs The State of U. P. (1), and in that case it has been held that where the petition under article 226 is considered on the merits as a contested matter and dismissed by the High Court, the decision pronounced is binding on the parties, unless modified or reversed by appeal or other appropriate proceedings under the Constitution, and so, if the said decision was not challenged by an appropriate remedy provided by the Constitution, a writ petition filed in respect of the same matter would be deemed to be barred by res judicata. Therefore, there can be no doubt that the general principle of res judicata applies to writ petitions filed under article 32 or article 226. It is necessary to emphasise that the application of the doctrine of res judicata to the petitions filed under article 32 does not in any way impair or affect the content of the fundamental rights guaranteed to the citizens of India. It only seeks to regulate the manner in which the said rights could be successfully asserted and vindicated in courts of law. The question in the present appeals, however, is somewhat different. The notices which are challenged by the appellants in the present proceedings are in respect of the tax levied for a period different from the period covered by the notices issued on August 23, 1958 which were the subject matter of the earlier writ proceedings (The Amalgamated Coalfields Ltd. ( 2 ) ) . Where the liability of a tax for a particular year is considered and decided, does the decision for that particular year operate as res judicata in respect of the liability for a subsequent year ? In a sense, the liability to pay tax from year to year is a separate and distinct liability; it is based on a different cause of action from year to year, and if any points of fact or law are considered in determining the liability for a given year, they can generally be deemed to have been considered and decided in a collateral and incidental way. The (1) ; (21 ; 185 trend 'of the recent English decisions on the whole appears to be, in the words of Lord Radcliffe, ',,that if is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels (I am not speaking, of course, of the effect of legal decisions establishing the law, which is quite a different matter), even though in the result, ' some expectations may be frustrated and some time wasted." (vide Society of Medical Officers of Health vs Hope Valuation Officer (1)). The basis for this view is that generally, questions of liability to pay tax are determined by Tribunals with limited jurisdiction and so, it would not be inappropriate to assume that if they decide any other questions incidental to the determination of the liability for the specific period, the decisions of those incidental questions need not create a bar of res judicata while similar questions of liability for subsequent years are being examined. In that connection, it would be interesting to refer to four English decisions. In the case of Broken Hill Proprietary Co. Ltd. and Municipal Council of Broken Hill, (2) the question which fell for decision was how the average annual value of a mine for rating purposes had to be determined, and it was held by the Privy Council that the said value was to be ascertained by dividing the value of the output during the three years by three, not by multiplying it by 205 and dividing it by 365. One of the points which the Privy Council had to consider was whether a contrary decision reached by the High Court of Australia between the parties as to the valuation for a previous year, operated as res judicata. In rejecting the plea that the principle of res judicata applied, Lord Carson. observed that ""the decision of the High Court related to a valuation and a liability to a tax in a previous year, and no doubt as regards that year, the decision could not be disputed. The present case relates to a new question, viz., the valuation for a different year and the liability for that year. It is not (1) , 563, (2) 186 eadem questio, and therefore, the principle of res judicata cannot apply." (p. 100). It, however, appears that in the same year, the Privy Council came to a somewhat contrary decision in the case of Hoystead vs Commissioner of Taxation.(1) In that case, the question which arose for decision was about the deduction claimable under ther elevant provision of the Land Tax Assessment Act, 1916 (Aust.) Upon the assessment for 1919 20, the Commissioner allowed only one deduction of 5,000 lbs. contending that the beneficiaries were not joint owners within the meaning of the Act. The case was then stated to the full Bench which upheld the Commissioner 's view and rejected the argument that the Commissioner was estopped from coming to that conclusion in view of his decision in a previous year. When the matter went before the Privy Council, it reversed the decision of the Full Court, because it held that the Commissioner was estopped, even though in the previous litigation no express decision had been given whether the beneficiaries were joint owners, it being assumed and admitted that they were, and the Privy Council thought that the matter so admitted was fundamental to the decision then given. It would thus be seen that this decision applied the principle of res judicata even where there was no express decision on the point, but the point had been conceded in the earlier proceedings. In 1960, the House of Lords had occasion to consider this question in the case of Society of Medical Officer of Health (2). We have already quoted one statement of 'the law from the speech of Lord Radcliffe in that case. In that case, the main reason given for repelling the application of the principle of res judicata in rating cases, was that the jurisdiction of the Tribunal which deals with those cases is limited, in that its function begins with and ends with deciding the assessment or liability of a person for a terminable period. Besides, it was (1) (2) , 563. 187 held that the position of a valuation officer is that of a neutral official charged with the recurring duty of bringing into existence a valuation list, and he cannot properly be described as a party so as to make the proceedings a lis inter partes. In coming to the conclusion that the doctrine of res judicata would not apply in such cases, Lord Radcliffe was influenced by the consideration that if decisions in rating cases are to be treated as conclusive for all time that Would be to impose a needlessly heavy burden upon the administration of rating (p.566). This decision purported to approve of the view taken in the case of the Broken Hill Proprietary Co. Ltd.(1) and to distinguish the view taken in the Hoystead case. (2) Lord Radcliffe had occasion to return to the same subject again in Gaffoor vs Income tax Commissioner. (3) Speaking for the Privy Council, Lord Radcliffe considered the problem of the application of res judicata to taxation cases, examined it in detail and came to the conclusion that the said doctrine did not apply to tax cases in the sense that the decision for the levy of a tax for one year does not operate as res judicata in dealing with the question of a tax for the subsequent year. On this occasion, emphasis was not placed so much on the limited nature of the jurisdiction of the Tribunal that deals with tax cases, but it was held that even if the matter goes to a High Court on a statement of the case, the decision of the High Court would also not create a bar of res judicata in dealing with the tax claim for a subsequent year. " 'The critical thing," said Lord Radcliffe, " 'is that the dispute which alone can be determined by any decision given in the course of these proceedings is limited to one subject only, the amount of the assessable income for the year in which the assessment is challenged. " He, no doubt, recognised that in the process of arriving at the necessary decision, it was likely that the consideration of questions of law turning upon the construction of the ordinance or of other statutes or (1) (2) , (3) [1961] 2 W.L.R.794. 188 upon the general law, may be involved, but he thought that the decision of those questions should be treated as collateral or incidental to what is the only issue that is truly submitted to determination (pp. 800 801). This decision would, therefore, support the appellants ' contention that the High Court was in error in dismissing their writ petitions on the preliminary ground that they were barred by res judicata. In considering this question, it may be necessary to distinguish between decision on questions of law which directly and substantially arise in any dispute about the liability for a particular year, and questions of law which arise incidentally or in a collateral manner, as Lord Radcliffe himself has observed in the case of the Society of Medical Officers of Health, (1) that the effect of legal decisions establishing the law would be a different matter. If, for instance, the validity of a taxing statute is impeached by an assessee who is called upon to pay a tax for a particular year and the matter is taken to the High Court or brought before this Court and it is held that the taxing statute is valid, it may not be easy to hold that the decision on this basic and material issue would not operate as res judicata against the assessee for a subsequent year. That, however, is a matter on which it is unnecessary for us to pronounce a definite opinion in the present case. In this connection, it would be relevant to add that even if a direct decision of this Court on a point of law does not operate as res judicata in a dispute for a subsequent year, such a decision would, under article 141, have a binding effect not only on the parties to it, but also on all courts in India as a precedent in which the law is declared by this Court. The question about the applicability of res judicata to such a decision would thus be a matter of merely academic significance. In the present appeals, the question which arises directly for our decision is : does the principle (1) , 563. 189 of constructive res judicata apply to petitions under article 32 or article 226 where the dispute raised is in respect of a year different from the year involved in a prior dispute decided by this Court ? We have already noticed the points actually decided by this Court against the appellants on the earlier occasion (vide The Amalgamated Coalfields Ltd.(1)). One of the points sought to be raised was in regard to the validity of the increase in the rate of tax from 3 pies to 9 pies per ton; and since this point had not been taken in the petition and relevant material was not available on record, this Court refrained from expressing any opinion on it. The appellants contend that the order passed by this Court refusing permission to the appellants to raise this point on the earlier occasion does not mean that this Court has decided the point on the merits against the appellants; it may mean that the appellants were given liberty to raise this point later: but even otherwise, the point has not been considered and should not be held to be barred by constructive res judicata . It is significant that the attack against the validity of the notices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion. It is not as if the same ground which was urged on the earlier occasion is placed before the Court in another form. The grounds now urged are entirely distinct, and so, the decision of the High Court can be upheld only if the principle of constructive res judicata can be said to apply to writ petitions filed under article 32 or article 226. In our opinion, constructive res judicata which is a special and artificial form of res judicata enacted by section 11 of the Civil Procedure Code should not generally be applied to writ petitions filed under article 32 or article 226. We would be reluctant to apply this principle to the present appeals all the more because we are dealing with cases where the impugned tax liability is for different years. In dismissing the appellants ' petitions on the ground of res judicata, the High Court has no doubt referred to (1) ; 190 article 141 under which the law declared by this Court is binding on all Courts within the territory of India. But when we are considering the question as to whether any law has been declared by this Court by implication, such implied declaration, though binding must be held to be subject to revision by this Court on a proper occasion where the point in question is directly and expressly raised by any party before this Court. Therefore, we are inclined to hold that the appellants cannot be precluded from raising the new contentions on which their challenge against the validity of the notices is based. The first. ground urged by the appellants on the merits is that the levy authorised to be imposed by the Act and the Rules framed thereunder violates the fundamental rights guaranteed to the citizens under article 19 (1) (f) of the Constitution, and in support of this Arguments reliance is placed on the decision of this Court in Kunnathat Thathunni Moopil Nair vs The State of Kerala (1). In that case, the impugned Act was struck down because it suffered from several serious infirmities; it was confiscatory in character and its provisions in regard to the levy of the impost were so arbitrary and unreasonable that the Court took the view that the Legislature had completely ignored the legal position that the assessment of a tax on person or property was at least of a quasi judicial character. This conclusion was based on the examination of the relevant statutory provisions. in the present case, we are not satisfied that this decision can assist the appellants at all, because the nature of the statutory provisions and the Rules framed under the Act in the present appeals is entirely different. At this stage, it is necessary to refer to the relevant statutory provisions and the Rules. Section 51 of the Act (which, in substance, corresponds to section 90 of the Act of 1948) reads thus (1) ; 191 "51. (1) Subject to the provisions of any law or enactment for the time being in force, a District Council may, by a resolution passed by a majority of not less than two thirds of the members present at a special meeting convened for the purpose, impose any tax, toll or rate other than those specified in sections 24, 48, 49 and 50. (2) The first imposition of any tax, toll or rate under sub section (1) shall be subject to the previous sanction of the Provincial Government. x x x X" Sub section (3) and the proviso are not relevant for our purpose. Then we go to section 79 which confers power on the Provincial Government to make Rules. Section 79 (1)(xv) is relevant for our purpose. It provides that : "The Provincial Government may make rules consistant with this Act and with reference, if necessary, to the varying circumstances of different local areas, as to the assessment and collection of the cases and rates specified in sections 48, 49 & 50 and of any tax, toll or rate imposed under section 51, as to the maximum amounts or rates at which any of them may be imposed, as to the prevention of evasion of assessment or payment thereof, as to the agency by which they shall be assessed and collected, and as to the manner in which account thereof shall be rendered by District Councils. " In pursuance of the powers conferred on the local Government by section 79, rules have been framed on December 16, 1935. Rules 3 to 10 deal with the question of the impost of tax and provide how decisions made in that behalf by appropriate authorities 192 become final. Rule 3 prescribed the rate at 3 pies per ton, Rule 4 provides that the figures reported by the concessionaires and the Railway companies half yearly to the Dy. Commissioner, shall be the basis for the assessment of the tax. Under Rule 5, every mining lessee has to submit a statement half yearly. On receipt of the statement, the assessment has to be made by the Chairman of the Independent Mining Local Board under Rule 6. A notice of demand follows under rule 7. Fifteen days ' period is given for filing objections under Rule 8. Rule 9 provides for the Consideration and disposal of the objections, and Rule 10 lays down that if no objection is filed, the Chairman 's assessment shall be final, if any objection is received, the Independent Mining Local Board 's decision shall be final and shall be communicated to the assessee as soon as possible. It would thus be seen that the scheme of these Rules provides ample opportunity to the assessees to object to the notice of demand served on them and in fact, the demand notices are substantially based on the figures supplied by the railway companies and the concessionaires and the statements submitted by the assessees themselves. Therefore, it would be idle to suggest that the impost of the tax authorised by the relevant statutory provisions and the Rules is a capricious administrative or executive affair and so, should be held to violate article 19(1)(f) of the Constitution. Then it is urged that the demand of the tax @ 9 'es per ton is invalid, because it is inconsistent with Rule 3 which has prescribed the maximum rate permissible to be levied against the assessees. We have already noticed that section 79(1)(XV) authorised the making of a rule as to the maximum amounts or rates at which any of the articles can be taxed. This was introduced by an amendment made in 1933 by C.P. Act VII of 1933, and so, the argument is that Rule 3 which provides that the tax shall be levied @ 3 pies per ton must be deemed to pro 193 vide for the maximum rate which can be levied and that is 3 pies per ton and no more. This argument is no doubt well founded., because Rule 3 will have to be read in the light of the power conferred on the local Government by section 79(XV) and that would mean that the rate of 3 pies per ton has been prescribed by the Rule of the maximum rate permissible. But this argument ignores the fact that this Rule has been subsequently deleted by a notification on September 6, 1943 published in the Government Gazette on September 10, 1943. When this notification was cited before us, the appellants conceded that the argument based on the construction of Rule 3 was not available to them. Therefore, the contention that Rule 3 prohibits the levy at a rate higher than 3 pies cannot succeed since the Rule itself has been subsequently deleted and was not a part of the Rules at the relevant time when the impugned notices were issued. It is then argued that the impost of the tax at the rate of 9 pies per ton is not valid, because it does not comply with the requirements of section 51(2) of the Act, and that raises the question of the construction of the said section. Section 51(1) authorises the imposition of the tax, provided, of course, the procedure prescribed by it and the requirements laid down by it are satisfied. Sub Section (2) then lays down that the first imposition of any tax shall be subject to the previous sanction of the Provincial Government. The appellants contend that in the context, the "first im position" means not only the first imposition in the sense of an initial imposition, but it includes every fresh imposition levied at an increased rate. On the other hand, the respondent Sabha contends that the first imposition means only the initial levy or impost and cannot take in subsequent imposts or levies. 'In this connection, it is relevant to remember that sub section (2) was added by the same Amending Act by which section 79(XV) was amended, and 194 so, it would not be unreasonable to assume that when the legislature gave power to the local Government to prescribe by rules the maximum rates permissible to be levied, it introduced sub section (2) in section 51 because it was thought necessary that whenever the rates were changed, the imposition of the tax at the increased rates should receive the previous sanction of the Government. If the respondent 's construction is accepted, it would mean that the respondent should obtain the previous sanction of the Government at the initial levy and thereafter may go on increasing the rate of the levy to any extent without securing the sanction of the Government in that behalf. Now that Rule 3 has been deleted and no maximum has been or can be prescribed by the Rules, it would be unreasonable to hold that the respondent is given an unfettered and unguided authority to levy the impost in question at any rate it likes. Since no ceiling has been placed by the Rules in that behalf, it would, we think be fair to hold that if the rates are increased and levy is sought to be imposed on the altered rates, the imposition of the levy at these altered rates should be deemed to be included in the express on "first imposition" under section 51(2). We are, therefore, inclined to accept the appellants ' construction of section 51(2). That being so, it is necessary to enquire whether the imposition of the tax @ 9 pies has received the previous sanction of the local Government. During the course of his arguments, Mr. Sastri for the respondent attempted to suggest that sanction had been obtained for the increase in the rates from time to time and a typed summary of the notifications issued in that behalf was supplied to us at the time of arguments. This summary refers to the three increments made in 1943, 1946 and 1947 respectively to which we have already referred. The summary read as if the increments had been sanctioned by the State Government. But Mr. Sachin Choudhury for the appellants contended that the 195 summary supplied by the respondent was incomplete and inaccurate and that the examination of the Gazette in which the notifications were published, would show that the amendments in the rates had been made not with the previous sanction of the Government, but by the Mining Local Board itself. Two of these notifications were then produced before us by the respondent, and they supported the conten tion made by Mr. Choudhury. Therefore, the argument that the imposition @ 9 pies per ton has received the sanction of the Government must fail, and so, the impugned notices which seek to recover the tax from the appellants @ 9 pies per ton must be held to be invalid The respondent is entitled to levy tax only @ 3 pies per ton because that levy has received the sanction of the Government, but if the respondent intends to increase the rate of the said tax, it must follow the procedure prescribed by s.51(2), provided of course, it is open to the respondent to increase the said tax. There is yet another point on which the appellants are entitled to succeed, and that has reference to the fact that the respondent is seeking to reopen some of the assessments made by it against the appellants. The argument is that once an assessment is made for a specific period, it becomes final and it is not open to the respondent to demand additional amount by way of tax in respect of the said period. The genesis of the tax is somewhat interesting. It appears that roads were constructed by the Independent Mining Local Board at enormous cost at the request of the Mining interests and even debt had to be incurred by the Board for completing the work of the construction of roads. Since the mining companies received substantial benefit from these roads, the Legislature thought of levying a tax on coal, and that is the origin of the tax. When the first notification was issued on December 16, 1935 it authorised and sanctioned the imposition by the Independent 196 Mining Local Board at Chhindwara in the Chhindwara District "of a tax at 3 pies per ton on coal, coal dust or coke, manufactured at the mines, sold for export by rail or sold otherwise than for export by rail, within the jurisdiction of the Independent Mining Local Board. " This tax was recovered by the Board and thereafter by the respondent in respect of coal whether sold inside the district of Chhindwara or sold outside the district of Chhindwara or even outside the State of Madhya Pradesh. In other words, the total coal produced by each mining lease holder substantially came to be taxed. But after the Constitution came into force, doubts arose as to whether article 286 of the Constitution did not preclude the respondent from recovering tax in respect of coal exported out of the State of Madhya Pradesh, and in view of the advice given to the respondent by the Government of Madhya Pradesh, the respondent did not collect the tax in respect of coal which was exported by rail outside the State of Madhya Pradesh from about 1952. The respondent wanted to consult legal opinion on this point, but the State Government refused permission to the respondent to incur expenditure in that behalf. Subsequently however, this question came to be decided by the High Court of Madhya Pradesh in a writ petition filed by M/s. Newton Chickli Collieries (Pvt. ) Ltd. (No. 265 of 1957). The High Court held that the tax levied by the janapada Sabhas under s.51 of the Act did not amount to a sales tax nor to an excise duty and so, the respondent thought that it could levy tax even on coal exported by rail outside the State of Madhya Pradesh. In fact after this judgment was pronounced by the High Court on August 6, 1958, the Provincial Government withdrew its instructions to the respondent not to levy tax on exported coal. That is how the respondent has issued notices against the appellants in respect of coal exported by rail out of the State of Madhya Pradesh in regard to the years for which assessment has already been levied against the 197 appellants for the coal not so exported, and the contention of the appellants is that this reopening of the assessment is not permissible under the Rules. This contention appears to be well founded. We have already seen the scheme of the Rules and we have noticed that Rule 10 provides that if no objection is filed, the Chairman 's assessment shall be final and if an objection is received, the decision of the Mining Board would be final. In other words, the scheme clearly provides that at the end of each six monthly period, the tax has to be assessed, notices to be issued to the assessee, his objections to be considered and the tax to be ultimately determined in the light of the decision on the said objections; and under Rule 10, the two decisions specified therein become final. It may be that the Rules do not prescribe any limitation within which these steps have to be taken by the respondent for each period, but that is another matter. In view of the provisions of Rule 10, it is difficult to hold that the respondent is entitled to reopen assessments already made and rendered final under the said Rule. There is no other provision for reopening assessment as we have under sections 34 & 35 of the Indian Income Tax Act, and so,. the respondent is not justified in issuing notices for the years which arc covered by assessment orders already passed. The finality provided for by Rule 10 will work as much against the respondent as against the assessees. In support of the appeals, another argument was sought to be raised against the increase of the rates. It was urged that the tax is in the nature of an excise duty or a sales tax and, therefore, any increase in the said tax beyond the limit of 3 pies the continuance of which has been saved by the provisions of article 143 of the Government of India Act, 1935 and article 277 of the Constitution will be invalid. This argument is based on the terms used 198 in the notification of December 16, 1935. Since coal is described as manufactured at the mines, the argument is that it is in the nature of an excise duty and since the notification also refers to coal sold for export by rail or sold otherwise than for export by rail, it is ' argued that it is a sales tax. On the other hand, the respondent contends that it is neither a sales tax nor an excise duty and as such, the rate can be increased subject, of course, to the requirements of section 51 (2) of the Act. It appears that by notification issued on September 6, 1943, the preamble of the Rules was modified by substituting for the words " 'coal, coal dust or coke" by "coal and dust coal" and by deleting the words " 'manufactured at the mines". Curiously enough, these amendments have not been made in the original notification itself. We have already noticed that this latter notification deleted Rule 3. Some arguments were urged before us by learned counsel on both sides as to the effect of this notification which modified the preamble to the Rules. We do not, however, think it necessary to consider these arguments in the present appeals because of our conclusion that the impugned notices levying the tax @ 9 pies per ton are invalid for two reasons: the increase in the rates has not been sanctioned by the State Government under section 51 (2) and an attempt to recover at the increased rate the tax for the years already covered by assessment orders passed in that behalf, is barred by Rule 10. The result is, the appeals and the writ petitions are allowed and an appropriate direction or order is issued restraining the respondent from recovering the tax at a rate higher than 3 pies per ton and also restraining the respondent from recovering any additional tax in respect of the years for which tax has already been assessed against the appellants. The same will be the order in the other companion appeals. The 199 appellants will be entitled to their costs, but one set of bearing fees will be taxed. Appeals and writ petitions allowed.

The 1st appellant in the first batch of appeals had filed a writ petition in this Court challenging the notices calling upon him to pay the tax of 9 pies per ton on coal including coal despatched outside the State of Madhya Pradesh on two grounds, namely, that the levy of the tax by the Independent Mining Board was invalid at the date of its initial imposition and, 173 therefore, the respondent Sabha which was the successor of the Mining Board could not continue the levy and also that on a proper construction of section 51 of the Act, the levy could not be made. Another point namely, the increase in the rate of tax from the original 3 pies to the 9 pies per ton at which the tax was demanded was illegal was sought to be canvassed but was not allowed to be argued by the Court as it had not been raised in the petition. The writ petition was rejected. The appellant challenged the levy of the tax for the further periods byway of a writ petition before the High Court of Madhya Pradesh on grounds distinct and separate from those which had been rejected by this Court. The High Court dis missed the writ petition on the ground that it was barred by res judicata by reason of the earlier judgment by this Court. In the case of the other appellants the High Court held that the matter was also concluded on the authority of the decision of this Court. The appellants in the first batch of appeals came by special leave and also filed writ petitions challenging the validity of the levy. Held, that while the general principle of res judicata applies to writ petitions under article 32 and article 226 of the Constitution, in its application to article 32 of the Constitution, the doctrine only regulates the manner in which the fundamental rights could be successfully asserted and does not in any way impair or affect the content of the fundamental rights. Pandit M.S.M. Sharma vs Dr. Shree Krishna Sinha, [1961] 1 section 0. R. 96, Raj Lakshmi Dasi vs Banamali Sen, [1953] section C. R. 154 and Daryao vs State of U.P., ; , referred to. Constructive res judicata was a creature of statute and its application could not be extended to other proceedings particularly those questioning tax liability for different years. Held, further, that the law declared by the Supreme Court which is binding under article 141 of the Constitution of India is that which has been expressly declared and any implied declaration though binding was subject to revision by this Court when the point was subsequently directly and expressly raised before this Court. Held, further, that the procedure of assessment of tax authorised by the relevant statutory provisions and the Rules could not be said to be a capricious administrative or executive affair so as to violate article 19(1) (f) of the Constitution. 174 Kunnathat Thathunni Moopil Nair vs State of Kerala, ; , distinguished. As the Rule which prescribed the maximum rate had itself been deleted it could not be said that there had been a levy in excess of the maximum prescribed. As neither the Act nor the Rules prescribed a ceiling on the levy, the expression "first impositions occurring in section 51(2) would include every increase of the levy after its initial imposition and the increased levy would require the previous sanction of the Local Government and such sanction not being there, the levy at the rate of 9 pies per ton was illegal. Considering the nature of the tax and the periods for which it was assessed and in the absence of any provision, the assessment once made by r. 10 was final and there could be no re assessment.

"Shahabad Stones" are included under Item 15 in Schedule I to Rule 10 of the Andhra Pradesh Minor Mineral Concession Rules 1966. The appellants, who are directors of Tandur and Navandgi Stone Quarries (Pvt.) Ltd. and holders of mining lease for extraction of lime stones (Shahabad Stones when being prosecuted, for the alleged violation of Rule 21(1)(ii) of the Mineral Conservation and Development Rules, 1958 which is made punishable under Rules 27 of the said rules in that they failed to employ a qualified geologist or a mining engineer, raised a preliminary objection as to the maintainability of the complaint in view of the specific exclusion of the "Shahabad Stones" from the purview of the 1958 Rules, being a minor mineral being used for building and construction purposes. The trial magistrate dismissed the application and the High Court declined to interfere under Section 48 of the Criminal Procedure Code, 1973. Dismissing the appeal by special leave the Court, ^ HELD: As the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court, the A.P. High Court was right in declining to grant relief to the appellants, bearing in mind the well recognised principles of law governing the matter and taking into consideration the nature of the impugned order. It is also not a matter in which Supreme Court may legitimately interfere in exercise of their extra ordinary powers under article 136 of the Constitution especially when the case at its threshold and evidence has still to be adduced as to whether the minerals extracted could or could not be used as a major mineral for certain purposes. It is not possible to determine difficult question of the kind involved in the instant case, purely in abstract without relevant evidence bearing on the matter in issue. [93G H, 94A B]

By a notification under section 4 of the West Bengal Land Deve lopment and Planning Act, 1948, the Government declared that certain plots of land belonging to the respondent were needed for the settlement of immigrants from East Pakistan and for improving living conditions in the locality. Thereafter a second notification was issued by the Government under section 6 read with section 7 of the Act declaring that the plots covered by the previous notification were needed for the same purpose as stated therein. When the Government started to erect structures on the land thus acquired the respondent moved the High Court under article 226 of the Constitution challenging the vires of the Act and impugning the legality of the proceedings taken under tile Act. The petition was heard by a judge of the High Court sitting singly who negatived all the contentions of the petitioner and discharged the rule. On appeal by the respondent under the Letters Patent, a Division Bench of the High Court held that the Act did not infringe the provisions of articles 19(i)(f) and 31(2) of the Constitution. The High Court further held that it was incumbent on the State Government to frame a development scheme after possession of the land had been taken even though the Government was entitled to deal with the land on an emergency basis under section 7 of the Act, which runs thus: " In cases of urgency, if in respect of any notified 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 notified area or any part thereof though no development scheme has either been prepared or sanctioned under section 5 ". The High Court allowed the respondent 's appeal and directed a writ of mandamus to issue to the Government requiring them to proceed to frame a development scheme in terms of the Act. On appeal by the State of West Bengal on a certificate granted by the High Court, 369 Held, that the High Court was in error in issuing the mandamus against the appellants. Section 7 of the Act com pletely dispensed with the statutory necessity of preparing a scheme of development as envisaged in section 5 of the Act in cases where the Government had taken the decision that it was necessary to proceed further with the acquisition proceedings without waiting for a development scheme. No discrimination was implicit in the provisions of section 7 of the Act and no fundamental right of the appellant was infringed either under article 14 or articles 19(1)(f) and 31(2) of the Constitution.

The appellants who are merchants carrying on business as dealers in jute in Calcutta, submitted returns of turnover for purposes of sales tax due under the Assam Sales Tax Act, 1947, but as they did not comply with the requisition of the Superintendent of Taxes to produce their books, the latter made a "best judgment assessment" under section 17(4) of the Act. Their appeals to the Assistant Commissioner of Taxes and revision petitions to the Commissioner of Taxes, Assam were dismissed. The appellants then moved the High Court of Assam by petitions under article 226 and contended that Explanation to section 2(12) of the Act was ultra vires the Assam Legislature and that the tax could not be levied on sales irrespective of the place where the contracts were made. They also contended that the finding of the Commissioner that the goods were actually in the State of Assam at the time when the contract was made was based on mere speculation. The writ petitions were dismissed by the High Court and the appellants appealed to the Supreme Court with certificate under article 132(1) of the Constitution. Before the Supreme Court the appellants applied for leave under article 132(3) of the Constitution to challenge the correctness of the decision of the High Court that the goods were actually within the State of Assam when the contracts were made. Held:(i) Leave under article 132(3) be refused and the appeal must be restricted to the question of law as to the interpretation of the Constitution, certified by the High Court. If these questions were desired to be raised the appellants ought to have moved the Commissioner to refer the case to the High Court under section 32 of the Act. They could have moved the High Court if the Commissioner refused to refer the case to the High Court. The Act provided machinery for obtaining relief and the same had to be resorted to and could not be allowed to be by passed. Ordinarily, the High Court does not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. The High Court does not generally enter upon questions which demand an elaborate examination of evidence to establish the rights to enforce which the writ is claimed. The High Court does not in exercise of its jurisdiction under article 226 act as a court of appeal against the decision of a court or Tribunal correct errors of fact. 656 The scheme of the Assam Sales Tax Act is that all questions of fact are to be decided by the taxing authorities. The opinion of the High Court can be obtained on questions of law arising out of the decisions of the taxing authorities. The High Court has under the Act no power to decide questions of fact which are exclusively within the competence of the taxing authorities. (ii)Explanation to section 2(12) of the Act is not ultra vires the Legislature.

The contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before February 11, 1981 in (1) transportation of materials within the plant which was not dependent on outside supply, (2) processes connected with manufacturing process, (3) removal and handling of waste products, and (4) sweeping and cleaning of machines etc., sought permanent employment under the principal em ployer. The dispute was referred by the State Government under section 10 of the to the Industrial Tribunal. The Tribunal held that the workmen constituted the contract labour and, therefore, the reference was not main tainable. It further held that action, if any, had to be taken under section 10 of the , power to take steps for which vested in the State Government and not in the Tribunal. The writ petition challenging the award was dismissed by the High Court in limine. In the appeal by special leave it was brought to the notice of the Court on behalf of the management that con tract labour was now confined to item 3 only. Disposing of the appeal, the Court ordered: 1. The reference to the Tribunal shall now read: "Wheth er the contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before 11.2.1981 are enti tled to permanent employment in 978 regard to items 1, 2 and 4 under the principal employer". [980B C] 2. The State Government to take its own decision within three months under the provisions of the in regard to item No. 3 as to whether the contract labour employment should be terminated. [980D] 3. The Tribunal to dispose of the dispute within six months. [980F]

The respondent stocked 'bunker coal ' at Candle Island in the State of Madras. They sold the coal to steamers calling at the port of Cochin in the State of Travancore Cochin and delivered it there. The respondent was assessed to sales tax on such sales for the year 1951 52 and 1952 53. , The respondent contended that no sales tax could be levied on these sales since they were either sales ' in the course of export ' or in the course of inter State trade exempt from sales tax under sub cl. (1) (b) or cl. (2) of article 286 of the Constitution and in the alternative that they were exempt from tax under a notification dated February 5, 1954, issued by the appellant State under which sales failing within the Explanation to article 286(1)(a) made during the period 4 1 1951 to 31 3 1953 were exempted from liability to pay tax. Held that the sales were exempt from tax under the Government Notification. The coal was delivered to the actual consumer, i. e., the steamships in Travancore Cochin and they were at liberty to consume it :wherever they desired, either within the State or outside the choice depending on its convenience and necessity. The delivery was for consumption within the State and the sales fell within the Explanation to Aft. 286(1)(a). Though the sales were in the course of inter State trade which were covered by the ban on taxation imposed by article 286(2) the levy was validated by the Sales Tax Validation Act, 1956. M. P. V. Sundararamier & Co. vs The State of Andhra Pra desh; , , relied on. The sales were not made 'in the course of export and were not covered by the ban imposed by article 286(1)(b). For article 286(1)(b) to apply it was not sufficient that the goods merely moved out of the territory of India, but it was further necessary that the goods should be intended to be transported to a destination beyond India. The concept of 'export ' in article 286 postulated the existence of two termini between which the goods were intended to be transported. 220 Burmah Shell Oil Storage & Distributing Co. of India Ltd. vs The Commercial Tax Officer, C.A. 751 of 957 & C.A. 10 of 1958 (Unreported) followed.

The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short). On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act. The Assistant Collector dismissed the application. The respondents appealed to the Additional Commissioner. The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal. The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries. The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal. Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land. The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits. On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession. This application and the subsequent appeals were rejected by the authorities. Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities. Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act. The Assistant Collector decreed the suit. The Additional Commissioner allowed the appeal filed by the respondents. The Board of Revenue dismissed the appellants ' second appeal. The appellants filed a writ petition in the High Court. A single Judge of the High Court dismissed the writ petition. A Division Bench of the High Court dismissed the special appeal filed by the appellants. Hence this appeal. The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act. Dismissing the appeal, ^ HELD. 1. The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2. The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '. So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '. The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding. The proceeding may as well fail for some other defect. Not all such defects can be said to be analogous to defect of jurisdiction. Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '. Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits. Such defect could be said to be of the like nature ' as defect of jurisdiction. Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14. [300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to. In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered. In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree. [298C D; E] 4. In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied. It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence. But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding. The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue. The cause of action was the reversal of the order of the Additional Commissioner. When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act. It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession. It had nothing to do with the order of the Additional Commissioner. Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution. [301B; 299A; 298G H; 299A] 5. Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act. [301G] 6. In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49. [302A B] 7. The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force. Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land. Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act. The respondents did move such an application which ultimately was accepted by the Additional Commissioner. Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants. [294H; 296D G] 290

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

Appeal No. 82 of 1957. Appeal from the judgment and decree dated April 4, 1955, of the Calcutta High Court in Appeal from Appellate Decree No. 1224 of 1953. G. section Pathak and D. N. Mukherjee, for the appellant. H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for the respondents. February 10. The Judgment of the Court was delivered by SHAH, J. Of the premises relating to which this dispute arises No. 5, Raja Rajkissen Street, Calcutta the respondents are the owners and the appellant was a contractual tenant from June 15, 1917, till June 15, 1947, under three successive tenancies for 10 years each. Under the first tenancy, the appellant paid rent at the rate of Rs. 84,15,0,per month, under the second tenancy at the rate of Rs. 180 per month 815 and under the third tenancy at the rate of Rs. 225 per month. The tenancy was in respect of buildings used for manufacturing " tin canisters " and open land. On September 30, 1946, the Governor of Bengal issued the Calcutta Rent Ordinance, V of 1946, making certain provisions for control of rent of premises in the town of Calcutta. By section 12 of the Ordinance, it was provided in so far as it is material that notwithstanding, anything contained in the Transfer of Property Act, the Presidency Small Cause Courts Act or the Indian Contract Act, no order or decree for the recovery of possession of any premises shall be made as long as the tenant pays rent to the full extent allowable by the Ordinance and performs the conditions of the tenancy. By the proviso, the landlord was, notwithstanding the protection granted entitled, if the conditions specified therein were fulfilled, to obtain possession of the premises. This Ordinance was replaced by Act I of 1947 which contained substantially the same provisions. By the West Bengal Act V of 1948, the provisions of Ordinance V of 1946 and Act I of 1948, were continued. Thereafter on December 1, 1948 the West Bengal Premises Rent Control (Temporary Provisions) Act XXXVIII of 1948 was brought into operation and by this Act, the West Bengal Act V of 1948 was repealed, but the protection granted to the tenants was con tinued. This Act was repealed by the West Bengal Premises Rent Control Act, 1950, and by section 12 of the latter Act protection to tenants, including tenants whose tenancies had expired, against eviction was granted by prohibiting courts from passing decrees or orders for recovery of possession of any premises in favour of landlords. It was provided by that Act that the landlord shall be entitled to obtain a decree in ejectment, inter alia, where the premises are reasonably required by, him either 1 for the purpose of building or rebuilding or for his own occupation. By letter dated May 15, 1957, the respondents called upon the appellant. to vacate and deliver possession on the expiry of the period of tenancy. Possession was however not delivered by the appellant 816 and he continued to pay the stipulated amount and the same was accepted by the respondents. In an application under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, the Controller fixed the standard rent of the premises at Rs. 455 per month. After the enactment of the West Bengal Premises Rent Control Act, 1950, another application was submitted by the appellant and the standard rent was reduced to Rs. 247,8,0. On October 10, 1950, the respondents served a notice upon the appellant requiring him " to quit, vacate and deliver possession of the premises occupied ", which the appellant was described as holding as " monthly tenant ", on the expiry of the 31st of Chaitra, 1357 B. section, i.e., April 14, 1951. The ground for eviction, it was claimed, was that the premises were reasonably required by the landlords for putting up now buildings thereon. The appellant having failed to vacate the premises, the respondents sued in the Court of Small Causes, Calcutta, for a decree in ejectment. The Court of Small Causes decreed the suit filed by the respondents. In appeal to the Special Bench, Court of Small Causes, the decree passed by the court of first instance was reversed. The appellate court held that by acceptance of rent after determination of the tenancy in June, 1947, the appellant continued to be " a tenant holding over " and as the purpose of the tenancy was manufacturing, it could be determined only by a notice of six months, expiring with the year of tenancy and as no such notice was served, the tenancy was not determined and the suit was liable to fail. In appeal to the High Court of Judicature at Calcutta, the decree passed by the Special Bench was reversed and the decree passed by the court of first instance was restored. With certificate of fitness under article 133(1)(c) of the Constitution this appeal is preferred by the appellant against the order of the High Court. The contractual tenancy in favour of the appellant was determined by efflux of time on June 15, 1947, and since that date there has been between the parties no fresh contractual tenancy. The respondents were, 817 it appears, anxious to obtain possession of the premises let out to the appellant, but they were unable to obtain assistance of the court in view of the protection afforded to the appellant by the successive rent control Acts. In the meanwhile, the appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent. Does the acceptance of the amounts paid by the appellant confer upon him the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act? Section 116 of the Transfer of Property Act in so far as it is material provides that if a lessee of property remains in possession thereof after the determination of the lease granted to him and the lessor accepts rent from the lessee or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased as specified in section 106. It is, however, well settled that where a con tractual tenancy to which the rent control legislation applies has expired by efflux of time or by determination by notice to quit and the tenant continues in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord has assented to a new contractual tenancy. It was observed by B. K. Mukherjee, J. (as he then was), in Kai Khushroo vs Bai Jerbai (1): " On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he does not, and there is neither assent or dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to (1) , 270,273. 818 the land but holds it merely through the laches of the landlord. If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by section 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of section 106 of the Act. " It was further observed ". . . in cases of tenancies relating to dwelling houses to which the Rent Restriction Acts apply, the tenant may enjoy a statutory immunity from eviction even after the lease has expired. The landlord cannot eject him except on specified grounds mentioned in the Acts themselves. In such circumstances, acceptance of rent by the landlord from a statutory tenant whose lease has already expired could not be regarded as evidence of a new agreement of tenancy, and it would not be open to such a tenant to urge, by way of defence, in a suit for ejectment brought against him, under the provisions of Rent Restriction Act that by acceptance of rent a fresh tenancy was created which had to be determined by a fresh notice to quit. " Under the Calcutta Rent Ordinance, 1946, and the subsequent legislation which culminated in the West Bengal Premises Rent Control Act, 1950, in the expression "tenant" was included any person who continued in possession after termination of his tenancy. Section 12 of the West Bengal Premises Rent Control Act, 1950, expressly protects a tenant whose lease has expired. By the Rent Restriction Statutes ' at the material time, statutory immunity was granted to the appellant against eviction, and acceptance of the amounts from him which were equivalent to rent after the contractual tenancy had expired or which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116, Transfer of Property Act. Failure to take action which was consequent upon a statutory prohibition 819 imposed upon the courts and not the result of any voluntary conduct on the part of the appellant did not also amount to " otherwise assenting to the lessee continuing in possession. " Of course, there is no prohibition against a landlord entering into a fresh contract of tenancy with a tenant whose right of occupation is determined and who remains in occupation by virtue of the statutory immunity. Apart from art express contract, conduct of the parties may undoubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case. Occupation of premises by a tenant whose tenancy is determined is by virtue of the protection granted by the statute and not because of any right arising from the contract which is determined. The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist. Once the prohibition against the exercise of jurisdiction by the court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of. the lessor 's right to evict the tenant will not unless the statute provides otherwise, be conditioned. The High Court was in our judgment right in holding that by merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over. It is true that in the notice dated October 10, 1950, the appellant is described as a " monthly tenant ", but that is not indicative of conduct justifying an inference that a fresh contractual tenancy had come into existence. Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a " tenant " and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant. The use of the adjective monthly " also was not indicative of a contractual relation. The tenancy of the appellant was determined by efflux of time an subsequent occupation by him 820 was not in pursuance of any contract express or implied, but was by virtue of the protection given by the successive statutes. This occupation did not confer any rights upon the appellant and was not required to be determined by a notice prescribed by is. 106 of the Transfer of Property Act. In that view of the case, this appeal fails and is dismissed with costs. Appeal dismissed.

The appellant was a contractual tenant of certain premises in the town of Calcutta of which the respondents were the owners. The respondents called upon the appellant to vacate and deliver possession of the premises on the expiration of the period of tenancy but possession was not delivered and the respondents were unable to obtain possession in view of the protection afforded to the tenants by the successive rent control Acts passed by the State. In the meantime the 814 appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent and the respondent accepted the same. The question arising for decision was whether the acceptance of the amounts by the respondents conferred upon the appellant the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act. Held, that where a contractual tenancy to which the rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy. Kai Khushroo vs Bai Jerbai , followed. Acceptance by the landlord from the tenant of amounts equivalent to rent after the contractual tenancy had expired or amounts which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116 of the Transfer of Property Act. Occupation of the appellant after the determination of tenancy was not in pursuance of any contract express or implied but was by virtue of protection granted by the successive statutes and such occupation was not required to be determined in the manner prescribed by section 106 of the Transfer of Property Act.

The predecessor in interest of the respondents who was a practising advocate, took on rent certain premises for residence. He could with the written consent of the appellant landlord set up his professional office also there. After the death of their predecessor in interest the respondents lived in the premises and sometimes later two of the respondents qualified a.% lawyers and started having an office in the premises. The appellant filed a suit for the respondents ' eviction on the ground that the respondents had acquired a "suitable residence" by building a large residential house and were liable to be ejected under section 13 (1) (h) of the Delhi & Ajmer Rent Control Act, 1952. During the pendency of the suit the Delhi Rent Control Act, 1958 came into force and under section 14(1) (h) of the Act, the word "suitable" was omitted. The trial Court dismissed the suit holding that since the premises had been let out to their predecessor in interest not for residential purpose alone but also for business purposes, no eviction could be ordered under the provisions of section 13 (1) (h) of the old Act or section 14(1) (h) of the new Act. The first appellate Court, and the High Court in revision affirmed the order of the trial Court. Dismissing the appeal this Court, HELD:Assuming, that section 14(1)(h) of the new Act, applied, having regard to its language, the original tenant in the present case was one who was in occupation of premises which were used for a composite purpose, namely, residence and profession. There could, therefore, be no eviction merely by acquisition of vacant possession of a residence by such a tenant and the position would be the same with regard to his heirs and legal representatives, the present respondents. Section 14(1) (h) can apply only where a tenant is in occupation of premises which are only residential; then alone he would have to go if he acquires or has residential accommodation of his own. [14 F] The decision of this Court in Dr. Gopal Das Verma vs Dr. section K. Bhardwaj ; applied apprositely to this case. The test of dominant intention with regard to the use of the premises was not applied in Dr. Gopal Das Vermals case. [13 F G; 15A] In view of the finding of the courts below that the premises had been let to the predecessor in interest of the respondents for residence cum profession, the submission that the permission was personal to the predecessor in interest of the respondent, which came to an end on his death could not be entertained.

The respondents were landlords of two houses in the Karol Bagh area of Delhi. The houses were built on lands given on long lease by the Delhi Improvement Trust to the rights, liabilities and assets. of which the Delhi Development Authority subsequently succeeded. Under the terms of the leases the buildings erected on the lands were to be used for residential purposes only. If they were used for any other purpose without the approval of the lessor the leases would become void. Portions of the buildings in question were however let out for commercial purposes viz. a barber shop and a scooter repair shop. The Delhi Development Authority gave notice to the landlords that since the buildings had been permitted to be used for commercial pur poses the leases were liable to be determined. They were called upon to discontinue the use of the land for commercial purposes failing which they were asked to show cause why their leases should not be determined and the land together with the buildings thereon be not reentered upon without compensation. Thereupon the landlords issued notice to the tenants asking them to stop the commercial use of the buildings. The landlords later on instituted proceedings against the tenants under the Delhi Rent Control Act, 1958 but the Controller ,dismissed the petitions. Their appeals were dismissed. The Division Bench of the High Court decided in favour of the landlords. In appeal to this Court by special leave the question for consideration was whether the landlords were estopped or otherwise prohibited from getting possession of the property from the tenants because they themselves had let it out for commercial purposes. The Court had to consider the question in the light of the provisions of section 14 of the Act. HELD : (i) If it is a case where the tenant has contrary to the terms of his tenancy used the buildings for a commercial purpose the landlord could take action under clause (c) of the proviso to section 14(1). He need not depend upon clause (k) at all. The only situation in which clause (k) can take effect is when the lease is for a commercial purpose agreed upon both by the landlord ,and the tenant but, that is ,Contrary to the terms of the lease of the land in favour of the landlord. [459E G] (ii)The policy of the legislatures seems to be to put an end to unauthorised use of the leased lands rather than merely to enable the authorities to get back possession of the leased lands. This conclusion is further fortified by a reference to sub section 11 of section 14. The lease is not forfeited merely because the building put upon the leased land is put to unauthorised use. The tenant is given an opportunity 455 to comply with the, condition imposed on the landlord by any of the authorities referred to in clause (k) of the proviso to sub section (1). As long as the condition imposed is complied with there is no forfeiture. It even enables the, controller to direct compensation to be paid to the authority for a breach of the conditions, which must be done in the presence of the authority. [459H; 460A D] (iii)The anxiety of the legislature is to prevent unauthorised user rather than protection of the tenant or strengthening the hands of the Development Authority in effecting forfeiture. The Development authority can always resort to the terms of the least, [460F G] There is no estoppel here because both the landlord and the tenant knew that the tenancy was not one permitted under the terms ofthe lease of the land. In any case there can be no estoppel againstthe statute. It would not benefit the tenant even if it is held thatthe landlord cannot, under the circumstances evict him. The landlordwill lose his property and the tenant will also lose. He cannot after the Development Authority takes over the building use it for a commercial purpose. [460G H] Therefore the conclusion must be that the lease in its inception was not void not is the landlord estopped from claiming possession because he himself was a party to the breach of the conditions under which the land was leased to him. Neither the clear words of the section nor a consideration of the policy of the Act lead us to the conclusion that the lease was void in its inception if it was for an unauthorised user. [461A] Smt. Uma Kumari vs Jaswant Rai Chopra, P.L.R. (1960) 460 and section P. Arora vs Ajit Singh, I.L.R. (1970) 11 Delhi 120, disapproved. Waman Shriniwas Kini vs Rati Lal Bhagwandas, ; , referred to. [The Court found that section 14 of the Delhi Development Act was inapplicable to the case. The matter was sent back to the Controller for deciding the question under sub section (11) of Section 14 whether he should exercise the one or the other of two alternatives mentioned therein.]

The appellants landlords leased out their land, situate at Kolhapur, to respondents Nos. 1 and 2 and the husband of respondents Nos. 3 and 4 on 12.10.1950 for a period of ten years. After the expiry of the lease period, they initiated proceedings under the Bombay Tenancy and Agricultural Lands Act, 1948, for obtaining possession of the lands but the application was dismissed ex parte, as it was held that the provisions of the Act were not applicable to the land inas much as only grass grew thereon naturally. Thereupon the appellants terminated the tenancy under the provisions of the Land Revenue Code and filed a Civil Suit against the respondents for possession mesne profits and for damages. Respondents 1 and 2 contested the suit contending inter alia that the civil court had no jurisdiction to try the suit inasmuch as the Act was applicable to the land and that they having been in rightful possession, the notice of termina tion of tenancy was invalid. The trial court tried the issues amongst others relating to the applicability of the Act, jurisdiction of the civil court and estoppel and after going through the evidence led by the parties, decreed the suit. The respondents appeal against the said decree having failed before the first appellate court, they preferred Second Appeal to the High Court of Bombay. The High Court set aside the judgment and order of the trial court as affirmed by the first appellate court and remanded the case back to the trial court with a direction that it should raise the necessary issues on the pleadings of the parties and should make a reference to the competent authority under Section 85A of the Act in regard to the issues which are required 2 to be determined by the competent authority under the Act and on receipt of findings, dispose of the suit according to law. Being dissatisfied with the said order, the appellants moved application for leave to appeal under the Letters Patent but the same having been dismissed they have filed this appeal after obtaining special leave. The appellants ' principal contention, amongst others, before this court is that the appellants ' application under Section 29(2) read with section 25(2) of the Act having been dismissed on the ground that the Act was not applicable and thus the authority had no jurisdiction to deliver possession is a finding which would operate as res judicata; hence the High Court 's direction making a reference to the competent authority under section 85A of the Act, now would be barred. According to them the civil court itself has jurisdiction to decide the issues. Respondents ' contention is that the direction of the High Court is consistent with the provi sions of the Act and that the earlier proceedings under the Act initiated by the appellants having been determined ex parte, it could not operate as res judicata. Dismissing the appeal, this Court, HELD: After the amendment of section 70(b) of the Act by insert ing words 'or was at any time in the past, a tenant ' the position has changed. The Civil Court has now no jurisdic tion to decide an issue arising incidentally in a civil suit which is to be specifically decided by a competent authority under the Act. Civil Court in such a case shall refer the issue to that authority and dispose of the suit in accord ance with the decision of the authority. [11F] (See G.S. Shinde vs R.B. Joshi, ; ;) The High Court in the instant case has rightly sent back the suit to the trial court with the direction to refer issues, if raised to be determined exclusively by the compe tent authority, to that authority. [13G] If a matter directly and substantially in issue in a former suit has been adjudicated upon by a court of exclu sive jurisdiction, the adjudication will bar the trial of the same matter in a subsequent suit. [15E] In the instant case, the Mamlatdar having decided the appellants ' application for possession, the appellants themselves went to the Civil Court and filed the suit. It does not now lie in their mouth to say that 3 the decision of the Mamlatdar would act as res judicata for the trial court.[15F] The Mamlatdar 's Court is a civil court for the purpose of Section 85A of the Act. [15F] In its comprehensive sense the word 'suit is understood to apply to any proceeding in a court of justice by which an individual pursues that remedy which the law affords. The modes of proceedings may be various but if a right is liti gated between parties in a court of justice the proceeding by which the decision of the court is sought may be a suit. But if the proceeding is of a summary nature not falling within the definition of a suit it may not be so treated for the purpose of Sec. 11. [15H; 16A] Besides, assuming the Mamlatdar in deciding the applica tion in 1962 63 to have been a court of exclusive jurisdic tion for the purpose of section 11 C.P.C., its decision rejecting the application would not be an evidence on the question of tenancy merely because it could be inferred from that deci sion. [16B] The expression 'heard and finally decided ', in section 11 means a matter on which the court has exercised its judicial mind and has after argument and consideration come to a decision on a contested matter. It is essential that it should have been heard and finally decided. What operates as res judicata is the ratio of what is fundamental to the decision but it cannot be ramified or expanded by logical extension. [16F G] (See Vithal Yaswant vs Shikander Khan Mutumukhtan, ; The law is well settled that a court which had no juris diction to try a cause cannot by its own erroneous decision confer on itself competence to decide it and its decision on the question of jurisdiction cannot operate as res judicata. Conversely the decision relating to jurisdiction cannot be said to constitute the bar of res judicata where by an erroneous interpretation of a statute it holds that it has no jurisdiction. [17B] (See Pandurang Mahadeo Kavade & Ors. vs Annaji Balwant Bokil & Ors., ;) Shivappa Satawappa Ashtekar vs Gajanan Chintaman Desh Pande, [1953] 55 Bom. Law Reporter. 843; Dhondi Tukaram vs Dadoo Piraji, ; Bhimaji Shanker Kulkarni vs Dundappa Vithappa Udapudi and Anr., ; ; Mussamiya 4 Imam Haidar Bax Razvi vs Rabari Govindhai Ratnabhai & Ors., ; ; Trimbak Sopana Girme vs Gangararn Mhatarba Yadav, ; Ishverlal Thakorelal Almaula vs Motibhai Nagjibhai, [1966] 1 SCR 367; Pandurang Hari Jadhav vs Shankar Maruti Todkar, ; Kalicharan Bhajanlal Bhayya vs Rai Mahalaxmi, ; Neminath Appayya Hanammannaver vs Jambu Rao Satappa Kocheri, AIR 1966 Mys. 154; Jambu Rao Satappa Kocheri vs Neminath Appayya Hanammannaver, ; ; Noor Mohd. Khan Ghouse Khan Soudagar vs Fakirappa Bharmappa Machenahalli, ; ; Ramchandra Rao vs Ramchandra Rao, [1922] 49 I.A. 129 and Bhagwan Dayal vs Mst. Reoti Devi, ; , referred to.

Section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948 provides that every tenant of agricultural land shall be deemed to have purchased from his landlord as on April 1, 1957 (Tiller 's Day) the land held by him as tenant free from all encumbrances. However to protect petty or small landlords against statutory compulsory purchase, provision was made in Part lI A of Chapter lII read with section 88 C of the Act enabling them to obtain exemption certificate under section 88 C. While section 33 A designates such petty land lords as 'certificated landlords ' and tho tenants of such exempted lands as `excluded tenants ', section 33 B confers a special right on a certificated landlord to terminate the tenancy of the excluded tenant in respect of the exempted land and obtain possession of such land if he bona fide requires the same for cultivating it personally. The land in question in this appeal had fallen to the share of the respondent in a family partition. The bona fides of the partition was the main issue in the proceedings held under section 88 C for grant of an exemption certificate in favour of the respondent. However, the order granting the certificate withstood all challenge from the tenants and became final. In the subsequent proceedings instituted by the respondent under section 33 B for possession of the land the Tehsildar arrived at the finding that the respondent required the land bonafide for his personal cultivation and this finding was confirmed by the Sub Divisional officer in appeal and the tenants were directed to hand over possession of the land to the respondent. The tenants filed revision applications before the Revenue Tribunal which allowed them on the ground that the Sub Divisional officer had wrongly declined to admit an important piece of evidence having a direct bearing on the question of bona fides of the partition. The respondent moved the High Court under article 227 and the High Court set aside the Tribunal 's judgment holding that the bona fides of the partition which had already been agitated inter partes in proceedings under section 88 C could not be reconsidered in a subsequent proceedings under section 33 B and directed the Tribunal to decide the revision in accordance with law. The Tribunal, taking note of the fact that the respondent had sold a piece of land 1 112 years before filing the present application for possession and also that he owned house property in Poona City, came to the conclusion that the respondent did not bona fide require the land in question for personal cultivation and 823 dismissed the application for possession of land. The respondent once again moved the High Court under article 227. The High Court restored the decision of the Sub Divisional officer, holding that the Tribunal was in error in holding that in order to obtain possession of land from an excluded tenant under section 33 B, it was obligatory upon a certificated landlord to prove the compelling necessity to cultivate the land, and that the sale of land by the respondent prior to the commencement of the present proceedings which was for a small price did not have an adverse impact on his bona fides. Counsel for appellant tenants submitted that even assuming that the High Court was right in holding that the bona fides of the partition could not be the subject matter of a collateral attack in the present proceedings as the same had been considered and decided in proceedings held under section 88 C, still the question could be gone into to ascertain the bona fides of the landlord when he moved an application under section 33 B seeking eviction for personal cultivation. Dismissing the appeal, ^ HELD: It is true that a certificated landlord is not entitled to recover possession from the excluded tenant merely for asking. He can only obtain the direction for possession if he bona fide requires the exempted land for cultivating it personally. When it is said that the landlord bonafide requires possession of the land, it would be necessary for him to prove that he is acting honestly and that the application for possession is not a device to dispossess the tenant and that he requires, in the sense needs possession of, the land for personal cultivation. In other words, personal cultivation is necessary to obtain the yield of the land for himself. Some element of requirement could inhere the requirement for maintenance by undertaking the avocation of personal cultivation. lt is not that the landlord even if he has sufficient source of maintenance, can seek possession merely because he wants to pursue the avocation of cultivating the land personally but this aspect hardly ever arises in an application under section 33 B because such an application can only be made by a certificated landlord and none else and the certificated landlord is one whose holding does not exceed an economic holding. As long as the certificate of exemption under section 88 C subsists, two inferences flow therefrom: that the landlord is a petty or small land holder and that his annual income from all sources including rent of land does not exceed Rs. 1,500. lt is the bonafide requirement of such a small and petty landlord for personal cultivation that has to be examined under section 33 B. It may be that while examining the bona fides of the requirement of the certificated landlord, the court may take into account how the landlord became the owner of the land and, if it is by partition, the bona fides of the partition may be examined. [830 G H; 831 A D] Arvind Lal Bhukanda vs Khandu, 63 B.L.R. 929 approved and distinguished. In the instant case, the appellant tenants contested the proceedings initiated by the landlord for certificate of exemption under section 88 C at all levels and on all available contentions, the principal one being the nature and 824 character of the partition. That contention having been concurrently negatived cannot be re opened. The Tehsildar arrived at the finding that the respondent required the land bonafide for his personal cultivation and it was confirmed by the first appellate court which was the last fact finding court. The Tribunal interfered with this finding on the ground that some important piece of evidence had been over looked. The finding cannot be reopened this state on the short submission that the Court declined to examine the genuineness or validity or bona fides of the partition particularly when this very question was considered in an earlier round of proceedings and decided in favour of the landlord. [832 E F; 833 E H]

Under the Punjab Rent Restriction Act, 1949 a landlord can evict a tenant only on the grounds and according to the procedure provided in section 13 of the Act. Section 3 of the Act provides for exemption to be granted by Government from the operation of section 13. By notification dated July 30, 1965 the Government of Punjab granted such ex emption in respect of building constructed during the year 1959 to 1963 for a period of 5 years from the date of their completion, on the .condition that during the aforsaid period of exemption suits for ejectment of tenants in respect of those, buildings "were or are" institutes in civil courts and decrees of ejectment "were or are" passed. The respondent had let out to the appellant a building which was completed in 1960. A suit for ejectment of the appellant was filed in 1963 and decree was obtained in 1969. In proceeding for execution the question was whether the .decree, having been obtained more than 5 years after completion of the building, was exempt from operation of section 13. The High Court in second appeal held in favour of the respondent. In appeal to this Court by special leave, the appellant contended that the decree in the suit having been passed after 1 period of 5 years from the date of construction, exemption from restrictions placed by section 13 will not be available because not only the suit should be filed but the decree for eviction should be obtained within the said period of 5 years. HELD : The filing of the suit within the period of exemption is the only condition that is necessary to satisfy one of the requirements of the exemption, the other requirement being the passing of the decree in respect of which no time has been prescribed. If the degree, as contended by the appointment has to be obtained within the period of 5 years, there was no need to specify the at the suit had to be filed within that period because the exemption from the requirements of section 13 is only in respect of the decree and not the suit. [928 F] The use of the words 'were or are ' in respect of decree ,is A will as suits supports the above interpretation. The suit should have been filed or are her , after, to filed and likewise decrees of ejectment bid been passed or are hereafter to be passed. Further, a suit may conceivably be filed on the last day of the expiry of the 5 years exemption. If so it will be absurd to postulate that a decree would be given immediately thereafter, as that would be the result, if the contention that both the suit.and the decree should be passed within the period of exemption. is accepted. [927 H 928 E] 923 A statue must be interpreted in the light of its object. The very purpose of the exemption of buildings ' from 'the operation of section 13 was to give landlords the light which as owners of buildings they had under the ordinary law, namely, to give them on lease at rents which they thought remunerative and to evict tenant 's during that period without any fetters imposed by the Act. If no provision was made for exempting such decrees in respect of the exempted buildings the exemption granted will be illusory.[1926 H 927 E] Accordingly the appeal must fail.

The appellant plaintiff purchased a plot of land. The respondent defendant accepted the plaintiff as owner on a rent of Rs. 1325 per annum for a period of five years, under a registered rent note. It was further stipulated therein that the tenant was to pay the municipal tax in respect of the rented land to the plaintiff, that on the expiry of the period of five years the tenant shall remove the constructions thereon at his own expense, and hand over the premises in the condition it was let out and that the premises shall not be let out to anyone else. The plaintiff called upon the defendant to remove the construction erected on the land, and the vacate the premises and hand over possession. As the defendant failed, a suit for eviction was filed, on a number of grounds one of which was that the premises had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable caused and, therefore the defendant was liable to eviction under section 13(1) (k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947. The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove bona fide requirement, and that as defendant No. 2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff, the plaintiff was not entitled to recover possession on the ground of illegal sub letting. The plaintiff took up the matter in appeal and the Assistant Judge allowed the appeal partly, holding that the notice of termination was a valid one, that the plaintiff did not 718 require the suit premises reasonably and bona fide for occupation for himself and that the suit premises had not been w ed by the defendant continuously for a period of six months immediately preceding the date of suit without any reasonable cause. The respondent tenant took up the matter in revision before the High Court, which reversed the finding of the Ist appellate court on the question of user by the defendant, holding that the construction of the super structure on the land itself was a user and, therefore, the courts below had committed a manifest error in holding that the land in question had not been w ed for more than six months prior to the institution of the suit. In the appeal to this Court, it was contended on behalf of the appellant landlord that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause, and that the tenant would be liable for eviction even if he did not use the premises and kept it locked. On behalf of the respondent tenant it was contended, that the purpose of letting cannot be assumed, and that it has got to be alleged and proved. The landlord plaintiff could seek eviction under 8. 13()(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been w ed for the purpose for which it was let out. It was further contended that if the landlord had specifically taken the plea of non user of the premises for the purpose for which it was let out, he would have been able to prove the reasonable caw e for not doing 80 but in the absence of such a plea the defendant tenant had been seriously prejudiced, and that sec. 12 and 13 of the Act are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted . Allowing the Appeal, ^ HELD : 1. The judgment of the High Court is set aside and the plaintiff 's suit stands decreed. The High Court has gone wrong in holding that the construction of super structure on the land in dispute was itself a user. The super structures had already been built before the defendant took the land from the plaintiff under rent note, exhibit 61. As regards sub tenancy, it has 719 been found by the Courts below to have been created long before A the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 came into force. There was therefore no question of the eviction of the subtenant as the sub tenancy was not illegal. [726 B; 725 G 726 A] 2. The scheme of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it appears from the preamble is to consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions. The control had to be brought in because of the scarcity of accommodation in the cities. If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of a reasonable cause. The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together. [724 H 725 B] 3. Neither the purpose of letting is indicated in the rent note (Ex.61) nor has it been proved by evidence. A perusal of the rent note indicates that, there is no specific mention of the purpose for which the premises was rented out to the defendant. The defendant had taken the premises from the predecessor in interest of the plaintiff and had made certain super structures on the land in question. There is, however, material on the record to show that the premises had been let out to the defendant for the purpose of business. Indeed, the premises had been taken in the name of a firm carrying on tobacco business. The defendant admitted in his deposition that he had shifted his business to Baroda. He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same. In the reply given by the counsel for the defendant to the notice, of termination given by the plaintiff, it is admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the registered firm Vora Manilal Chaganlal & Co., carrying in business in Nadiad. In this situation it cannot be argued that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant. [723 E H] 4. The stipulation in the rent deed to the effect that; 'even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above ' only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closed. This, however, does not 720 mean that the defendant can keep the premises closed without using lt for years together before the suit. This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns. If the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without incurring the liability of eviction, as it sought to be contended for the respondent, it would amount to allowing the parties contracting out of law. [724 D E] In the instant case, on the own showing of the defendant respondent, the premises had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda. Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out. [725 F]

In July, 1940 the plaintiffs father leased out the building of which he was the owner, to the defendant on a monthly rent of Rs. 950 for running a restaurant. Even after the expiry of the period of lease in July, 1943 the defendant continued to be in possession of the building. By virtue of the Madras Non residential Buildings Rent Control order, 1946 the defendant became a statutory tenant and under the order fair rent was fixed at Rs. 1680 p.m. In 1949 the 1946 order was replaced by the Madras Buildings (Lease and Rent Control) Act. On the death of his father in 1955 the plaintiff became the owner of the building. The 1949 Act was repealed and replaced by the Tamil Nadu Buildings (Lease and Rent Control ) Act, 1960 (the Principal Act). Section 30(iii) of the Principal Act provided that it was not applicable to non residential buildings, the rental value of which, according to the assessment of the Corporation of Madras, exceeded Rs. 400 p.m. Even so the defendant continued to be in possession of the building. Since the building was not governed by the Principal Act the plaintiff issued notice to the defendant to quit and instituted a civil suit in the City Civil Court on March 2, 1964 for eviction and damages. In the meantime in June, 1964, by an amendment Act, the exemption contained in section 30 of the Principal Act in respect of non residential buildings was withdrawn so that from then on non residential buildings with a monthly rent of Rs. 400/ and above were also governed by the Principal Act. Sec ion 3 of the Amending Act also provided that proceedings for eviction of the tenants of such non residential buildings instituted in civil courts should be treated as having abated. In view of the amendment in December 1964 the City Civil Court dismissed the plaintiff s suit as having abated. Thereupon the plaintiff filed an application under O. IX, r. 9 of the Code of Civil Procedure to set aside, its order dismissing the suit as having abated. This application was allowed. The defendants filed additional written statements in the City Civil Court raising the plea that the suit had actually abated by virtue of section 3 of the Amending Act. In the meantime as a result of the plaintiff s application under section 24, Code of Civil Procedure the High Court withdrew the suit to its file (on the death of the original defendant, defendants 2 to 10 were impleaded as his legal representatives). On the issue whether the suit had abated on June 10, 1964 by virtue of section 3 of the Amending Act the trial judge of the High Court refused to record a finding and disposed of the suit as if it was a fresh suit after the death of the 876 original defendant. He passed a decree for possession and damages for use and occupation. On appeal by the defendants the Division Bench of the High Court held that from March 1, 1964 the original defendant was a trespasser, that he was not entitled to the benefit of the Principal Act, that with the coming into force of the Amending Act the building itself was outside the scope of the principal Act, that section 3 of the Amending Act did not apply to the suit and so it did not abate on June 30, 1964 and that on the death of the original defendant, defendants 2 to 10 were not entitled to the protection against eviction under the Principal Act as amended in 1973. Allowing the appeal, ^ HELD: Section 3 of the Amending Act was applicable to the suit as it was a proceeding instituted in the City Civil Court on the ground that the building was exempt from the provisions of the Principal Act by virtue of section 30(iii) thereof although no express allegation was made in the plaint to that effect. [891 B] 1. (a) The view of the Division Bench that section 3 of the Amending Act was not applicable to this case was erroneous in the absence of a contention by the plaintiff that section 3 was unconstitutional. It was not for the court to ask whether there was any justification for the legislature to make a contrary provision in respect of the suits of the present nature. There was every justification for enacting section 3 in order to give protection to the tenants against whom suits for eviction had been filed for buildings. which were brought within the scope of the Principal ACT by deleting cl. (iii) of section 30 of the Principal Act. [886G, 887B] (b) In the context in which section 3 of the Amending Act was enacted it could not be said that it was not possible to identify the proceedings to which that provision referred. In P. J. Gupta 's case this Court held that a proceeding which had been instituted on the ground that a non residential building was exempt from the provisions of the Principal Act by virtue of section 30(iii) and was pending on the date of publication of the amendment in the official gazette would abate but did not consider the type of cases which would fall within the scope of 3 of the Amending Act [888A B, 889G H] P. J. Gupta & Co. vs K. Venkatesan Merchant & ors. ; ; held inapplicable. (e) The words "instituted on the ground that such building or part was exempt from the provisions of the Principal Act by virtue of cl. (iii) of section 30 of the Principal Act" should be construed in the context in which they appeared as referring to a proceeding which had been instituted in the light of section 30(iii) of the Principal Act which granted exemption in respect of the buildings refer red to therein from the operation of the Principal Act. Any other construction would defeat the object of the Amending Act. [890E F] In the instant case the original plaint was filed on the basis that The tenancy had been terminated with effect from the expiry of February 29, 1964. The plaintiff prayed for the eviction of the defendant damages for use and occupation and not the fair rent fixed under the Rent Control law. The suit could be filed only because of the exemption contained in section 30(iii) of the Principal Act 877 because in the absence of such exemption no effective decree for ejectment could be passed by the City Civil Court in view of section 10 of the Principal Act. [890 G H] 2. The original defendant was not a trespasser in possession of the premises after June 10, 1964. He became a statutory tenant of the premises and could not be evicted from them except in accordance with the procedure specified in the Principal Act. The position would not have been different even if a decree for eviction had been passed against him before June 10, 1964 and the decree had not been executed or satisfied in full on that date [894 C D] 3. (a) The building in question was a building within The meaning of that expression in section 21 '>) of the Principal Act on the date when section 3 of the amending Act came into force. [896 F G] (b) The view of the Division Bench that the suit property was not a "building" within the meaning of section 2(2) on the ground that there was no lease in force and hence it was not let and that on that date the plaintiff had no intention to lease it and therefore it was not to be let was erroneous. A definition clause does not necessarily apply in all possible contents in which the word may be found. The opening clause of section 2 of the Principal Act suggests that any expression defined in that section should be given a meaning assigned to it therein unless the context otherwise requires. [896 B C] 4. The original defendant became entitled to The protection of the Principal Act on June 10, 1964 and he could be evicted from the building only after an order was made by the Rent Controller. The High Court did not pass an order the suit had abated on June 10, 1964 till the death of the original defendant on January 15, 1968. As a result of the proceedings instituted by one or the other of the parties the case was treated as pending although in law it was not open to the Court to proceed with it after 10. [896G 897A] 5. It has not permissible for the trial court to treat the proceeding which had been instituted against the original defendant prior to June 10, 1964 as a live proceeding which could be converted into fresh suit instituted against defendants No. 2 to 10 after the death of the original defendant. An amendment of the plaint by inclusion of a new prayer or by addition of new parties can be made only where in the eye of law a suit is pending before a Court. When the suit filed on March 2, 1964 stood terminated with the coming into force of the amending Act on June 10, 1964 there was no plaint in a live suit which could be amended by the addition of new parties and the inclusion of a new prayer. Therefore the addition of parties which took place after the death of the original defendant and the amendment of the plaint in 1973 requesting the court to pass a decree against defendants 2 to 10 who were not ' parties to the suit prior to June 10, 1964 on a cause of action which accrued subsequent to January 15, 1968 were without jurisdiction. [898A D] B. Banerjee vs Anita Pan, ; ; held inapplicable.

iminal Appeals No,%. 79 and 89 of 1959. Appeals by special leave from the judgment and order dated May 6,1959, of the Allhabad High Court in Criminal Appeal No. 1224 of 1957. A. section R. Chari, B. K. Gary, D.P. Singh, section C. Agarvial and M. K. Ramamurthi, for the appellants. G. C. Mathur and C. P. Lal for the respondent. 77 1961. February 15. The judgment of the Court was delivered by SUBBA RAO, J. These two appeals are directed against the judgment of the High Court of Judicature at Allahabad dismissing the appeal preferred by the appellants and maintaining the convictions and sentences imposed on them by the learned Sessions Judge Meerut, under a. 147, section 424, section 452, section 325, read with section 149, and is. 323, read with section 149, of the Indian Penal Code. Briefly stated the case of the prosecution is as follows: One Har Narain had obtained a decree from the court of the Additional Munsif, Ghaziabad, against one Sunehri Jogi for a sum of money. In execution of that decree the Munsif issued a warrant for the attachment of the judgment debtor 's property. The amin to whom the said warrant was entrusted attached, inter alia, three buffaloes and two cows, which were in the house of the judgment debtor, as his property. The amin kept the cattle in the custody of one Chhajju, the sapurdar. As the said sapurdar had no accommodation in his house for keeping the animals, he kept them for the night in the enclosure of the decree holder with his permission. The next day at about 7 a. m., the nine appellants, armed with lathies, went to the enclosure of the decree bolder and began to untie two of the attached buffaloes. The decree holder, his son and his nephew protested against the acts of the appellants whereupon the appellants struck the three inmates of the house with lathies, and when P.W. 4 intervened, they struck him also with lathies. Thereafter, appellants 1. 2 and 3 took away the two buffaloes followed by the other appellants. The defence version is that on June 1, 1955, at about 7 a. m. the first appellant, Tika, was taking his two buffaloes for grazing when Har Narain and 1 1 others came with the amin and forcibly snatched the said buffaloes, that when Tika objected to it, those 12 persons assaulted him with lathies, that when appellant 2, Raja Ram, came there, he was also assaulted, and that Tika and Raja Ram used their lathies in self defence. 78 The learned Sessions Judge, on a consideration of the evidence, held that the cattle were attached on the evening of May 31, 1955, and that, after their seizure, they were kept in the house of Har Narain. The Sessions Judge disbelieved the defence version that the accused gave the beating to Har Narain and others at 11 a. m. on June 1, 1955 in self defence. On that finding, he convicted the accused as aforesaid. On appeal, the learned Judges of the High Court accepted the finding arrived at by the learned Sessions Judge and confirmed the convictions and the sentences passed by him on the accused, but directed the various sentences to run concurrently. Hence the appellants have preferred these two appeals against the Judgment of the High Court. Learned counsel for the appellants raised before us the following contentions: (1) The attachment of the buffaloes was illegal and, therefore, the appellants in taking away their own buffaloes from the possession of the decree holder did not commit any offence under section 424 of the Indian Penal Code. (2) Even if the attachment was valid, neither the amin had any authority to keep the attached buffaloes in the custody of the sapurdar, nor the sapurdar had any power to keep them in the custody of the decree holder, and therefore the decree holder 's possession was illegal and the appellants in taking away the buffaloes did not commit any offence within the meaning of section 424 of the Indian Penal Code. (3) The appellants also did not commit any offence under section 441 of the Indian Penal Code, as they had no intention to commit an offence or cause annoyance to the decree holder, but they entered the house of the decree holder only to recover their buffaloes from illegal custody. (4) The appellants did not commit an offence under section 325, read with as. 147 and 149, of the Indian Penal Code, as their common object was not to cause grievous hurt to the decree holder and others, but was only to recover their buffaloes illegally detained by the decree holder. The first two contentions may be considered together. The material facts relevant to the said contentions may be stated. Har Narain in execution of his 79 decree against Sunehri Jogi attached the buffaloes that were in the house of the judgment debtor. Tika, appellant 1, filed a claim petition it is common case that subsequent to the incident his claim petition was allowed. in the claim petition, the High Court pointed out that Tika did not question the validity of the attachment but only set up his title to the buffaloes. Indeed, his defence in the criminal case also was not that the incident happened when the attached buffaloes were in the house of the decree holder but that the incident took place before the attachment was effected. Before the Sessions Judge no point was taken on the basis of the illegality of the attachment. For the first time in the High Court a point was sought to be made on the ground of the illegality of the attachment, but the learned Judges rejected the contention not only on the ground that official acts could be presumed to have been done correctly but also for the reason that the appellants did not question the legality of the attachment in the claim petition. That apart, P.W. 1, the amin, was examined before the Sessions Judge. He deposed that he had attached the heads of cattle from the house of the judgment debtor, Sunehri Jogi, and that he had prepared the attachment list. He further deposed that the warrant of attachment received by him was with him. A perusal of the cross examination of this witness discloses that no question was put to him in regard to any defects either in the warrant of attachment or in the manner of effecting the attachment. In these circumstances, we must proceed on the assumption that the attachment had been validly made in strict compliance with all the requirements of law. If so, the next question is, what is the effect of a valid attachment of moveables? Order XXI, rule 43, of the Code of Civil Procedure describes the mode of attachment of movable properties other than agricultural produce in the possession of the judgment debtor. It says that the attachment of such properties shall be made by the actual seizure, and the attaching officer shall keep the attached property in his own custody or in the custody of one of his subordinates 80 and shall be responsible for the due custody thereof The relevant rule framed by the Allahabad High Court is r. 116, which reads, "Live stock which has been attached in execution of a decree shall ordinarily be left at the place where the attachment is made either in custody of the judgment debtor on his furnishing security, or in that Of some land holder or other respectable person willing to undertake the responsibility of its custody and to produce it when required by the court. " The aforesaid rule also empowers the attaching officer to keep the animals attached in the custody of a sapurdar or any other respectable person. Attachment by actual seizure involves a change of possession from the judgment debtor to the court; and the rule deals only with the liability of the attaching officer to the court. Whether the amin keeps the buffaloes in his custody or entrusts them to a sapurdar, the possession of the amin or the sapurdar is in law the possession of the court and, so long as the attachment is not raised, the possession of the court continues to subsist. Would it make any difference in the legal position if the sapurdar, for convenience or out of necessity, keeps the said animals with a responsible third party? In law the said third party would be a bailee of the sapurdar. Would it make any difference in law when the bailee happens to be the decree holder? Obviously it cannot, for the decree holder 's custody is not in his capacity as decree holder but only as the bailee of the sapurdar. We, therefore, hold that the decree holder 's possession of the buffaloes; in the present case was only as a bailee of the sapurdar. But it is said that even on that assumption, appellant 1, being the owner of the buffaloes, was not guilty of an offence under section 424 of the Indian Penal Code, as he could not have acted dishonestly in trying to retrieve his buffaloes as their owner from the custody, of the court 's officer or his bailee. This argument turns upon the provisions of section 424 of the Indian Penal Code. The material part of a. 424 of the said Code reads: 81 "Whoever dishonestly or fraudulently removes any property of himself or any other person, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both". The necessary condition for the application of this section is that the removal should have been made dishonestly or fraudulently. Under section 24 of the Indian Penal Code, "Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person is said to do that thing ,dishonestly '. " Section 23 defines "wrongful gain" and "wrongful loss". "Wrongful gain" is defined as gain by unlawful means of property to which the person gaining is not legally entitled; and "wrongful loss" is the loss by unlawful means of property to which the person losing is legally entitled. Would the owner of a thing in court 's custody have the intention of causing wrongful gain or wrongful loss within the meaning of a. 23 of the Indian Penal Code? When an attachment is made, the legal possession of a thing attached vests in the court. So long as the attachment lasts or the claim of a person for the thing attached is not allowed, that person is not legally entitled to get possession of the thing attached. If he unlawfully takes possession of that property to which he is not entitled he would be making a wrongful gain within the meaning of that section. So too, till the attachment lasts the court or it officers are legally entitled to be in possession of the thing attached. If the owner removes it by unlawful means, he is certainly causing wrongful loss to the court or its officers, as the case may be, within the meaning of the words "wrongful loss", In the present case when the owner of the buffaloes removed them unlawfully from the possession of the decree holder, the bailee of the sapurdar, he definitely caused wrongful gain to him. self and wrongful loss to the court. In this view, we must hold that appellant 1 dishonestly removed the buffaloes within the meaning of section 424 of the Indian Penal Code and, therefore, he was guilty under that ,section. 82 Now we shall proceed to consider some of the decisions cited at the Bar in support of the contention that under no circumstances the owner of a thing would be guilty of an offence under section 424 of the Indian Penal Code, if he removed it from an officer of a court, even if he was in possession of it under a legal attachment. Reliance is placed upon the decision of the Court of Criminal Appeal in Rex. vs Thomas Knight (1) where a prisoner, the owner of the fowls, ' took them away from the possession of the Sheriff 's officer, the court held that the prisoner was not guilty of larceny. "Larceny if; the willful and wrongful taking away of the goods of another against his consent and with intent to deprive him permanently of his property". There are essential differences between the concept of larceny and that of theft; one of them being that under larceny the stolen property must be the property of someone whereas under theft it must be in the possession of someone. It would be inappropriate to apply the decision relating to larceny to an offence constituting theft or dishonest or fraudulent removal of property under the Indian Penal Code, for the ingredients of the offenses are different. In Sarsar Singh vs Emperor (2), Bajpai, J., held that "the mere fact that the judgment debtor, who is entitled to remove his crops which are not validly attached, has removed them does not prove that he has done so dishonestly". There the attachment was made in derogation of the provisions of Order XXI, rule 44, Civil Procedure Code; and the Court held that the attachment was illegal and, therefore, the property would not pass from the judgment debtor to the court. It further held that under such circumstances the court could not presume that the act of removal was done dishonestly within the meaning of section 24, I.P.C. This decision does not help the appellants, as in the present case the attachment was legal. Sen, J., in Emperor vs Ghasi (3) went to the extent of holding that the owner cutting and removing a portion of the (1) (2) (3) All 214. 83 crops under attachment in execution of a decree and in the custody of a shehna did not constitute an offence under section 424, I.P.C. The learned Judge observed at p. 216, "If they were the owners of the crop and removed the same, their conduct was neither dishonest nor fraudulent". The learned Judge ignored the circumstance that the attachment of the crops had the legal effect of putting them in the possession of the court. For the reason given by us earlier, we must hold that the case was wrongly decided. In Emperor vs Gurdial (1) Pullan, J., held that the owner by removing the attached property from the possession of the custodian and taking it into his own use, did not commit an offence under section 424, I.P.C. But in that case also the attachment was illegal. But there is a current of judicial opinion holding that where there was a legal attachment, a third party claiming to be the owner of the moveables attached would be guilty of an offence under section 424 or section 379, I.P.C., as the case may be, if lie removed them from the possession of the court or its agent. Where a revenue court had attached certain plots and certain persons were appointed as custodians of the crop standing on the plots and accused out and removed the crop in spite of knowledge of the promulgation of the order of attachment, the Allahabad High Court held in Dalganjan vs State (2) that the removal of the crop by the accused was dishonest and that the conviction of the accused under section 379, I.P.C. was proper. The learned Judges said, "Since the possession passed from the accused to the custodians, the cutting of the crop by the accused in March 1951 was dishonest." In State vs Rama (3) the Rajasthan High Court held that where a person takes away the attached property from the possession of the sapurdar, to whom it is entrusted, without his consent, and with the knowledge that the property has been attached by the order of a court, he will be guilty of (1) All. 119., (2) A.I.R. 1956 All. (3) Raj. 84 committing theft, even though he happens to be the owner of the property. Though this was a case under s.379, I.P.C., the learned Judges considered the scope of the word "dishonestly" in section 378, which is also one of the ingredients of the offence under section 424, I.P.C. Wanchoo, C. J. observed at p. 775 thus: "There is no doubt that loss of property was caused to Daulatram inasmuch as he was made to lose the animals. There is also no doubt that Daulatram was legally entitled to keep the animals in his possession as they were entrusted to him. The only question is whether this loss was caused to Daulatram by unlawful means. It is to our mind obvious that the loss in this case was caused by un lawful means because it can never be lawful for a person, even if he is the owner of an animal, to take it away after attachment from the person to whom it is entrusted without recourse to the court under whose order the attachment has been made." These observations apply with equal force to the present case. A division bench of the Allahabad High Court in Emperor vs Kamla Pat (1) considered the meaning of the word "dishonestly" in the context of a theft of property from the possession of a receiver. Sulaiman, J., observed at p. 372 thus: "Therefore when a property has been attached under an order of a civil court in execution of a decree, possession has legally passed to the court. Any person who takes possession o f that property subsequent to that attachment would obviously be guilty tinder section 379 of the Indian Penal Code, if he knew that the property had been attached and was therefore necessarily acting dishonestly. " We need not multiply decisions, as the legal position is clear, and it may be stated as follows: Where a property has been legally attached by a court, the possession of the same passes from the owner to the court or its agent. In that situation, the owner of the said property cannot take the law into his own hands, but can file a claim petition to enforce his right. If he resorts to force to get back his property, (1) All. 368. 85 he acts unlawfully and by taking the property from the legal possession of the court or its agent, he is causing wrongful loss to the court. As long as the attachment is subsisting, he is not entitled to the possession of the property, and by taking that property by unlawful means he is causing wrongful gain to himself. We are, therefore, of the view that the appellants in unlawfully taking away the cattle from the possession of the decree holder, who is only a bailee of the sapurdar, have caused wrongful loss to him and therefore they are guilty of an offence under section 424,I.P.C. The next contention turns upon the provisions of section 441 of the Indian Penal Code. The argument is that the appellants did not commit trespass with intention to commit an offence or intimidate, insult or annoy any person in possession of such property. A distinction is made between intention and knowledge. It is said that the appellants did not trespass into the house of the decree holder with any such intention as mentioned in that section. But in this case we have no doubt, on the evidence, that the appellants entered the house of the decree holder with intent to remove the attached cattle constituting an offence under section 424 of the Indian Penal Code. The appellants are, therefore, guilty of the offence and have been rightly convicted under section 441 of the Indian Penal Code. The last contention is that the principal object of the accused was to get back their cattle which had been illegally attached and that their subsidiary object was to use force, if obstructed, and that in the absence of a specific charge in respect of the use of force the accused should not have been convicted of what took place in furtherance of the subsidiary object. The relevant charge reads thus: "That you, on or about the same day at about the same time and place voluntarily caused such injuries on the persons of Om Prskash, Har Narain, Jhandu and Qabul, that if the injuries would have caused the death of Har Narain, you would have been guilty of murder and thereby committed an offence under section 307 read with section 149 86 I.P.C. and within the cognizance of the court of Sessions. " Though section 149 of the Indian Penal Code is mentioned in the charge, it is not expressly stated therein that. the members of the assembly know that an offence under section 325 of the Indian Penal Code was likely to be committed in prosecution of the common object of that assembly. Under section 537 of the Code of Criminal Procedure, no sentence passed by a court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the charge, unless such error, omission or irregularity has in fact occasioned a failure of justice. The question, therefore, is whether the aforesaid defect 'in the charge has in fact occasioned a failure of justice. The accused knew from the beginning the case they had to meet. The prosecution adduced evidence to prove that the accused armed themselves with lathies and entered the premises of the decree holder to recover their cattle and gave lathi blows to the inmates of the house causing thereby serious injuries to them. Accused had ample opportunity to meet that case. Both the courts below accepted the evidence and convicted the accused under section 325, read with section 149, I.P.C. The evidence leaves no room to doubt that the accused had knowledge that grievous hurt was likely to be caused to the inmates of the decree holder 's house in prosecution of their common object, namely, to recover their cattle. We are of the opinion that there is no failure of justice in this case and that no case has been made out for interference. No other point was raised before us. In the result, the appeals fail and are dismissed. Appeals dismissed.

In execution of a decree the Amin attached, inter alia, two buffaloes from the house of the judgment debtor and entrusted them to the custody of a sapurdar. As the sapurdar had no accommodation in his house for keeping the buffaloes he kept them for the night in the enclosure of the decree holder with his permission. Early next morning the appellants armed with 76 lathies, went to the enclosure of the decree holder and began to untie the two. buffaloes; the decree holder, his son and nephew protested whereupon they and another person, who tried to intervene, were beaten by the appellant with lathies and the two buffaloes were taken away. Afterwards appellant No. 1 made a claim petition before the executing court and that court held that the two buffaloes belonged to him. The appellants were convicted of offenses under sections 147, 452, 424, 325/149 and 323/149 Indian Penal Code. They challenged their convictions on the grounds: (i) that the custody of the decree bolder over the buffaloes was illegal as neither the a minor had any authority to give them in the custody of the sapurdar nor had the sapurdar any power to keep them in the custody of the decree holder, (ii) that the appellants bad entered the enclosure of the decree holder only to recover their buffaloes and had not acted dishonestly. Held, that the appellants were rightly convicted. The decree holder 's possession of the buffaloes was as a bailee of the sapurdar. Order 21, Rule 43 read with R. 116 (framed by the Allahabad High Court) empowered the amin to keep the attached buffaloes in the custody of a sapurdar. The sapurdar could, for convenience or necessity, keep them with a third person as bailee and such third person could be the decree holder also. Attachment involved a change of possession from the judgment debtor to the Court; and whoever was entrusted with the possession held it on behalf of the Court until the attachment was raised. So long as the attachment lasted or the claim of a person for the thing attached was not allowed, that person was not legally entitled to get possession of the thing attached. If he unlawfully took possession of that thing he caused "wrongful gain" to himself and "wrongful loss to the Court. Rex vs Thomas Knight, , Sarsay Singh vs Emperor, and Emperor vs Gurdial, All. 119 distinguished. Emperor vs Ghasi, All. 214, disapproved. Dalganjan vs State, A.I.R. 1956 All. 630, State vs Rama, Raj 772 and Emperor vs Kamla Pat, All. 368, applied.

The Code of Criminal Procedure, 1973, provides inter alia, by sub section (3) of section 3.8 that no appeal against an order of acquittal passed by a lower court shall be entertained under sub section (1) or sub s.(2) except with the leave of the High Court. A practice was prevalent in the Madhya Pradesh High Court, requiring the State Government or the Central Government, desirous of preferring an appeal under sub section (1) or sub section (2) of section 378 of the Code, to make an application for leave under sub section (3) thereof, and it was registered as a Miscellaneous Criminal Case and treated as a petition and as such placed before a Single Judge for hearing as per r. 1 (q), Chapter I, Part I, of the Madhya Pradesh High Court Rules. It was only when the Single Judge granted leave to appeal under sub section (3), that the petition for leave was registered as a Criminal Appeal and placed before a Division Bench for admission under sub section (1) of section 384. The State Government of Madhya Pradesh having decided to prefer an appeal under sub section (1) of section 378 filed an application for leave to appeal under sub section (3) setting out therein the grounds of appeal and the Single Judge who heard it refused to grant the leave. The State Government made an application for grant of certificate under Article 134 (1) (c) of the Constitution. The application was heard by a Division Bench. The contention was that there was inherent lack of jurisdiction on the part of the Single Judge to hear and decide an application for leave under sub section (3) of section 378 of the Code, inasmuch as under r. 1 (q) (ii) of the Madhya Pradesh High Court Rules, Chapter I, Part 1, the matter had to be dealt with by a Bench of two Judges. The High Court, following its earlier decision in State of Madhya Pradesh vs Narendrasingh, (1974) MPLJ (N) 102, rejected the contention, holding that the State had to obtain 'leave ' of the High Court under sub section (3) of section 378, before an appeal against acquittal was preferred under sub section (1) thereof and therefore the learned Single Judge had jurisdiction to deal with tho application for leave under sub section 82 In appeal to this Court the State Government contended that the making of an application for leave under sub section (3) of section 378 is tantamount to filing an appeal under sub section (1) thereof, that the High Court could grant leave and entertain the appeal at one and the same time inasmuch as an application under sub section (3) would be transmuted into an appeal under sub section (1) when leave is granted under sub section (3) and, therefore, the application for leave under sub section (3) must have been laid before a Bench of two Judges under r. 1 (q) (ii) of the High Court Rules. Allowing the appeal, ^ HELD: 1. An application for 'leave ' to appeal under sub section (3) of section 378 without which no appeal under sub section (I) or sub section (2) thereof can be entertained, being an integral part of the appeal, must be laid before a Bench of two Judges of the High Court under r. 1 (q) (ii), Chapter I, Part I of the Madhya Pradesh High Court Rules (as it stood before the amendment) and could not be heard and disposed of by a Single Judge of the High Court under r. 1 (q) of the Rules, as it stood prior to its amendment. [92 E F; 83 D] 2. Sub section (3) of section 378 was introduced by Parliament to create a statutory restriction against entertainment of an appeal filed by the State Government or the Central Government under sub section (1) or sub section (2) thereof from an order of acquittal passed in a case instituted otherwise than upon a complaint. T here is a difference in the procedure regulating entertainment of State appeals under sub section (1) or sub section (2) of section 378 and appeals against acquittals filed by a complainant under sub section (4) of section 378. On a comparison of the language employed in sub section (3) and sub section (4) of section 378, it is clear that in the case of an appeal by the State Government or the Central Government under sub section (1) or sub section (2), the Code does not contemplate the making of. an application for leave under sub section (3) while making of an application under sub section (4) is a condition precedent for the grant of special leave to a complainant under sub section The difference in language used in sub section (3) and sub section (4) of section 378 manifests the legislative intent to preserve a distinction between the two classes of appeals by prescribing two different procedures in the matter of entertainment of appeals against acquittals. While a period Of limitation has been prescribed in sub section (5) of section 378 for an application of the complainant under sub section (4), there is no period of limitation prescribed for an application for grant of Leave to appeal under sub section (3), obviously because the Code does not contemplate the making of an application for leave under sub section (3) of section 378. It, therefore, follows that the State Government or the Central Government may, while preferring an appeal under sub section (1) or sub section (2) of section 378 incorporate a prayer in the memorandum of appeal for grant of leave under sub section (3) thereof, or make a separate application for grant of leave under sub section (3) of section 378, but the making of such an application is not a condition precedent for a State appeal. [90 F H; 91 A C; 88 G H; 91 C D] State of Madhya Pradesh vs Narendra Singh, [1974] MPLJ (N) 102 over ruled. State of Rajasthan vs Ramdeen & ors. [1977] 3 S.C.R. 139 relied on. 83

In February 1965, Bungalow No. 16 D, Beli Road (now 26 B.K. Banerjee Road), Allahabad was allotted to the appellant. On an application made in April 1975 the prescribed authority allowed, on 24th May, 1976, the application directing the release of the bungalow to the landlord. On appeal the appellate authority by its order dated 25th March, 1977 modified the order by releasing only a portion of the building and by permitting the appellant to continue in the remaining portion with a direction to the prescribed authority to divide the bungalow accordingly. The said order dated 25th March, 1977 became final, since the writ petition challenging the said order was dismissed. On the death of the landlord the appellant filed a fresh application before the prescribed authority not to proceed with the partition scheme. Since the prescribed authority refused to take note of this subsequent event, the issue has come up before this Court by way of special leave. Dismissing the appeal, the Court ^ HELD: 1. 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 proceedings taken against it by the appellant failed. The prescribed authority was bound to give effect to that final order and was not acting outside its jurisdiction or contrary to law. [79 C D] 2. It is true that subsequent events must be taken into account by a statutory authority or court when considering proceeding arising out of a landlord 's petition for ejectment of a tenant on the ground of the landlord 's personal need. But in the present case the order for release of a portion of the accommodation acquired finality before the death of the landlord and the controversy concluded by it could not be reopened now. [79 E F] 3. The present appeal being limited to the question which arose before the prescribed authority on the application of the appellant after the proceedings for release had acquired finality, it is not open even to the Supreme Court, to reopen the proceeding for release. [79 G H] 78

% As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982. The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal. On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application. The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent. The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties. A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent. The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge. Allowing the Appeal by the State this Court, ^ HELD: l. The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing. The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of. [823G H] 2. The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter. [824A B] 3. The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed. [824B c] 4. The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives. It could not be said that the appeal is disposed of as observed by the High Court. It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law. [824C D]

% The appellant Bank filed a suit against respondents including respondent firm and its partners, who were agriculturists, for recovery of a sum of Rs.18,14,817.91 being balance of three principal amounts severally advanced by the Bank to the firm under cash credit account on three different dates. The last loan was advanced by the Bank after its nationalisation on July 7, 1969. The Bank alleged that, to secure repayment of the aforesaid amount of loan, in addition to hypothecation made in its favour of the properties in `A ' and`B 'Schedules of the plaint, equitable mortgage of properties in Schedule `C ', `D ' and `E ' was also created in its favour by respondent No. 2, respondent No. 3 and his deceased father. The appellant Bank prayed for the sale of the said properties for the recovery of the amounts claimed by it. The respondents, including the firm, and Respondents No.4 to 12, who were alienees, denied creation of any equitable mortgage in favour of the appellant Bank. The respondent firm and its partners, namely, third respondent 's deceased father and the second respondent also filed counter claim against the appellant Bank. Dismissing the suit against respondent Nos. 4 12, the Subordinate Judge held that no equitable mortgage was created in favour of the appellant Bank and that the claim of the appellant Bank, except to the extent of Rs.1,00,418.55, was barred by limitation. The counter claim against the Bank was decreed. 962 Setting aside the Judgment and decrees of the Subordinate Judge, the High Court, in appeal, decreed the suit instituted by the appellant, but held that the Bank was entitled to recover the amount claimed by it, only after scaling down the debt in accordance with the provisions of the Andhra Pradesh (Andhra Area) Agriculturists Relief Act IV of 1938. In the appeal by special leave, it was submitted on behalf of the appellant Bank that in view of section 4(e) of the Act, the provisions of the Act were not applicable to the appellant Bank and as such, it was entitled to recover the entire amount without the same being scaled down as provided in section 13 of the Act, and that the words "special Indian Law" in section 4(e) referred to and related to law made by an Indian Legislature. On behalf of the respondents, it was contended that the words "special Indian law" meant a special Indian Law enacted by the Parliament of the United Kingdom, that even assuming that the expression "special Indian law" meant a law enacted by the Indian Legislature and that the Banking Act was such a law, still the provision of section 4(e) of the Act did not apply inasmuch as the appellant Bank was not formed in pursuance of "special Indian law", but by or under "special Indian law", that is, the Banking Companies Act, and as such, it was not a Corporation within the meaning of section 4(e) of the Act, that as the appellant Bank was nationalised and/or created under Ordinance VIII of 1969 promulgated on July 19, 1969 and the Banking Companies Act only ratified the already created bank under the said Ordinance, it was not formed or created under any `special Indian Law ' and that since a major part of the loan was contracted before the nationalisation of the appellant Bank, the provision of section 4(e) was not applicable. Allowing the appeal, ^ HELD: 1. The provisions of the Act are not applicable to the appellant Bank, and there is no question of scaling down the debt due to the Bank by the respondents. [972E] In the instant case, the amounts of loan were advanced by the Bank to the firm under the cash credit account opened in favour of the firm. Normally, the advances that are made from the cash credit account are repaid and thereafter fresh advances are made. It is not known what was the actual balance on the date the Bank was nationalised, and whether the first two amounts were repaid by the firm and, thereafter fresh advances were taken on the cash credit account. [971B D] 963 2.4 The Banking Companies Act is a special Indian law and the provision of section 4(e) Andhra Pradesh (Andhra Area) Act IV of 1938 is applicable to the appellant Bank.[969G] 2.2 In interpreting the words of the provision of a statute, while it may sometimes be necessary to take into consideration the setting in which such words are placed, that is not the only and the surest method of interpretation, and when such words convey a clear meaning, a different interpretation or meaning need not be given to them because of the setting. [968D] R.L. Arora vs State of Uttar Pradesh, ; , referred to. In the instant case the expression `special Indian law ' has a clear and unambiguous meaning. There is no reasonable justification to think that the expression must be an enactment of the British Parliament since there were in existence Indian Legislatures, including a Legislatures at the Centre. [968E] Section 3(27)(a) of the General Clauses Act, as it stood on the day the Act was passed, defines `Indian Law ' as meaning any Indian law enacted by the Indian Legislature. The expression `special Indian law ' therefore, means a special Indian law enacted by the Indian Legislature. [968F G] Indian Bank, Alamuru vs Krishna Murthy, AIR 1983 Andhra Pradesh 347,over ruled. 2.3 Inasmuch as the words `any special Indian law ' in section 4(e) of the Act refer and relate to a law made by the Indian Legislature and not by the British Parliament, the Banking Companies Act is quite legal and valid. [972C D] 2.4 Theoretically, there may be a distinction between the words `in pursuance of ' and the words `by or under ' but by using the expression `in pursuance of ' in section 4(e), the Legislature has not meant that the corporation, in question, should be formed by a third party in pursuance of the law and not by the law itself in order to come within the purview of section 4(e) of the Act. The intention of the Legislature is very clear in that the provision of section 4(e) would apply to a corporation which is the creature of a special Indian law, whether it is created in pursuance of or by or under the special Indian law. There is no difference 964 Or distinction whatsoever between the corporation formed in pursuance of,and a corporation by or under a special Indian law. [969E F] 2.5 An Ordinance is as much a law as an enactment of Parliament or Legislature. Therefore, it must be held that the bank was created under a special Indian law even assuming that the bank was created under the Ordinance VIII of 1969 and not under the Banking Companies Act. It is also manifestly clear from sub section (1) of section 3 of the Banking Companies Act which provides that on the commencement of the Banking Companies Act there shall be constituted such corresponding new Banks as are specified in the first Schedule, that the appellantBank, which is mentioned in the first Schedule, has been created under the provisions of the Banking Companies Act with effect from July 19, 1969.[970C,E F] R.C. Cooper vs Union of India, ; and Life Insurance Corporation of India vs Kota Ramabrahmam, ; , referred to.

One Raja Sahib took a lease from the District Board, Allahabad,. with respect to the realisation of bayai and bazar dues on the sale of commodities in the bazar. The appellant was his employee to collect these dues. A peon of Raja Sahib asked Shyam Lal, P.W. 2, who had sold linseed to Mewa Lal, respondent No. 2, to come to the Munim and pay the beyai dues. Mewa Lal asked Shyam Lal not to pay those dues. The peon took Shyam Lal to the appellant. The respondent No. 2 armed with a lathi, came there and on appellant 's asking him as to why he was creating obstruction in the realisation of the dues, filthily abused him and threatened to kill him. The appellant, thereafter, on obtaining sanction of the District Magistrate, instituted a complaint against Respondent No. 2 for prosecuting him for an offence under section 107 of the United Provinces District Board Act. The trial Magistrate convicted him of the offences under sections 504 and 506 of the Indian Penal Code and also of an offence under section 107 of the Act. On appeal, Sessions judge acquitted him of all the charges. Against acquittal, the appellant filed an appeal to the High Court which was dismissed. On appeal by certificates three contentions were raised by the appellant in this Court: (i) The order of the Sessions judge aquitting Mewa Lal was bad as no notice of hearing of the appeal was issued to the appellant, on whose complaint the Magistrate convicted him, (ii) The High Court was wrong in holding that the Raja could not collect the Tah Bazari dues through his agents, and (iii) that the appellant had requisite sanction under section 182 of the Act, for prosecuting Mewa Lal, respondent No. 2. Held that section 107 of the Act does not make obstruction or molestation of an employee of the person under contract with 359 the Board, an offence. The section speaks of the obstruction or molestation of two classes of persons. One class consists of persons employed by the District Board under the Act. The Raja or the appellant is not an employee of the District Board. The second class consists of those persons who are under contract with the Board under the Act. Surely, the person under contract with the Board is the Raja and not the appellant. The appellant is only an employee of the Raja. In view of these considerations, the acquittal of the respondent No. 2 could not be interfered with merits. The appeal, therefore, must be dismissed. The appeal was not heard on merits. If was considered not necessary to decide the first contention and the Court did not express any opinion on the second contention as the terms of the lease were not known. The third contention was held to be correct.

This appeal was against the order of the Deputy Registrar directing the present case to be registered as nine appeals and requiring the appellant to pay nine sets of court fees. The case originated out of one petition under article 226 of the Constition challenging the validity of various assessment orders. The High Court passed one order on the petition and one appeal was filed in this Court. 886 Held that the appellant should pay only one set of court fee and other charges as in a single appeal. It could not be said that there were as many proceedings as there were assessment orders as the appellant had by a single petition challenged them all together. Lajwanti Sial 's case, Petition for special leave No. 673 of 1959 and Kishinchand Chellaram 's case, C.A. Nos. 462 to 465 of 1960, referred to.

Appellant Natha Singh was recorded as a land owner in revenue records. Under the Punjab Security of Land Tenures Act, 1953, the Collector, Ferozepore, declared an area of 63 standard acres and 4 units, as surplus land in his hands. The sons of Natha Singh appealed to the Commissioner, Jullundur division, who remanded the case for fresh determination of "surplus area". On a re examination of facts, the Collector, Ferozepure, overruled the pleas of the appellants. Their appeal to the Commissioner, Jullundur division, and a further revision petition to the Financial Commissioner, Taxation, Punjab, were also dismissed. All these orders were challenged before the High Court under article 226. The High Court dismissed the matter in limine, but granted a certificate under article 133(1)(a). The appellants contended before this Court that in the facts and circumstances of the case, the High Court could not dismiss the writ petition in limine, as the revenue authorities had wrongly computed the 'surplus area '. They further contended that appellants No. 2 and 3 were not afforded proper and adequate opportunity by the Collector to prove their claims. The appellants also applied for permission to adduce additional documentary evidence. Dismissing the appeal, the Court, ^ HELD: (1) In dealing with a petition under article 226 of the Constitution, the High Court cannot exercise the jurisdiction of an appellate court, and cannot re examine or disturb the findings of fact arrived at by an inferior Court or a tribunal in the absence of an error of law. [622E F] (2) In the instant case, the orders passed by the revenue authorities did not suffer from any error of law so as to warrant interference in writ proceedings and the High Court was justified in dismissing in limine the writ petition preferred by the appellants. [623F] (3) The application of the appellants for additional evidence cannot be allowed in view of the well established principles of law that the discretion given to the appellate court to receive and admit additional evidence is not an arbitrary one but is a judicial one circumscribed by the limitations specified in order 41 rule 27 of the Code of Civil Procedure. The true test to be applied in dealing with applications for additional evidence is whether the appellate court is able to pronounce judgment on the materials before it, without taking into consideration the additional evidence sought to be adduced. [623G H, 624A] Arjun Singh alias Puran vs Kartar Singh & Ors. ; referred to.

minal Appeal No. 154 of 1959. Appeal by special leave from the judgment and order dated March 27, 1959, of the Mysore High Court in Criminal Appeal No. 168 of 1956. section N. Andley, J. B. Dadachanji, RameShwar Nath and Bavinder Narain, for the appellant. B. Gopalakrishnan and T. M. Sen, for the respondent. February 16. The Judgment of the Court was delivered by 130 RAGHUBAR DAYAL, J. This is an appeal by special leave against the judgment of the High Court of Mysore at Bangalore confirming the appellant 's conviction for an offence under section 5(2) of the Prevention of Corruption Act, 1947 (Act 11 of 1947), by the Special Judge, Dharwar. The appellant is alleged to have committed the offence while he was a Municipal Councillor and Chairman of the Managing Committee of the Navalgund Municipality. The only question for determination in this appeal is whether the appellant was a 'Public servant ' contemplated by section 2 of the Preven tion of Corruption Act. The contention for the appellant is that he was not such a 'public servant '. Section 2 of the Prevention of Corruption Act reads: "For the purposes of this Act, 'public servant ' means a public servant as defined in section 21 of the Indian Penal Code". Section 21 of the Indian Penal Code defines the persons coming within the expression 'public servant ' and its Tenth Clause reads: "Every officer whose duty it is, as such officer, to take, receive, keep or expend any property, to make any survey or assessment or to levy any rate or tax for any secular common purpose of any village, town or district, or to make, authenticate or keep any document for the ascertaining of the rights of the people of any village, town or district". The Rule 68 framed under the Bombay District Municipal Act, 1901 (Bombay Act III of 1901) and admittedly applicable to the appellant reads: "The Chairman of an Executive Committee shall sign payment orders on behalf of the Committee after the Committee have passed the bills and may also order payment of bills for fixed recurring charges such as pay bills in anticipation of the Committee passing them". The High Court held that the appellant, as Chairman of the Managing Committee, could expend the money of the Municipality as he could order payment of bills for fixed recurring charges and that therefore he 131 came within the purview of the expression 'public servant ' defined in the Tenth Clause of section 21 of the Indian Penal Code. The only criticism which the learned counsel for the appellant has urged against this view is that the High Court did not keep the distinction between the words ,duty ' and 'power ' in mind and that rule 68 empowers the Chairman to order payment and does not impose a duty on him to order payment. We are of opinion that the power to make payment of fixed recurring charges such as pay bills imposes a duty on the Chair. man to do so when necessary as the power it; vested in the Chairman for the benefit of the persons entitled to receive those recurring charges. Reference may usefully be made here to what was said in this connection in Julius vs The Lord, Bishop of Oxford (1). Earl Cairns, the Lord Chancellor, said in connection with the interpretation to be put on the expression 'it shall be lawful ' in a certain statute: "The words 'it shall be lawful ' are not equivocal. They are plain and 'unambiguous. They are words merely making that legal and possible which there would otherwise be no right 'or authority to do. They confer a faculty or er, and they do not of themselves do more than confer a faculty or power, But there may be something in the nature of the thing empowered to be done, something in the ob. ject for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so". The aforesaid power is conferred on the Chairman for the benefit of the persons who have served the Municipality and have got the right to receive their pay or money for articles provided. There may arise ciroumstances when any delay in payment may affect those persons adversely. The pay is due on the first day of (1). (1880) 5 App. 214, 222. 132 the month and it may not be convenient to fix a meet. ing of the Committee at a date for early payment of the pay due. A meeting already fixed may have to be adjourned for want of quorum. The passing of the pay bills, in the circumstances, is more or less a formal matter and therefore the rules empower the Chairman of the Managing Committee to order payment of the pay bills in anticipation of sanction by the Committee. The Chairman can exercise this power for the benefit of the employees voluntarily or when requested by those persons to exercise it. The mere fact that this power of the Chairman was to be exercised only with respect to fixed recurring charges and in anticipation of the Committee passing the bills for those charges therefore does not affect the question in any way. Clause ten of section 21 of the Indian Penal Code merely requires that the person should have the duty to expend property for certain purposes. It is not restricted to such cases only where there is no limitation on the exercise of that power of expending pro perty. The Chairman has the duty to order payment and to spend the money of the Municipality in certain circumstances. We therefore hold that the appellant was a (public servant ' when the alleged offence was committed. In view of our opipion, we do not discuss the effect of section 45 of the Bombay District Municipal Act which lays down that every municipal councillor shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code, or the question whether the appellant, as a mere Municipal Councillor, comes within the definition of 'public servant ' in section 21 of the Indian Penal Code. These questions were not considered by the High Court. We therefore dismiss the appeal. Appeal dismissed.

The question arising for determination was whether the Chairman of the Managing Committee of a Municipality who could order payment of bills for fixed recurring charges was a "public servant" within the meaning of section 21 of the Indian Penal Code. Held, that the power to make payment of fixed recurring charges, such as pay bills, imposed a "duty" on the Chairman to do so when necessary as the power was vested in the Chairman for the benefit of the persons entitled to receive those recurring charges. Julius vs Lord Bishop of Oxford, , referred to. Section 21, Cl. 1O of the Indian Penal Code merely requires that the person should have the "duty" to expend property for certain purposes and is not restricted to such cases only where there is no limitation on the exercise of that power of expending property. The Chairman had the duty to order payment and spend money of the Municipality in certain circumstances and as such was a "public servant".

The petitioner was Second in Command of 1. N. section Mysore which came to Bombay in the beginning of March, 1959. Soon thereafter he was arrested on a charge of murder under section 302 of the 'Indian Penal Code and was placed, and continued to remain, in naval custody all along during his trial. In due course he was placed on trial by a jury before the Sessions Judge, Greater Bombay, in which the jury returned a verdict of not guilty by a majority; but the Sessions judge disagreeing with the verdict of the jury made a reference to the High Court which convicted the petitioner under section 302 of the Indian Penal Code and sentenced him to imprisonment for life. On the same day when the High Court pronounced its judgment the Governor of Bombay passed an order under article 161 of the Constitution of India suspending the sentence passed by the High Court of Bombay on the petitioner until the appeal intended to be filed by him in the Supreme Court against his conviction and sentence was disposed of and subject meanwhile to the condition that he shall be detained in the Naval Jail custody. A warrant for the arrest of the petitioner which was issued in pursuance of the judgment of the High Court was returned unserved with the report that it could not be served in view of the order of the Governor suspending the sentence passed upon the petitioner. In course of the hearing of an application for leave to appeal to the Supreme Court filed by the petitioner in the High Court the matter of the unexecuted warrant was placed before it and a Special Bench of the High Court after examining the validity of the action taken by the Governor came to the conclusion that the order passed by the Governor was not invalid, that the order for detention of the petitioner in naval custody was not unconstitutional and that the sentence passed on the petitioner having been suspended the provisions of 0. XXI, r. 5, of the Supreme Court Rules did not apply and it was not necessary for the petitioner to surrender to his sentence. Thereafter the petitioner filed an application for special leave in the Supreme Court and also another application praying for exemption from compliance with the aforesaid rule and 498 for the hearing of his application for special leave without surrendering to his sentence. His plea at first was that as he was not a free man it was not possible for him to comply with the requirements of 0. XXI, r. 5, of the Supreme Court Rules; but he subsequently amended it to the effect that the aforesaid Rule did not apply to his case in view of the Governor 's order. On a reference of this matter by a Division Bench of this Court to the Constitution Bench for hearing, Held, that the Governor had no power to grant the suspension of sentence for the period during which the matter was sub judice in this Court. The Governor 's order suspending the sentence could only operate until the matter became sub judice in this Court on the filing of the petition for special leave to appeal whereupon this Court being in seisin of the matter would consider whether 0. XXI, r. 5 should be applied or the petitioner should be exempted from the operation thereof as prayed for. It would then be for this Court to pass such orders as it thought fit as to whether bail should be granted to the petitioner or he should surrender to his sentence or to pass such other order as the court deemed fit in the circumstances of the case. On the principle of harmonious construction and to avoid a possible conflict between the powers given under article 161 to the Governor and under article 142 to the Supreme Court, both of which are absolute and unfettered in their respective fields of operation, it must be held that. article 161,does not deal with the suspension of sentence during the time that article 142 is in operation and the matter is sub judice in the Supreme Court. Per KAPUR J. (dissenting) The language of article 161 is of the widest amplitude. It is plenary and an act of grace and clemency and may be termed as benign prerogative of mercy; The power of pardon is absolute and exercisable at any time. Rules framed under article 145 are subordinate legislation and cannot override the provisions of article 161 of the Constitution itself. While the Governor 's power to grant pardon is a power specially conferred upon him as was vested in the British Governor in British days, the power given to the Court under article 142(1) is a general power exercisable for doing complete justice in any cause or matter, and if they deal with the same matter then article 161 must prevail over article 142(1). The two powers may have the same effect but they operate in distinct fields on different principles taking wholly irreconcilable factors into consideration. The action taken by the executive being the exercise of overriding power is not subject to judicial review. It could not have been the intention of the framers of the Constitution that the amplitude of executive power should be restricted as to become suspended for the period of pendency of an appeal in the Supreme Court.

The respondent, holding the substantive rank of a Head Constable in the Madras Police Service, was promoted to officiate as a probationary Sub Inspector and, on the completion of the period of probation, placed in the category of approved probationers for confirmation when substantive vacancies arose. Instead of being confirmed he was, for administrative reasons, reverted to his substantive post as the number of vacancies in the post of Sub Inspectors was not sufficient to include him. Having failed to obtain redress from the Government, he moved the High Court under article 226 of the Constitution. Annexure 1 of r. 3 of the service rules provided that the percentage of promotions from the rank of Head Constable to that of Sub Inspector was to be "upto not more than 30% of the cadre", but provided no limitation for direct recruitment, r. 4 provided that no vacancy shall be filled by the appointment of a person who had not yet commenced his probation when an approved probationer or a probationer was available; cl. (a) of r. 5 provided that, for want of vacancy, the probationers were to be discharged first in order of juniority and thereafter the approved probationers in order of juniority and cl. (b) provided that this order of discharge might be departed from in cases involving, among others, exceptional administrative inconvenience. The Single judge, who heard the matter, held that there was a violation of r. 3 of the Service Rules and directed the State not to give effect to the order of reversion if by virtue of his seniority he could be included within the 30% prescribed for rank promotees by that rule. The Division Bench, on appeal, disagreed with the trial judge as to the scope of r. 3 but dismissed the appeal holding that the rule as to juniority prescribed by r. 5 of the service rules had not been strictly observed. The State filed an appeal on a certificate granted by the High Court. Held, that the words "upto and not more than 30% Of the cadre" in the Annexure 1 to r. 3, construed in the context of the provision relating to direct recruits which prescribes no limitation, clearly fix 30 as the maximum percentage of promotions 46 from the rank of Head Constables to the post of Sub Inspectors and leave the appointing authorities free to adopt any other percentage below that figure. There could, therefore, be no infraction of the rule if the percentage of rank promotees was less than 30% of the total number of the Sub Inspectors on ' the date of the reversion in question. Rule 4, which regulates the right of probationers and approved probationers to confirmation, applies only to the stage prior to confirmation when the integration of the rank promotees and the direct recruits takes place so as to form a united service and the proportion prescribed by r. 3 has effect. That rule has to be separately applied to the two classes and, consequently, there was no violation of that rule in appointing direct recruits to substantive posts in preference to the respondent. Under r. 5(a) the juniority for purposes of reversion has, on the same reasoning, to be determined separately for the direct recruits and the rank promotees who constitute separate classes. Even otherwise, the impugned order could be sustained under r. 5(b) in view of the case of administrative inconvenience made by the Government and accepted by the Courts below.

Appellant joined the Military Engineering Service as Assistant Executive Engineer, upon his selection by the Union Public Service Commission through the combined Engi neering Service Examination held in 1960. He represented that his previous service in Central Government should be considered in fixing his seniority. in the seniority list published, the appellant 's name was shown at 483rd position. The appellant made a representation against the lower place ment. Departmental Promotion Committee did not consider him for promotion because of the lower placement. Challenging the lower placement, the appellant filed a suit before the Civil Court which was dismissed. His first appeal before the District Judge as also the second appeal before the High Court met the same fate. This appeal, by special leave, is against the judgment of the High Court. The respondents resisted the appeal on grounds of limitation and res judicata. Allowing the appeal, HELD: 1.1. There has been no dispute in the Courts below, and here too, that the appellant has been legally recruited to the service. The Union of India accepted the position that recruitment through the Union Public Service Commission had been regularly made and the post was not a temporary one but as the performance of the appellant had not been of a high order, he had been placed below treating him to be temporary a position for which there is not much of legal support. [770B C, E, F] 1.2. Strictly speaking, Janardhana 's decision may not have the effect of res judicata for the present litigation, but in a dispute of the present dimension where hundreds of employees are concerned, it would not be proper for the employees to litigate over the same issue 768 from time to time. If it would be open to members of the service from time to time to raise disputes of the same nature and introduce uncertainty into the service, that would affect the efficiency of the service and would be against public interest. That also would call into jeopardy the guarantees of public service and expose the officers into an atmosphere of insecurity. A seniority list of a cadre should not be made the subject matter of debate too often. [771B D] A. Janardhana vs Union of India & Ors., ; ; affirmed. The plea of limitation raised by the respondents should not have been upheld in the facts of the case. The seniority list was being changed from time to time. The appellant had represented against the 1967 seniority list. The dispute was already pending before this Court in Bachan Singh 's case. In fact, without waiting for the judgment of this Court in that case, the plaintiff came to Court on 22.3.1971. The appellant was entitled to make a representa tion against the seniority list and rejection of the repre sentation actually would have given him the cause of action. In these circumstances, non suiting him on the plea of limitation would not at all be justified. [772E G] Bachan Singh vs Union of India, ; , referred to. Individual claims, could not have been barred from consideration if by the time Janardhana 's case came to be disposed of, claims were pending adjudication before the Court. Appellant 's case was already before the High Court by the time Janardhana 's appeal was disposed of by this Court. The stand taken by Respondent No. 1 that it was open to the appellant to appear in the competitive examination in the succeeding year to better his position, is no justification for depriving him of his legitimate claim to a higher place ment in the seniority in the cadre. Appellant 's position shall be shown below the recuirts of 1960 and above those of 1961 and he may be bracketed with one who has been assigned that position and an appropriate rectification shall be made in the seniority list of 1967 on the basis of the placement in terms of this judgment. His entitlement to promotion on the basis of such position shall be considered by the re spondents within four months hence. [772H; 773A D]

The petitioner challenged the order of the High Court recommending his supersession by promoting other Sub judges as Additional District Judges, and also the acceptance thereof by the Government, on the ground that his judicial career was without any blemish and therefore, the impugned orders were in violation of Articles 14 and 16 of the Constitution and that there was a colour of malice in the recommendation by the High Court. Dismissing the petition, the Court ^ HELD: 1. All that Article 16 requires is that the case of the employees similarly situate and eligible for promotion must be considered before others are promoted. The petitioner must establish that his case was not considered at all and persons junior to him were promoted without any reason. [457D E] In this case, Article 16 is not violated as his case for promotion was fully considered by the High Court and the Government an(l then it was decided not to promote him. At any rate, since the High Court is the best. judge of the performance of its officers and if the High Court was not satisfied about the suitability of the Petitioner having regard to his past record, for promotion article 16 is not attracted and this Court would not, therefore interfere at this state. [457B C. 458A B] (b) The petitioner and other Sub judges not being similarly situate as being of equal merit the question of discrimination or infraction of Article 14 of the Constitution also does not arise. [457H, 458AB] Supreme Court cannot take notice of allegation of malice as an argument when no such plea has been taken in the petition or proved in the affidavit filed in support of the petition. [458B]

% These appeals together with a petition for special leave raised a common question of law whether against an order of a District Court in revision under section 20 of the Kerala Buildings (Lease & Rent) Control Act 2 of 1965, a further revision would lie to the High Court under section 115 of the Code of Civil Procedure. Though the question was not res integra in view of the decision of this Court in Aundal Ammal vs Sadasivan Pillai, , the matters were listed for consideration, by a Bench of three Judges, of the very same question in order to see whether there was any conflict between the views taken in Aundal Ammal 's case above said and a later decision of this Court in Shyamaraju Hegde vs G. Venkatesha Bhatt & Ors., ; , and whether the view taken in the earlier case required reconsideration. Aundal Ammal 's case arose under the Kerala Act afore mentioned, and the Shyamaraju Hegde 's case was under the karnataka Rent Control Act, and there were essential differences between the two Acts. The scope and effect of section 20(1) read with section 18(5) of the Kerala Act came to be examined by a full Bench of the Kerala High Court in Vareed vs Mary, A.I.R. 1969 Kerala 103, which held that a decision of a District Court under section 20 of the Kerala Act was undoubtedly amenable to the revisional jurisdiction of the High Court under section 115 of the Code of Civil Procedure. The question decided by the full Bench of the Kerala High Court as above mentioned, came to be considered by this Court (a Bench of two Hon. Judges) in Aundal Ammal 's case (supra), and the Court held that the ratio laid down by the Kerala High Court in Vareed 's case (supra) could not be approved because the High Court had not properly construed the sections 18(5) 872 and 20 of the Kerala Act, and was in error. So far as the Karnataka Act was concerned, this Court held in Shyamaraju Hegde 's case (supra) that an order of a District Judge under section 50(2), though it conferred finality under the Act, was nevertheless open to challenge before the High Court by revision under section 115 C.P.C. by the aggrieved party. What fell for consideration in the present cases was whether there was any conflict between the decisions in Aundal Ammal 's case (supra) and Shyamaraju Hegde 's case (supra) and whether the ratio in the former case required reconsideration. Disposing of the Appeals and the Petition for Special Leave, the Court, ^ HELD: Per Sabyasachi Mukharji & section Natarajan, JJ. After examining the differences between the two Acts in detail, the Court concluded that there was really no conflict between the two decisions of this Court in Aundal Ammal 's case (supra) and Shyamaraju Hegde 's case (supra), because the provisions in the two Acts were materially different. As to the question whether a fresh thinking was called for on the scope of section 20 read with section 18(5) of the Kerala Act, the Court did not find any grounds for reconsidering the view taken in the Aundal Ammal 's case; on the contrary, the renewed discussion by the Court of the matter called for a reiteration of the view expressed in Aundal Ammal 's case. [889C D] The Court was unable to conntenance in the circumstances of the case, the argument advanced that since the decision of the Kerala High Court in Vareed vs Mary aforementioned had been a good law for a number of years in the Kerala State and since the High Court had been entertaining revision petitions under section 115 C.P.C. against the revisional orders of the District Courts under sections 20(1) of the Kerala Act, the decision should have been allowed to stand even though the reasoning therein was not commendable for acceptance by this Court, and the reason therefore, the Court observed, could be set out by referring to certain English decisions and the reasoning adopted therein, in West Ham Union vs Edmonten Union, 13 at 4; Robinson Brothers (Brewers) Ltd. vs Hongton V. Chester i.e. Street Assessment Committee, 12 , affirmed in These decisions had been followed in Brownsee Haven Proper 873 ties Ltd. vs Poole Corporation, On similar lines, this Court deemed it necessary to overrule the ratio in Vareed vs Mary (supra), as the decision suffered from miscontruction of the relevant sections in the Act, and the weakness in the reasoning became manifest in the light of the subsequent decision of this Court such as in Vishesh Kumar vs Shanti Prasad, ; = ; = ; ; 890A C] In the light of the conclusion of the Court, all the appeals succeeded in so far as the challenge to the right of the High Court to entertain revision petitions under section 115, C.P.C., was concerned. In Civil Appeals Nos. 626 of 1981 and 624 of 1985, the High Court allowed the revision petitions under section 115 C.P.C., and ordered the eviction of the tenants. In Civil Appeal No. 2079 of 1981, the District Judge set aside the order of eviction but the High Court restored the order of eviction. In the Civil Appeal No. 1619 of 1986, the District Judge allowed the Revision and restored the order of eviction passed by the Rent Controller and the High Court confirmed the said order in revisions. In the Civil Appeal No. 7505 of 1983, the District Judge reversed the decisions of the Rent Controller and the Appellant Authority and ordered eviction and the High Court confirmed the order of the District Judge. In the petition for special leave listed with the appeals, the Appellate Authority sustained the claim of the landlord for eviction under section 11(3) of the Act but remanded the case to the Rent Controller for deciding the question whether the tenant was entitled to resist the claim for eviction. The District Court and the High Court confirmed the order of remand.[890D G] In accordance with the pronouncement of the Court, the order of the High Court under section 115 C.P.C., in each of the appeals above mentioned was set aside and the revisional order of the District Judge in each case, restored to become operative. The appeals were directed only against the orders of the High Court passed in revision, and they were disposed of with the pronouncement of the Court on the above lines. [890G H; 891A] In the petition for special leave also, the order of the High Court under section 115 C.P.C., was not sustainable, but even so, the Court did not find any merit in the petition, because the finding of the Appellate Authority and the order of remand passed by it had been confirmed by the District Court 'and as such, there were no merits in the petition. [891B] 874 Per section Ranganathan, J. (dissenting) While a number of enactments of various States on rent control confer specific jurisdiction on the State High Courts, some others are broadly on the same pattern as the Kerala and Karnataka enactments. Though the Court was concerned only with Kerala and Karnataka enactments in these matters, a similar question might well arise under the corresponding enactments of some other States as well.[891C D] The Kerala and Karnataka Rent Control Acts vest power of revision in the District Judge against certain orders. The question in these matters was whether the jurisdiction of the High Court under section 115 C.P.C., could be invoked to seek a further revision of the revisional order passed by the District Judge. This question was answered in the negative in Aundal Ammal vs Sadasivan Pillai, [1987] 1 SCC 133 (a decision under the Kerala Act) but in the affirmative in Shyamaraju Hegde vs Venkatesha Bhat, ; (a decision under the Karnataka Act), and hence this reference to a larger Bench.[891E F] Normally, a revision lies to the High Court under section 115 of the C.P.C. against any order of the District Judge/Court. The fact that the order might have been passed under a special statute or that the statute contained expressions purporting to confer finality on the order of the District Judge/Court or a subordinate authority or Court, had been held insufficient to take away this jurisdiction. This was the effect of the decisions in Chhagan Lal vs The Municipal Corporation, Indore, ; and Krishandas Bhatija vs Venkatachala Shetty, S.L.P. No. 913 of 1978 decided on 13.2.1978 and Shyamaraju 's case (supra), which were direct decisions under the Karnataka Act. In the opinion of his Lordship, there was no vital or material difference between the two enactments in this respect and that the same result should follow under the Kerala Act also. [891G H; 892A B] Under the Karnataka Act, after its amendments in 1975, the rent control matters are decided, in the first instance, by the District Munsiff or the Civil Judge/Rent Controller. There is no provision for an appeal from this order but there is one for revision. This revisional power is bifurcated under section 50 between the High Court and the District Court. The High Court is empowered to revise the order of the Civil Judge/Rent Controller and the District Judge that of the District Munsiff. Section 50(2) specifically declares that the order of the District Judge under this provision is final. The Kerala pattern is the same except that section 18 provides for an appeal from the Rent Controller 875 to an officer or an authority of the rank of a Subordinate Judge or of a superior rank. Section 20 provides for revision. The revisional power is to be exercised by the District Court where the appellate authority is the subordinate Judge, and the High Court, in other cases. Section 20 does not provide, as does section 50 of the Karnataka Act, that the decision of the District Judge would be final. The much wider and more emphatic language of the Karnataka Act does not exclude the jurisdiction of the High Court under section 115 of the C.P.C., as had been held in the two cases referred to above, and it was difficult to see the justification for reading any such exclusion into the Kerala Act. [892C H] This led to the question of a choice between the two views of this Court one in Shyamaraju and the other, in Aundal Ammal. Shyamaraju followed the earlier decisions of this Court in Chhagan Lal vs The Municipal Corporation, Indore, AIR 1977 SC 1955 and Krishnadas Bhatija vs A.S. Venkatachala Shetty, SLP (Civil) No. 913 of 1978, decided on February 13, 1978. The only other decision of this Court, having relevance in the present context, was Vishesh Kumar vs Shanti Prasad, ; , relied upon in Aundal Ammal. His Lordship was in agreement with the view in Shyamaraju that Vishesh Kumar was rendered in a totally statutory context. That decision turned largely on legislative history of section 115 of the C.P.C. and section 25 of the Provincial Small Causes Courts Act, in their application to the State of Uttar Pradesh. His Lordship was, therefore, inclined to lean in favour of the view that had commended itself to this Court as to the interpretation of the Karnataka Act, and to hold that the High Court had a power of revision over the order of the District Judge under the Kerala Act as well. The result of applying Aundal Ammal would be to completely exclude the High Court in the Rent Control matters, and, this, as the two Acts were in pari materia according to his Lordship 's view, would leave the litigant in Karnataka only a right of revision to the District Court. It was doubtful whether, in the absence of clear language, the Legislature could be held to have intended to completely exclude the jurisdiction of the High Court in such an important Branch of law. The provisions did not and could not, in his Lordship 's view, preclude the applicability of section 115 of the C.P.C. to an order passed by the District Court, not as a persona designata, but as a civil court of the land. Section 18 and 20 had a vital role to pay but their effect was not to eliminate the revisional jurisdiction of the High Court under section 115. [893A F; 894B C] As a result of the various decisions of the Courts, the position had been that right through in the State of Karnataka and for at least a 876 period of 20 years in the State of Kerala, the prevalent view had been in favour of the maintainability of a second revision by the High Court. In a matter of procedure, such a long standing practice should not be disturbed unless the statutory indication was quite clear to the contrary. [894F] The revision petitions before the High Court were maintainable.[894G] Aundal Ammal vs Sadasivan Pillai, [1987] 1 S.C.C. 133; Shyamaraju Hegde vs G. Venkatesha Bhatt & Ors. , ; ; Balagangadhara Menon vs T.V. Peter, [1984] K.L.T. 845; Vareed vs Mary, AIR 1969 103; Vishesh Kumar vs Shanti Prasad, ; Krishnaji Venkatesh Shirodkar vs Gurupad Shivram Kavalekar & Ors., ILR 1978 Karnataka 1585; Chhaganlal vs The Municipal Corporation, Indore, ; ; Krishnadas Bhatija vs A.S. Venkatachala Shetty, SLP (Civil) No. 913 of 1978, decided on February 13, 1978; M.M. Yaragatti vs Vasant & Ors., AIR 1987 Karnataka 186; S.S. Khanna vs F.J. Dillon, AIR 1954 S.C. 497; West Ham Union vs Domonton Union, 13 at 4; Robinson Brothers (Brewers) Ltd. vs Honghton & Chester_ie_Street Assessment Committee, 12 and and Brownsee Haven Properties Ltd. vs Poole Corporation, referred to.

The respondent was convicted for an offence under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act, 1947 and section 161 of the I.P.C. The conviction was set aside by the High Court on the sole ground that the sanction for his prosecution was not accorded by a competent authority. The respondent was a Civilian in the Defence Services in the rank of temporary Superintendent, Building and oRads Grade I. The prosecution case was that he had accepted illegal gratification of Rs. 300/ from one Brij Bhushan Lal,Contractor, as a motive or reward for doing an official act. The sanction for the prosecution of the re spondent was accorded by Brig. Naresh Prasad Chief Engineer, North Western Zone, Chandigarh. The High Court held that Brig. Naresh Prasad had no authority under the relevant rules either plenary or dele gated to appoint a person to a post in class III service at the time when he passed the order for sanction of prose cution. That such a power was delegated to him subsequent ly. The learned Judge held that the authority was the Chief Engineer, Western Command and not the Zonal Chief Engineer. Section 6(1) of the Prevention of Corruption Act pro vides that no Court shall take cognizance of the offence in question alleged to have been committed by a public servant except with the previous sanction of the officer enumerated in clauses (a), (b) and (c) of that section. Sub section 2 of section 6 further provides that where for any reason whatsoever any doubt arises whether the previous sanction as required under sub section (1) should be given by the Central or State Government or any other authority such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed. The appellant contended that by an order communicated by letter dated 27 4 1956 (subsequently reiterated in letter dr. 23 1 1963) made under rule 10 the Engineer in Chief had empowered all Chief Engineers in Military Engg. Service to make first appointments and that the operation of the said order was preserved by the saving clause in rule 34(1) of the 1965 Rules. The appellant further contended that the fetter placed on the power given to the Chief Engineers in the matter of removal or dismissal of Class III servants operates only in case of persons appointed by the Engineer in Chief and not where he was appointed by the Chief Engi neer of a Command. In the present case, the respondent was appointed not by Engineer in Chief but by the Chief Engi neer, Western Command. The respondent contended that the order dated 27 4 1956 expressly delegates the power of making first appointments only to the Chief Engineers of the three commands then in existence and of the 'other departments specified therein. In 1956, when the order was made there were no zonal Chief Enginers, which 594 came into existence in December, 1962 as a class apart working under the overall administrative control of the Chief Engineers of Commands. A general delegation of the power in favour of the Chief Engineers of Commands as a class cannot by any reckoning amount to a delegation in favour of the Zonal Engineers also working under the control of the Chief Engineers of Commands. Secondly, the letter dated 23 1 1963 was not issued under the signature of the Engineer in Chief nor can it be construed as a delegation of the power of appointment under rule 10. Alternatively, the power delegated by the Engineer in Chief to the Chief Engi neers was a qualified one inasmuch as no power was given to them to dismiss or remove a Government servant of Class III service. Dismissing the appeal, HELD: (1 ) Unless a different intention appears the power to appoint to an office includes the power to dis miss or remove from that office as provided in section 16 of General Clauses Act. The post which the respondent was holding is a post of Class III service and the members of the service are governed by Central CiVil Services (Classi fication, Control and Appeal) Rules, 1965. 1965 Rules repeal the earlier 1952 Rules and any notification or orders issued thereunder in so far as they were inconsistent with the 1965 rules. Under rule 10, appointments to Class III and Class IV Civilian Service are to be made by the officers empowered by the Engineer in Chief. Thus the appointing authority is competent to delegate the power of appointment. [596 B, C, G H, 597D] (2) A perusal of the letter dated 27 4 1956 communicat ing the order of the Engineer in Chief shows that it is addressed to the Chief Engineers, Southern Command, Eastern Command and Western Command. On the date of this letter there were only 3 Commands; two Commands were created subse quently. There were no Zones or Zonal Chief Engineers at that time. Therefore, the Chief Engineers to whom the powers have been delegated under this letter could only be the Chief Engineers of the Commands as a class and it would cover Chief Engineers of the Commands which were subsequent ly created. But it would not include the Chief Engineers of Zone. Zonal Chief Engineers have, to work under the Command and technical control of Chief Engineers of Com mands. Zonal Chief Engineers are a class apart from the Chief Engineers of Commands. They are under the administra tive control of the Chief Engineers of Command. Thus the delegation is to the Chief Engineers of Commands and not to the Zonal Chief Engineers. [600 A B, F H 601 A B] (3) The letter dated 23 1 1963 is not signed by the Engineer in Chief. It appears to have been signed by some other person for Engineer in Chief. Nor does it purport to have been issued pursuant to any separately passed order of the Engineer in Chief expressly delegating the powers of appointment to posts in Class III service under Rule 10. There is nothing in the letter to show that the delegation was to the Zonal Chief Engineers. On the contrary, para 8 of the letter talks of the Command Chief Engineers. The way in which the Engineer in Chief has construed the letter is not relevant. [601 G H, 602AB] (4) Brig. Naresh Prasad, Zonal Chief Engineer was not competent to remove the respondent and as such, the order sanctioning the prosecution of the respondent was bad in law. [602 C]

The respondent was appointed as a Sub Inspector of police in a temporary post in 1955. He was discharged from service on July 13, 1957. A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959. Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State. A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal. Allowing the State appeal by special leave the Court, ^ HELD: 1. The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law. [1130D] 2. The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants. After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given. [1128F G] 3. It was open to the superior authority to terminate the respondent 's services on the ground on which it did so. And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment. A departmental enquiry is not required under the law. Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided. [1128H, 1129A, E] State of U.P.v. Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr. vs Shri Sukh Raj Bahadur, ; ; referred to. Union of India & Ors. vs R. section Dhaba, , State of Bihar & Ors. vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied. The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127

31 of 1959. Petition under article 32 of the Constitution of India, for enforcement of Fundamental Rights. M. C. Setalvad, Attorney General of India, section N. Andley, J. B. Dadachanji, Pameshwar Nath and P. L. Vohra, for the petitioners. B. Sen and I. N. Shroff, for the respondent. February 10. The Judgment of the Court was delivered by AYYANGAR, J. This petition under article 32 has been filed impugning the validity of two notices of demand served on the petitioners requiring them to pay what has been compendiously described as "coal tax" by the respondent, which is a Local Board constituted under the Central Provinces & Berar Local Government Act, 1948 (C. P. & Berar Act XXXVIII of 1948). The ground of challenge is that there was no legislative power for the levy of the tax and that consequently the fundamental rights of the petitioners under article 19(1)(f) and (g) are being violated. It may be stated at the outset that the tax now impugned has been imposed by the local authority, 3 from March 12, 1935 and that the first occasion when its validity was attacked was in only 1957, though if the petitioners are right in their submissions their acquiescence might not itself be a ground for denying them relief Before however we set out the points urged by the learned Attorney General in support of the petition, it would be convenient if we narrate briefly the history of the levy of this tax. Section 51 of the Central Provinces Local Self Government Act, 1920 (C. P. Act IV of 1920), which will be referred to hereafter as the Act, ran: "51(1). Subject to the provision of any law or enactment for the time being in force, a district council may, by a, resolution passed by a majority of not less than two thirds of the members present at a special meeting convened for the purpose, impose any tax, toll or rate other than those specified in sections 24, 48, 49 and 50. The first imposition of any tax, toll or rate under sub section (1) shall be subject to the previous sanction of the local Government. " The petitioners are working certain mines situated in the district of Chhindwara and for the area covered by the mines an Independent Mining Local Board was constituted in or about 1926 and such Boards are included in the definition of a Local Board under the Act and they have vested in them all the powers of a District Council. This Mining Board, after obtaining the previous approval of the local Government, passed on March 12, 1935, by the majority requisite under E;. 51(1) of the Act a resolution to impose a tax on coal, coal dust and coke in the following terms: "The tax shall be levied at the rate of three pies per ton on coal, coal dust or coke, manufactured at the mines, sold for export by rail or sold otherwise than for export by rail within the territorial jurisdiction of the Independent Mining Local Board. " The tax has been levied and collected ever since. The Local Self Government Act of 1920 was repealed and re enacted by the Central Provinces & Berar Local Government Act, 1948, but nothing turns on 4 this, because the later enactment and certain amendments made subsequently contain provisions for the continuance of the Local Boards constituted under. the repealed enactment and for the continued exigibility of the taxes and ceases in force at the date of the commencement of the Act of 1948. The respondent was, as stated earlier, constituted under the Act of 1948 and is admittedly the successor of the Inde pendent Mining Board which imposed the tax by its resolution dated March 12, 1935, and is legally entitled to continue the levy if the original imposition was valid. There is only one other matter to be mentioned at this stage, viz., that the rate of duty which, as seen from the resolution extracted earlier, was 3 pies per ton when imposed in 1935 was raised by the local body to 9 pies per ton in 1949, this being the rate which now prevails. On August 23, 1958, the Chief Executive Officer of the respondent Sabha served two notices of demand on the first and second petitioners requiring them to pay sums of Rs. 21,898.64 and Rs. 11,838 09 respectively as the tax due by each, for despatches of coal from their respective mines for the period January 1, 1958, to June 30, 1958. It is the validity of these notices that is impugned in this petition. The submissions of the learned Attorney General were three: (1) The levy of the tax by the Independent Mining Board was invalid at the date of its original imposition in 1935, and consequently the respondent Sabha its successor obtained no authority to continue the same. (2) Assuming the levy was valid when originally imposed, it ceased to be legal after the coming into force, first of the Government of India Act, 1935 and later of the Constitution of India in 1950 under which the tax in question or some portions of it became exclusively leviable by the Central or Union Government and would not be covered by the saving as to previously existing taxes in section 143 of the Government of India Act, 1935, and subsequently of article 277 of the Constitution. 5 (3) Assuming further that the provision contained in section 143 of the Government of India Act covered the tax, the protection afforded by it or the continuance for which it provided, is only for a tax at the rate of 3 pies per ton prevailing before the commencement of the Government of India Act (April 1, 1937), and the increase in the rate to 9 pies per ton in 1949 rendered the levy and the demand illegal either in whole or at least in part. We shall now proceed to deal with these points in that order: (1) That the imposition of the tax by the Independent Mining Board by resolution dated March 12, 1935, was invalid. This was sought to be rested on three distinct grounds: (a) that the levy of the tax was in contravention of section 80A(3) of the Government of India Act, 1915. Section 80A(3) enacted, to quote only the part material: "The local legislature of any province may not, without the previous sanction of the Governor General, make or take into consideration any law(a) imposing or authorising the imposition of any new tax unless the tax is a tax scheduled as exempted from this provision by rules made under this Act; or " The taxes now impugned are not within those enumerated in the schedules to the Scheduled Taxes Rules and hence the previous sanction of the Governor General was required before a bill authorising the levy of the tax could be taken into consideration. And the Act which by a. 51 authorised the imposition of the tax, had been passed by the local legislature without the previous sanction of the Government having been obtained. The petition as filed setting out this contention proceeds on the basis that the Act was passed after the Government of India Act, 1919, by which section 80A was introduced into the Act of 1915 came into force. If ,that had been the correct position, the proviso to ,section 80A(3) reading: 6 "Provided that an Act or a provision of an Act made by a local legislature, and subsequently assented to by the Governor General in pursuance of this Act, shall not be deemed invalid by reason only of its requiring the previous sanction of the Governor General under this Act." would be a complete answer to the above objection, since under the Government of India Act, 1915, before and after its amendment in 1919, every bill passed by a local legislative council had, after receiving the assent of the Governor, to be transmitted to the Governor General and could become law only after the latter had signified his assent (Vide section 81(1) & (3) of the Act). That the Governor General had assented to the Act under this provision was never in dispute. The saving contained in the proviso is, it should be noticed, in addition to the general saving contained section 84(2) of the Government of India Act (to read only the material words): ". the validity of any Act of. any local legislature shall not be open to question in any legal proceedings on the ground that the Act affects . a central subject" which is of wider import and designed to remove all questions of legislative competence of the type now put forward from the purview of Courts. At the stage of the arguments, however, it was found. that the Act had become law even prior to the coming into force of the Government of India Act, 1919, with the result that the contention raised in the petition based on section 80A(3) could not be urged. From the recitals at the beginning of the Act it was found that the previous sanction of the Governor General had been obtained to the introduction of the measure in the Local Legislature under section 79(2) of the Government of India Act, 1915 i.e., before section 80A(3) intro duced into the Government of India Act, 1919, was brought into force. The learned Attorney General, therefore, modified his argument and presented it in this form: No doubt when section 51 of the Act was enacted, it was within the competence of the Local Legislature. But the power conferred by that section to levy the tax was exercised 7 only in 1935 and by that date section 80A had been introduced into the Government of India Act and thereafter there could be no local imposition of a tax, not included in the Scheduled Taxes Rules without the previous sanction of the Governor General being obtained. We consider this argument wholly without force. The validity of section 51 of the Act, when enacted, not being open to any objection under the Government of India Act, 1915, the amendments effected to the Government of India Act, 1915, by the Act of 1919 did not in any manner, or to any extent, expressly or even by implication affect or trench upon the continued validity and operation of that section. Obviously, section 80A(3) was only concerned to lay down the preliminaries for enacting a law after that provision came into force and after a law has once been enacted and is in operation, there is no question of the procedure laid down for bills being attracted. This apart, all controversy is set at rest and any argument of the type now urged is precluded by r. 5 of the Scheduled Taxes Rules which runs: "Nothing in these rules shall affect the right of a local authority to impose a tax without previous sanction or with the previous sanction of the local Government when such right is conferred upon it by any law for the time being in force. " The submission therefore that before the power conferred by section 51 of the Act, the previous sanction of the Governor General had to be obtained or that there must be fresh legislation, must be rejected. (b) The second matter urged under this head was based on the meaning to be given to the opening words of section 51 of the Act: "Subject to the provision of any law or enactment for the time being in force". it was suggested that the provision contained in a. 80A(3) of the Government of India Act read with the Scheduled Taxes Rules framed under that section constituted "a law for the time being in force" to ,which the power to levy the tax was subject. In the first place, it is clear that a law like that which is found in section 80A(3) prescribing a procedure for enacting future Acts of the Local Legislature could not be 8 comprehended within those words. But even if it did, in the face of r. 5 of the Scheduled Taxes Rules, the construction suggested could have no basis. (c) The last reason assigned for disputing the validity of the original imposition of the tax, was that section 51 of the Act on its language and in the context of the other provisions referred to in that section, did not authorise the levy of a tax or cess of the nature of the "coal tax". We are wholly unable to accept this argument. The relevant words of section 51 are: "impose any tax, toll or rate other than those specified in sections 24, 48, 49 and 50". It is not suggested that "the coal tax" is one specified in any of the sections set out, and hence there was power to levy any other tax including that which is now impugned. The learned Attorney General however suggested that the tax authorised by section 51 should still be somewhat like the taxes referred to in the other sections, though not identical with them. Obviously, in the face of the words "other than those. " the rule Of ejusdem generis is contra indicated and if so on no rule of construction could "the coal tax" be excluded from the purview of the local authority. We, therefore, hold that the original imposition of the tax in 1935 was valid. (2) The next question is: has the tax ceased to be legally leviable by reason of the coming into force of the Government of India Act, 1935 and of the Constitution? Both these constitutional enactments contain express provisions whereby taxes, cesses, etc., which were previously lawfully levied by local authorities for the purposes of their local areas, might continue to be collected and applied for the same purposes notwithstanding that those taxes could thereafter be imposed only by the Central or the Union Government, as the case may be (Vide section 143 of the Government of India Act, 1935, and article 277 of the Constitution). The objection therefore that "coal tax" or some of the components of it, could have been imposed only by the Central Government or the Union Government is no ground for impugning the continued validity and exigibility of the tax. It is needless to add that if the 9 tax fell within the Provincial or the State List, the levy would be valid under section 292 of the Government of India Act and article 372 of the Constitution even without the aid of the special provision in section 143 or article 277. In view of those considerations the learned Attorney General did not address us seriously on this point. (3) The last point urged was as regards the validity of the increase in the rate of tax to 9 pies per ton effected in 1949, i.e., after the commencement of Government of India Act, 1935. This objection was not even hinted in the petition now before us, and we did not consider it proper to permit petitioners to raise the point. The result is that the petition falls and is dismissed with costs. Petition dismissed.

Section 51 of the Central Provinces Local Self Government Act, 1920 empowered a district council, subject to the previous sanction of the local Government, to impose "any tax, toll or rate, other than those specified in SS. 24, 48,49, and 50. " On March 12, 1935, an Independent. Mining Local Board functioning in the area in which the petitioners were working certain mines situated therein, and having vested in it all the powers of a district council, resolved to impose a tax on coal, coal dust and coke manufactured at the mines or sold within the territorial jurisdiction of the Board. The petitioners who were served with notices of demand requiring them to pay certain sums of money as the tax due by them for despatches of coal from their mines, challenged the legality of the levy of the tax on the grounds, inter alia (1) that the Act which by section 51 authorised the imposition of the tax, had been passed by the local legislature without the previous sanction of the Governor General, thereby contravening section 80A(3) of the Government of India Act, 1915, and that even if it was found that the Act was validly passed before the coming into force of the Government of India Act, 1919, which introduced section 80A into the Act of r 1915, the power conferred by section 51 to levy tax was exercised only in 1935 and by that date S.80 A had been introduced into the Government of India Act,1915, and that thereafter there could be no legal imposition of a tax without the previous sanction of the Governor General being obtained, (2) that section 51 Of the Central Provinces Local Self Government Act, 1920, on its language and in the context of other provisions referred to in that section, did not authorise .the levy of a tax of the nature of the coal tax, and (3) that, in any case, the tax ceased to be legally leviable after the coming 2 into force of the Government of India Act, 1935, and of the Constitution of India, since a tax like that in question could be in posed only by the Central Government. Held: (1) that the Central Provinces Local Self Government Act, 1920, having received the assent of the Governor General, its validity cannot be challenged in view of the saving clauses in the proviso to section 80A(3) and section 84(2) of the Government of India Act, 1915. (2) that the validity of Central Provinces Local Self Government Act, 1920, when enacted, not being open to any objection under the Government of India Act, 1915, any subsequent amendments to the latter Act could not in any manner affect its continued validity and operation. (3) that on the proper construction Of section 51 of the Act of 1920, the levy of a coal tax is not excluded from the purview of the local authority. (4) that the continued levy of the tax in question even after the coming into force of the Government of India Act, 1935, and the Constitution of India, is valid in view of section 143 Of the Act of 1935 and article 227 of the Constitution.

Respondent No. 1 acquired tenancy rights in five plots in the villages of Biknaur and Samahuta situated in the area known as Lower Murli Hill in District Shahabad, Bihar. In 1949 he filed a plaint in the Court of the Subordinate Judge Sasaram, against the State of Bihar and others, claiming inter alia that as a tenant he had a customary right to quarry limestone for trade purposes from the Lower Murli Hill. The claim was based mainly on certain entries in the Custom sheets prepared at the time of the Cadastral Survey in 1913 under section 102 of the Bihar Tenancy Act, 1885. The trial court rejected the claim but the High Court held the custom to be established by the evidence of the Customs sheets. The defendants appealed. Held The High Court was in error in holding that the plain tiff had established the custom pleaded by him or that it was reasonable. (i) There was nothing to show that the practices and privileges recorded in the Custom Sheets were exercised as a matter of right. The record has presumptive value. But the revenue authorities were concerned to ascertain the existing state of affairs and not to determine whether the practices and privileges were ancient, certain, reasonable and continuous. As evidence of local custom, the custom sheets had therefore not much value. On the other hand there were indications that the exercise of the privileges recorded therein was permissive. Even on the most liberal interpretation they did not provide evidence of the exercise of the privilege of commercial exploitation of limestone from the area in question. [317D; 319G] (ii) Even granting that the Custom sheets recorded a local custom that the tenants in the villages of Baknaur and Samahuta excavated stones from the hills near the villages for purposes of trade, a claim of right founded on that custom must be held unreasonable and incapable of enforcement by the sanction of a court 's verdict, [320B] A claim in the nature of a profit a prendre operating in favour of an indeterminate class of persons and arising out of a local custom may be held enforceable only if it satisfies the tests of a valid custom. A custom is a usage by virtue of which a class of persons belonging to a defined section in a locality are entitled to exercise specific rights against certain other persons or property in the same locality. To the extent to which it is inconsistent with the general law undoubtedly the custom prevails. But to be valid a custom must be ancient, certain and reasonable, and being in derogation of the general rules of law must be construed strictly. A right in the nature of a profit a prendre in the exercise of which the residents of a locality are entitled to excavate stone for trade purposes would ex facie 313 314 be unreasonable, because the exercise of such a right ordinarily tends to the complete destruction of the subject matter of the profit. The custom, if exercised in its amplitude as claimed, may also lead to breaches of the peace, for it would be open to all tenants to work any quarry simultaneously for trade purposes. [321B D; 324D] Lord Rivers vs Adams, L.R.3 exhibit Div. 361, Harris & Anr. vs Earl of Chesterfield and Anr. , , Alfred F. Beckett Ltd. vs Lyons , referred to Lutchhmeeput Singh vs Sadaulla Nushyo & Ors., I.L.R. 9 Cal. 698 and Arjun Kaibarta vs Manoranjan De Bhoumick, I.L.R. , approved. Henry Goodman vs The Mayor and Free Burgesses of the Borough of Saltash. 7 A.C. 633 and Mercer vs Denne, , 557 distinguished.

Respondent was residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State,. His income arising therein during the accounting year 1949 50 was sought to assessed to income tax 'for the year 1950 51 under the Indian Income tax Act 'as amended by the Indian Finance Act. He presented ' a petition under article 226 to the High Court praying 542 for the issue of a writ directing the Union of India not to assess income tax on his income which had accrued to him prior to April 1, 1950, because no income tax was leviable in Rajasthan (except in the State of Bundi) under any provision of law in force there. The High Court having accepted his petition, the Union of India preferred the present appeal to the Supreme Court. Section 3 of the Finance Act 1950 (Act XXV of 1550) made certain amendments in the Indian Income tax Act with effect from the 1st day of April, 1950" and substituted therein the present el. (14 A) in section 2 in place of previous el. (14 A) defining "taxable territories". Held, that under sub el. (i) of el. (b) of the proviso, the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of section 4 A of the Indian Income tax Act "as respects any period" The words "any period" mean any period before or after March 31, 1950. Respondent was therefore resident in the taxable territories during the accounting year 1949 50 and his income, whetherderived within or without the taxable territories was taxable under section 4 sub section (I) cl. (b) sub el. (ii) of the Indian Income tax Act. Further, all that section 2 (14 A) does is to define what the ex pression "taxable territories" means in certain cases and for certain purposes. wherever that expression is used in the various provisions of the Indian Income tax Act, and as the expression is used in the charging section 4 in connection with the conditions which are to determine liability to tax, sub el. (iii) of cl. (b) of the definition must, when read with section 4 of the Indian Income tax Act, have reference to chargeabiiity of income and not merely to its computation, and therefore sections 3 and 4 of the Indian Income tax Act read in the light of the definition in proviso (b) to the amended section Y. (14 A) and section 2 of the I inance Act, 1950, authorise the imposition of Indian income tax and super tax on the income derived by the respondent in the year 1949 50 in the territory of Rajasthan. Held also, that while it is true that the Constitution has no restrospective operation except where a different intention clearly appears, it is not correct to say that in bringing into existence now legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively. Articles 245 and 246 reda with entry No. 82 of List I of the Seventh Schedule empower Parliament to make laws with to taxes on income for the whole territory of India and limitation or restriction is imposed in regard to retroactive legislation &ad it is, therefore competent for Parliament to make a law imposing a tax on the income of any year prior to the the amendment of section 2, cl (14 A) of the Indian income tax Act by the Finance act by the Finance act the Indian Income tax Act by the Finance ,1950, so as to the authorise the levy of the authorise the levy of tax on income accuring in the territory of Rajasthan in the year 1949 50 ie therefore valid.

On August 19, 1964, officers belonging to the Department of the appellant raided and searched the premises of a company and foreibly removed certain accounts and goods. The respondents challenged the department 's action by writ petitions filed in the High Court under article 226 of the Constitution praying that the articles seized should be returned. It was contended by the petitioners that on a proper construction of section 41 of the Madras General Sales Tax Act, No. 1 of 1959, the officers of the Department had no authority to search the premises and seize any account books or goods found there; that if section 41(4) authorised seizure and confiscation of goods, it was beyond the legislative competence of the State Legislature, for it was not covered by item 54 of List II of the Seventh Schedule to the Constitution relating to "taxes on the sale or purchase of goods"; and that if various provisions in section 41 were capable of being construed as authorising search and seizure, they were violative of article 19(1)(f) and (g) of the Constitution. The High Court allowed the Petitions holding, inter alia, that section 41 (2) did not permit a search being made and only provided for inspection; the power of seizure or confiscation in section 41(4) was beyond the legislative competence of the State Legislature; and that subsections (2), (3) and (4) of section 41 contained unreasonable res trictions and were violative of article 19(1) (f) and (g). The High Court also found with respect to one of the petitions that the search warrant had been issued without the application of Mind by the magistrate and was bad. On appeal to this Court; Held: dismissing the appeal, (i)Anything recovered during the search must be returned to the petitioners for the safeguards provided by section 165 of the Code of Criminal Procedure were not followed and in one case the finding of the High Court that the search warrant issued by the magistrate was bad on various grounds was not challenged; furthermore anything confiscated must also be returned as sub section (4) of section 41 must fall.[163 B D]. Clause (a) of the second proviso to sub section (4) gives power to the officer ordering confiscation to give the person affected an option to pay in lieu of confiscation, in cases where the goods are taxable under the Act, the tax recoverable and an additional amount and thus provides for recovery of tax even before the first sale in 149 the State which is the point of time in a large majority of cases for recovery of tax. As such it was repugnant to the entire scheme of the Act and sub section (4) must therefore be struck down. As Clause (a) compels the officer to give the option and thus compels recovery of tax before the first point of sale, which cannot have occurred in cases of goods seized from the dealer himself, it is clearly intended by the legislature to go together with the main part of the Section and is not therefore severable. [159F 16OD]. (ii) Although generally speaking the power to inspect does not give power to search, where, as in the case of section 41 (2) the power has been given to inspect not merely accounts registers, records, goods, etc., but also to inspect the offices, shops etc. , these two powers together amount to giving the concerned officer the power to enter and search the offices etc. and if he finds any accounts or goods in the offices, shops, etc., to respect them. The High Court was therefore wrong in holding that there was no power of search whatsoever under sub section (2). [154H 155E]. The proviso to sub section (2) in providing that all searches under "this sub section" shall be made in accordance with the provisions of the Code of Criminal Procedure, bears out the construction that the main part of sub section (2) contemplates searches. Similarly it is clear from sub section (3) which gives power to seize accounts etc., in certain circumstances, that sub section (2) must include the power of search for a seizure under sub section (3) is not possible unless there is a search. [156D E. 158B C]. The contention that as the main part of sub section (2) does not provide for search of a purely residential accommodation and therefore the proviso is otiose must be rejected. Although generally a provision is an exception to the main part of the section, it Is recognised that in exceptional cases, as in the present case, the provision may be a substantive provision itself. [156D F]. Bhonda Urban District Council vs Taff Vale Railway Co., L. R. Commissioner of Income tax vs Nandlal Bhandari & Sons , and State of Rajasthan vs Leela Jain. ; , referred to. (ii)Sub sections (2) and (3) of section 41 are not violative of article 19 as they are protected by clauses (5) and (6) of article 19 of the Constitution. [162F G]. The High Court had wrongly assumed that the provisions of the Criminal Procedure Code did not apply to a search under section 41(2). In view of the safeguards provided in section 165 Cr. P.C. and in Chapter VII of that Code, it cannot be said that the power to search provided in sub section (2) is not a reasonable restriction keeping in View the object of the search, namely, prevention of evasion of tax. [161EG]. The mere fact that the Act gives power to Government to em power any officer to conduct the search is no reason to strike down the provision for it cannot be assumed that Government will not empower officers of proper status to make searches. [160 H], To, exercise the power of seizure under sub section (3) the officer concerned has to record his reasons in writing, has to give a receipt for the accounts seized, and can only retain the items seized beyond a period of 30 days with the permission of the next higher officer. These are sufficient safeguards and the restriction, if any, on 150 the right to hold property and the right to carry on trade by sub section (3) must therefore be held to be a reasonable restriction. [162 D G]. While the court held that the Legislature has power to provide for search and seizure in connection with taxation law in order that evasion may be checked, it did not decide the general question whether a power to confiscate goods which are found on search and which are not entered in account books of the dealer is an ancillary power necessary for the purpose of stopping evasion of tax. [159C D]. K.S. Papanna and another vs Deputy Commercial Tax Officer, Gunkakal, (1967) XIX S.T.C. 506; referred to.

The High Court of. Jammu and Kashmir, relying on the decisions of this Court in Election Commission, India vs Saka Venkata Subba Rao; , and K. section Rashid and Son vs The Income Tax Investigation Commission etc. ; , , dismissed an application for a writ made by the appellant against the Union of India and Anr. under article 32(2A), the relevant provisions of which are in the matter of enforcement of fundamental rights the same as in article 226 of the Constitution, on the preliminary objection that the said application was not maintainable against the Union of India as it was outside the territorial jurisdiction of that Court. The appellant 's case was that he was holding the substantive rank of Lieut. Col. in Jammu and Kashmir and had the right to continue in service until he attained the age of 53 on November 20, 1961, but was prematurely retired by a letter issued by the Government of India on July 31, 1954, without any allegation or charge and in contravention of article 16(1) of the Constitution. Held, that there can be no doubt as to the correctness of the decisions relied on by the High Court and the appeal must fail. 829 The jurisdiction of the High Court under article 226 of the Constitution, properly construed, depends not on the residence or location of the person affected by the order but of the person or authority passing the order and the place where the order has effect cannot enter into the determination of such jurisdiction. Since functioning of a Government really means giving effect to its order, such functioning cannot determine the meaning of the words "any person or authority within these territories" occurring in the article. A natural person, therefore, is within those territories if he resides there permanently or temporarily, an authority other than the Government is within those territories if its office is located there and a Government if its seat from which, in fact, it functions is there. It is not correct to say that the word "authority" in article 226 cannot include a Government. That word has to be read along with the clause "including in appropriate cases any Government" immediately following it, which, properly construed, means, that the word may include any Government in an appropriate case. That clause is not connected with the issuance of a writ or order and is not intended to confer discretion on the High Courts in the matter of issuing a writ or direction on any Government, and only means in such cases where the authority against whom the High Court has jurisdiction to issue the writ, happens to be a Government or its subordinates, the High Court may issue a writ against the Government. Election Commission, India vs Saka Venkata Subba Rao, and K. section Rashid and Son vs The Income tax Investigation Commission etc. ; , , approved. Maqbulunnissa vs Union of India, I.L.R. (1953) 2 All. 289, overruled. The Lloyds Bank Limited vs The Lloyds Bank Indian Staff Association (Calcutta Branches), I.L.R. , referred to. Proceedings under article 226 are not suits covered by article 300 of the Constitution. Such proceedings provide for extra ordinary remedies by a special procedure and there is no scope for introducing the concept of cause of action in it in the face of the express limitation imposed by it, that the person or authority concerned must be within the territories over which the High Court exercises jurisdiction. Ryots of Garabandho vs Zamindar of Parlakimedi, (1943) L.R. 70 I.A. 129, held inapplicable. The resulting inconvenience of such an interpretation of article 226 to persons residing far &way from New Delhi, where the Government of India is in fact located, and aggrieved by some order passed by it, may. be a reason for suitably amending the Article but cannot affect its plain language. This Court should not, except when it is demonstrated beyond all reasonable doubt that the previous ruling, given after 105 830 due deliberation and full hearing, was erroneous, go back upon it, particularly on a constitutional issue. Per Subba Rao, J. The object that the framers of our Con stitution had before them in declaring the fundamental rights in Part III of the Constitution and empowering the High Courts by article 226 of the Constitution to enforce them would be largely defeated if a person in a remote part of the country had to come to New Delhi to seek the protection of the Punjab High Court whenever the Union Government infringed his fundamental right. The power of the High Courts under article 226 of the Consti tution is of the widest amplitude and it can issue not merely writs but also directions and orders. The words "any Government" in the Article includes the Union Government which has no constitutional situs in a particular place and exercises its powers throughout India and must, therefore, be deemed in law to have functional existence throughout India and thus within the territories of every State. Consequently, when the Union Government infringes the legal right and interest of a person residing within the territorial jurisdiction of 'a High Court, the High Court has the power under the Article to issue a writ to that Government. If its orders are disobeyed by that Government or any of its officers, even though physically outside its territories, it can proceed in contempt against them under the Contempt. of Courts Act, 1952. Election Commission, India vs Saka Venkata Subba Rao, ; , held inapplicable. K. section Rashid and Son vs Income Tax Investigation Commission, ; and Ryots of Garabandho vs Zamindar of Parlakimedi, L.R. 70 I.A. 129, considered. Maqbul Unnissa vs Union of India, I.L.R. (1953) 2 All. 289, approved. Surajmal vs State of M.P., A.I.R. 958 M.P. 103 and Radhe shyam Makhanlal vs Union.of India, A.I.R. 1960 Bom. 353, held inapplicable. In the instant case, therefore, the High Court had the power to issue the writ to the Union Government under article 32(2A) of the Constitution. Per Das Gupta, J. It is neither correct nor appropriate to speak of location of any Government and there is no satisfactory test for ascertaining the location of the Government of India. Since the Government functions throughout the territory of India, the conclusion must be that it is within the territories under the jurisdiction of every High Court. The words "any Government" in article 226 clearly indicate that the High Court was intended to give relief against that Government as well. Even though the Government, of India is within the territories of every High Court, it will not have to face applications 831 for relief against the same order in all the High Courts in India. The words "in appropriate cases" in that Article, properly construed, indicate that there can be only one High Court thereunder that can exercise jurisdiction under the Article for every act or omission in respect of which relief is claimed. It is possible in every case to ascertain the place where the act or omission took place and that High Court alone, which exercises jurisdiction over that place, can have jurisdiction to grant relief under the Article. It is not correct to say that under article 226 the cause of action determines the jurisdiction. Neither that Article nor article 32(2A) of the Constitution is based on that principle. Election Commission, India vs Saka Venkata Subba Rao, ; , approved.

As a result of a notification dated December 30, 1967 under section 59(1) of the Madras General Sales Tax Act and later by Act 2 of 1968 sales of jaggery became liable to tax. But while by notification under section 17 'palm jaggery was exempted from tax 'cane jaggery ' was not. The appellants who were dealers in 'cane jaggery ' challenged the levy by writ petitions in the High Court which were, however, dismissed. In appeal before this Court it was contended (i) that the tax on 'cane jaggery ' while exempting 'palm jaggery ' was ,discriminatory and violative of article 14 of the Constitution; (ii) that taxation of 'cane jaggery ' was restrictive of trade and commerce and therefore violative of article 301; (iii) that the impugned legislation constituted a colourable exercise of power. HELD: (i) The evidence on record clearly showed that 'cane jaggery ' and 'palm jaggery ' were commercially different commodities. The methods of production of 'palm jaggery ' and 'cane jaggery ' were different; they reached the consumers through different channels of distribution; the prices at which they were sold differed and they were consumed by different sections of the community. 'Cane jaggery ' and 'palm jaggery ' did not thus belong to the same class and in differently treating them for the purpose of taxation there was no unlawful discrimination. [620 B E; 621 C D] It was incorrect to say that the State Legislature had always treated the two products on the same footing. For nearly three years before April 1, 1958 sales of 'palm jaggery ' were exempt from tax but sales of 'cane jaggery ' were not. [620 B] Further, it is for the legislature to determine the objects on which tax shall be levied. The courts will not strike down an Act as denying equal protection merely because other objects could have been but are not taxed by the legislature. [621 B C] N. Venugopala Ravi Varma Rajah vs Union of India, ; , applied. (ii) Freedom of trade, commerce and intercourse guaranteed by article 301 of the Constitution is protected against taxing statutes as well as other statutes, but by imposition of tax on transactions of sale of 'cane jaggery ' no restriction on the freedom of trade or commerce or in the course of trade with or within the State. was imposed. [621 D F] State of Madras vs N. K. Nataraja Mudaliar. ; , referred to. (iii) The plea of colourable exercise of power had no substance because the legislature had power in the present case to. levy the tax.[621 G] 4 Sup. C.I./69 616 K.C. Gajapati Narayan Deo & Ors. vs State of Orissa, [1954] S.C.R.1, applied.

The two respondents, R. Rajiah and R. Rajeswaran, who were members of the Tamil Nadu State Judicial Service, were functioning as District Munsifs when orders of their compulsory retirement from service were passed by the High Court of Madras in its administrative jurisdiction under Rule 56(d) of the Fundamental Rules. Both the respondents moved the High Court under Article 226 of the Constitution challenging the validity of the impugned orders on the grounds:(1) that the High Court had no power to pass an order of compulsory retirement of a member of the State Judicial Service as such an order could be passed only by the Appointing Authority i.e., the Governor; (2) that there was no material on record which could justify their premature retirement; and (3) that the Review Committees of the High Court that passed the impugned orders were not properly constituted. Two Judges of the Division Bench of the High Court delivered separate judgments and differed on the question of the power of the High Court to pass the impugned orders. One of the learned Judges took the view that though it was within the jurisdiction of the High Court to take a decision whether a member of the State Judicial service should be compulsorily retired or not, the formal order of compulsory retirement was to be passed by the Governor acting on the recommen 333 dation of the High Court. According to the other learned Judge, it was the High Court which was competent to pass an order of compulsory retirement of a member of the State Judicial Service without any formal order by the Governor under rule 56(d) of the Fundamental Rules. On merits, both the Judges came to the conclusion that there was no material on record to justify the impugned order. It was also held that in the case of Mr. Rajeswaran, the irregular or illegal constitution of the Review Committee vitiated the impugned order, while in the case of Mr. Rajiah, the manner in which the Reivew Committee considered the question of compulsory retirement was illegal. The High Court further pointed out that although Mr. Rajeswaran was confirmed as a District Munsif on 1.1.1976, in coming to a decision that Mr. Rajeswaran should be compulsorily retired, the third Judge of the Review Committee relied upon events that happened in 1954. It was contended on behalf of the appellant that the High Court alone has the power to pass an order of compulsory retirement of a member of the State judicial Service, and unless it is so held it would be in derogation of High Court 's control over subordinate courts as conferred on it by Article 235 of the Constitution. It was also urged that rule 56(d) of the Fundamental Rules should be declared ultra vires in so far as it confers power on the Governor to compulsorily retire members of the Subordinate judicial service. On merits, it was contended that the High Court was not at all justified in considering the question of adequacy or otherwise of the material on record in respect of the impugned orders of compulsory retirement. Dismissing the appeals, it was, ^ HELD: (Per M.M. Dutt, J.) (C.J.I. agreeing with him) (1) article 235 vests in the High Court control over Districts Courts and Courts subordinate thereto. The vesting of such control is consistent with the idea of preservation of the independence of the judiciary. If any authority other than the High Court is conferred with the absolute right to take action against a member of the subordinate judicial service, such conferment of power will impinge upon the power of control that is vested in the High Court under Article 235 of the Constitution. [339C D] (2) Rule 56(d) of the Fundamental Rules under which a member 334 of subordinate judicial service can be compulsorily retired has to be A read subject to and in harmony with the power of control vested in the High Court under Article 235 of the Constitutioin. [339E] (3) The test of control is not the passing of an order against a member of the subordinate judicial service, but the decision to take such action. Passing or signing of such orders by the Governor will not necessarily take away the control of the High Court vested in it under Article 235 of the Constitution. [339G H; 340A B] (4) An action against any Government servant consists of two parts. Under the first part, a decision will have to be made whether action will he taken against the Government servant. Under the second part, the decision will be carried out by a formal order. The power of control envisaged under Article 235 of the Constitution relates to the power of making a decision by the High Court against a member of the subordinate judicial service. [340B C] (5) The control of the High Court, as understood, will be applicable in the case of compulsory retirement in that the High Court will, upon an enquiry, come to a conclusion whether a member of the subordinate judicial service should be retired prematurely or not. If the High Court comes to the conclusion that such a member should be prematurely retired, it will make a recommendation in that regard to the Governor inasmuch as the Governor is the appointing authority. The Governor will make a formal order or compulsory retirement in accordance with the recommendation of the High Court. The Governor cannot take any action against any member of a subordinate judicial service without, and contrary to, the recommendation of the High Court. [342B C] (6) It may be that the power of the Governor under rule 56(d) of the Fundamental Rules is very formal in nature, for the Governor merely acts on the recommendation of the High Court. In the instant cases, as there is no formal order by the Governor under rule 56(d), the impugned orders of the High Court are ineffective. [343D E] (7) In that view of the matter, the contention made on behalf of the High Court that rule 56(d) should be declared ultra vires in so far as it confers power on the Governor to compulsorily retire a member of. the subordinate judicial service is without any substance whatsoever. [343E F] (8) When the High Court takes the view that an order of com 335 pulsory retirement should be made against a member of the subordinate judicial service, the adequacy or sufficiency of such materials cannot be questioned, unless the materials are absolutely irrelevant. But such a conclusion must be based on materials. If there be no material to justify the conclusion, it will be an arbitrary exercise of power by the High Court. As there is absence of any material to justify the impugned orders of compulsory retirement, these must be held to be illegal and invalid. [344C E] (9) It is true that the members of the Review Committee should sit together, but simply because one of them did not participate in the meeting, and subsequently agreed with the view expressed by the other two Judges, it would not vitiate the decision of the Committee. The third Judge might be justified in correcting the date with effect from which Mr. Rajiah would retire but that is a very minor issue and would not make the decision invalid. [344H; 345A B] (10) This Court failed to understand why the Chief Justice could not appoint a Review Committee. But the decision of the Review Committee should have been placed before a meeting of the Judges. In that sense, the recommendation of the Riview Committee was not strictly legal. [345C D] (11) The decision to compulsory retire Mr. Rajeswaran is vitiated as the Review Committee had relied upon some adverse incidents against him that took place in 1954, although the respondent was appointed to the post of District Munsif in 1976. [346E F] Per Sharma, J.: Since there is no material on record in support of the impugned orders of compulsory retirement of the two respondents they were rightly quashed by the High Court. No opinion is expressed on the other questions raised in these cases. [347B] State of West Bengal vs Nripendra Nath Bagchi, ; ; State of Haryana vs Inder Prakash Anand, ; State of Uttar Pradesh vs Batuk Deo Pati Tripathi, ; High Court of Punjab & Haryana vs State of Haryana, ; ; Shamsher Singh vs State of Punjab, ; B. Misra vs Orissa High Court, ; ; Baldev Raj Chadha vs Union of India, ; and Brij Bihari Lal Aggarwal vs High Court of M.P., ; , referred to. 336

The petitioners challenged the constitutional validity of the U.P. Consolidation of Holdings Act (U . P. V of 954), as amended by the amending Acts, which was intended to encourage the development of agriculture by the allotment of compact areas to tenure holders in lieu of scattered plots so that large scale cultivation might be possible with all its attendant advantages. A notification was issued under section 4 Of the impugned Act declaring the decision of the State Government to formulate a scheme of ' consolidation in respect of the area where the petitioners held their lands. This was followed up by a statement of proposals under section 19. The petitioners objected to these proposals and thereafter appealed to the Settlement Officer (Consolidation) but to no effect. It was contended, inter alia, on their behalf that (1) the provisions of sections 8, 9 and 10 read with those Of s 49 Of the impugned Act were discriminatory in that they laid down a procedure for correction and revision of revenue records for 929 villages under consolidation that was vitally different from that applicable to other villages under the U.P. Land Revenue Act, 1901; (2) that sections 14 to 17 as also sections 19 to 22 read with section 49 conferred arbitrary powers on the consolidation authorities in respect of the lands of the tenure holder and his rights therein and deprived him of the protection of courts available to other tenure: holders and that (3) section 29B which provided for compensation, by giving inadequate compensation, offended article 31(2) Of the Con stitution. Held, that the contentions must fail. Although the procedure laid down by the impugned Act was to some extent different from that under the U.P. Revenue Act, 1901, it was by no means arbitrary or devoid of natural justice. Regard being had to the advantages that consolidation conferred on the tenure holder such difference was supportable as a permissible classification on an intelligible differentia reasonably connected with the object of the Act. The expeditious procedure for effectuating consolidation laid down by ch. II of the Act read with the Rules, therefore, could not be said to violate article 14 Of the Constitution. Nor could for similar reasons the provisions of ch. III of the Act be said to violate article 14 Of the Constitution. The provision Of section 22(2) Of the Act which made the decision of the arbitrator final by ousting the jurisdiction of ordinary courts even where a party had obtained a decree which might be under appeal, was necessary in the interest of expedition. Having regard to the peculiar conditions in cases of this kind and the advantages a scheme of consolidation offered to the entire body of tenure holders, it could not be said that the cash compensation for tenure holders provided by section 29B of the impugned Act was inadequate, even assuming that article 31(2) applied to the case.

Appeal No. 65 of 1952. Appeal from an award dated 17th November, 1951, made by the Labour Appellate Tribunal of India, Calcutta, in Appeal No. 280 of 1951. K. P. Khaitan (Harnam Das, with him) for the appellant. H. B. Asthana for the respondents. Gopalji Mehrotra for the Intervener. December 2. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal by special leave against the decision of the Labour Appellate Tribunal, Calcutta, upholding the award made by the State Industrial Tribunal, Uttar Pradesh, with certain modifications. An industrial dispute arose between the appellant, the Vishwamitra Press Karyalaya, Kanpur, and the respondents, the workers of the Vishwamitra Press as represented by the Kanpur Samachar Patra Karamchari Union, Kanpur, in regard to the alleged victimisation of certain workmen under the guise of 'retrenchment. That industrial dispute was referred to the Industrial Tribunal, by a notification dated the 24th April, 1951. The time for making the award expired on the 9th June, 1951, and on the 9th June. 1951, a further notification was issued extending the time for making the award up to the 30th June, 1951. The 30th June, 1951, was a public holiday and the 1st July was a Sunday. The Industrial Tribunal made its award on the 2nd July, 1951, and pronounced it in open court on that day. It was however thought by the Uttar Pradesh Government that the award was beyond time and invalid and on the 18th July, 1951, a notification was issued extending the period up to the 3rd July, 1951. This award was challenged by the appellant before the Labour Appellate Tribunal. The Labour Appellate. Tribunal negatived the Contentions of the appellant. The appellat applied 274 for special leave which was granted by this Court on the 21st December, 1951, limited to the following grounds: " (1) The Government had no power to extend the time of the making of award after the expiry of the time originally fixed, and the award made by the Adjudicator after such time is illegal, ultra vires, inoperative and void. (2)In any case the State Government I had extended the time for making the award till 30th June, 1951, and the Adjudicator 's award made after that date is void. (3)That the extension of time by the Government on. 21st July, 1951, after even the time extended previously had expired, was ultra vires, and it could not make a void award a valid award. " The industrial dispute which arose between the appellant and the respondents was referred by the Uttar Pradesh Government to the Industrial Tribunal in exercise of the powers conferred by sections 3 and 4 of the Uttar Pradesh . The Uttar Pradesh Government had in exercise of the powers conferred by section 3 (d) of the Act promulgated an order inter alia providing for the adjudication of the industrial disputes referred by it to the Industrial Tribunals. Paragraph 16 of that order ran as under : " The Tribunal or the Adjudicator shall hear the dispute and pronounce its decision within 40 days (excluding holidays observed by courts subordinate to the High Court) from the date of reference made to it by the State Government, and shall thereafter as soon as possible supply a copy of the same to the parties to the dispute, and to such other persons or bodies as the State Government may in writing direct. Provided that the State Government may extend the said period from time to time." Paragraph 9 which prescribed the powers and functions of Tribunals inter alia provided: 275 "(9). The decision shall be in writing, and shall be pronounced in open court and dated and signed by the member or members of the Tribunal, as the case may be, at the time of pronouncing it. " It was not disputed before us that the original period calculated in accordance with paragraph 16 above expired on the 9th June, 1951, and the Uttar Pradesh Government validly extended the period up to the 30th June, 1951. It was however contended that the Industrial Tribunal should have made its award on the 30th June, 1951, and not on the 2nd July, 1951, as it purported to do. It was urged that the provision as to excluding holidays observed by courts subordinate to the High Court which obtained in paragraph 16 above did not apply when the period was extended up to a particular date. It would apply only if the period was extended by a particular number of days when for the purpose of the computation of those days the holidays would have to be excluded in the manner therein mentioned. The Uttar Pradesh Government having extended the period up to the, 30th June, 1951, it was submitted that the award, should have been made by the 30th June, 1951, and, not later and having been made on the 2nd July, 1951, was therefore beyond time and invalid. This argument might well have prevailed but for the provisions of section 10 of the U. P. General Clauses Act, 1904. That section provides: " Where, by any United Provinces Act, any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period, then, if the court or office is closed; on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open. " The Industrial Court was closed on the 30th June, 1951, which was declared a public holiday. The 1st July, 1951, was a Sunday and it was competent to the 'Industrial Court to pronounce its decision on the next 276 afterwards on which the Industrial Court was n, i.e., the 2nd July, 1951. Prima facie therefore award which was pronounced on the 2nd July, 1, was well within time. The only thing which Shri Khaitan counsel for the appellant urged before us therefore was that the Industrial Court was not a court within the meaning of section 10 of the U. P. General Clauses Act, "The court" according to his submission could only be construed mean a court in the hierarchy of the civil courts the State and an Industrial Court did not fall hin that category. We are unable to accept this intention of Shri Khaitan. The Uttar Pradesh industrial Disputes Act, 1947, was an Uttar Pradesh t. The General Order dated the 15th March, 1951, which provided inter alia for the reference of the industrial dispute for adjudication and the manner in which it was to be adjudicated, was promulgated by e U. P. Government in exercise of the powers conferred upon it by section 3 (d) of the Act. Paragraph (9) of the General Order provided for the decision ing pronounced by the Industrial Tribunal in open urt and we fail to understand how it could ever be ged that the Industrial Tribunal was not a court ithin the meaning of section 10 of the U. P. General lauses Act. If the Industrial Tribunal was thus a ourt within the meaning of section 10 of the U. P. General Clauses Act the court was closed on the 30th ane, 1951, as also on the 1st July, 1951, and the decion could be pronounced by the Industrial Court on i.e next day afterwards on which it was open, i.e., on ne 2nd July, 1951. In our opinion therefore the ecision which was pronounced on the 2na July, 951, 'was well within time and was valid and binding ' in the parties. The above decision is determinative of this appeal, and the appeal will therefore stand dismissed with costs. Appeal dismissed. Agent for the respondents and the intervener: C. P. Lal.

The time prescribed for making an award under the U. P. , expired on the 9th June, 1951. The Government extended the period up to 30th June, 1951. The 30th June was a public holiday and 1st July was a Sunday and the Industrial Tribunal pronounced its award on the 2nd July: Held, that an Industrial Tribunal to which a dispute is referred under the U. P. , is a " Court " within the meaning of section 10 of the U.P. General Clauses Act, 1904, and, as the 30th June and 1st July were holidays, the award pronounced on the 2nd July was not invalid on the ground that it was not pronounced within the period fixed. 273

The appellant company retired three of its workmen and the industrial dispute thus arising was referred to the Labour Court, Gorakhpur, for adjudication The reference was registered by the Labour Court as Adjudication Case No. 93 of 1960. The parties filed their written statement and proceedings went on resulting in the Labour Court passing an order dated February 26, 1961 holding that the retirement of the three workmen was neither legal nor justified. There were similar disputes regarding the retirement of several other workmen and the dispute relating to them was referred to the same Labour Court and this reference was registered as Adjudication Case No. 98 of 1960. The three workmen whose cases were the subject matter of the first reference were also included in the second reference. They applied to the Labour Court to have their names deleted from the second reference, and they were accordingly deleted. The Labour Court gave its award in the second reference on February 27, 1961. In this award the Labour Court specifically stated that it was not recording any finding with regard to the three workmen covered by the first reference. On a representation made by the appellant the State Government issued a notification on February 28. 1961 withdrawing the first reference relating to the three aforesaid workmen. This was purported to be done under sub section (1) of section 6 G of the U.P. Even so the State Government published the award in the first reference on May 6, 1961. The appellant filed a writ petition in the High Court under article 226 of the Constitution for the issue of a writ of certiorari quashing the award dated February 26, 1961 and also for a mandamus directing the State Government to withdraw its Notification dated May 6. 1961. The single Judge as well as the Division Bench decided against the appellant. In appeal before this Court, HELD : (i) The wording of sub section (1) of section 6 G is capable of being construed as conferring on the State Government a power to withdraw any proceedings or to transfer a proceeding from one Labour Court or Tribunal to another. But having regard to the scheme of section 6 G read in the light of the other provisions of the Act the section will have to be interpreted as giving to the State Government only a power to transfer a proceeding from one Labour Court to another. When section 6 makes it obligatory that an award has to be made by the tribunal concerned and that It has to be published by the State Government within 30 days of its receipt and declares that the award on is idle to expect that the legislature intended to by conferring an absolute power of withdrawal on Government State section 6 G. The proper way of reading section 6 G is to limit the power of withdrawal referred to therein only for the purpose of transferring proceedings from one Labour Court or Tribunal to another. [75D] The provisions of section 33B and section 6 D of the Act did not support a contrary conclusion. Sirsilk Ltd. and Others vs Government of Andhra Pradesh & Another ; , distinguished. (ii) The expression 'or ' in section 6 G (1) interposed between 'withdraw any proceedings ' or 'transfer a proceeding ' will have to be understood as 'and '. [75H] Mazagaon Dock Ltd. vs The Commissioner of income tax and Excess Profits Tax; , relied on.

The State of Bombay by a notification under the Bombay Relief Undertakings (Special Provisions) Act 1958 declared a Mill a 'relief undertaking ' and exempted it from the applicability of section 16 of the C.P. and Berar Industrial Dispute& Settlement Act, 1947. During the period the exemption was in force, the appellants employees of the Mill abstained from work and were dismissed for joining an illegal strike. After the exemption was withdrawn and was no longer in operation, the employees filed applications before the Labour Commissioner claiming reinstatement with back wages. The Labour Commissioner allowed the applications. The Mill preferred revisions to the Industrial Court which were allowed. In writ petitions filed by the employees, the High Court confirmed the finding of the Industrial Court, that the employees had no right to file applications under section 16 and the applications filed by them before the Labour Commissioner were not maintainable. In appeal to this Court. HELD : The High Court was in error in holding that the applications were not maintainable. The right of an employee to claim reinstatement on a wrongful dismissal existed de hors section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act. Section 16 provides a forum for a dismissed employee to claim reinstatement but does not create a right. The effect of an exemption granted by the notification issued under the Bombay Relief Undertakings (Special Provisions) Act, is not to destroy the right but to suspend the remedy prescribed by section 16 for enforcing that right during the period when the exemption remains in force. The right can be enforced by a dismissed employee by restoring to the provisions of section 16 of the Act provided he makes the application within six months from the date of his dismissal. [668 E]

With a view to give protection to Thika tenants against eviction and in certain other matters, the West Bengal Legislature enacted the Calcutta Thika Tenancy Act, 1949. That Act was amended by the Calcutta Thika Tenancy Amendment Act, 1953, which omitted section 28 of the Act. The question for decision in the appeal was whether the appellant against whom proceedings for execution of a decree for ejectment was pending, who had applied for relief under section 28 when that section was in force, was entitled to have his application disposed of in accordance with the provisions of section 28, which had ceased to exist retrospectively though it remained undisposed of on the date the Amendment Act came into force: Held, that section 1, sub section (2) of the Calcutta Thika Tenancy Act 1953, clearly intended that no relief under section 28 of the original 579 Act should be given in cases pending for disposal on the date the amendment became effective and section 28 ceased to exist retrospectively. The principles applicable to interpretation of statutes are four fold in nature, (1)such statutory provisions as create or take away substantive rights are ordinarily prospective ; they can be retrospective if made so expressly or by necessary implication and the retrospective operation must be limited only to the extent to which it has been so made either expressly or by necessary implication, (2)the intention of the legislature has to be gathered from the words used by it, giving them their plain, normal, grammatical meaning, (3)if any provision of a legislation the purpose of which is to benefit a particular class of persons is ambiguous so that it is capable of two meanings the meaning which preserves the benefit should be adopted. , (4)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 will be put on the words, if necessary, even by modification of the language used: Held, also, that judicial decorum ought never to be ignored. Where one Division Bench or a judge of a High Court is unable to distinguish a previous decision of another Division Bench or another Single judge and holds the view that the earlier decision was wrong, the matter should be referred to a larger Bench to avoid utter confusion. Deorajan Devi vs Satyadhan Ghosal, , overruled.

The respondent company paid to its employees Rs. 1,08,325/ as bonus for the year 1947 in the calendar year 1949, as a result of the award of the Industrial Tribunal dated January 13, 1949. This amount was debited by the company in its profit and loss account for the year 1948 and the corresponding credit was given to the bonus payable account. The books for 1948 were not closed till the date of the award of the Industrial Tribunal. For the relevant assessment year, 1950 51, the company claimed that under section 10(2)(x) of the Indian Income tax Act, 1922, it was entitled to an allowance in respect of the amount paid as bonus, but the claim was rejected by the Income tax authorities on the ground that according to the mercantile system of accounting which was followed by the assessee the year to which the liability was properly attributable was the calendar year 1947 and not 1949. It was the case of the Income tax authorities that it was a legal liability of the assessee which arose in 1947 and should have been estimated and Put into the accounts for 1947, and that, if necessary, the amounts for the year 1947 should be reopened. It was admitted that the bonus in the instant case was a profit bonus. Held:(i) It was only when the claim to profit bonus, if made, was settled amicably or by industrial adjudication that a liability was incurred by the employer, who followed the mercantile system, within section 10(2)(x), read with section 10(5), of the Indian Income tax Act, 1922; and as it was only in 1949 that the claim to profit bonus was settled by an award of the Industrial Tribunal, the only year the liability could be properly attributed to was 1949. (ii) The system of reopening accounts was not applicable under thescheme of the Indian Income tax Act. (iii) The words "Year in question." in proviso (b) to s.10 (2)(x) of the Act meant "year in respect of which bonus was paid".

A dispute regarding bonus payable to the workmen respondents of the two companies appellants for the year 1971 72 was referred to conciliation under section 12(1) of the . The workmen contended before the Conciliation officer that they were entitled to bonus equivalent to three months ' basic wages as on 31st March, 1972 as customary bonus or in any event as bonus payable under the provisions of the Act. The appellant companies, on the other hand, argued that the workmen were entitled to only minimum bonus as provided under the Act. The said dispute was ultimately settled before the Conciliation officer on the terms: (a) that each eligible work man will be paid an amount equal to three months ' basic wages as on 31.3.1970; and (b) that the demand of the Union for bonus this year will be referred to a Tribunal for adjudication. Accordingly, the Government referred the dispute for adjudication to the ninth Industrial Tribunal of West Bengal. After a detailed discussion of the evidence produced before the Tribunal, it found (i) that the workmen had failed to make out the claim of customary bonus or that they were entitled to maximum bonus of 20 per cent as provided under the Act; and (ii) that there was no available surplus during the year in question and that only the minimum bonus was payable under the provisions of the Act. However, after having recorded the aforesaid findings, it proceeded to hold that it was legally open to it to substitute for the agreement entered into between the 185 parties before the Conciliation officer a new contract and pass an award on that basis, if such a step would be conducive to industrial peace. On this basis the Tribunal, held that there would not be material alteration in the financial liability of the companies in case the agreement was modified by substituting for the words "that the workmen will be paid the amount equal to three months ' basic wages as on 31.3.1970" by the words "an amount equal to basic wages as on 31.3.1372" and accordingly it passed an award in those terms. In appeal to the Supreme Court, the appellants companies challenged the legality of this award. Allowing the appeal, ^ HELD: 1. The impugned award passed by the Ninth Industrial Tribunal is not legally sustainable and has to be set aside. The rights of the workmen for payment of bonus for the year in question will be governed by the terms of the agreement entered into before the Conciliation officer on October 9, 1972. [190F] 2. The rights and liabilities of the parties regarding profit bonus are governed by the provisions of the payment of Bonus Act, 1965 which are exhaustive on the subject and the adjudication had to be conducted by the Tribunal strictly in accordance with those provisions. [189C D] In the instant case, the Tribunal has categorically found that there was no "available surplus" in respect of the two companies for the year in question on a computation made under section 5 of the Act. The settlement entered into before the Conciliation officer constituted an agreement under section 34(3) of the Act and but for the said agree ment, the liability of the appellants under the provisions of the Act would have been only to pay minimum bonus under section 10 of the Act. [189E F] Sanghi Jeevraj Chewar Chand and Ors. vs Secretary Madras Chillies, Grains Kirana Merchants Workers ' Union and Anr., [ ; and Mumbai Kamgar Sabha. Bombay vs M/s Abdulbhai Faizullabhai & Ors., [ ; referred to. It is certainly open to an Industrial Court in an appropriate case to impose new obligations on the parties before it or modify contracts in the interest of industrial peace or give awards which may have the effect 186 of extending the agreement or making new one, but this power is conditioned by the subject matter with which it is dealing and also by the existing industrial law and it would not be open to it while dealing with a particular matter before it to overlook the industrial law relating to that matter as laid down by the legislature. " [190B D] The New Maneck Chowk Spinning and Weaving Company Ltd. Ahmedabad and others vs The Textile Labour Association, Ahmedabad, ; relied upon. In the instant case, in view of the finding recorded by the Tribunal that the result of the working of the companies during the concerned year was a loss and there was no available surplus, the Tribunal could not have legally proceeded to make an award directing payment of bonus at any rate higher than the minimum bonus specified hl section 10 of the Act. Therefore, the impugned award made by the Tribunal is clearly inconsistent with the provisions of the Payment of Bonus Act which contemplate the imposition of an obligation for payment of only the minimum bonus where the employer has no allocable surplus in the concerned accounting year. However, inasmuch as the appellant companies had entered into the settlement before the Conciliation Officer agreeing to pay bonus at a rate higher than the minimum bonus, the said settlement would constitute an agreement under section 34 of the Act and the terms of the settlement will govern the liability for bonus for the year in question. [190D E]

In exercise of the power under section 6 of the the undertakings of the appellant company at Allahabad and Lucknow were taken over by the State Electricity Board, U.P. with effect from September 17, 1964. The workmen of the company were taken into the employment of the Board without any break in continuity of employment. Certain workmen of the Allahabad undertaking filed before the Labour Court applications under section 6 H(2) of the U.P. , for payment of retrenchment compensation and salary in lieu of notice. A group of workmen 'from the Lucknow undertaking also sub mitted applications under section 6 H(2) with the same prayers; in addition they claimed compensation for accumulated earned leave not enjoyed by them till September 16, 1964. The Labour Court allowed the applications. The Company appealed to this Court by special leave. According to the company there was no retrenchment of the workmen because they had voluntarily left the service of the company to join the service of the Board with no break in their service. The questions that fell for consideration wer (i) Whether the matter was to be decided under the provisions of the or those of the U.P. ; (ii) Whether the Labour Court had jurisdiction under section 6 H(2) of the U.P. Act to decide the applications or because of there being dispute as to the liability to pay retrenchment compensation the matter was in view of item 10 of the second schedule to the U.P. Act within the exclusive jurisdiction of the Industrial Tribunal; (iii) Whether section 6 0 of the U.P. Act also necessitated that the question of liability to pay retrenchment compensation be first determined; (iv) Whether in view of sections 6 & 7 of the and sections 57 & 57A of the Indian read with Cl. V of the sixth schedule thereto, the liability to pay retrenchment compensation was that of the Board and not that of the company; (v) Whether the claim of the Lucknow workmen for compensation for earned leave not enjoyed by them was allowable. Held : (i) Under the Seventh Schedule to the constitution legislation in respect of 'Trade Union Industrial and Labour Disputes ' falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation. Act 1 of 1957 added to the U.P. , section 6 R(2) which enacts that the rights and liabilities of employers and workmen relating to lay off and retrenchment shall be determined in accordance with the provisions of 508 sections 6 J to of 1957 received the assent of the President and by virtue of article 254(2) of the Constitution section 6 R(2) of the U.P. Act prevails notwithstanding any prior law made by the Parliament. The rights and obligations of the parties had therefore to be decided under the U.P. Act including section 6 R(2). [511 H 512 D] Rohtak & Hissar Districts Electric Supply Company vs State of U.P., , distinguished. (ii) Section 6 H(1) and (2) of the U.P. Act were substantially the same as sub sections (1) and (2) of section 33 C of the Central Act and cases decided by this Court under the latter provisions were applicable in the interpretation of the former. According to the rule laid down in section 6 H(2) the Labour Court was competent to determine what each workman was entitled to receive from the employer by way of retrenchment compensation payable in terms of money and the denial of liability of the company did not affect the jurisdiction of the Labour Court. Where, however, as in the present case, the dispute was whether the workmen had been retrenched and computation of the amount of compensation was subsidiary or incidental, the, Labour Court had no authority to trespass upon the powers of the industrial Tribunal which had exclusive jurisdiction under item 10 of the second schedule of the U.P. Act to decide disputes relating to retrenchment. [514 B D 517 F] The Central Bank of India, Ltd. vs P. section Rajagopalan etc. ; and Bombay Gas Co. Ltd. vs Gopal Bhiva and Others, ; , applied. The Board of Directors of the South Arcot Electricity Distribution Co. Ltd. vs N. K. Mohammad Khan etc., , explained. Chief Mining Engineer, East India Coal Co. Ltd. vs Rameswar and Others, [1968] 1 S.C.R. 140, State Bank of Bikaner and Jaipur vs R. L. Khandelwal, and Punjab National Bank Ltd. vs K. L. Kharbanda, [1962] Supp. 2 S.C.R. 977, referred to. (iii) Assuming that the Labour Court had jurisdiction to determine the liability of the company to pay retrenchment compensation no order awarding retrenchment compensation could still be made without recording a finding that workmen were retrenched and compensation was payable for the retrenchment. For section 6 0 of the U.P. Act deprives the workmen of the right to retrenchment compensation in the conditions mentioned therein. The company asserted , that the conditions precedent to the exercise of the jurisdiction did not exist while the workmen asserted the existence of the conditions. Without deciding the, issue the Labour Court could not compute the amount of compensation payable to the workmen on the assumption that the workmen had been retrenched and their claim fell within section 6 0. [518 B; 519 B C] (iv) Sections 6 and 7 of the did not support the case of the Company that the liability was enforceable against the Board after it took over the undertaking. Under these sections when the undertaking vests in the purchaser, any debt, mortgage or similar obligation attaches to the purchase money in substitution of the undertaking. The liability to pay retrenchment compensation is a debt : if it arises on transfer it will attach to the purchase money payable to the Company in substitution of the undertaking. [521 A B] 509 (v) The provisions of sections 57 and 57A of the Indian , also did not assist the case of the Company. These sections deal with the licencee 's charges to consumers and the Rating Committees. In the Sixth Schedule to the Act (incorporated into every license by section 57 'aforesaid) it is provided by cl. IV that certain amount shall be appropriated towards Contingencies Reserve from the revenues of each year of account. Clause V then provides for the appropriation of the Contingencies Reserve :it requires the undertaking to hand over the Contingencies Reserve to the purchaser. If the retrenchment compensation becomes properly due to the employees of the Company, it would, by virtue of cl. V sub cl. (2) proviso, be charged upon the Contingencies Reserve and the balance alone would be handed over to the purchaser. In the present case however there was no finding by the Labour Court that the Contingencies Reserve had been paid over to the purchaser. 521 C 522 Cl (vi) The claim of the Lucknow workmen to compensation in lieu of earned leave not enjoyed by them could not be allowed. After the company closed its business it could obviously not give any earned leave to these workmen 'and the latter could not claim it. In the absence of a statutory provision to that effect no such compensation was payable. [522 E]

In the former appeal, the appellant is a nationalised Bank. In 1977, some demands for wage revision made by the employees of all Banks were pending and in support of their demands, a call for a country wide strike was given. The appellant Bank issued a Circular on September 23, 1977 to its managers and agents directing them to deduct wages of the employees for the days they go on strike. The respondent Unions gave a car for a four hour strike on December 29, 1977. Two days before the strike, the appellant Bank issued an Administrative Circular warning the employees that if they participate in the strike, they would be committing a breach of their contract of service and they would not be entitled to salary for the full day and they need not report for work for the rest of the working hours on that day. However, the employees went on strike as scheduled, for four hours which included banking hours of the public, and re sumed duty thereafter. The appellant Bank did not prevent them from doing so. The appellant Bank by its circular di rected the managers and agents to deduct the full day 's salary of those employees who participated in the strike. On a writ petition filed by the respondents, the High Court quashed the said Circular. The Letters Patent Appeal filed by the appellant was dismissed. Hence, the appeal by the Bank. In the latter appeal, the appellant is a company whose workers had indulged in "go slow" in July 1984, thereby bringing down production. The workers did not attend to their work and were loitering in the premises and were indulging in go slow tactics to pressurise the 215 company to concede their demands. The company suspended its operation by giving a notice of lock out. It did not pay wages to the workers for July , 1984 on the ground that they did not work during all the working hours and had not their wags. The workers ' union filed a complaint before the Indus trial Court complaining that the appellant company had indulged in unfair labour practice and that the lock out declared was illegal The Industrial Court held that the deduction of wages for July, 1984 on account of the go slow was not justified It also declared that the company had committed an unfair labour practice by not paying full monthly wages to the workers and directed the company to pay the said wages for the month of July, 1984. Aggrieved, the appellant company has preferred the appeal. Allowing the appeals, this Court, HELD: 1.1 There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employer can take disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages. However, when miscon duct is not disputed but is, on the other band, ' admitted and is resorted to on a mass scale such as when the employ ees go on strike, legal or illegal, there is no need 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 strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was pre vented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it. That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either. It is true that in the present case when the employ ees came back to work after their four hours strike, they were not prevented from entering the Bank premises. But admittedly, their attendance after the four hours strike was useless because there was no work 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 threatened, they would not be entitled to the wages for the whole day and hence they need not 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 hi its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not 216 do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank. In fact, the direction was to the contrary. Hence, the later resumption of work by the employees was not in fulfil ment of the contract of service or any obligation under it. The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours or work that the employees remained in the Bank premises without doing any work. It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employment and for which they were entitled to be paid. [222E H; 223A F] 1.2 Although the service regulations do not provide for a situation where employees on a mass scale resort to ab sence from duty for whole day or a part of the day whether during crucial hours or otherwise they do provide for treat ing an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence. [224D E] 2.1. When the contract, 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 concerned, the wages can be deducted even under the provisions of such enactment. [231F] 2.2. 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 conditions under which alone its exercise may become legal. Whereas, there fore, a legal strike may not invite disciplinary proceed ings, 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 not either make the strike illegal as a weapon or deprive the workers of it. When workers resort to it, they do so knowing full well its consequences. During the period of strike the contract of employment continues but the workers withhold their labour. Consequently, they cannot expect to be paid. [232C E] 2.3. The contract, which is this case is monthly, cannot be subdivided into days and hours. If the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month 217 he served. If the employment contract is held indivisible, it will be so for both the parties. There is no difficulty, inequity or impracticability in construing the contract as divisible into different periods such as days and hours for proportionate reimbursement or deduction of wages, which is normally done in practice. [232G H; 233A] 2.4. The contract 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 not provide a remedy for mass misconduct which is admit ted or cannot be disputed. Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper. The service conditions are not expect ed to visualise and provide for all situations. When they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so. The pro rata deduction of wages is not an unreasonable exercise of power on such occasions. Whether on such occasions, the wages are deductable 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 no work for the rest of the day as in the present case, the employer may be justified in deducting salary for the whole day. On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiense in it. In that case the employer may not be entitled to deduct wages at all or be entitled to deduct only for the hours of strike. If statutes such as the 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 not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is silent on the subject. [233B F] V.T. Khanzode & Ors. vs Reserve Bank of India & Anr., ; ; Paluru Ramkrishnaiah & Ors. etc. vs Union of India & Anr. ; , and Senior Superin tendent of Post Office & Ors. vs lzhar Hussain; , , relied on. Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; ; V. Ganesan vs The State Bank of India & Ors., ; State Bank of India, Canara Bank, Central Bank etc. & Ors. vs Ganesan, Jambunathan, Venkatara 218 man, B.V. Kamath, V.K. Krishnamurthy, etc. & Ors. , ; Sukumar Bandyopadhyyay & Ors. vs State of West Bengal & Ors., [1976] IX LIC 1689; Algemene Bank Nederland, N.V. vs Central Government Labour Court, Calcutta & Ors., [1978] II LLJ, 117; V. Ramachandran vs Indian Bank, [1979] I LLJ 122; Dharam Singh Rajput & Ors. vs Bank of India, Bombay & Ors. , ; R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; R.N. Shenoy & Anr. etc. vs Central Bank of India & Ors. , [1984] XVII LIC 1493; Prakash Chandra Johari vs Indian Overseas Bank & Anr., [1986] II LLJ 496; Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Ltd. vs Firestone Tyre & Rubber Co., ; ; Krishnatosh Das Gupta vs Union of India & Ors., ; Sant Ram Sharma vs State of Rajasthan & Anr., ; ; Roshan Lal Tandon vs Union of India, ; ; Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors. (No. 2), ; Miles vs Wakefield Metropolitan District Council, [1989] I LLJ 335 and Cutter vs Pwell, [1795] 6 TR 320, referred to. There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment. It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work. It has been roundly condemned as an industrial action and has not 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 disciplinary action for it. Hence, once it is proved. those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service. [237G H; 238A] 3.2. The proof of go slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre produc tion activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors hearing on the average production etc. The go slow further may be indulged in by an individual workman or only some workmen either in one sec tion 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 produc tive process. Even where it is admitted, go slow may in some case present 219 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 deduc tion of wages for go slow may, therefore, present difficul ties which may not be easily resoluble. When, therefore, wages are sought to be deducted for breach of contract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to he adjudicated by an independent machinery statutory or otherwise as the parties may resort to. 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 normal or average production may not 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 he 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 not will depend on the facts of each case. [238B G] 3.3. In the instant case, there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen resulting in loss of production during the said period. Since the said finding is not challenged, it is not possible to interfere with it in this appeal. Though the appellant is justified in deducting wages for the said period, in the facts and circumstances of the case it is directed that it will not deduct more than 5 per cent of the wages of the workmen for the month of July, 1984 when they indulged in go slow tactics. [239D F] M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., ; T.S. Kelwala & Ors. vs Bank of India & Ors., and Apar (Pvt) Ltd. vs S.R. Samant & Ors., [1980] II LLJ 344, referred to.

Appeals Nos. 218 to 223 of 1959. Appeals from the Judgment and Decree dated August 9, 1953, of the Bombay High Court in Appeals Nos. 605 and 606 of 1952 from Original Decrees. B. B. Kotwal, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant (In C. As. Nos. 218 and 219 of 59), Respondent No. 1 (In C. As. Nos. 220 and 222 of 59), Respondent No. 2 (In C. A. No. 221 of 59) and Respondent No. 5 (In C. A. No. 223 of 59). W. section Barlingay and A. G. Ratnaparkhi, for the appellants (In C. As. Nos. 220 and 221 of 59), Respondents Nos. 1 to 4 (In C. As. Nos. 218 and 223 of 59) and Respondents Nos. 3 to 6 (In C. As. Nos. 219 and 222 of 59). Naunit Lal, for the appellants (In C. As. 222 and 223 of 59), Respondent No. 6 (In C. A. No. 218 of 59), Respondent No. 1 (In C. As. Nos. 219 and 221 of 59) and Respondent No. 3 (In C. A. No. 220 of 59). R. Gopalakrishnan, for Respondents Nos. 5(a) to 5(c) (In C. A. No. 218 of 59), Respondents Nos. 2(a) to 2(c) (In C. As. Nos. 219, 220 and 222 of 59) and Respondents Nos. 3(a) to 3(c) (In C. A. No. 221 of 59) and Respondents Nos. 6(a) to 6(c) (In C. A. No. 223 of 59), 794 1961. February 10. The Judgment of the Court was delivered by SHAH, J. These six appeals are filed with certificates under article 133 of the Constitution granted by the High Court of Judicature at Bombay. The appeals arise out of the judgments and decrees in suits Nos. 47 of 1948 and 36 of 1949 in the court of the Civil Judge, Senior Division, Dharwar. The following geneology set out in the plaint in Suit No. 47 of 1948 explains the relationship between the parties: Dongarsa | | | Yamosa Ramakrishnasa | | | | | | | Hanmantsa Kashinathsa Bhaskarsa Murarsa | (D 1) | (D 2) Bhimasa | (D 3) | | | | | Narsingsa Pandurangsa Benakosa Hanmantsa (P 1) (P 2) (P 3) (P 4) The principal contesting party in the suits was Kashinathsa, eldest son of Yamosa, and he was the first defendant in both the suits. For facility of reference, we propose to refer to the parties as they were arrayed in Suit No. 47 of 1948. Bhimasa the plaintiff in Suit No. 36 of 1949 will, therefore, be referred in this judgment as defendant No. 3. At a partition in 1893 between Dongarsa 's branch and the other branches, the former branch received property of the aggregate value of Rs. 13,000/ . Members of that branch thereafter carried on business of weaving silk garments and also of sale and purchase of silk garments. In 1912, defendant No. 1 started a cloth shop in the name of Kashinathsa Kabadi. In 1916, be started a commission agency business in the name of H. R. Kabadi Shop, and in 1920 he started, business in money lending and silk goods. Since 1912, defendant No. 1 was the principal earning member of of the family and was attending to the various lines of business and he was assisted by the other members of the family. The family prospered and in course of time acquired a large estate. Before 1946, Bhaskarsa father of the plaintiffs and Ramakrishnasa and 795 Hanmantsa grandfather and father respectively of defendant No. 3 had expired, and the first defendant was the senio rmost member of the family. In 1946, disputer, arose between the members of the family and defendant No. 3 declined to continue in jointness with the other members of the family and demanded that he be given his half share after dividing the properties by metes and bounds. Claiming that he alone was instrumental in amassing the vast estate which exceeded in value to Rs. 14,00,000/ , defendant I submitted that the estate be divided in four equal shares and that one share be given to him and the remaining shares to the heirs of Bhaskarsa, defendant No. 2 and defendant No. 3. On August 17,1946, the disputes were referred under a deed in writing to three persons Vithaldas Devidas Vajreshwari a merchant of Betegiri, Devindrasa Tuljansa a common relation of the parties and Parappa Nagappa Jagalur a clerk of the pleader acting for the family (whom we will collectively refer as the Panchas) with authority to determine what shares should be allotted to the different branches of the family and to determine the extra shares to be given to defendant No. 1 for " special exertions made by him in acquiring the property " and to divide the assets of the money lending and other properties of the family_ business as the " Panchas thought fit and proper." The Panchas accepted the reference and embarked initially upon an enquiry for ascertaining what shares in the family property should be allotted to the various contesting parties. On September 23, 1946, the Panchas decided that each of the four parties defendant No. 1, defendant No. 2, the plaintiffs collectively and defendant No. 3 should be given a fourth share in the properties of the family. This decision was reduced to writing: it was signed by the Panchas and was accepted by the parties and in token of acceptance, they subscribed their signatures thereto. On the same day, gold ornaments of the value of Rs. 67,000/ were divided by the Panchas in four equal shares. A record thereof was made in the proceedings of the Panchas. 102 796 The Panchas then proceeded to award to each of the parties gold ornaments weighing 167 tolas 15 as. and silver 481 tolas and 4 as. On September 24, 1946, it is the case of defendant No. 1 that the Panchas decided to give him an additional share of the value of Rs. 40,000/ out of the property for bringing the family " to the present prosperous conditions " and the Panchas directed that defendant No. 2 should for that purpose pay out of his share Rs. 30,000/ to defendant No. 1 and the plaintiffs should pay Rs. 10,000/ to him and the old house of the joint family be allotted to him as his exclusive property. This was denied by the other parties. On October 12, 1946, the Panchas divided the residential houses and a record of this division was entered in five separate books hereinafter referred to as "partition books. " In each of the " partition books the Panchas subscribed their signatures under the record of the division and allotment of the shares and the parties also signed underneath the same in token of acceptance of that division. On October 19, 1946, the Panchas divided an amount of Rs. 64,000/ entries regarding which had been posted in the family books of account. Each party was given Rs. 16,000/ and this division was entered in the account books of Yamosa Dongarsa Kabadi and the entry was duly signed in token of acknowledgment of the correctness by all the parties. It is the case of defendant No. 1 that on that day another amount of Rs. 3,20,000/. which was " the unaccounted cash lying in the safe of the family but which was not entered in the books of account and details whereof were set out in a Tippan Book," was also divided and each party was given Rs. 80,000/ . of the two major contentions in this group of appeals, one has centered round the truth of the story about the division of this amount. 1 On October 20, 1946, the " four empty safes " and the warehouses and lands at Betgiri were divided. On October 21, 1946, the stock in trade of the silk shop was divided in four equal shares and on November 10, 1946, miscellaneous gold and pearl ornaments and the houses at Gadag and plots of land in the Hubli Cotton Market were similarly divided, On February 7, 1947, 797 the agricultural lands, cattle and agricultural implements were divided. On February 22,1947, Rs. 24,000/as the accumulated cash on hand in the money lending business were divided into four equal shares. Divisions made on October 20, 1946, October 21, 1946, February 7 and February 22, 1947, were duly entered in the " partition books " and the entries were signed by the Panchas and were also by the parties in acknowledgment of the correctness of the divisions. On February 24, 1947, acknowledgments were obtained from the junior members of the family to the reference to the Panchas and to the decision of the Panchas dated September 23, 1946, whereby each branch was given a four annas share and also to the subsequent divisions made from time to time between September 23, 1946, and February 24, 1947. Between February 25, 1947, and April 10, 1947, cotton bales belonging to the family of the value of Rs. 3,20,000/were divided into four equal shares. The record of this division was not signed by the parties. After the furniture and utensils of the family were divided, there survived certain disputes about the outstandings of the family and other properties especially a dispute about Rs. 16,000/ lying in cash with the family which could not be decided. To resolve the disputes about these properties and the outstandings of the family, the Panchas, with the consent of the parties referred them for decision to one Bhim Rao Godkhindi, a senior pleader of the Gadag Bar. On November 3, 1947, the Panchas executed a writing in favour of Godkhindi authorising him to complete the work of partition of the estate. Godkhindi accepted the authority. On December 5, 1947, Godkhindi asked the parties to "state clearly " what according to them were the properties which remained to be partitioned, and the plaintiffs gave a list to Godkhindi of such properties. Between February 5 and February 9, 1948, outstandings of the value of Rs. 1,20,000/ were divided by Godkhindi and this was accepted by the parties. But Godkhindi was unable to proceed with the division of the remaining assets. On February 9, 1948, the first plaintiff served a notice canceling the authority of the Panchas to 798 divide the properties of the family and on August 19, 1948, he filed Suit No. 47 of 1948 in the court of the Civil Judge, Senior Division, Dharwar, for partition of the properties remaining to be divided and for accounts of the joint family properties. By his plaint, the plaintiffs admitted that the parties had agreed to divide the property into four equal shares. in para. 6 of their plaint, they set out the properties which they alleged had not been divided. The plaintiffs claimed that they be awarded a fourth share in the outstandings of the assets of " Kashinathsa Yamosa Kabadi " and " H. R. Kabadi " shops, and in " a considerable amount of money that has been there" since the time of the ancestors the Tippan in respect of which it was alleged was with defendants Nos. 1 and 2 and in certain gold and silver articles, and lands and houses and rents which were recovered. On August 19, 1948, the plaintiffs also filed a petition in the court of the Civil Judge for leave to revoke the authority of the Panchas. Notice of this petition was served upon the Panchas, and the Panchas having expressed unwillingness to function the court passed an order cancelling their authority. Thereafter defendant No. 3 filed Suit No. 36 of 1949 on August 16, 1949, for partition and separate possession of a half share in all the properties of the joint family. By his plaint, he claimed that he " had been told " that despite the decision of the Panchas dated September 23, 1946, he will be given a half share in the properties, that his consent to the divisions made by the Panchas was obtained by misrepresentation and that the Panchas were guilty of partiality and therefore their decisions were not binding on him. He averred that it was not possible for him to give the descriptions of the properties other than those described in the plaint and of all the movables belonging to the family and the money lending dealings, he claimed a declaration that the authority given to the Panchas had been revoked and for a decree for partition and separate possession of a half share in the property which may be proved to belong to the joint family. 799 In both the suits, defendant No. 1 contended that the Panchas had divided the properties in four equal shares after their decision to divide the same in that manner was accepted, that the Panchas from time to time had made actual division of the properties with the consent of the parties, that the division of the properties in each case was acted upon and properties allotted to the parties were reduced into possession by the parties to whom they were allotted, and that on that account the division could not be reopened. He also contended that the " unaccounted cash " had been divided on October 19, 1946, and each party was given his share therein, and that the Panchas had given to him an extra share of the value of Rs. 40,000/ in cash payable by the plaintiffs and defendant No. 2 and the residential family house at Betgiri. Defendant No. 2 supported the claim made by the plaintiffs. The Civil Judge held that by virtue of the order passed in the petition for revoking the reference to the Panchas their authority as well as the proceedings and all the decisions given by them ceased to bind the parties because " the decisions stood cancelled." He also held that the decisions were not binding upon the parties as they were not filed in court; that the Panchas were not proved to have awarded to defendant No. 1 any additional share in the property of the family; and that the ,unaccounted cash" of the family which amounted to Rs. 3,20,000/ was not divided. He accordingly passed decrees in the two suits ordering that a fresh partition be effected of all the joint family property moveable and immoveable. Against the decrees passed by the court of first instance defendant No. 1 preferred Appeal No. 605 of 1952, against the decree in Suit No. 47 of 1958 and Appeal No. 606 of 1952, against the decree in Suit No. 36 of 1949. In the two appeals, the High Court at Bombay by a common judgment modified the decrees passed by the court of first instance. In the view of the High Court, there were in law no valid awards made by the Panchas which could be set up in defence by defendant No. 1 to the claim made by the third defendant. They observed that the awards of the 800 Panchas were not binding because they were not properly stamped and those that affected immoveable properties were not registered. But the High Court held that the division of the moveables such as gold and silver ornaments made on September 23, 1946, could not be reopened. They further held that the " unaccounted cash " amounting to Rs. 3,20,000/ was divided on October 19, 1946, and that each branch had received Rs. 80,000/ . The High Court accordingly modified the decree passed by the trial court in so far as it related to the gold and silver ornaments divided by the Panchas on September 23, 1946, and also in respect of the amount of the unaccounted cash of Rs. 3,20,000/ . There were certain other modifications made in the decrees which are not material for the purposes of these appeals, as no arguments have been advanced at the bar relating thereto. In these appeals by defendant No. 1, the plaintiffs and defendant No. 3, two principal questions fall to be determined: (1) whether defendant No. 3 is entitled to a half share in all the properties of the joint family ignoring the division already made and (2) whether the unaccounted cash which was estimated by defendant No. 3 and the plaintiffs at Rs. 4,00,000/ and which was stated by defendant No. 1 to be Rs. 3,20,000/was divided on October 19, 1946. On these two questions, the parties are differently arrived. On the first question, defendant No. 1 is supported by the plaintiffs and defendant No. 2. On the second question, defendant No. 1 is opposed by the plaintiffs and defendants Nos. 2 and 3. After setting out the contentions of the parties, it is recited in the deed of reference that the parties had given authority to the Panchas to peruse the written and oral evidence and to decide what shares shall be allotted to the different branches and also to decide what may appear to be proper for providing an "extra share" to defendant No. 1. The agreement between the members of the joint Hindu family to appoint Panchas for dividing the family properties amounts to severance of the joint family status from the date of the agreement. Once reference is made, joint family 801 status is severed and it is not postponed until the division of the property by metes and bounds. To appreciate the contentions, it is necessary to follow the method adopted by the Panchas in dividing the properties. The decision of the Panchas to allot to each branch a fourth share was accepted by all the parties. Thereafter the Panchas proceeded to allot shares in the properties movable and immovable. The distribution of the properties was set out in writing and in acknowledgment of the fact that distribution was made as described the parties signed the writing: " We have appointed these as the Panchas. In accordance therewith all the Panchas heard all the information (placed below them) and all the Panchas unanimously decided on 23 9 1946 that Kashinathsa Yamosa Kabadi should be given a 1/4 share, that Narasingsa Bhaskarsa Kabadi should be given a 1/4 share, and that Bhimasa Hanumantasa Kabadi should be given a I share, and we all having consented to the said decision of the Panchas, we all and all the Panchas have put our respective signatures to the said decision of the Panchas. The details of the properties that have fallen to the shares of the different shares as per the decision effected in accordance with the said decision are as follows:" This acknowledgment was not merely an agreement not to challenge the decision of the Panchas, but was made as evidencing the division actually made and reduced to writing. The trial court found that the properties separately allotted to the various branches were reduced into possession by the parties and the High Court agreed with that view. If the consent of the parties was not procured by fraud, misrepresentation or any other ground which may vitiate a partition under the general law, the division made by the Panchas and accepted by the parties would be binding upon them. It is always open to the members of a joint Hindu family to divide some properties of the family and to keep the remaining undivided. By the reference to the Panchas, the parties ceased, to be members of the joint Hindu family. If thereafter the 802 assets of the family were divided and that division was accepted by the parties, the properties reduced by the parties to their possession must be deemed to be of the individual ownership of the parties to whom they were allotted, and the remaining properties as of their tenancy in common. Evidently in this case, the Panchas suggested what they regarded as a just and convenient method of partition and that method was accepted by the parties. Originally it was intended to make a general division or award in respect of all the properties and with that end in view a stamp paper of the value of Rs. 30/ was purchased. But in the course of the proceedings, effectuating a division of all the properties by a single award was apparently found inconvenient and a convenient method was adopted and the properties were divided by stages. In the first instance, the principle of division was discussed and decided upon and that principle was accepted by the parties. Thereafter the properties were divided in different sections. The plea raised in his plaint by defendant No. 3 that his consent to the reference was obtained by coercion and undue influence is somewhat vague and indefinite. He merely stated that he had recently attained the age of majority, that defendant No. I was the head of the family and that he was not in a position ',either to say anything against him (defendant No. 1) or to act against him." He also stated that defendant No. I had threatened him that he (defendant No. 3) would be given a share only if he acted according to the behest of defendant No. 1 otherwise he would be driven out of the house without anything and therefore he " became helpless " and agreed to sign the " letter of authority passed in favour of the Panchas." He pleaded in para. 5 of the plaint that he had not agreed to take a more fourth share and that he " had all along been insisting upon receiving a half share," and that it was his intention to take his legitimate half share " without dispute if that could be managed " and as he believed that he would be given that share he did not immediately raise any objections He also stated that hill had been promised 803 by defendant No. 1 that he would be given his share in the property. The learned trial judge rejected this plea holding that Defendant No. 3 failed to prove that he was " compelled by exercise of undue influence and coercion to agree to the reference to the Panchas, and that he had been promised by defendant No. I that he would be given a half share." In the High Court, the plea raised by defendant No. 3 about coercion and undue influence and the promise made by defendant No. I does not appear to have been seriously pressed. The plea of defendant No. 3 that he subscribed his signatures to the various decisions given by the Panchas from time to time because he believed that he was bound by the decision dated September 23, '1946, and that but for such belief he would not have subscribed his signatures to those decisions has in our judgment no force. Defendant No. 3, it appears on the evidence, voluntarily accepted the decision that each branch was to be given a fourth share and he accepted the division of the properties allotted to him on that footing. Again by virtue of the order passed by the Civil Judge cancelling the reference, the proceedings taken by the Panchas including the division of the property which had been accepted were not revoked. The plaintiffs filed Misc. Application No. 15 of 1948 for an order revoking the reference and as the Panch Devendrasa was found unwilling to proceed with the work of dividing the property, the arbitration was cancelled. Under section 12, sub section (2) of the Arbitration Act, where the authority of an arbitrator or arbitrators is revoked by leave of the court, the court may order that the arbitration agreement shall cease to have effect with respect to the difference referred. If the decisions of the Panchas had not been accepted by the parties with the revocation of the reference, all proceedings which they had adopted might have fallen through; but the parties did accept the decisions made from time to time and the cancellation of the reference had not the effect of vacating the divisions already made. We are unable to agree with the view of the trial judge that the cancellation had the effect of 804 nullifying all the interim divisions and that they must be deemed to have been impliedly set aside. It is unnecessary to consider whether these decisions may be regarded as " interim awards " within the meaning of section 27 of the Arbitration Act. The decisions given and divisions made were not merely tentative arrangements liable to be superseded at a later stage. The decisions were treated as final and were carried out. We agree with the High Court that whatever may be the original intention of the parties, the Panchas having with the consent of the parties proceeded to divide the properties in stages, each decision must be regarded as final with regard to the property divided thereby. We are of the view that it was open to defendant No. I to set up the division of the properties made from time to time as a defence to the action filed by defendant No. 3. Even assuming that the records of the divisions made by the Panchas are awards strictly so called, what is set up in defence is not the awards made by the Panchas, but the partition of the property by agreement after accepting the method of partition suggested by the Panchas. To such a plea, there is in our judgment no bar of section 32 of the Arbitration Act. By section 32 it is provided: " Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act. " Before the , was enacted, an award made by arbitrators appointed out of court even if it was not made a rule of the court was regarded as equivalent to a final judgment and any suit filed on the original cause of action referred to the arbitrators was held barred. In Muhammad Nawaz Khan vs Alam Khan it was held by the Judicial Committee of the Privy Council that an award is valid even if no party has sought to enforce it by the summary procedure, (1) (1891) L.R. 18 I.A. 73. 805 Since the enactment of the ,, there has &risen wide divergence of judicial opinion among the High Courts on the question whether an award made in a reference out of court can be set up as a defence to an action filed by a party thereof on, the original cause of action when the award is not filed in court. Section 31, sub section (2) of the provides: " Notwithstanding anything contained in any other law for the time being, in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed and by no other court " and section 33 sets out the procedure to be followed for challenging the existence, effect or validity of an arbitration agreement or an award or to have its effect determined. It is manifest that questions relating to the validity, effect or existence of an award can be decided by the court to which an application making it a rule of court lies. In Babui section K. Kuer vs B. N. Sinha (1), the Patna High Court held that by virtue of section 32 of the , an award made on a private reference to arbitration is not operative of its own force; it only becomes operative on being made a rule of the court. It was held in that case that an award cannot be set up as a defence to an action unless it is filed in court and a decree is obtained thereon. Similar view was taken in Sait Pamandass vs T. section Manikyam Pillai Bhimavarapu Venkatasubbauva vs Addanki Bapadu and Firm Gulzarimal Gheesdal vs Firm Rameshrhandra Radhyeshyam (4). On the other hand, in Pamudurthi Suryanarayana Reddy vs Pamudurthi Venkata Reddi (1), it was held that sections 32 and 33 of the Indian , did not preclude a defendant from (1) (1952) l. L.R. 31 Pat. (2) A.I.R. 1960 And. Pra. 59. (3) A.I.R. 1951 Mad. (4) I.L.R. (5) I.L.R. 806 setting forth an award which had been fully performed by him but which was not filed in Court under section 14 and on which a judgment was not pronounced or a decree given under section 17 of the Act, in answer to the plaintiff 's claim which was the subject matter of the reference and the award. That view was accepted in Rajamanickam Pillai vs Swaminatha Pillai (died) (,). It is not necessary in this appeal to express a considered opinion on this disputed question. It may be sufficient to observe that where an award made in arbitration out of court is accepted by the parties and it is acted upon voluntarily and a suit is thereafter sought to be filed by one of the parties ignoring the acts done in pursuance of the acceptance of the award, the defence that the suit is not maintainable is not founded on the plea that there is an award which bars the suit but that the parties have by mutual agreement settled the dispute, and that the agreement and the subsequent actings of the parties are binding. By setting up a defence in the present case that there has been a division of the property and the parties have entered into possession of the properties allotted, defendant No. I is not seeking to obtain a decision upon the existence, effect or validity of an award. He is merely seeking to setup a plea that the property was divided by consent of parties. Such a plea is in our judgment not precluded by anything contained in the . The records made by the Panchas about the division of the properties, it is true, were not stamped nor were they registered. It is however clear that if the record made by the Panchas in so far as it deals with immoveable properties is regarded as a non testamentary instrument purporting or operating to create, declare, assign, limit or extinguish any right, title or interest in immoveable property, it was compulsorily registrable under section 17 of the Registration Act, and would not in the absence of registration be admissible in evidence. But in our judgment, the true effect of what are called awards is not by their own force to create any. interest in immoveable property they recorded (1) A.I.R. 1952 Mad. 807 divisions already made and on the facts proved in this case, their validity depends upon the acceptance by the parties. The records made by the Panchas were documents which merely acknowledged partitions already made and were not by law required to be registered. On a perusal of exhibit 456A which is a translation of the tippan book in which are recorded the decisions which are signed by the parties, it is evident that the Panchas were merely recording what had been actually divided and they were not seeking to set out their decisions relating to division of property to be made. The question whether the various decisions recorded in exhibit 456A and in the, books of account were required by law to be stamped need not be decided. The documents were admitted in evidence by the trial court and no question of admissibility of those documents can be raised at a later stage of the suit or in appeal (see section 36, Stamp Act). We are unable to agree with the view of the High Court that the decisions dated October 12, 1946, October 20,1946, and November 10, 1946, were not intended to be final decisions. There is no reliable evidence to support the view of the High Court. Even if the divisions are not strictly in conformity with the shares declared in the decision dated September 23, 1946, the parties having accepted those divisions and having reduced the shares allotted to their possession, it is not open to them to seek to reopen the same on the ground that the division was unequal. Defendant No. 3 contended in the trial courts and the High Court that he had not taken possession, of the property allotted to his share. The trial court held that he had taken possession of all the properties which had fallen to his share and the plea that he has not obtained possession was untrue. The High Court has accepted that view. To sum up: on a consideration of the materials placed before the court, the reference to Panchas is proved to be made voluntarily by all the parties, that the Panchas had in the first instance decided that each branch was to get a fourth share in the properties and that decision was accepted by the parties, that division 808 of properties made from time to time was also accepted by the parties, and subsequently, when the Panchas were unable to proceed with the division, the matter was referred by consent of the parties to Godkhindi and Godkhindi divided with the consent of the parties the outstandings. but he was unable to divide the remaining properties. For reasons we have already stated, the division made by the Panchas and by Godkhindi is binding upon the parties. Such properties as are not partitioned must of course be ordered to be divided and the division will be made consistently with the rules of Hindu law. To the division of such properties which have not been divided, the decision of the Panchas dated September 23, 1946, will not apply. We may now turn to the second question whether on October 19, 1946, the amount of Rs. 3,20,000/ which was the " unaccounted cash with the family " was partitioned. It was the plea of defendant No. I that on that day after dividing the amount of Rs. 64,000/ the " unaccounted cash " which was found to be Rs. 3,20,000/ was actually divided and each branch was given Rs. 80,000/ . Defendant No. 1 relied upon his own testimony besides the testimony of Parappa (one of the Panchas) and of Huchappa clerk of the family shop. Defendant No. 3 examined the other Panch Devendrasa. The trial court held that the testimony of Huchappa and Parappa was unreliable. Defendant No. 1 did admit that the family possessed Rs. 3,20,000/ as " unaccounted cash "; and the burden of proving that division was in fact made lay on him. The trial court observed that there was no writing evidencing the division of Rs. 3,20,000/ , no receipt was taken from any person for payment of a share in that amount, and that it was highly improbable that a person like defendant No. 1 would part with substantial amounts without taking receipts. The High Court disagreed with this view. , They pointed out that there was no entry made in the books of account of this large amount of cash, and apprehending that a division of the property with a 809 formal record which may ultimately be produced in court was likely to involve the members of the family in proceedings for concealment of income, no record was maintained of the division thereof. The High Court also relied upon the testimony of Parappa, Huchappa and defendant No. 1 and upon the circumstance that neither in the plaintiffs ' plaint nor in the plaint of defendant No. 3 was any specific reference made to the refusal of defendant No. 1 to divide this amount. In our view, the High Court was right in the conclusion to which it arrived. It is true that it is difficult to rely upon the oral testimony of either side. Defendant No. I and defendant No. 3 are evidently interested persons and their testimony may not carry much weight. Parappa one of the Panchas deposed that the amount of Rs. 3,20,000/ was divided on August 19, 1947, and each branch received its share. He stated that the amount was not entered in the books of account. He further stated that after the safes were opened, the Tippan book was found together with the money and that the cash was counted but it was not compared with the Tippan book, that thereafter the amount was divided. According to this witness, there was no documentary evidence about that amount and he did not know whether the defendants had knowledge of the extent thereof He explained that no receipts were taken because defendant No. I did not demand the same, that he did not press for a writing as the parties said that it was a " secret arrangement ", and as the division was " with complete concord ", he did not think it necessary to take a writing or to record it in the books. The testimony of Huchappa 'was similar. The other Panch Devendrasa stated that plaintiff No. 1 and defendant No. 2 had pressed the Panchas to give them their share in the " unaccounted cash ", saying that defendant No. I was " indefinitely postponing " it, that the Panchas advised defendant No. 1 to divide this amount, but he stated that he would be " reduced to equality " with others when ' he had a large family and that he had made great efforts and that he should 810 be given more property, otherwise he would not allow division of the " unaccounted cash " and the other property. The Panchas then told him that they had decided upon the share each should be given and no further proposal would be entertained by plaintiff No. 1. The witness then said that he left for Gadag. In cross examination, he stated that he and the other Panchas had told defendant No.1 to give the shares of the unaccounted cash to the other sharers. The evidence of the witnesses clearly shows that the question relating to the division of the "unaccounted cash " was expressly discussed and the plaintiffs as well as defendant No. 3 were fully aware of the existence of this amount lying in the safe which was not entered in the books of account. It is the case of defendant No. I that the amount was divided on October 19, 1947. The first plaintiff and defendant No. 3 have denied this on oath; defendant No. 2 did not enter the witness box. The burden certainly did lie upon defendant No. 1 to establish the division of the amount but there are several important circumstances which go to prove that a partition must have been effected as alleged by defendant No. 1. From the sequence in which various properties were partitioned, it is clear that in the first instance the principle of division was decided and then the valuable properties like the immovable properties, the cash, stock in trade of the shops, were divided and then the division of properties of comparatively small value like the agricultural implements, pots and furniture was taken in hand. If there was a. large amount of Rs. 3,20,000/ in cash lying undivided before dividing pots, pans and furniture, the other parties would have insisted upon the division of that amount. : It is difficult to believe especially having regard to the plea that defendant No. 1 had adopted a refractory attitude with the other parties that defendant No. 3 accepted the division of properties of comparatively small value without insisting upon division of this large amount. There is also the circumstance that even though plaintiff No. I know about the existence of the " unacounted cash " in the safe, it was 811 expressly mentioned in the plaint. We would have expected the plaintiffs to state expressly that on or about October 19, 1947, " unaccounted cash " was found in the safe and that even though defendant No. I was asked to divide the same by the remaining parties as well as the Panchas, he declined to accede to that demand. The conduct of defendant No. 3 in not setting out this item in his plaint renders the story that defendant No. I refused to divide this amount somewhat improbable. There is again no reference in the plaint filed by defendant No. 3 that the amount that was divisible was not divided on account of the attitude adopted by defendant No. 1. Counsel for defendant No. 3 relied upon the averments in para. 9 of the plaint that it was not possible for defendant No. 3 to give a description of the remaining properties and the movable articles belonging to the family and the money lending dealings. But there is in the plaint no reference to any cash amount. Schedules appended to the plaint are very detailed and it is difficult to believe that defendant No. 3 did not mention that this amount of Rs. 3,20,000/ was not divided even after demands were made and ignored. The plea that he apprehended that he might be called upon to pay court fee ad valorem on the amount if he specified it in the plaint is futile. Consistently with the 'practice prevailing in the courts in the Bombay Province, defendant No. 3 had paid Rs. 18,12,0 as court fee under article 17, cl. VII, on the plea that he and the other parties were in constructive possession of the entire property, belonging to the family. Properties worth lakhs of rupees were described in the schedules annexed to the plaint and if court fee ad valorem was not payable according to defendant No. 3 in respect of, those properties, we fail to appreciate why he should have apprehended that court fee ad valorem would still be payable if he claimed a share in the cash amount of Rs. 3,20,000/ . There is also the other circumstances that with consent of the parties reference was made to Godkhindi by the three Panchas of all the matters which had 812 remained to be settled, and in the statement made before him which was recorded in writing, there was no reference to the claim that the amount of Rs. 3,20,000/ had remained to be divided. Plaintiff No. 1 gave a detailed statement of the properties which remained to be divided and that document is dated December 5, Item 5 is " cash balance in the Dalali shops and in the house should be divided ", and again in cl. (12) it was stated " an account of the amounts in suspense (parabhare) account should be taken and the total of the said amount should be divided. " Counsel for the plain. tiffs and the third defendant submitted that the original of this list was in Kannad which was translated into Marathi and the Marathi word which is translated into English as " suspense " was " parabhare ". That word according to the plaintiffs and the third defendant meant " unaccounted for ". It is difficult for us to express any opinion on this argument. It may be observed that the learned Judge of the High Court who delivered the judgment was himself conversant with the Marathi language and he was not prepared to accept that interpretation. But that by itself may not be sufficient to reject the plea of the plaintiffs. What is material is that in a detailed statement consisting of as many as 24 items the plaintiffs have not set out that this amount of Rs. 3,20,000/ which was found in the family safe and which the Panchas wanted to divide, was on account of the uncompromising attitude of the first defendant not divided. If the amount had not been divided, we have not the slightest doubt that in the statement this amount would have been expressly included. Godkhindi was examined as a witness in these suits. The trial court found him to be a person who was wholly disinterested. It appears from the evidence of Godkhindi that no question about the division of Rs. 3,20,000/ was mooted. If the amount had not been divided, we have no doubt that this question would have been prominently brought to his notice; but no such plea was even raised. We are of the view having regard to these circumstances that 813 the amount of Rs. 3,20,000/ must have been divided. In that view of the case, the decree passed by the High Court will be modified as follows: The properties of the joint family except the properties divided on September 23, 1946, October 12, 1946, October 19, 1946, including the amount of Rs. 3,20,000/ , October 20, 1946, October 21, 1946, including the stock in trade, silks and sarees and cupboards, and on November 10, 1946, February 7, 1947, February 22, 1947, February 24, 1947, February 25, 1947, and the furniture, utensils and other movables between May and June, 1947, and the property divided on July 13, 1947, and the outstandings divided be tween February 5, 1948, and February 9,1948, shall be partitioned between the parties. The partition will be made on the footing that defendant No. 3 is entitled to a half shar and defendant No. 1, the plaintiffs collectively and defendant No. 2 are each entitled to a 1/6 share. Defendant No. I will be entitled to his costs in Appeals Nos. 218 of 1959 and 219 of 1959. The other appeals filed by the plaintiffs and defendant No. 3 will be dismissed. One hearing fee. C. As. Nos. 218 and 219 of 1959 allowed. C. As. Nos. 220 to 223 of 1959 dismissed.

The parties were members of a joint Hindu family possessed of considerable property movable and immovable. They volun tarily appointed Panchas to determine the shares of the parties and to divide the property. The Panchas first determined the shares of the parties and reduced the determination to writing. It was accepted by the parties and was signed by all of them and the Panchas. Thereafter, on various dates the Panchas divided several items of movable and immovable properties and the parties entered into possession of their shares. These divisions were duly entered in the " partition books " and were signed by the parties and the Panchas. The Panchas were unable to divide the remaining properties and with the consent of the parties they appointed one G to divide them. G divided some of the properties but he too was unable to divide the remaining properties. One of the parties served a notice cancelling the authority of the Panchas and filed a suit for partition of the remaining properties. Upon an application made by the plaintiff for revoking the reference the Trial Court cancelled the arbitration as one of the Panchas was unwilling to proceed with the division. Another party filed a suit for partition of all the properties contending that the division made by the Panchas was not binding as the award had not been made a rule of the court and the reference had been revoked and as the award was not registered. Held, that the divisions already made by the Panchas were binding on the parties and only the remaining properties were liable to be partitioned. By the reference to the Panchas, the 793 parties ceased to be members of the joint Hindu family. Thereafter, by the division of the family assets which was accepted by the parties and by the taking into possession of their shares by the parties, the properties came under the individual ownerships of the parties to whom they were allotted; and in respect of the remaining properties they became tenants in common. The proceedings taken by the Panchas were not revoked by the order of the trial Court revoking the reference as they had been accepted and acted upon by the parties. Where an award made in arbitration out of court is voluntarily accepted and acted upon by the parties and a suit is thereafter filed by one of the parties ignoring the acts done in pursuance of the acceptance of the award, the defence that the suit is not maintainable is not founded on the plea that there is an award which bars the suit but that the parties have by mutual agreement settled the dispute, and that the agreement and the subsequent actings of the parties are binding. Such a plea is not barred by section 32 of the Arbitration Act. The records made by the Panchas were documents which merely acknowledged partitions already made and were not required to be registered.

% As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982. The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal. On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application. The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent. The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties. A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent. The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge. Allowing the Appeal by the State this Court, ^ HELD: l. The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing. The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of. [823G H] 2. The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter. [824A B] 3. The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed. [824B c] 4. The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives. It could not be said that the appeal is disposed of as observed by the High Court. It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law. [824C D]

Held, (i) that the ordinary and primary jurisdiction of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 is appellate; (ii) that section 22 of the Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction; (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the 1242 workmen an additional remedy which they did not have under the . The two now sections 33 and 33 A inserted in the Industrial Di putes Act 1947 (XIV of 1947) by Act XLVIII of 1950 confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein. Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award. The provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms. A ban has been put by section 22 of 1950 Act and section 33 of the 1947 Act upon the ordinary right, which the employer has under the ordinary law governing a contract of employment with a view to protect the workmen against victimisation by the employer and to ensure the termination.of the proceedings in connection with industrial disputes in a peaceful atmosphere and the only thing that the authority is called upon to do is to grant or withhold the permission i.e. to lift or maintain the ban. These sections do not confer any power on the authorities to adjudicate upon any other dispute. Under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950) the Labour Appellate Tribunal has no jurisdiction to impose conditions as a pre requisite for granting permission to the employer to retrench its workmen. Under section 33 A of the and section 23 of the 1950 Act the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to give a decision on the merits of an industrial dispute and grant appropriate relief which when published by the appropriate Government will become enforceable under the respective Acts. Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd. ([1951] , Batuk K. Vyas vs Surat Borough Municipality ([1952] , Raj Narain vs Employer s ' Association of Northern India ([1952] 1 Lab. L.J. 381), The Queen vs County Council of West Riding of Yorkshire ([1896] 1 Q.B. 386), Carlsbad Mineral Works Co., Ltd. vs Their Workmen ([1953] , Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union ([1953] S.C.R. 780) and Bhattacharji vs Parry & Co., Ltd., Calcutta ([1954] , referred to.

The appellant is a resident of Bombay while the father of respondent was a resident of Prantij in the former State of Baroda. They were betrothed in 1945 and their marriage was solemnised at Bombay according to Hindu rites on March 10, 1947. On August 27, 1947, respondent gave birth to a daughter after 5 months and 17 days of their marriage. In April 1956. the appellant filed a petition for annulment of his marriage with respondent on the ground that the child had been conceived long prior to his marriage through someone ,else, the respondent was, at the time of marriage, pregnant by some one other than himself, that that fact was concealed from him and that ever since he had learnt about the birth of the child he had not cohabited with the respondent nor had he any relation with her whatsoever. The defence of respondent was that she conceived the baby as a result of sex relations with the appellant after their betrothel on being assured by him that that was permissible in their community, and that the parents of the appellant knew about the relations between the parties and also about her having conceived prior to her marriage. The trial court accepted the allegations of the appellant and held that the respondent was not pregnant by the appellant but by a person other than the appellant even before marriage. Respondent went in appeal to the High Court against the order ,of annulment passed by the trial court. The High Court was not satisfied with the findings of the trial court and remanded the case to the trial court after framing the following two new issues: 1. Is it proved that the respondent was pregnant at the time of marriage? 2. Is it proved that marital intercourse with the consent of the petitioner has not taken place since the discovery by the petitioner of the existence of the grounds for a decree? Respondent further alleged that the child was the result of conception after the marriage. The trial court recorded additional evidence and came to the conclusion that the respondent 268 was not pregnant at the time of marriage and that no sexual intercourse with the consent of appellant took place after the discovery by appellant of the grounds for a decree. These findings were submitted to the High Court which held that it was not proved that respondent was pregnant at the time of marriage and that it was proved that petitioner had marital intercourse with the respondent subsequent to his discovery of the existence of the grounds for the decree. The High Court allowed the appeal of respondent and dismissed the petition for annulment of marriage. Appellant came to this Court after obtaining a certificate of fitness from the High Court. Accepting the appeal, Held (Mudholkar, J. dissenting). (i) The child born to res pondent on August 27, 1947 was practically a mature child and weighed 44bs. in weight and therefore it could not have been the result of conception taking place on or after March 10, 1947. The child was conceived prior to March 10, 1947 and therefore respondent was pregnant at the time of marriage by some one other than appellant. Hence, appellant was entitled to annulment of his marriage. (ii) The appellant did not have marital intercourse with respondent after he discovered that she had been pregnant by some one else at the time of marriage. In divorce cases, the court usually does not decide merely on the basis of the admissions of the parties. This is a rule of prudence and not a requirement of law. However, where there is no room for supposing that parties are colluding decision can be based on the admission of the parties. It is undesirable that the burden should be imposed on litigants in this class of cases, in which the substantial issue between the parties was whether the husband had at what was considered the relevant times any opportunity of intercourse with his wife and no question of an abnormal period of gestation had been raised until the trial and then only by the commissioner himself, of adducing medical evidence re: the period of gestation. However, that may be unavoidable where medical evidence in regard to the period is called by respondent and then the case becomes the battle ground of experts. (iii) The case of Clark vs Clark is not a good guide both on facts and law for the determination of the question about the legitimacy of the child of the respondent. In that case, delivery after 174 days of the conception was proved to be on account of the fact that the mother of the child fell a day before delivery. It is not correct to add a lunar month to the ascertained period of gestation in cases of a known date of conception merely on the ground that when books speak of foetus of a certain number of months, that foetus might be due to a conception taking place on any day of the lunar month corresponding to the menstruation prior to the conception and the missperiod after conception. Per Mudholkar, J. if the birth of an apparently normal child 171 or 186 days after conception is an impossible phenomenon and if its impossibility is notorious, then alone a court 269 can take notice of it and the question of drawing a presumption arises. All that can be said is that such an occurrence is at best unusual but it is a far cry to say that it is impossible. It is true that courts have taken notice of the fact that the normal period of gestation is 282 days but courts have also taken note of the fact that there are abnormal periods of gestation depending on various factors. It is not safe to base a conclusion as to the illegitimacy of a child and unchastity of its mother solely on the assumption that because its birth and condition at birth appeared to be normal, its period of gestation must have been normal, thus placing its date of conception at a point of time prior to the marriage of its parents. When a court is called upon to decide a matter mainly, if not wholly, on the opinion of medical men, it must proceed, warily. Medical opinion. even of men of great experience and deep knowledge, is after all generalisation founded upon the observation of particular instances, however numerous they may be. When the Court finds that in. individual cases departure from the norm has in fact been observed by some experts and when again the experts themselves do not speak with the same voice, the need for circumspection by the court becomes all the more necessary. It may land itself into an error involving cruel consequences to innocent beings if it were to treat the medical opinion as decisive in each and every case. The responsibility for the decision of a point arising in a case is solely upon the court and while it is entitled to consider all the relevant materials before it, it would be failing in its duty if it acts blindly on such opinion and in disregard of other relevant, materials placed before it. Under the and the Divorce Act, 1869, the condition for the grant of relief is the satisfaction of the court as to the existence of the grounds for granting the particular relief. The satisfaction as to the existence of the ground must be, as in a criminal proceeding beyond reasonable doubt and must necessarily be founded upon material which is relevant for consideration of the court which would of course include evidence adduced in the case. Although in the the words used are "satisfied on the evidence" while in the , the legislature has used the words "if the court is satisfied" their meaning is the same. When the law places the burden of proof upon a party, it requires that party to adduce evidence in support of his allegations, unless he is relieved of the necessity to do so by reason of admissions made or the evidence adduced on behalf of his opponent. The law does not speak of the quantum of burden but only of its incidence and it would be mixing up the concepts of the incidence of the burden of proof with that of the discharge of the burden to say that in one case it is light and in another heavy. Unless it is shown that important or relevant evidence has been overlooked or misconstrued, it is not in consonance with the practice of Supreme Court to re examine a concurrent finding of fact, particularly when the findings are based on appreciation of evidence. Case law referred to. 270

The appellant was at the relevant dates posted as Subordinate Judge at Masulipatam and Amalapuram. Charges were made against him of bribery and serious irregularities in the discharge of official duties, and they were enquired into by one of the judges of the Madras High Court who sent his reports on August 2o, ,953, and November Io, 953. On the basis of the reports the High Court decided on January 25, 1954, that the appellant should be dismissed from service on the charge of bribery and removed from service on the charge of irregularities, and on January 28, 1954, placed him on suspension until further orders. The appellant moved the High Court under article 226 of the Con stitution of India for quashing the order of suspension on the ground (1) that under r. 4(I)(a) of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, an enquiry into the 415 conduct of a Government servant drawing a monthly salary of Rs. 15o and above could be made only by a Tribunal to be appointed by the Government, and that as the rule came into, effect from October 1, 1953, the order of the Madras High Court dated January 28, 1954, was without jurisdiction, and (2) that the order was repugnant to article 31I of the Constitution of India. The High Court dismissed the application and on appeal against the judgment. Held:(1) that in view of the amendment of r. 4 Of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, on April II, 955, excluding, with retrospective effect, the jurisdiction of the Tribunal in respect of enquiries into the conduct of the judicial officers, the order of the Madras High Court dated January 28, 1954, was not open to attack. (2)that an order of suspension pending final orders is neither one of dismissal nor of removal of service within article 311 of the Constitution. (3)that under r. 13 of the Madras Civil Services (Classification, Control and Appeal) Rules, the High Court had the power to impose suspension pending enquiry into grave charges under r. 17(e) against the Members of the State judicial Service.

The main point for decision in this appeal by the Municipal Committee of Dhamtari and its President was, whether in appointing an Executive Officer in exercise of its powers under section 53A of the C. P. and Berar Municipalities Act, 1922, the State Government acted in a judicial capacity or in an administrative one Complaints having been made against the appellants, the additional Deputy Collector was directed to hold an enquiry and on his report the State Government, by a notification under that section, appointed an Executive Officer of the Municipal Committee for 18 months with specified powers and duties. The appellants were given notice of the said enquiry, filed objections 1441 and the President was personally present on some occasions during the enquiry. The notification charged the appellants with incompetency as well as abuse of power. Against that notification the appellants moved the High Court under article 226, of the Constitution for a writ of certiorari quashing the same, but their application was rejected by the judge sitting singly. An appeal under the Letters Patent against his decision was summarily dismissed. It was contended before this Court on behalf of the appellants that, (1) although the notification purported to be one under section 53A of the Act, it was in effect and reality one under section 57 Of the Act, that (2) it was, therefore, incumbent on the Government under section 57(5) of the Act to afford the appellants an opportunity to furnish explanation and that (3) even if the notification was one under section 53A of the Act, the Government was bound by the rules of natural justice to give the appellants an opportunity to defend themselves. Held (per curiam), that sections 53A and 57 of the C. P. and Berar Municipalities Act, 1922, differed materially in their scope and effect, but it was not obligatory under either of them for the Government to take any action at all. Although a finding of incompetency of the Municipal Committee was a condition precedent to action under both the sections, the Government was free to choose its remedy as the occasion demanded and it could not be contended that because a notification made under section 53A of the Act, along with a finding of incompetency, contained some instances of abuse of power as well, it must be held to have been made under section 57 of the Act. Nor could the vesting of power in the Executive Officer by the notification, however substantial in character, be said, in effect and reality, to amount to a dissolution of the Municipal Committee under section 57 Of the Act. Per Das C. T. and Kapur J. The real test whether the State Government functioned in a quasi judicial capacity or in an administrative capacity in exercising its powers under section 53A of the Act was whether the statute required it to act judicially either expressly or by implication. The Act contained no express provision to that effect, nor could the determination of the fact of incompetency as a condition precedent to any action under that section, by itself, carry such an implication. In making the notification under section 53A of the Act, therefore, the Government functioned in an administrative capacity and not in a quasi judicial one. Even so, by the enquiry held, the State Government afforded the appellants ample opportunity to defend themselves and there could hardly be any ground for complaint. Province Of Bombay vs Kusaldas section Advani, [1950] S.C.R. 621, Rex vs Electricity Commissioners, , Rex vs London County Council, , R. vs Legislative Committee Of the Church Assembly, (1928) 1 K.B. 411 and Nakkuda Ali 's Case, , referred to. 1442 Per Bhagwati J. Since the enquiry held in this case fully satisfied the requirements of natural justice, it was unnecessary to determine for the purpose of this case whether the State r Government in acting under section 53A of the Act did so in a quasi judicial capacity or in an administrative one. Per section K. Das J. If the question was one of compliance with the rules of natural justice, the enquiry held in the present case could hardly be said to have complied with such rules; but since the State Government in acting under section 53A of the Act had only to consider policy and expediency and did at no stage have any form of lis before it, its action thereunder was purley of an administrative character not amenable to a writ of certiorari. Manchester Legal Aid Committee, , applied. Per Subba Rao J. On a proper appreciation of the criteria laid down by section 53A of the Act itself, there could be no doubt that it imposed a duty on the State Government to act judicially in ascertaining the fact of the incompetency of the Municipal Committee to perform its duties. It is clear that the determination of such a jurisdictional fact could not have been left to the subjective satisfaction of the Government but was intended to be arrived at objectively and, therefore, it was incumbent upon the Government to give a reasonable opportunity to the appellants to explain the charge levelled against them. Such enquiry as was held in the instant case could hardly take the place of reasonable opportunity to be given by the Government for the proposed action under section 53A of the Act. Rex vs The Electricity Commissioners, (1924) i K. B. 171, Province of Bombay vs Kusaldas section Advani, ; and R. vs Manchester Legal Aid Committee, , referred to.

The appellant land owner held lands in excess of 30 standard acres as on 6.4.1960. He filed a return as required by the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 and an enquiry was initiated by the Authorised Officer concerned under Section 9(2)(b) of the Act. Several objections raised by the appellant were rejected and the Authorised Officer came to the conclusion that the family of the appellant could be reckoned to be of five members be tween 6.4.1960 and 2.10.1962 and thus the appellant was entitled to 30 standard acres; his wife and daughter however could hold 10 and 7.71 standard acres respectively as strid hana. The appellant was asked to elect which lands he wished to be included in his holding and state which lands should be treated as surplus. Feeling aggrieved by the said deter mination, the appellant preferred an appeal under Section 78(1) to the Land Tribunal. The appellant contended (i) that the Authorised Officer had wrongly included the lands of his minor sons, unmarried daughter and wife gifted to them long before 1960; (ii) that subsequent to the filing of the appeal, the Act was amended as a consequence whereof his rights and liabilities with regard to the fixation of ceil ing area were required to be worked out on the basis of the revised date of commencement of the Act i.e. 15.2.1970; notified date being 2.10.1970. It was also urged by the appellant that the lands of his eldest son Laxminarayanan could not be included in his holding. On those grounds amongst others relating to the effect of subsequent transac tions the appellant prayed that the matter ought to be remanded to the Authorised Tribunal for a de novo considera tion. The appellant authority rejected all the contentions and dismissed the appeal, whereupon the appellant preferred a revision application before the High Court. Before the High Court his plea regarding subsequent transactions was confined to the documents executed between 15th February 1970, the date of commencement of the 359 Act, and 2nd October 1970, the notified date; contentions regarding other transactions were not pressed. The High Court accepted this contention and took the view that even in respect of proceedings which commenced prior to the coming into force of the Amending Act, an affected person can take advantage of the provisions contained In Section 2 IA. The High Court held that while Section 2 of the Amending Act reduced the ceiling area to half, benefit was conferred by Section 21A and hence both the provisions had to be read together. On that reasoning the High Court opined that the three documents relating to subsequent transactions executed between the said date, could not be ignored in fixing the ceiling area unless it was found that the documents were executed to defeat the provisions of the Act, in which case the transactions may be declared void under Section 22 of the Act. The High Court accordingly directed the Authorised Officer to make further inquiries regarding the three trans actions in question and pass appropriate orders. The High Court rejected the other contentions. The appellant being aggrieved with the rejection of other points raised before the High Court has preferred this appeal by special leave. Dismissing the appeal, this Court, HELD: The proceedings in this case had started and concluded before the Authorised Officer long before the Amending Act saw the light of the day. Under Section 3(1) of the Amending Act, any action taken (including any order made, decision or direction given, proceeding taken, etc.) under the provisions of Act before the date of publication of the Amending Act, can be continued and enforced after the said date in accordance with the provisions of the Act as if the Amending Act had not been passed. This is however, subject to subsection (2) which carves out an exception to sub section (1) insofar as the reduction of the ceiling area from 30 standard acres to 15 standard acres is concerned. [367E G] B.K.V. Radhamani Ammal vs Authorised Officer, Land Reforms, Coimbatore, , referred to.

The respondent Board realised terminal tax on goods experted by the appellants. In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation. The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees. In second appeal the High Court held that the levy was illegal. The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others. On the question whether the levy could be said to be a thing done or purported to be done under the Act. Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation. [172 D] 1. (a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act. [172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed. (b) The terminal tax could not be imposed under any of The provisions of the Act. The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits. [173 F G 174 Al 2. The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950. With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law. But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force. the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act. But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder. The levy could not, therefore, be saved by cl. (b) of the proviso to section 2. on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses. The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired. [173A, F G]

Appeals Nos. 421 to 423 of 1957. Appeals from the judgment and order dated February 18, 1955, of the Allahabad High Court (Lucknow Bench), at Lucknow in F.A.F.O. Nos. 11 to 13 of 1953. J. B. Dadachanji, for the appellant. C. B. Agarwala and C. P. Lal, for the respondent. February 6. The Judgment of the Court was delivered by SHAH, J. These three appeals were filed by the appellants M/s. Jethanand & Sons with certificate of fitness granted under article 133(1) (c) of the Constitution by the High Court of Judicature at Allahabad. The appellants entered into three separate contracts with the Government of the United Provinces (now called the State of Uttar Pradesh) on March 20, 1947, May 27, 1947, and June 28, 1947, for the supply of stone ballast at Shankar Garh, District Allahabad. The contracts which were in identical terms contained the following arbitration clause 97 756 " All disputes between the parties hereto arising out of this contract whether during its continuance or after its rescission or in respect of the construction or meaning of any clause thereof or of the tender, specifications and conditions or any of them or any part thereof respectively or anything arising out of or incident thereto for the decision of which no express provision has hereinbefore been made, shall be referred to the Superintending Engineer of the Circle concerned and his decision shall in all cases and at all times be final, binding and con clusive between the parties." Pursuant to the contracts, the appellants supplied stone ballast. Thereafter, purporting to act under cl. (16) of the agreements, the Executive Engineer, Provincial Division, referred certain disputes between the appellants and the State of Uttar Pradesh, alleged to arise out of the performance of the contracts, to arbitration of the Superintending Engineer of the Circle concerned. The Superintending Engineer required the appellants to appear before him at the time fixed in the notices. The appellants by their letter dated May 31, 1951, declined to submit to the jurisdiction of the Superintending Engineer, and informed him that if he hears and determines the cases ex parte, the " decisions will not be binding " on them. On February 7, 1953, the Superintending Engineer made and published three awards in respect of the disputes arising under the three contracts and filed the same in the court of the Civil Judge, Lucknow. The appellants applied for setting aside the awards alleging that the contracts were fully performed and that the dispute alleged by the State of Uttar Pradesh to have arisen out of the contracts could not arise after the contracts were fully performed and that the State could not refer those alleged disputes to arbitration. They also contended that the awards were not valid in law because on the arbitration agreements action was not taken under section 20 of the Arbitration Act. The Civil Judge, Lucknow, held that the disputes between the parties were properly referred to the Superintending Engineer by the State of Uttar 757 Pradesh and that the awards were validly made. Against the orders passed by the Civil Judge, Lucknow, three appeals were preferred by the appellants to the High Court of Judicature at Allahabad. The High Court set aside the orders passed by the Civil Judge and remanded the cases to the Trial Judge with a direction that he do allow the appellants and if need be, the respondent to amend their pleadings, and frame all issues that arise out of the pleadings and allow the parties an opportunity to place such evidence as they desire and decide the case on such evidence. In the view of the High Court no proper notice of the filing of the awards was served upon the appellants and that they were " seriously handicapped in their reply by the course which had been adopted both by the court and the arbitrator in the conduct of the proceedings in court. " On the applications filed by the appellants, the High Court granted leave to appeal to this court under article 133(1)(c) of the Constitution, certifying that the cases were fit for appeal to this court. Counsel for the respondent has urged that the High Court was incompetent to grant certificate under article 133(1) (c) of the Constitution. The order passed by the High Court was manifestly passed in exercise of the inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Under article 133 of the Constitution, an appeal lies to this court from any judgment, decree original order in a civil proceeding of a High Court if the High Court certifies that : (a). . (b). . or (c)"the case is a fit one for appeal to the Supreme Court. " In our view, the order remanding the cases under section 151 of the Civil Procedure Code is not a judgment, decree or final order within the meaning of article 133 of the Constitution. By its order, the High Court did not decide any question relating to the rights of the parties to the dispute. The High Court merely 758 remanded the cases for retrial holding that there was no proper trial of the petitions filed by the appellants for setting aside the awards. Such an order remanding the cases for retrial is not a final order within the meaning of article 133(1)(c). An order is final if it amounts to a final decision relating to the rights of the parties in dispute in the civil proceeding. If after the order, the civil proceeding still remains to be tried and the rights in dispute between the parties have to be determined, the order is not a final order within the meaning of article 133. The High Court assumed that a certificate of fitness to appeal to this court may be issued under section 109(1)(c) of the Code of Civil Procedure, even if the order is not final, and in support of that view, they relied upon the judgment of the Judicial Committee of the Privy Council in V. M. Abdul Rahman vs D. K. Cassim & Sons (1). But section 109 of the Code is now made expressly subject to Ch. IV, Part V of the Constitution and article 133 (1) (c) which occurs in that chapter authorises the grant of a certificate by the High Court only if the order is a final order. The inconsistency between section 109 Civil Procedure Code and article 133 of the Constitution has now been removed by the Code of Civil Procedure (Amendment) Act 66 of 1955. But even before the amending Act, the power under section 109(1) (c) being expressly made subject to the Constitution, an appeal lay to this Court only against judgments, decrees and final orders. Again, the orders passed by the High Court did not raise any question of great public or private importance. In the view of the High Court, the applications forgetting aside the awards filed by the appellants were not properly tried and therefore the cases deserved to be remanded to the court of first instance for trial de novo. The High Court granted leave to the parties to amend their pleadings; they also directed the Civil Judge to frame " all the issues that arise and allow the parties an opportunity of adducing such evidence as they desired. " It was an order for trial de novo on fresh pleadings and on all issues that may (1)(1933) L.R. 60 I.A. 76. 759 arise on the pleadings. Evidently, any decision given by the High Court in the course of the order would not in that trial de novo be binding and the cases will have to be tried afresh by the Civil Judge. The High Court was of the view that the interpretation of para. 3 of the first schedule of the Indian Arbitration Act raised a substantial question of law. But by the direction of the High Court, this question was also left open to be tried before the Civil Judge. We fail to appreciate how an observation on a question which is directed to be retried can still be regarded as raising a question of law of great public or private importance justifying grant of a certificate under article 133 (1) (c) of the Constitution. We accordingly vacate the certificate granted by the High Court and dismiss these appeals with costs. One hearing fee. Appeals dismissed.

Pursuant to an agreement between the parties a dispute relating to the supply of stone ballast was referred for adjudication to an arbitrator who was appointed under the agreement. The arbitrator 's awards were contested by the appellants but the trial court held that the dispute was properly referred and the awards were validity made. The High Court set aside the orders 755 of the trial court and remanded the case for decision after framing all the issues and giving the parties an opportunity to produce evidence. The High Court then granted a certificate of fitness or appeal to this Court under article 133(1)(c) of the Constitution. Held, that an order remanding a case without deciding any question relating to the rights of the parties is not a judgment, decree or final order within the meaning of article 133 of the Constitution. An order is final if it amounts to a final decision relating to the rights of the parties in dispute in the Civil proceeding. The power under section 109 of the Code of Civil Procedure having been expressly made subject to Ch. IV, Part V of the Constitution an appeal lay under that section to this Court only against judgments, decrees and final orders. V. M. Abdul Rahman and Others vs V. D. K. Cassim and Sons and Another (1933) L.R. 60 I.A. 76, referred to. As the orders passed by the High Court did not raise any question of great public or private importance and even the question of interpretation of Para. 3 of the first schedule of the Indian Arbitration Act was left open to be tried by the Civil Judge, no certificate of fitness to appeal to this Court could be granted under article 133 of the Constitution.

The present Writ Petitions relate to the mining of lime stone quarries in Dehradun mining area. During the pendency of the Writ Petitions, the Court appointed a Committee known as Bhargav Committee for the purpose of inspecting the lime stone quarries mentioned in the writ petitions, The Government of India had also appointed a Working Group headed by the same Sh. D.N. Bhargav who was a member of the Bhargav Committee appointed by the Court on mining of lime stone quarries in Dehradun Mussoorie area, some time in 1983. After the hearing was over, the Court passed the following order on the Writ Petitions observing that the reasons for the order will be set out in the judgment to follow later. The Court is clearly of the view that so far as the lime stone quarries classified in category (c) in the Bhargav Committee Report are concerned, which have already been closed down under the directions of the Bhargav Committee, should not be allowed to be operated. If the lessees of these lime stone quarries have obtained any stay order from any court permitting them to continue the mining operations, such stay order will stand dissolved an if there are any subsisting leases in respect of any of these lime stone quarries, they shall stand terminated without any liability against the State of Uttar Pradesh. The lime stone quarries in Sahasradhara Block even though they are placed in category (b) by the Bhargav Committee should also not be allowed to be operated and should be closed down forthwith. The Court would also direct, agreeing with the Report made by the Working Group that the lime stone quarries placed in category (2) by the Working Group other than those which are placed in categories (B) and (C) by the Bhargav Committee should also not be allowed to be operated and should be closed down save and except for the lime stone quarries covered by mining leases Nos. 31, 36 and 37 for which the Court would give the same direction as will H be given in regard to the lime stone quarries classified as category B in the 170 Bhargav Committee Report. If there are subsisting leases in respect of any of these lime stone quarries they will forthwith come to an end and if any suits or writ petitions for continuance of expired or unexpired leases in respect of any of these lime stone quarries are pending, they too will stand dismissed. [175G H; 176A] (2) So for as the lime stone quarries classified as category in the Bhargav Committee Report and/or category I in the Working Group Report are concerned, they are divided into two classes, one class consisting of those which are within the city limits of Mussorie and the other consisting of those which are outside the city limits. The lime stone quarries falling within category of the Bhargav Committee Report and/or Category 1 of the Working Group Report and falling outside the city limits of Mussorie, should be allowed to be operated subject of course to the observance of the requirements of the Mill`i Act 1952, the Metalliferous Mines Regulations, 1961 and other relevant statutes, rules and regulations. Of course, it must be made clear that the Court is not holding that if the leases in respect of these lime stone quarries have expired and suits or writ petitions for renewal of the leases are pending in the courts, such leases should be automatically renewed. It will be for the appropriate courts to decide whether such leases should be renewed or not having regard to the law and facts of each case. So far as the lime stone quarries classified in category in the Bhargav Committee Report and/or cat gory 1 in the Working Group Report and falling within the city limits of Mussorie are concerned, the Court would give the same direction which is it giving in regard the lime stone quarries classified as category B in the Bhargav Committee Report. [176F H 177A C] The Court does not propose to clear the lime stone quarries classified as category (B) in the Bhargav Committee Report and category 2 in the Working Group Report for continuance of mining operations nor to close them down permanently without further inquiry, and accordingly appoint a high powered Committee to be headed by Mr. Bandyopadhyay, Secretary, Ministry for Rural Development as Chairman. The lessees of the lime stone quarries classified as category in Bhargav Committee Report and/or Category I in the Working Group Report and filling within the city limits of Mussoorie as also the lessees of the lime stone quarries classified as category in the Bhargav Committee Report will be at liberty to submit a fully and detailed scheme for mining their lime stone quarries to this Committee (hereinafter called the Bandyopadhyay Committee) and if any such scheme or schemes are submitted, the Bandyopadhyay Committee will proceed to examine the same without any unnecessary delay and submit a report to this Court whether in its opinion the particular lime stone quarry can be allowed to be operated in accordance with the 'scheme and if so, subject to what conditions and if it can not be allowed to be operated, the reasons for taking that view. The report submitted by the Bandyopadhyay Committee in each case will be considered by the Court and a decision will then be taken whether the lime stone quarry or quarries in respect of which the Report has been made should be allowed to be operated or not. But until then those lime stone quarries will not be allowed to be operated or worked and the District Authorities of Dehradun will take prompt and active steps for the purpose of ensuring that these lime 171 stone quarries are not operated or worked and no mining activity is carried on even clandestinely. [177D H; 178D H: 179A] 4. So far as the lime stone quarries at Sl. 17 to 20 in the category in the Bhargav Committee Report are concerned, they have already been closed down and no further direction therefore is necessary to be given in regard to them save and except in regard to removal of the lime stone, dolomite and marble chips which may have already been mined and which may be lying at the site. [179E F] 5(i) So far as lime stone quarries classified as category in the Bhargav Committee Report and/or category I in the Working Group Report and falling side the city limits of Mussoorie are concerned, the Court has permitted the lessees of these lime stone quarries to carry on mining operations and hence they must be allowed to remove whatever minerals are lying at the site of these lime stone quarries without any restirication whatsoever, save and except those prescribed by any statutes, rules or regulations and subject to payment of royalty. [181B C] 5. (ii) So far as the other lime stone quarries are concerned, whether comprised in category of Bhargav Committee Report of category 1 of the Working Group Report and falling within the City limits of Mussoorie or falling within category 2 of the Working Group Report, the lessees of these lime stone buarries are permitted to remove whatever minerals are found lying at the site of its vicinity, provided of course such minerals are covered by their respective leases and/or quarry permits. Such removal will be carried out and completed by the lessees within four weeks from the date of this Order and it Shall be done in the presence of an officer not below the rank of Deputy Collector to be nominated by the District Magistrate, Dehradun a gazetted officer from the Mines Department nominated by the Director of Mines and a public spirit individual in Dehradun, to be nominated by Shri D. Bandopadhyay. No part of the minerals lying at the site shall be removed by the lessees except in the presence of the above mentioned three persons. The lessees will, on the expiry of the period of four weeks, submit a report to this Court setting out the precise quantities of minerals removed by them from the site pursuant to this Order made by the Court. The lessees shall not be entitled to remove any minerals after the expiration of the period of four weeks. [112E H; 113A] 6(i) In order to mitigate the hardship that may be caused to the lessees of lime stone quarries which have been directed to be closed down permanently or which may be directed to be closed down permanently after consideration of the Report of the Bandhopadjay Committee, the Court would direct the Government of India and the State of Uttar Pradesh that whenever any other area in the State of Uttar Pradesh is thrown open for grant of lime stone or dolomite quarrying, the lessees who are displaced as a result of this Order shall be afforded priority in grant of lease of such area and intimation that such area is available for grant of lease shall be given to the lessees who are 172 displaced so that they can apply of grant of lease of such area and on the basis of such application, priority may be given to them subject, of course, to their otherwise being found fit and eligible. [179G H :180A C] 6(ii) The lime stone quarries which have been or which may be directed to be closed down permanently will have to be reclaimed and afforestation and soil conservation programme will have to be taken up in respect of such lime stone quarries. and the Court would therefore direct that immediate steps shall be taken for reclamation of the areas forming part of such lime stone quarries with the help of the already available Eco Task Force of the Department of Environment, Government of India and the workmen who are thrown out of employment in consequence of this Court shall, as far as practicable and in the shortest possible time, be provided employment in the afforestation and soil conservation programme to be taken up in this area. [180E G] ^

After an enquiry under section 476 of the Code of Criminal procedure the Judicial Magistrate, Baroda, ordered that the appellant he prosecuted for offences under sections 205, 467 and 468 read with section 114 of the Indian Penal Code. In Appeal the Additional Sessions Judge held that the said complaint was justified but only in respect of the offence under section 205 read with section 114. The High Court dismissed the appellant 's revision pettion but granted a certificate under article 134(1)(c). The appellant came to this Court. On behalf of the respondent State it was contended that the High Court 's order dismissing the revision was not a final order as it, did not determine the complaint filed by the Magistrate nor did it decide the controversy between the parties viz., the State of Gujarat and the appellant.whether the appellant had committed the offence. Held : (Per Wanchoo C. J. and Shelat and Vaidialingam JJ.) (i) A judgment or order may be final for one purpose and interlocutory another or final as to part and interlocutory as to part. The meaning of the two words 'final ' and 'interlocutory ' his, therefore to be considered separately in relation to the particular purpose for which it is required However, generally speaking a judgment or order which determines the principal matter in question is termed final. It may be final although it directs enquiries or is made on an interlocutory application or reserves liberty to apply. [687 H; 688 A ,B] Salaman vs Warner , Standard Discount Co., vs La Grange, , A. Great Eastern Rail Co. [1879] 27 W.R,. 759, Shutrook vs Tufnell, , Bozson vs Altrincham Urban Council, , Abdul Rehman vs The King [1947] Cassim & Sons vs 60 IA. 76, S.Kuppusami Rao vs King, , Mohammad Amin Brothers Ltd. vs Dominion of India, Sardar Svedna Taher Saifuddin Saheb vs The State of Bombay , Jethainand and Sons vs The State of Uttar Pradesh ; , Premchand Satramadas vs State of Bihar ; , State of Uttar Pradesh vs Sujan Singh, [1964] 7 S.C.R. and State of Orissa vs Madan Gopal [1952] S.C.R. 28, referred to. (ii) The order of the High Court in the present case disposed of the controversy whether the filing of the complaint against the appellant was justified, The finality of that order was not to be judged by co relating that order with the controversy in the controversy viz., whether the appellant had committed the offence charged against him therein. The fact 686 that that controversy remained alive was irrelevant. Consequently the order passed by the High Court in the revision filed by the appellant was it final order within the meaning of article 134(1)(c). [693 D H] Ramesh vs Patni, ; , relied on. (iii) The High Court, before it certifies the case in cases not covered by clauses (a) and (b) of article 134(1)(c), must be satisfied that it involves some substantial question of law or principle. Only it case involving something more than mere appreciation of evidence is contemplated by the Constitution for the grant of a certificate under article 134(1) (c) The question in the revision petition before the High Court was whether the filing of a complaint against the appellant was expedient in the interest of justice. This was a question of fact and therefore the grant of certificate was not justified. [694 B F] Haripada Dey vs Slate of West Bengal, ; , and Babu State of Uttar Pradesh, relied on. Per Bachawat and Mitter, JJ. (dissenting) : Whatever test is applied,in order directing the filing of a complaint and deciding that there is a prima facie case for enquiry into an offence is not a final order. It is merely a preliminary step in the prosecution and therefore and, interlocutory order. As the order is not final, the High Court was not competent to grant a certificate under article 134(1)(c). [695 B] section Kuppuswamy Rao vs The King , relied on.

The appellants and the respondents who were originally appointed as Junior Engineers in the Andhra Pradesh Elec tricity Subordinate Service, were subsequently transferred along with other Junior Engineers to the State Electricity Board with effect from October 1, 1973 on the basis of options exercised by them to join the Board. in response to G.O.Ms. No. 1651 dated 28.12.1972. The terms and conditions of transfer were stipulated in G.O.Ms. No. 1166 dated 7.11.1973. On the date of transfer, the seniority list of the Junior Engineers had not been finalised. However a seniority list prepared by the State Public Service Commission, taking into account the deletion of rule 22(ii)(c) of the Andhra Pradesh State and Subordinate Rules with retrospective effect from April 1, 1964, had been circulated among the concerned Junior Engineers for objections, if any, and most of them. including the petitioners and respondents, had submitted their objections before October 1, 1973. After the transfers were effected, the State Electricity Board prepared a revised seniority list but the High Court struck down the same on the ground that the Board had no power to alter the seniority of the transferred employees, whose seniority was fixed by the Government. However, it observed that if the Government had retained any power under the transfer order it would be at liberty to revise the seniority list. In view of the aforesaid observations, the Government issued show cause notices once again to all the persons belonging to backward classes (the respondents) for revising the seniority. 913 In a writ petition filed by the respondents for re straining the Government from revising the seniority, a Single judge of the High Court, upheld the power of the Government to revise the seniority list. During the pendency of appeal before the Division Bench, the Government issued a final revised seniority list, vide G.O. No. 233 of May 23, 1981. Thereafter, the Division Bench quashed the revised seniority list on the grounds that there was a declaration in G.O. of November 7, 1973 that the exercise of the option was final, and since the Government and the Board had acted upon the option exercised by the employees and transferred them from Government service to the service of the Board, they were estopped from revising the seniority and similar ly, the employees were estopped from claiming that their seniority should be revised on any grounds whatsoever, that since the transfers were on "as is" basis which included seniority, the seniority could not be disturbed on any ground whatsoever, that the Government had no power to alter the seniority of the employees after October 1, 1973 since they had ceased to be Government employees, and the power given under Rule 36A of the Rules to review the seniority could not be exercised to rectify the mistake, and that merely because the Board had no jurisdiction to disturb the seniority so fixed, it did not follow that the Government continued to have jurisdiction in respect of those employees who were no more its employees. This decision was challenged in the appeals before this Court. Allowing the appeals, this Court, HELD: 1.1 The Government had reserved the power, as it had every right to do so, to change the seniority of the employees as on October 1, 1973 or prior to that date when they were employees of the Government. It had not reserved the power, as it could not, to change the seniority of the employees after October 1, 1973. Even if it so willed, it could not have reserved power to change the seniority of the employees after October 1, 1973. Conversely the Government had always the power to revise the seniority list of the employees as on October 1. 1973 on account of reasons accru ing prior to the said date. To do it, it was not necessary for it to reserve any power, for it had inherent power to do so. [925B; 924H; 925A] 1.2 By a mere reading of two Government Orders, and particularly, G.O. No. 1166 it is clear that seniority of the appellants as on October 1, 1973 was liable to be re vised by the Government at any time. Clause (3) of paragraph 6 makes it clear that the names in the Annexure sent along with the order were not arranged in the order of seniority, 914 and did not. therefore, confer any right for seniority on that basis. This shows that the Government had not finalised the seniority list and the list which was sent to the Board with the said order was a provisional one. The Government had to say so. because, admittedly, as on that day the seniority of the employees was in a flux on account of various reasons. viz., non receipt of options of non gazet ted technical staff and pendency of appeals of the gazetted technical staff, like the appellants and non technical staff against the Common Gradation Lists prepared as per the recommendations of various committees with reference to seniority position between November 1, 1956 and October 1, 1973, sequel to reorganisation of the States and amalgama tion of different regions in the State. Besides. the Govern ment could not have ignored the position that as on October 1, 1973 the dispute with regard to the seniority of the appellants and the respondents was pending in the High Court right from November 1966 when, 10 Junior Engineers including some of the present appellants had filed Writ Petition giving rise to further proceedings. In these circumstances, it cannot be held that whereas the Government reserved power and could reserve power to revise the seniority list on account of the disputes about seniority arising out of the States re organisation and/or on account of the non receipt of options of the non gazetted technical staff etc.it did not or could not reserve such power to meet the situations arising out of the orders of the courts in the disputes pending between the appellants and the respondents. There fore, even if no such powers were specifically reserved in the said Government order, the Government would have been obliged to revise the seniority list to comply with such orders. [923B H; 924A] 1.3 Since the Government had not sent the list of the employees to the Board arranged according to seniority, the expression "as is" in clause (3) of paragraph 6 of the Government Order in the circumstances referred to service conditions other than seniority. Even if the word "etc" at the end of clause (4) was construed to exclude the dispute with regard to seniority pending in the court, that would not have exempted the Government from complying with the orders of the Court. To hold that the Government by its own order, such as the present one, could prevent operation of the order of any court is to invite conflict in the juris diction of the executive and the judiciary. Similarly, the Government could not have forced the employees to accept the term with regard to the seniority as an immutable one. In fact the said Government Order did not lay down any such term. Hence, it cannot be said that the appellants had accepted the seniority as was forwarded by the Government to the Board and they were estopped thereafter from agitating against it. The decision of the Court being the law, no plea of 915 estoppel could be raised against it. [925C F] 1.4 It is well settled that there cannot be a right without a remedy. Law abhors such vacuum. But, there are two periods with respect to which the power to alter seniority has to be examined. The first period is upto October 1, 1973 and the second commences thereafter. In the first period, there was a relationship of employer employee between the Government and the transferred employees. Hence, the Govern ment had every right to correct or amend the seniority of the employees upto that date. If, therefore, the Government had advertently or inadvertently committed any error in preparing the seniority list upto October 1, 1973, or be cause of the decisions of the courts it had to amend the said seniority list, not only it had power to do so but it was the only authority which could do it. The seniority list which was corrected by the Government was the seniority list as on or before October 1, 1973. [925H; 926A B] In the circumstances, the decision of the High Court suffers from legal infirmities and has to be set aside. The revised seniority list sent by the Government to the Board with Government Order No. 233 of May 23, 1981 is restored and the respondent Electricity Board is directed to act on the same. [926C]

In these two appeals the same questions of law arise and the facts in C.A. No. 166 of 1962 are similar to those in C.A. 167 of 1962 which are stated below. The appellant in C.A. No. 167 of 1962 is the owner of certain lands situated in the city of Kanpur. The land is occupied by a Mill and godowns and no part of the land is waste land or arable land. In 1932 the U. P. Government sanctioned by a notification a Scheme (Scheme No. XX) of the improvement Trust, Kanpur. This Trust has been replaced by the Development Board, Kanpur, by reason of the Kanpur Urban Area Development Act, 1945. 426 In 1955 the Housing Department of the Government of U.P, sponsored a scheme for building industrial tenements. Part of the scheme concerned the locality in which the land in dispute is situated. In 1956 a notification was issued under section 4 of the Land Acquisition Act, 1894, by the Governor of U.P. to the effect that the plots in dispute were required for the construction of tenements tinder the subsidized industrial.housing scheme of the U.P. Government as well as for general improvement and street scheme No. XX of the Board. This was followed by a notification under section 6 of the Land Acquisition Act stating that the case being one of urgency the Governor was pleased under sub sections (1) and (I A) of section 17 of that Act to direct that the Collector of Kanpur, though no award under section II had been given, might on the expiration of the notice mentioned vs 9(1) take possession of land mentioned in the schedule. Subsequently a notice under section 9 was issued which stated that possession of the land will be taken within 15 days. The appellant thereupon filed a writ petition under article 226 of the Constitution in the High Court. Two main points were raised in the petition. Firstly, it was contended that as the acquisition was for the purpose of Scheme No. XX of the Board action had to be taken in accordance with section 114 of the Kanpur Act and the schedule thereto and as no action had been so taken the proceedings for acquisition were bad. In the second place, it was urged that it was not open to the Governor to issue the notification under section 6 of the Land Acquisition Act without first taking action under section 5A thereof. The High Court rejected both these contentions and in the result dismissed the writ petition. The present appeal was filed with a certificate issued by the High Court. In the appeal before this Court the same questions which were agitated before the High Court were raised. Held it is only when the Board proceeds to acquire land by virtue of its powers under section 71 that section 114 comes into play and the proceedings for acquisition have to take place under the Land Acquisition Act as modified by section 114 read with the schedule. But where the acquisition is, as in the present case, by the Government under the Land Acquisition Act, for public purposes though that purpose may be the purpose of the Board, the Kanpur Act has no application at all and the Government proceeds to acquire under the provisions of the Land Acquisition Act alone. From the scheme of the Act it is clear that compliance with the provisions of s.5 A is necessary before a notification 427 can be issued under section 6. Even where the Government makes a direction under section 17(1) it is not necessary that it should also make a direction under section 17(4). If the Government makes a direction only under section 17(1) the procedure under section 5 A would stil have to be followed before a notification under section 6 is issued. It is only when the Government also makes a declaration under section 17(4) that it becomes necessary to take action under section 5 A and make a report thereunder. Under the Land Acquisition Act an order under section 17(1) or section 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable land on which buildings stand. just as section 17(1) and section 17(4) are independent of each other, section 17(1.A) and section 17(4) are independent of each other and an order under section 17 (I A) would not necessarily mean that an order under section 17(4) must be passed. The right to file objections under section 5 A is a substantial right when a person 's property is being threatened with acquisition and that right cannot be taken away as if by a side wind because section 17(1 A) mentions section 17(1). Section 17(1 A) mentions section 17(1) merely to indicate the circumstances and the conditions under which possession can be taken. It was not open to the State Government to say in the notification under section 4 that proceedings under section 5 A will not take place. This part of the notification under section 4 is beyond the powers of the State Government and in consequence the notification under section 6 also, as it was issued without taking action under section 5 A, must fail.

The appellant a private company was carrying on the business of manufacture and sale of artificial marbles and tiles. In or about 1957 the company moved the Government for acquiring additional land for purposes of the company and the Government on January 7, 1958 issued a notification under section 4 of the Land Acquisition Act, 1894, which was followed by a separate notice by the Land Acquisition officer acquiring the land in dispute. This was followed by another notification under section 6 of the Act which was served on the respondent on January 25, 1960. The purpose of the acquisition was mentioned in the notification, as "public purposes for which the land is needed for Himalayan Tiles and Marble (Pvt) Ltd." The acquisition proceedings culminated in an award made under section 12 of the Act on April 11, 1961, which was published in the State Gazette on April 18, 1961. On December 11, 1961 a letter was written on behalf of the Government informing the owner of the acquired land that possession would be taken on or about the 12th of January, 1962. The first respondent in his writ petition to the High Court, contended that the Government was not competent to acquire the land for purposes of a private company which could not be said to be a public purpose under section 4 of the Act and prayed that the entire land acquisition proceedings should be quashed. A Single Judge of the High Court accepted the plea, allowed the writ petition and quashed the land acquisition proceedings along with the notifications. The appellant filed an appeal before the Letters Patent Bench which confirmed the view of the Single Judge and dismissed the appeal on the ground that the appellant had no locus standi to file the appeal, as it was not 'a person interested ' within the meaning of section 18(1) of the Act. In the appeal to this Court it was contended on behalf of the appellant: (1) the Letters Patent Bench of the High Court was wrong in holding that the appellant was not 'a person interested ' and therefore had no locus standi to file an appeal, and (2) in view of the various amendments in the Land Acquisition Act, 1894 particularly in sections 40 and 41 it could not be said that the acquisition under section 4 was ultra vires of the Act. 236 Dismissing the appeal, ^ HELD: 1(i) The appellant was undoubtedly 'a person interested ' as contemplated by section 18(1) of the Act. The High Court committed an error in throwing out the appeal of the appellant on the ground that it had no locus standi to file an appeal before the Bench. [243F] (ii) The 'definition of 'a person interested ' given in Section 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation. [240D] In the instant case, the lands were actually acquired for the purpose of the Company and once the land vested in the Government, after acquisition, it stood transferred to the Company under the agreement entered into between the Company and the Government. Thus it cannot be said that the Company had no claim or title to the land at all. Secondly, since under the agreement the Company had to pay the compensation, it was most certainly interested in seeing that a proper quantum of compensation was fixed so that the Company may not have to pay a very heavy amount of money. For this purpose, the Company could undoubtedly appear and adduce evidence on the question of the quantum of compensation. [240E F] (iii) The preponderance of judicial opinion seems to favour the view that the definition of person interested must be liberally construed so as to include a body, local authority, or a company for whose benefit the land is acquired and who is bound under an agreement to pay the compensation. This view accords with the principles of equity, justice and good conscience. [243 B] (iv) The view taken by the Orissa High Court or even by the Calcutta High Court that a company, Local authority or a person for whose benefit the land is acquired is not an interested person is not correct. Such a person is vitally interested both in the title to the property as also in the compensation to be paid thereof because both these factors concern its future course of action and if decided against him seriously prejudice his rights. [243E] Sunder Lal vs Paramsukhdas ; referred to; The Hindustan Sanitryware and Industries Ltd. Bahadurgarh & Anr. vs The State of Haryana & Ors A.I.R. [1972] Punjab & Haryana 59, M. Kurpuswami vs The Special Tahsildar (L.A.) II Industrial Estate Ambathur at Saidapet, Madras {1967] approved; Comilla Electric Supply Ltd. vs East Bengal Bank Ltd. Comilla & ors. A.I.R. [1939] Calcutta 669; State of orissa through the Land Acquisition Collector, Sambalpur vs Amarandra Pratap Singh & Anr. A.I.R. [1967] orissa, 180 over ruled. 2(i) The properties not having vested in the Government the acquisition was not complete and its invalidity could not be cured by section 7 of the amendment Act. [246 G] (ii) The basis of the decision in R. L. Arora vs State of U. P. [1962] Supp. 2 SCR 149 was removed by the . By virtue of Section 7 of the amending Act, retrospective effect was given to the amendment superseding any judgment, decree or order passed before July 20, 1962. The validity of the amending Act was upheld in R. L. Arora vs State of Uttar Pradesh ; [239 A, E] (iii) Even under section 7 of the amending Act, an acquisition made by a company prior to July 20, 1962 must fulfil the following conditions: (a) that 237 the land has been acquired and is vested in Government, (b) that the acquisition has been made under Clauses (a) and (b) or section 41, (c) that every such acquisition and any proceeding, order etc. shall be deemed always as valid as if the provisions of sections 40 and 41 of the Act, as amended by the amending Act, were in force at all material times; and (d) that by virtue of section 7 validity to the acquisition is given to all actions taken in connection there with in spite of any judgment, decree or order of any court to the contrary. [244F H] In the instant case the first condition that there must be a complete acquisition before section 7 could validate the same has not been fulfilled at all. [245A] (iv) Until the possession of the entire land acquired was taken by the Government, the acquisition could not be a complete acquisition so as to attract the operation of section 7 of the amending Act. [246H 247A] In the instant case the appellant did not appear before the Single Judge in the writ petition filed by the. respondents and the petition was contested only by the State. Perhaps the appellant may have thought that as his interests were fully safeguarded lay the Government, it was not necessary for it at that stage to appear before the High Court. The pleas of both the parties taken together clearly show that the entire possession of the property did not pass to the Government and thus no title vested, in the Government despite the notification acquiring the land. [246F G]

Under section 22A(2) of the Saurashtra Ordinance No. 2 of 1948, an appeal lay to a Division Bench of the Saurashtra High Court Tom a judgment of a single Judge of that High Court in the exercise of its appellate jurisdiction, if the Judge certified that the, case was a fit one for appeal. The , merged the Part 'B ' State of Saurashtra into the State of Bombay, abolished the High Court of Saurashtra as from November 1, 1956, and transferred the proceedings pending before the High Court of Saurashtra to the High Court of Bombay. Section 52 of the Act conferred upon the High Court of Bombay, after November 1, 1956, the original, appellate and other jurisdiction which was exercised by the High Court of Saurashtra immediately prior to that date in respect of the territories in the State of Saurashtra. The Saurashtra Ordinance No. 2 of 1948 was repealed with effect from November 1. 1956. by the Saurashtra (Adaptation of Laws on Union Subjects Order, 1957. and the Rules and orders relating to practice and procedure framed by the High Court of Saurashtra were abrogated as from November 1, 1956 by rules of the High Court of Bombay made under section 54 of the State Reorganisation Act. The effect of section 57 of the is that the powers of a Division Bench of the High Court for the new State of Bombay shall be the same as the powers of the Division Bench under the law in force immediately before November 1, 1956, in the State of Bombay. Clause 15 of the Letters Patent of the High Court of Bombay, which was law in force immediately before November 1. 1956, in the State of Bombay, provides that an appeal from the judgment of a single Judge of the Bombay High Court, in a first appeal from a judgment of the Subordinate Court, could be filed without a certificate of the Judge hearing the first appeal. Clause 15 of the Letters Patent of the Bombay High Court applied also to the Gujarat High Court which was established as a result of the Bombay Reoganisation Act. A first appeal against a decree of a subordinate court in Saurashtra, pending in the Saurashtra High Court on November 1, 1956, was transferred to the High Court of Bombay, and disposed of by a single Judge of the Bombay High Court. 'An appeal to the Division Bench under CI. 15 of the Letters Patent of the High Court of Bombay, was transferred to the Gujarat High Court after its establishment, but the Gujarat High Court held that the appeal was incompetent under section 22A of the Saurashtra Ordinance No. 2. of 1948 without a certificate from the single Judge. 435 In appeal to this Court, HELD: (1) It was only in the absence of any provision to the contrary, that a right attached to the action when it was commenced in the subordinate court in Saurashtra that an appeal against the decision of the single Judge of the High Court of Saurashtra in appeal, shall lie only if the single. judge certified that it was a fit case for appeal to a Division Bench. Garikapatti Veerayya vs N. Subbiah Choudhury; , , referred to. [443 A B]. (2) But, from November 1, 1956, the Saurashtra High Court was abolished, the Saurashtra Ordinance No. 2 of 1948 was repealed, and the jurisdiction of the High Court of Saurashtra was conferred upon the Bombay High Court. Therefore, the single Judge of the High Court who heard the first appeal, heard it not as a Judge of the Saurashtra High Court, but as a Judge of the Bombay Court. [443 B C] (3) Section52 of the does not mean that the jurisdiction conferred upon the Bombay High Court in respect of the territories within the State of Saurashtra was to be regulated with reference to the law which was in force on November 1, 1956 in Saurashtra. Therefore, it does not incorporate either expressly or by implication the limitations prescribed by section 22A(2) of the Saurashtra Ordinance into the Letters Patent of the High Court. [443 G H; 444 C D] (4) Since the restriction placed by section 22A of the Ordinance applied only to a judgment of a single Judge of the High Court of Saurashtra and could not apply to a judgment of a single Judge of the Bombay High Court, and could not operate to restrict a right of appeal exercisable under CI. 15 ' of the Letters Patent, the judgment of the single Judge of the Bombay High Court was, under section 57 of the , subject to appeal to a Division Bench without a certificate of the single Judge. [443 D F]

The respondent State granted a mining lease to the appellant. The 5th respondent, whose application was rejected moved the Central Government under rule 54 of the, Mineral Concession Rules, 1960, praying (i) for setting aside the grant in favour of the appellant, and (ii) for grant of the area on lease to him. The Central Government asked for the comments of the appellant and the State Government and after receipt of these comments, they were passed to the parties for further comments. The Central Government by an order passed on Sept. 30, 1964 rejected the application of 5th respondent as time barred. Thereafter, the Central Government on Nov. 5, 1964, under the revisionary powers conferred by r, 55, of the Rules and "all the powers enabling in this behalf," set aside the order granting the lease to the appellant, and further directed regrant after issuing fresh notification. The appellant, moved the High Court under article 226 of the Constitution for quashing the order of November, 1964, The High Court dismissed the petition. HELD : The appeal as well as the Writ Petition must be allowed and the order of the Central Government Nov. 5, 1964 must be set aside. The High Court erred in its approach that the two prayers in the application of the 5th respondent were independent, and that the Central Government by its order of Sept. 30, 1964 had disposed of only the prayer of 5th respondent to grant the area on lease to him, but it had not disposed of his other prayer to cancel the grant in favour of the appellant. The two reliefs asked for by the 5th respondent were inter connected reliefs. In the context in which they were mad, they could not be considered as independent prayers. Further by its order dated September 30, 1964, the Central Government dismissed the entire application of the 5th res pondent on the ground that the same was time barred. If his application in respect of one part of his prayer was time barred, it was equally, time barred in respect of the other part. [527 B D] The order of Nov. 5, 1964 of the Central Government does not show that it was made in the exercise of its suo motu powers. It is purported to have been made on the basis of the application made by the 5th respondent. [527 E] If the Central Government wanted to exercise its suo motu power it should have intimated that fact as well as the grounds on which it proposed to exercise that power to the appellant and given him an opportunity to show cause against the exercise of suo motu power as well as 5 2 3 against the grounds on which it wanted to exercise its power. The Central Government had not given him that opportunity. Failure of the Central Government to do so, vitiates the impugned order. [527 H]

Appeals Nos. 314 316 & 778 of 1957. Appeals from the Judgment and Decree dated September 8, 1954, of the Calcutta High Court in appeal from Original Decree No. 159 of 1951. section Chowdhury, B. Das and P. K. Ray Chaudhury, for the appellants in Civil Appeal No. 314 of 1957. M. C. Setalvad, Attorney General for India, R. Ganapathy Iyer and D. Gupta, for respondent No. 1. section N. Mukherjee, for respondent No. 2. section M. Bose, B. Sen and B. N. Ghosh, for respondents Nos. 3 18, 20 40, 42 and 44 47. B. N. Ghosh, for respondent No.48. N. C. Chatterjee and P. K. Chatterjee, for respondent No. 51. section M. Bose, section Chowdhury, B. Sen and B. N. Ghosh, for the appellants in Civil Appeal No. 315 of 1957. M. C. Setlvad, Attorney General for India, R. Ganapathy Iyer and D. Gupta, for respondent No. 1. section N. Mukherjee, for respondent No. 2. 823 P. K. Ray Chaudhury, for respondent No. 6. B. Das and P. K. Ray Chaudhury, for respondents Nos. 8 28. P. K. Chatterjee, for respondent No. 30. section Chowdhury and P. K. R. Chaudhury, for the appellant in Civil Appeal No. 316 of 1957. M. C. Setalvad, Attorney General for India, R. Ganapathy Iyer and D. Gupta, for respondent No. 1. section N. Mukherjee, for respondent No. 2. B. Das and B. N. Ghosh, for respondents Nos. 3 18, 20 40, 42, 44, 47 and 49 69. N. C. Chatterjee and P. K. Chatterjee, for respondent No. 71. M. C. Stealvad, Attorney General for India, R. Ganapathy Iyer and D. Gupta, for the appellant in Civil Appeal No. 778 of 1957. section M. Bose, section Chowdhary, B. Sen and B. N. Ghosh, for respondents Nos. 2 17, 19 39, 41 and 43 46. Sukumar Ghose, for respondent No. 40. section Chowdhury and P. K. Ray Chaudhury, for respondent No. 47. section Chowdhury, B. Das and P. K. Ray Chaudhury, for respondents Nos. 49 69. N. C. Chatterjee and P. K. Chatterjee, for respondent No. 71. February 17. The Judgment of the Court was delivered by WANCHOO, J. These four appeals on certificates granted by the High Court at Calcutta arise out of one judgment and will be dealt with together. The brief facts necessary for present purposes are these: In September 1946 there was food shortage in the country. In order to relieve this shortage, the Government of India entered into an agreement with the President of Argentine Institute for Promotion of Trade by which it undertook to freeze, requisition and take over and sell to the Argentine Institute and ship to Argentine 30,000 tons of hessian and, in return the Institute guaranteed to obtain licences for shipment 824 from Argentine of maize and wheat offals already purchased by the Government of India in Argentine. This agreement was arrived at on September 27, 1946. In anticipation of this agreement, the Government of India on September 20, 1946, addressed letters to the managing agents of various jute mills in Bengal demanding from them information as to stocks of hessian of certain description held by the mills under their managing agencies and prohibiting them from selling, transferring, removing, consuming or otherwise disposing of any article enumerated in Sch. B to the communication. This demand was made under Sub rule (5) of r. 75 A of the Defence of India Rules (hereinafter called the Rules). After the information had been gathered, the Government of India issued an order on September 30, 1946, to the same managing agents requisitioning the hessian specified in the Schedule to the order and directing them and every other person in possession of the said property to deliver it to the Director of Supplies, Calcutta, and in the meantime not to dispose of the property in any manner without the permission of the Central Government. The Schedule to the order in each case indicated the mill from which the requisition was made, the quantity, the description of the hessian and the name of the registered stock holders. These requisition orders were served upon the managing agents of the mills under sub r. (1) of r. 75 A of the Rules on that very day. Thereafter on the same day, that is, September 30, 1946, the Government of India issued a notice under sub r. (2) of r. 75 A to the managing agents communicating that it had been decided to acquire the property under that sub rule. The managing agents were further informed that by virtue of sub r. (3) of r. 75 A the said property would vest in the Central Government at the beginning of the day on which the notice was, served upon them free from any mortgage, pledge, lien or other similar encumbrance. The notices of acquisition were accompanied by schedules similar to the schedules accompanying the requisition orders. This notice of acquisition was also served on the same day on all the 825 managing agents. Further on the same day the Deputy Director of Supplies, Government of India, wrote to the Secretary, Indian Jute Mills Association that shipping instructions would be issued in due course by the Director of Supplies, Calcutta, with respect to hessian requisitioned and acquired under the orders and notices already referred to. The Government then tried to take possession of the hessian requisitioned and acquired but the mills and the holders of delivery orders resisted the Government 's attempt on the ground that the orders of requisition and acquisition were invalid. The Government of India then filed the suit, out of which the present appeals have arisen, on December 11, 1946, for enforcing the orders of requisition and acquisition and also applied for a receiver to be appointed. This application was resisted and it became apparent that it would take some time before it could be disposed of. As ships which were to carry the hessian to Argentine were ready and shipment could not be delayed, the Government on January 7, 1947, promulgated an Ordinance, being Ordinance No. I of 1947, whereby notwithstanding the pendency of the suit the title and possession of the goods requisitioned and acquired were made to vest in the Government. The Government then took possession of the hessian and shipped the same to Argentine. The suit however did not become infructuous or unnecessary after this because section 3 of the Ordinance provided that the suit should be proceeded with in regard to one question involved in it and decision thereon obtained. Under section 3 it was provided that if in the suit it was finally decided that the said goods were not validly requisitioned or acquired by the Central Government on the 30th day of September, 1946, each of the several previous owners of the said goods would be entitled to receive as compensation from the Central Government the market price prevailing on the date of the institution of the aforesaid suit; but if no such decision was made in the suit, the said goods would be deemed to have been validly requisitioned and acquired by the Central Government on the 30th September, 1946, and the 826 amount of compensation to be paid by the Central Government to the several previous owners of the said goods would be determined in accordance with the provisions of law in force on September 30, 1946, relating, to the requisition and acquisition of movable property under the rules made under the Defence of India Act, 1939. It may be mentioned that the Defence of India Act, 1939, and the Rules made thereunder came to an end on September 30,1946. The main question therefore which remained to be decided in the suit was whether the orders of requisition and acquisition were valid and binding on the respective defendants; and the suit was confined to obtaining a declaration to that effect. If a declaration was granted to the Government of India as prayed, the compensation would be determined as on September 30, 1946, in accordance with the provisions of law in force on that day relating to the requisition and acquisition of movable property under the rules made under the Defence of India Act, 1939. On the other hand, if no such declaration was granted, compensation would have to be arrived at in accordance with the market price of hessian prevailing on the date on which the suit was filed, i.e., December 11, 1946. The main questions which arose for determination in the trial court were four, namely (1) Were the alleged orders of requisition dated September 30, 1946, mentioned in the plaint properly and/or validly and/or duly served? (2) Did such alleged orders effect any valid requisition of the goods mentioned in the Schedules to such orders? (3), Were the orders and notices of acquisition mentioned in the plaint properly made or given and/or duly served ? (4) Is there any custom of trade, practice or usage that upon delivery orders being made over to the buyers against payment the property in the goods represented by such delivery orders passed to such buyers ? Sarkar, J., who tried the suit on the original side of the High Court held that the orders of requisition were properly and validly made. He further held that there was no service of the orders on the mills which were in possession of the hessian and which 827 had to be served in order to effect a valid requisition. He therefore held that as there was no proper or due service of the orders there was no valid or binding requisition. Further on the question of acquisition he held that as the goods requisitioned and acquired were subject to pucca delivery orders and in view of the usage that pucca delivery orders were only issued against payment, were passed from hand to hand by endorsement and were sold and dealt with in the market as absolutely representing the goods to which they relate and as the mills were estopped from challenging that the property in the goods had passed (see Anglo India Jute Mills Co. vs Omademall (1)), the Government which was claiming ownership through the mills was also subject to estoppel and as the holders of the delivery orders being the owners of the property were not served on September 30,1946, under r. 75 A (2) of the Rules, the property in the goods therefore did not pass on September 30, 1946. On this view the suit was dismissed. The Union of India then went in appeal. The appeal court reversed the view of Sarkar J. on the question of requisition. It held that the requisition orders did affect and intended to affect individual mills and service on the managing agents of the mills was good service on the mills and therefore the orders of requisition were valid. On the question of acquisition the appeal court posed the question whether the notices of acquisition were served on the owners as required by r. 75 A (2). It did not agree with the view of Sarkar J. that the Government was claiming through the mills and were therefore estopped from challenging the title of the holders of delivery orders. It also held that property in the goods could not pass by estoppel in the face of the provisions of the , III of 1930. Accordingly it held that it was not necessary to serve the holders of the delivery orders with notices of acquisition ; but it further held that the mills which were the owners of the goods requisitioned were not served with the notices of (1) Cal. 127, 828 acquisition, as in its opinion strict compliance with, the provisions of the rules in 0. XXIX of the Code of Civil Procedure were necessary in order that transfer of ownership contemplated under r. 75 A of the Rules, may be effected. Further as there was failure to comply strictly with the provisions of 0. XXIX of the Code of Civil Procedure and as in the view of the appeal court r. 119 (I B) of the Rules did not apply,,, to the case, there was no service of notices of acquisition on the owners as required by r. 75 A (2) of the Rules therefore it held that the acquisition was not valid. In the result the appeal was partly allowed as to the effect of the requisition orders but the view of Sarkar J. was upheld as to the effect of notices of acquisition. This has been followed by four appeals on certificates granted by the High Court. Appeals Nos. 314 to 316 are by the defendants in the suit challenging the view of the appeal court that the orders of requisition were valid and binding. The appellants in these appeals will hereinafter be referred to as the defendants. Appeal No. 778 is by the Union of India challenging the view of the appeal court that the, notices acquisition were not properly served and, therefore there was no acquisition of property: on September 30, 1946, as provided by r. 75 A (3). We shall first deal with the three appeals by the defendants relating to the requisition orders. It is necessary to set out rr. 75.A and 119 of the Rules in this connection, for the validity of the requisition orders depends upon whether the, two rules have been complied ', with. The two rules are as follows: " 75A. (1) If in the opinion of the Central Government or the Provincial Government it is necessary or expedient so to do for securing the defence British India, public safety, the maintenance of public order or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community, that Government may by order in writing requisition any property, movable or immovable, and may make such further orders as 829 appear to that Government to be necessary or expedient in connection with the requisitioning : Provided that no property used for the purpose of religious worship and no such property as is referred to in rule 66 or in rule 72 shall be requisitioned under this rule. (2) Where the Central Government or the Provincial Government has requisitioned any property under sub rule (1), that Government may use or deal with the property in such manner as may appear to it to be expedient, and may acquire it by serving on the owner thereof, or where the owner is not readily traceable or the ownership is in dispute, by publishing in the Official Gazette, a notice stating that the Central or Provincial Government, as the case may be, has decided to acquire it in pursuance of this rule. (3) Where a notice of acquisition is served on the owner of the property or published i n the official gazette under sub rule (2), then at the beginning of the day on which the notice is so served or published, the property shall vest in Government free from any mortgage, pledge, lien or other similar encum brance and the period of the requisition thereof shall end. (4). . . . . . . " "119. (1) Save as otherwise expressly provided in these Rules, every authority, officer or person who makes any order in writing in pursuance of any of these Rules shall, in the case of an order of a general nature or affecting a class of persons, publish notice of such order in such manner as may, in the opinion of such authority, officer or person, be best adapted for informing persons whom the order concerns, in the case of an order affecting an individual corporation or firm serve or cause the order to be served in the manner provided for the service of a summons in rule 2 of Order XXIX or rule 3 of Order XXX as the case may be in the First Schedule to the Code of Civil Procedure, 1908 (V of 1908), and in the case of an 830 order affecting an individual person (not being a corporation or firm) serve or cause the order to be served on that person (i) personally, by delivering or tendering to him the order, or (ii) by post, or (iii)where the person cannot be found, by leaving an authentic copy of the order with some adult male member of his family or by affixing such copy to some conspicuous, part of the premises in which he is known to have, last resided or carried on business or personally worked for gain. (1 A). Where any of these Rules empowers an authority, officer or person to take action by notified order, the provisions of sub rule (1) shall not apply in relation to such order. (1 B). If in the course of any judicial proceeding, a question arises whether a person was duly informed of an order made in pursuance of these Rules, compliance with sub rule (1), or, in a case to which sub rule (1 A) applies, the notification of the order, ' shall be conclusive proof that he was so informed; but a failure, to comply with sub rule (1) (i) shall not preclude proof by other means that he had information of the order; and (ii) shall not affect the validity of the order. " The scheme of r. 75 A(1) which provides for requisitioning is that the Government has to form an opinion whether it is necessary or expedient to make a requisition for securing the defence of British India, public safety, the maintenance of public order or the efficient prosecution of the war or for maintaining supplies and services essential to the life of the community. After such opinion has been formed, the Government may by order in writing requisition any property, movable or immovable, and make such further orders as appear to it to be necessary ;or expedient in that connection. It has been faintly urged on behalf of the defendants that the orders of requisition were invalid as they did not comply with 831 the first condition indicated above, namely, the necessity or expediency of passing the order. It is enough to say that there is nothing in this contention. The order of September 30, 1946, states in so many words that " in the opinion of the Central Government it is expedient for maintaining supplies and services essential to the life of the community " to make a requisition. It has never been the case of the defend. ants that the orders of requisition were passed mala fide In these circumstances, in the absence of mala fide, the opinion of the Government is final and the purpose indicated by it in the orders for making requisitions is one of the purposes for which an order of requisition can be made under r. 75 A. The main contention of the defendants in their appeals is that r. 75 A contemplates that the order of requisition must be brought to the knowledge of the person whose interests are being affected by it and that this was not done in this case, for neither the holders of delivery orders nor the mills were apprised of the orders of requisition on September 30, Therefore, it is urged that the orders of requisition were not valid and binding. Now sub rule (1) of r. 75 A does not specifically provide for the manner in which an order of requisition is to be served, nor does it provide specifically on whom such an order should be served. So far as the person on whom an order of requisition should be served is concerned, we agree with the appeal court that service of such an order is necessary on the. person who can place the goods in question at the disposal of the requisitioning authority and until that is done there cannot be any valid and effective requisition. This is also clear from the definition of the word " requisition " in r. 2(11) of the Rules, for " requisition " means in relation to any property, to take possession of the property or to require the property to be placed at the disposal of the requisitioning authority. Therefore a requisition of property can be effected either by taking possession of the property or by requiring the property to be placed at the disposal of the requisitioning authority. In the present case we are concerned with 832 the second mode of requisition. In such a case it is necessary that the party which is required to place the goods in question at the disposal of the requisitioning authority should be informed of the order of requisition, so that it may place the property at the disposal of the requisitioning authority as required by the order. Three questions therefore immediately &rise in this connection, namely, (i) who were the proper persons on whom orders of requisition should have been served, (ii) what is the manner in which the orders should have been served, and (iii) whether proper persons have been served in the proper manner in this case. So far as an order of requisition is concerned, we are of opinion that there is no question of any service of the order on the holders of delivery orders, for whatever may be their position as to the ownership of the goods (a matter with which we shall deal later when considering the matter of, acquisition), they were admittedly not in possession of the goods on September 30. Further the goods were admittedly in the possession of the mills and therefore the proper persons to be served with the orders of requisition in this case were the mills. The next question is as to the manner in which the mills which were in possession of the goods had to be served. To that the answer is in our opinion to be found in r. 119 of the Rules. Rule 119 (1) provides that save as otherwise expressly provided in these rules every order in writing in pursuance of any of these rules shall be served in the manner provided therein. Now there is no express provision as to the manner in which an order of requisition in writing issued under r. 75 A has to be served ; therefore it has to be served as provided in r. 119 (1). Further, as orders in this case concerned an individual corporation they had to be served in the manner provided for ' service of summons in r. 2 of 0. XXIX of the Code of Civil Procedure. Rule 2 of 0. XXIX provides that where 'the suit is against a corporation, the summons may be served on the secretary, or on any director, or other principal officer of the corporation, or by leaving 833. it or sending it by post addressed to the corporation as the, registered office or if there is no registered office then at the place where the corporation carries on business. We have therefore to see whether the mills were served with the orders of requisition in the manner provided by r. 2 of 0. XXIX of the Code of Civil Procedure. Further in case there is any irregularity in service it will have to be seen whether the matter comes under sub r. (1 B) of r. 119. Let us therefore first examine the question whether the mills were served as provided in 0. XXIX, r. 2. Now the orders of requisition were sent to the managing agents of the various jute mills. It is true that in the heading of the order, though the name of the managing agency corporation was mentioned, it was not specifically stated there that the order was being addressed to it as the managing agents for such and such mills. But when one reads the schedule attached to each order sent to the managing agents, it becomes immediately clear that the order was intended for the mills mentioned in the schedule and was being served on the managing agents of the mills. As an instance, we may refer to one requisition order addressed to Messrs. Thomas Duff and Co. Ltd. In the, schedule it was clearly stated that the order was with respect to jute bales held by the jute mills under the managing agency of the addressee and the names of the jute mills with respect to; which the order was passed and was being communicated to the managing agents were also mentioned, that is, Titaghur, Victoria, Samnaggur (South) and Samnaggur (North) Jute, Mills. Any one. receiving this order should be therefore able immediately to understand that the order was served on Messrs. Thomas Duff and Co. Ltd., as the managing agents of the four jute mills mentioned above. The defect therefore, in the form of address was in our opinion of no consequence. The order read as a whole along with the schedule leaves no doubt that the order was meant for the jute mills mentioned in the schedule and was addressed to Messrs. Thomas Duff and Co. Ltd. as the managing agents of, those jute mills, It is not in dispute, that 834 orders of requisition with respect to other mills addressed to other managing agents were in the same form and contained similar schedules. There can therefore in our opinion be no doubt that the orders of requisition were meant for the mills and were addressed to them through the managing agents. It is not in dispute that those orders were served on the managing agents on September 30, 1946, and the only question therefore that remains to be considered is whether the service on the managing agents on behalf of the mills is proper service as provided in r. 119 (1) of the Rules read with r. 2 of 0. XXIX of the Code of Civil Procedure. In the matter of service, we are concerned with cl. (a) of O. XXIX, r. 2, which provides that summons may be served on the secretary, or on any director or other principal officer of the corporation ; and what we have to see is whether service on the managing agents was service on "other principal officer" of the corporation. Section 2 (II) of the Indian Companies Act, No. VII of 1913, which was in force at the relevant time, defines an " officer " to include any director, managing agent, manager or secretary. So a managing agent of a corporation is an officer of the corporation. The question then is whether he is,& principal officer, and the answer to our mind is obvious, considering the nature of the duties of a managing agent of a corporation. It is not seriously disputed either that if a managing agent is an officer of the corporation, he would, considering the nature of his duties, be a principal officer. What is, however, contended is that the definition of an officer given in the Companies Act is an artificial definition and is only for the purposes of the Companies Act and not for the Code of Civil Procedure. The appeal court did not accept this contention and was of the opinion that, the definition of an officer given in the Companies Act can also be utilised for the purpose of the Code of Civil Procedure and we think,that that view is correct. Therefore, when the service in this case was effected on the managing agents of the mills it was effected on one of the principal officers of the corporation and 835 would be a good service under O. XXIX, r. 2 But it is contended that the intention behind O. XXIX, r. 2 is that the service must be on a human being and that O. XXIX, r. 2 does not contemplate service on one corporation for the purpose of securing service on another corporation. In this connection reliance is placed on rr. I and 3 of 0. XXIX where it is urged that the same words occur and it is clear that these rules contemplate that the other principal officer mentioned therein must be a human being. This contention was urged before the appeal court and was rejected by it and in our opinion, rightly. It is true that under rr. I and 3, the principal officer envisaged must be a human being, but that conclusion follows from the setting in which these words appear in these two rules. Rule I relates to the signature and verification of a pleading by the secretary, director or other principal officer of the corporation while r. 3 provides that a court may require the personal appearance of the secretary or of any director or other principal officer of the corporation. It is obvious therefore from the setting in which the words "other principal officer" appear in these two rules that he must be a human being, for signature and verification in one case and personal appearance in another can only be by a human being. But rr. I and 3 do not define who a principal officer is. Therefore, even though in these two rules a principal officer must be a human being, it does not follow that in r. 2 also he must be a human being. Rule 2 relates to service and cl. (b) thereof clearly shows that the service to be effected need not necessarily be on a human being connected with the corporation, for under el. (b) the service will be effective if the summons is left or sent by post addressed to the corporation at the registered office or if there is no registered office then at the place where the corporation carries on business. Therefore, for service to be effective it is not necessary that summons must be served on some human being connected with the corporation. Nor do we see anything in 0. XXIX which would militate against our holding that the service on one corporation may be made by serving 836 another corporation which may be the principal officer of the first corporation. Once it is clear in view of the definition of an " officer" ins. 2 (11) of the Companies Act that a managing agent is an officer and when it is obvious considering the nature of the duties of a managing agent of the corporation that it must be held to be a principal officer, service on the managing agent of a corporation would be effective service for the purpose of 0. XXIX, r. 2. We therefore agree with the appeal court that the orders of requisition in this case having been undoubtedly served on the managing agents of the mills as such there has been proper service of the said orders on the mills as required by r. 119 of the Rules. Therefore as the service on the mills through the managing agents was good service within the meaning of r. 119 read with 0. XXIX, r. 2, it is unnecessary to consider the further question whether it is good service within the meaning of r. 119 (1 B). We are therefore in agreement with the appeal court that the orders of requisition were properly and validly and duly served on the mills through the managing agents and therefore these orders effected a valid requisition of the goods mentioned in the schedules attached thereto. In this view Appeals Nos. 314 to 316 fail and are hereby dismissed. Now we turn to the appeal of the Union of India with respect to acquisition. It is not disputed that on the same day (namely, September 30, 1946) notice of the decision to acquire the requisitioned goods was served on the same managing agents. Here again in the heading of the notice only the name of the managing agent was mentioned without specifying in so many words that the communication was being addressed to the managing agents corporation concerned as managing agents of such and such mills. But it is not in dispute that as in the case of orders of requisition so in the case of notices of acquisition there was a schedule attached and that schedule mentioned that acquisition was of goods held by the jute mills under the managing agency of the corporation to which the notice was addressed and the names 837 of the mills whose managing agents the addressed corporation was, were also mentioned in the schedule. It is clear therefore that the notice of the decision to acquire was given to the various managing agents of the various mills in their capacity as managing agents of the mills specified in the schedule and the question is whether the notice was in accordance with r. 75 A (2). Rule 75 A(2) provides that after the property has been requisitioned the Government may acquire it by serving on the owner thereof a notice stating that the Government has decided to acquire it. Further sub r. (3) of r. 75 A lays down that where a notice of acquisition has been served on the owner, then at the beginning of the day on which the notice is so served the property shall vest in Government free from any mortgage, pledge, lien or other similar encumbrance and the period of the requisition thereof shall end. Sub rule (2) therefore requires that there should be a service of the notice of acquisition on the owner of the property requisitioned. Two questions therefore immediately arise in view of the provisions of r. 75 A (2), namely, (1) that there should be a service of the notice on the owner, and (2) that this service should be in accordance with r. 75 A (2). If both these conditions are satisfied, r. 75 A (3) comes into play and the property vests in the Government as provided therein. The first question therefore that arises is whether the notice in this case was served on the owner of the requisitioned goods. The argument on behalf of the defendants is that the requisitioned goods did not belong to the mills and that the real owners were the holders of the pucca delivery orders, and as there was no service of notice on them, there could be no acquisition under r. 75 A (3). Reliance in this connection is placed on Anglo India Jute Mills Co. 's case (1). In that case it was held that " by the usage of the jute trade in Calcutta, pucca delivery orders are issued only on cash payment, are passed from hand to hand by endorsement and are sold and dealt with in the market as absolutely representing the goods to which (1) Cal. 838 they relate." Therefore, it is urged that the owners of the goods were the holders of the pucca delivery orders and not the mills even though the goods were in the possession of the mills at the time when notices Of acquisition were issued. Now it is not in dispute so far as these pucca delivery orders with which we are concerned in these appeals are concerned that though holders thereof pay for the goods specified therein, at no time till actual delivery is given is there any appropriation of the goods either to the contract or the delivery orders. In spite however of the absence of such appropriation, the holders of pucca delivery orders are regarded by the trade as the owners of the goods specified therein and as held in The Anglo India Jute, Mills Co. 's case (1) these pucca delivery orders are passed from hand to hand by endorsement and are sold and dealt with in the market as absolutely representing the goods to which they relate. The question therefore that arises is whether the property in the goods represented by the pucca delivery orders can be said to have passed to the holders thereof, when they receive them. The contention on behalf of the Union of India is that property in the goods cannot pass in law to the holders of the pucca delivery orders till the goods are actually appropriated to the particular order; therefore, as in this case it is not in dispute that no goods were actually appropriated towards the pucca delivery orders concerned, the property in the goods did not pass to the holders thereof but was still in the mills. Reliance in this connection is placed on section 18 of the Indian , go. III of 1930. That section lays down that " where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. " In the present case, as we have already said it is not in dispute that the goods covered by the pucca delivery orders are not ascertained at the time such orders are issued and, ascertainment takes place in the shape of appropriation when the goods are actually delivered in compliance (1) Cal. 839 therewith. Therefore, till appropriation takes place and goods are actually delivered, they are not ascertained. The contract therefore represented by the pucca delivery orders is a contract for the sale of unascertained goods and no property in the goods is transferred to the buyer in view of section 18 of the Indian till the goods are ascertained by appropriation, which in this case takes place at the time only of actual delivery. The appeal court in our opinion was therefore right in holding that the property in the goods included in the pucca delivery orders did not pass to the holders thereof in view of section IS of the in spite of the decision in the case of the Anglo India Jute Mills Co. (1). What that case decided was that in a suit between a holder of a pucca delivery order be he the first holder or a subsequent holder who has purchased the pucca delivery order in the market and the mills, there will be an estoppel and the mill will be estopped from denying that cash had been paid for the goods to, which the delivery order related and that they held the goods for the holder of the pucca delivery order. That case therefore merely lays down the rule of estoppel as between the mill and the holder of the pucca delivery order and in a suit between them the mill will be estopped from denying the title of the holder of pucca delivery orders; but that does not mean that in law the title passed to the holder of the pucca delivery order as soon as it was issued even though it is not disputed that there was no ascertainment of goods at that time and that the ascertainment only takes place when the goods are appropriated to the pucca delivery orders at the time of actual delivery. The appeal court was in our opinion right in holding that the effect of the decision in the case of Anglo India Jute. Mills Co. (1) was not that the property in the goods passed by estoppel and that that case only decided that as between the seller and the holder of the pucca delivery order, the seller will not be heard to say that there was no title in the holder of the delivery order. That case was not dealing with the question of title (1) Cal. 840 at all as was made clear by Jenkins C.J. but was merely concerned with estoppel. In the present case the question whether the Government of India will be estopped is a matter which we shall consider later; but so far as the question of title is concerned there can be no doubt in view of section 18 of the that title in these cases had not passed to the holders of the pucca delivery orders on September 30, 1946, for the goods were not ascertained till then, whatever may be the position of the holders of the pucca delivery orders in a suit between them and the mills to enforce them. The next question then is whether the Government of India is also estopped from challenging that the title passed to the holders of the pucca delivery orders as soon as they got the delivery orders. Sarkar J. seems to have taken the view that as the Government of India was claiming under the mills and had stepped into the place of the mills by acquisition and was claiming ownership through the mills, it would also be estopped from denying the title of the holders of pucca delivery orders in the same way as the mills through whom it was claiming. The appeal court on the other hand held that the Government of India was not claiming through the mills and therefore would not be estopped like the mills from disputing the title of the holders of the pucca delivery orders. We are of opinion that the view of the appeal court is correct. The Government was not acquiring the property through the owners but under the power given to it by the statute, namely, the Defence of India Act and the Rules made thereunder. It did not acquire merely the rights of the owners of the property but the whole property. This is clear from r. 75 A (3) which lays down that "where a notice of acquisition is served on the owner of the property then at the beginning of the day on which the notice is so served, the property shall vest in Government free from any mortgage, pledge, lien or other similar encumbrance. " This shows clearly that what the Government is acquiring under the statute is a kind of paramount title and not any title derived from any owner, for 841 title derived from the owner would not be (for example) free from mortgage, etc. Therefore when Government takes action to acquire the requisitioned property under sub r. (2) of r. 75 A by serving a notice of its decision to do so, it is acquiring the whole property under the statute and is not making any claim to the property through the mills. Thus it is not merely the rights of the owners that the Government acquires; it acquires the whole property free from all kinds of encumbrances. What is thus acquired under the Defence of India Rules is no particular person 's right but the totality of the rights in the property. It cannot therefore be said that. the Government of India when it takes action under r. 75 A (2) is claiming through anybody: it acquires the totality of the rights in the property by virtue of the power vested in it by the statute, eliminating all subsisting private rights. There can in such a case be no estoppel against the Government of India qua the holders of the pucca delivery orders, for the Government of India is not stepping into the shoes of the mills but is acquiring title which is paramount in nature. Therefore even though there may be an estoppel against the mills in view of the decision of The Anglo India Jute Mills Co. (1), there can be no estoppel against the Government of India. Further as in law the property had not passed to the holders of the pucca delivery orders in the circumstances of this case, it was not necessary to serve them with notices under r. 75 A (2), for in law the owners were the mills and it was sufficient if notices were served on them. We may incidentally make it clear that the decision in the case of Anglo India Jute Mills Co. (1) would still be good law in an appropriate case where the question of estoppel can rightly arise. " In view of the foregoing discussion, the conclusion at which we arrive is that on September 30, 1946, the mills were in law the owners of the property which had been requisitioned and with respect to which notices of acquisition were given on the same day. Therefore the notice required under r. 75 A (2) had to be given only to the mills. (1) 842 The question then which arises is whether due notice was given to the mills under r. 75 A (2). The appeal court held that strict compliance with the provisions of the rule by which such transfer of ownership can be effected was necessary. It further held that as notices were not addressed in so many words to the managing agents as managing agents of the various mills, there was no due service as required by r. 75 A (2) and therefore there was no acquisition following on the service of the notices in this case. The first question that arises in this connection is the manner in which notice has to be served under r. 75 A (2). Now all that r. 75 A (2) says ' is that notice of the decision to acquire the property has to be served on the owner thereof (except in certain circumstances with which we are not concerned). The contention of the learned Attorney General on behalf of the Union of India is that. a notice under r. 75 A (2) has also to be served in the manner provided in r. 119 and that therefore the provisions of r. 119 (1 B) would also apply to service of such a notice. On the other hand it has been contended on behalf of the defendants that r. 119 refers to service of orders in writing and r. 75 A(2) does not speak of an order in writing as is the case in r. 75 A(1). We do not think it necessary for purposes of this case to decide whether a notice stating that the Government has decided to acquire the requisitioned property is an order in writing as contemplated under r. 119. Assuming that it is not so, it still remains to be seen how a notice of the kind envisaged in r. 75 A (2) has to be served on a corporation. The appeal court was of the view that as r. 75 A (2) did not provide for the manner of service and as in its opinion r. 119 did not apply, the service of a notice under r. 75 A (2) must be in a reasonable manner. Proceeding on the assumption that r. 119 does not apply, it seems to us that the view of the appeal court that a notice under r. 75 A (2) must be served in a reasonable manner is correct. What then is this reasonable manner of service of notice under r. 75 A(2)? In this connection reference may be made to two provisions in two other Acts. The first 843 is a provision in section 148 of the Indian Companies Act, 1913, which was then in force. That section provides that " a document 'may be served on a company by leaving it at, or sending it by post to, the registered office of the company. " The other provision is 0. XXIX, r. 2 of the Code of Civil Procedure, which we have already considered. We may however read the opening words of this rule for this purpose. They are as follows: " Subject to any statutory provision regulating service of process, where the suit is against a corporation the summons may be served. " It will be seen that r. 2 of 0. XXIX of the Code of Civil Procedure is subject to any statutory provision regulating service of process and where there is any specific statutory provision r. 2 would not be applicable. The only other statutory provision is in section 148 ibid. But that provision, as the words themselves show, is merely an enabling provision and it nowhere lays down that the method mentioned in section 148 is the only method of serving all documents on a company. The section lays down that a document may be served on a company by leaving it or sending it by post at the registered office of the company. But the language shows that that is not the only provision nor is it imperative that service can be effected in the way mentioned in that section, and in no other way. If that were the intention this section of the Companies Act would have been very differently worded. We therefore find that there is one enabling,.provision in section 148 of the Companies Act as to the manner in which documents may be served on a company or a corporation. Order XXIX, r. 2 lays down another method also in addition which courts may employ in effecting service on a corporation. To our mind either of the modes specified in section 148 of the, Indian Companies Act or 0. XXIX, r. 2 of the Code of Civil Procedure is a reasonable mode of effecting service on a company. It is said that 0. XXIX, r. 2 applies to a case of a suit by or against a corporation. That is undoubtedly so. But what is good service in suits would in our opinion 844 be reasonable service for the purpose of r. 75 A (2). Therefore, notices under r. 75 A (2) could be served on the mills either in the manner provided in a. 148 of the Companies Act or in the manner provided in 0. XXIX, r.2 of the Code of Civil Procedure. In this case the manner employed for the service of notices under r. 75 A (2) is that provided in 0. XXIX, r. 2 (a), namely, by effecting service on the principal officer of the mills, namely, the managing agents. We have already considered whether the orders of requisition on the various managing agents were duly served and have held that it was so. We fail to see why what was good service under 0. XXIX, r. 2 in the case of orders of requisition would not be good service or & reasonable way of service in the case of notices of acquisition, for it is not in dispute that the two were served on the same day one after the other and were substantially the same. There was the same defect in the two communications, namely, the heading where the name of the managing agent was mentioned did not contain in so many words that it was being addressed " the managing agent of such and such mill, but the schedule attached made it clear that was addressed as managing agent of those mills both for the purpose of requisition as well as for the purpose of acquisition. The appeal court seems to think that though this kind of service was good for the purpose of requisition it was not good for the purpose of acquisition, because where acquisition was concerned it was necessary that there must be strict compliance with the manner of service, that is, the heading should have also contained that the managing agents were being addressed &a managing agents of particular mills. We are of opinion that this view of the appeal court is not correct and that what was good service in the case of orders of requisition was also good service in the matter of notices of acquisition, for in substance the two services were effected exactly in the same manner on the principal officer of the mills, which 'in one case were in possession of the goods and in other were owners of the goods. We are therefore of opinion that service of the notices of acquisition in this case 845 on the managing agents of the mills was effective service on the mills as owners for the purpose of r. 75 A (2). In consequence r. 75 A (3) would apply and the property in the goods passed to the Government of india on September 30, 1946. The appeal of the Union of India therefore is allowed and a declaration is granted that the goods were validly requisitioned and acquired and that the orders of requisition and notices of acquisition were valid and binding on the respective defendants, and the goods specified therein vested in the Government of India on September 30, 1946. As to costs, it appears that this litigation was due entirely to the defect in the form of address of the requisition orders and the notices of acquisition. In the circumstances we order parties to bear their own costs throughout. Civil Appeals Nos. 314 to 316 of 1957 dismissed. Civil Appeal No. 778 of 1957 allowed.

The Government of India entered into an agreement with the President of Argentine Institute for Promotion of Trade to supply Hessian in return for licences for. shipment to India of food stuff purchased there and with a view to implement that agreement issued orders under r. 75A(i) of the Defence of India Rules, 1939, on the managing agents of certain jute mills on September 30, 1946, requisitioning hessian and directing them and any other person in possession of the said goods to deliver them to the Director of Supplies, Calcutta. Although in the heading of the notices after the names of the managing agents it was not stated that they were being addressed as managing agents of such and such mills, the schedules attached to them made it clear that they were addressed 'as managing agents of such and such mills. On the same day notices of acquisition under r. 75A(2) were served on the said managing agents and they were further informed that under r. 75A(3) the goods would vest in the Government at the beginning of the same day free from any mortgage, pledge, lien and other similar encumbrance. The notices of acquisition were also accompanied by schedules similar to those accompanying the requisition orders. The 821 Government of India tried to take possession of the hessian but was resisted by the mills and the holders of pucca delivery orders and brought the suit, out of which the present appeals arose, for enforcing the said orders of requisition and acquisition. The Defence of India Act, 1939, and the Rules made thereunder, had in the meantime come to an end and the question before the courts below was whether the orders of requisition and acquisition as served were effective in law. The trial judge held that as there were no valid orders of requisition as the mills had not been properly served and since the goods were subject to pucca delivery orders, the mills as well as the Government were estopped from challenging the ownership of the holders of the said delivery orders. The appeal court held that the orders of requisition were valid and binding, that the mills, and not the holders of the delivery orders, were the owners of the goods but that the notices of acquisition had not been served as required by r. 75A(2) Of the Rules and, therefore, there was no valid acquisition under r. 75A(3) Of the Rules. Held, that the requisition of the goods could be effected either by taking possession of them or by requiring them to be placed at the disposal of the requisitioning authority. Since in the present case, the mills and not the holders of the delivery orders were admittedly in possession of the goods on the date of the requisition, the proper persons to be served with the orders were the mills. Since the Rules did not expressly provide as to the manner in which orders of requisition in writing under r. 75A had to be served, r. 119(i) must apply and as the orders in the present case concerned an individual corporation, they had to be served in the, manner prescribed by 0. XXIX, r. 2 of the Code of Civil Procedure. The word "officer" as defined by section 2(ii) Of the Indian Companies Act, 1913, includes a managing agent and such definition can be utilised for the purpose of the Code and regard being ha to the nature of his duties there can be no doubt that a managing agent would be within the expression " other principal officer" in O. XXIX, r. 2(1) of the Code. There was no basis for the contention that service under r.2 must be on some human being or that there could be no effective service on a corporation by serving another corporation which might be its principal officer. The service of the orders of requisition on the managing agents obviously meant for the mills in the instant case, was, therefore, good service under 0. XXIX, r. 3 Of the Code. Since r. 75A(2) itself did not provide for any mode of service of notice under it, either the one or the other of the modes specified in section I48 of the Indian Companies Act, 1913, or 0. XXIX, r. 2 Of the Code would be a reasonable mode of effecting service thereunder. In the instant case the notices of 822 acquisition having been served under 0. XXIX, r. 2(a), as the orders of requisition had also been, such service was good service and the acquisition was effective in law. It was not correct to say that the property in the goods represented by the pucca delivery orders had passed to their holders. The contract involved in such delivery orders is a contract of sale of unascertained goods and in view of section 18 of the Indian , title cannot pass to the buyer till the goods are ascertained by appropriation. Anglo India jute Mills Co. vs Omademull Cal. 127, explained. It was not correct to say that the Government of India in acquiring the requisitioned goods was claiming title through the mills and would be, like them, estopped qua the holders of pucca delivery orders. The power to acquire the property flowed from the Defence of India Act and the Rules made thereunder and covered not merely the rights of the owners but the entire goods. Rule 75A(3) of the said Rules made it quite clear the acquisition thereunder was of a title paramount and of the whole of the property freed from all kinds of encumbrances. No question of serving any notice on the holders of pucca delivery orders, therefore, arose in the present case as the property in the goods had not in law passed to them.

In 1921 the Auditor General, as the administrative head of the Indian Audit Department, inserted Article 1666A by a circular No. 1757 E/1129 dated 18th April 1921 giving weight to the length of service as Upper Division Clerks in the fixation of seniority in the Subordinate Accounts Service. In the Audit Code prepared subsequently, Article 1666A appeared as Article 52. Thereafter, in the Manual of Standing Orders issued by the Auditor General in 1938, Article 52 found expression as paragraph 143. By a correction slip dated 27th July, 1956, the Comptroller and Auditor General removed the factor of weightage on the basis of length of service in the determination of seniority. The respondents in the appeals, who had entered service in the Office of the Accountant General, as Upper Division Clerks, appeared in the Subordinate Accounts Service Examination and passed the examination held in November 1969, and were promoted shortly thereafter. They claimed seniority on the basis that their length of service in the inferior post should be taken into account, and rested their claim on paragraph 143 of the Manual of Standing Orders as it stood prior to its amendment by the correction slip of 27th July 1956. The claim was rejected by the Comptroller and Auditor General A writ petition filed by them in the High Court was allowed by a Single Judge and the judgment was affirmed by the Appellate Bench of the High Court. The Accountant General and the Comptroller and Auditor General appealed to this Court. During the pendency of the appeals, the President enacted 156 the Indian Audit and Accounts Department (Subordinate Accounts Service & Subordinate Railway Audit Service) Service Rules, 1974. They were deemed to have come into force on 27th July, 1956. These rules purported to give statutory recognition to the amendment of paragraph 143 by the Comptroller and Auditor General. Rule 6 provided for appointments to the service and Rule 7 dealt with seniority. Rule 9 provided that in matters not specifically provided for the rules, regulations, orders or instructions of the Central Civil Services as applicable to the Indian Audit and Accounts Department would be applicable. Rule 10 empowered the Comptroller and Auditor General to issue general or special instructions for giving effect to the Rules. In the appeals, the respondents assailed the validity of the Rules of 1974 and the amendment made in paragraph 143, contending that the Rules are invalid as clause (5) of Article 148 does not permit the retrospective enactment of rules made thereunder, that the specific rules affecting the seniority of the respondents are invalid because in entrusting power to the Comptroller and Auditor General to issue orders and instructions in his discretion the doctrine against excessive delegation of legislative power has been violated, and that paragraph 143 possesses the status of a statutory rule and, therefore, the amendment attempted by the correction slip has no legal effect upon it. In the connected writ petitions, the petitioners who had passed the Subordinate Accounts Service Examination were promoted to the Service after 1956 some before the enactment of the Rules of 1974 and some thereafter. It was contended on their behalf that the fixation of seniority having been made by Rule 7(2) to depend on the order in which appointments to the service were made under Rule 6 depends on an arbitrary power conferred on the Comptroller and Auditor General to pass orders and instructions. On the question whether the respondents are entitled to claim fixation of their seniority in the Subordinate Accounts Service after taking into account their length of service as Upper Division Clerks. Allowing the appeals and dismissing the writ petitions, ^ HELD: 1. There is nothing in the language of clause (5) of Article 148, to indicate that the rules framed therein were intended to serve until Parliamentary legislation was enacted. All that the clause says is that the rules framed would be subject to the provisions of the Constitution and of any law made by Parliament. Clause (5) of Article 148 confers power on the President to frame rules operating prospectively only. The rules of 1974 cannot have retrospective operation. Sub rule (2) of rule 1, which declares that they will be deemed to have come into force on 27th July, 1956 is therefore ultra vires. [163B C] B.S. Vadera vs Union of India & Ors. [1968] 3 S.C.R. 575 referred to. 2. The Comptroller and Auditor General is a high ranking constitutional authority, and can be expected to act according to the needs of the service and without arbitrariness. He is the constitutional head of one of the most important departments of the State, and is expected to know what the depart 157 ment requires and how best to fulfil those requirements. The power conferred on him under the Rules does not violate the principle against excessive delegation. [165C D] 3. Paragraph 143 in the Manual of Standing Orders remained throughout a departmental instruction and, therefore, could be amended by the departmental instruction contained in the correction slip issued by the Comptroller and Auditor General in 1956. [164F] 4. There is a clear dichotomy in the power conferred by Article 309, a division of power between the Parliament or President, as the case may be, on the one side and the State Legislature or Governor on the other. The division is marked by the circumstance that under Article 309 services and posts in connection with the affairs of the Union are dealt with by a separate authority from the services and posts in connection with the affairs of a State. That dichotomy is not possible in the power employed for appointing persons in the Indian Audit and Accounts Department and for prescribing their conditions of service. [160H 161A] 5. The authority vested in the Comptroller and Auditor General ranges over functions associated with the affairs of the States. It is a single office, and the Indian Audit and Accounts Department, which it heads, is a single department. They cannot be said to be concerned with the affairs of the Union exclusively. Consequently, the regulation of the recruitment and conditions of service of persons serving in the Indian Audit and Accounts Department cannot be regarded as a matter falling within the domain of the President within the terms of the proviso to Article 309. [162 C] B. Shiva Rao, "The Framing of India 's Constitution: A Study" [1968] Chap. 12, pp. 414 417 referred to. It cannot be said that persons serving in the Indian Audit and Accounts Department are holding office in connection with the affairs of the Union exclusively. [161 C] 7. The power contained in clause (5) of Article 148 is not related to the power under the proviso to Article 309. The two powers are separate and distinct from each other and are not complementary to one another. The reference to the proviso under Article 309 in the recital of the Notification publishing the Rules of 1974 is meaningless and must be ignored. [162D E] 8. Having regard to the provision determining the fixation of seniority under the Rules of 1974 and the position obtaining thereafter, none of the petitioners in the writ petitions can claim the benefit of weightage on the basis of length of service. [165A]

By an order dated August 20, 1943, the Appellate Tribunal directed that certain deductions claimed by the assessee should be allowed. The matter came back to the Income tax Officer and he made an order on September 26, 1945, but did not issue any fresh notice of demand. The assessee appealed to the Appellate Assistant Commissioner complaining that in his order of September 26, the Income tax Officer had wrongly included a sum of Rs. 13,000 60 464 as unassessed foreign income of earlier years. The Appellate Assistant Commissioner held that the order of September 26 was not appealable. The assessee, therefore, made a miscellaneous application to the Appellate Tribunal, which held that the Incometax Officer acted wrongly in including the sum of Rs. 13,000 at that stage and directed the Income tax Officer to revise his computation accordingly. The Commissioner of Income tax, being of opinion that the Appellate Tribunal had no jurisdiction to entertain or make such order on a miscellaneous application applied for a reference to the High Court under section 66 (1) of the Income tax Act. The Tribunal referred certain questions and the High Court directed the Tribunal to refer certain other questions also but when the references came on for bearing the High Court held that the references were incompetent. The Commissioner of Incometax appealed to the Supreme Court with the leave of the High Court : Held, (i) that in carrying out the directions of the Tribunal and in passing the order of September 26, 1945, the Income tax Officer cannot be regarded as having acted under section 23 or section 27 of the Act and no appeal lay from his order under section 30 (1). The order made by the Appellate Assistant Commissioner was not therefore an order under a. 31 (3) and no further appeal lay to the Appellate Tribunal under section 33 (1) so as to enable the Tribunal to make an order under section 33 (4) and us there was no order under a. 33 (4), no question of law can be said to arise out of an order under section 33 (4) and there can be no valid reference under section 66 (1) or section 66 (2); (ii) even assuming that the order of the Income tax Officer dated September 26, 1945, was an order under a. 23 or section 27 and as such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under any of the sub sections of a. 31 and no appeal lay therefrom to the Appellate Tribunal under section 33 (1) and there could be no order of the Appellate Tribunal under section 34 (1). The order of the Appellate Tribunal correcting the order of the Income tax Officer and directing that the sum of Rs. 13,541 should not be included cannot be regarded in any event as an order under section 33 (4) so as to attract the operation of section 66 (1) or (2).

Certain disputes having arisen between the Union of India and the Contractors in respect of the Contract awarded to the letter for the execution of certain civil works pertaining to the Metro Railway Project in Calcutta, the same were referred for decision to two Arbitrators appointed by the High Court of Calcutta. The Contractors filed their itemised claim before the Arbitrators for a total sum of Rs.2,05,67,554. The Arbitrators awarded a sum of Rs.57.47,198 to the contractors in full and final settlement of all their claims which included a sum of Rs.6.76,540 as interest vide item (1). They directed that the award shall be complied with within sixty days of its publication fail ing which simple interest @ 11 percent per annum shall accrue thereon (excluding interest amount of Rs.6.76,540) till the date of payment or decree upon award which ever is earlier. On an application being made to the High Court for making the Award a rule of the Court. the learned single judge confirmed the award except that the principal sum awarded was reduced by Rs.5,20,000 with the direction that the amount so awarded will carry interest @ 11% per annum from the date of reference till the date of the award. 639 The Union of India preferred an appeal to the Division Bench, which reduced the amount awarded under item (c)(xii) from Rs.23.96.000 to Rs.2.39,000. Thus the principal amount to be awarded to the contractors was finally put at Rs.30.70,798 and this amount was directed to carry interest @ 11% per annum from the date of the reference till the date of the award. Aggrieved by the order of the Division Bench reducing the amount awarded under item (c)(xii) from Rs.23,96,000 to 239,600 the contractors preferred an appeal to this Court. The Union of Indian on the other hand preferred a cross appeal praying (i) that interest should not be payable on the amount of Rs.30,70,798 fixed by the High Court but only on Rs.23,94,258 left after deducting therefrom the amount of Rs.6,76,540 awarded by the Arbitrators in respect of item No. (L) and (ii) that. though the arbitrators had also awarded interest on the principal sum till the date of payment or decree on award in case payment was not done within sixty days of the publication of the award. the contractors should be held entitled to interest upto the date of the award only and not beyond it because both the learned single judge and the Division Bench have held so and the contractors have preferred no appeal therefrom. Taking up the contractor 's appeal first, this Court came to the conclusion that the Division Bench had exceeded its jurisdiction in interfering with this part of the award and restored the amount awarded by the arbitrators under item (c)(xii). Dealing with the appeal of the Union of India this Court ruled that there was really no dispute left about Union of India 's first contention as to what was the correct amount on which interest was payable to the contractors after its findings in the contractor 's appeal and placed the figure at Rs.45,50,658. Dealing with the second contention as to what was the period with reference to which interest would be payable to the contractors on the above amount it was noticed that the arbitrators had allowed interest from 5.10.82 (date of termination of contract) to 26.3.84 (date of award) under item (L) and had also allowed interest from the date of the award till the date of payment or decree whichever is earli er. The learned single judge had deleted the interest for the period 5.10.82 to 6.5.83 (date of reference) but held that the arbitrators had jurisdiction to award interest from the date of the reference till the date of award and also post award interest. As the objection of the Union of India 640 before the Division Bench in the LPA on the question of interest was only that the arbitrators had erred in awarding interest from 6.5.1983 to 26.3.1984 the High Court had not decided that the contractors were not entitled to interest beyond the date of award and therefore this contention of the Union of India failed and was rejected. The Court. HELD: The grant of pendente lite interest would be justified only when reference to arbitration is made in the course of a suit. The principle indicated is that since a court has. under section 34 of power to grant pendente lite interest in a suit. an arbitra tor to Whom a reference to arbitration is made in the course of the suit would be clothed with all the powers of the court including one to grant such interest. Generally speak ing. it would only seem reasonable that the power to grant interest pendente lite should be treated as ancillary to the award of damages or compensation which. but for the delay in the litigation (Whether in court or by way of arbitration). the claimant should have received much earlier. However. though pendente interest has been made available in court proceedings. its extension to arbitration law appears to have acquired some technical limitations resulting in denial of pendente lite interest in most arbitration cases. Pendent lite interest cannot still be awarded by an Arbitrator appointed by the parties under a private agreement for which there may be no justification in equity. Anomalies have arisen because formerly an Arbitrator could not be treated as a court to which the code of civil procedure applied and because now the Interest act, 1978, while including arbitration proceed ings within its ambit, has, apart from a reference to section 34 omitted to provide specifically for pendente lite interest. This has been clearly brought out by Chinnappa Reddy, J., in Abhaduta Jena which outline the principle the learned judge had in mind for permitting pendente lite interest by arbi trator. Abhaduta Jena has been followed in later cases also and its scope has been recently explained in Sharma 's Case , and the Gujarat Water Supply case where pendente lite interest was denied. [655H; 656A F] Gujarat Water Supply & Sewage Board vs Unique Erectors, ; ; Firm Madan Lal Roshan Lal Mahajan vs Hukumchand Mills Ltd., lndore; , ; Allen Berry & Co. Pvt. Ltd vs Union of India, ; N. Chellappan vs Secretary, Kerala State Electricity Board & Anr., ; ; Hindustan Tea Co. vs K. Shashi Kant Co. & Anr., ; Hindustan Steel Works Construction Ltd. vs C. Rajasekhar Rao, [1987] 4 S.C.C. 93; Sudarsan Trading Co. vs Government off Kerala & Anr. ; M/s. Alppi Prashad & Sons, Ltd. vs 641 Union of India; , ; Bhagat Trading Co. vs Union of India, AIR 1984 Delhi 358; Union of India vs Bakshi Ram, [1957] LIX P.L.R. 572; Executive Engineer vs Abhaduta Jena, [1988] 1 S.C.C. 418; Nachiappa vs Subramaniam, ; Satinder vs Amrao, ; ; Union vs Bungo Steel Furniture P. Ltd., ; ; Ashok Construction Co. Ltd. vs Union, ; State vs Saith & Skelton P. Ltd., ; ; Food Corpora tion of India vs Surendra, Devendra & Mohendra Tansport Co., and State of Rajasthan vs Sharma & Co., ; , referred to.

This appeal to the Supreme Court was from a reversing decree of the Bombay High Court in a suit for possession of certain immovable properties. The suit was dismissed by the trial court on 20 12 1946, the value of properties being found to be over Rs. 10,000. The decree of the High Court allowing the plaintiff 's claim was passed on the 8th November 1949. The defendants applied to the High Court for leave to appeal to the Federal Court on 6 1 1950 which was granted on 1 10 1951. One of the questions for determination was whether article 133 of the Constitution applied to the case and the appeal was competent to the Supreme Court. Held, that article 133 did not apply as it relates expressly to appeals against any judgment, decree or final order in a civil proceeding of a High Court in the "territory of India". Held further that on the date of the decree of the High Court, the defendants had a vested right of appeal to the Federal Court as the properties were of the requisite value and on 6 1 1950 a certificate of leave to appeal was bound to be granted. Held also that the appeal was competent to the Supreme Court by virtue of the provisions of article 135 of the Constitution as the jurisdiction and powers in relation to the matter in dispute were exercisable by the Federal Court immediately before the commencement of the Constitution under an existing law inasmuch as the Federal Court had jurisdiction to entertain and hear appeals from a decree of a High Court which reversed the lower court 's decree as regards properties of the value of more than Rs. 10,000. The construction contended for by the respondent that the jurisdiction was exercisable under article 135 by the Federal Court only if the matter was actually pending before the Federal Court and that it could not be said to be pending until the appeal is declared admitted under Order XLV of the Civil Procedure Code is 873 too narrow and does not give full and proper scope to the meaning of the word 'exercisable ' in the Article.

Under the Madhya Bharat Municipalities Act, 1954, the Municipal Corporation determined the house lax payable by the appellant in respect of his house with effect from April 1, 1954. On appeal by the appellant regarding assessment, the Additional District Judge remanded the case to the Corporation for a fresh decision after due enquiry. Ulti mately, by a notice dated October 12, 1965 issued under section 146 of the Madhya Pradesh Municipal Corporation Act, 1956 (as amended in 1961) the Corporation revised the amount of tax payable but maintained the date of liability for payment of tax as April 1, 1954. On appeal by the appellant, the additional District Judge held that the tax was payable with effect from April 1, 1965 and not April 1, 1954 for the reason that the tax was finally fixed after the notice dated October 12, 1965. The Revision Petition of the Corporation was allowed by the High Court holding that tax was payable from April 1, 1954 because the proceedings were started even before the 1956 Act came into force. In appeal to this Court the appellant contended that (1 ) as the fresh notice was issued under section 146 of the 1956 Act on October 12, 1965 after remand of the case by the District Judge, house lax could be imposed only with effect from April 1, 1965 and not retrospectively and (2) the order of the District Judge being final under section 149(2) of the 1956 Act the High Court had no jurisdiction to interfere with that order and in any event the High Court exceeded its power under section 115, C.P.C. Dismissing the appeal. HELD: The proceeding relating to the house tax was a continuous proceeding relating to the tax payable from April 1, 1954 and the notice issued by the Corporation after remand by the District Judge did not amount to notice of fresh assessment or re assessment. [874 E F] 1. There is no force in the contention .that under the 1956 Act the municipality had no power to pursue the pro ceedings regarding the levy of tax for an earlier period. The notice issued by the Corporation to the appellant made it clear that the Commissioner was proceeding to fix the value in pursuance of the remand. The appellant 's plea that the Commissioner was not authorised to determine the value and impose the tax for any period before the date of issue of the notice ignores the fact that the valuation and deter mination of tax from 1954 was pending and the proceedings related to that period. Section 3(3) of the 1956 Act pro vides that all rates, taxes and sums of money due to the Municipalities when this Act was made applicable shall be deemed to be due to the Corporation and sub section (4.) states that all suits and other legal proceedings instituted by or against a Municipality may be continued by or against the Corporation. The proceedings in the instant case were originally taken under the Madhya Bharat Municipalities Act, 1954 and the proceedings regarding the levy of the house tax were not concluded when under the new Act the Corporation became entitled to pursue the proceedings. [874F C, 875A D] 2. (a) Under section 115, C.P.C. the High Court has power to revise the order passed by Courts subordinate to it. The District Court being subordinate to 872 the High Court, is liable to the revisional jurisdiction of the High Court. Moreover, the question of want of jurisdic tion of the High Court was not raised before that Court and cannot be allowed to be raised in this Court for the first time. [875 F G] (b) The principles governing interference by the High Court trader section 115, C.I.C. have been laid down by this Court in a catena of decisions, the last of which is The Municipal Corporation of Delhi vs Suresh Chandra Jaipuria & Anr. (A.I.R. [875H, 876A B] Baldevdas Shivlal & Anr. vs Filmistan Distributors (India) (P) Ltd. & Ors. ; , M/s. D.L.F. Housing and Construction Co. (P) Ltd. vs Sarup Singh and Ors. A.I.R. 1971 S.C. 2324, The Managing, Director (MIG) Hindustan Aeronautics Ltd. Balanagar, Hyderabad and Ant. vs Ajit Prasad Tarway, Manager (Purchase and Stores) Hindu stan Aeronautics Ltd. Balanagar, Hyderabad, A.I.R. 1973 S.C. 76 and The Municipal Corporation of Delhi vs Suresh Chan dra Jaipuria and Anr. A.I.R. 1976 S.C. 2621 referred to.

In the execution proceedings to satisfy a decree dated 14 10 1958 for title and recovery of possession of certain "ganju Bhogra lands" obtained by the appellant against the State, the Notified Area Council. Rourkela claimed the suit lands by an application u/o XXI Rule 58 r/w sections 37 and 38 Code of Civil Procedure. The said application was rejected. A revision against it was also dismissed with the observation that the council was free to file a regular suit for adjudication of its rights. When the appellant took out a fresh application for execution u/s 47 of the Code` of Civil Procedure, the Council which never filed any suit, and the respondent State which never appealed against the original decree, opposed the execution application on the ground that the decree became infructuous by virtue of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The Executing court upheld the objection and dismissed the execution petitition. On appeal the Additional District Judge, by his order dated 2 5 1970, held that the decree was executable resulting in a second appeal to the High court by the respondent State. The High Court allowed the appeal by its order dated 4 11 1974 holding that as the decree holder was not in actual physical possession of the land, the tenure has vested in the State free from all encumbrances u/s 3 of the Act and the decree was rendered "non est". Dismissing the appeal by special leave, the Court, ^ HELD: (1) As a result of the abolition of the village office under section 3 of the OMTA, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land" stood extinguished by virtue of the provision of clause (b) of section 3, and ail settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant, stood cancelled under section 3(c). The right of the appellant to receive emoluments was also deemed to have been terminated under Cl. (d) and by virtue of Cl. (f), his bhogra land stood resumed and "vested absolutely" in the State free from all encumbrances. Section 3 of the Act, in fact, expressly provided that this would be the result, notwithstanding anything in law, usage, settlement, grant, sanad, order or "in any judgment, decree or order of a court. " All these consequences ensued with effect from April 1, 1966 the date of coming into force of the orissa Merged territories (Village offices Abolition) Act, 1963. From that date, the appellant suffered from these and other disabilities enumerated in section 3 of the Act, the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession was, therefore, lost to him as it vested "absolutely" in the State Government free from all encumbrances. The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act and there is nothing wrong in holding that the decree was rendered incapable of execution by operation of law. [77 D H] (2) Under sec. 5 of orissa Merged Territoies ((Village offices Abolition) Act, 1963, once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled" with rights of occupancy thereunder. The settlement of the land contemplated by sec. S had to be with the holder of the village office and the other persons who were enjoying it (or part of it) and as his co sharers, as tenants under him or his co sharers, but that was to be so on the condition 76 that "each such person, namely, the holder of the village office and his cosharers or the tenants under the holder of the office or his co sharers was in separate and actual cultivating possession" of the land immediately before April, 1966. The words "each such person" occurring in sub section I of Sec. 5 include the holder of the village office so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and cultivating possession of the "bhogra land" immediately before April 1, 1966. There is nothing in sub section I of Sec. 5 to justify the argument that the interpretation of the words "each such person" should be such as to exclude the holder of v the village office from its purview. [78 E, F H] State of orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974) decided on 27 6 1975 (orissa High Court) over ruled; Meharabansingh and Ors. vs Nareshaingh and ors. (held not applicable). (3) The provisions of sec. 9 do not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land. stood resumed and vested absolutely in the State Government free from all encumbrances. [80 E] (4) The normal consequences arising out of the rejection of the application under o. XXI, r. 58, Civil Procedure Code and the failure to institute the suit thereafter, were rendered nugatory by the express provisions of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The question of executability of the decree did not arise. [81 A B] [The Court left open to the authorities concerned to examine the question of settlement of the land under section 5(1) of the orissa Merged Territories (Village Dr offices Abolition) Act, 1963, with liberty to the village officer to rely upon such matters as may be available according to law.]

Allowing the appeal, the Court. ^ HELD: 1. The trial of a chid under the provisions of the Haryana Children Act, 1974 for the offence of murder was not barred. The appellant here was a child within the meaning of that term under clause (d) of section 2 of the Act. [689 A, C] 2. A perusal of section 22 of the Central (Act LX of 1960) which is in pari materia with section 21 of the Haryana and other provisions of the State and Central Children Acts shows that the procedure for trial, conviction and sentence under the Children Acts are simple humane and by Courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973. The intention of the State Legislature of Haryana and of the Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedure so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals. The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life. [691 G H, 692 A B] 3:1. The purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life [693 C D] 3:2. Section 27 of the Criminal Procedure Code, 1973 is not 'a specific provision to the contrary ' within the meaning of section S of the Code the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature". Parliament 687 certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier. What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the . It is an enabling provision and has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life. [693 C, D G] 4:1. If there be any conflict between any provisions of the Act and the Criminal Procedure Act, in view of Article 254(1) of the Constitution, the provision of the Haryana repugnant to any provision of the Criminal Procedure Code will be void to the extent of repugnancy [692 B C] 4:2. Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution. One of the circumstances under 'which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable. In the case in hand the relevant provisions of the Criminal Procedure Code and the Haryana can co exist. Their spheres of operation are different. [693 G H, 694 A] Dev Singh and 2 Ors. vs State of Madhya Pradesh, Madhya Pradesh, overruled.

Appeal No. 276 of 1956. Appeal from the judgment and decree dated October 15, 1954, of the Allahabad High Court in Execution First Appeal No. 224 of 1951. section P. Sinha and Tiryugi Narain for the appellants. G. C. Mathur, for respondent No. 1. 1961. February 20. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal raises a question of limitation in execution proceedings. The decree sought to be executed was made by the Civil Judge, Kanpur, on September 2, 1938, in a suit for partition brought by two brothers Jumna Prasad and Devi Prasad and two minor sons of Jumna Prasad, against Gajju Lal, his son Jawala Prasad, the four minor sons of Jawala Prasad Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal, and one Smt. Sundari. By the decree one of the properties, a house formerly bearing No. 36/22 and now 36/58, Etawa Bazar, Kanpur, was awarded along with other properties to the defendants in the suit. The present application for execution was made by the four brothers, Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal on Novem ber 23, 1949. The prayer was that these applicants may be delivered possession over this Etawa Bazar house along with Gajju Lal, Jawala Prasad and Smt. Sundari on dispossession of Jumna Prasad and Devi Prasad. It is stated in the application that all these applicants had " up till now been minors and one of them is still a minor and so no question in respect of time arises. " This ' it is important to note, was the first application for execution of the ' partition decree. A number of objections were raised but the principal objection and the only one with which we are concerned in this appeal was that the application was barred by time. The decision of this question depended on the answer to the question raised on behalf of the opposite parties that Jawala Prasad one of the persons entitled jointly 'with these applicants to make an application for the execution of the decree could have 877 given a discharge of the liability under the decree without the concurrence of his minor sons and so time ran under section 7 of the Limitation Act against them also from the date of the decree. The Trial Court did not feel satisfied that Jawala Prasad could give a valid discharge and held accordingly that the application was within time. on appeal the High Court held that Jawala Prasad as the Karta of the Hindu joint family could act on behalf of the entire joint family in taking possession of the house allotted to the defendants and delivery of such possession could discharge the liability qua the entire joint family and held accordingly that the application was barred by limitation. The High Court however granted a certificate under article 133(1)(c) of the Constitution and on that certificate this appeal has been filed by the applicants for execution. Two contentions were raised on behalf of the appellants in support of the plea that the High Court erred in holding that the application for execution was barred by limitation. First, it is urged that section 7 of the Limitation Act does not apply at all to a partition decree. The second contention is that in any case Jawala Prasad could not give a valid discharge of the liability under the decree in view of the provisions of O. 32 of the Code of Civil Procedure. On the first contention the argument is that the word " discharge " is appropriate only in respect of a monetary claim and is wholly inappropriate in respect of any decree for possession whether on partition or otherwise. There is, in our opinion no substance in this argument. The mere fact that the two illustrations to section 7 are in respect of debts is no ground for thinking that the provisions of section 7 are limited to suits or decrees on monetary claims only. Nor can we see any reason to think that the word " discharge " can refer only to debts. Discharge means, to free from liability. The liability may be in respect of monetary claims, like the debts; it may be in respect of possession of property; it may be in respect of taking some order as regards property it may be in respect of many other matters. Except in the case of declaratory decrees or 878 decrees of a similar nature, the decree in favour of one person against another requires the person against whom the decree is made liable to do something or to refrain from doing something. This liability is in a sense a debt which the party is in law bound to discharge. The ordinary use of the word " judgment debtor " to denote a person against whom a decree has been made makes a clear recognition of this. It is worth mentioning in this connection that the Code of Civil Procedure itself defines " judgment debtor " to mean " any person against whom a decree is passed or an order capable of execution has been made. " It is helpful to notice in this connection the provisions of section 8 of the Limitation Act that " nothing in section 6 or section 7 applies to suits to enforce rights of preemption. " If section 7 had been applicable merely to litigation for monetary claims it would have been unnecessary and indeed meaningless to take the special step of exempting suits to enforce rights of pre emption from the operation of section 7. This is a further reason in support of the conclusion that the word " discharge" in section 7 is not limited to discharge of monetary claims only but also to discharge or satisfaction of all other liabilities as well. We therefore hold that the first argument raised on behalf of the appellants has no substance. Equally untenable is the second argument that the provisions of 0. 32 of the Code of Civil Procedure debar the manager of a Hindu joint family from giving discharge in respect of a liability to deliver properties. Under the Hindu Law the Karta of a Hindu joint family represents all the members of the family and has the power and duty to take action which binds the family in connection with all matters of management of the family property. Clearly, therefore, when in respect of a transaction of property possession has to be received by the several members of the family, it is the Karta 's duty and power to take possession on behalf of the entire family, including himself, the members of the family who are sui juris as well as those who are not. 879 When any minor member of a joint family is a party to a proceeding in a court he has however to be represented by a next friend appointed by the court and where somebody other than the managing member, of the family has been appointed a guardian ad litem there might be difficulty in the way of the managing member giving a discharge on behalf of the minor. Where however the managing member himself is the guardian ad litem the only difficulty in the way of action being taken by him on behalf of a minor is to the extent as mentioned in 0. 32, rr. 6 and 7. In Ganesha Row vs Tuljaram Row (1) the Judicial Committee pointed out that: " No doubt a father or managing member of a joint Hindu family may, under certain circum stances and subject to certain conditions, enter into agreements which may be binding on the minor members of the family. But where a minor is party to a suit and a next friend or guardian has been appointed to look after the rights and interests of the infant in and concerning the suit, the acts of such next friend or guardian are subject to the control of the Court. " In that case their Lordships held that in view of the provisions of section 462 of the then Code of Civil Procedure (which corresponds to 0. 32, r. 7 of the present Civil Procedure Code) the managing member who had been appointed a guardian in the suit had no authority to enter into any compromise or agreement purporting to bind the minor. This principle has been applied also to cases where the provisions of 0. 32, r. 6 would apply and so it has been held in numerous cases in India that the Karta of a Hindu joint family though guardian in the suit cannot give a valid discharge in respect of a claim or a decree for is money or other movable property." (Parmeshwari Singh vs Banjit Singh (2) and Letchmana Chetty vs Subbiah Chetty (3)) In the present case however there is no scope for the application of either the provisions of 0. 32, r. 6 or O.32, r. 7 of the Code of Civil Procedure. Neither is (1) (1913) L.R. 40 I.A. 132,138, (2) A.I.R. 1939 Pat. (3) Mad. 920. 880 this a case of a receipt of any money or movable properties nor is there any question of entering into an agreement or compromise on behalf of the minor. For, clearly acceptance of delivery of possession of property in terms of the decree in a partition suit can by no stretch of imagination be considered entering into any " agreement or compromise" We are therefore of the opinion that Jawala Prasad, the managing member of the family could have given a discharge of the liability under the partition decree by accepting delivery of possession on behalf of his minor sons without their consent and so time ran against them also under section 7 of the Limitation Act from the date of the decree. The High Court was therefore right in its conclusion that the application for execution was barred by limitation. The appeal is accordingly dismissed with costs. Appeal dismissed.

A decree dated September 2, 1938, in a suit for partition of joint Hindu family property awarded a house to the share of one J and his four minor sons. J failed to execute the decree. On November 23, 1949, an application was made by the appellants, the four sons of J, for execution of the decree stating that three of them had been minors till then and one of them was still a minor and so no question of limitation arose. The respondent objected that the application was barred under section 7 of the Indian Limitation Act. The appellants contended that section 7 did not apply to a partition decree and that section 7 was no bar as j could not have given a valid discharge of the liability under the decree in view of the provisions of 0. 32 of the Code of Civil Procedure. Held, that the application for execution was barred by limitation. J, the managing member of the family could have given a discharge of the liability under the partition decree by accepting possession on behalf of his minor sons without their consent and so time ran against them under section 7 from the date of the decree. Order 32, rr. 6 and 7 were no bar to j giving a discharge of the liability under the decree as it was neither a case of receipt of any money or movable property nor was there any question of entering into an agreement or compromise on behalf of the minors. Ganesha Row vs Tuljaram Row (1913) L.R. 40 1.A. 132, Parmeshwari Singh vs Ranjit Singh, A.I.R. 1939 Pat. 33 and Letchmatsa Chetty vs Subbiah Chotty, Mad. 920, referred to. 876

On the application of two creditors (respondents in this appeal) the appellant was adjudged a bankrupt by the Subordinate Judge, Kakinada, and a receiving order was passed against him. This adjudication was based on the one act of insolvency out of three alleged in the application which was accepted by the sub judge, i.e., the sale of some of his properties in execution of a money decree. Appeals against the order to the District Judge, and later to the High Court, were dismissed. It was contended on behalf of the appellant that the alleged act of insolvency was not established as he had deposited, within one month of the sale, the entire decretal amount, and the sale was set aside on a petition by him under Order 21, rule 89 of the Code of Civil Procedure; that in any event he was entitled to have the application dismissed under section 25 of the , which allows a creditor 's application to be dismissed on sufficient cause. HELD: The adjudication of the appellant as an insolvent and the receiving order against him were properly made. [214 E] An act of insolvency once committed cannot be explained or purged by subsequent events. The insolvent cannot claim to wipe it off by paying some of his creditors; the same act of insolvency is available to all his creditors and is not erased unless all creditors are satisfied. The act of insolvency which the appellant had committed had remained and was not purged by payment of the decretal amount after the sale in execution of the money decree; the respondents could therefore rely on it even though one or more creditors might have been paid in full. 1212 F H] (ii) Although section 25 of the is in wide terms, it cannot be given effect to so as to ignore an act of insolvency in cases such as the present one, where the debtor continues to be heavily indebted and there is no proof that he is able to pay his debts. [213 A B] Venkatakrishnayya vs Malakondayya, A.I.R. 1942 Mad. 306; Pratapmall Rameshwar vs Chunnilal Jahuri, A.I.R. 1933 Cal. 417 and Lal Chand Changhuri vs Bogha Ram & Ors., A.I.R. 1938 Lah. 819, referred to.

This appeal is directed against the order of the Gujarat High Court upholding the order dated the 15th November, 1977 passed by the State of Gujarat whereby the amounts of gratu ity and pension payable to the appellant on superannuation were reduced by 50 per cent. The appellant was born on January 15, 1909 and after obtaining a Degree in Bachelor of Engineering (Civil) joined the service in the former State of Junagarh and as such was governed by the Junagadh State Pension and Parwashi Allow ances Rules of 1932 which were duly codified and published in the Junagadh State Account Code, State of Junagadh was integrated into the State of Saurashtra on 20.1.1949 and the services of the appellant were absorbed in the State of Saurashtra. The conditions of service of the absorbed serv ants were duly protected and a proclamation providing a guarantee that the service conditions of absorbed servants could not be varied to their disadvantage was issued on 20.1.49 that being the date of merger of the State. The State of Saurashtra made the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955. Rule 3(i) thereof provided that a Government servant shall, unless for special reasons otherwise directed by Government retire from service on his completing 55 years of age. After the merger of the State of Saurashtra with State of Bombay the old Bombay Civil Service Rules, 1959 were made applicable to Saurashtra area and on 1.7.59 the Bombay Civil Service Rules, 1959 were promulgated. As per clause (c)(2)(ii)(1) of Rule 161, Government servants in the Bombay Service of Engineers Class I were to retire on reaching the age of 55 years. 215 The appellant was compulsorily retired by the State on 12.10.1961 with effect from 12.1.1962 when he had completed the age of 53 years. The appellant challenged that order by means of writ before the High Court and having remained unsuccessful he took up the matter before this Court and this Court by its judgment dated 9.4.69 allowed the appeal and declared that the appellant was entitled to remain in service until he attained the age of 55 years and that the impugned order compulsorily retiring him at the age of 53 years was invalid and ineffective. In order to give effect to this Court 's order mentioned above, the Government of Gujarat on 4.8.69 intimated the appellant that he will be deemed to have remained in service uptil 14.1.64, when he attained the age of 55 years. as he had attained that age prior to the decision of this Court. In the meantime the age of superannuation of the employ ees of the State of Gujarat had been raised from 55 years to 58 years. The appellant in order to take benefit of the change moved a writ petition before the High Court of Guja rat but remained unsuccessful. Thereupon he filed a special leave petition before this Court. This Court by its order dated 21.7.1975 declined to interfere. Thus the appellant was not entitled to continue in service beyond 55 years of age. It may be mentioned that prior to his compulsory retire ment there were three departmental inquiries pending against the appellant, on grounds of slackness in supervision. overpayment to contractors and loss to the Government and payment in advance of the receipt of goods. The first in quiry was initiated on 6.2.61. second on 11.4.1963 and the third on 17.8.63. These inquiries remained pending against the appellant till 1971. The appellant filed yet another Special Civil Applica tion No. 504 of 1971 before the High Court praying for issue of a writ of mandamus directing the State to pay to the appellant all his outstanding salary. allowances. including due increments after the efficiency bar from 12.1. 1902 to 14.1. 1964 together with 6% interest. An application for interim relief was also filed but was withdrawn later on the representation perhaps made by the State that the enquiries had become infructuous consequent to appellant 's retirement. In the meanwhile the State of Gujarat issued a show cause notice dated 17.7.1971 to the appellant intimating him that the Government 216 considered his service record and did not find the same thoroughly satisfactory for the reasons mentioned in the said notice and accordingly the Government proposed to make 50% reduction both in the payment of Gratuity and Pension admissible to him. The appellant submitted his reply and these proceedings due to laches on the part of the appellant went on for a considerable time and the Government passed the final order on 15.11.1977 reducing the Pension and Gratuity by 50 per cent. To challenge this Order the appellant again filed Spe cial Civil Application before the High Court for quashing the order reducing his Pension and gratuity. The High Court dismissed the application in limine on 8.3.1978 observing that in the present case the Government recorded reasons why it came to the conclusion that the petitioner 's Service was unsatisfactory and therefore, put a proportionate cut in the Pension. as no case of discrimination was made out. The appellant, preferred Letters Patent Appeal. against the order passed by the Single Judge. His contention before the Division Bench was that he continued to be governed by the Junagadh Rules in spite of the fact that the Bombay Rules were sought to be made applicable to him. His alternative contention was that even if the Bombay Rules were to be made applicable, so far as the question of payment was concerned, inasmuch as they were not less advantageous on compulsory retirement. proportionate pension was payable to the appel lant under the Bombay Rules of 1959. The Division Bench held that under either set of Rules, it was open to the State Government to reduce the amount of pension payable to the petitioner as his service had not been found satisfactory by the State under Junagadh Rules as also under Bombay Civil Service Rules. The High Court accordingly dismissed the Letter Patent Appeal. Hence this appeal. It was contended on behalf of the appellant that the High Court went wrong in upholding the impugned order reduc ing the amounts of pension & gratuity in exercise of its power under Rules 188 and 189 of the Bombay Rules, as it had already been ruled by this Court in its judgment in Civil Appeal No. 409 of 1966, that Bombay Rules could not be made applicable to the appellant. It was urged that the appellant was not governed by Saurashtra Rules either, and it was asserted that either in the show cause notice or in the impugned order. it Is nowhere specifically stated as to under what set of Rules, the impugned order Imposing a cut in the Pension or Gratuity has been passed. A contention was also raised based on clauses 3, 13 & 15 of Rule 241 A of Junagadh Rules stating that they operate in different fields. It was added that no inquiry as contemplated under Rule 189 had been made and admittedly the State had stated before the High Court that 217 the departmental inquiries had become infructuous consequent upon the retirement of the appellant. According to the counsel for the State the appellant having been retired in pursuance of a judicial order passed by this Court, he cannot now be heard that his retirement at the age of 55 years should be construed as compulsory re tirement the superannuation age having been increased to 60 years under Junagadh Rules, that the retirement of the appellant is normal one; he was entitled to pension under Rule 241 of the Junagadh Rules and the State has passed the impugned order after complying with the provisions of Rules or gratuity be not reduced. Dismissing the appeal. this Court, HELD: Rules 188 and 189 have expressly preserved the State Government 's power to reduce or withhold pension by taking proceedings against a Government Servant even after his retirement. [229H; 230A] In the instant case, in accordance with the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and Appeal Rules a show cause notice had been issued to the appellant on 17.7.71 calling upon him to show cause within 30 days from the date of the receipt of the notice as to why the proposed reduction should not be made in the Pension and death cum retirement gratuity. The appellant failed to avail that opportunity to disprove the allegations and satisfy his appointing authority that he rendered satisfactory service throughout. It was in those circumstances the appointing authority thought fit to impose reduction on the Pension and gratuity in accordance with Rules 188 and 189 of the Bombay Rules on the ground that the appellant had not rendered satisfactory service. The appel lant is not entitled to take advantage of clause (b)(ii) of the proviso to Rule 189 A since the proceedings had been instituted long before his retirement. Further as per clause (a) of the said proviso the proceedings were already insti tuted long before his retirement. Further as per clause (a) of the said proviso, the proceedings already instituted while the Government servant was in service could be contin ued and concluded even after his retirement. Therefore the order dated 15.11.1977 reducing the pension and gratuity cannot be said to contravene the Bombay Rules. [231A E] A combined reading of clauses 3, 13 and 15 of Rule 241 A of 218 Junagadh Rules shows that clause 3 is an exception to the general scheme laid down in clauses 13 and 15. [228C] Bholanath J. Thakar vs State of Saurashtra, AIR 1954 SC 680; Dalip Singh vs State of Punjab, ; Moti Ram Deka etc. vs General Manager NEF Railways, Maligaon, Pandu etc. ; , ; State of Maharashtra vs M.H. Mazumdar; , and M. Narasimhachar vs State of Mysore, [1960] 1 SCR 981, referred to. State of U.P.v. Brahm Datt Sharma, [1987] 2 SCC 179, fol lowed.

% The question which arose for determination in this case was whether a Letters Patent Appeal would lie to a Division Bench of the High Court of Gujarat from an interlocutory order of a Single Judge of that High Court in the course of the trial of an election petition filed under the Representation of the People Act, 1951. The appellant and respondents Nos. 1 to 6 were candidates at an election held to fill a seat in the Legislative Assembly of the Gujarat State. The appellant was declared elected. Thereupon, the 1st respondent filed an election petition in the High Court, challenging the validity of the election of the appellant on a number of allegations, and in order to establish his case, he filed an application before the Single Judge who was trying the election petition, to direct the Returning Officer to produce all the records of the election, mentioned in the application, and prayed for permission to inspect the same. The appellant opposed the prayers made by the 1st respondent. The Single Judge declined to grant the application made by the Ist respondent. Against the order of the Single Judge, the Ist respondent preferred an appeal under clause 15 of the Letters Patent of the Gujarat High Court. The Division Bench of the High Court allowed the appeal to the extent indicated in its judgment, overruling the contention of the appellant that the appeal was not maintainable as there was no provision in the Act, permitting an appeal to the Division Bench of the High Court against an interlocutory order of a Single Judge hearing an election petition filed under the Act. Aggrieved by the decision of the Division Bench, the appellant moved this Court for relief by special leave. Allowing the appeal, setting aside the judgment of the Division 1044 Bench of the High Court and dismissing the Letters Patent Appeal while expressing no opinion on the merits of the case, the Court, ^ HELD: The only point urged in this appeal by the appellant was that the appeal filed under clause 15 of the Letters Patent of the High Court against the interlocutory order passed by the Single Judge was not maintainable and, therefore, the judgment of the Division Bench was liable to be set aside. [1048C D] Under the provisions of the Act as amended and the provisions of the Constitution of India, no Court exercising power under any ordinary law other than the Judge of a High Court who had been assigned the work of trying an election petition under sub section (2) of section 80 A of the Act and the Supreme Court which was empowered to hear an appeal against any order passed by the judge of the High Court under section 98 or section 99 of the Act, could decide any question arising out of an election petition. The power of the Supreme Court under the provisions of the Constitution was, however, unaffected by any of the provisions of the Act. It meant that when an election petition was pending in the High Court, only the judge who was asked to try the election petition could deal with the questions arising in it and no other judge or judges of the High Court could deal with them. When an order was passed under section 98 or section 99 of the Act by a judge of the High Court in an election petition, it was subject to the appellate jurisdiction of the Supreme Court under section 116 A of the Act, Article 136 of the Constitution being excluded in view of the express provisions of section 116 A of the Act, and being resorted to by any party aggrieved by any order passed by the judge trying an election petition not falling under section 98 or section 99 of the Act. It followed that the Division Bench of the High Court, which was entitled to hear an appeal against any order of a Single Judge under clause 15 of the Letters Patent of the High Court, which was an ordinary law, could not hear an appeal against any interlocutory order passed in the course of the trial of an election petition by the Judge trying the election petition, since the Division Bench was not specified in the Act as an appellate authority which could deal with questions arising out of an election petition filed under the Act. [1053G H; 1054A D] Under clause 15 of the Letters Patent, an appeal no doubt lay from an order of a Single Judge of the High Court exercising Original Jurisdiction to the High Court itself irrespective of the fact that the judgment was preliminary or final or that it was one passed at an interlocutory stage, provided it satisfied certain conditions, but the said 1045 provision could not be extended to an election petition filed under the Act. Conferment of the power to try an election petition under the Act did not amount to enlargement of the existing jurisdiction of the High Court. The jurisdiction exercisable by the Single Judge under the Act was a special jurisdiction conferred on the High Court by virtue of Article 329(b) of the Constitution. In view of the limited nature of the appeal expressly provided in section 116 A of the Act, it should be held that any other right of appeal (excluding that under the Constitution) was taken away by necessary implication. Therefore, it was difficult to subscribe to the view that when once the jurisdiction to try an election petition was conferred on the High Court, all other powers incidental to the ordinary original jurisdiction exercised by a single Judge of a High Court would become applicable to an election petition under the Act. If the Parliament had intended that the Division Bench of the High Court should exercise its appellate jurisdiction under clause 15 of the Letters Patent of the High Court, probably, it would not have enacted sub section (7) of section 86 of the Act, having regard to the well known tendency of one or the other party to an election petition preferring appeals against the interlocutory orders to the Division Bench. If such appeals against the interlocutory orders to the High Court, were permitted, perhaps, no election dispute would be finally settled till the next election became due. As regards the jurisdiction to try an election petition and the right of appeal of the parties to an election petition, the provisions of the Act (apart from the provisions in the Constitution) constituted a complete code and no Judge or Judges other than the Single Judge of the High Court, who was asked to try an election petition, and the Supreme Court, exercising the appellate powers under section 116 A of the Act in respect of orders passed under section 98 or section 99 of the Act or under Article 136 of the Constitution in respect of other orders, could have any jurisdiction to deal with any matter arising out of an election petition filed under the Act. The Court disagreed with the view expressed on this question by the Gujarat High Court in Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta & Ors., (12 Gujarat Law Reporter 850), and overruled that decision of the High Court. The Court also overruled the decision of the Madras High Court in Kadiravan alias Shamsudeen vs B. Thirumalaikumar, ILR (1970) 2 Mad. 183 and the decision of the Madhya Pradesh High Court in Laxmi Narayan Nayak vs Ramratan Chaturvedi & Ors, AIR 1986 Madhya Pradesh 165 which had taken the same view as in Dr. Chotalal Jivabhai Patel 's Case (supra). The Court agreed with the view expressed by the Allahabad High Court in Siaram vs Nathuram & Ors., [1968] ALL. L.J. 576 and by the Rajasthan High Court in Ramdhar vs Shanwar Lal, AIR which held that by necessary 1046 implication an appeal to the High Court from an interlocutory order of the Single Judge of the High Court in the course of trial of an election petition filed under the Act, was excluded. [1054G H; 1055A H; 1056A H] The Division Bench of the High Court of Gujarat had no jurisdiction to hear the appeal filed by the Ist respondent against the interlocutory order passed by the Single Judge who was trying the election petition. Judgment of the Division Bench of the High Court set aside, Letters Patent Appeal dismissed. [1057B] Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta Shamsudeen vs B. Thirumalai Kumar, ILR ; and Laxmi Narayan Nayak vs Ramratan Chaturvedi and Ors., A.I.R. 1986 Madhya Pradesh 165, overruled. Siaram vs Nathuram and Ors., [1968] All. L.J. 576 and Ramdhan vs Bhanwarlal, A.I.R. approved. N.P. Ponnuswami vs Returning Officer, Namekkal Constitutency and others; , ; Shah Babulal Khimji vs Jayaban D. Kania & Anr., ; and National Telephone Company Ltd. vs Post Master General, [1913] A.C.546, referred to.

The first appellant, widow of one Dr. Ramachandra, a tenant since 1932 of one room used as a medical shop was recognised as tenant on the death of her husband in or about 1960 by Babu Lal, the original landlord. The rent was fixed at Rs.416 per month. Over the years the rent came to be increased from Rs.16 to 60 per month, i.e. both when Dr. Ramachandra was alive and also later. Babulal died on 14.11.1973 and the respondent became the Karta of the family as the senior most male member of the joint family. The respondent issued a notice on 12.6.1974 terminating the tenancy with effect from 30.6.1974 and called upon the first appellant wife to surrender possesssion of the leased shop from 1.7.74. As the appellants (wife and son of Dr. Rama chandra) failed tO deliver possession a salt for eviction was filed under the Bihar Buildings (Lease, Rent and Evic tion) Control Act on two grounds: (a) default of rent and (b) bonafide requirements of the junior members of the Joint family. The trial court allowed the eviction petition. In appeal, the appellate court reversed the findings of the Trial Court and applying the principle of unjust enrichment contrary to statutory law, held that the appellants were entitled to have the excess payment adjusted towards arrears of rent as well as future payments of rent since 1943. However, in the Second Appeal, the Full Bench of the Patna High Court held that the rule of "in pari delicto" would squarely apply to tenants who pay enhanced rents in contra vention of the terms of the Rent Restriction Acts and there fore the appellants cannot claim adjustment of excess rent paid and seek avoidance of their eviction. The High Court also reversed the finding of the appellate court on the question of bona 535 fide requirement as being vitiated by misreading of facts and misapplication of law. Hence the tenant 's appeal by special leave. Dismissing the appeal, the Court, HELD: 1. In Mohd Salimuddin vs Misrilal & Anr. , ; , the Supreme Court have taken care to set out that the doctrine of "in pari delicto" will not be attracted when there is no element of compulsion or exploitation and both parties have by consensus contravened the provisions of law for their mutual advantage. [539D E] 2. It is true that in a second appeal a finding on fact even if erroneous will generally not be disturbed but where it is found that the finding is vitiated by application of wrong tests or on the basis of conjectures and assumptions then a High Court will be well within its rights in setting aside in a second appeal a patently erroneous finding in order to render justice to the party affected by the errone ous finding. [540F G]

K, a Hindu had no issue, but had a brother R who had 3 daughters. K, and R jointly executed a will bequeting the assets of K to son or sons born in future to R, to the exclusion of the daughters, after the death of K and R. K died in 1947. The appellants claiming to be the sons of R by his subsequent marriage, filed a suit for a declaration that R had only life interest in K 's properties with the remainder vested in them under the will. The trial court decreed the suit holding that the second marriage of R was legal and the appellants were entitled to the properties subject to R 's life estate and that R 's daughter had no right in the properties. R 's daughters filed an appeal to the High Court. Soon after K 's death, another suit was filed by R 's daughters 'for administration of K 's estate in which the: appellants mother was a party. This suit was dismissed on the ground that the plaintiffs had lost their right on the birth of appellants. An appeal to the High Court was pending in this suit also. The High Court by a common judgment held that the appellants, sons of R, were born after K 's death, so the devise in their favour was void, and that after the life estate of R, his daughters became entitled to the properties for their life time. HELD: Although there is no authority in Hindu Law to justify the doctrine that a Hindu cannot make a gift or 'bequest for the benefit of an unborn person yet that doctrine has been engraved in Hindu Law by the decision of the Judicial Committee in Tagore vs Tagore. I.A. (1872) Supp. This doctrine was laid down for the first time in the case of Tagore. This decision of the Judicial Committee has stood a great length of time and on the basis of that decision rights have been regulated, arrangements as to property have passed. Therefore this was a proper case in which maxim communis error facit jus be applied. The principle underlying the maxim is that "the law so favours the public good, that it will in some cases permit a common error to pass for right". The bequests in favour of R 's sons were void and of no legal consequence. [477 A; 478 F G] It is, therefore, not possible to accept the argument that the will was intended to operate or to come into effect after the death of both the testators. In 'regard to K 's properties the life estate devised in favour of R must necessarily take effect and remain in force during the life of R and not after that; it is true that at the end of the will there is a clause that both the testators have the right to revoke the will during their lives and that the will take effect only sub:sequent to their death. But the true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory. It must, therefore, be held that as the express devise to R for his life is a disposition intended to take effect after the death of K and before the death of R the last clause in the will could not be literally correct. The daughters also could not take under the will as the bequest in their favour was subject to the defeasance clause. [480 E H] 472 Tagore 's case, I.A. (1872) Supp. 47 and Charles Dalton vs Henry Angus & Co., , 812, referred to.

The areas in question which were parts of two estates belonging to the appellants, called Gangole A and Gangole C, were situated in what was known as the Godavari Agency tract which was governed by the Scheduled Districts Act, 1874. By section 92 of the Government of India Act, 1935, no Act of the Provincial Legislature was applicable to certain areas in which the Godavari Agency was included, unless the Governor by public 536 notification so directed. The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, was enacted in 1948, and on August 15, 1950, the Government of Madras issued a notification under section 1(4) Of the Act by which, among other estates, Gangole A and Gangole C in their entirety were purported to be taken over, specifying September 7, 195o, as the date on which the vesting was to take place. But as no action as contemplated by section 92 of the Government of India Act, 1935, had been taken to render the Madras Act of 1948 applicable to the Godavari Agency tract, only parts of the Gangole estates were within the operation of that Act, while there were portions of the estates which were outside its purview and operation. When this legal situation was noticed another notification was issued on September 5, 1950, by which the areas in question were excluded from the scope of the notification dated August 15, 1950. In exercise of the power under para 5(2) Of the Fifth Schedule to the Constitution, Madras Regulation IV of 1951 was passed on September 8, 1951 by which, inter alia, the Act Of 1948 was made applicable to the areas in which the two Gangole estates were situate with retrospective effect from April 19, 1949. On January 14, 1953, the Government of Madras issued a notification vesting those portions of the Gangole estates to which the Act Of 1948 was extended. The appellants challenged the legality of the notification on the ground that the various provisions of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, showed that the Act contemplated the taking over of estates as a unit and not in parts, while what the Government had done in the present case was to deal with the two estates of Gangole A and Gangole C as if each one of them were really two estates, one that which lay in the Godavari Agency tract and the other outside that area, and had issued notifications in respect of these units separately. Held, that the first notification dated August 15, 1950, as modified by that dated September 5, 1950, was valid and effective in law to vest the portion of the estate to which it related in the State Government. Held further, that the notification dated January 14, 1953, was equally valid. The action taken by the Government in issuing the said notification was in conformity with the scheme of the Act of 1948 that the entirety of the estate should be taken over.

A petition under article 226 of the Constitution was filed in the High Court on behalf of the. appellant, who was sen tenced to death, praying that, since the appellant was insane the State should be restrained from carrying out the sentence. The High Court dismissed the petition holding that if the appellant were really insane, the appropriate authorities would take necessary action. In appeal to this Court, it was contended that convicted person who became insane after conviction and sentence could not be executed until he regained sanity. Dismissing the appeal, HELD: (1) (a) Courts have no power to prohibit the carrying out of a sentence of death legally passed upon an accused person on the ground either that there is some rule in the common law of England against the execution of an insane person sentenced to death or for some theological religions or moral objection to it. Our statute law on the subject is based entirely on secular considerations which place the protection and welfare of society in the fore front. [249 B] (b) What the statute law does not prohibit or enjoin cannot be enforced, by means of a writ of mandamus under article 226 of the Constitution, so as to set at naught a duly passed sentence of a court of justice. [249 C] (2) (a) Section 30 of the Prisoners Act, 1900 has nothing to do with the powers of courts. It only regulates the place and manner of confinement of a person, who appears to be a lunatic, when his detention or imprisonment is either during the trial or during the period when, after the sentence, he is undergoing imprisonment. In the case of a person condemned to death, no question of keeping him in prison would arise except for the period elapsing between the passing of the sentence of death and its execution. [243 F] (b) Insanity, to be recognised as an exception to crimi nal liability must be such as to disable an accused person from knowing the character of the act he was committing when he commits a criminal act. If, at the time of the commis sion of the offence, the appellant knew the nature of the act he was committing, he could not be absolved of responsi bility for the grave offence of murder. [245 B D] Jagmohan Singh vs The State of U.P. ; referred to. In the instant case, the whole object. of the proceed ings in the High Court and before this Court seems to be to delay execution of the sentence. In view of the number of times the appellant had unsuccessfully applied the powers of the High Court and of this Court ought not to have been invoked again. [244 A]

Appeal No. 112 of 1957. Appeal by special leave from the judgment and decree dated January 28, 1954, of the Bombay High Court in First Appeal No. 69 of 1950. Purshottam Trikamdas and Naunit Lal for the appellants. C. K. Daphtary,Solicitor General of India, section N. Andley, J. B. Dadachanji and P. L. Vohra for respond ents Nos. I and 2. B R. L. Iyengar for respondents Nos. 6 to 9. 1961. February 21. The Judgment of the Court was delivered by SHAH, J. The genealogy which sets out the relationship between some of the principal parties in this litigation is as follows: Mallappa | | | | | Balappa Shivappa Basavanappa Chanamalappa | | Basalingappa | Rachappa | (Parvatewa Balappa deft. 9 | respdt. 12) | | | | | | | Shrishailappa Shivappa | (Plaintiff 1) (plaintiff 2) | | | | | | | | | malappa Chanabasappa Balappa Basavanappa Shrishailppa (deft. 5) (deft.6) (adopted by (deft. 7) (deft. 8) Chanamalappa Mallappa had four sons Balappa, Shivappa, Basavanappa and Chanamalappa. These four sons, formed a joint Hindu family. Chanamalappa separated himself from the joint family sometime in the year 1909 and his other three brothers continued to remain joint. Shivappa was the Manager of the joint family 898 after the death of Mallappa. Shivappa died in 1928. and Rachappa became the Manager of, the family. The joint family possessed lands in seventeen, villages and many houses in Khanapur. The family had also an extensive money lending business. One Bashettappa Neeli hereinafter referred to as Bashettappawas married to the sister of Rachappa. On July 29, 1929, Bashettappa executed a deed of simple mortgage in favour of Rachappa in respect of certain parcels of lands and houses belonging to him to secure repayment of Rs. 1,73,000/ , Rs. 76,700/ out of which were received in cash and the balance represented amounts which Rachappa agreed to pay to Bashettappa 's creditors. To one Gurappa, Bashettappa owed Rs. 8,000/ as an unsecured debt and Rachappa agreed to pay that debt. In Insolvency Application No. 22 of 1929 of the file of the First Class Subordinate Judge, Dharwar, Bashettappa was adjudicated an insolvent and receivers were appointed by the Insolvency Court to administer his estate. The receivers applied for a declaration that the mortgage deed, in favour of Rachappa was in fraud of creditors and was 'accordingly void. The Assistant Judge, Dharwar, in Appeal No. 25 of 1934 from the order of the Insolvency Court held that Rachappa was entitled out of the mortgage amount to recover Rs. 45,700/ as a secured debt and Rs. 31,000/ as unsecured debt. Gurappacreditor of Bashettappa in the meanwhile filed Suit No. 84 of 1932 against Rachappa and other members of his family in the court of the First Class Subordinate Judge, Dharwar, for a decree for Rs. 8,000/claiming that Rachappa had, acting on behalf of the joint family of which he was the manager, undertaken under the deed of mortgage to pay that amount and. that he Gurappa had accepted that undertaking. ; A decree exparte was passed in that suit against Rachappa on February 28,1933, and the claim against the other members of the family was either withdrawn ' or rejected. On July 23, 1939, the three branches of the joint family by mutual agreement severed the joint status and properties movables and immovables beloning to the family were divided. Pursuant to 899 this division, lands and houses which fell to the shares of the three branches were mutated in the Revenue and Municipal records in the names of the managers of the respective branches. Movables were also divided. The mortgage amount recoverable from Bashettappa and a claim against one Desai were ' it is the case of the plaintiff in the suit out of which this appeal Arises, kept joint. Gurappa after making certain infructuous attempts to execute the decree filed dharkhast No. 176 of 1940 to recover Rs. 11,061 6 9 and prayed for an order of attachment and sale of the rights of Rachappa under the mortgage bond dated July 29,1929. One Ganpatrao N. Madiman hereinafter referred to as Madiman offered the highest bid at the court auction and the mortgage bond was sold to him for Rs. 20,000/ An application filed by Rachppa for setting aside the sale pleading that the sale was vitiated by material irregularities and fraud in publishing and conducting the sale was rejected. The mortgage bond was delivered by the executing court to Madiman and orders were issued against Bashettappa and the receivers of his estate prohibiting them from making payments of the dues under the mortgage or any interest thereon, to any person or personal except the purchaser Madiman. In Miscellaneous Application No. 57 of 1944, Madiman applied, to the Insolvency Court to be recognised as an unsecured creditor for Rs. 31,000/., and the application was granted on the footing that the entire interest under the mortgage bond was purchased by him. Receivers appointed by the Insolvency Court thereafter put up for sale. the equity of redemption in the mortgaged properties and the same was purchased for Rs. 15,500/. by Madiman. The sale deed in this behalf was executed by the receivers in favour of Madiman on January 28, 1947. Madiman accordingly became the owner of the equity of redemption and claimed to be entitled to the entire mortgagee right as a purchaser of the right, title and interest of Rachappa. Basalingappa who was the natural brother of Rachappa and was adopted by his uncle Basavanappa died in 1946 leaving him surviving his widow 900 Parvatewa, and two sons Shrishailappa and Shivappa. The sons of Basalingappa who will hereinafter be referred to as the plaintiffs filed Suit No. 253 of 1947 for a decree for Rs. 1,23,400/ by enforcing the mortgage deed executed by Bashettappa claiming that Madiman had at the court auction acquired in the mortgagee right only the right, title and interest of Rachappa which was a third and the plaintiffs and defendants 5 to 8 sons of Shivappa continued to remain owners of the remaining two third share. The plaintiffs prayed for a decree that the amount due under the mortgage be awarded to them and in default of payment the amount be realised by sale of the mortgaged property. To this suit were impleaded Bashettappa as defendant No. 1, receivers of his estate as defendants Nos. 2 and 3,Madiman as defendant No. 4, sons of Shivappa as defendants Nos. 5 to 8 and Rachappa and his son as defendants Nos. 9 and 10. Madiman died after the institution of this suit and his sons were impleaded as defendants Nos. 4A to 4C and his widow as defendant 4D. Madiman 's sons were the principal contesting defendants and the main contentions raised by them were: (1) that the mortgagee right was the separate property of Rachappa and it did not belong at any time to the joint family, of Rachappa defendants 5 to 8 and the plaintiffs, (2) that in any event, at the partition between the three branches the mortgagee right had failed to the share of Rachappa and that it was not kept undivided as alleged by the plaintiffs, and (3) that in Execution Petition No. 176 of 1940, the entire interest of the joint family was sold and it was purchased by Madiman and consequently, the plaintiffs could not enforce the mortgage. The trial court negatived the contentions raised by the sons of Madiman and held that only a third share in the mortgagee right was purchased at the court auction by Madiman. The court accordingly passed a decree against defendants Nos., 4A to 4D for payment of Rs. 60,933 5 4 and proportionate costs ',with future interest at 6% per annum 'on Rs. 30,466,10 8 901 from the date of the suit to the plaintiffs and defendants 5 to 8 within six months and in default of payment for sale of the mortgaged property. Against that decree, defendants 4A to 4C hereinafter referred to as the appellants appealed to the High Court at Bombay. The High Court held that the mortgagee right belonged to the joint family, that the agreement to pay Rs. 8,000/ to Gurappa was not binding upon that family and therefore in execution of the decree passed in favour of Gurappa only the right, title and interest of Rachappa was purchased by Madiman. The High Court further held that there was in 1939 severance of joint family status between the members of the family of Rachappa, plaintiffs and others, but as in the state of the record in the view of the court a finding on the question whether the mortgage debt was kept undivided could not be recorded, they remanded the case for recording a finding on the following issue: " Whether it is proved that the mortgage debt of 29th July, 1929, fell to the share of defendant No. 9 at the family partition of July, 1939, " and directed the trial court to allow both the parties to lead evidence upon this issue and to certify its findings thereon. The trial court recorded a negative finding on that issue. It held that the mortgage claim was kept undivided at the partition. The High Court confirmed this finding and dismissed the appeal filed by the appellants, subject to a slight modification as to the rate of interest awarded by the trial court. With special leave under article 136 of the Constitution, this appeal is preferred. No serious argument was advanced before us on the plea that the amount due under the mortgage from Bashettappa was not the property of the joint family. At the material time when the mortgage deed was executed by Bashettappa, Rachappa was the manager of the joint family. In Suit No. 84 of 1932 filed by Gurappa it was alleged that Rachappa was the manager of the joint family consisting of himself and the branches of Shivappa and Basavanappa and that the mortgage transaction was for the benefit of the joint family and that Raohappa had entered into that 902 transaction for and on behalf of the joint family and in that suit Rachappa alone was declared liable to pay Rs. 8,000/ . Partition of the year 1930 is supported by evidence which has remained unchallenged. Intimation was given to the village and Municipal authorities pursuant to the partition for mutating the names of the different branches to whom the shares were allotted. The evidence of Rachappa and Mallappa that the partition took place also has remained uncontradicted. The question which calls for consideration is whether at the partition, the mortgagee right under the deed executed by Bashettappa was kept undivided. Mallappa defendant No. 5 in his evidence when he was examined after remand stated that " an equal division was made of the lands according to the income and that Rachappa was not given a smaller share in the lands. " He also stated that the houses were divided in equal shares and the outstandings in the money lending business except two bonds the mortgage bond executed by Bashettappa and one Desai were kept undivided. He denied the suggestion that the mortgage debt due from Bashettappa was allotted exclusively to Rachappa. Rachappa in his evidence also stated that the mortgage bond was kept undivided between the three branches and that it was not true that it was allotted to his shares at the partition. Devidas defendant No. 4 A had evidently no personal knowledge about this partition or the terms thereof His statement that Rachappa had told him at the time when Madiman offered his bid at the court auction that the mortgage bond was allotted exclusively to Rachappa 's share could not in the circumstances of the case be true and was rightly "believed by the trial court and the High Court.

The manager of an undivided Hindu family consisting of himself, his brother and their step mother, instituted a suit for recovery of the amount due under a mortgage belonging to the family. The step mother who was interested in the mortgagee right was not made a party to the suit. Though the manager (the first plaintiff) did not describe himself as the manager in the plaint, the allegations in the plaint showed that the suit was filed on behalf of the joint family. No objection as to non joinder was raised in the trial court, but when the appeal was pending in the High Court the step mother was added as a party on her applica tion. The contesting defendants pleaded that as all persons having an interest in the mortgage security were not joined as parties within the period of limitation prescribed for a suit to enforce the mortgage, and the first plaintiff did not, in any case, purport to institute the suit in his capacity as the manager, the suit must fail. Held: (1) that the failure to join a person who is a proper but not a necessary party does not affect the maintainability of the suit nor does it invite the application of section 22 Of the Indian Limitation Act, 1908 ; (2) that the question whether a suit as instituted by the manager of an undivided Hindu family in his personal capacity or as representing the family depends upon the circumstances of each case and that the failure of the plaintiff to describe himself as the manager in the plaint is not decisive of the question. (1) (2) 897 In the resent case, the step mother was not a necessary party, and the facts showed that the suit was instituted by the first plaintiff in his capacity as manager. Accordingly, the suit was maintainable. Guruvayya Gowda and Others vs Dattatraya Anant and Others Bom. 11, referred to.

The appellants and the respondents trace their interest and rights through their geneology to one Veeranna who died in 1906. One of his sons Pitchayya, predeceased him in 1905 and it is alleged that sometime before his death Pitchayya took Venkayya, the son of his brother Chimpirayya, in adoption. It is further alleged that a partition of the joint family properties between Veeranna and his four sons took place. Venkayya died in 1938 having a son Subbarao. Chimpirayya died in 1945 having executed a will whereunder he gave his properties in equal shares to Subbarao and Kamalamma, the daughter of his predeceased daughter. He also directed Raghavamma, the wife of his brother Pitchayya, to take possession of the entire property belonging to him, manage it and to hand over the same to his two grand children when they attained majority. Chimpirayya excluded his daughter in law Chenchamma from management as well as inheritance. But Raghavamma allowed Chenchamma to take possession of the property. Subbarao died in 1949. In 1930, Raghavamma filed a suit for possession of the property impleading Chenchamma as the first defendant, Kamalamma as the second defendant and Punnayya as the third defendant. 934 Chenchamma, the first defendant and the present first respondent, contended that Venkayya was not given in adoption and that there was no partition as alleged by the plaintiff. She averred that Chimpirayya died undivided from his grandson Subbarao and therefore, Subbarao became entitled to all the properties of the joint family by right of survivorship. The trial Judge came to the conclusion that the plaintiff had not established adoption of Venkayya by her husband Pitchayya and that she also failed to prove that Chimpirayya and Pitchayya were divided from each other and in the result dismissed the suit. On appeal, the High. Court upheld the above two findings of the trial judge. A new pica was raised by the appellant before the High Court that the will executed by Chimpirayya contained a clear intention to divide and that this declaration constituted a severance in status enabling him to execute a will. The High Court rejected this contention also and in the result dismissed the appeal. On appeal by certificate, the appellants contended that the findings of the High Court on adoption as well as on partition were vitiated by the High Court not drawing the relevant presumptions permissible in the case of old transactions, not appreciating the great evidentiary value of public documents, ignoring or at any rate nor giving weight to admissions made by parties and witnesses, adopting a mechanical instead of an intellectual approach and perspective and above all ignoring the consistent conduct of parties spread over a long period. inevitably leading to the conclusion that the adoption and the partition set up by the appellant were true. (2) On the assumption that there was no partition by metes and bounds, the court should have held on the basis of the entire evidence that there was a division in status between Chimpiravva and Pitchayya, conferring on Chimpirayya the right to , bequeath his divided share of the family property. (3) The will itself contained recitals emphasizing the fact that he had all through been a divided member of the family and that on the date of execution of the will he continued to possess that character of a divided member so as to entitle him to execute the will in respect of his share and, therefore, the recitals in the will themselves constituted an unambiguous declaration of his intention to divide and the fact that the said manifestation of the intention was not communicated before his death to Subbarao or his guardian Chenchamma could not affect his status as a divided member. (4) Chenchamma, the guardian of Subbarao, was present at the time of execution of the will and, therefore, even if communication was 935 necessary for bringing about a divided status, it was made in the present case. The respondents raised a preliminary objection, that the certificate issued by the High Court did not contain any issue relating to adoption or partition. Hence, this Court should not allow the appellants to raise these questions. Secondly, it was contended that since the question, whether declaration in the will constituted a partition was raised in the High Court for the first time it should not be allowed to be raised. It war. further urged that on the issues of partition and adoption, there were concurrent findings of fact by the trial Court and the High Court and this Court should not interfere. Held that a successful party can question the maintain ability of the appeal on the ground that a certificate was wrongly issued by the High Court in contravention of article 133 of the Constitution, but if the certificate was good, the provisions of that Article did not confine the scope of the appeal to the certificate. This Court has the power to review the concurrent findings of fact arrived at by the lower courts in appropriate cases. But this Court ordinarily will not interfere with concurrent findings of fact except in exceptional cases, where the findings are such as "shocks the conscience of the Court or by disregard to the forms of legal process or some violation of some principles of natural justice or otherwise substantial and grave , injustice has been done ' . It is not possible nor advisable to define those circumstances. It must necessarily be left to the discretion of this Court having regard to the facts of a particular case. The present case is not one of those exceptional cases where a departure from the salutary practice adopted by this Court is justified. Case Law referred to. There is an essential distinction between burden or proof and onus of proof; burden of proof lies upon the person who has to prove a fact and it never shifts but the onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. The criticism levelled against the judgments of the lower courts, therefore, only pertain to the domain of appreciation of evidence. 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 its validity. In the present case, the appellant has failed to discharge that burden. 936 The burden is upon that person who sets up partition to prove that fact. The general principle is that a Hindu family is presumed to be joint unless the contrary is proved. The finding whether there was partition or not is a finding of fact. An interference in the concurrent findings of fact on this point by the courts below is not justified. Bhagavati Prasad Shah vs Dulbi Rameshwari Juar, , referred to. It is settled law that a member of a joint Hindu family can bring about his separation in status by a definite and un equivocal and unilateral declaration of his intention to separate himself from the family and enjoy his share in severality. One cannot declare or manifest his mental state in a vaccum. To declare is to make known, to assert to others. Others must necessarily be those affected by the said declaration. Therefore, a member of a joint Hindu family seeking to separate himself from others will have to make known his intention to the other members of the family from whom he seeks to separate. A declaration to be effective should reach the person or persons affected by one process or other appropriate to a given situation. Adujallath Kathusumma vs Adujalath Beechu, I.L.R. 1950 Mad. 502, Suraj Narain vs Iqbal Narain, All.80 (P. C.), Ramalinga Annavi vs Narayanan Annavi, (1922) I. L. R. C.), Sayed Kasam vs Jorawar Singh, Cal. 84 (P. C.), Soundararayanl vs Arunachalam Chetty, Mad. 159 (P.C.), Bal Krishna vs Ram Krishna, C.), Babu Ramasaray Prasad Choudhary vs Radhika Devi, (1935) 43 L. W. 172 (P.C.), Kamepalli Avilamma vs Manmen Venketaswamy, , Rama Ayyar vs Meenakshi Ammal, (1930) 33 L. W. 384, Narayana Rao vs Purshothama Rao, I. L. R. and Indira vs Sivaprasad Rao, I. L. R. , discussed . Once the declaration is expressed and brought to the knowledge of the person affected, it relates back to the date of 937 declaration or the expression of intention to separate. As the doctrine of relation back involves retroactivity, it cannot affect vested rights. It would follow that, though the date of severance is that of manifestation of the intention to separate, the rights accrued to others in the joint family property between the said manifestation and the knowledge of it by the other members would be saved. Applying the above principles to the present case it must be held that on the death of Chimpirayya his interest devolved on Subbarao since it has not been established that Subbarao or his guardian had knowledge of the contents of Chimpirayya 's will before Chimpirayya died.

The appellant company filed a suit against the respondents in the court of the Senior Subordinate Judge, Gurgaon, for the specific performance of an agreement for the purchase of ' certain land by the company from the respondents. Part of the land in question became the subject of proceedings under the Land Acquisition Act, 1894, and dispute relating to compensation was referred to the Court of the District Judge. The court fixed the compensation at over Rs. 2 Iakhs. A dispute as to apportionment of the compensation was also. referred under section ' 30 of the Land Acquisition Act to the court but the proceedings were stayed by the Additional District Judge, pending decision of the suit for specific performance by the Senior Subordinate Judge. The suit was dismissed and thereupon the respondents applied to the Additional District Judge for continuation of proceedings under section 30 and for payment of compensation to them. The appellant company resisted the application on the ground that it had filed an appeal in the High Court against the decree of the Senior Subordinate Judge. The Additional District Judge after hearing both parties stayed the proceedings under section 30 pending disposal of the company 's appeal by the High Court. On a revision application under section 115 C.P.C. filed by the respondents, the High Court ordered on March 18, 1969 that a sum of not more than Rs. 1,78,000 out of the compensation for the acquired land be paid to the respondents who must undertake not to sell the rest of the land during the pendency of the appeal. The Additional District Judge after hearing the parties judicially interpreted the order to. mean that Rs. 1,78.000 were to be paid to the respondents after the conclusion of the proceedings under ' section 30. The respondents again moved the High Court with an application under section 151/141 C.P.C. for a clarification of its earlier order whereupon by order dated May 8, 1969 the High Court ordered immediate payment. The company challenged the High Court 's orders dated March 18, 1969 and May 8, 1969 in an appeal before this Court. It was contended on its behalf that in making its first order the High Court exceeded its jurisdiction u/s 115 C.P.C. and in making the clarificatory order ex parte it violated the rules of natural justice. HELD: (i) The position is firmly established that while exercising its jurisdiction under section 115, it is not competent to the High Court to correct errors of fact however gross or even errors of law unless the errors have relation to the jurisdiction of the Court to try the dispute itself. Clauses (a) and (b) o.f this section on their plain reading quite clearly did not cover the present case because it had not been shown that the learned Additional Sessions Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question. Clause (c) of the section also did not apply 369 to the present case. The words "illegally" and "with material irregularity" as used in this clause do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may relate either to breach of some provision of law of to material defects of procedure. affecting the ultimate decision, and not to errors of either fact or of law, after the prescribed procedure has been complied with. [375 D G] The High Court had not adverted to the limitation imposed on its power under section 115 of the Code and had treated the revision as if it was an appeal. Merely because the High Court would have felt inclined, had it dealt with the matter initially, to come to a different conclusion on the question of continuing stay of the reference proceedings pending decision of the appeal could hardly justify interference on revision under section 115 of the Code when there was no illegality or material irregularity committed by the Additional Sessions Judge in his manner of dealing with the question. The order of the High Court dated March 18, 1964 had therefore to be set aside. [375 F H] Rajah Amir Hassan Khan vs Sheo Baksh Singh, I I Indian Appeals 237: Balakrishna Udayar vs Vasudeva Aiyar, 44 Indian Appeals 261; Keshav Deo vs Radha Kissan. ; applied. (ii) The ex parte order dated May 8 1969 was equally difficult to sustain. The High Court had proceeded to make an order virtually and in effect reversing the judicial order made by the learned Additional Judge in favour of the appellant. This could, more appropriately be done only on appeal or revision after notice to the party affected and not on an application under sections 151/141 C.P.C. Such an application in the. circumstances was misconceifed. [376 C, F]

The Respondent had filed a suit for defamation in the Bombay High Court against the petitioner, claiming Rupees one crore as damages for the injury alleged to have been caused to his reputation by the publication/imputation of certain alleged defamatory statements made by the petitioner at a Press Conference held at New Delhi on January 10, 1989. The allegation in the plaint was that the petitioner le velled several accusations at the said Press Conference which were widely circulated/reported in the newspapers of January 11, 1989. In substance the allegation was that the Respondent and his family members pocketed more than Rs.300 crores through fraudulent deals in lands situate in Banga lore and other parts of Karnataka, whereby the respondent favoured his relatives/friends, besides non resident Indi ans. By the instant petition, filed by the petitioner under section 25. Code of Civil Procedure, the petitioner prays for the transfer of the said suit pending in Bombay High Court to any Civil Court in Karnataka, preferably the City Civil Court at Bangalore on the ground of forum non conven ience. In support of the petition it is urged by the peti tioner that: (i) the petitioner 's father maintains a family house at Bangalore; (ii) that all the events that provide the defence to the litigation took place in Karnataka at Bangalore; (iii) that the entire documentary evidence touch ing the alleged acts being in official files and in private custody would be easily available in Bangalore, (iv) that most of the witnesses who are in the know of respondent 's wrongs are residents of Karnataka, more particularly Banga lore; (v) that the discovery and inspection of documents can be conveniently had in Bangalore; (vi) that the evidence relating to telephone tappings done at the behest of the respondent would be available in Karnataka, and (vii) that the people of Karnataka State are vitally interested in the outcome of the litigation. For these reasons, amongst oth ers, the petitioner prays for the Transfer of the suit from Bombay to Bangalore. 470 The respondent while opposing the transfer of the suit contends that the petitioner having aligned himself with the Ruling Party at the Centre was indulging in making intemper ate, slanderous and false allegations against him with a view to maligning him and advancing the political interest of the Ruling Party at the Centre. According to him the hearing of the suit has been delayed as the petitioner has not filed his written statement. The respondent further contends that being the dominus litis he was entitled to choose the forum. Allowing the petition, this Court, HELD: The Supreme Court is empowered at any stage to transfer any suit, appeal or other proceeding from a High Court or other Civil Court in one State to a High Court or other Civil Court of another State if it is satisfied that such an Order is expedient for the ends of justice. [474H; 475A] The question of expediency would depend on the facts and circumstances of each case but the paramount consideration for the exercise of power must be to meet the ends of jus tice. [476C] Words of wide amplitude for the ends of justice have been advisedly used to leave the matter to the discretion of the apex court as it is not possible to conceive of all situations requiring or justifying the exercise of power. [475D] If the ends of justice so demand, the case may be trans ferred under this provision notwithstanding the right of dominus litus to choose the forum and considerations of plaintiff 's convenience, etc. cannot eclipse the requirement of justice. Justice must be done at all costs, if necessary by the transfer of the case from one Court to another. [476D E] The ends of justice in the instant case demand that the suit be transferred from the Bombay High Court to the City Civil Court, Bangalore, where most of the documentary evi dence and the majority of witnesses are available. Since the respondent ordinarily resides in Bangalore and was the Chief Minister of Karnataka during the period the various acts of which he is accused of took place, the impact of the accusa tion would be as much, if not more, on the readers of Banga lore. No prejudice, much less substantial prejudice would be caused to the respondent if the suit is transferred as prayed. [477C & F G] 471 Sanjay Gandhi and Anr. vs Rani Jethmalani, ; and Union of India vs Shrimani Gurdwara Prabandhak Committee and Ors. , ; , referred to.

The Settlement Officer under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 suo motu made an inquiry as to whether a particular village notified by the State Government was an estate or not within the contemplation of section 9(2) of the Act and held that it was not an "inam estate" within the meaning of section 2(7) of the Abolition Act but that the village became an estate by virtue of Madras Estates Land (3rd Amendment) Act, 1936. Ther appellants unsuccessfully appealed to the Estate Abolition Tribunal. The appellant then instituted a suit (O.S. 47 of 1953) against the State Government for a declaration that the village was not an "estate" under section 3(2)(d) of them Madras Estates Land Act, 1908 and consequently Madras Estate (Reduction of Rent) Act, 1947 and the Abolition Act were not applicable to it. The trial court decreed the suit. The State Preferred an appeal. During the pendency of the appeal the appellant filed a suit (O.S. No. 101 of 1954) against the respondents for recovery of certain amount as rent or damages in respect of lands cultivated by them in the village in dispute. The respondents contended that the village was an estate within the meaning of the Act and that it had been so held by the Settlement Officer. Ultimately both the parties filed a joint memo on 26th March, 1958 that they would abide by the decision of the High Court or the Supreme Court in the appeal or revision arising out of the suit (O.S. 47/53) on the question whether the village was or was not an "estate" under, section 3(2)(d) of the Madras Estates Land Act. The High Court (in A.S. No. 668 of 1954 which was an appeal arising out of O.S. 47 of 1953) confirmed the decree of the trial court that the village in dispute was not an 'estate '. The State did not appeal, with the result that the High Court 's decision became final and the decree dated 28th March, 1958 became, effective. Against the decree of 28th March, 1958 the appellants preferred an appeal (A.S. 239 of 1961) to the High Court. The appeal related only to the extent of the land in the possession of the respondents and the quantum of rent or damages. The appellants ' claim was that the entire land was under cultivation of the respondents and so the lower court was wrong in not decreeing the appellants ' claim for rent or damages in toto. The respondents raised a preliminary objection at the time of hearing of the appeal that the suit itself was incompetent as the Civil Court had no jurisdiction to decide whether the suit village was an estate or not and, therefore, any (decision given by the High Court would not bind the parties and the decree in O.S. 101 of 1954 would be without Jurisdiction rendering it null and void and that the Settlement Officer was the competent authority to decide the tenure of the village and his deci sion had become final in view of the introduction of section 9A by Act 20 of 1960. The High Court upheld the preliminary objection of the respondents and rejected the contentions of the appellants that since section 9A was inserted by an amendment which came into force on 23rd June, 1960, it could not affect the compromise decree of the court passed on March 28, 1958 or the decree of the High Court by which both the parties agreed to abide by the decision of the High Court or the Supreme Court in appeal or revision arising out of O.S. 47 of 1953. The High Court held that the Civil Court was not the forum for the suit as framed by the appellants and the questions raised in the suit L748SuP CI/74 656 including the claim for arrears of rent or damages, were outside the jurisdiction of the Civil Court, and so dismissed the appeal. Allowing the appeal, HELD:1 (a) There is no doubt that the question was within the competence of the Civil Court. Under the Abolition Act, as it stood at the material date, the inquiry of the Settlement Officer could legitimately be confined to the ascertainment of only two disputes of fact, viz., (i) Was the village an "inam village"? (ii) If so, was it an 'Inam Estate ' as defined in section 2(7) of the Abolition Act ? Once issue (ii) was determined, the inquiry would be complete and the limits of his exclusive jurisdiction circumscribed by section 9(1) reached; if he went beyond those limits to investigate and determine something which is unnecessary or merely incidental or remotely related to issue No. (ii), 'then such incidental or unnecessary determination could be questioned in a Civil Court. [668FG] (b) Any finding recorded by the Settlement Officer regarding the property in question being an 'inam village ' or not, ' is not final or conclusive it being a finding of a jurisdictional fact only, the Preexistence of which is a sine qua non to the exercise of his exclusive jurisdiction by the Settlement Officer. [668H] (c) The legislature must have visualised that under the cloak of an erroneous finding as to the existence or nonexistence of this prerequisite, the Settlement Officer may illegally clutch at jurisdiction not conferred on him or refuse to exercise jurisdiction vesting in him. Perhaps that is why the statute does not leave the final determination of this preliminary fact to the Settlement Officer/Tribunal and his erroneous finding on that fact is liable to be questioned in a Civil Court. Once it is held that determination of this fact is not a matter of the exclusive jurisdiction of the Settlement Officer, the appellants cannot be debarred on the basis of any doctrine of res judicata from getting the matter fully and finally adjudicated by a court of competent jurisdiction. [669B C; E] Addanki Tiruvenkata Tata Desika Charyulu vs State of Andhra Pradesh A.I.R. 1964 S.C. 807 followed. District Board, Tanjore vs Noor Mohammed, (1952) 2 MJ. 586 (S.C.) referred to. (2) It is well settled that ordinarily when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was taken unless the new statute shows a clear intention to vary such rights. A plain reading of the impugned Act would show that there was nothing of this kind which expressly or by necessary intendment affects pending actions. [67OC D] (b) There is no non obstante clause in the amending Acts 17 and 18 of 1957 with reference to pending or closed civil actions. These amending Acts ' were published in the government gazette of December 23, 1957 and will therefore be deemed to have come into force from that date only. They could therefore be construed as having prospective operation only. [67OG H] (c) In the Amending Act 20 of 1960 also no back date for its commencement has been mentioned. It will, therefore, be deemed to have commenced on June 23, 1960 which is the date on which it was published in the Government gazette. [674E] Section 9A takes in its retrospective sweep only those decisions of the Settlement Officer or the Tribunal which at the commencement of 'the Amending Act 20 of 1960 were subsisting and had not been totally vacated or rendered non est by a decree of a competent court. [675 F] In the instant case the decision of the Settlement Officer dated September 2, 1950 was not such a decision. It had ceased to exist as a ' result of the inter linked decree in O.S. 47 of 1953 and O. section 101 of 1954 passed before the enactment of the Amending Act. The Amending Act of 1960, therefore, does not in any way affect the finality or the binding effect of those decrees. [675G] 657 (d) Order 23 rule 3 C.P.C. not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit. If the compromise agreement was lawful the decree to the extent it was a consent decree was not appealable because of the express bar in section 96(3) of the Code. [672E] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; , Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality and Reid vs Reid at 408, followed. (e) In any suit the parties, in order to avoid unnecessary expenses and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage There was nothing unlawful and improper in such an arrangement particularly when the interests,of the respondents were sufficiently safeguarded by the State. By no stretch of reasoning it could be said that the agreement was collusive or was an attempt, to contract out of the statute. In the instant case as soon as the parties made the agreement to abide by the determination in the appeal (A. section 668) and induced the court to pass a decree in terms of that agreement the principle of estoppel underlying section 96(3) C.P.C. became operative and the decree to the extent it was in terms of that agreement became final and binding between the parties. It was as effective in creating an estoppel between the Parties as a judgment on contest. [672F C & 673C] In the instant case that part of the decree in suit No. 101 of 1954 and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement. The combined effect of the two integrated decrees was to completely vacate and render non est decision dated September 2, 1950 of the Settlement Officer. [673F] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; applied. Per Krishna Iyer, J. concurring Courts have to be anchored to well known canons of statu tory construction and if they are out of tune With the law maker 's meaning and purpose the legitimate means of setting things right is to enact a new Interpretation Act. [678B] The Indian Constitution, adopting the fighting faith of equal I protection of the laws to all citizens, necessarily contemplates a new jurisprudence where vested rights may be, and often times are, extensively interfered. with for achieving the founding fathers ' social goals. Legislative exercises directed towards distributive justice as in the present case, cannot be considered in the light of dated value system, though sanctified by bygone decisions of Courts. [677H] In the present case the Act in question is clear about its intent and its application gives little difficulty.

On the death of H, who as the mother of the last male owner had succeeded to the estate, the respondents claimed the estate and brought a suit for its recovery on the strength of the pedigree which they set up that they were the sons of the halfsisters of the last male owner and therefore came before the agnates. The suit was contested by some of the agnates, of whom the appellant was one, who challenged the correctness of the pedigree, and maintained that the respondents ' mothers were not the half sisters of the last male owner. The trial court agreed with the respondents ' case and decreed the suit and this was confirmed by the High Court. The High Court relied on exhibit 1, a petition dated November 2, 1917, which S, one of the brothers of the third plaintiff, on his own behalf and on behalf of his brothers had filed in Suit NO. 31 Of 19I7 which was a suit instituted by some of the agnates of H 's husband questioning the alienations made by H. In the petition,, S alleged that the applicants were the legal claimants to the properties in the suit and prayed to be added as co defendants to the suit. The petition contained a pedigree which supported the pedigree set up 815 by the respondents, and the High Court held that exhibit I was admissible under section 32(5) of the Indian Evidence Act. The oral evidence of P.W. 2 and P.W. 4 supported the respondents ' case as to the pedigree set up by them and the High Court held that their evidence was admissible under section 50 Of the Indian Evidence Act. On appeal to the Supreme Court, it was contended for the appellant (1) that exhibit I was not admissible under section 32(5) Of the Indian Evidence Act because (a) the statement therein was a joint statement of three persons of whom one alone was dead, and (b) it was not made before disputes had arisen ; and (2) that the testimony of P.W. 2 and P.W. 4 did not fall within the purview Of section 50 Of the Indian Evidence Act and that the High Court erred in admitting and accepting such evidence. Held: (1) that section 32(5) Of the Indian Evidence Act was applicable to the statements as to pedigree in exhibit I because : (a) they were really made by S for self and on behalf of his brothers, and that, in any case, they were as much statements of S as of the other two brothers who are alive. Chandra Nath Roy vs Nilamadhab Bhattacharjee, (1898) I.L.R. , approved. (b) they were made before the precise question in dispute in the present litigation had arisen, as the respondents were not preferential heirs at the time of the previous suit and no question arose or could have arisen then as to the relationship between them and the last male owner. (2) that the evidence of P.W. 2 and P.W. 4 that they were present at the marriage of the mother of plaintiffs 1 and 2 as also at the Upanayanam ceremonies of plaintiffs 1 and 2, showed the opinion of those witnesses as to the relationship as expressed by their conduct, and was admissible under section 50 Of the Indian Evidence Act. The word " opinion " in section 50 Of the Indian Evidence Act means something more than mere retailing of gossip or hearsay; it means judgment or belief, that is, a belief or a conviction resulting from what one thinks on a particular question. Such belief or conviction may manifest itself in conduct or behaviour which indicates the existence of the belief or opinion. Under section 50 such conduct or outward behaviour as evidence of the opinion held is relevent and may be proved. Chander Lal Agarwala vs Khalilay Rahman, I.L.R. , approved. Conduct, as an external perceptible fact, may be proved either by the testimony of the person himself whose opinion is evidence under section 50 or by some other person acquainted with the facts which express such opinion, and as the testimony must relate to external facts which constitute conduct and is given by persons personally acquainted with such facts, the testimony is in each case direct within the meaning of section 60 of the Indian Evidence Act. 816 The observations 'of Hutchins, J., in Queen Empress vs Subbarayan, Mad. 9, that section 50 of the Indian Evidence Act seems to imply that a person whose opinion is a relevant fact cannot be called to state his own opinion as expressed by his conduct and that his conduct may be proved by others only when he is dead or cannot be called, disapproved.

Proceedings were initiated in 1974 under the Orissa Land Reforms Act, 1960 for declaration of surplus land of the appellants. The appellants filed objections asserting, inter alia, that in view of the partition in their families in the year 1965 the land in the ancestral properties which fell in their share could not be clubbed with those of their father. This contention was not accepted on the definition of the term "family" contained in section 37(b) of the Act. Such of the major married sons who as such had separated by parti tion before the 26th day of September, 1970, as contemplated by the definition of the term "family", were allotted sepa rate ceiling units but so far as the appellants were con cerned, their shares were clubbed with those of their fa ther. The appellants, having failed to get relief in the appeals and revisions filed by them under the Act, chal lenged the orders passed by the various authorities in writ petitions before the High Court of Orissa which were dis missed, relying on its earlier Full Bench decision in Nitya nanda Guru vs State of Orissa, (A.I.R. 1983 Orissa 54). Before this Court it was contended that (1) the protec tion under Article 31(C) would not be available to section 37(b) of the Act and it would be hit by Article 14 unless it was established that it had nexus with the policy of the State towards securing any of the principles laid down in Part IV of the Constitution; (2) section 37(b) of the Act had to be read in such a manner as to exclude the land which had fallen to the share of the appellants even though they did not fail within the category of a major married son" as contemplated by the definition of the term "family" in that section, by adding the word "or" between the words "major" and "married", (3) the words "as such" qualify only "son" and not "major married son" and are meant to distinguish son from brother or uncle, etc. Dismissing the appeals, it was, 605 HELD: (1) The Act aims at agrarian reform and Section 37(b) has a clear nexus with the policy of the State towards securing the principle laid down in Article 39(b) of the Constitution occurring in Part IV thereof. [607E F] Tumati Venkaish etc. vs State of Andhra Pradesh; , ; Seth Nand Lal & Anr. vs State of Haryana, ; and Waman Rao & Ors. vs Union of India, ; referred to. (2) It is difficult to take recourse to the suggested mode of interpretation of section 37(b), i.e., by adding the word "or" between the words "major" and "married" in view of its plain language. [608C D] (3) On a plain reading of the definition of the term "family" in section 37(b) of the Act, the said definition as it stands is neither meaningless nor of doubtful meaning. [608F] British India General Insurance Co. Ltd. vs Captain Itbar Singh Ors., referred to. (4) Keeping in view the agrarian reform which was con templated by the Act and particularly the provisions of Chapter IV relating to ceiling and disposal of surplus land which were calculated to distribute the surplus land of big tenure holders among the overwhelming havenots of the State. the Legislature in its wisdom gave an artificial meaning to the term "family". [608F G] (5) The main provision containing the definition of the term 'family ' is to be found in the first part of section 37(b), namely "family in relation to an individual means the individual, the husband or wife as the case may be of such individual and their children whether major or minor". The latter part of section 37(b), namely "but does not include a major married son who as such had separated by partition or otherwise before the 26th day of September 1970", does not on the face of its contain a matter which may in substance be treated as a fresh enactment adding something to the main provision but is apparently and unequivocally a proviso containing an exception. This admits of no doubt in view of the words "but does not include". [608G H; 609A B] Commissioner of Income Tax, Mysore vs The lndo Mercan tile Bank Limited, [1959] Supp. 2 SCR 256 referred to. (6) Given its proper meaning, the words "as such" can only be 606 interpreted to mean that it is only such son who would get the benefit of the exception who had separated by partition or otherwise before the 26th day of September, 1970 as "major married son". [609F]

The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour. The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959. Thereafter, the 7th respondent died in November 1959. The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds. It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit. HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record. (ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree. The appeal therefore abated so far as the 7th respondent was concerned. [217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these. cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit. But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage. Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished. Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to. N)3S.C.I. 1 212

Appeal No. 759 of 1957. Appeal from the judgment and Order dated June 26, 1957, of the Bombay High Court in Appeal No, 92 of 1956. J. C. Bhatt, section N. Andley, J. B. Dadachanji, Rameshuar Nath and. P. L, Vohra, for the appellants. R. Ganapathy Iyer and D. Gupta, for respondent. February 16. The Judgment of Gajendragadkar, Subba Rao, Wanchoo and Mudholkar, JJ., was delivered by Wanchoo, J. Sarkar, J., delivered a separate Judgment. WANCHOO, J. This appeal by certificate granted by the High Court of Bombay raises the constitutionality, of section 114(2) of the Bombay Industrial Relations Act, No. XI of 1947, hereinafter called the Act). The brief facts necessary for present purposes are these. 108 The appellant is a cotton textile mill situate in Bombay. It is said that the appellant had been continuously making losses from 1950 to 1955. References were however made under section 73 A of the Act by the Rashtriya Mill ' Mazdoor Sangh, Bombay, in respect of disputes relating to bonus for the years 1952 and 1953, which are said to be pending before the Industrial Court, Bombay. The ease of the appellant before the Industrial Court was that as it had made losses there was no question of its paying any bonus for the years in dispute. It seems that at the same time there were cases relating to bonus of other mills pending before the Industrial Court and the appellant applied that its case should be dealt with separately, and this prayer was acceded to. It seems that while the references were pending, an agreement was. arrived at between the Mill owners ' Association, Bombay and the Rashtriya Mill Mazdoor Sangh, Bombay, with respect to payment of bonus for the years 1952 to 1957 and the agreement was to come into force with respect to each mill when it was signed by each member mill of the Mill owners ' Association. Clause (6) of that agree ment provided for payment of bonus even where the profit made by a mill was not adequate to provide for all prior charges as per the Full Bench formula evolved by the Labour Appellate Tribunal in The Mill owners ' Association, Bombay vs The Rashtriya Mill Mazdoor Sangh (1) or even where a mill made actual loss, the minimum bonus being in either of these two cases 4 8 per cent. of the basic wages. earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years under the provisions of the agreement. This agreement was registered and was made enforceable as an award against those mills which were parties thereto. The appellant however did not sign the agreement and therefore it was not enforced as an award by the Industrial Court against the appellant. Thereafter the Rashtriya Mill Mazdoor Sangh wrote to the Government of Bombay requesting that the (1) 109 said award should be enforced against the appellant in exercise of the powers vested in the Government by section 114(2) of the Act. After necessary action under section 114(2), the Government of Bombay issued a notification dated July 31, 1956, directing that the award made by the Industrial Court on March 13, 1956, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant. This was followed by a writ petition by the appellant in the High Court challenging the constitutionality of section 114(2) and also challenging the power of the State Government to issue such a notification under that provision. The petition was however dismissed on October 9, 1956. There was then an appeal to a Division Bench of the High Court in which also the appellant failed. The appellant then applied for a certificate to enable it to file an appeal to this Court, which was granted and that is how the matter has come up before us. Two main points have been urged on behalf of the appellant before us. In the first place, it is urged that section 114(2) is unconstitutional as it violates the fundamental rights guaranteed under article 19(1)(f) and (g) of the Constitution. In the second place, it is urged that even if section 114(2) is constitutional, the notification has gone beyond the powers conferred on the State Government by that section and therefore the notification is bad. We do not think it necessary for purposes of the present appeal to consider the constitutionality of section 114(2), for we have come to the conclusion that the notification is bad because it goes beyond the powers conferred on the State Government by that section. This brings us immediately to the second point that has been urged before us and in that connection we have to consider the ambit of the power of the State Government under section 114(2). Section. 114(2) reads as follows. "In cases in which a Representative Union is a party to a, registered agreement, or a settlement, submission or award, the State Government may, 110 after giving the parties affected an opportunity of being heard, by notification in the Official Gazette, direct that such agreement, settlement, submission or. award shall be binding upon such other employers and employees in such industry or occupation in that local area as may be specified in the notification: Provided that before giving a direction under this section the State Government may, in such cases as it deems fit, make a reference to the Industrial Court for its opinion. " The words of section 114(2) are very general and may at first blush be open to the interpretation that any agreement, settlement, submission or award may be extended thereunder provided it fulfills its terms. But further consideration shows that there are two obvious limitations on the power of the State. Government in that behalf. The first limitation arises out of the subject matter of the agreement etc., to be extended. Suppose the agreement etc. deal with (lot us say) the wages of a certain type of workmen in a certain mill. Suppose that the agreement etc., are extended to ano ther mill where that type of workmen does not exist. Obviously the agreement cannot be extended in these circumstances and the power of the State Government is thus limited by the subject matter of the agreement etc. The second limitation which again, is obvious arises from the provisions of law. The proviso to section 114(2) shows that before exercising its power under the said section the Government can refer the matter to an Industrial Court and there can be no doubt that an Industrial Court cannot and will not, advise anything against the law. Section 95 A makes the determination of any question of law in any order, decision, award or declaration passed or made, by the Full Bench of the Industrial Court under the regulations made under section 92 binding in all proceedings under the Act. What is done under section 114(2) is also a proceeding under the Act after notice to the parties affected. The State Government is thus bound by any decision on a question of law while proceeding under a. 114(2). The 111 policy of the Act underlying section 95 A therefore lead,,; to the conclusion that the exercise of power conferred by section 114(2) has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of this Court. The State Government therefore when it passes an order under section 114(2) must have full regard to the law as laid down by the legislature and by the decisions of this Court and cannot pass an order under section 114(2) which is against such law. Besides, section 114(2) places a registered agreement, a settlement, a submission and an award on the same footing and so if an award has to conform to section 95 A as it must so must the other three mentioned therein. Therefore, when the State Government acts under section 114(2) it can only do as between the parties before it what a labour court, an Industrial Court or a wage board can in law do under the Act. We do not think that section 114(2) authorises the State Government to act against the law as laid down by the legislature or by this Court. Section 114(2) therefore appears to be speedy remedy (dispensing with all appeals provided under the Act) by which the State Government may direct that the terms and conditions of employment in the matter of wages, hours of work and so on may be the same in a particular industry or occupation in a particular area as may have been settled between a representative union and other employers in that area and as could if necessary be enforced through an award in a case to which the representative union was a party. There can be no doubt however that the State Government cannot do under section 114(2) what an adjudicator has 'no power to award under the provisions of the Act. Therefore, as we read a, 114(2) we cannot escape the conclusion that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator (be it a labour court, an Industrial Court or a wage board under the Act) to make an award thereunder, and the State Government cannot under section 114(2) do what an adjudicator cannot do under the Act. This being the ambit of the State Government 's power in respect of giving a direction under a. 114(2), 112 let us now proceed to see whether the impugned notification is within the ambit of these powers. By this notification the State Government has directed that the award dated March 13, 1956, made by the Industrial Court shall be binding on the appellant and its employees in the matter of payment of bonus for the years 1952 to 1957 (both inclusive). It is not in dispute that the said award was based, on an agreement between the Mill owners ' Association, Bombay and the Rashtriya Mill Mazdoor Sangh, Bombay. The said agreement provided that it would have to be signed by each member mill of the Mill owners ' Association before it would be binding on it and again it is not in dispute that the appellant mill though it is a member of the Mill owners ' Association never signed it. Farther, cl. (6) of the agreement provided for payment of minimum bonus even in cases where there was no adequate profit to provide for all prior charges as per the Full Bench formula and also in cases where a mill had made actual loss on the year 's working, subject to a proviso as to adjustment. Thus by the direction given in the impugned notification the appellant is subjected to payment of bonus even where it has not made adequate profit to provide for all prior charges or has in fact made a loss. The contention on behalf of the appellant is that it would not be open to an Industrial Court to grant bonus when profit was not adequate to meet all prior charges or where there was an actual loss and therefore when the impugned notification made it possible for grant of bonus even in these cases (for prima facie the appellant had made losses upto 1955), it directed something which even an Industrial Court could not do. ' In consequence, it is urged that the notification inasmuch as it makes this possible is beyond the powers conferred on the State Government under section 114(2) because it allows something to be done which even an Industrial Court could not allow. Reliance in this connection is placed on the decision of this Court in The New Manekchowk Spinning. Co. Ltd. and Others vs The Textile Labour Association (1). In that case this Court was considering (1) [1961] 3 S.C.R. 113 a similar agreement relating to Ahmedabad. The Industrial Court had imposed that agreement after its expiry for one year on the mills inspite of their contention that they were not bound to pay any bonus for the years in dispute in view of the law laid down by this Court in The Associated Cement Companies, Limited vs The Workmen (1). After examining the terms of the agreement then in dispute this Court came to the conclusion that in view of the law laid down in The Associated Cement Companies ' case, the Industrial Court had no jurisdiction to impose that agreement on the mills. It further held that an agreement of that kind could only continue by consent of parties. and could not be enforced by industrial adjudication against the will of any of the parties. The agreement in the present case directed to be enforced by the impugned notification is similar in terms and as held New Manekchowk 's case (2) it could not be enforced by industrial adjudication against the will of any of the parties. The power of the State Government under section 114(2) being co terminus with the power of an adjudicator under the Act, such an agreement cannot therefore be directed to be enforced against the will of the appellant even under section 114(2) inasmuch as by doing so the State Government would be going beyond the powers conferred on it by that section. The impugned notification therefore must be held to be bad inasmuch as it goes beyond the powers conferred on the State Government under section 114(2) and must therefore be struggle down. We therefore allow the appeal with costs and setting aside the order of the High Court hold that the notification dated July 31, 1956, is beyond the powers of the State Government under section 114(2) and direct that it will not be enforced. We should however like to make it clear that this decision will not prejudice the trial of any references with respect to bonus which may be pending or which may hereafter be made between the appellant and its employees with respect to years 1952 to 1957 (both (1) (2) ; 114 inclusive). If such references are pending or are hereafter made they will be decided in accordance with the decision of this Court in The Associated Cement Companies ' Case SARKAR, J. This appeal arises but of an application made by the appellants to the High Court at Bombay under article 226 of the Constitution for a writ directing the respondent, the State ' of Bombay, to forbear from acting upon or enforcing a certain notification issued by it under a. 114(2) of the Bombay Industrial Relations Act, 1946. This order was; sought on two grounds. The first ground was that section ll4(2) was ultra vires, illegal and void. The second ground was that if it was not so, the notification had been issued in improper exercise of the powers conferred by that provision. The appellants are a cotton textile mill in Greater Bombay, a local area under the Act, and its directors and shareholders. Their application was dismissed by the High Court and hence the present appeal. It appears that certain references were pending since 1953 and 1954 under the Act in the Industrial Court between various cotton textile mills in Greater Bombay and their employees, in respect of disputes concerning bonus for the years 1952 and 1953. In these references the employees were represented by the Rashtriya Mill Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry as defined in the Act and a union registered under it. The appellant mill was a party to these references. On March 1, 1956, while these references were pending, the Rashtriya Mill Mazdoor Singh entered into an agreement with the Mill Owners Association, Bombay, of which fortyseven cotton textile mills including the appellant mill, were members, regarding the bonus to be paid to the employees of these mills for the years 1952 to 1957. This agreement was subsequently accepted individually by about fortytwo of the mills who were members of the Association and parties to the references, and became binding on these mills. This agreement was later registered under the Act and filed in the pending references and an award was (1) 115 made by the Industrial Court on March 13, 1956, in terms of it, as between the mills who had individually accepted the agreement and their employees. The appellant mill did not accept the agreement and no award was made in the references concerning it and so far as it was concerned, the references remained pending. On July 31, 1956, the respondent made the order which is challenged in these proceedings. That order was in these terms: "Whereas the. Rashtriya Mill Mazdoor Sangh, Bombay. .is a party to an award dated the 13th March 1956 And whereas the Government of Bombay, con siders that the award should be made binding upon the employers specified in column 1 of the schedule hereto annexed and their employees And whereas the said employers and the Rash triya Mill Mazdoor Sangh, Bombay, representing the said employees being the parties affected were heard Now, therefore, in exercise of the powers conferred by sub section (2) of section 114 of the said Act, the Government of Bombay hereby directs that the said award shall be binding on the employers specified in column 1 of the schedule hereto annexed and their employees in the matter of payment of bonus for the years specified against the employers in column 2 of the said schedule. " The appellant mill was one of the employers men. tioned in the schedule to the notification and the schedule further provided that the award would be binding on the appellant mill and its employees for the years 1952 to 1957, both inclusive. As a result of this notification the appellant mill became liable to pay bonus to its employees for the. years mentioned, in terms of the award based on the agreement, to neither of which it was a party. The appellants contend that the appellant mill is not liable to pay bonus in law as laid down by this Courtin Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union (1) and by the Full Bench (1) ; 116 of the Labour Appellate Tribunal, in Mill Owners ' Association, Bombay vs Rashtreeya Mills Mazdoor Sangh (1) as it has not made any profit for the period commencing from June 30, 1950, and ending on June 30,1955. The agreement on which the award was based, adopted a formula for ascertaining the available surplus of the profits of an employer and provided for payment of certain bonus out of it. This bonus, I gather, would have been of a smaller amount than that payable under the formula laid down in the cases mentioned earlier. The appellants have no complaint against this Part of the agreement for, presumably, under it, they would not be liable to pay any bonus at all. What they object to is el. 6 of the ' agreement. This clause in substance provided that when no avai. lable surplus was found to exist according to the for mula or even when a mill had incurred loss in a particular year, it would have to pay its employees "a minimum bonus equivalent to 4.8 per cent of the basic wages earned by them during the year", with a right to recoup the bonus so paid, out of the bonus that would be payable under the agreement in subsequent years and out of the residue of the surplus profits then remaining, it would have to pay bonus in terms of the agreement. The substance of the appellants ' grie vance against the notification is that under it the appellant mill has to pay bonus in terms of cl. 6 of the agreement even though it has been working at a loss. The first question is whether section 114(2) is invalid and illegal. That section so far as is material is in these terms: "section 114 (1). A registered agreement or a settlement, submission or award shall be binding upon all per. sons who are parties thereto: (2) In cases in which a Representative Union is a party to a registered agreement, or a settlement, submission or award, the State Government may, after giving the parties affected an opportunity of (1) 117 being heard, by notification in the Official Gazette, direct that such agreement, settlement, submission or award shall be binding on such other employers or employees in such industry or occupation in that local area as may be specified in the notification. " The appellants first challenge the validity of the .section on the ground that it offends article 14 of the Constitution. It is said that it gives an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others. It seems to me that this contention is not well founded. The power given by the provision is not, in my view, uncontrolled. The object of the Act clearly is the settlement of industrial disputes and attainment of industrial peace. Furthermore, under the section the order can be made on employerS and employees in a local area which again is a limitation of the power. Now, a local area is an area notified as such for the purposes of the Act: see section 2(23). The object of this pro vision as to local areas is to divide the State into several areas for better maintenance of industrial peace and to group together for that purpose, the industries in a region. If conditions of labour in any area where a large number of workmen is collected, are uniform, then there is less likely to be disaffection among them whereas if such conditions are not the same, the workmen are likely to become restive. It is well known that regional considerations are closely connected with industrial disputes and are of importance for their settlement. The local area contemplated by section 114(2) is obviously the area in respect of which the Representative Union mentioned in it has been registered. No reference can be found in the section to any other local area. Under section 2(33) a Representative Union means a union registered as such under the Act and under section 13(1) a Representative Union is a union which has a membership of not less than fifteen per cent. of the employees in any industry in any local area and registered for that industry in the area. 118 The agreement, settlement, submission or award mentioned in the section has to be one to which a Representative Union is a party. It follows from this that a substantial body of workmen in an area has come to a decision or become bound by an award as to a question or questions affecting them. Therefore, the power under the section can be exercised only for achieving industrial peace in that area. It is not unlikely when a substantial section of workmen congregated in an area have secured certain rights that the other employees in that area may claim similar rights and this may disturb industrial peace in that area. The power can be exercised only for meeting such disturbance and only in the local area where it occurs. There are therefore two guiding principles. First, the power can be exercised only to prevent breach of industrial peace. Secondly, it can be exercised only in a specified area if there is a threat to industrial peace there. An exercise of the power outside the area and for purposes other than maintenance of industrial peace, would be beyond the scope of the section. Again, once there is occasion for legitimate exercise of the power and it is exercised, it must be exercised in all units of the industry in that local area in which units the threat to the industrial peace exists if that would restore the peace. It would be open to the Courts to correct a discriminatory use of the power or its use outside the scope of the section. Therefore it does not seem to me that the section confers unguided and arbitrary power. is of some interest to state that in the present case there has been no such discriminatory use of the power or any use outside the section. The respondent has made the award binding on all the remaining mills who had not accepted the agreement and there is evidence that there was: threat of breach of industrial peace in these mills. Then also, I find that the section has conferred the power on the highest authority, namely, the Government itself. That would be some guarantee that it would be duly exercised. This is a further reason for 119 holding that the section does not confer absolute and arbitrary Power. The next objection to the section is that it offends article 19(1)(g) in that it puts an unreasonable restriction on a person 's right to carry on business. This contention also is unacceptable to me. There is no doubt that the section puts certain restrictions on a person 's right to carry (in an occupation or business. The real question is whether the restrictions have been put in the interest of the general public and are reasonable. That the restrictions have been put in the interest of the general public seems to me to be unquestionable. The reason why the restrictions have been put is that otherwise, industrial peace would be disturbed. The entire country is interested in industries and, therefore, in industrial peace. This point requires no elaboration. , Then, are the restrictions put, reasonable? It seems to me that they are. The restrictions are that an agreement; settlement, award or submission all of ,Which of course must be concerning industrial disputes to which a person is not a party is made binding on him. By an "agreement", the parties to an industrial dispute settle it themselves. A "settlement" means a settlement of an industrial dispute arrived at with the assistance of a conciliator in the course of conciliation proceedings under the provisions of the Act. A "submission" is a reference of an industrial dispute to arbitration. An "award" is an adjudication on an industrial dispute by the court constituted under the Act. An agreement, a settlement or a submission is the result of the free consent of the parties to the dispute. As earlier stated, the section only applies to an agreement, settlement or submission to which a Representative Union, which is a union representing a substantial number of workmen, is a party. Therefore, the section can apply to an agreement, settlement or submission which a substantial number of workmen and an employer has, of their free choice, accepted. It would follow that such an agreement, settlement or submission has been considered reasonable by parties 120 interested and in the case of a settlement by the con ciliator appointed under the Act also. The restrictions imposed by any of these must therefore be reasonable. An award, on the other hand, is a decision of a court and can, therefore, always be expected to be reasonable. If certain restrictions are reasonable for an employer and his employees, I suppose it would follow that those restrictions would be equally reasonable for other employers and employees and more so, when they are all in the same neighborhood where the conditions are likely to be more or less the same. Therefore, it seems to me that the restrictions imposed by section 114(2) cannot be said to be unreasonable. I have earlier summarised the offending part of the agreement. I do not think that there is anything unreasonable there. The employer pays only 4.8 per cent of the basic wage in the year when he makes no profit with a right to recoup it in a subsequent and more prosperous year. The maximum that he has to pay as bonus in the best year is, I gather, less than what he would have to pay under. the formula regarding bonus laid down by this Court. The agreement extends over 6 years and it would not be unreasonable to suppose that during_ these years profits might be made to wipe off the minimum bonus paid in a lean year. The restrictions put by the present agreement are, therefore,, in my view quite reasonable. It may be that in individual cases, which are not likely to be many, the restrictions may work hardship. But that would not justify a conclusion that section 114(2) itself imposes unreasonable restrictions on a man 's right to carry on his business or occupation. This view was taken by this Court in Bijay Cotton Mills vs The, State, of Ajmer (1), where it was said in respect of the ; "Individual employers might find it difficult to carry on the business on the basis of the minimum wages fixed under the Act but this must be due entirely to the economic conditions of these particular employers. That cannot be a reason for the striking down the law itself as unreasonable." (1). [1955] 1 S.C.R. 752, 755 6. 121 Another ground on which the validity of the section was challenged was that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act. But I do not see that there is an inherent right in a party to an industrial dispute to have it decided by an Industrial, Court under the Act. The right to ask for an adjudication by an Industrial Court is itself created by the Act. What the Act has given, it can clearly restrict or take away in any manner it thinks fit. The provisions of the Act must be read together and in cases in which power under section 114(2) has. been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing. I thus come to the conclusion that the section is not invalid for any of the reasons mentioned. I also feel no doubt that the section was quite within the legislative competence of the legislature which passed it. I did not understand the learned counsel for the appellants to contend to the contrary. I have mentioned the legislative competence only to dispose of another argument which also, I think, was aimed at the validity of the section. It was said that there is no power anywhere to provide for payment of bonus where in law such bonus is not payable. This argu ment is founded on the decision of this Court in the Muir Mills case (1) where it had been said that no bonus is payable where no profit has been made. Therefore it is said that the section authorises payment of bonus where none is payable in law. This argument seems to me to be misconceived. If the section is legislatively competent and otherwise valid, as I think it is, then it cannot be invalid for the simple reason that it directs payment of bonus where, as held by this Court, as a matter of adjudication, none would be payable in law. The law laid down by this Court is only for application when the question comes up for adjudication by a court bound by that law. It has no relevance, in deciding the validity of an otherwise competent law. The law laid down by any Court cannot take away legislative competence. The (1) ; 122 enactment in question has left the law laid down by this Court quite unaffected; it will still apply in all cases where it is applicable. Now I proceed to consider the validity of the notification. As I understood the learned counsel for the appellants, he put his case on two grounds. He first said that the notification was invalid as it was made while a reference was pending in an Industrial Court. The reasoning is that it is invalid as it takes away the jurisdiction of that Court to decide the pending reference. I think what I have earlier said is a sufficient answer to this contention. The right to have the pending reference proceeded with was given by the Act. There is nothing to prevent that Act or any other, from providing that the pending reference shall be discontinued or become infructuous. If a notification could be made under the section, as the present argument assumes it could be, then as to when it could be made, would certainly depend on the terms of the statute. I find nothing in the Act to show that a notification could not be made while a reference was pending and so as to render it 'abortive. Therefore I think that no exception can be taken to the notification in the present case for the reason that it was issued while the reference was pending. The other challenge to the notification does not appear to have been raised in the High Court. It was based on section 95A of the Act which is in these terms: section .95A. The determination of any question of law in any order, decision, award or declaration passed or made, by the Full Bench of the Industrial Court, constituted under the regulations made under section 92, shall be recognised as binding and shall be followed. in all proceedings under this Act. It is said that the Government in issuing a notification under section 114(2) was, in view of section 95A, bound by the decisions of the Full Bench but in issuing the present notification, it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where he had made no profits. Therefore it is contended that the notification is invalid. I am unable to accept this argument. I will assume 123 that there is Full Bench decision of the kind mentioned. It is also true that the effect of the notification is to make the appellant mill pay bonus for a year when it had made no profit. All this, however, to my mind makes no difference for, though in issuing a notification under section 114(2) the respondent has to give the parties sought to be affected by it a hearing, there is really no proceeding held within the meaning of section 95 A in connection with the issue of the notification. All that section 95A does is to make "the determination of any question of law" by the Full Bench binding in certain proceedings. In order that determination of a question of law may be binding in another proceeding, that proceeding must raise the same question for, a determination of one question of law cannot be binding on another question. Now what is the question when a notification is intended to be issued under is. 114(2)? The only question is whether it is necessary for preserving industrial peace in a locality that a certain agreement, settlement, submission or award should be made binding on persons who are not parties to it. Such a question would not be a question of law at all; it would not be a question which could ever have arisen before the Full Bench. It would follow that no occasion of being bound by a determination of a question of law by the Full Bench can ever arise when the Government is considering whether a notification under section 114(2) should be issued. It may be that the result of a notification made under section 114(2) is to create a liability, for example, to pay bonus. The question of law as to the liability to pay bonus may have been decided by the Full Bench. That however cannot make the question arising under section 114(2) a question whether in law bonus is payable. The questions remain essentially different. Therefore, it seems to me, that section 114(2) does not contemplate a proceeding of the nature conceived by section 95A. Then I find that section 95A occurs in Chapter XIII of the Act which is concerned with Industrial Courts. It appears from the provisions of this chapter that the Industrial Court is the highest Court contemplated by 124 the Act. Under section 92 it has power to provide by regulations made by it that it will sit in Benches consisting of more than one person. Obviously it is intended that when a question of importance and difficulty arises, the Court will sit in a larger Bench. Section 95A appears, therefore, to have been enacted for the purpose that other courts acting under the Act should follow the decisions of the Full Bench so that there might be uniformity of law. It was not intended to have any application to the issue of a notification under is. 114(2). It also seems to me that if in issuing a notification under section 114(2) the Government were to be bound by the decisions of the Full Bench, then that section would be rendered almost completely infructuous. The question whether in view of section 95A, in issuing a notification under section 114(2) the Government is bound to follow the decisions of the Full Bench can arise only if section 114(2) is valid. If section 114(2) is valid, an interpretation of a. 95A which renders it infructuous cannot be correct. The sections of a statute must be so interpreted as not to affect the operation of one another. Let me take the case of an agreement concerning bonus between employer A and his employees. Now there is nothing in law to prevent an employer and his employees from making any agreement they like as to bonus. They may agree that bonus would he paid at a certain rate even when the employer has not made any profit. That would be a perfectly valid agreement. The agreement that was made in this case was of that kind. It has not been suggested that the agreement was invalid. Indeed, the fact that it was filed in the pending references and an award was made in terms of it would put it beyond doubt that it was unexceptionable for, the award was made in terms of the agreement as required by section 115A and it could not have been so made unless the agreement was in all respects valid. The Act therefore contemplates an agreement of this kind. If the argument of the learned counsel for the appellants is right, this agreement cannot be made 125 binding between B and his employees. Now, first, section 114(2) does not say that the agreement contemplated by it must comply with all decisions of the Full Bench. I find no justification for adding to the word "agreement" in section 114(2) the words "provided it is in compliance with decisions of the Full Bench". Secondly, common experience would show that when; disputants settle their disputes themselves by an agreement, they rarely, if ever, make the agreement strictly in terms of their legal 'rights; they, as it is said, give and take and adjust matters in their own way. So cases would be rare where the parties make ' the agreement strictly in terms of the law laid down ' by the Full Bench. Thus if the contention of the appellants is right, there would practically be no agreement to which section 114(2) would apply. Now, what is the law that can be laid down by the Full Bench regarding right to bonus? It can Only be general principles as to when it is to be payable and if payable, how the amount of it is to be calculated. This is what this Court did in the Muir Mills Case (1) and the subsequent cases regarding bonus. The actual award of bonus by the Full Bench on the facts of the case before it, would of course not be a determination of a question of law. Suppose now that the agreement between A and his employees was in compliance with the Full Bench decision. That agreement must therefore only provide that bonus of a certain amount would be paid in certain years. I do not find it possible to conceive of an agreement concerning bonus made after the Full Bench decision, which does not provide for the amount of the bonus to be paid but ,only lays down the formula for calculating what is to be paid, for, the formula is in the Full Bench decision and does not require to be laid down afresh. That agreement would be an agreement in compliance with the Full Bench decision. Suppose such an agreement provides for payment of a month 's wage,% as bonus. Now this agreement is to be made binding on B and his employees. If the argument that it can be made so binding only if as a result, B is not made to pay (1). [1955] 1 S.C.R. 991. 126 anything more than what he would have to pay under he Full Bench decision itself, is right then, it seems to be that the only case in which the agreement can be made so binding will be that in which the figures for example, of income, expenses, rehabilitation and a host of other things on which according to the Full Bench decision the bonus is to be calculated, are in the case of B absolutely identical with those in the case of A. If the figures were not so identical, then in the case of B, a month 's wages may be too large a bonus according to the Full Bench decision, though it La just right in the case of A. I do not think that such identity would ever exist. I think it right to point out here that under section 114(2) only the agreement as made can be extended to become binding on others. There is no power under it to alter the agreement in any way and then make it binding. What I have said so far concerning agreements would apply equally to settlements. Therefore, again almost all agreements made in terms of the Full Bench decision would also be taken out of the operation of section 114(2). Then I take the case of an award. An award is a decision of a court adjudicating upon an industrial dispute under the Act. I do not consider now an award based on an agreement for such an award would in substance be an agreement and with agreements, I have already dealt. I will, therefore, take an award passed as a matter of adjudication. I should suppose that such an award would be in accordance with the law as decided by the Full Bench for the decision of the Full Bench would be binding on the court passing the award in view of a. 95A. As stated in connection with agreements such an award would only decide how much bonus, assuming the dispute to be concerning bonus, would have to be paid; it would not be laying down any general principle for calculating bonus for, ex hypothesis those principles have already been laid down by the Full Bench. Here again, as in the case of agreements and for the same reason, if the argument for the appellants is right, the award can be made binding on employers not parties to it only when the relevant figures in the case if both the employers, 127 namely, the one who is a party to the award and also the other on whom the award is sought to be made binding, are identical. I conceive, such identity would never exist. As regards submissions, I am unable to see how section 95A can have any application at all. Submissions are defined in section 66 of the Act which, so far as material, provides, that "Any employer and a Representative Union may, by a written agreement, agree to submit any present or future industrial dispute to . . arbitration Such agreement shall be called a submission. " It does not appear to me to be conceivable that the Full Bench could ever have decided whether such a submission shall be made or not. The making of a submission involves no question of law. It can be made only in respect of industrial disputes. Section 66 gives the parties concerned the right to make it. Clearly, when a submission by A and his employees is sought to be made binding on B and his employees, there can be no question of compliance with any Full Bench decision. It would, therefore, appear that section 114(2) would become almost wholly infructuous if a notification under it could be issued only where the effect of that would not be to produce a result which is not in compliance with Full Bench decisions. It also strikes me that if in issuing the notification, the Government had to follow the Full Bench decisions, then the issue of that notification would really become an adjudication, the Government taking the place of the Industrial Court. The very same questions would then arise as would have arisen if the matter had to be decided by an Industrial Court. I am unable to hold that the inten tion was to make the Government itself an Industrial Court. If an adjudication by a court was necessary then the Industrial Court was already there and there was no need to put the duty of adjudication on the Government. For all these reasons I do not think that in issuing a notification under section 114(2) any question of complying with any Full Bench decision arises. In my view, 128 the issue of the notification is not a proceeding as contemplated by section 95A. Lastly, it was contended that the notification under the section had been issued mala fide. The only reason for this contention was that the object of such issue was to get round the decision of this Court in Muir Mills case (1). It is true that one of the reasons why the Rashtriya Mill Mazdoor Sangh wanted the notification to be issued was that it wanted to find a "way out of the situation arising as a result of the decision of the Supreme Court in Muir Mills case (1)". But I am not able to agree that makes the notification mala fide. Apart from the fact that the Sangh felt that the decision had not helped the industry or the workmen, which feeling I have no reason to doubt was perfectly honest, I am unable to see bow, if it is legally permissible under the statute to do a thing the result of which would be to get round a decision of this Court, the doing of it can be said to be mala fide. The Act directly permits and contemplates a notification which would produce a result in variance with a decision of this Court. There has been no misuse of the Act at all. As I have earlier stated, in the case of bonus the effect of a notification under section 114(2) would almost always be to permit something which is not permitted under the rule laid down in the Muir Mills case (1). That being so, a notification duly issued under the section cannot be said to have been issued mala fide. For all these reasons, in my view, the Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside. I would, therefore, dismiss the appeal with costs. By COURT: In accordance with the majority judgment, the order of the High Court is set aside and the appeal is allowed with costs. Appeal allowed.

The disputes regarding bonus to be paid to the ' workmen of the appellant mill and other cotton textile mills in Greater Bombay for the year 1952 and 1953 were referred to the Industrial Court under the provisions of the Bombay Industrial Relations Act, 1946, and while the references were pending, an agreement was arrived at between the Mill owners ' Association, Bombay, and the Rashtriya Mills Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry with respect, to payment of bonus for the years 1952 to 1957, providing inter alia for payment of bonus even where a mill made actual loss, the minimum bonus being 4.8 per cent. , of the basic wages earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years. This agreement was registered and was made enforceable as an award (1) L.L.R. (2) A.I.R. 1937 Mad. 763. 106 against those mills which were parties thereto. The appellant; however, did not sign, the agreement, and its case before the Industrial Court was that it had been continuously making losses from 1950 to 1955. On July 31, 1956, the Government of Bombay issued a notification under section 114(2) Of the Act directing that the award made by the Industrial Court aforesaid, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant. The appellant challenged the validity of section 114 on the grounds (1) that it offended article 14 Of the Constitution inasmuch as it gave an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others, (2) that it offended article 19(i)(g) in that it put an unrea sonable restriction on a person 's right to carry on business, and (3) that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act. In any event, the appellant contended that the notification was bad, because (a) it was made while a reference was pending in an Industrial Court and, therefore, took away the jurisdiction of, that Court to decide the pending references and (b) the notification went beyond the powers conferred on the State Government by section 114 since under that section the Government was bound by the decisions of the Full Bench in view of section 95A, but in the present case it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where it had made no profits. Held (Sarkar, j., dissenting), that the notification dated July 31, 1956, was beyond the powers conferred on the State Government under section 114(2) Of the Bombay Industrial Relations Act, 1946, and must, therefore, be struck down, There are three limitations on. the power of the State Government when acting under section 114(2): (1) that it is limited by the subject matter of the agreements, or settlement, submission or award sought to be extended, (2) that it has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of the Supreme Court, and (3) that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator and the State cannot do 'what an 'adjudicator cannot do under the Act. Action taken by the State Government under section 114(2) is a proceeding under the Act within the meaning Of section 95A of the Act. The New Maneckchowk Spining Co. Ltd. and others vs The Textile Labouy Association, [1961] 3 S.C.R. I, relied on. Per Sarkar, J. (1) Section 114 of the Bombay Industrial Relations Act, 1946, does not offend article 14 Of the Constitution. The object of the Act is the settlement of industrial disputes and 107 attainment of industrial peace and the section does not confer absolute and arbitrary power. (2) The restrictions imposed by section 114(2) are reasonable and have been put in the interest of the general public. Consequently, the section does not contravene article 19(i)(g). Bijay Cotton Mills Ltd. vs The State of Ajmer, ; , referred to. (3) The provisions of the Act must be read together and in cases in which power under section 114(2): has been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing. (4) The issue of a notification under section 114(2) is not a proceeding as contemplated by section 95A and, therefore, any question of complying with any Full Bench decision does not arise. (5) Section 114 directly permits and contemplates a notification which would produce a result in variance with a decision of the Supreme Court and, therefore, a notification duly issued under that section cannot be said to have been issued, mala fide. Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , referred to. (6) The Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside.

Section 10(1) of the , does not confer on the appropriate Government the power to cancel or supersede a reference made thereunder in respect of an industrial dispute pending adjudication by the tribunal constituted for that purpose. Nor can section 21 of the , vest such a power by necessary implication. It is well settled that the rule of construction embodied in section 21 of the can apply to the provisions of a statute only where the subject matter, context and effect of such provisions are in no way inconsistent with such application. So judged it is clear that that section cannot apply to section 10(1) of the . Minerva Mills Ltd. vs Their Workmen, ; , held inapplicable. 1192 Strawboard Manufacturing Co. Ltd. vs Gutta Mill Workers ' Union, ; , explained. The Textile Workers ' Union, Amritsar vs The State of Punjab and others, A. I. R. 1957 pun. 255 and Hayendranath Bose vs Second Industrial Tribunal, , overruled. South Indian Estate Labour Relations Organisation vs The State of Madras, , distinguished. Consequently, where the appropriate Government by two notifications, issued one after the other, referred two industrial disputes between two batches of workmen and their employer for adjudication to the industrial tribunal constituted for that purpose and, thereafter, by a third notification superseded the two earlier notifications and the High Court, on the applications of both the workmen and the employer under articles 226 and 227 of the Constitution, issued a writ of certiorari quashing that notification and by a writ of mandamus required the tribunal to proceed expeditiously with the two references and the State Government appealed: Held, that the impugned notification was invalid and ultra vires 'and the finding of the High Court must be affirmed. Held, further, that since a reference under section 10(1) of the was in the nature of an administrative act, the more appropriate writ to issue would be one of mandamus and not one in the nature of certiorari. The State of Madras vs C. P. Sarathy, , referred to.

The appellant paid wages to its workmen in the Carding Department on piece rate basis and in addition, the workmen were entitled to receive further emoluments if their production exceeded a certain norm. The right to receive these additional emoluments had become a part of the terms of service of these workmen. In 1948 the Government of Uttar Pradesh with a view to make it obligatory on the employers in the different industries to keep the wages of workmen at a certain level, by its order under the provisions of section 3 of the U.P. , laid down the standard of basic wages and dearness allowance for different industries in the province. The appellant in giving effect to the said order of the Government for introducing the new piece rate raised the fixed piece rate but stopped the system of paying additional emoluments, as it thought itself to be justified, in taking into consideration for this purpose the amounts actually earned by the workers including what had been earned as additional emoluments which were being paid to the workmen by way of productive and incentive bonuses. The workmen 's case was that by stopping the additional emoluments which they used to get on the basis of better production by extra efforts the employer had in fact reduced the wages to which they were entitled and the fact that higher piece rates were introduced did not affect the question. The question was whether the Government order required or authorised the company to. include the incentive bonus and the production bonus which they had been so long paying in fixing the new piece rate for the purpose of compliance with the directions given in the Government order as regards the basic wages: Held, that the Government. order did not require or justify the employer including the production and incentive bonuses in the calculation of the rates of the basic wage of the workers and consequently the Government order did not have the effect of absolving the company from the duty of continuing to pay the production and incentive bonuses to workmen as before: Held, further, that the concept of " basic " is not peculiar to wages alone; it is what is normally allowable to all, irrespective of special claims and is also ordinarily understood to mean that part of the price of labour, which the employer must pay to all 489 workmen belonging to all categories. The phrase is used ordinarily in marked contradistinction to " dearness allowance " the quantum of which varies from time to time, in accordance with the rise or fall in the cost of living. Thus understood " basic wage" never includes the additional emoluments which some workmen may earn, on the basis of a system of bonuses related to the production. Titaghur Paper Mills Co. Ltd. vs Their Workmen, [1959] SUPP. (2) S.C.R. 1012, referred to.

The appellant entered into contract with Government for the supply of goods, and in the assessment year 1942 43 Rs. 10,80,653 and in the assessment year 1943 44, Rs. 7,45,336 were assessed as its income by the Income tax Officer. The supplies to Government were made for. Jaipur by the appellant, and payment was by cheques which were received at Jaipur. The contention of the appellant was that this income was received at Jaipur outside the then taxable territories. This contention was not accepted by the Income tax Appellate Tribunal, Delhi. The appellant then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Tribunal referred the following question for the decision of the High Court. " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government 211 of India were received by the assessee in the taxable terri tories ?" The High Court remanded the case to the Tribunal for a supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the department in the matter ". The appellant questioned the order of the High Court relying on the decision in New Jehangir Vakil Mill 's case; , Held, that the enquiry in such cases must be to see whether the question decided by the Tribunal admits of the consideration of the new point as an integral or an incidental part thereof. The supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal and should not open the door to fresh evidence. Held, further, that the question as framed in this case was wide enough to include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case, [1955] 1 S.C.R. 185 or Jagdish Mills case; , In the absence of anything expressly said in the Order of the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil Mills case. The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, ; , distinguished. Jagdish Mills Ltd. vs Commissioner of Income tax, ; , Keshav Mills Co. Ltd., vs Commissioner of Income tax, , Sir Sobha Singh vs Commissioner of Income tax, , Kirloskar Bros. Ltd.v. Commissioner of Income tax, [1952] 21 I.T.R. 82, Commissioner of Income tax vs Ogale Glass Works Ltd. , Commissioner of Income tax vs Kirloskar Bros. Ltd., and Mrs. Kusumben D. Mahadevia, Bombay vs Commissioner of Income tax, Bombay, ; , referred to.

An award, called the Standardisation Award, fixing the wages for different categories of workers in the textile mills at Ahmedabad was made by the Industrial Tribunal. The wages of clerks were, however, settled by a subsequent agreement bet ween the Ahmedabad Mill Owners ' Association and the Textile 221 Labour Association. Clauses 2 and 5 of the said agreement were as follows, " 2. That this agreement shall apply to all the Clerks employed in the local mills, i. e., persons doing clerical work, that is those who do routine work of writing, copying or making calculations and shall also include compounders and assistant compounders who are qualified and who are employed in the local mills. A separate scale for those of the employees who occupy the position lower than that of a full fledged Clerk but higher than that of an operative will be provided as under: Rs. 40 3 70 EB 4 90 5 105 This scale will be applicable in case of ticket checker, coupons seller, tally boy, scale boy, production checker, third counter, cloth measurer or yard counter, fine reporter, cloth/ yarn examiner, department store man, cut looker and those others who have not been included above but who can properly fall under the above category. " The respondents moved the Authority under section 16 of the (4 of 1936), for an order against the appellant for payment of. their delayed wages. They claimed to be semi clerks, lower than full fledged clerks but higher than operatives, and as such governed by cl. 5 of the agreement. The Authority held against them and the appellate Authority affirmed its decision holding that Cl. 2 Of the agreement determined the applicability of cl. 5 and since the respondents did not come within Cl. 2 they could not maintain their claim under cl. 5. The High Court, on an application under article 226 and article 227 of the Constitution, took a contrary view and set aside the orders of the Authorities and directed a rehearing. In this Court the appellant mills urged that (1) the High Court had exceeded its jurisdiction under articles 226 and 227 in setting aside the order of the appellate Authority and (2) the Authority had itself exceeded its jurisdiction under section 15 of the Act in entertaining the applications of the respondents made under section 16 of the Act. Held, that both the contentions must be negatived. The High Court has power under article 226 of the Constitution to issue a writ of certiorari not only in cases of illegal exercise of jurisdiction but also to correct errors of law apparent on the face of the record, although not errors of fact even though so apparent. No unfailing test can, however, be laid down when an error of law is an error apparent on the face of the record and the rule that it must be self evident, requiring no elaborate examination of the record, is a satisfactory practical test in a large majority of cases. Rex vs Northumberland Compensation Appeal Tribunal, ; and Nagendra Nath Bora V. Commissioner of Hills Division and Appeals, Assam, ; , referred to. 222 Viswanath Tukaram vs The General Manager, Central Railway, V. T., Bombay, , considered. A look at the two clauses is enough to show that the appel late Authority in construing them in the way it did committed an obvious and manifest error of law. It was clear that the two clauses applied to two distinct categories of persons and persons falling under cl. 5 could not be governed by cl. 2 and were not expected to satisfy the test prescribed by it. Under section 15 of the , the Authority in exercising its jurisdiction, made exclusive by section 22 of the Act, has necessarily to consider various questions incidental to the claims falling thereunder and, although it would be inexpedient to lay down any hard and fast rule for determining the scope of such questions, care should be taken not to unduly extend or curtail its jurisdiction. Whether a particular employee was an operative or one above the rank of an operative and below that of clerk arid, therefore within cl. 5 of the agreement, was a question intimately and integrally connected with wages as defined by the Act and as such fell within the jurisdiction of the Authority under section 15 of the Act. There could, therefore, be no substance in the contention that an employee falling within the category of those others mentioned in the last part of cl. 5, to whom no designation was attached, could not apply under section 15 of the Act. A. V. D 'Costa vs B. C. Patel, ; , referred to. Anthony Sabastin Almeda vs R. M. T. Taylor, (1956) 58 Bom. L.R. 899, distinguished.

The Governor General of India, finding that on account of mismanagement and neglect a situation had arisen in the affairs of the Sholapur Spinning and Weaving Company Ltd. which had prejudicially affected the production of an essen tial commodity and had caused serious unemployment amongst a certain section of the community, and that an emergency had thereby arisen which rendered it necessary to make special provision for the proper management and administration of the said company, promulgated an Ordinance, which was subse quently reenacted in the form of an Act of the Legislature called the sholpur Spinning and Weaving Company (Emergency Provisions)Act, 1950, the net result of which was that the Managing Agents of the said company were dismissed, the directors holding office at the time automatically vacated their office, the Government was authorised to appoint new directors, the rights of the shareholders of the company were curtailed in the matters of voting, appointment of directors, passing of resolutions and applying for winding up, and power was also given to the Government to further modify the Indian Companies Act in its application to the company; and in accordance with the provisions of the Ordi nance new directors were appointed by the Government. A shareholder of the company made an application under article 32 of the Constitution for a declaration that the Act was void and for enforcement of his fundamental rights by a writ of mandamus against the Central Government, the Government of Bombay and the directors, restraining them from exercising any powers under the Act and from interfering with the management of the company, on the ground that the Act was not within the Legislative competence 870 of the Parliament and infringed his fundamental rights guaranteed by articles 19 (1) (f), 31 and 14 of the Constitu tion and was consequently void under article 13. The company was made a respondent and opposed the petition. Held per KANIA C.J., FAZL ALI, MUKHERJEA and DAS JJ. (i) that the impugned Act did not infringe any fundamental right of the petitioner under article 31 (1), as if did not deprive the company or the petitioner of any property save under authority of law; (ii) that the impugned Act did not infringe any fundamen tal right guaranteed by article 31 (2.) inasmuch as it did not authorise the "acquisition" of any property of the company or of the shareholders or "the taking possession" of the property of the petitioner, namely, the shares which he held in the company, though he was disabled from exercising some of the rights which an ordinary shareholder in a company could exercise in respect of his shares, such as the right to vote, to appoint directors, and to apply for winding up; and, if the Act had authorised the "taking possession" of the property of the company, the petitioner was not entitled to any relief on that score under article 32; (iii) that, as the Act did not impose any restrictions on the petitioner 's right "to acquire, hold and dispose of" his shares, there was no infringement of article 19 (1) (f); and assuming that the restrictions imposed on the right of voting etc. were restrictions on the right to acquire, hold or dispose of property within article 19 (1) (f), such restric tions were reasonable restrictions imposed in the interests of the public, namely, to secure the supply of a commodity essential to the community and to prevent serious unemploy ment amongst a section of the people, and were therefore completely protected by cl. (5) of article 19. Held also per KANIA C.J., FAZL ALI, and MUKHERJEA JJ. (PATANJALI SASTRI AND DAS JJ. dissenting). that though the Legislature had proceeded against one company only and its shareholders, inasmuch as even one corporation or a group of persons can be taken to be class by itself for the purposes of legislation, provided there is sufficient basis or reason for it and there is a strong presumption in favour of the constitutionality/of an enactment, the burden was on the petitioner to prove that there were also other companies similarly situated and this company alone had been discrimi nated against, and as he had failed to discharge this burden the impugned Act cannot be held to have denied to the peti tioner the right to equal protection of the laws referred to in article He and the petitioner was not therefore entitled to any relief under article 32. Per PATANJALI SASTRI J. As the impugned Act plainly denied to the shareholders of this particular company the protections of the law relating to incorporated Joint Stock Companies as embodied in the Indian Companies Act. it was Prima facie within 871 the inhibition of article 14; and, even though when a law is made applicable to a class of persons or things and the classification is based on differentia having a rational relation to the object sought to be attained, it can be no objection to its constitutional validity that its applica tion is found to affect only one person or thing. since the impugned Act selected a particular company and imposed upon it and its shareholders burdens and disabilities on the ground of mismanagement and neglect of duty on the part of those charged with the conduct of its undertaking no ques tion of reasonable classification arose and the Act was plainly discriminatory in character and within the constitu tional inhibition of article 14. Whilst all reasonable pre sumptions must undoubtedly be made in favour of the consti tutional validity of a law made competent legislature, no such presumption could be raised in this case as on the face of it the Act was discriminatory and the petitioner could not be called upon to prove that similar mismanagement existed in other companies. The issue was not whether the impugned Act was ill advised or not justified by the facts on which it was based but whether it transgressed the ex plicit constitutional restriction on legislative power imposed by article 14. Per DAs J. The impugned Act, ex facie, is nothing but an arbitrary selection of a particular company and its shareholders for discriminating and hostile treatment, and, read by itself, is palpably an infringement of article 14 of the Constitution. Assuming that mismanagement and neglect in conducting the affairs of a company can be a basis of classification and that such a classification would bear a reasonable relation to the conduct of all delinquent compa nies and shareholders and may therefore create no inequali ty, a distinction cannot be made between the delinquent companies inter se or between shareholders of equally delin quent companies, and one set cannot he punished for its delinquency while another set is permitted to. continue, or become, in like manner, delinquent without any punishment unless there be some other apparent difference in their respective obligations and unless there be some cogent reason why prevention of mismanagement is more imperative in one instance than in the other. The argument that the pre sumption being in favour of the Legislature, the onus is on the petitioner to show that there are other individuals or companies equally guilty of mismanagement prejudicially affecting the production of an essential commodity and causing serious unemployment amongst, certain section of the community does not, in such circumstances, arise, for the simple reason that here there has been no classification at all and, in any case, the basis of classification by its very nature is much wider and cannot, in its application, be limited only to this company and its shareholders; and that being so, there is no reason to throw on the petitioner the almost impossible burden of proving that there are other companies which are in fact precisely and in all particulars similarly situated. In any event the petitioner, 872 may well claim to have discharged the onus of showing that this company and its shareholders have been singled out for discriminating treatment by showing that the Act, on the face of it, has adopted a basis of classification which, by its very nature, cannot be exclusively applicable to this company and its shareholders but which may be equally ap plicable to other companies and their shareholders and has penalised this particular company and its shareholders, leaving out other companies and their shareholders who may be equally guilty of the alleged vice of mismanagement and neglect of the type referred to in the preamble in the Ordinance. Per PATANJALI SASTRI, MUKHERJEA and DAS JJ. (KANIA, C.J,, dubitante). In so far as the petitioner 's rights as a shareholder were curtailed he was entitled to apply for relief under article 30, in his own right on the ground that the Act denied to him the equal protection of the laws and therefore contravened article 14 even though the other share holders did not join him in the application. Per MUKHERJEA J. The fundamental rights guaranteed by the Constitution are available not merely to individual citizens but to corporate bodies as well except where the language of the provision or the nature of the right, com pels the inference that they are applicable only to natural persons. An incorporated company, therefore, can come up to the Supreme Court for enforcement of its fundamental rights and so may the individual shareholders to enforce their own; but as the company and its shareholders are in law separate entities, it would not be open to an individual shareholder to complain of a law which affects the fundamental right of the company except to the extent that it constitutes an infraction of his own rights as well. In order to redress a wrong to the company the action should prima facie be brought by the company itself. Article 32 of the Constitution is not directly concerned with the determination of the constitutional validity of particular enactments, what it aims at is the enforcement of fundamental rights guaranteed by the Constitution and to make out a case under the Article it is incumbent on the petitioner to establish not merely that the law complained of is beyond the competence of the Legislature but that it affects or invades his fundamental rights guaranteed by the Constitution, of which he could seek enforcement by an appropriate writ or order. Under article 32 the Supreme Court has a very wide discre tion in the matter of framing writs to suit the exigencies of particular cases and an application under the article cannot be thrown out simply on the ground that the proper writ or direction has not been prayed for. In the context in which the word "acquisition" is used in article 31 i2) it means and implies the acquiring of the entire title of the expropriated owner whatever the nature or extent of that right might be, 873 The guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions. It means only that there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is the same. Quaere : Whether the word "property" in article 31 means the totality of the rights which the ownership of the property connotes, and whether clause (1) of article 31 contem plates only confiscation or destruction of property in exercise of what are known as police powers in American law for which no compensation is necessary. DAS J. The question whether an Act has deprived a person of his "property" must depend on whether it has taken away the substantial bulk of the rights constituting his property. Where the most important rights possessed by the shareholders of a company are still preserved by an Act even though certain privileges incidental to the ownership of the shares have been put in abeyance, the shareholders cannot be said to have been deprived of their "property" in the sense in which that word is used in article 19(1) (f) and article 31. If on the face of the law there is no classification at all, or at any rate none on the basis of any apparent dif ference specially peculiar to the individual or class af fected by the law, it is only an instance of an arbitrary selection of an individual or class for discriminating and hostile legislation and, therefore, no presumption can, in such circumstances, arise at all Assuming, however, that even in such a case the onus is thrown on the complainant, there can be nothing to prevent him from proving, if he can, from the text of the law itself, that it is actually and palpably unreasonable and arbitrary and thereby discharging the initial onus. The right to vote, to elect directors, to pass resolu tions and to present an application for winding up, are privileges incidental to the ownership of a share, but they are not by themselves apart from the share, "property" within the meaning of article 19 (1) (f) and article 31; and even assuming that they are "property" such rights cannot be said to have been acquired or taken possession of by the Govern ment in this case within article 31 (2). The language of clause (1) of article 31 is wider than that of clause (2), for deprivation of property may well be brought about otherwise than by acquiring or taking possession of it and in such a case no question payment of compensation arises. FAZAL ALI MUKHERJEA and DAS JJ. Except in the matter writs in the nature of habsas corpus no one but those whose rights are directly affected by a law can raise the question of the constitutionality of a law and claim relief under article 39. A corporation being a different entity from the shareholders, a 112 874 share holder cannot complain on the ground that the rights of the company under articles 19 (1) (f) or 31 are infringed. FAZL ALl J. A classification which is arbitrary and which is made without any basis is no classification and a proper classification must always rest upon some difference and must hear a reasonable and lust relation to the things in respect of which it is proposed. But the presumption is always in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of constitutional principles. Though article 14 lays down an important fundamental 'right, which should be closely and vigilantly guarded, a doctri naire approach which might choke all beneficial legislation should not be adopted, in construing it. i A.K. Gapalan vs The State ([1950] S.C.R. 87), Minister of State for the Army vs Dalziel ; , Yick Wo vs Hopkins , Southern Railway Co. vs Greene ; , Gulf C. & S.F. Co. Ellis ; , Middle ton vs Texas Power and Light & Co. ; , Badice vs New York (264 U.S. Pennsylvania Coal Co. vs Mahon (960 U.S. 3931, McCabe vs Archison ; , Jeffrey Manufactur ing Co. vs Blang , Newark Natural Gas and Fuel Co. vs City of Nework U.S 403), Truax vs Raich (939 U.S. 33), Buchanan vs W 'arley ; Darnell vs The State of Indiana , Lindely vs Natural Carbonic Gas Co. , and Barbier vs Connolly ; referred to.

The respondents, who were the workmen of the appellant, applied to the Second Labour Court, Bombay, under section 33C(1) of the , claiming compensation for lay off during a certain period. The appellant contended that : (i) the Labour Court had no jurisdiction as the dispute fell to be tried under the C.P. and Berar Industrial Disputes (Settlement) Act, 1947; and (ii) the application under section 33C was incompetent, because, it was not a claim for money due and calculations had to be made for ascertaining the money due. The Labour Court, as well as the High Court under articles 226 and 227 of the Constitution. rejected the contentions. In the appeal to this Court. HELD : (i) The argument that the controversy was wrongly before Labour Court was entirely erroneous. Chapter V A of the , which was inserted by section 3 of the Industrial Disputes (Amendment) Act, 1953, is the only Chapter in which there is provision regarding lay off or compensation for lay off. Though the C.P. and Berar Act applies to the textile industry, it contain* no provision either for recovery of money or for compensation for lay off and they are not matters over which the C.P. and Berar Act has any jurisdiction. Therefore, if a workman has a claim for lay off, it can only come up for decision under the . Even if sections 31 and 25J save the application of the C.P. and Berar Act, they do so, subject to the condition that the question of lay off must be decided in accordance with Chapter V A. Since section 33C provides that a dispute for any money due under Chapter V A has to go before the appropriate Government or its delegate, and since the delegate is the Second Labour Court, the respondents were entitled to go before the Labour Court to realise due from the appellant under Chapter V A. [769 F] (ii) It is not essential that the claim which can be brought before the Government or its delegate under section 33C(1) most always be for a predetermined sum. [769 G H] Kays Construction Co. (P) Ltd. vs State of U P. & Ors. ; , followed.

The respondent assessee built up a factory for the manufacture of paper and paper boards, which started production on 7.5.1964. The respondent claimed that the duty in respect of the paper boards manufactured in the factory during the period 7.5.1964 to June 1966 was payable at the concessional rates allowed by the Government of India notification dated 1st March, 1964. The claim was however rejected by the Revenue on the ground that the factory had not come into existence on or before the 9th day of November, 1963 as stipulated in clause (a) of Proviso (3) of the said notification. The respondent 's writ application before the High Court was allowed by the Single Judge and the appellant 's Letters Patent appeal was dismissed in limine. The High Court has accepted the respondent 's contention that the date '9th of November, 1963 ' mentioned in the notification was arbitrary. On behalf of the Revenue it was contended that the date (9.11.1963) was selected because an earlier notification bearing No. 110 had required applications to be made on or after 9.11.1963. It was further contended that a statutory provision had necessarily to be arbitrary in the choice of date and it could not be challenged on that ground. On behalf of the respondent it was contended that the said date did not have any significance whatsoever and did not bear any rational relationship to the object sought to be achieved by the notification. PG NO 1051 PG NO 1052 Dismissing the appeal, it was HELD: 1. A rule which makes a difference between past and present cannot be condemned as arbitrary and whimsical. [1056D] 2. In cases where choice of the date is not material for the object to be achieved. the provisions are generally made prospective in operation. [1056D] 3. The Revenue has not been able to produce notification No. l 10. Unless the nature and contents of notification No. 110 and its relevance with reference to the present notification are indicated, it is futile to try to defend of the choice of the date in clause (a) on its basis. [1055A;1056E] 4. In the present case, the benefit of concessional rate was bestowed upon the entire group of assesses referred therein and by clause (a) of Proviso (3) the group was divided into two classes without adopting any differentia having a rational relation to the object of the Notification. [1057F] 5. Clause (a) of the Proviso (3) of the Notification was ultra vires and the benefit allowed by the Notification would be available to the entire group including the respondent. [1057G] Union of India vs M/s. P. Match Works [1975]2 SCR 573 Jagdish pandey vs The chancellor, University of Bihar. [19681 I SCR 237 and U.P. M. T. S.N.A. Samiti, Varanasi vs State of U.P.,[1987]2 SCR 453, distinguished. Dr .Sushma Sharma vs State of Rajasthan, [1985] Supp. SCC 45; and D.S. Nakara vs Union of lndia, [1983] I SCC 365 referred to.

Appeals . 101 to 104 of 1957. Appeals from the judgment and order dated February 4, 1954, of the Mysore High Court in Regular, Second Appeals Nos. 5 and 6 of 1953 and Writ Petitions Nos. 67 and 68 of 1953 respectively. H. N. Sanyal, Additional Solicitor General of India, R.Ganapathy Iyer and D. Gupta for the appellant. A. V. Visv)anatha Sastri, M. section K. Sastri and ' T. R. V. Sastri for A. G. Ratnaparkhi, for the respondents. February 20. The Judgment of the Court was delivered by WANCHOO, J. These are four appeals on certificates granted by the Mysore High Court. They will be disposed of together as the. points raised in them are common. The facts of these cases are complicated and may be mentioned in some detail. On July 7, 1949, the then State 'of Mysore passed The Mysore Administration of Evacuee Property (Emergency) Act, No. XLVII of 1949 (hereinafter called the. first Mysore Act). It provided for the appointment of a Custodian of Evacuee Property for the State of Mysore and other officers subordinate to him for the purpose of administering evacuee property in that 858 State. Section 2(c) defined an " evacuee " and section 2(d) evacuee property ". Section 5 laid down that all evacuee property situate in Mysore would vest in the custodian. Section 6 provided for a notification by the Custodian in the Mysore Gazette of evacuee property vested in him. Section 8 provided that any person claiming any right to or interest in any property notified under section 6 as evacuee property or in respect of which a demand requiring a surrender of possession had been made by the Custodian might arefer a claim to the Custodian on the ground that he property was not evacuee property or his interest in the property had not been affected by the provisions of that Act. It was further provided that the Custodian was, to hold a summary inquiry in the prescribed manner into such claims and after taking such evidence as might be produced, pass an order stating the reasons there for) either rejecting the claim :or allowing it wholly or in part. Finally, section 30 provided for an appeal to the High Court where the original order under section 8 had been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian. This Act remained in force till it was replaced by the Mysore Administration of Evacuee Property (Second) (Emergency) Act, No. LXXIV of 1949 (hereinafter called the second Mysore Act), which came into force on November 29, 1949. On September 21, 1949, the Custodian issued a notification by which he declared the properties. of the two respondents as evacuee properties which had vested in him, as the, respondents had become evacuees. Thereupon two claims were filed under section 8 of the first Mysore Act separately by the two respondents. These claims were investigated by the Deputy Custodian who dismissed the same on April 17, 1950, declaring that the, properties were evacuee properties. , It may be mentioned that in the meantime, the second Mysore Act had come into force by which the first Mysore Act was repealed. But section 53(2) of the second Mysore Act provided, that anything done or any action taken. in the exercise of any power conferred by the first Mysore Act shall be deemed to have been done 859 or taken in the exercise of the powers conferred by the second Mysore Act. It was also provided that any penalty incurred or proceeding commenced under the first Mysore Act shall be deemed to be a penalty incurred or proceeding commenced under the second Mysore Act as if the latter Act were in force on the day on which such thing was done, action taken, penalty incurred or proceeding commenced. There was how. ever one difference in the two Mysore Acts. The first Mysore Act had provided by section 5 for the vesting of all evacuee property situate in Mysore ipso facto in the Custodian; section 6 then provided for notification by the Custodian and section 8 for preferring claims. The second Mysore Act however made a departure from this and section 5 thereof provided that " a where the Custodian is of opinion that any property is evacuee property within the meaning of this Act he may, after causing notice thereof to be given in such manner as may be prescribed to the persons interested, and after holding such inquiry into the matter as the circumstances of the case permit, pass an order declaring any such property to be evacuee property. " Section 6 then provided for vesting of any property declared to be evacuee property in the Custodian. Thus while under the first Mysore Act the evacuee property vested in the Custodian and the person who claimed that it was not evacuee property had to make an application under section 8 and to get it declared that it was not evacuee property, under the second Mysore Act there was no vesting in the Custodian and the Custodian had to give a notice in the manner prescribed (if he thought any property to be evacuee property) and after hearing the persons interested to declare the property to be evacuee property; and it was only thereafter that the property vested in him as evacuee property. Further, the second Mysore Act also defined the " Custodian General " as the Custodian General of Evacuee Property in India appointed by the Government of India under section 5 of the Administration of Evacuee Property Ordinance (Central Ordinance No, XXVII of 1049), which had come 860 into force on October 18, 1949. Further there was a change in the forum of appeals and instead of the High Court the appeal lay to the Custodian General from an order passed under section 5 of the second Mysore Act where the original order had been passed by the 'Custodian, Additional Custodian or Authorised Deputy Custodian and in some cases to the District Judge designated in this behalf by the Government under sections 22 and 23 of the second Mysore Act. In addition, provision was made by section 25 of the second Mysore Act for revision by the Custodian General of orders passed by the District Judge or the Custodian on appeal. It may be mentioned that the , No. XXXI of 1950 (hereinafter called the Act), came into force on the day the Deputy Custodian passed the order dated April 17, 1950. It may also be mentioned that in the meantime the Constitution of India had come into force on January 26, 1950, and the former State of Mysore had become the new Part B State of Mysore under the Constitution. The Act was to apply to the whole of India except the States of Assam, West Bengal, Tripura, Manipur and Jammu and Kashmir. Thus the Act applied to the Part B State of Mysore on April 17, 1950, and though there was no specific provision then in the Act repealing the second Mysore Act it is not seriously disputed that the Act by necessary implication repealed the second Mysore Act, as the Act substantially enacted all that was contained in the second Mysore Act. However that may be, appeals were filed against the order of April 17, 1950, before the Custodian. These appeals were allowed on August 22, 1950. The Custodian held that there was not sufficient evidence to prove the respondents as evacuees and consequently the properties in question could not be treated as evacuee properties. On October 3,1950, the Custodian General gave notices to the respondents under section 27 of the Act in respect of the order of the: Custodian dated August 22, 1950, and asked them to show cause why '; the said order of the Custodian be not revised, On December 7, 1950, the Administration of Evacuee 861 Property (Amendment) Act, No. LXVI of 1950, was passed by which inter alia section 58 of the Act was amended and it was provided that if immediately before the. commencement of the Act there was in force in any State to which the Act extended any law which corresponded to the Act and which was not repealed by, sub section (1) it shall stand repealed. This was made retrospective from the date from which the Act came into force (namely, April 17, 1950) and so the repeal of evacuee property laws which were in force in those States to which the Act applied which was implicit in it was made explicit from December 7, 1950, so that frum April 17, 1950, only the Act held the field. On February 11, 1952, the Custodian General set aside the order of the Custodian dated August 22, 1950, and ordered that further proceedings in these cases should be taken before the Custodian as an original matter and be was directed to dispose of the cases afresh in the light of the evidence already recorded and such other evidence as might be produced before him by the two respondents. When the matter thus came back to the Custodian he ordered the Deputy Custodian on April 7, 1952, to record the evidence and then submit the record to him for final disposal. Eventually, the matter came before the Custodian for final disposal on December 2, 1952. He held that the two respondents were evacuees and their properties were evacuee properties. This was followed by two appeals to the High Court on January 2, 1953. As, however, the respondents felt some doubt whether any appeal lay to the High Court two writ petitions were also filed on September 7, 1953, against the order of the Custodian. The two appeals as well as the two writ petitions were disposed of by the High Court by a common judgment on February 4, 1954. The High Court held that the appeals before it were competent. It further seems to have 'held that the CustodianGeneral had no power under section 27 of the Act to revise the order passed by the Custodian on August 22,1950. Finally, as the High Court held that the appeals were competent it went into the matter as an appellate court and came to the conclusion that the order of the 862 Custodian dated December 2, 1952, was erroneous. It, therefore, allowed the appeals as well as the writ petitions and set aside the order of the Custodian dated December 2, 1952, and restored the earlier order of the Custodian dated August 22, 1950. Thereupon "followed applications by the Custodian of Evacuee Property, Mysore, for certificates to file appeals to this Court on which the High Court granted the certificates, and that is how the four appeals have come up before us. The main contention of the learned Additional Solicitor General on behalf of the appellant is two. He urges firstly that the High Court was in error when it held that the Custodian General had no power to set aside the order of August 22, 1950, under section 27 of the Act. In the second place, his contention is that the High Court was in error in holding that an appeal lay to it from the order of the Custodian dated December 2, 1952. Therefore, the High Court could not deal with the matter before it as if it were hearing an appeal; it could only consider the writ petitions before it and in doing so it would not be justified in issuing a writ of certiorari against the order of December 2, 1952, because that order was not passed without jurisdiction and there was no error of law apparent on the face of the record to call for interference with it. Mr. Sastri for the respondents In reply submits that as the proceedings in these oases began under a. 8 of the first Mysore Act and as there was nothing corresponding to that section either in the second Mysore Act or in the Act, which replaced successively the first Mysore Act, the High Court was entitled to hear an appeal from the order of Decem ber 2, 1952, as that order must be held to have be On passed in a proceeding under the first Mysore Act, even if it be that the Custodian General had the jurisdiction to set aside the order of August 22, 1960 under section 27 of the Act. Further, Mr. Sastri contends that the Custodian General had no jurisdiction to set aside the order of August 22, 1960, under section 27 of the Act. 863 The first point therefore which falls for consideration is whether the Custodian General had jurisdiction to set aside the order of August 22,1950, under section 27; for if he had no such jurisdiction the High Court may be entitled after holding that the Custodian General 's order of February 11, 1952, was without jurisdiction, to set aside all subsequent proceedings, leaving:the order of August 22, 1950, operative and in full force (assuming for this purpose that the High. Court had jurisdiction in writ proceedings to set aside the order of the Custodian General whose headquarters were in New Delhi). Now the first Mysore Act had no provision relating to the Custodian General. It was the second Mysore Act which for the first time brought in the CustodianGeneral and gave him powers of revision under section 25 with respect to orders passed by the Custodian or the District Judge in. appeal. Then came the Act on April 17, 1950, by which the Custodian General was given the power to call for the record of any procee in which any District Judge or Custodian had passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and to pass such order in relation thereto as he thought fit. This provision is wider than the provision in the second Mysore Act and is not confined to orders passed by a District Judge or a Custodian in appeal and would apply even to original orders passed by the Custodian, which term, according to the definition in section 2(c) includes any Additional, Deputy or Assistant Custodian of evacuee property. We have already pointed out that the Act provides substantially for all ,matters contained in the second Mysore Act and therefore must be held to have repealed the second Mysore Act by implication. but in any case the question whether the second Mysore Act was repealed by the Act when it came into force on April 17, 1950, I" been set at rest by the later Central Act, LXVI of 1950. That Act was passed on December 7, 1950, and 2 thereof began thus: "For section 58 of the, , the following section shall be 864 substituted. and shall be deemed always to have been substituted. " This clearly shows that Central Act LXVI was amending section 58 retrospectively from the date on which it came into force (namely, April 17, 1950). The new section 58 which was thus substituted in the Act from April 17, 1950, contained sub section (2) which is as follows: " If, immediately before the commencement of this Act, there is in force in any State to which this Act extends any law which corresponds to this Act and which is not repealed by sub section (1), that corresponding law shall stand repealed. " It is clear therefore that the second Mysore Act was expressly repealed as from April 17, 1950, by the Act in view of this substituted section 58 put into it retrospectively by Act LXVI, for the second Mysore Act was undoubtedly a law corresponding to the Act. The High Court seems to have overlooked the fact that Act LXVI gave retrospective operation to the new section 58(2) which was inserted in the Act. It seems to think that the second Mysore Act was repealed on December 7, 1950, when Act LXVI came into force. The High Court was further in error in holding that the amended sub section (3) of section 58 which was put into the Act also came into force from December 7, 1950, while as matter of fact it came into force from April 17, 1950, when the Act itself first came into force. The position when the Custodian General gave notice in October, 1950, under section 27 of the Act therefore was that the first Mysore Act had already been re. 'pealed by the second Mysore Act and the second Mysore Act had been repealed by the Act as from April 17, 1950, and therefore in October, 1960, only the Act held the field. The question then arises whether it was open to the Custodian General to revise the order dated August 22, 1950, under section 27 of the Act in February, 1952. Now section 27 is very wide in terms and gives power to the Custodian General at any. time either on his own motion or on application made to him in this behalf. , to call for the record of any proceeding in which any District Judge or Custodian 865 has passed an order for the purpose of satisfying himself as to the legality or propriety of any order and to pass such order in relation thereto as he thinks fit. Prima facie, therefore, these wide words give power to the Custodian General to revise any order passed by the Custodian. It is urged on behalf of then respondents that the Custodian General could; not revise the order dated August 22, 1950. We are not impressed by this argument. Now the Act was passed in 1950 to set up a central organisation for the custody, management and control, etc. , of property declared by law to be evacuee property with the Custodian General at the head. It is also clear that all similar laws existing in various States on the date the Act came into force (namely, April 17, 1950) were repealed by it. The intention of the Legislature obviously was to provide for the custody and management etc. of evacuee property in the manner provided in the Act with the Custodian General as the head of the organisation. Further, action taken with respect to evacuee property under the first Mysore Act was deemed under section 53 (2) of the second Mysore Act to have been taken thereunder and finally any action taken in the exercise of the power conferred by the second Mysore Act was deemed to have been taken in the exercise of the powers conferred by the Act. Therefore, any action taken with respect to evacuee property and any order passed by any Custodian in any proceeding with respect to such property would be subject to the revisory jurisdiction of the CustodianGeneral under section 27 in view of the wide language thereof and the fact that proceedings started under the first Mysore Act. would not, in our opinion, make any difference to the power of the Custodian General under section 27. Obviously the order of August 22, 1950 was passed when the Act was in force in a proceeding relating to evacuee property by the Custodian and the Custodian General would be competentunder section 27 to call for the record of that proceeding and satisfy himself as to the legality or propriety of any such order and thereafter pass, such order in relation thereto so he thought fit, We are, therefore, of opinion that ' 866 considering the purpose for which the Act was passed and the successive saving clauaes in the second Mysore Act and in the Act,,the Custodian General had the power under section 27 to call for the record of the proceed. ing in which the order of August ' 22, 1950, was passed &ad consider its legality or propriety and Pass such order in relation thereto as he thought fit. Even if the notice of October, 1950, may be open to question as it was issued before Act LXVI of 1950 was passed, there can be no doubt that the order of February,, 1952, under a. 27 was passed after hearing the parties and would be valid and within the jurisdiction of the Custodian General when it was passed. Therefore, the order of the Custodian General dated February II,, 1952, being within his jurisdiction would not be liable to be set aside on a writ of certiorari as if the Custodian General had acted without jurisdiction. The subsequent proceedings, therefore, which took place after the order of the Custodian General would also be with jurisdiction and would not be liable to be set aside on a writ of certiorari on the ground that they were without jurisdiction. The High Court, thereforewas in error in holding that the order of the Custodian, General dated February 11, 1952,was without juries diction and therefore all subsequent proceedings taken in pursuance thereof were also without jurisdiction, with the result that the order of August 22, 1950 stood fully operative. This brings us to the next question whether any appeal lay to the High Court against the order of December 2, 1952. There is no,doubt that the proceedings in the present case commenced under the first, Mysore Act with a notification under is. 6 and claim applications under section 8. If the original proceeding had finished when the first Mysore Act was in force and the order of December 2, 1952, had been passed during its operation there would undoubtedly have been as appeal to the High Court under section 30 thereof. But the, first Mysore Act, was repealed by the second Mysore Act in. November, 1949, and the second Mysore Act was in its turn repealed by the Act #,a from April 1950. The, questions therefore, that arises for consideration 867 is 'Whether after the repeal of the first Mysore Act an appeal would still lie to the High Court from the order of December 2, 1952. The main contention of Mr. Sastri in this behalf is that if the second Mysore Act or the Act contained provisions which were similar to the provisions contained in section 8 of the first Mysore Act, it may have been possible to say that the remedy provided by the first Mysore Act under section 30 had been superseded by the remedy provided in the Act, that remedy being an appeal to the Custodian General under section 24 of the Act. The argument further proceeds that neither the second Mysore Act nor the Act provides anything similar to what was provided by section 8 of the first Mysore Act. Therefore, even though the first Mysore Act was repealed by the second Mysore Act the proceedings in the present case must be deemed to be still under the first Mysore Act which must be deemed to be existing for this purpose and, therefore, the right of appeal being a vested one and &rising when the proceedings commenced, there would still be a right of appeal under section 30 of the first Mysore Act in spite of its being repealed. When the matter came before the Custodian in 19,52 it was contended before him that the proceedings should be taken to be under the first Mysore Act. He accepted this contention, though he added that it was immaterial for the purposes of the present cases as the definition of " evacuee " in section 2(c) of the first Mysore Act was practically the same as in section 2(d) of the Act. It is urged that in view of the manner in which the Custodian, dealt with the case when he passed the order. dated December 2, 1952, the proceedings before him must be taken to be under the first Mysore Act and if so an appeal would lie to the High Court under ,section 30.,of the first Mysore Act. This view has been accepted by the High Court also and that is why it hold; that the appeals before it were competent; and it is,, the correctness of this view which has been challenged before us. Now there is no doubt that the right of appeal is a substantive right and arises when A proceeding is commenced and cannot be taken away by subsequent 868 legislation, except by express provision or necessary intendment. There is no express provision in the present case taking away the right of appeal conferred by the first Mysore Act. We have therefore to see whether it can be said that the right of appeal conferred by the first Mysore Act has been taken away by necessary intendment by the subsequent legislation ; and if so whether it has been completely taken away or has been replaced by another right of appeal, though not to the High Court. Under the first Mysore Act, as we have already pointed out, evacuee property ipso facto vested in the Custodian under section 5. There. after the Custodian was expected to notify such property under section 6. On such notification or where the Custodian demanded surrender of possession a person claiming any right to the property was entitled to make an application preferring a claim before the Custodian. That application was dealt by the Custodian in a summary manner and he had 'the power either to reject the application or allow it in whole or in part. An order passed by the Deputy or the Assistant Custodian under section 8 was appealable to the Custodian and an order passed by the Custodian or Additional Custodian or an authorized Deputy Custodian was appealable to the High Court. The contention on behalf of the respondents is that when the first Mysore Act was replaced by the second Mysore Act, there was a vital change in the procedure and therefore cases in which proceedings had commenced under section 8 could only be dealt with under the first Mysore Act and for that purpose the first Mysore Act would be deemed to be alive under a. 6 (e) of the Mysore General Clauses Act, No. III of 1899, which corresponds to section 6 (e) of the General Clauses Act, No. X of 1897. Now there is no doubt that the proceedings in these cases commenced under the first Mysore Act though they terminated when that Act was no longer in force. What we have to see is whether there is anything in the repealing legislation which by necessary intendment took away the right of appeal provided by the first Mysore Act and substituted in its place another right of appeal provided by the repealing Act, 869 The argument of Mr. Sastri is that there is nothing in the second Mysore Act which repealed the first Mysore Act corresponding to section 8 of the first Mysore Act and therefore in spite of the repeal of the first Mysore Act proceedings commenced under a. 8 of that Act would continue to be governed thereby, including the right of appeal. In this connection he urges that the scheme of the second Mysore Act with respect to evacuee property is vitally different from the scheme which is to be found in the first Mysore Act. In the second Mysore Act there is no provision corresponding to section 5 of the first Mysore Act by which any property becomes ipso far to evacuee property and vests in the Custodian. Under the second Mysore Act the Custodian has first to form a tentative opinion whether the property is evacuee property and after he has formed such opinion he gives notice thereof to the persons interested; after such notice is given he holds inquiry into the matter and thereafter passes an order declaring the property to be evacuee property. Thus under the first Mysore Act the property became evacuee property ipso facto and the person claiming any interest in it had to proceed under section 8 and make a claim which had to be investigated and thereafter the Custodian finally declared whether the property, which he had notified under section 6 was evacuee property or not. Under the second Mysore Act there being no vesting ipso facto, the proceeding commences; with a notice by the Custodian to the person interested followed by an inquiry after which the Custodian decides to declare the property evacuee if he finds it to be so under the law. Further under the second Mysore Act when an order was passed declaring property to be evacuee property under a. 5 it was open to the person aggrieved by such order to file an appeal to the Custodian where the original order had been passed by the Deputy Custodian or Assistant Custodian and to the Custodian General where the original order had been passed by the Custodian, Additional Custodian or Authorised Deputy Custodian. There was also in certain cases appeal to the District Judge; but we are not concerned with that in the 870 present appeals. The position under the Act was also the same as under the second Mysore Act and the right of appeal was also similar. It is thus true that there has been a change in the procedure by which evacuee property is finally declared to be evacuee property. Under the first Mysore Act the property became evacuee property and the person had to go and file a claim and establish that it was not. That claim was investigated and after investigation the Custodian had to come to a final conclusion whether the property was evacuee or not. 'If he came to the conclusion that it was evacuee property, the vesting under section 5 was confirmed. If on the other hand he came to the conclusion that the pro perty was not evacuee property the legal effect was that there was no vesting under section 5 of the first Mysore Act. Under the second Mysore Act the property did not ipso facto vest in the Custodian as evacuee property but he formed a tentative opinion as to whether it was evacuee property and then gave notices to the persons interested. They appeared before him and the matter was investigated. He then had to come to a final conclusion whether the property was evacuee property or not. If he came to the conclusion that it was evacuee property he declared it to be such; if on the other hand he came to the conclusion that it was not evacuee property the proceedings came to an end. It will be seen therefore on a comparison of the two procedures that though there is difference between the two, the difference is not of a vital or substantial nature. In the one case the ' law started with the presumption that the property was evacuee property and the person interested had to go and make a claim and establish that it was not evacuee property and the matter had to be investigated and the Custodian finally had to come to the conclusion one way or the other. In the other case the law did not start with the presumption but only a tentative opinion was to be formed by, the Custodian who gave notice to the person interested and the matter was then investigated and thereafter the Custodian had to decide finally one way or the other 871 But in both cases the question whether the property was evacuee property or not was investigated and it was only after investigation that it could be finally said whether the property was evacuee property or, not. Therefore, though there may be an apparent difference between what is provided by a. 8 in the, first Mysore Act and by section 5 in the second Mysore Act as also by section 7 in the Act, the difference is, not material and it is only after investigation, whether under section 8 of the first Mysore Act, or under section 5 of the second Mysore Act or under section 7 of the Act that the Custodian comes to the final conclusion whether the property is evacuee property or not. Under the circumstances it would not in our opinion be unreasonable to say that the investigation provided under a. 8 of the first Mysore Act and the subsequent remedies following on an order under section 8 are in substance the same as the investigation provided under section 5 of the second Mysore. Act ores. 7 of the Act and the subsequent remedies following on an order thereon. We cannot, therefore, agree with the High Court that there is nothing in the second Mysore. Act to correspond to section 8 of the first Mysore Act and therefore these proceedings which began under the first Mysore Act must continue to be governed by that Act in spite of its repeal by the second Mysore Act. As we have pointed out above the proceedings under section 8 of the first Mysore Act are in substance equal to proceedings under section 5 of the second Mysore Act and therefore proceedings commenced under the first Mysore Act must in view of a. 53(2) of the second Mysore Act, be deemed to be proceedings under section 5 of the latter Act. Once that conclusion is reached and it seems to us that it is inevitable it follows that an order made in a proceeding commenced under section 8 of the first Mysore Act must be deemed to be an order made under section 5(1) of the second Mysore Act or under section 7(1) of; the Act. In this connection it is relevant to point out that; it could not have been the intention of the legislature to keep the first Mysore Act alive for certain purposes for all, time the whole object of passing the subsequent Acts is plainly against such an assumption. 872 The next question that arises is whether the second Mysore Act and the Act took away the right of appeal which lay to the High Court under the first Mysore Act and substituted for it another right of appeal by necessary intendment. As we have already Pointed out, there is no express provision either in the second Mysore Act or in the Act in this behalf. But once it is held that proceedings which commenced under section 8 of the first Mysore Act must, when the second Mysore Act came into force, be deemed under section 53(2) thereof to be proceeding under section 5(1) or when the Act came into be deemed under section 58(3) thereof to be proceeding under section 7(1) and must be continued under those provisions, it follows that the legislature necessarily intended that all subsequent action following an order under section 5(1) or section 7(1) must be taken under the second Mysore Act or under the Act as the case may be. It could not have been intended by the legislature when it was expressly providing for appeal from an order under section 5(1) of the second Mysore Act or under section 7(1) of the Act that a proceeding commenced under the first Mysore Act (which was equivalent to a proceeding under section 5(1) or section 7(1) should continue to be governed in the matter of appeal by the first Mysore Act. This is therefore in our view a case where by necessary intendment (though not by express provision) the legislature intended that the provision as to appeals provided by subsequent legislation should supersede the provision as to appeals under the first Mysore Act. We may point out that this is not a case where the right of appeal disappears altogether,, all that happens is that where the order is passed by the Custodian the appeal lies to the Custodian General instead of to the High Court. The legislature has provided another forum where the appeal will lie and in the circumstances it must be held that by necessary intendment the legislature intended that forum alone to be, the forum where the appeal will lie and not the forum under the first Mysore Act. Reference in this connection may be made to Garikapatti Veeraya vs 873 N. Subbiah Choudhury (1), where this Court held that the vested right of appeal was a substantive right and was governed by the law prevailing at the time of th commencement of the suit and comprised all successive rights of appeal from court to court which really constituted one proceeding but added that such right could be taken away expressly or by necessary intendment. In the present cases we are of opinion that once proceedings under section 8(1) of the first Mysore Act are held to be similar to proceedings under section 5(1) of the second Mysore Act or section 7(1) of the Act, it must necessarily follow that the legislature intended this all subsequent proceedings in the nature of appeal after the first Mysore Act came to an end, must being the forum provided by the subsequent legislation We are therefore of opinion that the High Court was in error in holding that appeals to it lay from the order of December 2, 1952. The result of the view we have taken is that the High Court was not justified in looking into the order of December 2, 1952, as an appellate court,, though I would be justified in scrutinizing that order as if it was brought before it under article 226 of the Constitutional for issue of a writ of certiorari. The limit of th jurisdiction of the High Court in issuing writs of certiorari was considered by this Court in Hari Vis Kamath vs Syed Ahmed Ishaque and others (2) and the following four propositions were laid down: (1) Certiorari will be issued for correcting errors of jurisdiction ; (2)Certiorari will also be, issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice; (3), The court issuing a writ of critorari acts in exercise of a supervisory land not appellate jurisdiction. One consequence of this is that, the court will not review findings of fact reached by. the inferior court or tribunal, even if they be erroneous; (4)An error in the decision or determination itself may also be amenable to a writ of certiorari if (1) ; (1) ; , 874 it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by certiorari but not a mere wrong decision. In the present case, the Custodian had jurisdiction to decide the matter once it is held that the, Castodian General had jurisdiction to set aside the order of August 22, 1950. The main question for decision in these cases was whether the respondents were evacuees within the meaning of a. 2(c) of the first Mysore Act. The questions that fall for decision under section 2(o) are questions of fact and as pointed out in Hari Vishnu Kamath 's case (2) it is not open on a writ praying for certiorari to review findings of fact reached by an inferior court or tribunal even though they may be erroneous. Further, unless there is a patent error of law there can be no interference by a writ of certiorari. While dealing with the writ petitions the main argument that appealed to the High Court was that the Custodian General, had no Jurisdiction in revision to reopen the earlier proceedings and in consequence all subsequent proceedings were null and void The High Court was further aware of the fact that, the ordinary remedy of the respondents in these cases against the order of December 2, 1952, was to appeal to the Custodian General tinder section 24 of the Act; but as it was of the view that the order of ;the Custodian General under a. 27 was without jurisdiction it held that it should interfere and set aside the order of December 2, 1952, which was also without jurisdiction and restore that, of August 22,1950. In the view we have taken, the order of the Custodian General was with jurisdiction and therefore there was in our opinion no reason for the High Court interfere in the exercise of its jurisdiction under article 226 of the Constitution with the order of December 2, 1952, as this is a case where only a writ of certiorari could issue and that is not justified in view of the decision in Hari Vishnu Kamath 's case(1) (1) ; 875 We therefore allow the appeals, set aside the order of the High Court and restore that of the Custodian dated December 2, 1952. This of course will not take away the right if any of the respondents to approach the Custodian General, for we have not considered the merits of the order, of December 2, 1952. In the circumstances of this case we pass no order as to costs. Appeals allowed.

On July 7, 1949, the then State of Mysore passed the Mysore Administration of Evacuee Property (Emergency) Act, 1949, providing, inter alia, for the appointment of a Custodian of Evacuee Property for the State of Mysore for the purpose of administering evacuee property in the State. By section 6 all evacuee property vested in the Custodian under section 5 had to be notified by him in the Mysore Gazette, while section 8 provided that any person claiming any right to any property notified under section 6 might prefer a claim to the Custodian on the ground that the property was not evacuee property. Section 30 provided for an appeal to the High Court where the original order under section 8 had been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian. This Act was replaced by the Mysore Administration of Evacuee Property (Second) (Emergency) Act, 1949, which came into force on November 29, 1949. Section 53(2) of that Act provided that anything done or any action taken in the exercise of any power conferred by the earlier Act shall be deemed to have been done or taken in the exercise of the powers conferred by the later Act. Under the second Act, instead of the High Court an appeal from the order of the Custodian lay to the Custodian General, appointed by the Government of India under the provisions of the Administration of Evacuee property Ordinance, 1949, which had come into force on October 18, 1949 ; and in addition, section 25 Of that Act provided for revision by the Custodian General of orders passed by the Custodian. The , which was passed by Parliament and which came into force on April 17, 1950, provided substantially for all matters contained in the second 856 Mysore Act. Section 27 gave the Custodian General powers of revision against the orders of the Custodian, and section 58 as amended and given retrospective operation, provided that " if, immediately before the commencement of this Act, there was in force in any State to which this Act extended any law which corresponded to this Act and which was not repealed. . that corresponding law shall stand repealed. " On September 21, 1949, the Custodian issued a notification declaring the properties of the respondents as evacuee properties, and claims filed by them under section 8 of the earlier Mysore Act were investigated by the Deputy Custodian who dismissed the same on April 17, 1950. Appeals were filed against the said order before the Custodian and were allowed on August 22, 1950. on the ground that there was not sufficient evidence to prove the respondents as evacuees and consequently the properties in question could not be treated as evacuee properties. On October 3, 1950, the Custodian General gave notice to the respondents under section 27 of the , in respect of the order of the Custodian dated August 22, 1950, and asked them to show cause why the said order be not revised. On February II, 1952, the Custodian General set aside the order and directed the Custodian to dispose of the cases afresh. On December 2, 1952, the Custodian passed an order by which he held that the respondents were evacuees and that their properties were evacuee properties. Against this order the respondents filed two appeals to the High Court, and also two writ petitions under article 226 of the Constitution as they had doubts whether any appeal lay to the High Court. The High Court took the view that the Custodian General bad no power under section 27 of the Act to revise the order of the Custodian and that as the proceedings in these cases began under section 8 of the first Mysore Act and as there was nothing corresponding to that section either in the second Mysore Act or in the Act of 1950, the High Court was entitled to hear the appeal from the order of December 2, 1952, as that order must be held to have been passed in proceedings under the first Mysore Act. The High Court then went into the matter as an appellate court and came to the conclusion that the order of the Custodian dated December 2, 1952, 'Was erroneous. Held, that the High Court erred in holding that the order of the Custodian General dated February II, 1952, was without jurisdiction. Considering the purpose for which the Administra tion of Evacuee Property Act, 195o, was passed and the successive saving clauses in the second Mysore Act and in the Act, the Custodian General bad the power under S ' 27 to call for the record of the proceeding in which the order of August 22, 1950, was passed and consider its legality or propriety. Held, further, that the High Court was also in error in holding that appeals to it lay from the order of December 2, 1952. 857 An order made in a proceeding commenced under section 8 of the. first Mysore Act must be deemed to be an order made under section 5(1) of the second Mysore Act or under section 7(1) of the Act, in view of section 53(2) of the second Mysore Act and section 58(3) of the Act. Consequently, by necessary intendment, the legislature must have intended that the provision as to appeals provided by subsequent legislation should supersede the provision as to appeals under the first Mysore Act. Garikapatti Vecraya vs N. Subbiah Choudhury ; , referred to. Since the main question for decision in these cases was whe ther the respondents were evacuees, and as such a question was one of fact, the High Court was not justified in looking into the order of December 2, 1952, as an appellate court in dealing with applications for a writ of certiorari under article 226 of the, Constitution. Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; , applied.

The appellant made an application on the 15th November, 1978 under chapter VII of the Land Acquisition Act, 1894 for the acquisition of the lands earlier purchased by Respondent No. 1 herein. The Government issued on the 29th October, 1980 a notification for acquisition of the said land under section 4 of the Act which was published in the Government Gazette dated 30th October, 1980. Respondent No. 1 objected to the said notification. Subsequently the Government bled an enquiry under section SA of the Act and, after submitting a report in March 1981, on or about 10th April 1981, the Deputy Collector issued notice to Respondent No. I that enquiry under rule 4 of the Land Acquisition (Companies) Rules 1963 would be held on the 15th April, 1981 to which the latter filed his objections on merit by his letter dated 4th May, 1981. On 26th October, 1983, agreement was executed between the government and the acquiring company. A notification under section 6 that the land in question was needed for the purpose of development of tourism, was published in the Government Gazette dated 27th October 1983. Respondent No. 1, thereupon, filed a petition under Article 226 of the Constitution challenging the said notifications under sections 4 and 6 of the Land Acquisition Act. The High Court of Bombay (Goa Bench) quashed the said notifications on the first ground alone namely, the notifications were bad for prior non compliance with Rule 4 of the Land Acquisition (Companies) Rules 1963, and noted that it was not necessary to deal with other grounds of challenge. Hence the appeal by special leave 938 Allowing the appeal and remitting the case back, the Court ^ HELD: 1. ON a correct interpretation of the scheme of the Land Acquisition Act, it is not necessary that enquiry under rule 4 of the Land Acquisition (Companies) Rules, 1963 must in all cases precede issuance of the notification under section 4 of the Act. In an appropriate cash if it is possible, enquiry under rule 4(1) may be held before the issuance of the notification under section 4. But it is not a mandatory requirement that it must precede the issuance of the notification under the Act. [949B C] RAJA Ram Jaiswal vs Collector, Allahabad & Another, (1980) 2 ILR Allahabad 269; conclusion approved. Babu Barkya Thakur vs State of Bombay (now Maharashtra), ; at 1206, followed. Abdul Husein Tayabali & Ors. vs State of Gujrat l Ors. , [1968] I SCR 597. explained and distinguished. A consepectus of the provisions of the Land Acquisition Act as well as Land Acquisition (Companies) Rules 1963 indicate that there are two purposes of acquisition of land one being for the public purpose and other for the purpose of a company, In case of acquisition for company, the appropriate Government has to satisfy itself that such acquisition is needed and would be useful also for public need. [943E F] 2.2 Land Acquisition proceedings begin with the publication of the preliminary notification under section 4 of the Land Acquisition Act, 1894. When the acquisition is for a company the Purpose has to be investigated under section SA (by hearing objections and disposing them) or under section 40 necessarily after the notification under section 4 of the Act. Under section 6 if the Government is satisfied after considering the report, if any, made under section 5A that any particular land was needed for public purposes or for a company a declaration shall be made to that effect subject to certain conditions stipulated therein. Sub rule 4 of Rule 4 of the Land Acquisition (Companies) Rules 1963 provides that no declaration shall be made by the Appropriate Government under section 6 of the Act unless (i) the appropriate government had consulted the committee and had considered the report submitted under the said rule and the report if any, submitted under section SA of the Act and (ii) further any agreement under section 41 of the Act executed by the Company. To complete the acquisition proceedings notification under section 6 of the Act is required. Section 6 of the Act enjoins that the government has to be satisfied that the land is needed for public purpose or for a company and after declaration is made the acquisition is complete after the award is made and possession of the land is taken when the land vests under section 16 in the government free from encumbrances. Section 4 939 does not require as such this satisfaction of the government. The government might initiate acquisition proceedings "if it appears" to the government that land is needed either for public purpose or for a company. That might appear to the government by enquiry aliunde or on a petition or application made by any company. Whether the need is proper or genuine that can be found by the government subsequently after notice under section 4 of the Act. An enquiry under rule 4 might be made before issuance of the notification under section 4 of the Act but it is not a sine qua non for the issuance of the notification under section 4 to have an enquiry under rule 4 of the Rules. The scheme and the language of the Act and the Rules do not indicate that. Therefore, section 4 as such does not require government to be satisfied, it is sufficient if it appears to the government that land is needed either for public purpose or for a complain. It may so appear to the Government either by independent inquiry or from reports and information received by the government or even from an application by the company concerned. [943H; 944A F] 2.3 It is undoubtedly true that a notification under section 4 can be issued after enquiry under rule 4. But under the scheme of the Act, the converse is not correct, i.e., the enquiry under rule 4 must always precede notification under section 4 of the Act, though enquiry under rule 4(1) must precede action under section 6 of the Act. Further certain matters which are required to be done under rule 4 cannot be done before because the officer or the person authorised by him would have no authority, unless notification under section 4 is issued. [945G H; 946A] Rule 4(4) does not prohibit or forbid issuance of notification under section 4 of the Act unless rule 4(1) has been compiled with. If it is now insisted that there should be no issuance of notification under section 4 of the Act before enquiry under rule 4 then this sub rule has to be re written by stating that no notification under section 4 and no declaration under section 6 issued or made as the case may be unless the requirements mentioned in clauses (i) and (ii) of sub rule (4) of rule 4 have been complied with. On the contrary, it will be contrary to the scheme and purpose of the acquisition proceedings because the compensation for the acquisition has to be fixed under section 23 of the Act keeping the market rate as or the date of F the issuance of the notification under section 4 in view. If it be that the enquiry as contemplated by rule 4 should also precede issuance of notice under section 4 of the Act then that may upset the fixation of the market value and escalation of price with the passage of time between publication of the notification under sections 4 and 6 would make acquisition difficult. [945A.D] 3. In a matter of this nature where several Contentions factual and legal are urged and when there is scope of an appeal from the decisions Of the Court, it is desirable as was observed by the Privy Council long time ago to avoid delay and protraction of litigation that the court should, when dealing with any matter dispose of all the points and not merely rest its decision on one single point. [950A B] 940

The appellant, a Hindu reversioner, brought the suit out of which the appeal arose for recovery of certain properties alienated by two widows having widow 's estates under the will of their husband. The respondents resisted the suit mainly on the grounds that the appellant, who was an undischarged insolvent at the time the succession opened, could not maintain the suit even after his absolute discharge as the properties must be taken to have vested in the official receiver and that under the will of their husband the widows got not a widow 's estate but an absolute estate and had the right to alienate the properties which they did. The trial court found in favour of the appellant and directed delivery of possession of the properties to him. On appeal the High Court took the contrary view on both the points and dismissed the suit. The appellant came up to this Court on the certificate granted by the High Court. Held that the High Court was in error in holding that the appellant could not maintain the suit. There is nothing in the Provincial Insolvency Act that takes away the right of the insolvent to sue in courts after he is granted a discharge for he then becomes a free man. Though there is no specific provision in the Act with respect to the property that may remain undisposed of by the court or by the receiver, the provisions in section 67 by necessary implication read in the light of the general scheme of the Act provides an answer to this and all such property must be treated as surplus to which an insolvent is entitled, after an absolute order of discharge is made in his favour, subject always to the condition that if any debts provable under the Act have not been discharged before such order, 521 the property will remain liable for such discharge as also the expenses of all proceedings under the Act till they are fully met. Cohen vs Mitchel, (I 890) ; Sayad Daud Sayed Mahomed vs Mulna Mahomed Sayad, (1926) 28 Bom. L. R. 334; Yellavajjhula Suraya vs Tummalapali Mangayya, A.I.R. , Rup Narain Singh vs Har Gopal Tewari, 'I. L. R. (1933), 53 All. 503; Diwan Chand vs Manak Chand, A.I.R. (1934) Lah. 809; Arjun Das Kundu vs Marchhiya Tolinee, I.L.R. ; Kanshi Ram vs Hari Ram, A. I .R. and Parsu vs Balaji, I.L.R. (I , discussed. In order to determine the true intention of a testator, the clauses of the will should be read as a whole in the light of the surrounding circumstances as also in contrast to the other clauses and where the testator, as in the instant case, having used the word owner ' in the previous clause, follows up by using the words "during her lifetime enjoy as owner the income in any manner she likes" the latter words clearly limit the bequest and indicate that what is given is no more than a life estate. Where the interests of the various defendants in possession of various properties are independent, the appeal cannot abate as a whole by reason of the heirs of a deceased defendant in possession of a property not having been brought on the record within the prescribed time.

Meriappa Gounder respondent No. 1 in C.A. 466/69 and appellant 1 in C.A. 2375/69 filed a suit on August 23, 1950 in the District Court, Trichur, for specific performance of an agreement dated May 22, 1950 made by one Soliappa Chettiar. The said Soliappa Chettiar pleaded inability to perform the contract in view of the refusal of one Neelakanta Iyer a lessee of the factory to give up possession. Pending the suit Late Kochivareed, husband of the appellant in C.A. 466/69 obtained an assignment of the lease from Neelakanta Iyer on March 5, 1951. On March 8, 1951 Soliappa Chettiar executed a sale deed of the suit property in favour of one George Thatil, a nephew of Kochivareed. In the course of the proceedings the trial court appointed a Receiver to manage the suit property. On March 21, 1951, Late Kochivareed obtained a lease, of the suit property at a rent of Rs. 15,000/ for a period of one year which was renewed for another year from the Receiver and a sum of Rs. 30,000/ SO collected as rent for two years was deposited in the Court by the Receiver. The District Court on August 28, 1952 decreed the suit for specific performance and mesne profits at a reduced rate of Rs. 15,000/ per annum, instead of at Rs. 30,000/ per annum as claimed. Against the decree two appeals were filed in the High Court by Kochivareed and George Thatil. The High Court allowed the appeals and dismissed the suit by its judgment dated March 21, 1953. The appeal filed by Meriappa Gounder (CA 129/56) was allowed by this Court as per its judgment and decree dated April 22, 1958. On the question of the liability of the mesne profits, the present appeals arose out of interpretation of the direction (e) of this Court 's decree dated April 22, 1958. Allowing the appeals by certificate in part the Court ^ HELD: 1. Mesne profits being in the nature of damages, no invariable rule governing their award and assessment in every case can be laid down and the "Court may mould it according to the justice of the case". Even so one broad basic principle governing the liability for mesne profits is discernible 59 from section 2(12) of the Code of Civil Procedure which defines 'mesne profits ' to mean 'those profits which the person in wrongful possession of property actually received or might with ordinary deligence have received therefrom together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession." [68G H, 69A] Wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defandant 's liability therefor, Generally, the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits. But, where the plaintiff 's dispossession, or his being kept out of possession can be regarded as a joint or concreted act of several persons, each of them who participants in the Commission of that act would be liable for mesne profits even though he was not in actual possession and the profits were received not by him but by some of his confederates. Possession through another, such as a tenant may be sufficient to create liability for mesne profits, if such possession is wrongful. [69A C and G] 2. In such a case, where the claim for mesne profits is against several tresoassers who had combined to Keep the plaintiff out of possession, it Is open to the Court to adopt either of the two courses. It may by its decree hold all such trespassers jointly and severally liable for mesne profits leaving them to have their respective rights adjusted in a separate suit for contribution; or it may, if there is proper material before it ascertain and apportion the liability of each of them on a proper application made by the defendant during the same proceedings. [69C D] 3. A decree under Order XX Rule 12 of C.P.C., directing enquiry into mesne profits, howsoever expressed must be construed to be a decree directing the enquiry in conformity with the requirements of Rule 12(1)(c), 80 that the decreeholder is not entitled to mesne profits for a period (commencing from the date of the institution of the suit) extending beyond three years from the date of the preliminary decree. [69E Fl Chitturi Subhanna vs Kudappa Subbanna, ; ; referred to. The words "whichever event first occurs" in sub clause (c)(iii) of clause I of Rule 12 of Order XX Civil Procedure Code imply that the maximum period for which future mesne profits can be awarded is three years from the date of the decree for possession and mesne profits, finally passed. The period of three years is to be computed from the date of decree of this Court i.e. from April 22, 1958 and it will expire on the date on which possession was delivered or relinquished by the defendant in favour of the decreeholder pursuant to that decree. In other words, the decree mentioned in sub clause (iii) of clause (c) would be the appellate decree dated April 22, 1958 of this Court. The period of three years mentioned in the said subclause is, therefore, to be reckoned from April 22, 1958. [73G H, 74A B] 5. Section 144 of the Code of Civil Procedure, in terms, says that for the purpose of the restitution, the Court may make any orders, including orders for the payment of interest, damages compensation and mesne profits which are properly consequential on variation or reversal of the decree. [77A B] There is nothing in the decree, dated April 22, 1958 of this Court which expressly or by implication, prohibits the payment of interest on the sum of 60 Rs. 30,000/ withdrawn by defendant 3 by way of restitution. The trial court had rightly allowed interest. [77B C] 6. The decree dated April 22, 1958 of this Court was a composite decree, partly final, and party preliminary. It was final in so far as it granted the reliefs of specific performance and possession on deposit of the price by the Plaintiff. It was preliminary in as much as it directed an inquiry with regard to the assessment of mesne profits and as to who out of the defendants was/were liable for payment of those mesne profits. But? it laid down in no uncertain terms that only such of the defendants would be liable for mesne profits "as may have been in possession of the property". This direction in the decree means that only the defendant or defendants found in actual possession and enjoyment of the property would be liable for mesne profits. [70A C] In the instant case: (a) The third defendant was in sole, actual possession and control of the suit property from March 3, 1951, when he obtained the alleged assignment of lease in his favour from Neelakanta Iyer. In terms of the decree of this Court, therefore defendant 3 alone is liable for mesne profits in respect of the period he was in possession (excepting the period during which the property was under the management of the Court Receiver). [71E F] (b) The contention that the possession of defendant 2 was the legal possession of an owner while that of defendant 3 was derivative possession of a lessee or licensee under the former is not correct, since at no stage, in the Courts below defendant 3 took up the position that he was in derivative possession of the property under defendant 2. Nor was there even a whisper in the pleadings that defendant 2 and defendant 3 were joint tortfeasors and therefore jointly and severally liable for mesne profits. [69H, 70C, G] (c) There is nothing in the decree of this Court dated April 22 1958, indicating that the amount deposited by the plaintiff towards the price should have been sel off against the liability of defendant 3 for mesne profits. On the contrary, it allowed deduction of the amounts found due against defendant 1 and defendant 2 from the deposit of Rs. 85.000/ to be made by the plaintiff towards the price, and further directed that after such deduction, the balance of such deposit made by the plaintiff, if any, shall be paid to the third respondent (defendant 2) who is the assignee of the second respondent (defendant 1) pendente lite. [71F H] (d) The plaintiff was not bound to suffer a set off in favour of defendant 3, merely because defendant 2 or his assignee withdrew the price deposited by the plaintiff without furnishing any security for its refund or adjustment towards the liability of defendant 3, there being no evidence whatever, on record to show that such withdrawal was the result of any collusion or conspiracy between the plaintiff and defendant 2 and defendant 3. Even assuming that both defendants 2 and 3 were liable for mesne profits jointly and severally, then also, the plaintiff could at his option. recover the whole of the amount of mesne profits from either of them; and how such inter se liability of the defendants was to be adjusted or apportioned was a matter between the defendants only. [72A C] (e) Defendant 3 entered into possession of suit property under a l assignment of sham lease from Neelakanta Iyer on March 5, 1951 during the 61 pendency of the plaintiffs suit, which was instituted on August 25, 1950. The A plaintiff had deposited Rs. 50,000/ sometimes after the presentation of the plaint. Under the agreement of the sale, dated May 22, 1950 made by defendant 1 in favour of the plaintiff, the total sale considerations was fixed @ Rs. 90,003/ . Out of it Rs 5,003/ had been paid to defendant I on the very date of the agreement. It was further stipulated that out of the balance, Rs. 50,000/ would be paid by the plaintiff purchaser at the time of the registration of the sale deed which was to be executed and registered on or before July 15, 1950. It was further stipulated that on payment of the further sum of Rs. 50,000/ the plaintiff would be entitled to be put in possession of the suit property. Thus when defendant 3 entered into possession, first under the garb of an assignee of sham lease from Neelkanta Iyer, and then further purchased the property with his on funds in favour of defendant 2 pendente lite, he was fully conscious that he was purchasing a litigation. His possession was therefore wrongful qua the plaintiff from its inception [72E H] (f) Disallowance of the claim for deduction for interest on the deposit of Rs. 50,000 which the plaintiff had withdrawn on August 19, 1953 and had redeposited on 9 2 1959 is incorrect. The defendant is entitled to interest @ 6% per annum for the said period, after deduction the interest for the period during which the property was under the management of the Receiver. [74D E] (g) The plaintiff`s claim for mesne profits @ the rate of Rs. 25,000/ has correctly been negatived. Since the plaintiff did not object to the lease granted by the Receiver to defendant 3 on an annual rental of Rs. 15,000/ and since he did not produce any other reliable evidence, the High Court was not wrong in holding that the mesne profits should be on the basis of this rental value of Rs. 15,000/ [76A C] (h) The plaintiff, in view of the long drawn out litigation is entitled to interest @ 6% per annum upto March 29, 1959. [76E F]

Respondent No. 1 in the appeals instituted a suit for partition against his younger brothers and sisters, and the heirs of his deceased brothers. The plaintiff was the eldest among the brothers and sisters. The 1st and 2nd Defendants were his brothers, the 3rd Defendant his sister, the 4th and 5th Defendants, the widow and son respectively of the third brother. Defendant 6 was the widow of the fourth brother, and Defendants 7 to 12 were his children, while Defendant No. 14 was the wife of Defendant No. 1, and Defendants 13, 15, 16 and 17 were their children. The subject matter of the appeals related only to one item of property known as "Naroda Chawl" measuring 7 acres and 2 gunthas of land, where 115 rooms and huts stood con structed, out of which 114 rooms had been let out to ten ants, and one room was retained for the caretaker. According to Defendants No. 6 to 12 this property exclu sively belonged to defendant No. 6 and was not liable to partition. The other defendants however supported the plain tiff 's case that it belonged to the 233 joint family and was liable to partition. Defendants 6 to 12 pleaded that the plaintiff 's father Bapalal orally gifted this property to his daughter in law Defendant No. 6 in March 1946 and made a statement before the Revenue authorities on . the basis of which her name was mutated and she was put in possession thereof, that although she came in peaceful possession, the management which in cluded realisation of rent was in the hands of Defendant No. 1, that as some dispute arose in 1952 she assumed direct charge of the chawl and had remained in possession thereaf ter, and that she had acquired good title therein by adverse possession before the suit was filed in 1960. The City Civil Judge who tried the suit, held that there was a joint Hindu family and a business was carried on for the benefit of the family and the income therefrom was thrown into the common pool and all the properties including the disputed chawl were treated as belonging to the family. As the case of Defendant No. 6 about the gift, the mutation of her name, and her exclusive possession from 1946 till the date of the suit was found correct, it was held that she had acquired title by adverse possession, and the suit was dismissed with respect to the disputed chawl. The plaintiff appealed to the High Court. Some of the defendants also filed appeals in respect of the other items of property. All these appeals were heard and disposed of by a common judgment. The High Court reversed the finding of adverse posses sion in regard to the disputed chawl and granted a decree for partition. It held that Defendant No. 6 remained in exclusive possession of the property only since 1952, the period was thus short of the time required for prescription of title. It further held that since the rents of the chawl from 1952 were collected by her husband and after his death by her son (Defendant No. 7), she was liable to render accounts till the death of her husband, and she along with Defendant No. 7 would be jointly liable for the period thereafter. Separate Appeals were preferred by Defendant Nos. 6 and 7 to this Court. Allowing the Appeals, setting aside the decision of the High Court and restoring that of the Trial Court. 234 HELD: 1. The principle that revenue entry furnishes presumptive evidence of title is inapplicable in the instant case. It cannot be denied that title to Naroda Chawl could not have passed to Defendant No. 6 by virtue of the entry Ext. The value of the chawl even in 1946 was large and no registered instrument of transfer was executed. Besides Ext. 247 describes the plaintiff 's father (Bapalal) and Defendant No. 6 (Chandrakanta) as Kabjedar, that is occu pant. In such circumstances, the presumption which can be raised in favour of Defendant No. 6 from this entry is with respect of her possession and possession only. [238F G] Gangabai and others vs Fakirgowda Somaypagowda Desai and others, AIR 1930 Privy Council 93; and Desai Navinkant Kesarlal vs Prabhat Kabhai, 9 Gujarat Law Reporter 694, referred to. The account books have to be rejected as not reli able. It is apparent from the evidence that nobody takes the responsibility of supporting the correctness of the entries therein. Many of the documents produced by Defendant No. 1 were accepted, but the account books which were section Nos. 123 75 to 123 97 of Ext. 123 were in express terms not admitted. The plaintiff filed his objection Ext. Defendant No. 6 also filed her objection Ext. The books were admitted in evidence and marked as exhibits on the statement of the plaintiff which he made in cross exami nation. The plaintiff by saying that he had written as per the instructions of Defendant No. 1 made it clear that he Could not vouchsafe for its reliability. Defendant No. 1 could not summon courage to support them either personally or through any witness. No reason has been suggested as to why he did not produce other important documents in his possession which could have supported the account books and the joint case of the parties resisting the appellant 's claim. [243B E] 3. Defendant No. 1 cannot be treated to be in joint possession as he was actually collecting the rents from the tenants. it is well settled that the possession of the agent is the possession of the principal and in view of the fidu ciary relationship, Defendant No. 1 cannot be permitted to claim his own possession. [247D E] David Lyeii vs John Lawson Kennedy, [1889] XIV H.L.(E) 437; Williams vs Pott, L.R. XII Equity Cases 149 and Secre tary of State for India vs Krishnamoni Gupta, 29 Indian Appeals 104, referred to. It is the intention to claim exclusive title which makes 235 possession adverse and this animus possidendi must be evi denced and effectuated by the manner of occupancy which again depends upon the nature of the property. The manner of possession depends upon the kind of possession which the particular property is susceptible. That possession to the extent to which it is capable of demonstration must be hostile and exclusive and will cover only to the extent of the owner 's possession. [246E F] (b). The title to the chawl as owner, subject to the tenancy was an interest in immovable property so as to be covered by Article 144 of the Indian Limitation Act, 1908, which specifically mentioned, ". or any interest therein". [246E] In the instant case, the parties have been fighting for the rent from the chawl so long as it continued in posses sion of the tenants. Before the gift of 1946 the Defendant No. 1 was collecting the rent and he continued to do so even thereafter till 1952. The appellant has, however, estab lished her case that the Defendant No. 1 acted as her agent after 1946 and when he repudiated this agency in 1952 he was effectively removed from the management of the chawl. Since 1946 the tenants attorned to the Defendant No. 6 and paid rent to her under printed receipts announcing her ownership, but of course through her agent the Defendant No. 1. The fact that the tenants have been in actual physical posses sion of the chawl is, in the circumstances, of no assistance to the respondents. What is material is that they paid the rent to the Defendant No. 6. Defendant No. 6 was in adverse possession from the period 1946 to 1952 through her agent Defendant No. 1 and thereafter through her husband and son Defendant No. 7 till 1960 when the suit was filed, the total period being more than 12 years. [246G H; 248G] Uppalapati Veera Venkata Satyanarayanaraju and another vs Josyula Hanumayamma and another, and Hari Prasad Agarwalla and another vs Abdul Haw and others, A.I.R. 1951 Patna 160, referred to.

The petitioners challenged the validity of the orders issued by the State of Mysore under article 13(4) of the Constitution on July 10, 1961, and July 31, 1962. The petitioners contended that they had applied for admission to the Pre Professional Class in Medicine in the Karnatak Medical College, Hubli and they would have secured admission to the said medical college but for the reservation directed to be made by the orders mentioned above. They contended that the above mentioned orders were ultra vires. They prayed for an appropriate writ or order restraining the respondents from giving effect to those orders and requiring them to deal with their applications for admission on merits. Held, that the petitioners were entitled to an appropriate writ or order as claimed by them and the respondents were restrained from giving effect to the above mentioned orders. M. R. Balaji vs State of Mysore [1963] Supp. 1 S.C.R. 439, followed. The impugned orders we quashed only with reference to the additional reservation made in favour of the socially and 476 educationally backward classes and so the respondents were at liberty to give effect to the reservation made in favour of the ' Scheduled Castes and Scheduled Tribes, which was not challenged at all. The said reservation continues to be operative.

Under a contract dated August 3, 1957 the defendant agreed to sell to the plaintiffs 40,000 tons of float iron lying in a mining area in the Hosadurgo Taluka in Mysore State, and gave, them a right to win and remove iron ore. On September 2, 1957, the defendant wrote to the plaintiffs that further to the agreement dated August 3, 1957, he agreed to assign the said lease area of 184 acres for iron and manganese ores to the plaintiffs subject to their paying one lakh and eighty thousand rupees within three months. The three months expired on November 6, 1957 without the offer being accepted by the plaintiffs orally or by letter. On October 31, 1957 the defendant posted a letter to the plaintiffs revoking the offer, which reached them on November 6, 1957. The plaintiffs instituted a suit (O.S. No. 55 of 1957) against the defendant alleging that by contract dated September 2, 1957 the defendant had agreed to assign to the plaintiffs his leasehold interest in the aforesaid 184 acres of land and claiming specific performance of the contract. The trial court decreed the suit. The defendant appealed to the High Court. On the question whether the offer made in the defendant 's letter of September 2, 1957 had been accepted by the plaintiffs the High Court held that the plaintiffs had accepted the said offer in their plaint in another suit relating to the possession of the same land (O.S. No. 46 of 1957) a copy of which was served on the defendant on November 5, 1957 a day earlier than the defendant ' s letter revoking the offer reached the plaintiffs. Despite this finding, on another ground, the High Court allowed the defendant appeal and dismissed the suit, namely, O.S. No. 55 of 1957. The plaintiff appealed with certificate to this Court. HELD : The appeal must be dismissed on the ground that there was no concluded contract between the parties. [585 C D] The letter dated September 2, 1957 sent by the defendant to the plaintiffs, though worded as an agreement was in point of law an offer only. The defendant was at liberty to revoke the offer at any time before its acceptance by the plaintiffs. The defendant 's letter revoking the offer reached the plaintiffs on November 6. 1957. Before that date the plaintiffs did not accept the offer either orally or by letter. The High Court was wrong in holding that the plaintiffs accepted the offer by their plaint in O.S. No. 46 of 1957 and that this acceptance was communicated to the defendant before November 6, 1957. [583 B B] Considering the contents of its relevant paragraphs the plaint in question was not in point of law an acceptance of the offer, nor was it intended to be an acceptance. It is not usual to accept a business offer by a plaint; nor is it usual to communicate an acceptance by serving a copy 592 of the plaint through the medium of the Court. To hold thus would be straining the language of s section 2(6), 3 and 7 of the Contract Act. [585 A B] The old chancery practice under which the mere filing of a bill in a suit to enforce specific performance was regarded as sufficient acceptance of the defendant 's offer unless the offer had been withdrawn before the filing of the suit, cannot be applicable under the present Indian practice and procedure. [585 C E] The argument based on Bloxam 's case that the communication of an assent was not necessary and mere mental assent of the plaintiffs to the defendant 's proposal was sufficient. was misconceived. [585 F] Boys vs Ayerst, ; , 326=56 E.R. 11 12, 1115, Agar vs Biden, and Bloxam 's case; , , distinguished. In re : Pellatt 's case, , applied.

The sixth respondent granted various Pattas of his lands to his wife, to the appellant and others in November, 1944. After the coming into force of the Andhra Pradesh (Andhra Area) Estates Communal, Forest and Private Lands (Prohibition of Alienation) Act, 1947, section 4(1) of which declared alienation of Communal or Forest Lands after October, 1939, to be void, a petition was filed in the District Court by two ryots for a declaration that the alienations in the present case were void and did not confer any rights on the alienees. The District Judge allowed the petition holding that the lands in question were forest lands and the alienations were void. Revision petitions filed before a Single Judge of the High Court were dismissed but in a Letters Patent Appeal it was held that the petitioners as ryots had no right to maintain the petition, and a reasonable opportunity had to be given to the State to get itself transposed as the petitioner. The State Government was then transposed as the petitioner but thereafter the District Judge held that the petition was not maintainable by reason of the repeal of the Act of 1947 upon the passing of a subsequent Act namely the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948. However, a revision petition against this order was allowed by the High Court which remitted the matter to the District Judge. By a judgement in November, 1960 the District Judge allowed the were forest lands and there transfers were void. Further revision petitions filed by the appellant and others were dismissed by the High Court. In appeal to this Court it was contended inter alia on behalf of the appellant that (1) the Act of 1947 was a temporary Act and all proceedings thereunder came to an end with the implied repeal of the Act by Act XXVI of 1948; (2) a notification by the State Government describing the land as forest land was an essential pre requisite to the application of the Act; and (3) the Act applied only to lands which were admittedly forest lands and the operation thereof could not be extended to lands in respect of which there was a dispute as to the nature thereof. It was argued that any such dispute could only be decided by the Settlement Officer and not by the District Judge. HELD: Dismissing the appeal, (1) The purpose of the Act of 1947 was to prohibit the alienation of communal, forest and private lands in estates in the Province of Madras and the preamble to the Act shows that it was enacted to prevent indiscriminate alienation of such lands pending the enactment of legislation for acquiring the interest of landholders in such estates and introducing ryotwari settlement therein. No fixed duration of the Act was specified 330 and it was impossible to hold that merely because of the contents of the preamble, the Act became a temporary Act or that it stood repealed by the enactment of the later Act of 1948 unless there were express words to that effect or unless there was a necessary implication. It is not reason able to hold that the alienation of large blocks of land which were rendered void under the Act of 1947 became good by reason of the passing of the later Act. [332 B] (2) The definition of "forest lands" in section 2(b) of the Act is an inclusive one and shows that 'forest land ' would include not only waste land containing trees, shrubs and pasture lands but also any other class of lands declared by Government to be forest land. This does not mean that before a piece of land could be said to be forest land there would have to be a notification by the Government and that otherwise the application of the Act would be excluded. [334 C] (3) Section 20(1) of the Act of 1948 as originally enacted was substituted for another by section 9 of the Madras Estates (Abolition and Conversion into Ryotwari) (Amendment) Act, 1956, which was to. be deemed to have come into force on April 19, 1949 being the date on which the Act of 1948 originally came into force. The section as it now stands did not confer any jurisdiction on the Settlement Officer to determine any question as to whether any land was forest within the meaning of the Act and consequently the adjudication by the District Judge under sub. section (4) of

Appeal No. 369 of 1957. Appeal from the judgment and decree dated the January 27, 1956, of the Allahabad High Court (Lucknow Bench) at Lucknow in Civil Misc. Application No. 17 of 1954 (0. J.). C. B. Agarwala and C. P. Lal, for the appellant. V. D. Misra, for the respondent. February 16. , J. This is an appeal against the judgment and order of the High Court of Allahabad on a certificate granted by that court. The respondent filed a 99 petition under article 226 of the Constitution praying that the imposition of stamp duty by the Collector of Sitapur, of Rs. 85,595/7/ and a penalty of Rs 5/ was against law and could not be realized against him and prayed that the order be quashed. ,, On September 12, 1948, the, respondent executed a wakf by oral recitation of Sigha and then it was written on a stamped paper which was signed by the respondent and attested by, Witness. On September 15, 1948, it was presented to the Collector for his opinion under section 31 as to the duty chargeable. As the Collector himself was in doubt, he referred the matter to the Board of Revenue which, after a fairly long time, held that the document was liable to duty in accordance with article 58 of the Stamp Act. On October 29, 1951, the Collector held that Rs. 85,598/7/ were payable as stamp duty and ordered that it be deposited within fifteen days. Notice to this effect was served on the respondent on November, 10, 1951. Thereupon the respondent filed a petition in the High Court under article 226 which was dismissed on November 3, 1952 on the ground that it was premature. On February 2, 1954, a further notice was served upon the respondent to deposit the amount of the stamp duty plus the penalty of Rs. 5/ within a month otherwise proceedings would be taken against him under section 48 of the Stamp Act. Thereafter on March 1 1944, the respondent filed a petition under article 226 of the Constitution in the Allahabad High Court challenging the legality of the, imposition of the stamp duty and the penalty and prayed for a writ of certiorari. A full bench of the High Court quashed the order of the Collector and the State of U.P. has come in appeal to this Court. The decision of this appeal depends upon the interpretation of ss, 31, 32 and 33 of the Stamp Act. The relevant portion of section 31 provides: , section 31(1) "When any instrument,, whether executed or not and whether previously stamped or not,, is brought to the Collector and. the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of such amount (not exceeding five rupees and 100 not less than eight annas) as the Collector may in each case direct, the Collector shall determine the duty (if any) with which, in his judgment, the instrument is chargeable. " It is admitted that the document in dispute was submitted to the Collector for his opinion under a. 31 and the opinion of the Collector was sought as to what the duty should be. Under section 32 of the Act when such an instrument is brought to the Collector, under a. 31 and he determines that it was already fully stamped or he determines the duty which is payable on such a document and that duty is paid, the Collector shall certify by endorsement on the instrument presented that full duty with which it is chargeable has been paid and upon such endorsement being made, the instrument shall be deemed to be fully stamped or not chargeable to duty as the case may be ' Under the proviso to section 32, the Collector is not authorised to make the endorsement if an instrument is brought to him a month after the date of its execution. Then follows section 33 which is as follows: section 33 "Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom an instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped impound the same. (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him in order t o ascertain whether it is stamped with a stamp of the value and description required by the law in force in British India when such instrument was executed or first executed: Provided that (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding 101 under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898; (b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf. (3) For the purposes of this section, in case of a doubt, (a) the collecting Government may determine what offices shall be deemed to be public offices; and (b) the collecting Government may determine who shall be deemed to be persons in charge of public offices. " The decision of this appeal depends upon the interpretation to be put upon the words "before whom any instrument chargeable. . . . is produced or comes in the performance of his functions". Dealing with these words the High Court held: " With all respect, therefore, we agree that the learned Judges deciding Chuni Lal Burman 's (1) case took a correct view of the words " is produced or comes in the performance of his functions" used in Section 33 of the Act to mean "that production of the instrument concerned in evidence or for the purpose of placing reliance upon it by one party or the other. " The High Court was also of the opinion that the object of paying the whole stamp duty was to get the instrument admitted into evidence or its being acted upon or registered or authenticated as provided in sections 32(3), 35, 38(1) and 48(1) of the Stamp Act. Counsel for the State referred to the various sections of the Act; first to the definition section; Section 2(11) which defines what is "duly stamped"; section 2(14) which defines "instrument" and section 9(12) which defines "executed". He then referred to section 3 which lays down what "chargeable" means and then to section 17 which provides that all instruments chargeable with duty and executed by any person in British India shall be stamped before or at the time of the execution. Certain other sections i.e. sections 35 and 38(1) were also (1) A.I.R. 1951 All. 851. 102 referred to and so also sections 40(1)(a), 41, 42 and 48 but in our opinion it is not necessary to refer to these sections. What has to be seen is what is the consequence of a person applying to a Collector for his determination as to the proper duty on an instrument. The submission on behalf of the State (appellant) was that if an instrument whether 'stamped or not is submitted for the opinion of the Collector before it is executed, i.e., it is signed, then the Collector is required to give his determination of the duty chargeable and return the document to the person seeking his opinion but if the document is scribed on a stamped paper or unstamped paper and is executed then different consequences follow. In the latter case it was submitted that under section 33 the Collector is required to impound the document if he finds that it is not duly stamped. On the other hand it was submitted on behalf of the respondent that on his giving his opinion the Collector becomes functus officio and can take no action under section 33. It is these two rival contentions of the parties that require to be decided in this case. After an inordinately long delay, the Collector determined the amount of duty payable and impounded the document. Power to impound is given in section 33 of the Act. Under that section any Person who is a Judge or is in charge of a public office before whom an instrument chargeable with duty is produced or comes in the performance of his functions is required to impound the instrument if it appears to him not to be duly stamped. The question is does this power of impounding arise in the present case?. The instrument in dispute was not produced as a piece of evidence nor for its being acted upon e.g. registration, nor for endorsement as under section 32 of the Stamp Act but was merely brought before the Collector for seeking his advise as to what the proper duty would be. The words "every person. . before whom any instrument. . is produced or comes in the performance of his functions" refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved and secondly refer to other officers who have to perform any 103 function in regard to those instruments when they come before them e.g. registration. They do not extend to the determination of the question as to what the duty payable is. They do not cover the acts which fall within the scope of section 31, because that section is complete by itself and it ends by saying that the Collector shall determine the duty with which, in his judgment, the instrument is chargeable, if it is chargeable at all. Section 31 does not postulate anything further to be done by the Collector. It was conceded that if the instrument is unexecuted i.e. not signed, and the opinion of the Collector is sought, he has to give his opinion and return it with his opinion to the person seeking his opinion. The language in regard to exe cuted and unstamped documents is no different and the powers and duties of the Collector in regard to those instruments are the same, that is, when he is asked to give his opinion, he has to determine the duty with which, in his judgment, the instrument is chargeable and there his duties and powers in regard to that matter end. Then follows section 32. Under that section the Collector has to certify by endorsement on the instrument brought to him under section 31 that full duty has been paid, if the instrument is duly stamped, or it is unstamped and the duty is made up, or it is not chargeable to duty. Under that section the endorsement can be made only if the instrument is presented within a month of its execution. But what happens when the instrument has been executed more than a month before its being brought before the Collector? Section 31 places no limitation in regard to the time and there is no reason why any time limit should be imposed in regard to seeking of opinion as to the duty payable. Chapter IV of the Act which deals with instruments not duly stamped and which contains as. 33 to 48, provides for impounding of documents, how the impounded documents are to be dealt with, Collector 's powers to stamp instruments impounded and how the duties and penalties are to be recovered. It would be an extraordinary position if a person seeking the advice of the Collector and not wanting to rely upon 104 an instrument as evidence of any fact to be proved nor wanting to do any further act in regard to the instrument so as to effectuate its operation should also be liable to the penalties which unstamped instruments used as above might involve. The scheme of the Act shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under section 31. If it is properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purposes of evidence, he is to make up the duty and under section 32 the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed any further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as an instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio and the provisions of section 33 have no application. The provisions of that section are a subsequent stage when something more than mere asking of the opinion of the Collector is to be done. Our attention was drawn to the observations of Rankin C. J. in Be Cooke and Kelly (1) but those observations are obiter as the High Court held that the reference under section 57 of the Stamp Act was incompetent. The doctrine of functus officio was applied in several cases: Collector, Ahmednagar vs , Rambhau Tukaram Nirhali (2). In that case a certificate of sale had been signed but the certificate was not duly stamped which was pointed out when it was sent to the Sub Registrar for registration. The Sub Registrar informed the Judge about it and the Judge got back the certificate from the purchaser and thinking that he had power to impound the document and to impose a penalty asked for the opinion of the high Court and it was held that after he had signed it he was functus officio and could not act any further and could not impound it. The same principle was laid down in (1) Cal. 1171. (2) A.I.R. 1930 Bom. 105 Paiku vs Gaya (1) and in Chunduri Panakala Rao vs Penugonda Kumaraswami (2) and in our opinion as soon as the Collector determined the duty he became functus officio and he, could not impound the instrument under a. 33 and consequential proceedings could not ') therefore, be taken. The appeal is therefore dismissed with costs. Appeal dismissed.

The respondent executed an instrument and presented it to the Collector for his opinion under section 31 Stamp Act as to the duty chargeable. The Collector,, after a reference to the Board of Revenue, determined the duty payable. He then impounded the instrument and ordered that the ditty be deposited within 98 fifteen days. Later, a notice was served upon the respondent to deposit the amount of stamp duty and penalty within one month and threatening that in default proceedings would be taken to recover them as arrears of land revenue. The respondent challenged the legality of the impounding of the instrument and demand of stamp duty and penalty. Held, that after determination of the stamp duty the Collector became functus officio and could not impound the instrument or demand duty and penalty. Under section 31 the Col lector has merely to determine the proper amount of duty. If the person executing the instrument wants to effectuate the instrument or to use it for purposes of evidence he has to make up the duty and under section 32 the Collector makes the necessary endorsement. Section 33 empowers every person in charge of a public office before whom an instrument chargeable with duty is produced or comes in the performance of his functions to impound the instrument if it is not duly stamped. When an instrument is presented to the Collector under section 31 for determination of duty it cannot be said that it "is produced or comes in the performance of his functions" as contemplated by section 33. These words refer firstly to production before judicial or other officers performing judicial functions as evidence of any fact to be proved, and secondly refer to other officers who have to perform any function in regard to those instruments when they come before them, e.g., registration. In Re Cooke and Kelly, Cal. 1171, held obiter. Collector, Ahmednagar vs Rambhau Tukaram Nirhali, A.I.R. , Paiku vs Gaya, I.L.R. and Chunduri Panakala Rao vs Penugonda Kumaraswami, A.1,R. , referred to.

In 1948 the Central Government referred a number of cases in which the petitioner was concerned, to the Income tax Inves tigation Commission set up under the relevant provisions of the Taxation on Income (Investigation Commission) Act, 1947. After the Commission had submitted the report under section 8 A(1) of the Act, in which the total tax payable on the undisclosed income upto March 31, 1947, was estimated, the petitioner applied for a settlement of his case by offering to pay the amount of tax in instalments and by agreeing to pay the whole amount immediately in case of default in payment of any of the instalments in time. The Central Government accepted the terms suggested by the petitioner and passed an order on November, 21, 1949, under section 8 A(2) of the Act directing the service of a demand notice on the petitioner and recovery of the tax in accordance with the terms and conditions of the settlement. On December 2, 1949, a notice of demand was issued to the petitioner who, in pursuance thereof, made certain payments. But as the petitioner was unable to make full payment within the stipulated periods, the whole amount outstanding became immediately payable and certain properties belonging to him and his family were attached by the Collector of the district Concerned for the recovery of the amount. On June 8, 1959, the petitioner filed a writ petition tinder article 32 of the Constitution of India challenging the legality of the demand notice dated December 2, 1049, and the subsequent proceedings taken in pursuance of that notice on the ground that after the coming into force of the Constitution of India on January 26, 1950, they were violative of the fundamental right of equal protection of the laws guaranteed under article 14, inasmuch as what he had agreed to pay the Government as a result of the settlement was really a debt, and he had been dealt with differently from other debtors who owed money to the State under a contractual liability. Held, (1) that the proceedings against the petitioner cul minating in the service of the notice of demand against him were all completed before the coming into force of the Constitution and the petitioner cannot challenge those proceedings under 967 article 14 of the Constitution, because it is well settled that the Constitution is prospective and not retrospective; (2) that the true scope and effect of sub section (2) of section 8 A is to enforce the terms of any settlement arrived at in pursuance of sub section (1), which was really income tax which had escaped assessment; (3) that the petitioner belonged not to the larger class of debtors of Government but to a special class which had evaded payment of income tax for which the procedure laid down in section 8 A(2) was one and the same, and that the classification being reasonable having a just relation to the object of the provision, the recovery procedure cannot be challenged as discriminatory under article 14. Suraj Mail Mohta and Co. vs A. V. Visvanatha Sastri and Another, [1955] 1 S.C.R.448, M. CT. Muthiah & two Others vs The Commissioner of Income tax, Madras & Another, ; and Basheshar Nath vs The Commissioner of Income tax, Delhi & Rajasthan and Another, [1959] Supp. 1 S.C.R. 528, distinguished.

The respondent, as plaintiff, filed a suit against the appellant, as defendant, in the Original side of the Bombay High Court for the enforcement of its claim for a large amount of over Rs. 40 lakhs. The appellant not only contested the claim but also made a counter claim. The appellant made a request that in the event of a decree being passed against them, they may be allowed to pay the decretal amount in instalments. A single Judge dismissed the counter claim and passed a decree in favour of respondent and allowed the decretal amount to be paid in instalments. Delivery of Judgment which commenced on 12th December 1980 was concluded on 16th December 1980, upon which the advocates for the appellant addressed a letter to the Prothonotary and Senior Master, High Court, requesting that the accompanying memorandum of appeal be taken on file. This appeal which was numbered 36 of 1981 26 was filed on 20th January, 1981. The appeal was directed against the order in respect of instalments. On 21st January 1981, when the matter was called for admission before a Division Bench the appellant asked for leave to withdraw the appeal and the appeal was allowed to be withdrawn. A week after the withdrawal of appeal No. 36 the appellant filed an appeal against the judgment taking grounds relating to the merits of the case and also the direction as to instalments. This appeal was numbered 44 of 1981. After this appeal was heard on merits for a few days, the respondent raised a preliminary objection that because the appellant had earlier filed appeal No. 36 against the provision regarding instalments and which had been withdrawn, the present appeal No. 44 was not maintainable. The Division Bench upheld the preliminary objection and dismissed appeal No. 44 on the ground that the appellant had by filing appeal No. 36 against the provision relating to instalments abandoned its right to challenge the decree on merits. The appellant contended in this Court that the filing of earlier appeal No. 36 or the withdrawal thereof does not affect the right of appellant to prefer appeal No. 44 against the decree on merits. Appeal No. 36 was filed against the order of the High Court passed under Order 20, r. 11 of the Code of Civil Procedure in regard to instalments only and not against the decree. Appeal No. 36 had been filed soon after the judgment had been pronounced and long before the decree incorporating the order regarding instalments had been drawn up. Appeal No. 36 must be considered to be an appeal against the order and not against the decree. The right to prefer an appeal is a creature of statute. The order regarding instalments is not appealable under C.P.C. and such an order cannot also be considered to be a 'Judgment ' within the meaning of clause 15 of the Letters Patent. Appeal No. 36 which was against the order regarding instalments was incompetent and was therefore no appeal in the eye of law and for all legal purposes was non est. Even if appeal No. 36 has to be considered an appeal against the decree in view of amended provision of Order 20, r. 11 of C.P.C., the said appeal still must be held to be incompetent and no appeal in the eye of law as the appeal was filed without a certified copy of the decree and was even withdrawn before a certified copy of the decree could be filed. Appeal No. 44 filed against the decree in terms of the provisions contained in the Original Side Rules of Bombay High Court becomes a proper and competent appeal as the earlier appeal No. 36 was not a valid appeal in the eye of law. The provisions of Order 2, r. 2 and Order 23, r. 1 of C.P.C. do not in any way affect the maintainability and the merits of appeal No. 44 as the cause of action and the subject matter of appeal No. 44 are entirely different from the cause of action and the subject matter of appeal No. 36. The appellant did not waive his statutory right to file the appeal. The appellant by his conduct has also not disentitled himself to file Appeal No. 44. Appeal No. 36 was filed on the advice of lawyer under mistaken belief; mistaken advice of a lawyer cannot be the foundation of a plea of estoppel. No prejudice has been caused to the respondent by filing and withdrawal of appeal No. 36 by the appellant. The respondent contended that in view of the amended provisions of Order 20, r. 11, the order regarding instalments which is required to be incorporated in the decree necessarily forms a part of the decree. In view of the 27 provisions contained in Order 2, r. 2 and Order 23, r. 1 of C.P.C. it was open to the appellant to prefer an appeal against the decree or to appeal against any part thereof. The appellant preferred to file appeal No. 36 only against the part of the decree relating to instalments and not against the decree as a whole. The filing of appeal restricted to the directions as to the instalments bars a subsequent appeal against the decree on merits. The appellant having obtained a benefit or advantage under the decree to the prejudice of respondent cannot now question the correctness of the decree passed. Allowing the appeal, ^ HELD: The provisions of Order 20, r. 11, Order 41, r. 1 Order 5, r. 2 and Order 23, r. 1 of the Code of Civil Procedure do not deprive the appellant of his right to file appeal No. 44. [54 D] The right to prefer an appeal is a right created by statute. A right of appeal may be lost to a party in appropriate cases by the provisions of law and also by the conduct of the party. The law of limitation may deprive the party of the right he may enjoy to prefer an appeal. Also in appropriate cases a party may be held to have become disentitled from enforcing the right to appeal which he may otherwise have. [46 A C] In the instant case the defendant appellant did have a right of appeal against the decree by virtue of the provisions of section 96 read with Order 41 of Civil Procedure. The appeal has been filed within the period of limitation, The law of limitation, therefore, does not defeat the right of the appellant to file an appeal. [46 C D] Order 20, r. 11 makes provisions for postponement of payment of money decree and of its payment in instalments and lays down the procedure for directing payment of a money decree in instalments. The amendment introduced in 1976 to Order 20, r. 11 requires that any provision directing the payment of the amount decreed shall be postponed or shall be made by instalments may be incorporated in the decree. The direction regarding payment of the decretal amount is an independent order which is required to be incorporated in the decree and it can only be incorporated in the decree when the decree is drawn up. It retains the character of an order till it is so incorporated in the decree. The rules of the Original Side of the Bombay High Court make necessary provisions as to the drawing up of a decree. In view of procedure laid down in the rules for the drawing up of a decree, there is bound to be a time lag between the judgment and the drawing up of a decree, in which the order regarding instalment is to be incorporated. Appeal against any provision granting instalments or refusing to grant instalments will not be competent if the direction granting or refusing to grant instalments is considered to be an order. Such an order is not appealable under the Code. Such an order will also not be a 'judgment ' within the meaning of clause 15 of the Letters Patent and will not be appealable as such if however, the direction with regard to instalments is considered to be a part of the decree, an appeal will undoubtedly lie as an appeal from a decree. [47 D E, 41 G H, 41 C D, 47 F H] 28 The provisions of Order 20, r. 11 do not deprive the appellant in the instant case of his right to prefer an appeal against the decree. The earlier appeal No. 36 of 1981 had been filed long before the decree in which the order regarding instalments under Order 20, r.11 of the Code was to be incorporated had been drawn up. As at the time of filing the earlier appeal No. 36 the order regarding instalments had not been incorporated in the decree, the order retained its character of an order. The earlier appeal No. 36 at the time when it was filed, should therefore be regarded as an appeal against an order. The precipe filed for the drawing up of the order, the letter to the Prothonotary and Senior Master of the High Court by the Advocates for the appellant, the memorandum of appeal filed and the amount of stamp furnished on the memorandum are facts which go to indicate that the earlier appeal had been filed against the order regarding instalments treating the same to be an order. The appeal No. 36 must therefore be held to be incompetent. If the earlier appeal No. 36 were to be considered to be an appeal against the decree, the appeal would still be incompetent, because the appellant had furnished the amount of stamp necessary for preferring an appeal against the order and the requisite stamp in respect of an appeal against a decree had not been affixed. [46 E, 48 D E, 48 H, 49 A B, 48 B, 43 D C] Under Order. 41, r.1, every appeal has to be preferred in the from of a memorandum signed by the appellant or his pleader and presented to the court or to such officer as it appoints in that behalf, and has to be accompanied by a copy of the decree appealed from, and of the judgment on which it is founded. Rule 1 empowers the appellate court to dispense with the filing of the judgment but there is no jurisdiction in the appellate court to dispense with the filing of the decree. The requirement that the decree should be filed alongwith the memorandum of appeal is mandatory and in the absence of the decree the filing of the appeal would be incomplete, defective and incompetent. So long as the certified copy of the decree is not filed there is no valid appeal in the eye of law. Though by virtue of the provisions of the Original Side Rules of the Bombay High Court the earlier appeal could be permitted to be filed without a certified copy of the decree or order, the appeal would not be valid and competent unless the further requirement of filing the certified copy had been complied with. [49 G H, 50 A, 53 C, F] In the instant case, at the time when the earlier appeal No. 36 had been withdrawn, the certified copy of the decree had not been filed. The said appeal without the certified copy of the decree remained an incompetent appeal. The withdrawal of an incompetent appeal which would indeed be no appeal in the eye of law cannot in any way prejudice the right of any appellant to file a proper appeal, if the right of appeal is not otherwise lost by lapse of time or for any other valid reason. [52 F G] Order 2, r.2, contemplates that at the time of the institution of the suit, the whole of the claim which the plaintiff is entitled to make in respect of the cause of action, has to be made and also deals with the consequences of non compliance with the requirements of the said rule. It is doubtful whether the principles underlying this rule can be said to be applicable to an appeal. This rule is applicable only to suits and cannot in terms apply to appeals. Even if 29 an appeal be considered to be a continuation of a suit for certain purposes, the provision of this rule cannot in terms be made applicable to an appeal in view of the scheme of the said rule and the language used therein. [53 F G, 53 E F] In the instant case the provisions of Order 2, r.2 of the Code do not stand in the way of the appellant in the matter of filing the subsequent appeal No. 44. Even if the principles underlying Order 2, r.2 are considered as applicable to an appeal the maintainability of the appeal No. 44 cannot be held to be affected in any way as the cause of action in respect of the present appeal is entirely different from the cause of action on which the earlier appeal was filed. [23 A B, G] Order 23, r.1 of the Code does not also stand in the way of the maintainability of the instant appeal No. 44. Apart from the incompetency of the earlier appeal No. 36, the subject matter of the said appeal was entirely different from the subject matter of the present appeal. [53 H, A B] The provisions of the Code of Civil Procedure contained in Order 20, r.11, Order 2. r. 2 and Order 23,r. 1 do not in terms deal with any question in relation to the right of appeal or the extinguishment thereof. These provisions do not by themselves confer any right of appeal on a party or deprive any party of the right of appeal which a party may enjoy. These are not the statutory provisions which either confer a right of appeal on a party or deprive a party of any such right. [54 B C] A mere prayer for postponement of payment of decretal amount or for payment thereof in instalments on the basis of the provisions contained in Order 20, r.11 (1) of the Code at a time when the decision in the suit is yet to be announced can never be considered to amount to such conduct of the party as to deprive him his right to prefer an appeal against any decree, if ultimately passed, and to disentitle him from filing an appeal against the decree. [55 G H] In the matters of litigation the litigant who is not expected to be familiar with the formalities of law and rules of procedure is generally guided by the advice of his lawyers. The statement of the lawyers recorded by the Division Bench in its judgment clearly goes to indicate that the lawyer had advised filing of the earlier appeal under mistaken belief. The act done by the defendant appellant on the mistaken advice of a lawyer cannot furnish a proper ground for depriving the defendant appellant of his valuable statutory right of preferring an appeal against the decree. The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant appellant as to disentitle him to maintain the present appeal. [56 C, D; F, G] The present appeal No. 44 had been filed long before the decree had been drawn up, and, there can be no question of execution of any decree at the time when that appeal was filed. The question of the defendant appellant having obtained an advantage under the decree does not therefore really arise. [59 A B] 30

The appellant was assessed to agricultural income tax by the Assistant Collector, Banaras, U.P. Act 3 of 1949, under which assessment was made, mentioned only the 'Collector ' a.,, competent to make assessment. The assessment made by the Assistant Collector was therefore set aside by the Collector. Subsequently the law was amended by U.P. Act 14 of 1956 to provide that the word 'Collector ' would include 'Assistant Collector ' and that the Collector could review his earlier orders quashing assessments on the ground of want of jurisdiction, if application for review were made to him by any of the parties within 90 days of the coming into force of the amendment. Such application having been filed in the appellant 's case, the Collector set aside his earlier orders quashing the assessment, and the Assistant Collector made a fresh assessment. The fresh assessment was challenged by the appellant by writ petition in the High Court and having failed there, The appellant came to the Supreme Court by special leave. It was contended on behalf of the appellant that the assessment made by virtue of the provisions of the amending Act was barred by limitation because the retrospective operation of the provisions relating to jurisdiction would not extend the time for making the assessment. HELD : The Collector 's order on the review application had the effect of restoring the earlier proceedings. No question of limitation could possibly arise, for those proceedings were initiated in time and must be deemed to have been pending throughout, and the fresh assessment was made in those very proceedings. [339 A B]. section C. Prashar vs Vasantsen, ; and Commissioner of Income tax, Bihar vs Lakhmir Singh, A.I.R. , held inapplicable.

The appellant was a displaced person from West Pakistan. In 1949 he was allotted 42 standard acres and 11 units of land which were later consolidated. In 1958 claiming to be a small holder he made an application under section 14 A(1) of the Punjab Security of Land Tenures Act 1953 before the Assistant Collector for the ejectment of respondent No. 4 who was a tenant of the land. The Assistant Collector rejected application on the ground that because of improvements the income from the lands had risen considerably and consequently the land had become equivalent to more than 50 standard acres, and therefore the applica tion was untenable under section 14 A. In appeal the Collector held that since the appellant was allotted only 42 standard acres and 11 units he was entitled to be treated as a small land holder. The Collector 's order was upheld by the Commissioner and by the Financial Commissioner. The tenant thereupon filed a writ petition before the High Court. According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment. Farther according to the High Court what is 'permissible area ' available to a landlord under the Act had also to be determined as obtaining on the date of the application for eviction made by the landlord. On this view the High Court allowed the tenant 's writ petition. In appeal by special leave to this Court, HELD: Under the provisions of the Act the entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area must then be ascertained. If he is then found to be 'a small landowner, he continues to be so for the purpose of the Act, until he acquires more land and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner. The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined. If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings. section 19 F(b) which was introduced into the Act during the pendency of the appeal clarified the position to the same effect. [514 B D; 515 F] The appellant did not acquire any land after the commencement of the Act. His status as a small landowner was not altered by reason of subsequent improvements or re allotments of land on compulsory consolidation of holdings. On the date of the application, he therefore continued to be a small landowner. The High Court was in error in holding that the status of the appellant should be determined by evaluating his 5 12 land in terms of standard acres on the dates of the application for eviction. [515 H; 516 A B] Per Mudholkar J : Provisions relating to the valuation of lands under the Act are to be found in section 19 F(a) and 19F(b). The former did not apply to the present case as it applies only to the ascertainment of ,surplus area ' held by a landowner at the commencement of the Act; the appellant held only 'permissible area ' and no 'surplus are at all. Under section 19 F(b) fresh evaluation of land can take place "at any time" but the power under that section is exercisable only in the context of special circumstances, that is to say, where the landlord owns land after the commencement of the Act by inheritance, bequest or gift. These special circumstances did not exist in the present case. [519 H; 520 H; 521 B, D] When the provisions of section 19F are thus not attracted, the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area. [521 F] Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land. The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and recalculating the standard acreage. [521 G H] It would follow that the High Court was in error and its order must be set aside.

% In this appeal, the appellant questioned the constitutional validity of sub section (4) of section 6 of the U.P. ( 'The Act ') and also the validity of the order passed by the Govt. remitting the award passed by the Labour Court for reconsideration by it. The appellant was an employee of respondent No. 5. M/s. Electric (India) Ltd., Meerut. The services of the appellant were terminated by the Management of the said respondent. The termination of services led to an industrial dispute. The State Government of Uttar Pradesh under section 4 K of the Act referred the said dispute for adjudication of the Labour Court, Meerut. The Labour Court passed an award and forwarded it to the State Government. Instead of publishing the award in the Official Gazette, as required by sub Section (3) of section 6 of the Act, the State Government passed an order under section 6(4) of the Act, remitting the award for reconsideration. The appellant submitted before the Labour Court that he did not want any re consideration of the award. On 7.2.1985, the Management filed an application saying that the case might be fixed for hearing after two months. The appellant opposed the application. The case was adjourned to 11.3.85 and on 11.3.85 to 26.3.85 at the further request of the management. In the meanwhile, the management moved the State Government to transfer the case from the Labour Court, Meerut, to another Labour Court or the Industrial Tribunal. The State Government passed an order transferring the case to the Industrial Tribunal Meerut. Aggrieved by the order, remitting the award to the Labour Court and the subsequent order, transferring the case to the Industrial Tribunal, the appellant filed a writ petition in the High Court, challenging the above said two orders. The High Court dismissed the writ petition in respect of the order made under section 6(4) of the Act, but set aside the order of transfer. Aggrieved by the judgment of the High Court, upholding the 470 order passed under section 6(4) of the Act, the appellant filed this appeal in this Court for relief by special leave. Allowing the appeal, the Court, ^ HELD: By leave of the Court, the appellant raised an additional ground before the Court, questioning the constitutional validity of sub section (4) of section 6 of the Act itself, and the Court first took up for consideration the question relating to the constitutional validity of sub section (4) of section 6 of the Act. [476B C] The questions raised before the Labour Court were very simple ones. They had no effect on the national economy. They did not in any way interfere with the principles of social justice. No grave consequences would have ensued if the award had been published in the Official Gazette and the parties, allowed to question its validity before the High Court under Article 226 of the Constitution of India or before the Supreme Court under Article 136 of the Constitution. The parties had not been given notice by the State Government to show cause why the award should not be remitted to the Labour Court for a fresh consideration. The order of the State Government also did not state why and on what points the State Government was not satisfied with the award and the questions on which the Labour Court was required to reconsider its award. [479G H; 480A B] When once a decision is given by a quasi judicial authority, it would not be safe to confer on any executive authority the power of review or remission in respect of the said decision without imposing any limitation on the exercise of such power, Even when a Court is conferred the power of review, such power can be exercised ordinarily under the well known limitations as are found in Order 17 of the Code of Civil Procedure. Similarly, under section 16 of the , the power to remit an award to the Arbitrator can be exercised by a Civil Court only under the circumstances specified in that connection. Sub section (4) of section 6 of the act imposes no such limitations. [482C D] The argument of the State Government that it was open to the State Government to seek necessary guidance from the object and contents of the Act, and that the State Government could remit the award to the Labour Court only for a reason which was germane to the statute in question, was not of any assistance to the State Government in this case because even though the reason for remitting the award may be a 471 reason connected with industry or labour, it can still be used arbitrarily to favour one party or the other. The ground for remitting the award should be one corresponding to a ground mentioned in section 16 of the ; otherwise the power is capable of serious mischief. The facts in this case themselves serve as a good illustration of the above proposition. There were only two main issues for consideration before the Labour Court: (1) whether the appellant was a workman, and (2) whether his services had been validly terminated. The Labour Court had recorded its findings on both the issues in favour of the appellant. From the prayers made before the Labour Court after the case had been remitted to it, it is seen that the Management wanted to adduce additional evidence before the Labour Court in support of its case. It was not the case of the Management that the Labour Court had unreasonably refused permission to the Management to adduce all its evidence before the award was passed. It was not even a case where industrial peace was likely to be disturbed if the award had been implemented as it was. The award would not have also affected prejudicially either national economy or social justice. In the above circumstances, it would not certainly be proper for the State Government to make an order remitting the award. The State Government in this case could do so because it had been entrusted with such unguided power under section 6(4) of the Act. [482E H; 483A C] It was urged by counsel for the State Government that sub section 4 of section 6 of the Act needed not to be struck down but the Court might direct that the State Government should give a hearing to the parties before an order was passed under section 6(4), remitting the award, and also require the State Government to give reasons in support of its order. The Court did not think that this was an appropriate case where the impugned provision could be upheld by reading into it the requirement of issuing notice to the parties and the requirement of giving reasons for its orders. The provisions could not be upheld in the absence of necessary statutory guidelines for the exercise of the power conferred by it, having regard to the fact that the proceeding before the Labour Court or the Industrial Tribunal is in the nature of quasijudicial proceeding where parties have adequate opportunity to state their respective cases, to lead evidence and make all their submissions. It is significant that the corresponding Act which is in force in the other parts of India, i.e., the Industrial Dispute Act, 1947 (Central) Act XIV of 1947) does not contain any provision corresponding to section 6(4) of the Act, and the absence of such a provision in the Central Act has not led to any serious inconvenience to the general public. [483D F] 472 The Management could not derive much assistance from the decision of this Court in the Sirsilk Ltd. & Ors vs Government of Andhra Pradesh & Anr.[1964] 2 SCR 448 as in this case there was no settlement arrived at between the appellant and the Management, which made the publication of the award unnecessary. [484H; 485F] There was one other good reason for taking the view that without any guidelines it will not be appropriate to confer power on the State Government to nullify virtually the effect of an award by exercising its power under section 6(4) of the Act. applies not merely to disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by the State Government and their workmen. In the cases where the Government is the owner of the industry, it would be inappropriate to confer uncontrolled and unguided power on the State Government itself to remit the award passed on the industrial disputes arising in such industries for there is every chance of the power being exercised arbitrarily in such cases. The danger of entrusting unguided and uncontrolled power to remit an award for reconsideration of the Labour Court or Industrial Tribunal can very well be perceived, particularly where the award has gone against the State Government in a dispute arising out of an industry owned by it. The sub section (4) of section 6 of the Act, which is so widely worded is, therefore, likely to result in grave injustice to a party in whose favour an award is made as the said provisions can be used to reopen the whole case. The Court did not agree with the view expressed by the High Court of Allahabad in V.E. Thamas & Ors. vs State of Uttar Pradesh & Ors. , , in which the validity of sub section (4) of section 6 of the Act had been upheld. [485F H; 486G H; 487C D] Taking into consideration all the aspects of the case, including the object with which the Act was enacted, the Court felt that sub section (4) of section 6 of the Act was violative of Article 14 of the Constitution of India as it conferred unguided and uncontrolled powers on the State Government. The Court declared sub section (4) of section 6 of the Act as unconstitutional and struck it down. It followed that the order passed by the State Government, remitting the case for reconsideration by the Labour Court was also liable to be set aside. The State Government was directed to publish the award under section 6(3) of the Act. On publication of the award, it was open to any of the parties aggrieved by the award to resort to such remedies as might be available to it in law. [487H; 488A C] 473 Messrs. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others; , ; State of Bihar vs D.N. Ganguly & Ors., ; ; Sirsilk Ltd. 448; P. Sambamurthy & Ors. vs State of Andhra Pradesh & Anr. , ; and Star Paper Mills Mazdoor Sangh & Ors. vs Star Paper Mills Ltd., Saharanpur & Ors., , referred to. V.E. Thamas & Ors. vs State of Uttar Pradesh and Ors., , disapproved.

Appellant Natha Singh was recorded as a land owner in revenue records. Under the Punjab Security of Land Tenures Act, 1953, the Collector, Ferozepore, declared an area of 63 standard acres and 4 units, as surplus land in his hands. The sons of Natha Singh appealed to the Commissioner, Jullundur division, who remanded the case for fresh determination of "surplus area". On a re examination of facts, the Collector, Ferozepure, overruled the pleas of the appellants. Their appeal to the Commissioner, Jullundur division, and a further revision petition to the Financial Commissioner, Taxation, Punjab, were also dismissed. All these orders were challenged before the High Court under article 226. The High Court dismissed the matter in limine, but granted a certificate under article 133(1)(a). The appellants contended before this Court that in the facts and circumstances of the case, the High Court could not dismiss the writ petition in limine, as the revenue authorities had wrongly computed the 'surplus area '. They further contended that appellants No. 2 and 3 were not afforded proper and adequate opportunity by the Collector to prove their claims. The appellants also applied for permission to adduce additional documentary evidence. Dismissing the appeal, the Court, ^ HELD: (1) In dealing with a petition under article 226 of the Constitution, the High Court cannot exercise the jurisdiction of an appellate court, and cannot re examine or disturb the findings of fact arrived at by an inferior Court or a tribunal in the absence of an error of law. [622E F] (2) In the instant case, the orders passed by the revenue authorities did not suffer from any error of law so as to warrant interference in writ proceedings and the High Court was justified in dismissing in limine the writ petition preferred by the appellants. [623F] (3) The application of the appellants for additional evidence cannot be allowed in view of the well established principles of law that the discretion given to the appellate court to receive and admit additional evidence is not an arbitrary one but is a judicial one circumscribed by the limitations specified in order 41 rule 27 of the Code of Civil Procedure. The true test to be applied in dealing with applications for additional evidence is whether the appellate court is able to pronounce judgment on the materials before it, without taking into consideration the additional evidence sought to be adduced. [623G H, 624A] Arjun Singh alias Puran vs Kartar Singh & Ors. ; referred to.

A dispute between the respondent company and the Government of Bihar over the bills for the amount payable to tile company in respect of the construction works carried out by it for the Government was referred to arbitration. The agreement to refer to arbitration was executed on behalf of the Governor by L, an executive engineer, who had been specifically authorised to do so by a Secretary to the Government. The arbitrator made his award and sent copies thereof to the parties. The respondent applied to the Court under the provisions of the , for a decree in terms of the award. The State filed objections thereto and the matter was registered as a suit. While the suit was pending the arbitrator sent to the court a copy of the award duly signed by him for being filed as provided in the Act, and on the receipt thereof the respondent bad it validated on payment of the requisite stamp duty under section 35 of the Indian Stamp Act, 1899. The appellant, the State of Bihar, contended that no decree could be passed on the basis of the award on the grounds (1) that the agreement for reference to arbitration did not comply with the requirements of section 175(3) of the Government of India Act, 1935, inasmuch as it was not signed by the person authorised to do so under the notification issued by the Government of Bihar on April 1, 1937, in exercise of the powers conferred by section 175(3), and (2) that the instrument before the court was a certified copy and that under section 35 of the Indian Stamp Act, 1899, a copy Could not be validated or acted upon. Held, that section 175(3) of the Government of India Act, 1935, does not prescribe any particular mode in which authority must be conferred and that where authorisation is conferred ad hoc on any person, the requirements of the section must be held to be satisfied. 828 Held, further, that the award sent by the arbitrator to the court was the original and not a copy of the award and by applying the provisions of section 35 of the Indian Stamp Act, 1899, it was effectively validated. The Rajah of Bobbili vs Inuganti China Sitaramasami Garu (1899) L.R. 26 I.A. 262, referred to.

Appeal No. 31 of 1957. Appeal from the judgment and order date September 27, 1955, of the Jammu and Kashmir High Court in Misc. Application No. 23 of 1955. Jaswant Singh, Advocate General for the State of Jammu and Kashmir and R. H. Dhebar, for the appellant. section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for respondent. February 23. The Judgment of the Court was delivered by SARKAR, J. The respondent is a Civil Engineer who held various positions under the appellant, the Government of the State of Jammu and Kashmir. On September 8, 1954, while the respondent was holding the post of Development Commissioner, he was placed under suspension by an order made by the appellant on that date. Later, the appellant passed another order on February 12, 1955, demoting the petitioner to the post of a Divisional Engineer. On May 12, 1955, the respondent moved the High Court of Jammu and Kashmir under article 32(2A) of the Constitution of India as applied to the State of Jammu and Kashmir, for a writ directing the appellant not to give effect to the order dated February 12, 1955, and to recognise him as the Chief Engineer, the substantive post held by him when he was suspended, with effect from the date of suspension and with all the emoluments of that office. The High Court issued the writ as prayed. The State appeals from the judgment of the High Court, 971 In the view that, we think, must be taken of this case, it is unnecessary to go into the facts a great deal. At one stage of his career under the appellant, the respondent held a job of some responsibility in what was called the Sindh Valley Hydro Electric Scheme. This Scheme was for generating electric power by dams erected in the Sindyh water course and for using the water for irrigation purposes. The work on this Scheme seems to have commenced some time ago. The respondent was connected with the Scheme from 1949 till he was transferred from the work in 1953. It appears that the appellant was dissatisfied with the Progress of the work and the manner in which it had been carried out and decided to establish a Commission of Inquiry (a) to investigate into the reasons for (i) progressive rise in the estimates, (ii) the defective planning and the delay in the execution of the work and (iii) the other irregularities and (b) to fix responsibility upon the persons concerned and make appropriate recommendations. Pending the investigation various officers associated with the planning and execution of the Scheme including the respondent, were placed under suspension on September 8, 1954. Thereafter on October 20, 1954, a commission was set up by the appellant consisting of various persons. The Commission made certain enquiries and eventually submitted its report to the appellant. The appellant then made the order demoting the respondent purporting to act on the basis of the report. It is not necessary to set out the facts any more. The respondent, in his application for the writ, questioned the validity of the orders suspending and demoting him on these grounds. He alleged that the Commission did not conduct the enquiry according to the rules of natural justice. He said that he was not even informed of the charges against him nor given a proper hearing and that if he had been given proper opportunity, he would have proved that he had not been at fault at all. He also said that the appointment of the Commission could only have been made under section 2 of the Public Servants (Inquiries) Act, 1977 124 972 (Kashmir era), and must, therefore, be deemed to have been so made. He complained that the provisions of this Act were not observed by the Commission in making the enquiry. Lastly, he said that the respondent could be reduced in rank only in accordance with the procedure laid down in the Kashmir Civil Service Rules passed by the State Council Order No. 81 C of 1939 and this procedure had not been followed. In the High Court, the question as to whether these Rules had the status of law seems to have been debated at great length. The High Court took the view (that they had. We will proceed on the basis that the High Court was right and the allegations made by the respondent in his petition had been substantiated. Now, the High Court was moved to exercise its powers under article 32 (2A) of the Constitution. The order made by it cannot be upheld if it was not justified by that provision. This is not in dispute. That provision is in these terms: article 32(2A). " Without prejudice to the powers conferred by clauses (1) and (2), the High Court shall have power throughout the territories in relation to which it exercises jurisdiction to issue to any person or authority, including in appropriate cases any Government within those territories, directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by this Part. " The High Court can then exercise its powers under article 32 (2A) only " for the enforcement of any of the rights conferred by this Part ". The Part referred to is Part III and the rights conferred by it are the fundamental rights. Therefore, the High Court can act under cl. (2A) of article 32 only to enforce a fundamental right. The only fundamental right, however, on the violation of which learned counsel for the respondent could rely in support of the order of the High Court was that conferred by article 14, namely, the right to the equal protection of the laws. He said that the 973 respondent was entitled to have the procedure prescribed by the Kashmir Civil Service Rules followed before the order demoting him could be made and as that procedure was not followed, his client had been denied the equal protection of the laws. It seems to us that even if the Rules are a law and the respondent has not been given the benefit of them, all that can be said to have happened is that the appellant has acted in breach of the law; But that does not amount to a violation of the right to the equal protection of the laws. Otherwise, every breach of law by a Government would amount to a denial of the equal protection of the laws. We are not aware of any authority in support of that proposition and none has been cited to us. Nor are we able to find any support for it in principle. It is not the respondent 's case that other servants of the appellant had been given the benefit of those Rules and such benefit has been designedly denied only to him. It seems to us that the appeal must be allowed on the simple ground that the respondent 's petition does not show a violation of any fundamental right. The High Court had no power to act under article 32 (2A) at all. We think it right to point out that articles 226 and 311(2) of the Constitution of India had not been applied to the State of Jammu and Kashmir at any material time. No question of the respondent 's application being maintainable in view of these articles, therefore, arises. The appeal is accordingly allowed. There will be no order as to costs. Appeal allowed.

The Government of Jammu and Kashmir on the basis of the report of the commission of enquiry set up by it demoted the respondent who had been suspended earlier. The respondent moved the Jammu and Kashmir High Court under article 32(2A) of the Constitution of India as applied to the State of Jammu and Kashmir for a writ, inter alia, questioning the validity of the order suspending and demoting him, alleging violation of rules of natural justice by the commission of enquiry and breach of statutes and rules of service. Articles 226 and 311(2) of the Constitution of India bad not been applied to the State of Jammu 970 and Kashmir. The High Court acting under article 32(2A) set aside the orders suspending and demoting the respondent. Held, that the High Court had no powers to act under article 32(2A) of the Constitution of India as the writ petition did not disclose a violation of any fundamental right. Held, further, that the breach of a law by the ' Government, if any, did not amount to a denial of the equal protection of the laws, as it had not ever been alleged by the respondent that the benefit of that law had been designedly denied only to him.

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

At the sale held by the Official Liquidator under the orders of the Bombay High Court, the appellant a public limited company, purchased the "Hirji Textile Mills" minus its goodwill and its workmen who were discharged earlier. The appellant invested some fresh capital in the business, renovated the machinery and employed workmen on fresh contracts which included 70% of the workmen formerly working in that factory and commenced to produce certain never types of things at the factory w.e.f. November 12, 1955, after obtaining a new licence to run it. When by the end of February, 1956 the Regional Provident Fund Commissioner made certain enquiries about the working of the factory in order to enforce the provisions Provident Fund Act against the appellant, the appellant wrote to him stating that The factory was an infant factory having been established on November 12,1955 and the period of three years had not elapsed from that date within the meaning of Section 16(1) (b) of the Act. When the Regional Provident Fund Commissioner was not convinced about its explanation, the appellant first filed a writ petition under Article 226 of the Constitution before High Court of Bombay in Miscellaneous Application No. 76 of 1957 challenging the applicability of the Act to the factory and after withdrawing it, filed Short Cause Suit No. 2088 of 1958 before the City Civil Court at Bombay for a declaration that the Act and the scheme framed thereunder could not be enforced against the factory until the expiry of three years from November 12, 1955 and that the appellant was not liable to make any contributions under the Act. The trial Court dismissed the suit holding, that in view of the several facts established in the case it could not be presumed that a new factory was established by the 517 appellant on November 12, 1955, that the continuity of the old factory had A not been broken and as such the appellant was liable to make contributions under the Act. The judgment of the trial Court was affirmed by the Bombay High Court in Appeal No.406/64. Hence the appeal by special leave. Dismissing the appeal, the Court, ^ HELD: 1.1. Every statute should be construed so as to advance the object with which it is passed and as far as possible, avoiding any construction which would facilitate evasion of the Act. [521 C] 1.2. In consonance with the directions enshrined in Article 43 of the Constitution, Employees ' Provident Fund Scheme is intended to encourage the habit of thrift amongst the employees and to make available to them either at the time of their retirement or earlier, if necessary, substantial amounts for their use from out of the provident fund amount standing to their credit which is made up of the contributions made by the employers as well as the employees concerned. The Act being a beneficent statue and section 16 of the Act being a clause granting exemption to the employer from the liability to make contributions, section 16 should receive a strict construction [521A B, 522A] 2.1. The criterion for earning exemption under section 16(1)(b) of the Act is that a period of three years has not yet elapsed from the date of establishment of the factory in question. It has no reference to the date on which the employer who is liable to make contributions acquired title to the factory which once established may be interrupted on account of factory holidays, strikes, lock outs, temporary breakdown of machinery, periodic repairs to be effected to the machinery in the factory, non availability of raw materials, paucity of finance etc., and also on account of an order of court as in the present case. Interruptions in the running of factory which is governed by the Act brought about by any of these reasons without more cannot be construed as resulting in the factory ceasing to the factory governed by the Act and on its restarting it cannot be said that a new factory is or has been established. On the resumption of the manufacturing work in the factory it would continue to be governed by the Act which does not state that any kind of stoppage in the working of the factory would give rise to a fresh period of exemption. In other words the period of three years should be counted from the date on which the factory was first established and the fact that there had been a change in the owners p makes no difference to the counting of period. [522A D, 524D E] Lakshmi Rattan Engineering Work vs Regional Provident Fund Commissioner, Punjab & Ors. SC, reiterated. Chaganlal Textile Mills Pvt. Ltd. Y.P.A. Bhaskar Misc. Appln. No. 289 of 1956 disposed of on November 5, 1956: M/s. Bharat Board Mills Ltd. vs The Regional Provident Fund Commissioner & Ors. Vegetable Products Ltd. vs Regional Provident Fund Commissioner W. Bengal & Ors. ; Jamnadas Agarwala & Anr. vs The Regional Provident Fund Commissioner West Bengal & Ors. ; 518 Robindra Textile Mills vs Secretary Ministry of Labour Govt. of India New Delhi & Anr A.I.R. 1936 Punjab 55. Hindustan Electric Co. Ltd. vs Regional Provident Fund Commissioner Punjub & Anr. A I.R 1959 Punjab 27 Regional Provident Fund Commissioner Punjab & Anr. v Lakshmi Rattan Engineering Works Ltd M/s. R.L. Sahni & Co vs Union of India represented by the Regional Provident Commissioner Madras & Anr. A.l.R. ; Kunnath Textile vs Regional Provident Fund Commisioner ; The New Ahmedabad v Bansidar Mills Pvt Ltd. Ahmedabad vs Union of India & Ors. A I R. 1968 Gujarat 71; approved. Provident Fund Inspector Trivendrum vs Secretary N.S. section Co operative Society Changanacherry ; Vithaldas Jagnnathdas & Anr. vs The Regional Provident Fund Commissioner Madras & Anr. ; distinguished.

Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained. In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '. The Revenue Officer rejected the ease. Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate. Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order. In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer. The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate. A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms. Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '. In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950. Allowing the appeals, this Court, HELD: 1. Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950. In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to. [96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed. 2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman. Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable. [96A] 3. In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community. The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa. [96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers. [95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]

These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act. Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure. A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed. There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court. Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,. R. , approved. There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award. The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable. There can be no difference in law between an arbitaration by agreement of parties and one under a statute. A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator. If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it. An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on. National Telephone Company Limited vs Postmaster General, , explained.

% The question which arose for determination in this case was whether a Letters Patent Appeal would lie to a Division Bench of the High Court of Gujarat from an interlocutory order of a Single Judge of that High Court in the course of the trial of an election petition filed under the Representation of the People Act, 1951. The appellant and respondents Nos. 1 to 6 were candidates at an election held to fill a seat in the Legislative Assembly of the Gujarat State. The appellant was declared elected. Thereupon, the 1st respondent filed an election petition in the High Court, challenging the validity of the election of the appellant on a number of allegations, and in order to establish his case, he filed an application before the Single Judge who was trying the election petition, to direct the Returning Officer to produce all the records of the election, mentioned in the application, and prayed for permission to inspect the same. The appellant opposed the prayers made by the 1st respondent. The Single Judge declined to grant the application made by the Ist respondent. Against the order of the Single Judge, the Ist respondent preferred an appeal under clause 15 of the Letters Patent of the Gujarat High Court. The Division Bench of the High Court allowed the appeal to the extent indicated in its judgment, overruling the contention of the appellant that the appeal was not maintainable as there was no provision in the Act, permitting an appeal to the Division Bench of the High Court against an interlocutory order of a Single Judge hearing an election petition filed under the Act. Aggrieved by the decision of the Division Bench, the appellant moved this Court for relief by special leave. Allowing the appeal, setting aside the judgment of the Division 1044 Bench of the High Court and dismissing the Letters Patent Appeal while expressing no opinion on the merits of the case, the Court, ^ HELD: The only point urged in this appeal by the appellant was that the appeal filed under clause 15 of the Letters Patent of the High Court against the interlocutory order passed by the Single Judge was not maintainable and, therefore, the judgment of the Division Bench was liable to be set aside. [1048C D] Under the provisions of the Act as amended and the provisions of the Constitution of India, no Court exercising power under any ordinary law other than the Judge of a High Court who had been assigned the work of trying an election petition under sub section (2) of section 80 A of the Act and the Supreme Court which was empowered to hear an appeal against any order passed by the judge of the High Court under section 98 or section 99 of the Act, could decide any question arising out of an election petition. The power of the Supreme Court under the provisions of the Constitution was, however, unaffected by any of the provisions of the Act. It meant that when an election petition was pending in the High Court, only the judge who was asked to try the election petition could deal with the questions arising in it and no other judge or judges of the High Court could deal with them. When an order was passed under section 98 or section 99 of the Act by a judge of the High Court in an election petition, it was subject to the appellate jurisdiction of the Supreme Court under section 116 A of the Act, Article 136 of the Constitution being excluded in view of the express provisions of section 116 A of the Act, and being resorted to by any party aggrieved by any order passed by the judge trying an election petition not falling under section 98 or section 99 of the Act. It followed that the Division Bench of the High Court, which was entitled to hear an appeal against any order of a Single Judge under clause 15 of the Letters Patent of the High Court, which was an ordinary law, could not hear an appeal against any interlocutory order passed in the course of the trial of an election petition by the Judge trying the election petition, since the Division Bench was not specified in the Act as an appellate authority which could deal with questions arising out of an election petition filed under the Act. [1053G H; 1054A D] Under clause 15 of the Letters Patent, an appeal no doubt lay from an order of a Single Judge of the High Court exercising Original Jurisdiction to the High Court itself irrespective of the fact that the judgment was preliminary or final or that it was one passed at an interlocutory stage, provided it satisfied certain conditions, but the said 1045 provision could not be extended to an election petition filed under the Act. Conferment of the power to try an election petition under the Act did not amount to enlargement of the existing jurisdiction of the High Court. The jurisdiction exercisable by the Single Judge under the Act was a special jurisdiction conferred on the High Court by virtue of Article 329(b) of the Constitution. In view of the limited nature of the appeal expressly provided in section 116 A of the Act, it should be held that any other right of appeal (excluding that under the Constitution) was taken away by necessary implication. Therefore, it was difficult to subscribe to the view that when once the jurisdiction to try an election petition was conferred on the High Court, all other powers incidental to the ordinary original jurisdiction exercised by a single Judge of a High Court would become applicable to an election petition under the Act. If the Parliament had intended that the Division Bench of the High Court should exercise its appellate jurisdiction under clause 15 of the Letters Patent of the High Court, probably, it would not have enacted sub section (7) of section 86 of the Act, having regard to the well known tendency of one or the other party to an election petition preferring appeals against the interlocutory orders to the Division Bench. If such appeals against the interlocutory orders to the High Court, were permitted, perhaps, no election dispute would be finally settled till the next election became due. As regards the jurisdiction to try an election petition and the right of appeal of the parties to an election petition, the provisions of the Act (apart from the provisions in the Constitution) constituted a complete code and no Judge or Judges other than the Single Judge of the High Court, who was asked to try an election petition, and the Supreme Court, exercising the appellate powers under section 116 A of the Act in respect of orders passed under section 98 or section 99 of the Act or under Article 136 of the Constitution in respect of other orders, could have any jurisdiction to deal with any matter arising out of an election petition filed under the Act. The Court disagreed with the view expressed on this question by the Gujarat High Court in Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta & Ors., (12 Gujarat Law Reporter 850), and overruled that decision of the High Court. The Court also overruled the decision of the Madras High Court in Kadiravan alias Shamsudeen vs B. Thirumalaikumar, ILR (1970) 2 Mad. 183 and the decision of the Madhya Pradesh High Court in Laxmi Narayan Nayak vs Ramratan Chaturvedi & Ors, AIR 1986 Madhya Pradesh 165 which had taken the same view as in Dr. Chotalal Jivabhai Patel 's Case (supra). The Court agreed with the view expressed by the Allahabad High Court in Siaram vs Nathuram & Ors., [1968] ALL. L.J. 576 and by the Rajasthan High Court in Ramdhar vs Shanwar Lal, AIR which held that by necessary 1046 implication an appeal to the High Court from an interlocutory order of the Single Judge of the High Court in the course of trial of an election petition filed under the Act, was excluded. [1054G H; 1055A H; 1056A H] The Division Bench of the High Court of Gujarat had no jurisdiction to hear the appeal filed by the Ist respondent against the interlocutory order passed by the Single Judge who was trying the election petition. Judgment of the Division Bench of the High Court set aside, Letters Patent Appeal dismissed. [1057B] Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta Shamsudeen vs B. Thirumalai Kumar, ILR ; and Laxmi Narayan Nayak vs Ramratan Chaturvedi and Ors., A.I.R. 1986 Madhya Pradesh 165, overruled. Siaram vs Nathuram and Ors., [1968] All. L.J. 576 and Ramdhan vs Bhanwarlal, A.I.R. approved. N.P. Ponnuswami vs Returning Officer, Namekkal Constitutency and others; , ; Shah Babulal Khimji vs Jayaban D. Kania & Anr., ; and National Telephone Company Ltd. vs Post Master General, [1913] A.C.546, referred to.

The respondent by virtue of the sanad granted to his ancestors by the British Government, claimed, in respect of certain lands situated in village Shiramba Taluka Koregaon, District North Satara, compensation under section 6(2) of the Bombay Paragana and Kulkarni Watans (Abolition) Act. 1950, for the resumption of the lands by the appellant. The suit claim of Rs. 15,074 4 0 being "a sum equal to ten times the amount of such land revenue" was decreed by the trial court. On appeal by the State, the High Court affirmed the same. after construing the sanad granted by the British Government in favour of the respondents ' ancestors and other relevant records, as it was a watan of land revenue and not in respect of the soil. Dismissing the State 's appeal by special leave to this Court, ^ HELD: (1) The High Court was right in holding that the grant in favour of the ancestors of the respondent was a grant of land revenue only and not a grant of the soil and since the watan held by the respondent at the date of the coming into force of the Act was a watan of land revenue the respondent was entitled to compensation in the sum of Rs. 15,074 4 0 under section 6(2) of the Bombay Paragana and Kulkarni Watan (Abolition) Act, 1950. [982B C] (2) The sanad undoubtedly used the words "lands" to describe the subject matter of the grant, but the word "land" is defined in Bombay Act II of 1863 [The Exemption From Land Revenue (No. 1 ) Act 1863], to include share of land revenue and this meaning would apply in the construction of the word "land" in the sanad since the sanad was apparently granted pursuant to the enquiry made under Bombay Act II of 1863. The description of the subject matter would not, therefore, necessarily indicate that it was a grant of the soil. In fact, this description standing alone would rather indicate that it was a grant of land revenue only, since grant of the soil would ordinarily be accompanied by words such as 'Darobast ' or 'Jal ', 'Taru ', 'Truna ', 'Kastha ' and 'Pashan '. [981F H] [Their lordships deprecated the litigious approach adopted by the State Government and observed "State Governments which have public accountability in respect of their actions should not lightly rush to this Court to challenge a judgment of the High Court which is plainly and manifestly correct and drag the opposite party in unnecessary expense.]

The appellants migrated to India in 1947 from West Pakistan. To begin with, they were given temporary allotment of land in two villages. In 1949, land was allotted to them on quasi permanent basis, and they have remained in possession of the same eversince. Originally, land was classified into two kinds: urban and agricultural land. Later on, a third classification was introduced, known as sub urban land. The two villages in which land was allotted to the appellants were not included in the notification with respect to sub urban land. In February, 1952, the Director of Rehabilitation passed and order declaring those villages as 734 sub urban land. The result of the order was that the allotment made to the appellants was to be reduced. The appellants went in revision to the Custodian General, and their revision petitions were dismissed on the ground that the view of Rule 14(6)(iii)(d) of the Rule it was open to the Central Government by a special order to direct cancellation or variation of the allotment made in favour of the appellants, and the Central Government has on the representation of the Punjab Government agreed to declare the two villages in question as sub urban by its order dated October 11, 1955. The appellants filed a writ petition in the High Court but that was dismissed summarily. The have come in appeal to this Court by special leave. ^ Held, that when the notification of March 24, 1955, was made under section 12 of the placed Persons (Compensation and Rehabilitation) Act, 1954, the evacuee property in those villages ceased to be evacuee property and became a part of the compensation pool. That property could only be dealt with under the Act of 1954. If any variation or cancellation of allotment was to he made that could be done only under the provisions of section 19 of Act of 1954. There was no power left in the Central Government to act under Rule 14(6)(iii)(d) of the Rules framed under the with respect to that land after the notification of March 24, 1955. Balmukand vs The State of Punjab, I.L.R. 1957 Punjab 712 and Major Gopal Singh vs Custodian of Evacuee Property, ; , followed.

Appeals Nos. 105 and 106 of 1957. Appeals from the judgment and decree dated April 8, 1954, of the Assam High Court in Appeal from Appellate Decree Nos. 41 and 54 of 1951. L. K. Jha and D. N. Mukherjee, for the appellant. Naunit Lal, for respondents Nos. 1 to 12. February 23. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two appeals arise from a suit instituted by the appellant in the Court of the Special Subordinate Judge, Assam Valley Districts, in which he claimed a declaration that the sale deeds of lands described in detail in the various Schedules attached to the plaint were void and for possession of the lands covered by the said sale deeds. His case was that Madhab Temple at Hajo is a very ancient temple and the Assam Rajahs had granted lands to the Bardeuries (temple officials) to enable them to render service to the deities installed in the said temple. The lands thus granted to the temple officials were endowed lands and the same had been burdened with service to the temple; in other words, the grantees were entitled to enjoy the lands on condition that they rendered the requisite service to the temple. As a corollary of the 949 burden imposed on the grantees by the said grant the lands were inalienable to strangers though they could be transferred to any of the Bardeuries of the temple. According to the appellant the said lands had originally been granted to Hem Kanta Sarma and Uma Kanta Sarma who were then the worshippers at the temple. The respondents who were impleaded to the" suit represented the heirs of the original grantees and assignees from those heirs. The appellant has brought this suit on behalf of the Madhab Temple at Hajo, and his case is that the alienations made by the worshippers in favour of non worshippers were invalid and so the temple was entitled to claim a declaration as set out in the plaint and to ask for possession of the lands unauthorisedly transferred to the predecessors in title of the respondents. The lands in suit have been described in detail and specified in three Schedules called Ka, Kha and Ga. The respondents denied this claim. They urged that the original grants were not burdened with service and were alienable without any restriction whatever. They also pleaded that they had purchased the lands bona fide for valuable consideration and without notice of any such burden or obligation subsisting on the lands. Besides, they added a plea of limitation in respect of the lands specified in Schedules Kha and Ga. The trial court upheld the appellant 's contention and made a finding that the lands in suit were burdened with service with the result that the impugned alienations were void. It also found that the purchasers had not shown that they had made adequate enquiries and so their plea that they were purchasers without notice could not be sustained. On the question of limitation, however, it accepted the plea raised by the respondents in respect of the lands described in Schedules Kha and Ga. In regard to the lands described in Schedule Ka the trial Court directed that the appellant should obtain delivery of possession of the said lands through the transferor defendants or their heir if the latter were willing to render service to the temple; otherwise the appellant was held entitled to get independent possession and the said transferors 950 would be deemed to have relinquished their interest in the said lands. This decree gave rise to cross appeals before the District Court. The said appeals were heard together and the appellate court confirmed the decree passed by the trial court in respect of Kha and Ga lands. In regard to the lands in Schedule Ka the appellate court maintained the declaration in favour of the appellant but discharged the conditional decree for possession because it held that in regard to the said lands the appellant must be left to move the sovereign authority to sue for resumption of the said lands. This appellate decree became the subject matter of two appeals and cross objections before the High Court. The High Court has held that the finding concurrently recorded by the courts below in regard to the burden subsisting on the lands in question was based on evidence most of which was hearsay and the whole of which taken together was meager and insufficient in law to sustain the said finding. The High Court has also criticised the courts below for placing the onus of proof in regard to the character of the lands on the respondents. According to the High Court it was for the appellant to prove his case in respect of the nature of the original grant. The High Court has then taken into account the fact that the evidence shows that many of the lands were transferred to strangers and that was inconsistent with the case made out by the appellant. Besides, the High Court has referred to the fact that the lands in question are described as Brahmottar lands in revenue papers and that clearly shows that the said lands are heritable and transferable without restriction. On the question of limitation the High Court has accepted the plea of the respondents that Article 144 of the Limitation Act applied. As to the declaration granted to the appellant by the District Court the High Court has observed that the said declaration was absolutely futile. In the result the suit preferred by the appellant has been dismissed with costs throughout. It is this decision which is challenged before us by the appellant with a certificate granted to the appellant by the High Court in that behalf 951 The principal point which has been urged before us by Mr. Jha for the appellant is that the High Court was in error in coming to the conclusion that lands in suit which are admittedly described as Brahmottar lands in the revenue records are transferable without, any restriction. In support of its conclusion the High Court has referred to the history of the lands, the nature of the initial grant and the recognition of the title of the grantees by the British Government after it conquered Assam and of the several steps taken thereafter. This history has been set out in detail in the Assam Land Revenue Manual(1). From this introduction it appears that Nisf khiraj (half revenue paying) estates as distinguished from Khiraj (full. revenue paying) estates form a class of tenure found only in Assam Proper and they have a special history of their own. In 1834, shortly after Assam was annexed by the Government of India it ruled that " all rights to hold lands free of assessment founded on grants made by any former Government must be considered to have been cancelled by the British conquest. All claims therefore for restoration to such tenure can rest only on the indulgence of the Government without any right. " This ruling clearly and emphatically brought out the legal consequences of political conquest. Grants made by the previous Governments came to an end and their continuance after the conquest would depend upon the indulgence of the succeeding Government. It appears that prior to the conquest of Assam under the previous regime the predecessors in interest of the then owners of Nisf khiraj estates held their lands revenue frce and called themselves lakhirajdars. They continued to describe themselves as such even after their lands were resumed and assessed at half rates. Mr. Scott, the first British Commissioner of Assam, refused to recognise any claims to hold land revenue free. Research made by him in that behalf showed that even prior to the Burmese conquest of Assam lakhiraj land had occasionally been assessed at five annas a pura (four bighas) in timer, of trouble by (1) Vol. 1, 6th Ed., p. lxvii. 952 the Assam Rajahs themselves. Basing himself on this precedent Mr. Scott fixed the assessment of the said land at the said rates and subsequently increased it to seven or eight annas a pura. This imposition war, known as Police Barangani. Captain (afterwards General) Jenkins became the Commissioner of Assam in 1834. The lakhirajdars objected to pay the tax imposed on their lands by Mr. Scott on the ground that Mr. Scott intended to levy the said tax temporarily and had promised Lo remit it. This dispute was referred by General Jenkins to the Government of India who replied that they saw no reason to believe that the tax imposed by Mr. Scott was intended to be temporary, and they added that if it was Mr. Scott 's intention it would Dot be valid because Mr. Scott had not obtained the sanction of the Government in that behalf. Even so, the Government of India directed that a full enquiry should be made into all claims to rent free lands on the part of Rajahs or as debotter or dharmottar or on any other plea throughout the districts of Assam and Captain Bogle was appointed Special Commissioner to make the said enquiry under Regulation III of 1818. This enquiry had to be held subject to the control and orders of General Jenkins. The Government prescribed certain principles to guide Captain Bogle in his enquiry. One of these principles was that pending the lakhiraj enquiry Mr. Scott 's moderate rates were to be levied. The orders issued by the Government in that behalf clearly declared the right of the Government to assess all lands held revenue free in Assam Proper, but subject to this right Government were prepared to grant the indulgence of restoring to the lakhirajdars all lands held by them and to confirm them in possession. It appears that the instructions issued by the Government were not fully carried out by General Jenkins. Instead of treating all lakhiraj lands as being on the same footing and liable to assessment the General drew a broad distinction between debotter lands which were appropriated to temples and lands known as brahmottar or dharmottar, that is to say, 953 lands devoted to some religious purpose not being temple lands. In respect of the former he confirmed the grants revenue free. In respect of the latter be simply confirmed the grantees in possession subject to the payment of Mr. Scott 's favourable rates until, Captain Bogle 's enquiry was terminated and final orders passed in that behalf It is curious that though the enquiry of Captain Bogle went on for many years it was not formally completed till the year 1860. By that time the instructions issued by the Government of India at the commencement of the enquiry were lost sight of. No report was submitted to the Government by the enquiring officer and final orders of the Government of India were not obtained on the question whether the holders of brahmottar and dharmottar lands were to hold their lands at the rates fixed by General Jenkins. In consequence holders of these lands have ever since continued to hold at half rates without any formal decision by the Government of India having been reached in that behalf. Subsequently the holders ' rights to continue to hold the lands at the said rates have been recognised and their holdings have been declared to be heritable and transferable by the Government of India in 1879. This summary of the history of these lands which is to be found in the introduction to the Assam Land Revenue Manual shows that Nisf khirajdar of the present day " is ordinarily a person whose lands were claimed by his ancestors revenue free on the ground that they were granted by the Assam Rajas for some religious or charitable purpose". It appears that the word " Nisf khiraj " was invented for the first time in 1871 and it applied to all estates which paid half the ordinary revenue rates. This word was presumably invented to avoid confusion caused by the use of the word " lakhiraj which had been applied to them prior to 1871. The history of this tenure is similarly stated in the Government Gazette relating to Assam as well as by Baden Power (Vol. III, pp. 406 following). 954 At this stage it would be necessary to refer to the relevant provisions of Regulation 1 of 1886,. It in called the Assam Land and Revenue Regulation of the said year. Section 3(g) of this Regulation defines " land holder " as meaning any person deemed to have acquired the status of a land holder under section 8 ; while section 8 (1) provides, inter alia, that any person who has, before the commencement of this Regulation, held immediately under the Government for ten years continuously any land not included either in a permanently settled estate, or in a revenue free estate, and who has during that period paid to the Government the revenue due thereon or held the same under an express exemption from revenue, shall be deemed to have acquired the status of a land holder in respect of the land. That takes us to section 9 which provides that a land holder shall have a permanent heritable and transferable right of use and occupancy in his land subject to the provisions contained in cls. (a), (b) and (c) of the said section. It is unnecessary to refer to the said exceptions. It would thus be clear, and indeed it is not disputed, that the transferor Bardeuries who held the lands in suit fall under section 8 (1) (a) and became land holders under section 3 (g). The inevitable consequence of this position is that section 9 applies to them and their rights in the lands in their occupation are statutorily recognised to be permanent, heritable and transferable. This statutory position is consistent with the declaration made by the Government of India in 1879, and in view of this clear statutory position it would be difficult to sustain the plea that the lands in question are burdened with the special condition that they can be transferred only to Bardeuries and not to any strangers outside the group. As the High Court has found. and that is no longer in dispute, these lands are described as brahmottar lands in revenue records and to the said lands and their holders the statutory provisions of the Regulation to which we have just referred applied; therefore, it is impossible to escape the conclusion that by virtue of the relevant statutory provisions of the Regulation the lands must be deemed to be heritable and transferable without any restrictions 955 This aspect of the matter was completely ignored by the trial court and the appellate court, and so the High Court was right in correcting the error which had crept into the concurrent decisions of the courts below. Besides, the High Court was also right in holding that in a case of this kind where the appellant urged that the lands could be alienated only to a specified class of persons, the onus 'Was on the appellant and not on the respondents to prove the contrary. Failure to put the onus on the appellant introduced a serious infirmity in the approach adopted by the courts below in dealing with this question. That was another infirmity in their decision. It is also clear that the evidence adduced by the appellant in support of his case to which reference has been made by the first two courts is entirely unsatisfactory and, even if it is believed, in law it would be insufficient to sustain the plea that there was a limitation on the transferability of the lands in question. We are also satisfied that the declaration granted by the District Court was futile. Therefore, in our opinion, the view taken by the High Court is absolutely correct and the grievance made by the appellant against the validity of the said conclusion cannot be sustained. In the result the appeals fail and are dismissed with Costs. Appeals dismissed.

The plaintiff appellant filed a suit alleging that the lands in suit were unauthorisedly transferred to the predecessors in title 121 948 of the respondents. His contention was that the lands were granted to the Bardeuries (officials) of a certain ancient temple in Assam in order to enable them to render service to the deities installed in the temple and as such the lands were inalienable to strangers other than the Bardeuries. Held, that in view of the history of land tenure in Assam and by virtue of the relevant statutory provisions of Assam Land and Revenue Regulation (Reg. 1 of 1886) the lands must. be deemed to be heritable and transferable without any restriction. The transferor Bardeuries, who held the lands described as brahmottar lands in revenue records, fell under section 8(1)(a) and became " land holders " under section 3(g) of the Regulation and consequently section 9 applied to them statutorily recognising their rights in the lands to be permanent, heritable and transferable. To prove the plaintiff appellant 's contention that the lands could be alienated only to a specified class of persons, the onus was on the appellant and not on the respondents to prove the contrary.

On the demise of Karuna, there were two rival claims for inheritance to his property. One by the appellant who claimed it as his widowed mother, ' and the other by his father 's brother who contended that the appellant had remarried and was thereby barred from succeeding as Karuna 's heir. After the consolidation officer had decided against her, and the settlement officer, Etah Camp, Aligarh, in her favour, the Deputy Director of Consolidation decided a revision petition against the appellant holding that her remarriage excluded her from the inheritance. Thereafter, the appellant unsuccessfully filed a writ petition before the High Court. Allowing the appeal, the Court HELD: Kasturi claimed inheritance not as a widow of her husband Madhua but as the mother of Karua. We are entirely in agreement with the view that "unchastity of a mother is no bar to her succeeding as heir to her son, nor does her remarriage constitute any such bar". Under the Hindu law, the bar of inheritance would not apply to a mother, as it would to a widow. [27B D] 'Hindu Law ' 14th Edn. clause iii) p. 116 followed.

One Ramjidas built a dharmasala, a temple and shops appurtenant thereto with the joint family funds on Government land with the permission of the Government. After his death the other members who were in management and possession of those properties were dispossessed by the State, its officers and the local Municipality which was put in possession. The petitioners applied to the Punjab High Court for the issue of appropriate writs under article 226 of the Constitution, but the petition was dismissed on the, preliminary, ground that the matter involved disputed questions of fact. An appeal against that order was also dismissed on the same ground. The petitioners then moved this court under article 32 of the Constitution. Their case was that they had been evicted without authority of law and in violation of the Constitution. It was urged on behalf of the State that the property being trust property built on Government land, the petitioners were mere trespassers liable to be ejected with the minimum amount of force and relying on the decision of this Court in Sohal Lal vs The Union of India, it was further urged that redress by way of writs was wholly inappropriate in disputes on questions of fact and title. Held, that on the admitted facts of the case the petitioners could not be trespassers in respect of the dharmasala, temple and shops, nor the State the owner of the property, irrespective of whether it was a trust, public or private. The maxim, that what is annexed to the soil goes with the soil, is not an absolute rule of law in this country, and if the State wanted to remove the constructions or resume the land, it should have taken appropriate legal action for the purpose. Thakoor Chunder Parmanick vs Ramdhone Bhuttacharjee, , Lala Beni Ram vs Kundan Lall, (1899) L.R. 26 I.A. 58, and Narayan Das Khettry vs jatindranath, (1927) L.R. 45 I.A. 218, referred to. Even if Ramjidas was no more than a trustee, that would not give the State or its officers the right to take the law into their 70 own hands and the argument that the petitioners were tres passers and could be removed by an executive order must be rejected not merely as specious but highly dangerous in its implication. It was not necessary in this case to determine disputed questions of fact, nor as regards the precise rights of the petitioners. It was enough that they were bona fide in possession of the property and could not be removed except by authority of law. The executive action taken in the present case must be deprecated as being destructive of the basic principles of the rule of law; it was a highly discriminatory and autocratic act which deprived a person of the possession of property without reference to any law or legal authority.

The appeallants are the tenants of certain intermediary landlords known as Girasdars. Respondents Nos. 4 5 are the legal heirs of certain Girasdars from whom some of the appellants held lands on lease. Respondent No. 9 is a Giras dar who is represented by the Assistant Custodian Evacuee Property. The other respondents, being statutory authorities are formal parties. The dispute between the parties relate to the mode of allotment to the Girasdars which has arisen in the following circumstances. After the coming into force of the Saurashtra Land Reforms Act 1951, the respondents Girasdars, as required by the Act filled in Form I showing therein the cultivable land in the estate as 1353.34 acres. The family of the Girasdars was treated as an 'A ' class Girasdar. The Mahalkari Kutiana by his decision dated June 25, 1959 held that the entire area comprising cultivable land formed part of the joint and undivided estate of all the Girasdars and on that basis he allotted to them three eco nomic units of land amounting to 60 acres. The Girasdars preferred an appeal against the said decision and in that appeal, the Deputy Collector, Porbander, Respondent No. 2, modified the allotment made by Mahalkari. He took the view that some of these Girasdars had separate or swang lands and thus entitled to separate allotments from swang lands, out of their swang estate. A revision application was preferred before the Gujarat Revenue Tribunal against the decision of the Deputy Collec tor. The Tribunal agreed in principle with the Deputy Col lector that the Girasdars were entitled to separate allot ment both from the estate held jointly by them and also to separate allotments from the Estates separately by them. The Tribunal accordingly held that the Girasdars were entitled to three 79 economic units out of the aforesaid cultivable lands jointly held by them and some of them were entitled to separate allotments out of the lands separately held by them but included in the aforesaid area of 1353.34 acres. The tenants thereupon challenged the decision of the Tribunal before the High Court by means of a writ petition. The High Court held that in respect of the joint or "Majmu" estate of the concerned Girasdars, they were liable to be treated as one unit and entitled to allotment as an 'A ' class Girasdars and were thus entitled jointly to three economic holdings which came to 60 acres. The High Court affirmed the decision of the Tribunal in the case of Ali Khokhar, Girasdars who had handed over 15 acres of land of the joint estate and directed that on the basis of joint holding, the Girasdars were entitled to the balance area of 45 acres. It also upheld the decision of the Tribunal that some of the Girasdars were entitled to separate allotments as 'C ' class Girasdars with respect to their separate hold ings. Thus the High Court treated the total holding of 1353.34 acres as partly joint and the remaining part com prised separate holdings of some of the Girasdars. The appellants tenants have appealed to this Court after obtaining special leave. Dismissing the appeal, this Court, HELD: Judicial notice can be taken that much lesser hardship would be caused to a tenant whose land holding was substantially in excess of the economic holding if a part of that land were taken for allotment to the Girasdars than to a tenant whose excess holding was only marginal if a part of his land is taken for such allotment. [85F] The Revenue Tribunal in deciding as to whose excess land should be handed over by the tenants has proceeded on a just and equitable basis that it should touch only such tenants whose land substantially exceeds the economic holding, and smaller tenants should not be asked to surrender any part of their holdings.

This was an appeal by the trustees of the ancient and renowned temple of Sri Venkataramana of Moolky Petta, who were managing the temple on behalf of the Gowda Saraswath Brahmins in accordance with a Scheme framed in a suit under section 92 of the Code of Civil Procedure. After the passing of the Madras Temple Entry Authorisation Act (Madras V of 1947) which had for its object the removal of the disability of Harijans from entering into Hindu public temples, the trustees made a representation to the Government that the temple was a private one, and, therefore, outside the operation of the Act. But the Government did not accept that position and held that the Act applied to the temple. Thereupon the trustees brought the suit, out of which the appeal arises ' for a declaration that the temple was not one as defined by section 2(2) of the Act but was a denominational one having been founded exclusively for the Gowda Saraswath Brahmins. It was contended that section 3 of the Act was void as being repugnant to article 26(b) of the Constitution which vouchsafed to a religious denomination the right to manage its own affairs in matters of religion. The trial court found against the appellants. It held that matters of religion did not include rituals and ceremonies. But on appeal the High Court while holding that the public were entitled to worship in the temple, passed a limited decree in favour of the appellants by reserving to the latter the right to exclude the general public during certain ceremonies in which the members of the denomination alone were entitled to participate. The question for decision was whether the rights of a religious denomination to manage its own affairs in matters of religion under article 26(b) can be subjected to, and controlled by, a law protected by article 25(2)(b) of the Constitution. Held, that the expression " religious institutions of a public character " occurring in article 25(2) (b) of the Constitution contemplates not merely temples dedicated to the public as a whole but also those founded for the benefit of sections thereof and includes 114 896 denominational temples as well. While article 25(1) deals with the rights of individuals and article 26(b) with those of religious 2 denominations, article 25(2) covers a much wider ground and controls both. Article 26(b) must, therefore, be read subject to article 25(2) (b) of the Constitution. Although the right to enter a temple for purposes of worship protected by article 25(2) (b) must be construed liberally in favour of the public, that does not mean that that right is absolute and unlimited in character. It must necessarily be subject to such limitation or regulation as arises in the process of harmonising it with the right protected by article 26(b). Where the denominational rights claimed are not such as can nullify or substantially reduce the right conferred by article 25(2) (b), that Article should be so construed as to give effect to them, leaving the rights of the public in other respects unaffected. The expression 'matters of religion ' occurring in article 26(b) of the Constitution includes practices which are regarded by the community as part of its religion and under the ceremonial law pertaining to temples, who are entitled to enter into them for worship and where they are entitled to stand for worship and how the worship is to be conducted are all matters of religion. The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshimindra Thirtha Swamiar of Sri Shirur Mutt, ; ; Gopala Muppanar vs Subramania Aiyar, (1094) and Sankaralinga Nadan vs Raja Rajeswara Dorai, (1908) L.R. 35 I.A. 176, referred to. Held further, that it is well settled that where the original dedication is proved to have been for the benefit of a particular community the fact that members of other communities were allowed to worship cannot lead to the inference that the dedication was also for their benefit. Babu Bhagwan Din vs Gir Hay Saroop, (1939) L.R. 67 I.A. referred to.

The plaintiff/appellant is the second son of late Raja Padam Singh, the ex ruler of Bushahr State in Himachal Pradesh. The erstwhile Ruler of Bushahr had sought the aid of the British Government in the management of his forests with a view to preserving, conserving and protecting the same from large scale illicit and indiscriminate cutting of trees. Pursuant to this request, an agreement of lease dated 20th June, 1864 was executed between the said Raja and the British Government. The terms of this agreement were revised in 1877 and again 1928. Before the expiry of its extended term, another agreement of lease was executed between Raja Padam Singh and the Government of Punjab on 25th September, 1942 superseding all previous agreements. By clause (III) of this agreement the Raja granted to the Punjab Government the entire and sole control of the forests of Bushahr excepting those reserved for his use under clause (II) thereof. The Raja was to receive in lieu thereof an annual payment of Rs.1 lakh, and further payment of the whole net surplus on the working of the forests included in the lease. Raja Padam Singh executed a document on 28th November, 1942 whereby be bestowed upon the plaintiff and his mother land admeasuring about 1720 acres, both measured and unmeas ured. The original document, called the Patta, was admitted ly lost during the minority of the appellant. The patta had, however, been referred to in the subsequent two grants executed by the Raja on 11th March 1943 and lOth December 1946. After the execution of the first grant or patta the 470 plaintiff 's father had made an Order No. 5158 directing corresponding mutation changes. The mutation entry, besides mentioning the area of 263.4 bighas, also speaks of 'part of uncultivated 'Jagir '. Subsequently, in September, 1959, the plaintiff 's forests were notified as 'private Forests ' under section 4 of the Himachal Pradesh Private Forests Act, 1954. But in July, 1960 the State Government annulled the notifi cations on the ground that they were erroneously issued and that the lands in fact belonged to the Himachal Pradesh Administration. The plaintiff filed a suit on 18th November, 1964 for a declaration his proprietary rights in about 1720 acres of forest land, both measured and unmeasured. The learned Single Judge substantially decreed the suit. The learned single Judge held that (i) the plaintiff 's father, who in internal matters had sovereign powers, had bestowed the lands in dispute as a perpetual and uncondi tional grant on the plaintiff; (ii) the mere fact that in the mutation entry the areas was shown to be 263.4 bighas did not imply that the grant was limited to that much land only; (iii) in the State of Bushahr only cultivated land was generally measured and forest lands remained unmeasured, and, therefore, the area of only revenue yielding cultivated land was mentioned in the mutation entry; (iv) the evidence, considered as a whole, fully established that the grant was not rependiated but was given effect to by the Political Agent, Simla, as well as by the revenue authorities of Bushahr State and was also recognised by the Dominion of India at the time of the State 's merger; (v) even assuming that the lands in dispute formed part of forests leased to the Government of Punjab, the Raja was not precluded from making the grant and the grants made in favour of the plain tiff were perfectly legal and valid; (vi) after the lease was terminated on 11th April, 1949, the Himachal Pradesh Administration treated the plaintiff as the owner and per mitted him various acts as owner and person in possession; (vii) notifications were issued under Section 4 of the Himachal Pradesh Act, 1954 declaring the disputed land as private forests; and (viii) the notification issued under section 29 of the had no application to such lands. The Division Bench, allowing the State appeal, inter alia took the view that after the execution of the lease deed dated 25th September, 1942 in favour of the Government of Punjab, the Raja had no surviving or subsisting right in the forest lands in question which he could transfer by way of a grant; at the most the grant made by the erstwhile ruler could take effect in respect of revenue yielding lands only, admeasuring 471 about 263.5 bighas, and not in respect of the forest lands; and that the notification under section 29 of the was validly issued and so long as it held the field, no notification could be issued under section 4 of the Himachal Pradesh Private Forests Act, 1954. Allowing the appeal, this Court, HELD: (1) The plaintiff 's father had a surviving and subsisting right in the forest lands which the subject matter of the lease dated 25th September, 1942 and was competent to grant the same to the plaintiff or anyone else, albeit subject to the terms of the lease. [486C] (2) The paramount object of the lease was to conserve the forests of Bushahr State. By concluding the lease agree ment with the Punjab Government, the Raja did not convey all his rights, title and interest in the leased forest lands to the Government. All that he did was to transfer the control and management of the forests to the Punjab Government with a view to preserving and conserving the forests. He however retained his proprietary interest in the forest lands. Had it been the intention of the Raja to divest himself of all his interests in the forest lands, there was no need to provide the duration of the lease on the expiry whereof (unless the renewal clause was invoked) the Raja would have a right of re entry. [485G H; 486A] (3) The lease provided that in addition to the two half yearly installments of Rs.50,000 each, the Raja was to receive payment of "whole net surplus" on the working of the forests included in the lease. This was consistent only with the position that the Raja retained his proprietary inter ests in the forest lands. [486A B] (4) If the terms of the document are clear and unambigu ous, extrinsic evidence to ascertain the true intention of the parties is inadmissible because section 92 of the Evi dence Act mandates that in such a case the intention must be gathered from the language employed in the document. But if the language employed is ambiguous and admits of a variety of meanings, it is settled law that the 6th proviso to the section can be invoked which permits tendering of extrinsic evidence as to acts, conduct and surrounding circumstances to enable the Court to ascertain the real intention of the parties. [491B C] In such a case the subsequent conduct of the parties furnished evidence to clear the blurred area and to ascer tain the true intention of the author of the document. [491D] 472 Abdulla Ahmed vs Animendra Kissen Mitter, ; , referred to. Since the words 'part of the uncultivated Jagir ' were ambiguous, extrinsic evidence allunde the grant became necessary to explain the coverage of those words. [492A] (6) There is intrinsic evidence to show that the grant was not limited to only the revenue yielding area of 263.4 bighas. If by the grant the Raja intended to grant only the revenue yielding area of 263.4 bighas, there was no need to mention 'and part of uncultivated Jagir ' and these words would be rendered redundant. The subsequent conduct of the parties lends support to this view. [488H; 489A] (7) From the various documents placed on record it is quite clear that the disputed forests did not belong to the Government nor did the Government have any proprietary rights therein. The Government was also not 'entitled ' to the whole or any part of the produce in its own right dehors the lease. [493C] (8) The word 'entitled ' in the context of section 29 of the must take colour from the preceding words and must be understood to mean that the Government must have an independent claim or right to collect and deal with the same subject to an obligation to account for the same to the owner. On that account the State was not 'enti tled ' to the forests produce from such private lands. There fore, the notification issued under section 29 could have uo application to such private forests. The State Government was, therefore, competent to issue the two notifications under section 4 of the Himachal Pradesh Private Forest Act, 1954 and it was not justified in annulling them on the erroneous premise that the said lands belonged to the State Government. [493F; 494F G]

The assessee, owners of a tea estate in Assam, after carrying on the business of cultivation, manufacture and sale of tea during the years 1948 to 1953 sold the tea estate on July 9, 1953. In 1961, they received a notice from the Agricultural Income tax Officer to furnish returns of their agricultural income for the assessment years 1949 50 to 1953 54 in respect of that tea estate. They did not submit any returns. Thereafter, they received a notice of demand under section 23 of ' the Assam Agricultural Incometax Act, 1939, for payment of the tax assessed on best judgment basis under section 20(4). The assessees were not served with any notice under s.19(2) which provides for a notice to be served personally on the assessee, during the respective years, nor under section 30 of the Act which deals with escaped assessment. The purchasers of the tea estate were served. in 1961, with assessment orders under section 20(4) in respect of the assessment years 1951 52 to 1955 56 with notices of demand for payment of the tax assessed for each year. These assessees were also not served with any notice under section 19(2) or section 30. All the assessees challenged the assessments in writ petitions and the High Court allowed the petitions. In appeal to this Court, it was contended that the assessment proceedings commenced with the publication of a general notice under section 19(1), that it was open to the Agricultural Income tax Officer to make a best judgment assessment under section 20(4) without any limitation as to time and that it was not necessary to issue any individual notice under section 19(2) or to initiate proceedings under section 30. HELD: Notwithstanding the difference in language between section 20(4) of the Act and section 23(4) of the Income tax Act the principles laid down by this Court in interpreting sections 22, 23 and 34 of the Income tax Act apply in the interpretation of sections 19, 20 and 30, the corresponding sections of the Assam Agricultural Income tax Act. [788 A C] On those principles the publication of the general notice in any financial year under section 19(1) of the Assam Act to furnish a 'return o.f one 's agricultural income in the previous year, does not initiate proceedings against an assessee unless such assessee files a return. If no return is made pursuant to the general notice under section 19(1) assessment could be made against an assessee under section 19(2), serving an individual notice on that assessee during that financial year. Once that financial year is over, and no return has been made in response to the general notice under section 19(1) and no individual notice has been served under section 19(2), there would arise a case of escaped assessment; and, the only way to bring that income to tax is to initiate proceedings by a notice in accordance with section 30 within 3 years of 781 the end of that financial year. Since no such proceedings were initiated in the present case, the assessment orders. were rightly quashed. [787 E H] The Commissioner of Income tax, Bombay vs Ranchhodas Karsondas, Bombay, ; , Ghanshyam Das vs Regional Assistant Commissioner of Sales tax, Nagpur; , and The State of Assam vs Deva Prasad Barua, [1969] 1. S.C.R. 698, followed.

The Court of Wards granted to the appellants a large area of land belonging to the Bettiah Raj which was then under the management of the Court of Wards, on the recommendation of the Board of Revenue, at half the usual rates. A few years later, the Working Committee of the Indian National Congress expressed the opinion that the settlement of the lands was against public interest, and in 1950, the Bihar Legislature passed an Act called the Sathi Lands (Restoration) Act, 1950, which declared that, notwithstanding anything contained in any law for the time being in force the settlement granted to the appellants shall be null and void and that no party to the settlement or his successors in interest shall be deemed to have acquired any right or incurred any liability thereunder, and empowered the Collector to eject the appellants if they refused to restore the lands. The appellants, alleging that the Act was unconstitutional, applied under article 226 of the Constitution for a writ of mandamus against the State of Bihar restraining it from taking any action under the Act. It was found that there were several other settlements of lands belonging to the Bettiah Raj on similar terms against which the Government had taken no action: Held, that the dispute between the appellants and the State was really a private dispute and a matter to be determined by a judicial tribunal in accordance with the law applicable to the case, and, as the Legislature had, in passing the impugned enactment singled out the appellants and deprived them of their right to 1130 have this dispute adjudicated upon by a duly constituted Court, the enactment contravened the provisions of article 14 of the Constitution which guarantees to every citizen the equal protection of the laws, and was void. Legislation which singles out a particular individual from his fellow subjects and visits him with a disability which is not imposed upon the others and against which even the right of complaint is taken away is highly discriminatory. Though the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people, yet when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance to the State. Ameerunnissa Begum vs Mahboob Begum ; and Gulf of Colorado etc. Co. vs Ellis ; referred to.

l Appeal No. 89 of 1952. Appeal by 'special leave from the Judgment dated June 27, 1951, of the Labour Appellate Tribunal of India at Calcutta in Appeals Nos. 94 and 142 of 1950 arising out of the Award of the Second Industrial Tribunal, Madras (published in the Fort St. George Gazette, Madras, dated October 3, (1950). N. C. Chatterjee (section N. Mukherjee, with him) for the appellant. section C. C. Anthoni Pillai (President, Madras Labour Union) for the respondents. December 2. The Judgment of the Court Was delivered by MAHAJAN J. 220 MAHAJAN J. This is an appeal by special leave from a decision dated 27th June, 1951, of the Labour Appellate Tribunal of India at Calcutta in appeals Nos. 94 and 142 of 1950, arising out of the award of the Second Industrial Tribunal, Madras. The relevant facts and circumstances giving rise to the appeal are as follows: On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4 30 p.m. and some at 5 p.m. The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely. The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948, as a holiday for solar eclipse. On the 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act (XXV of 1934) and that the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act. This position was not accepted by the Madras Labour Union. The Madras Government by an order dated the 11th July, 1949, made under section 10(1) (c) of the (XIV of 1947), referred this dispute along with certain other disputes to the Industrial Tribunal, Madras. The adjudicator gave the award which was published in the Gazette on 12th October, 1950. By his award the adjudicator found that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the . No such notice had been given. In view of this finding he upheld the view of the management that the continuity of service of the workers was broken by the interruption 221 caused by the illegal strike and that as a consequence the workers who participated in such strike were not entitled to annual holidays with pay under section 49 B (1) of the Factories Act. He, however, considered that the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay. The decision of the management was varied to this extent. The Mills as well as the Union appealed against this decision to the Labour Appellate Tribunal. That Tribunal upheld the contention of the Mills that the adjudicator had no power to interfere with and revise the, discretion of the management exercised by it under section 49 B (1). It also upheld the contention of the Union that what happened on the night of the 1st November did not amount to a strike and did not cause any interruption in the workers ' service. This is what the Tribunal said: "It would be absurd to hold that non permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section. We are inclined to hold that the stoppage of Work for the period for about 2 to 4 hours in the circumstances of the case is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned. " In the result the appeal of the Union on this point was allowed and it was ordered that holidays at full rates as provided for in section 49 A of the Factories Act will have to be calculated in respect of the operatives concerned on the footing that there was no break in the continuity of their service by the stoppage of work on 1st November, 1948. In this appeal it was contended on behalf of the Mills that on a proper construction of section 49 B (1) 29 222 of the Factories Act: (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months ' continuous service in the factory, and that the non permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49 B. In our judgment, this contention is well founded. Section 49 B provides "Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen 'Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35. " "Explanation. A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness ', accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days. . . . It is clear that the benefit of this section is not avail able in cases where the interruption in service is brought about by an illegal strike. Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines "strike" as meaning "a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have 223 been so employed to continue to work or to accept employment. The adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and :refusing resume work on the night of the 1st November ' He observed that the fact that a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a day 's leave was granted to the day shift workers. He further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded. In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers 'were acting in concert. That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression "strike" in section 2(q) of the . We have not been able to appreciate the view expressed by the Appellate Tribunal that stoppage of work for a period of two to four hours and such non permitted absence from work cannot be regarded as strike. Before the adjudicator the only point raised by the Union was that it was a spontaneous and lightning strike but it was not said by them that stoppage of work did not fall within the definition of " 'strike" as given in the Act. It cannot be disputed that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted. All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 224 1948, amounted to a strike. It was not a case of an individual worker 's failure to turn up for work. It was a concerted action on the part of a large number of workers. The Appellate Tribunal was thus in error in not regarding it as a strike and it had no discretion not to regard what in law was a strike as not amounting to a strike. If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry. It was contended by the President of the Union, who argued the case on behalf of the workers, that the Factories Act had no application to this case, because by a notification of the Government of Madras dated 23rd August, 1946, the Buckingham an Carnatic Mills had been exempted from the provisions of Chapter IV A of the Act and the provisions of sections 49 A and 49 'B were not therefore attracted to it and that no substantial question of law in respect to the construction of the section fell to be decided by this Court and that being so, this Court should not entertain this appeal under article 136 of the Constitution. This contention has no validity. The Mills were granted exemption from the provisions of Chapter IV A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV A of the Factories Act. These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in volves a substantial question of law. Reliance was next placed on section 49 A of the Factories Act which provides that the provisions of the new Act would not operate to the prejudice of any rights which the workers were entitled to under the ' earlier rules and it was argued that under the leave rules of the Mills which prevailed prior to the coming into force of the Factories Act, the workers were entitled to privilege leave and there was no provision in those rules similar to the one that has been made in section 49 B or in the new rules and that the Mills 225 had no right to deprive them of leave by reason of the strike. This contention cannot be sustained because section 49 A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification ' dated 23rd August, 1946. Lastly, it was urged that the stoppage of work on 1st November, 1948, was not a concerted action on the part of the workers and that several workers in their own individual capacity wanted leave on that date. In our opinion, in view of the facts and circumstances detailed in the adjudicator 's award this contention cannot be seriously considered. We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word "strike" as given in section 2(q) of the and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules. The learned counsel for the appellant undertook on behalf of the management ex gratia that it would condone the default of the workers on 1st November, 1948, and the cessation of work on that night would not be treated as depriving them of the holidays under the rules and we appreciate the spirit in which this undertaking was given and hope that the workers would also take it in that spirit. The result is that the appeal is allowed, and the decision of the Labour Appellate Tribunal on this point is set aside. In the circumstances of this case we make no order as to costs. Appeal allowed.

Where the night shift operatives of a department of a textile mills stopped work from about 4 p.m. up to about 8 p.m. on a certain day, the apparent cause of the strike being that the management of the mills had expressed its inability to comply with the request of the workers to declare the forenoon of that day as a holiday for solar eclipse, and it was found that the stoppage of work was the result of concerted action: Held (i) that the stoppage of work fell within the definition of a "strike" in section 2 (q) of the ; (ii) that the strike was an illegal strike as the textile mills was a public utility industry and no notice had been given to the management, even though the refusal to work continued only for a few hours; and (iii) that the continuity of service of the workers was interrupted by this illegal strike and they were not entitled to claim holidays with pay under section 49 B (1) of the Indian Factories Act, 1934.

In pursuance of its policy of reorganising its business by concentrating more on manufacturing side than agency business, the appellant company gave up more than half of its agencies in Calcutta and some agencies in other places including Madras. The Union representing the workmen wrote to the Labour Commissioner to intervene stating that due to the company 's said policy it feared retrenchment. The company served notices on some of the employees for retrenchment to take effect two days thereafter. Also notice was given to the Labour Commissioner and the Conciliation Officer as required under section 25F (c) of the Industrial Disputes Act. On reference of the dispute to the Industrial Tribunal, the company justified the retrenchment and the Manager of the Calcutta branch gave evidence that retrenchment was done in pursuance of the said policy decision taken by the company. The Tribunal held that a good case for retrenchment was not made out and ordered reinstatement. The Tribunal did not accept the manager 's evidence holding that the development on the manufacturing side of the company 's business should have been contemporaneous with the surrender of agencies in Calcutta. The Tribunal also held that the policy decision was actuated by parochial considerations for transferring the company 's resources from Calcutta to Madras, that there was overload of work on the remaining employees; that the retrenchment could have been avoided by transferring the retrenched employees to other branches specially as their conditions of service included the liability of being transferred; and that the retrenchment was in breach of a. 25F(c) as the notice of retrenchment was two days prior to the date of the retrenchment and not with immediate effect, the proviso to r. 77(1) of the West Bengal/ndustrial Disputes Rules, 1958, did not apply and a notice of one month, as required by sub el. (1) of that rule, was necessary. The company filed a petition for a writ of certiorari. The Single Judge of the High Court set aside the. award and remanded the case to the Tribunal only for enforcing the retrenchment according to the principle of "last come first go". The Division Bench of the High Court in appeal, agreed with the findings of the Tribunal and held that the Single Judge was not competent to interfere with those findings. In appeal this Court, HELD: Some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence. The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in a writ petition for certiorari. (i) A writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction. It is available, in those cases 977 where a tribunal though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure 0r violates the principles of natural justice where no particular procedure is prescribed. But a mere wrong decision cannot be corrected by a writ of certiorari as float would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected. [985] Basappa vs Nagappa, ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra, [1957] S.C.R. 152 and Andhra Pradesh & Ors. vs Sree Ram Rao, ; , followed. (ii) The Tribunal wrongly rejected the company 's evidence on the ground that the policy decision being the function of the Board of Directors, the Manager was not competent to depose about it and that if the company, wanted to establish it, it should have produced a resolution of the Board. In its letter to the Labour Commissioner and also during conciliation proceedings the union had assumed that the company had taken the said decision, that consequently, retrenchment was apprehended and that therefore that officer should intervene. In these circumstances, the finding that the company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid. [987 D F] 1. K. Iron and Steel Co. vs Iron and Steel Mazdoor Union, , followed. (iii) It is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent for a tribunal to question its propriety. If a scheme for such reorganisation results in surplusage of employees, no employer is expected to carry the burden of such economic tribuanaldead weight and retrenchment has to be accepted as inevitable. however unfortunate it is. The Legislature therefore, provided by section 25F compensation to soften the blow of hardship resulting from 'an employee being thrown out of employment through no fault of his. The Tribunal having come to the conclusion that the said policy was not actuated by any motive of victimisation or unfair labour practice and therefore was bona fide, any consideration as to its reasonableness or propriety was clearly extraneous. It is not the function of the Tribunal, to go into the question whether such 'a scheme is profitable or not and whether it should have been adopted by the employer. So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the 'conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision. The fact that in the earlier year some temporary appointments were made or that the Union 's Secretary deposed that work had accumulated would not mean that the surplus age calculated by the manager was unjustified. Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there Was no surplusage. [987 G, 989 D F] (iv) While reorganising its business, it is not incumbent on a company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time. These considerations which the Tribunal took into account were 978 totally extraneous to the issue beore it and the Tribunal ought not to have allowed its mind to be influenced by such consideration and thereby disabling itself from viewing the issue from proper perspective. The finding that the policy decision was actuated by parochial considerations, namely, for transferring the company 's resources from Calcutta to Madras at the cost of the former, was without evidence and was entirely speculative. Even assuming that the company decided to concentrate its activity in Madras there is nothing in the Industrial Law to compel it to continue its business in Calcutta. [988 D, G] D. Marcropollo & Co. vs Their Employees Union , Ghatge & Patil Concern 's Employee 's Union vs Ghatge & Patil (Transport) (P) Ltd. [1968] 1 S.C.R. 300, and Workmen of Subong Tea Estate vs The Outgoing Management of Subong Tea Estate, ; , followed. (v) The liability of an employee to be transferred and the right of the company to transfer him did not mean that there was a corresponding obligation on the company to transfer the employee to another branch. No evidence was led by the Union to show that if transferred, these men could have been absorbed at other places, or that there were vacancies or that the work there was the same as was done by them at Calcutta. There was no evidence whether wage scales, dearness allowance and other conditions of service were the same in Madras and other centres. It is true that the company had started developing its manufacturing business in Madras but the Tribunal made_ no enquiry whether these employees could have been fitted in the manufacturing work when they had done only administrative and 'other duties connected with the agency business, yet the Tribunal drew the conclusion that because the company failed to transfer these employees to other centres retrenchment was not justified. [989 G 990 A] (vi) Rule 77(1) of the West Bengal Industrial Disputes Rules, provides that when an employer finds it necessary to retrench any workmen he shall, at least _one month before the date of actual retrenchment, give notice thereof to the Labour Commissioner and the Conciliation Officer. The proviso to it states that where an employer retrenches any workman with immediate effect by paying him wages in lieu of notice he shall immediately after such retrenchment give notice thereof to the said officers. Though the notice of retrenchment was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso to r. 77(1). The object of the proviso clearly is that where it is not possible for an employer to give one months notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment. instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out. So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place. [990 C]

The appellant in this appeal had been assessed to Income Tax which was reduced on appeal but that assessment was set aside by the Income Tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the assessment year in Chota Nagpur. On a reference by the Tribunal the High Court con firmed the setting aside of this assessment. By the promulgation of Bihar Regulation IV of 1942 by the Governor of Bihar (which was assented to by the Governor General) the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from the 30th March 1939. On the 8th February 1944 the Income Tax Officer passed an order in pursuance of which a fresh notice was issued under section 34 which resulted in the assessment of the appellant to income tax. The question for determination in this appeal was whether the notice under section 34 was validly issued. Held (i) that for the purposes of section 34 of the Act the income, profits or gains sought to be assessed were chargeable to income tax according to the scheme of the Act and the provisions of sections 3 and 4 of the Act; (ii) that it was a case of chargeable income escaping assessment within the meaning of section 34 and was not a case of mere non assessment of income tax because the earlier assessment proceedings in the present case had in fact been taken but failed to result in a valid assessment owing to some lacuna which was not attributable to the assessing authorities. C.I.T., Bombay vs Sir Mahomed Yusuf Ismail ([1944] , Fazal Dhala vs C.I.T., B. & O. ([1944] 12 I.T.R. 341), Baghavalu Naidu & Sons vs C.I.T., Madras ([1945] , Raja Benoy Kumar Sahas Boy vs C.I.T., West Bengal ([1953] , Chatturam vs C.I.T., Bihar ([1947] F.C.R. 116), Whitney vs Commissioners of Inland Revenue ([1926] A.C. 37), C.I.T. Bombay & Aden vs Khemchand Ramdas ([1938] at 428), Sir Rajendranath Mukherjee vs C.I.T., Bengal ([1934] , Madan Mohan Lal vs C.I.T., Punjab ([1935] , C.I.T., Bombay vs Pirojbai N. Contractor ([1937] , Kunwar 291 Bishwanath Singh vs C.I.T., C.P. ([1942] , Raja Bahadur Kamakshya Narain Singh vs C.I.T. B. & 0. ([1946] and Chatturam vs C.I.T., B. & 0. ([1946] , referred to.

The services of the appellant workman were terminated by the Management of the respondent. On a report from the Conciliation Officer the Government referred the dispute to the Labour Court. The Management contended that the workman had not raised any demand with the Management and that there was, therefore, no industrial dispute. The Labour Court found as a fact that the Union had raised a valid demand with the Management and that the termination of services of the workman was illegal and mala fide. The Management invoked the jurisdiction of the High Court under article 226. A Single Judge of the High Court quashed the Award of the Labour Court on the finding that no demand had been raised and there was no industrial dispute which could be properly referred by the Government for adjudication. The judgment of the Single Judge was affirmed by the Division Bench. Allowing the appeal, ^ HELD: The High Court was not right in interfering with the Award of the Labour Court under article 226 on a mere technicality, [728 E] The jurisdiction under article 226 of the Constitution is truly wide but, for that very reason, it has to be exercised with great circumspection. It is not for the High Court to constitute itself into an appellate court over Tribunals constituted under special legislations to resolve disputes of a kind qualitatively different from ordinary civil disputes and to readjudicate upon questions of fact decided by those Tribunals. That the questions decided pertain to jurisdictional facts does not entitle the High Court to interfere with the findings on jurisdictional facts which the Tribunal is well competent to decide. [727 D F] In the instant case there was a conciliation proceeding, the conciliation had failed and the Conciliation Officer had so reported to the Government. The Government was justified in thinking that there was an industrial dispute and referring it to the Labour Court. The High Court 's discussion on what was an industrial dispute and what was a jurisdictional fact was an entirely unnecessary exercise. [727 G F; 728 A B] Sindhu Resettlement Corporation Ltd. vs The Industrial Tribunal of Gujarat, [1968]1 S.C.R. 515, explained and distinguished.

On the termination of the appellant 's services by his employer an industrial dispute was raised by his union and the question of his dismissal along with a number of other disputes was referred to the Industrial Tribunal. After several adjournments of the case the management and the union filed a joint petition of compromise settling all the points in dispute out of Court. Prior to this the appellant filed an application praying that he might be allowed to be represented by two of his co workers instead of the Secretary of the Union in whom he had no faith and who had no authority to enter into the compromise on his behalf. This prayer was not allowed by the Tribunal which made an award in terms of the compromise. The appellant, thereupon, made an application to the High Court praying for a writ quashing the order of the Tribunal disallowing him to be represented by a person of his own choice and 197 also for a direction to the Tribunal not to record the compromise. The High Court summarily dismissed the Writ Petition. , On appeal by special leave, Held, that the appellant was Dot entitled to separate repre sentation when already being represented by the Secretary of the union which espoused his cause. A dispute between an individual workman and an employer cannot be an industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of workmen or by a considerable number of workmen. When an individual workman becomes a party to a dispute under the Industrial Disputes Act be is a party, not independently of the Union which has espoused his cause. Central Provinces Transport Service Ltd. vs Raghunath Gopal Palwardhan, , followed. Although no general rule can be laid down in the matter, the ordinary rule should be that representation by an officer of the trade union should continue throughout the proceedings in the absence of exceptional circumstances justifying other representation of the workman concerned.

The appellant Municipality in its Appeal by Special Leave impugned the interlocutory order of the High Court restraining the Municipality from recovering a graduated consolidated rate on the annual value of the holdings in terms of the amended provisions in sections 123 and 124 of the Bengal Municipal Act, 1932 as amended by the Bengal Municipal (Amendment) Act, 1980. Allowing the Appeal, ^ HELD: 1. The High Court should not in proceedings under Article 226 of the Constitution grant any stay of recovery of tax save under very exceptional circumstances. The grant of stay in such matters, should be an exception and not a rule. [345F] 2. The levy or impost does not become become bad as soon as a Writ Petition is instituted to assail the validity of the levy. There is no warrant for presuming the levy to be bad at the very threshold of the proceedings. The main purpose of passing an interim order is to evolve a workable formula of a workable arrangement to the extent called for by the demands of the situation. The only consideration at that juncture is to ensure that no prejudice is occasioned to the rate payers in case they ultimately succeed. This object can be attained by requiring the authority levying the impost to give an undertaking to refund or adjust the levied amount against future dues, in the event of the entire levy or a part thereof being ultimately held to be invalid by the Court. [345 G H; 346 A] 3. The main purpose of passing an interim order is to evolve a workable formula or a workable arrangement to the extent called for by the demands of the situation keeping in mind the presumption regarding the constitutionality of the legislation and the vulnerability of the challenge, only is order that no irreparable injury is occasioned. The Court has therefore to strike a delicate balance after considering the pros and cons of the matter lest larger public interest is not jeopardized and institutional embarrassment is eschewed. [346H; 347A] 345 4. The Court has to show awareness of the fact that in the case of the fact that in the case of a Municipality it cannot function or meet its financial obligations if its source of revenue is blocked by an interim order restraining it from recovering the taxes as per the impugned provision. The Municipality has to maintain essential civic services, run public institutions, purchase supplies and pay the salaries of its employees etc. The grant of an interlocutory order would paralyze the administration and dislocate the entire working. These serious ramifications were lost sight of by the High Court in the instant case while making the impugned order. [346 C D]

A considerable number of workmen were employed by a large number of small businessmen in a locality in the city. Prior to 1965, the employers made ex gratia payment to the workers by way of bonus which they stopped from that year. A Board of Arbitrators appointed under section 10A of the Industrial Disputes Act, to which the bonus dispute was referred, rejected the workers demand for bonus. The dispute was eventually referred to an Industrial Tribunal which in limine dismissed the workers ' demand as being barred by res judicata, in view of the decision of the Arbitration Board. The Tribunal in addition. held that bonus so far paid having been founded on tradition and custom, did not fall within the four corners of the Bonus Act which is a complete code and came to the conclusion that the workers were not entitled bonus. On appeal to this Court it was contended that (i) the appellant Union not being a party to the dispute had no locus standi, (ii) the claim of the workmen not being profit based bonus, which is what the Bonus Act deals with, the Act has no application to this case; and (iii) since no case of customary or contract bonus was urged before the Arbitration Board such a ground was barred by the general principles of res judicata. Dismissing the appeal. ^ HELD: 1(a) In an industrial dispute the process of conflict resolution is informal, rough and ready and invites a liberal approach. Technically the union cannot be the appellant, the workmen being the real parties. There is a terminological lapse in the cause title, but a reading of the petition, the description of the parties, the grounds urged and grievances aired, show that the battle was between the workers and the employers and the Union represented the workers. The substance of the matter being obvious, formal defects fade away. [596H] (b) Procedural prescriptions are handmaids, not mistresses of justice and failure of fair play is the spirit in which Courts must view processual deviances. Public interest is promoted by a spacious construction of locus standi in our socio economic circumstances, conceptual latitudinarianism permits taking liberties with individualisation of the right to invoke the higher courts where the remedy is shared by a considerable number, particularly when they are weaker. [597B; D] Dhabolkar ; and Nawabganj Sugar Mills ; held inapplicable. (e) In industrial law collective bargaining, union representation at conciliations, arbitrations, adjudications and appellate and other proceedings is a welcome development and an enlightened advance in industrial life. [597G] In the instant case the union is an abbreviation for the totality of workmen involved in the dispute. The appeal is, therefore, an appeal by the workmen compendiously projected and impleaded through the union. [598D] 592 2(a) The demands referred by the State Govt. under section 10(1) (d) of the Industrial Disputes Act, specifically speak of payment of bonus by the employers which had become custom or usage or a condition of service in the establishments. The subject matter of the dispute referred by the Govt. dealt with bonus based on custom or condition of service. The Tribunal was bound to investigate this question. The workers in their statements urged that the demand was not based on profits or financial results of the employer but was based on custom. [599 D E] (b) The pleadings, the terms of reference and the surrounding circumstances support the only conclusion that the core of the cause of action is custom and/or term of service, not sounding in or conditioned by profits. The omission to mention the name of a festival as a matter of pleading did not detract from the claim of customary bonus. An examination of the totality of materials leads to the inevitable result that what had been claimed by the workmen was bonus based on custom and service condition, not one based on profit. [600E; 601B] Messrs. Ispahani Ltd. vs Ispahani Employees ' Union [1960] 1 S.C.R. 24, Bombay Co. ; , Jardine Henderson [1962] Supp.3 S.C.R.382, Howrah Amta Light Rly. [1966] II LLJ 294, 302, Tulsidas Khimji [1962] I LLJ 435 and Tilak Co. A.I.R. 1959 Cal. 797 referred to. (c) When industrial jurisprudence speaks of bonus it enters the area of right and claim to what is due beyond strict wages. Viewed from this angle prima facie one is led to the conclusion that if the Bonus Act deals wholly and solely with profit bonus it cannot operate as a bar to a different species of claim merely because the word 'bonus ' is common to both. [604G] (d) The welfare of the working classes is not only a human problem but a case where the success of the nation 's economic adventures depends on the cooperation of the working classes to make a better India. Against such a perspective of developmental jurisprudence there is not much difficulty in recognising customary bonus and contractual bonus as permissible in industrial law. [605B] Churakulam Tea Estate , Ispahani [1960] 1 S.C.R. 24, Bombay Co. , Jardine Henderson [1962] Supp. 3 S.C.R. 382, Howrah Amta Light Rly. [1966] II LLJ 294, 302 and Tulsidas Khimji [1962] I LLJ 435 referred to. 3(a) It is true that if the Bonus Act is a complete code and is exhaustive of the subject whatever the species of bonus, there may be a bar to grant of bonus not covered by its provisions. But it is quite conceivable that the codification may be of everything relating to profit bonus in which case other types of bonus are left untouched. Merely calling a statute a code is not to silence the claimant for bonus under heads which have nothing to do with the subject matter of the code. [605D] (b) The history of the Act, the Full Bench formula, the Bonus Commission Report and the statutory milieu as also the majuscule pattern of bonus prevalent in the Indian industrial world, converge to the point that the paramount purpose of the Act was to regulate profit bonus. If such be the design of the statute, its scheme cannot be stretched to supersede what it never meant to touch or tackle. [607C D] (c) The objects and reasons of the Bonus Act indicate that the subject matter of the statute was the question of payment of bonus based on profit to employees employed in establishments. Schematically speaking, statutory bonus is profit bonus. To avoid an unduly heavy burden under different heads of bonus it is provided in section 17 that where an employer has paid any puja bonus or other customary bonus, he would be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him under the Act. If the customary bonus is thus recognised statutorily and, if in any instance it happened to be much higher than the bonus payable under the Act, there is no provision totally cutting off the customary bonus. The provision for deduction 593 in section 17 on the other hand, indicates the independent existence of customary bonus although, to some extent, its quantum is adjustable towards statutory bonus. Section 34 does not mean that there cannot be contractual bonus or other species of bonus. This provision only emphasises the importance of the obligation of the employer, in every case, to pay the statutory bonus. The other sub sections of section 34 also do not destroy the survival of other types of bonus than provided by the Bonus Act. The heart of the statute, plainly read, from its object and provisions, reveals that the Act has no sweep wider than profit bonus. [607E G; 608 B D] (d) The fact that certain types of bonus which are attended with peculiarities deserving all special treatment have been expressly saved from the bonus Act did not mean that whatever had not been expressly saved was by necessary implication included in the Bonus Act. [608D] (e) The long title of the Bonus Act seeks to provide for bonus to persons employed "in certain establishments" not in all establishments. Moreover, customary bonus does not require calculation of profits, available surplus, because it is a payment founded on long usage and the Act gives no guidance to fix the quantum of festival bonus. It is, therefore, clear that the Bonus Act deals with only profit bonus and matters connected therewith and does not govern customary, traditional or contractual bonus. [608G H] (f) The Bonus Act speaks and speaks as a whole code on the sole subject of profit based bonus but is silent on and cannot therefore annihilate by implication, other distinct and different kinds of bonus such as the one oriented on custom. [609D] Ghewar Chand 's case ; distinguished and held inapplicable. (g) The principle that a ruling of a superior court is binding law is not of scriptural sanctity but is of ratio wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. So there is no impediment in reading Ghewar Chand 's case as confined to profit bonus, leaving room for non statutory play of customary bonus. That case relates to profit bonus under the Industrial Disputes Act. The major inarticulate premise of the statute is that it deals with and only with profit based bonus. There is no categorical provision in the Bonus Act nullifying all other kinds of bonus, nor does such a conclusion arise by necessary implication. The core question about the policy of the Parliament that was agitated in that case turned on the availability of the Industrial Disputes Act as an independent method of claiming profit bonus de hors the Bonus Act and the Court took the view that it would be subversive of the scheme of the Act to allow an invasion from the flank in that manner. A discerning and concrete analysis of the scheme of the Act and the reasoning of the Court leaves no doubt that the Act leaves untouched customary bonus. [609E H; 611D E] (4) So long as Pandurang stands industrial litigation is no exception to the general principle underlying the doctrine of res judicata. But the case of Pandurang is distinguishable. In that case there was a binding award of the Industrial Tribunal relating to the claim which had not been put an end to and so this Court took the view that so long as that award stood the same claim under a different guise could be subversive of the rule of res judicata. In the present case the Arbitration Board dealt with one dispute; the Industrial Tribunal with a fresh dispute. The Board enquired into one cause of action based on profit bonus; the Tribunal was called upon to go into a different claim. [612D F] [The court expressed a doubt about the extension of the sophisticated doctrine of constructive res judicata to industrial law which is governed by special methodology of conciliation, adjudication and considerations of peaceful industrial relations where collective bargaining and pragmatic justice claim precedence over formalised rules of decision based on individual contests, specific causes of action and findings on particular issues.]

Two employees of the respondent Bank preferred a claim on the basis of the existence of legal light in them to the payment of a customary bonus on the eve of pooja. Their case was that the bonus paid to them every year on the eve of pooja at the rate of pay as on 1st September of the respective year was unrelated to any profit or loss made by the company and that the consecutive payment for more than 16 years without any break of such bonus has developed into a condition of service giving rise to a right and an expectancy which in law assumed the characteristics of customary bonus. The claim was resisted by the bank on the grounds, namely, (a) the application itself was not maintainable since the alleged right pleaded by the workmen was not a condition of service and that such a right did not exist in fact also; (b) the conditions of service of the employees of the Bank are governed by various awards and settlements; (c) though there were agreements entered into between the bank and its employees on several matters there was no agreement at any time on the question of payment of bonus; and (d) though the bonus was paid, as a result of the employees demand every year as per separate agreement for the payment thereof the bonus paid was related to profit and not based on any custom. After considering correspondence that passed between the Bank and its employees, the Labour Court dismissed the application holding that on the basis of the material on record, there was no existing right to customary bonus and that the Labour Court could not either create or declare a right which was not in existence to stretch its jurisdiction under section 330(2) of the . Hence the appeal by special leave. ^ HELD: 1. In the facts and circumstances of the case the bonus received by the appellants did not have the characteristic of customary bonus as known to law and therefore they were not entitled to the quantification of that amount under section 33 c(2) of the , on the basis of tho existence of a legal right in them. In Vegetable Products Ltd. vs Their Workmen, , the Supreme Court has laid down the tests to determine what exactly is customary or festival bonus. The tests laid down are; (I) that the payment has been made over an unbroken series of years; (2) that it has been for a sufficiently long period the period has to be longer than in the case of an implied term of employment; (3) that it has been paid even in years of loss and did not depend on the earning of profits; and (4) that the payment has been at a uniform rate throughout. In the instant case, the record shows that the bonus paid does not satisfy the requirements laid down by the Court. The mere fact the payments were made in the month of September or thereabout every year, by itself will not make the bonus paid a customary pooja bonus. The rate has not been uniform. The management has at all times taken the definite stand that the payment was related to profits and that it was in anticipation of making profit. Further the payments were made at all time pursuant to demands made by the employees. 11061 C F Vegetable Products Ltd vs Their Workmen, applied. The concept of any customary bonus is unknown to nationalised banks. All the nationalised banks are wholly owned undertakings of the Government of India. In the matter of bonus, the employees of the nationalised banks must be dealt with on a common denominator. If therefore, the contention of the appellants were to prevail the employees of the respondent. which is only one amongst many Nationalised banks, would enjoy an undeserved advantage compared to their counterpart in other nationalised banks and even in the other branches of the respondent bank and may become a cause of disharmony and inequality. Therefore, in larger public interest also, the demand for customary bonus otherwise found to be untenable, must be negatived. [1063 C E]

Appeal No. 624 of 1960. Appeal by special leave from the judgment and order dated May 30, 1960 of the Mysore High Court in Civil Revision Petition No. 1098 of 1959. K. R. Karanth and R. Gopalakrishnan, for the appellant. A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan, for the respondent. B. R. L. Iyengar and T. M. Sen, for the State of Mysore (On Notice issued by the Court). February 27. The Judgment, of the Court was delivered by SHAH, J. Smt. Vimla hereinafter referred to as the plaintiff filed suit No. 73 of 1956 in the court of the Subordinate Judge, South Kanara, for a decree for 1016 possession of lands, buildings, house sites described in sch. A and movable properties described in sch. B and for mesne profits in respect of properties described in sch. A and for a decree for possession and management and for account of the properties described in sch. C and institutions alleged to be the private family religious endowments in sch. D. The plaintiff claimed that on the death of her father Shri Dharmasthala Manjayya Heggade on August 31, 1955, she became entitled to the properties in suit but the defendant wrongfully possessed himself of those properties. The plaintiff valued the properties in schs. C and D under section 28 of the Madras Court fees and Suits Valuation Act, 1955 at Rs. 21,000/ and paid a court fee of Rs. 275/ . She valued the lands in schedule A for purposes of jurisdiction at 30 times the assessment and separately valued the buildings and paid court fee on that footing. On June 28, 1956, the Subordinate Judge ordered on an objection raised by his office that the amount of Rs. 34,577/ paid as court fee by the plaintiff was adequate. Then followed a course of proceedings for which not many precedents may be found. On September 9, 1950, the defendant filed his written statement raising an objection inter alia to the valuation of the properties in suit and the court fee exigible on the claim. The trial court then raised an issue about the adequacy of the court fee, paid by the plaintiff. On February 13, 1957, the defendant applied for the appointment of a Commissioner to value the properties. The court dismissed the application and declared that the court fee paid was adequate. In Revision Petition 272 of 1957 preferred by the defendant to the High Court of Judicature at Bangalore, the order passed by the Subordinate Judge was set aside and it was directed that the trial court do " ascertain the value of the properties for purposes of court fee in accordance with law after giving full opportunity to the parties and if need be by appointing a Commissioner to ascertain the present market value of the suit Schedule properties and decide the issue afresh on merits. " Pursuart to this direction, a Commissioner was appointed by 1017 the Subordinate Judge. The Commissioner submitted his report as to valuation of the properties. Objections were raised by the defendant to that report and a further report was submitted by the Commissioner. On the direction of the Subordinate Judge, a supplemental report was submitted by the Commissioner. After hearing the parties, the Subordinate Judge held that the properties described in sch. D were " extra commercial " and fixed court fee was exigible in respect of the claim for possession thereof, that pro perties described in sch. D were " trust properties " and section 28 of the Madras Court fees and Suits Valuation Act applied thereto as the dispute related to the right of management between persons claiming to be rival trustees, that the houses built on revenue paying lands had to be valued according to their market value and not at 30 times the land assessment and that the lands in sch. A were worth Rs. 7,74,665/ and the house sites were worth Rs. 27,625/ . The plaintiff paid the additional court fee as directed by the court,. Against the order passed by the Subordinate Judge, the plaintiff and the defendant applied by separate petitions in revision to the High Court of Mysore. The High Court heard the Advocate General of the State and substantially confirmed the order passed by the Subordinate Judge except as to an institution described as " Nelliyadi Beedu ", in respect of which the High Court directed the trial court to determine whether the institution was " extra commercial " after giving an opportunity to both parties to put forth their contentions and to lead evidence in that behalf. Against that order of the High Court, this appeal has been preferred by the defendant with special leave under article 136 of the Constitution. The Court fees Act was enacted to collect revenue for the benefit of the State and not to arm a contesting party with a weapon of defence to obstruct the trial of an action. By recognising that the defendant was entitled to contest the valuation of the properties in dispute as if it were a matter in issue between him and the plaintiff and by entertaining petitions preferred by the defendant to the High Court in exercise of 1018 its revisional jurisdiction against the order adjudging court fee payable on the plaint, all progress in the suit for the trial of the dispute on the merits has been effectively frustrated for nearly five years. We fail to appreciate what grievance the defendant can make by seeking to invoke the revisional jurisdiction of the High Court on the question whether the plaintiff has paid adequate court fee on his plaint. Whether proper court fee is paid on a plaint is primarily a question between the plaintiff and the State. How by an order relating to the adequacy of the court fee paid by the plaintiff, the defendant may feel aggrieved, it is difficult to appreciate. Again, the jurisdiction in revision exercised by the High Court under section 1 15 of the Code of Civil Procedure is strictly conditioned by cls. (a) to (c) thereof and may be invoked on the ground of refusal to exercise jurisdiction vested in the Subordinate Court or assumption of jurisdiction which the court does not possess or on the ground that the court has acted illegally or with material irregularity in the exercise of its jurisdiction. The defendant who may believe and even honestly that proper court fee has not been paid by the plaintiff has still no right to move the superior court by appeal or in revision against the order adjudging payment of court fee payable on the plaint. But counsel for the defendant says that by Act 14 of 1955 enacted by the Madras Legislature which applied to the suit in question, the defendant has been invested with a right not only to contest in the trial court the issue whether adequate court fee has been paid by the plaintiff, but also to move the High Court in revision if an order contrary to his submission is passed by the court. Reliance in support of that contention is placed upon sub section (2) of section 12. That sub section, in so far as it is material, provides: " Any defendant may, by his written statement filed before the first hearing of the suit or before evidence is recorded on the merits of the claim. plead that the subject matter of the suit has not been properly valued or that the fee paid is not sufficient. All questions arising on such pleas shall 1019 be heard and decided before evidence is recorded affecting such defendant, on the merits of the claim. If the court decides that the subject matter of the suit has not been properly valued or that the fee paid is not sufficient, the court shall fix a date before which the plaint shall be amended in accordance with the court 's decision and the deficit fee shall be paid. . " But this section only enables the defendant to raise a contention as to the proper court fee payable on a plaint and to assist the court in arriving at a just decision on that question. Our attention has not been invited to any provision of the Madras Court fees Act or any other statute which enables the defendant to move the High Court in revision against the decision of the court of first instance on the matter of court fee payable on a plaint. The Act, it is true by section 19, provides that for the purpose of deciding whether the subject matter of the suit or other proceeding has been properly valued or whether the fee paid is sufficient, the court may hold such enquiry as it considers proper and issue a commission to any other person directing him to make such local or other investigation as may be necessary and report thereon. The anxiety of the Legislature to collect court fee due from the litigant is manifest from the detailed provisions made in ch. III of the Act, but those provisions do not arm the defendant with a weapon of technicality to obstruct the progress of the suit by approaching the High Court in revision, against an order determining the court fee payable. In our view, the High Court grievously erred in entertaining revision applications on questions of court fee at the instance of the defend. ant, when no question of jurisdiction was involved. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

The question was whether the defendant was entitled to raise a grievance and contest the valuation of the properties in dispute as if it were a matter in issue between the plaintiff and himself and could seek to invoke the High Court in its revisional jurisdiction against the order adjudging 'court fees payable on the plaint. Held, that the Court Fees Act is enacted to collect revenue and not to be used as a technical weapon by the defendant for obstructing the progress of the suit by approaching the High Court in its revisional jurisdiction against the order determining and adjudging court fees payable on the plaint. That section 12(2) of the madras Court Fees Act, 1955, only enabled the defendant to assist the court in arriving at a just decision on the question of court fees payable on the plaint. That in the instant case the High Court grievously erred in entertaining revision application on the question of court fees at the instance of the defendant when no question of jurisdiction was involved.

One Ittiyavira, the deceased father of the appellant purchased properties and paid part of the consideration for the transaction in cash and for the balance executed two hypothecation bonds in favour of his vendors, Ramalinga Iyer and Raman Vela Yudhan. Ramalinga Iyer assigned his hypothe cation bond in favour of one Sankara Rama Iyer. He had executed a promissory note in favour of one Anantha Iyer who, after his death, instituted a suit against his son Sankara Subha Iyer for recovery of the amount thereunder and obtained a decree. Treating the deed of assignment executed by Ramalinga 496 Iyer in favour of Sankara Rama Iyer as a sham document, Anantha Iyer attached the mortgagee rights of Ramalinga Iyer in the hypothecation bond and eventually purchased them. In a partition in Anantha Iyer 's family, the rights under the hypothecation bond purchased by him were allotted to his share and to that of his brother. These two persons instituted a suit against Ittiyavira being O. section No. 59 of 1093 and obtained a decree for realisation of the amount against him and transferred their decree to one Venkiteswara Iyer who. at the court auction held in execution of that decree, purchased the hypothecated properties which are properties in the suit and eventually obtained possession of the properties on 12. 7: 1099. Before the institution of O. section 59 of 1093 by Anantha Iyer and his brother, Ittiyavira had executed a sale deed of these properties on 8. 10. 1093 in favour of his son, the appellant. The appellant was not. male a party to O. section No. 59 of 1093. Ituyavira died in the 1107 and on 2. 2. 1108, Venkiteswara Iyer sold all the suit properties to the plaintiffsrespondents. Thereafter the respondents instituted proceedings under section 145 of the Code of Criminal Procedure in the Court of Magistrate claiming their possession over the suit properties which was disputed by the appellant. The properties were attached and placed in the possession of the Receiver appointed by the court. Eventually, the court held that the appellant 's possession over the properties be maintained until otherwise ordered by the competent civil court. The High Court of Travancore affirmed the order of the Magistrate and the appellant was handed over the possession of the properties by the Receiver. Consequently, the respondents instituted a suit out of which this appeal arises. The trial court dismissed the suit and that decision was reversed by the High Court. It was contended before this Court that the decree obtained by Anantha Iyer in O. section 59/1093 was a nullity because the suit was barred by time. It was further urged that the appeal before tile High Court should have been heard not by a Division Bench of merely two judge but by a Bench of three judges as provided in section II (1) of the Travancore High Court Act, 1099. Held, that if the suit was barred by time and yet, the court decreed it, the court would be committing an illegality and the aggrieved party would be entitled to have the decree set aside by preferring an appeal against it. As has often been said, courts have Jurisdiction to decide right or to decide wrong and even though they decide wrong the decree rendered by them cannot be treated as nullities, 497 Maqbul Ahmad vs Onkar Pratap Narain Singh, A. 1. R. , held inapplicable. Where the question of limitation was not raised in the High Court, it cannot be allowed to be raised in this Court when the question was one of mixed fact of law. In the instant case the possession of the Receiver during the proceedings under section 145 of the Code of Criminal Procedure would necessarily unure for the benefit of the successful party and if this period is taken into account, the respondent 's suit would be well within time. Held, further that no party has a vested right to have his appeal heard by a specified number of judges and no right of the party has been infringed merely because it was heard by two judges and not by three judges. A litigant has no right to contend that a tribunal before whom he. should have taken an appeal when he instituted the suit, should not be abolished and unless it can be shown that the repeal of the Travancore High Court Act was unconstitutional, whatever right of appeal may have vested in the party stood abrogated by the competent legislature.

In pursuance of a Housing Scheme the Tamil Nadu Housing Board, Madras had allotted residential plots over the land acquired under the Land Acquisition Act, to different groups of applicants including the low income group on terms and conditions stipulated in the lease deed Exh. B 3 sometime in the year 1963. After a lapse of more than a decade of the allotment, fresh demands were made from the allottees in 1975. Objecting to the same, the respondent herein filed a suit for self and on behalf of all the allottees of low income group settled in the Colony named Ashok Nagar, pray ing for a permanent injunction restraining the Board from enforcing the demand. The defendant Board questioned the very maintainability of the suit in a representative capacity and also pleaded that it was entitled to finally determine the correct prices for the plots after taking into account the final award of the compensation for acquired land and until then the prices were tentative. The trial court negatived the objection to the maintainability of the suit but dismissed it on merits. The first appellate court confirmed the decree. On second appeal, the High Court reversed the finding on merits. The High Court held that it was open to the Board to determine within a reasonable time what portion of the demand included the excess on account of compensation awarded by the courts for acquisition of the land and realize the same after serving fresh demand notices. But since the impugned demand included both the excess amount of compensation as also the additional developmental charges injunction was granted in regard to the entire demand as the two amounts were not separately mentioned. Dismissing the appeal of the Board, this Court, HELD: The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation. The condition necessary for application of the provisions is that the 273 persons on whose behalf the suit is being brought must have the same interest. In other words either the interest must be common or they must have a common grievance which they seek to get redressed. [276C D] The Court, while considering whether leave under the Rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule. [276E] Persons who may be represented in a suit under Order I, Rule 8 need not have the same cause of action. [277F]

The respondent landlord filed a suit for eviction of the appellantstenant from the house in question on the ground of failure to pay rent and for realisation of arrears of rent. While the respondent pleaded that the rate of rent was Rs.70 per month, the appellant contended that it was only Rs.40 and not Rs.70, and that he was paying Rs.30 per month for the furniture, provided by the landlord which he returned sometime after the tenancy commenced. The trial court dismissed the suit holding that the rate of rent was Rs.40 per month and, as such, the appellant was not defaulter. In the revision filed by the respondent, the Revisional Court held that the rent was Rs.70 per month. The appellant filed a writ petition before the High Court, which quashed the revisional order and remanded the case for deciding the revision petition afresh. Thereafter, the revisional court again allowed the revision. The appellant challenged the revisional order before the High Court which dismissed the same. In the appeal, by special leave, it was contended on behalf of the appellant tenant that in the face of clear admission of the respondent in the receipt, the rent of the house was Rs.40 per month, and that the amount of Rs.70 per month mentioned in the rent note had been explained in the receipts, to be Rs.40 as house rent and Rs.30 for furniture. On behalf of the respondent, it was contended that the tenancy 757 was for a furnished building and failure to pay a part of the rent, in respect of furniture, would attract the provi sions of section 20(2)(a) of the U.P. Urban Building (Regulation of Letting Rent and Eviction) Act, 1972 and the appellant was liable to be ejected. It was also contended that the tenancy being of a furnished house the tenant could not under law, unilaterally surrender part of tenancy. Allowing the appeal, HELD: It was never the case of the respondent at any stage that furnished house was given on rent to the appel lant. In the notice before filing the suit and in the plaint, it was specifically pleaded that rent of the house was Rs.70 per month and the tenant was in arrears. In the written statement, appellant took a clear stand that the rent of the house was only Rs.40 and Rs.30 was for the furniture, which according to him, was returned after the commencement of the tenancy. [760C D] In the face of clear pleadings on the record, it is impermissible to raise the plea that the landlord rented a furnished house to the tenant. It would be contrary to the pleadings. That apart, neither before the trial court nor before the Revisional Court and not even before the High Court this plea was raised. [760F] The trial court relied upon the rent receipts, 39/C and 40/C, produced by the appellant. It was clearly mentioned in the receipt 39/C that Rs.40 were towards house rent and Rs.30 towards furniture charges and Rs.3 towards water and electricity charges. The respondent admitted the contents of the receipt but explained that Rs.30 towards furniture charges was mentioned at the request of the tenant. [758G H] In the face of the clear admission by the .respondent in the two receipts, the finding of the Revisional Court that the monthly rent was Rs.70 is erroneous. [759D]

The Respondent, a licencee under floe Karnataka Excise Act for selling liquor at an approved shop, flied a Writ Peti tion before the High Court challenging the vires of Section 23(d) of the Mysore Excise Act, 1965 and Rule 8(1) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as being beyond the legislative competence of the State. The High Court negatived the contention of the Respond ent in respect of Section 23(d) of the Act but held that Rule 8(1) authorising tihe levy of licence fee for retail shop was without authority of law and dircted refund of the levy collected for three years prior to the filing of tiWrit Petition. Aggrieved by the High Court 's decision, the appellant State has preferred the present appeal by special leave. Dismissing the appeal, this Court, HELD: The High Court rightly did not accept the chal lenge to Section 23(d) of the Mysore Excise Act, 1965. What is authorised under Section 23(d) is imposition of a fee of licence in respect of manufacture or sale of any excisable articles. Rule 8(1) of the Karnataka Excise (Sale of Iadion & Foreign Liquors) Rules, 1968 has obviously gone beyond the enabling provision in the section by requiring a licence fee to be paid for the premises where the licensed shop is located. Such a fee would not have the support of Section 23(d). It is unnecessary to refer to precedents for support for this conclusion. It may be possible for the Legisla 701 ture to make a statutory provision for a liicence fee of the type contemplated under the Rules but without authority of the statute a rule of this type should not have been made. [702E F]

The appellant made a gift in 1951 of certain ordinary and preference shares in a company to. his wife and on the date of transfer the value of the shares was Rs. 69,730. After the company had converted the preference shares into ordinary shares the appellant 's wife sold most of the shares held by her for Pa. 1,54,800, resulting in a capital gain of Rs. 70,860 as computed under section 12B of the Income Tax Act. She deposited the entire amount realised from the sale of shares with a firm and thereby earned an interest of Rs. 9,288 per year. In the appellant 's assessment for 1957 58, the Income Tax Officer included the amount of Rs. 70,860 on the view that the gain resulting from the sale of the shares was the income of the appellant 's wife which arose directly or indirectly from assets transferred by him within the meaning of section 16 (3)(a)(iii) of the Income Tax Act, 1922. Similarly, in the appellant 's assessment for the year 1958 59 ' and 19591 60, the interest amount of Rs. 9,288 was also included as income within the meaning of section 16 (3) (a) (iii). In appeals made against the three assessment orders, while the Appellate Assistant Commissioner dismissed the appeal in respect of the assessment year 1957 58 be partly allowed the other two appeals taking the view that only that part of the interest which was attributable to the monetary value of the shares at the time of the gift was liable to be included in the appellant 's total income under section 16 (3)(a)(iii); since the monetary value of the shares gifted to the wife at the time when the gift was made was. only Rs. 69,730. the interest attributable to it worked, out at Rs. 4,138 and only this amount could be included in the appellant 's income. The Appellate. Tribunal dismissed the appellant 's further appeal and also allowed cross appeals filed by the Department. The High Court. upon a reference. held that the sum of Rs. 70,860 was properly included in the appellant 's income, in 1957 58 but that the interest amount in excess of Rs. 4.138 was not liable to be included in his income for 1958 59 and 1959 60. In the appeal to this Court the only question for consideration was whether the amount of Rs. 70.860 was the appellant 's income under section 16 (3)(a)(iii). It was contended on his behalf (i) that what comes within the ambit of section 16(3.)(a)(iii) is the income from the transferred assets.which is different from the profits or gains arising from the sale of the transferred assets. or in other words "the capital gains" from the transferred assets; and (ii) that section 16(3)(a)(iii) was enacted in 1937 when the word 'income ' did not include 'capital gains ' and income from the property was understood to be income falling under that head in section 6 of Act. HELD: The High Court had rightly decided that the amount. of Rs. 70,860 was properly included in the assessees income under section 16 (3) (a) (iii). 361 (i) There is no logical distinction between income arising from the asset transferred to the wife and arising from the sale of the assets so transferred. The profits or gains which arise from the sale of the asset would arise or spring from the asset, although the operation by which the profits or gain is made to arise out of the asset is the operation of sale. [364 G H] (ii) Although at the time when section 16(3)(a)(iii) was enacted the definition of 'income ' did not include 'capital gains ', capital gains having been brought within the meaning of 'income ' in section 2(6C), the expression 'income ' as used in section 16(3)(a)(iii) must be construed according to the amended definition of the word and would, therefore, include capital gains. There is nothing in the context or language of section 16(3)(a)(iii) of the Act to suggest that capital gains are excluded from its scope and there is no reason why a restricted interpretation should be given to the provisions of section 16(3) (a) (iii). [365 C E]

The appellant company filed a suit against the respondents in the court of the Senior Subordinate Judge, Gurgaon, for the specific performance of an agreement for the purchase of ' certain land by the company from the respondents. Part of the land in question became the subject of proceedings under the Land Acquisition Act, 1894, and dispute relating to compensation was referred to the Court of the District Judge. The court fixed the compensation at over Rs. 2 Iakhs. A dispute as to apportionment of the compensation was also. referred under section ' 30 of the Land Acquisition Act to the court but the proceedings were stayed by the Additional District Judge, pending decision of the suit for specific performance by the Senior Subordinate Judge. The suit was dismissed and thereupon the respondents applied to the Additional District Judge for continuation of proceedings under section 30 and for payment of compensation to them. The appellant company resisted the application on the ground that it had filed an appeal in the High Court against the decree of the Senior Subordinate Judge. The Additional District Judge after hearing both parties stayed the proceedings under section 30 pending disposal of the company 's appeal by the High Court. On a revision application under section 115 C.P.C. filed by the respondents, the High Court ordered on March 18, 1969 that a sum of not more than Rs. 1,78,000 out of the compensation for the acquired land be paid to the respondents who must undertake not to sell the rest of the land during the pendency of the appeal. The Additional District Judge after hearing the parties judicially interpreted the order to. mean that Rs. 1,78.000 were to be paid to the respondents after the conclusion of the proceedings under ' section 30. The respondents again moved the High Court with an application under section 151/141 C.P.C. for a clarification of its earlier order whereupon by order dated May 8, 1969 the High Court ordered immediate payment. The company challenged the High Court 's orders dated March 18, 1969 and May 8, 1969 in an appeal before this Court. It was contended on its behalf that in making its first order the High Court exceeded its jurisdiction u/s 115 C.P.C. and in making the clarificatory order ex parte it violated the rules of natural justice. HELD: (i) The position is firmly established that while exercising its jurisdiction under section 115, it is not competent to the High Court to correct errors of fact however gross or even errors of law unless the errors have relation to the jurisdiction of the Court to try the dispute itself. Clauses (a) and (b) o.f this section on their plain reading quite clearly did not cover the present case because it had not been shown that the learned Additional Sessions Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question. Clause (c) of the section also did not apply 369 to the present case. The words "illegally" and "with material irregularity" as used in this clause do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may relate either to breach of some provision of law of to material defects of procedure. affecting the ultimate decision, and not to errors of either fact or of law, after the prescribed procedure has been complied with. [375 D G] The High Court had not adverted to the limitation imposed on its power under section 115 of the Code and had treated the revision as if it was an appeal. Merely because the High Court would have felt inclined, had it dealt with the matter initially, to come to a different conclusion on the question of continuing stay of the reference proceedings pending decision of the appeal could hardly justify interference on revision under section 115 of the Code when there was no illegality or material irregularity committed by the Additional Sessions Judge in his manner of dealing with the question. The order of the High Court dated March 18, 1964 had therefore to be set aside. [375 F H] Rajah Amir Hassan Khan vs Sheo Baksh Singh, I I Indian Appeals 237: Balakrishna Udayar vs Vasudeva Aiyar, 44 Indian Appeals 261; Keshav Deo vs Radha Kissan. ; applied. (ii) The ex parte order dated May 8 1969 was equally difficult to sustain. The High Court had proceeded to make an order virtually and in effect reversing the judicial order made by the learned Additional Judge in favour of the appellant. This could, more appropriately be done only on appeal or revision after notice to the party affected and not on an application under sections 151/141 C.P.C. Such an application in the. circumstances was misconceifed. [376 C, F]

The appellant firm M/s. Kishinchand Chellaram was assessed to tax for the assessment year 1947 48, the relevant accounting year being the year ending 6th April, 1947. The concerned Income Tax Officer on an information that a sum of Rs. 1,07,350 purported to have been sent by the assessee by a telegraphic transfer through the Punjab National Bank Ltd., Madras, to its Bombay Branch favouring one Nathirmal on 16 10 1946, has escaped assessment, called upon the assessee, through his letters dated 24th February, 1955 and 4th March, 1955 to explain the same. The Income Tax Officer did not refer to the letters dated 14th January, 1955 and 10th February, 1955 addressed by him to the Bank Manager nor the reply of the Manager dated 18th February, 1955 in the said two letters addressed to the assessee. Nor were the copies supplied to the assessee nor even made available on record before all authorities including the Supreme Court. The assessee through its letter dated 24th March, 1955 replied that as per its records no such remittance was ever sent by it from Madras to Nathirmal in Bombay. On 2nd February, 1956, the Income Tax Officer for the second time called the very same particulars to which the assessee by its letter dated 9th February, 1956 once again denied the remittance by it. Despite this, by his letter dated 4th March, 1957 addressed to the assessee, the Income Tax Officer repeated his earlier request to it to explain about the remittance, complaining at the same time of silence by the assessee to his letter dated 2nd February, 1956. The assessee in its reply dated 13th March, 1957 while inviting attention to its earlier replies dated 24th March, 1955 & 9th February, 1956 reiterated that no amount of Rs. 1,07,350 was remitted by it from Madras to Nathirmal. Disbelieving it, the Income Tax Officer, by his order brought to tax the amount of Rs. 1,07,350 on the ground that it represented the concealed income of the assessee and observed that "there was no reason to doubt the banker 's statement that the amount was remitted by M/s. Kishinchand Chellaram from Madras". The assessee preferred an appeal to the Assistant Appellate Commissioner. At this stage, it came to light that the purported telegraphic transfer was applied for by one "Tilok Chand C/o M/s. K. Chellaram, 181, Mount Road, Madras" and it was received at Bombay by one "N.B. Bani". In spite of the plea of the assessee that the transaction did not relate to its firm, the Assistant Appellate 721 Commissioner holding that the assessee has not discharged the burden of proof lying on it to explain the amount, rejected the appeal. Further appeal to the Tribunal and a reference called for by the High Court at the instance of the assessee was also answered against it. Hence the appeal after obtaining special leave of the Court. Allowing the appeal, the Court, ^ HELD: (1) There was no material evidence at all on the basis of which the Tribunal could come to the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras and that it represented the concealed income of the assessee. [731E]. In the face of the application for remittance signed in the name of Tilok Chand, that this amount was sent by the assessee and the finding to that effect reached by the Tribunal is unreasonable and perverse. What at the highest could be said to be established by the material evidence on record is that Tilok Chand remitted the amount of Rs. 1,07,350 from Madras and this amount was received by Nathirmal in Bombay. Even if it is accepted that Tilok Chand and Nathirmal were employees of the assessee as held by the Tribunal, the utmost that could be said is that an employee of the assessee in Madras remitted the amount of Rs. 1,07,350 to another employee in Bombay. But, from this premise it does not at all follow that the remittance was made by the employee in Madras on behalf of the assessee or that it was received by the employee in Bombay on behalf of the assessee. The burden was on the Revenue to show that the amount of Rs. 1,07,350 said to have been remitted from Madras to Bombay belonged to the assessee and it was not enough for the Revenue to show that the amount was remitted by Tilok Chand, an employee of the assessee, to Nathirmal, another employee of the assessee. It is quite possible that Tilok Chand had resources of his own from which he could remit the amount of Rs. 1,07,350 to Nathirmal. It was for the Revenue to rule out this possibility by bringing proper evidence on record, for the burden of showing that the amount was remitted by the assessee was on the Revenue. [730H 731D] The two documents viz. the letters dated 18th February, 1955 and 9th March, 1957 did not constitute any material evidence which the Tribunal could legitimately have taken into account for the purpose of arriving at the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras to Bombay because while the former was not disclosed to the assessee by the Revenue Authorities till the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case, giving the assessee an opportunity to cross examine the Manager of the Bank, the latter was not disclosed to the assessee at any stage. Further, there is no explanation given by the Revenue as to how these two important documents were not traceable earlier. Even if these two letters were to be taken into account, they did not supply any reasonable basis for reaching the finding that it was the assessee which sent the remittance of Rs. 1,07,350. There can be no doubt that if the amount had been remitted by Tilok Chand on behalf of the assessee he would have signed the application for telegraphic transfer on behalf of the assessee and not in his own name. This apart it is impossible to believe that the Manager of the Bank could have failed to appear before the Income Tax Officer in answer to the summons dated 5th March, 1957 and there is no doubt that this statement must have been recorded and the said statement also withheld. [729H 730A; 729B, C; 730B, E; 729F G] 722 (2) It is true that the proceedings under the Income Tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as evidence. But before the Income Tax Authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross examine the Manager of the Bank with reference to the statements made by him. Moreover, this letter was said to have been addressed by the Manager of the Bank to the Income Tax Officer on 18th February, 1955 in relation to a remittance alleged to have been sent on 16th October, 1946 and it is impossible to believe in the absence of any evidence to that effect, that the Manager who wrote this letter on 18th February, 1955 must have been incharge of the Madras Office on 16th October, 1946 so as to have personal knowledge as to who remitted the amount of Rs. 1,07,350. The Revenue authorities ought to have called upon the Manager of the Bank to produce the documents and papers on the basis of which he made the statements contained in his letter and confronted the assessee with those documents and papers but instead of doing so, the Revenue authorities chose to rely merely on the statements contained in the letter and that too, without showing the letter to the assessee. [728A F]

Appeal No. 451 of 1960. Appeal from the judgment and order dated September 18, 1957, of the Bombay High Court in I.T.R. No. 8 of 1957. K. N. Rajagopal Sastri and D. Gupta, for the appellant. 894 Bishan Narain, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent,. February 21. The Judgment of the Court was delivered by KAPUR, J. This is an appeal pursuant to a certificate of the High Court of Bombay under section 66A(2) of the Indian Income tax Act (hereinafter called the " Act "). For the year of assessment 1949 50 the respondent was assessed to a sum of Rs. 1,80,646/14/ as income tax and super tax on June 2, 1954. A notice of demand under section 29 of the Act was served on the respondent to pay that amount on or before July 17, 1954. On his application the respondent was allowed to pay by instalments. The last instalment of Rs. 30,646/14/ was payable on or before March 20, 1955. As there was a default in the payment of this instalment the Income tax Officer on March 31, 1955 imposed a penalty of Rs. 3,000/ under section 46(1) of the Act. On April 20, 1955 the respondent filed an appeal to the Appellate Assistant Commissioner but by that date the last instalment had not been paid and it was paid on May 16, 1955. The Income tax Officer raised a preliminary objection before the Appellate Assistant Commissioner that the appeal was not competent 'because the last instalment of the tax had not been paid. This was upheld by the Appellate Assistant Commissioner. Against this order the respondent took an appeal to the Income tax Appellate Tribunal which held that the right of appeal was conferred by section 30(1) of the Act and is not taken away by section 30(2) of the Act, only the remedy is barred. It further held that as the right had not been destroyed the appeal became good appeal as soon as the assessee paid the arrears of tax and the only effect of the payment on May 16, 1955, was that the appeal shall be taken to have been preferred before the Appellate Assistant Commissioner on that date and it was then for the Appellate Assistant Commissioner to decide whether it was a fit case for extension of time and condonation of delay. The Tribunal therefore directed the. Appellate Assistant Commissioner to dispose of the appeal in accordance with law. At the instance of the Commissioner 895 of Income tax, who is. the appellant before us, the Tribunal stated the following question of law to the High Court: " Whether the appeal filed before the Appellate Assistant Commissioner on 20th April, 1955, became a proper and complete appeal though barred by limitation and the Appellate Assistant Commissioner should have decided the question of the condonation of delay ? " The High Court answered the question in the affirmative. The Commissioner of Income tax has come in appeal against this judgment. Appeals are provided against assessments under section 30 of the Act. There is a, proviso to section 30(1) in regard to the payment of taxes in the following 'Words: " Provided that no appeal shall lie against an order under sub section (1) of section 46 unless the tax has been paid. " The controversy between the parties revolves round the words " no appeal shall lie." The contention which was raised before us was that these words mean that there is no right of appeal till the tax is paid and therefore if the tax has not been paid the memorandum of appeal cannot be filed and if filed it is merely a waste paper. In our opinion the meaning of the words " no appeal shall lie " in the proviso is not that no memorandum of appeal can be presented. All that it means is that the appeal will not be held to be properly filed until the tax has been paid. If, for instance, the memorandum of appeal is filed 'on the 20th day, i.e.,. 10 days before the period of limitation expires and the tax is paid within the rest of the 10 days, the appeal will be a proper appeal; it will be within time and no question of limitation will arise but if the tax is paid after the period of limitation has expired it will be taken to have been filed on the day when the tax is paid even though the memorandum of appeal was presented earlier and within the period of limitation. , The question, will then have to be decided whether there was sufficient cause for condonation of delay and that is exactly what the Tribunal had ordered 896 and that in our opinion is the effect of the proviso to section 30(1) read with sub section (2) of section 30 of the Act. It is unnecessary therefore to refer to the two cases referred to by the High Court, i.e., Raja of Venkatagiri vs Commissioner of Income tax (1) and Kamdar Brothers vs Commissioner of Income tax (2). The appeal is without force and is therefore dismissed with costs. Appeal dismissed.

Against an order imposing penalty under section 46(1) of the Indian Income tax Act on account of failure to pay an instalment of Income tax, an appeal was preferred. Though the memorandum of appeal was presented with the period of limitation, the tax was paid after the period of limitation prescribed for presenting the appeal had expired. Held, that the expression " No appeal shall lie " in the proviso to section 30(2) of the Indian Income tax Act means that the appeal cannot be held to be properly filed until the tax is paid, and not that no memorandum of appeal may be presented. The effect of proviso to section 30, sub section (1) read with sub section (2) of the Act is that the appeal will be deemed to be filed on the date when the tax due is paid and the question will then have to be decided whether there is sufficient cause for condonation of delay.

The appellant assessee is a company carrying on the business of manufacturing and selling Textile at Porbunder (formerly a princely State) in Saurashtra in the State of Gujarat. No income tax was levied by the former Porbunder State prior to 1948. In 1949 the princely State of, Porbund er integrated into newly formed Saurashtra State. In 1949 the State of Saurashtra promulgated the Saurashtra Income Tax Ordinance wherein provision for grant of depreciation based on written down value was made. On 26.1.1950, State of Saurashtra became a part of the Union of India as a Part 'B ' State and thus the Income Tax Act, 1922 became applicable to the State of Saurashtra from 1st April 1950 under the Fi nance Act, 1950. The said Saurashtra Income Tax Ordinance was repealed under Sec. 13 of the Finance Act, 1950. Section 12 of that Act provided for removal of difficulties, if any, arising in giving effect to the Income Tax Act. The Central Govt. on 2.12.50 issued an order known as "Taxation Laws (Part B States) Removal of Difficulties) Order 1950". Clause 2 of the said order provided the manner in which the aggre gate depreciation allowance and written down value were to be computed. On March 9, 1953, the Central Government in the exercise of its powers under Sec. 60A of the Indian Income Tax Act, 1922, added an Explanation to the said clause (2). The vires of the said Explanation was challenged before the Andhra Pradesh High Court which held that the Explanation referred to above was ultra vires the powers of the Central Government under Sec. 60A of the Income Tax Act. Commissioner of Income Tax, Hyderabad vs D.B.R. Mills Ltd., Thereupon, the Central Government issued another notifi cation dated the 8th May, 1956 in exercise of its powers under Section 12 of the Finance Act 1950, whereby an Expla nation in identical terms as the earlier Explanation was added to Clause (2) of the Removal of Difficulties Order, 1950. The validity of the said Explanation added by the notification dated 8th May, 1956 was upheld by this Court in The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; On the appeal from the said decision of the High Court 2 of the Andhra Pradesh in Commissioner of Income tax, Hydera bad vs D.B.R. Mills, The assessee was assessed under the Indian Income Tax Act from 1940 41 in respect of the income arising or deemed to arise in British India from 1940 41 onwards. For these years its income was assessed on receipt basis but in calcu lating the world income depreciation was taken into consid eration for arriving at the income outside British India. The assessee was also assessed for the assessment year 1949 50 under the Saurashtra Income Tax Ordinance, 1949. From 1950 51 it was assessed under the Income Tax Act. The assessment years concerned in this case are 1957 58, 1958 59 and 1959 60, the corresponding previous years being the Calender years 1956, 1957 and 1958 respectively. The case of the assessee is that during the course of the assessment of its income, depreciation was allowed for the assessment year 1950 51 and thereafter on the original cost of the assets as reduced by the depreciation allowance given under the Sau rashtra Income Tax Ordinance 1949. The respective written down values for the assessment years 1951 52 and 1952 53 were fixed on the basis of the written down value for the assessment year 1950 51. But later the concerned Income Tax Officer rectified the calculations of depreciation allowance by further reducing the written down value of the assets of the assessee. The Income Tax Officer took the written down value for the assessment years 1940 41 as the starting point. The assessee was not satisfied with this rectification. Its contention was that the depreciation for the previous years should have been calculated only on the basis of Clause (2) of the Taxation Laws (Part B States) (Removal of Difficulties) Order 1950, which provided for computation of the aggregate depreciation allowance on the basis of the deduction which was actually allowed under the Saurashtra Income Tax Ordinance, 1949. Regarding the explanation, the assessee contended that it was ultra rites the powers of the Central Government as it was not necessary for the removal of any difficulty. The contentions of the assessee were rejected by the Income Tax authorities as well as by Income Tax Appellate Tribunal. It was contended by the assessee before the Tribu nal that the decision of this Court in Commissioner of Income Tax Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; was no longer good law in view of the later decision of this Court in Straw Products Ltd. vs Income Tax Officer "A" Ward, Bhopal and Ors., The Tribunal having rejected the said contentions, at the in stance of the assessee a reference was made to the Gujarat High Court in which the following question was raised: 3 "Whether on the facts and in the circumstances of the case. the Tribunal was justified in holding that the depreciation allowable and not 'actually allowed ' under the Saurashtra Income tax Ordinance, 1949, should be taken into account in computing the aggregate depre ciation allowance and written down value under Sec. 10(2)(vi) of the Income Tax Act 1922. " The High Court held that in its advisory jurisdiction under the Income Tax Act, it could not go into the question of the vires of the said Explanation and therefore answered the question against the assessee. Therefore, the appellant filed Special Civil Application 1797 of 1972 in the High Court. The Division Bench of the High Court in its judgment disposing of the said special Civil Application pointed out that the decision of this Court in the Commissioner of Income Tax, Hyderabad vs Dewan Bahadur Ramgopal Mills, case, referred to above had upheld the validity of the Explanation in question. The High Court further opined that some of the arguments which did not find favour with this court in the said case were accepted by a Bench of 7 Learned Judges in the Straw Products Ltd. vs Income Tax Officer, "A" Ward, Bhopal and Ors., The High Court fur ther pointed out that in its decision in the said case of Straw Products this court had considered the decision in Dewan Bahadur Ramgopal Mills Ltd. and explained that on the facts of that case a difficulty had arisen and it was for removing that difficulty that the Order of 1956 was issued. For the said reason the High Court considered that decision was good law and following the same, it dismissed the Spe cial Civil Application. Hence this appeal by the assessee. In this appeal the Explanation added by the Central Government by its notification dated May 8, 1956 as well as the assessments made on the assessee for the assessment year 1957 58 to 1959 60 have been assailed. It was inter alia contended on behalf of the assessee that there was no diffi culty which had arisen in giving effect to the provisions of the Indian Income Tax Act in the State of Saurashtra and hence the pre condition on which the Central Government was authorised to make an Order under the Removal of Difficul ties Order and add the Explanation in question had never come into existence and as such the Explanation was without the authority of Law, invalid and of no legal effect. It was further contended by the assessee that under the scheme of the Income Tax Act, generally speaking, almost the entire cost of a capital asset used for purposes of business or profession should 4 be allowed to be written off by way of depreciation, whether worked on the basis of straight line method or written down value. The assessee disputed the mode of assessment and the applicability of the Explanation. Following this Court 's decision in Dewan Bahadur Ramgo pal Mills ' Ltd. ; this Court dismissing the appeal, HELD: The Saurashtra Income Tax Ordinance was repealed by Section 13 of the Finance Act 1950 and not by any provi sion in the Indian Income Tax Act. The basic and normal scheme of depreciation under the Indian Income Tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeeding years actual cost less all deprecia tion actually allowed under the Income Tax Act or any Act repealed thereby etc. [18D E] Commissioner of Income Tax Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., ; The Saurashtra Income Tax Ordinance having been repealed not by the Indian Income Tax Act but by Sec. 13 of the Finance Act 1950, a difficulty had come into existence, and hence it could not be said that the Government had no good basis to come to the conclusion that a difficulty had, in fact, arisen. [18F G] Madeva Upendra Sinai vs Union of India & Ors., [1975] 98 I.T.R. 209.

This appeal raised a short question as to the interpretation of sub section (4)(a) of section 4 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 ("the Bombay Rent Act"). The appellants were the sub tenants of the respondent No. 1 Firm in respect of the premises called Gala No. 4 in a godown. Respondent No. 1 Firm were the tenants of the said godown, having taken a lease of the building from the Bombay Port Trust. The appellants were in occupation of the said Gala under written agreements executed from time to time for one year each. The last such agreement expired on 19th October, 1971. The respondent No. 1 Firm served a notice on the appellants on 13th January, 1972 to hand over possession of the said gala on the ground that the period of lease had expired. By notice dated February 3, 1972, the respondent No. 1 Firm terminated the tenancy of appellants and then filed a suit in the City Civil Court against the appellants to recover possession of the premises in dispute inter alia on the ground that the period of lease had expired. The appellants took up the contention that they were not liable to be evicted as they were entitled to protection under the provisions of the Bombay Rent Act. The City Civil Court decreed the suit. On appeal by the appellants, the High Court (Single Judge,) holding that the notice of termination of tenancy dated 3rd February, 1972, was a valid notice and the provisions of the Bombay Rent Act did not apply to the premises in question, upheld the decree of eviction passed by the City Civil Court. Letters Patent appeal against this judgment was dismissed by a Division Bench of the High Court. The appellants then moved this Court for relief by special leave. Dismissing the appeal, the Court, 907 ^ HELD: The only submission made by the appellants before the Court was that the said premises, viz, Gala No. 4, were entitled to the protection of the provisions of the Bombay Rent Act and the respondent No. 1 Firm was not entitled to a decree for eviction as no grounds for eviction under the Act had been made out. [910G] The question raised was whether the protection of the sub section (4)(a) of section 4 of the Bombay Rent Act was available to the sub lessee in a building leased by the lessee from the Government or a local authority or put up by a lessee of the land belonging to the Government or a local authority but not under any building lease or pursuant to any obligation imposed on the lessee to put up a building. In this case, the entire building in which the premises in question, namely, Gala No. 4 were situated, belonged to the Bombay Port Trust. It was nowhere contended at any stage by the appellants that the building in which the said premises were situated was put up by the respondent No. 1 Firm. The Court was, therefore, not directly concerned with the position of a sub lessee in a building put up by a lessee of the land taken from the Government or a local authority without being under any obligation to do so. [913D F] A plain reading of sub section (1) of section 4 of the Bombay Rent Act makes it clear that the provisions of the Bombay Rent Act are not applicable to premises belonging to the Government or a local authority. Sub section (4)(a) only takes out from the scope of the exemption conferred by section 4(1) "a building erected on any land held by any person from the Government or a local authority under an agreement, lease, licence or other grant, although having regard to the provisions of such agreement, lease, licence or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be". If this provision were to be as including any building put up or erected on land held by any person from the Government or a local authority, the result would be that such protection would be available even against the Government or a local authority and the provision of sub section (1) of section 4 may be rendered largely nugatory. The provisions of sub section (4)(a) were never intended to take away the immunity conferred upon the premises belonging to the Government or a local authority, and if the provisions of section 4(4)(a) were to be construed as urged by the appellants, this immunity would be rendered practically nugatory. A plain reading of the provisions of sub section (4)(a) in the context clearly shows that there is no intention therein to take a building put up by the Government or a local authority from the scope of the exemption conferred by sub section (1) of section 908 4. The language of sub section (4)(a) and sub section (1) of section 4 of the Bombay Rent Act, read together, suggests that it was only in respect of a building put up by the lessee on the Government land or the land belonging to a local authority under a building agreement that the sub lessees were taken out of the exemption contained in sub section (1) of section 4 and allowed the benefit of the provisions of the Bombay Rent Act. It was significant that the exemption granted under the earlier part of sub section (1) of section 4 is in respect of the premises and not in respect of the relationship. In order to confer the protection of the provisions of the Bombay Rent Act on the sub lessees occupying the premises in any building erected on the government land or the land belonging to a local authority irrespective of the question who has put up the building as against the lessees of the land but without affecting the immunity conferred on the government or local authorities as contemplated by sub section (1) of section 4 of the Bombay Rent Act, the Court would have to practically rewrite the provisions of section 4, and it was not open to the Court to do that. The argument of the appellants, therefore, could not be accepted. The learned Judge of the High Court was right in coming to the conclusion that the premises in question were not entitled to the benefit of the provisions of the Bombay Rent Act. [914A H;915A] The decision of this Court in Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461 cited by the appellants was of no assistance to the case before the Court, and the decision of this Court in Maneklal and Sons vs Trustees of Port of Bombay and Others, cited by the appellants, far from supporting the submission of the appellants, militated against it. [916D] There was no merit in the appeal and it must fail. Taking the facts and circumstances of the case into consideration, the Court directed that the appellants would not be evicted from the premises in question until December 31, 1988. [916E] The Court observed that if the intention of the legislature was that the protection should be given to the sub lessee against the lessee in a building taken on lease by the lessee from the government or a local authority, it was for the legislature concerned to make appropriate amendments in the Bombay Rent Act and it was not open for the Court to re write the provisions of sub section (4)(a) of section 4 of the Bombay Rent Act on the ground of any such intention as suggested by Dr. Chitale counsel for the appellants. [916F] 909 Bhatia Co operative Housing Society Ltd. vs D.C. Patel, ; Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461; Maneklal and Sons vs Trustees of Port of Bombay and Others, and Ram Bhagwandas vs Municipal Corporation of the City of Bombay, , referred to.

By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam. The appellant thought it fit in the circumstances to grant compensatory allowance to all its employees in September 1959. It was not made through any standing order or circular. Thereafter there was another notification by the Central Government dated December 8, 1960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled lo draw both. this was to remain in force for five years. In view, however, of the notification dated December 8, 1960, the management thought that the contents of the circular were binding on the company and therefore they unilaterally. without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959. This concession was withdrawn with effect from July 1960. The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw he concession granted by it unilaterally. The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as s.9A of the , has not been complied with by the Company the management was not legally entitled to with draw the concession of the Assam Compensatory Allowance granted to. the employees. This appeal has been preferred by the management on the basis of the specials leave granted by this Court. It was contended for the appellant (i) that the compensatory allowance was given purely on the basis of ' the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (ii) that even if the provisions, of s.9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and, therefore, it was not necessary to give any notice to them before withdrawing the concession of the, compensatory allowance. Rejecting the contentions and dismissing the appeal, ^ HELD: (i) 'There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted. Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor. were they taken into confidence, nor any attempt was made to open a dialogue with them on this question. So far as the compensatory allowance is concerned it was given in order to enable the workers to meet the high cost of living in a far off and backward area like Assam. It had absolutely no casual connection with the housing subsidy or house rent allowance which was a different type of concession. Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the need of their 111 workers. In these circumstances, the conclusion is irresistible that the grant of compensatory allowance was an implied condition of service so as to attract the mandatory provisions of section 9A of the Act. Twenty one days notice has to be given to the workmen. This was not done in this case. [113C 114B] Workman of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal Hyderabad and others, [1961] 2 L.L.J. 526, Bhiwani Textile Mills vs Their The Workman and others , Oil and Natural Gas Commission vs The Workman ; , Hindustan Lever Ltd. vs Ram Mohan Ray and Other ; , and M/s. Tata Iron and Steel Co. Ltd. vs The Workman and others[1972] 2 S.C.C 383, referred to. (ii) The compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can one be made dependent on the other. the object of these two concessions is quite different and both of them serve quite different purposes. [118A B] .

% The question which arose for determination in this case was whether a Letters Patent Appeal would lie to a Division Bench of the High Court of Gujarat from an interlocutory order of a Single Judge of that High Court in the course of the trial of an election petition filed under the Representation of the People Act, 1951. The appellant and respondents Nos. 1 to 6 were candidates at an election held to fill a seat in the Legislative Assembly of the Gujarat State. The appellant was declared elected. Thereupon, the 1st respondent filed an election petition in the High Court, challenging the validity of the election of the appellant on a number of allegations, and in order to establish his case, he filed an application before the Single Judge who was trying the election petition, to direct the Returning Officer to produce all the records of the election, mentioned in the application, and prayed for permission to inspect the same. The appellant opposed the prayers made by the 1st respondent. The Single Judge declined to grant the application made by the Ist respondent. Against the order of the Single Judge, the Ist respondent preferred an appeal under clause 15 of the Letters Patent of the Gujarat High Court. The Division Bench of the High Court allowed the appeal to the extent indicated in its judgment, overruling the contention of the appellant that the appeal was not maintainable as there was no provision in the Act, permitting an appeal to the Division Bench of the High Court against an interlocutory order of a Single Judge hearing an election petition filed under the Act. Aggrieved by the decision of the Division Bench, the appellant moved this Court for relief by special leave. Allowing the appeal, setting aside the judgment of the Division 1044 Bench of the High Court and dismissing the Letters Patent Appeal while expressing no opinion on the merits of the case, the Court, ^ HELD: The only point urged in this appeal by the appellant was that the appeal filed under clause 15 of the Letters Patent of the High Court against the interlocutory order passed by the Single Judge was not maintainable and, therefore, the judgment of the Division Bench was liable to be set aside. [1048C D] Under the provisions of the Act as amended and the provisions of the Constitution of India, no Court exercising power under any ordinary law other than the Judge of a High Court who had been assigned the work of trying an election petition under sub section (2) of section 80 A of the Act and the Supreme Court which was empowered to hear an appeal against any order passed by the judge of the High Court under section 98 or section 99 of the Act, could decide any question arising out of an election petition. The power of the Supreme Court under the provisions of the Constitution was, however, unaffected by any of the provisions of the Act. It meant that when an election petition was pending in the High Court, only the judge who was asked to try the election petition could deal with the questions arising in it and no other judge or judges of the High Court could deal with them. When an order was passed under section 98 or section 99 of the Act by a judge of the High Court in an election petition, it was subject to the appellate jurisdiction of the Supreme Court under section 116 A of the Act, Article 136 of the Constitution being excluded in view of the express provisions of section 116 A of the Act, and being resorted to by any party aggrieved by any order passed by the judge trying an election petition not falling under section 98 or section 99 of the Act. It followed that the Division Bench of the High Court, which was entitled to hear an appeal against any order of a Single Judge under clause 15 of the Letters Patent of the High Court, which was an ordinary law, could not hear an appeal against any interlocutory order passed in the course of the trial of an election petition by the Judge trying the election petition, since the Division Bench was not specified in the Act as an appellate authority which could deal with questions arising out of an election petition filed under the Act. [1053G H; 1054A D] Under clause 15 of the Letters Patent, an appeal no doubt lay from an order of a Single Judge of the High Court exercising Original Jurisdiction to the High Court itself irrespective of the fact that the judgment was preliminary or final or that it was one passed at an interlocutory stage, provided it satisfied certain conditions, but the said 1045 provision could not be extended to an election petition filed under the Act. Conferment of the power to try an election petition under the Act did not amount to enlargement of the existing jurisdiction of the High Court. The jurisdiction exercisable by the Single Judge under the Act was a special jurisdiction conferred on the High Court by virtue of Article 329(b) of the Constitution. In view of the limited nature of the appeal expressly provided in section 116 A of the Act, it should be held that any other right of appeal (excluding that under the Constitution) was taken away by necessary implication. Therefore, it was difficult to subscribe to the view that when once the jurisdiction to try an election petition was conferred on the High Court, all other powers incidental to the ordinary original jurisdiction exercised by a single Judge of a High Court would become applicable to an election petition under the Act. If the Parliament had intended that the Division Bench of the High Court should exercise its appellate jurisdiction under clause 15 of the Letters Patent of the High Court, probably, it would not have enacted sub section (7) of section 86 of the Act, having regard to the well known tendency of one or the other party to an election petition preferring appeals against the interlocutory orders to the Division Bench. If such appeals against the interlocutory orders to the High Court, were permitted, perhaps, no election dispute would be finally settled till the next election became due. As regards the jurisdiction to try an election petition and the right of appeal of the parties to an election petition, the provisions of the Act (apart from the provisions in the Constitution) constituted a complete code and no Judge or Judges other than the Single Judge of the High Court, who was asked to try an election petition, and the Supreme Court, exercising the appellate powers under section 116 A of the Act in respect of orders passed under section 98 or section 99 of the Act or under Article 136 of the Constitution in respect of other orders, could have any jurisdiction to deal with any matter arising out of an election petition filed under the Act. The Court disagreed with the view expressed on this question by the Gujarat High Court in Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta & Ors., (12 Gujarat Law Reporter 850), and overruled that decision of the High Court. The Court also overruled the decision of the Madras High Court in Kadiravan alias Shamsudeen vs B. Thirumalaikumar, ILR (1970) 2 Mad. 183 and the decision of the Madhya Pradesh High Court in Laxmi Narayan Nayak vs Ramratan Chaturvedi & Ors, AIR 1986 Madhya Pradesh 165 which had taken the same view as in Dr. Chotalal Jivabhai Patel 's Case (supra). The Court agreed with the view expressed by the Allahabad High Court in Siaram vs Nathuram & Ors., [1968] ALL. L.J. 576 and by the Rajasthan High Court in Ramdhar vs Shanwar Lal, AIR which held that by necessary 1046 implication an appeal to the High Court from an interlocutory order of the Single Judge of the High Court in the course of trial of an election petition filed under the Act, was excluded. [1054G H; 1055A H; 1056A H] The Division Bench of the High Court of Gujarat had no jurisdiction to hear the appeal filed by the Ist respondent against the interlocutory order passed by the Single Judge who was trying the election petition. Judgment of the Division Bench of the High Court set aside, Letters Patent Appeal dismissed. [1057B] Dr. Chotalal Jivabhai Patel vs Vadilal Lallubhai Mehta Shamsudeen vs B. Thirumalai Kumar, ILR ; and Laxmi Narayan Nayak vs Ramratan Chaturvedi and Ors., A.I.R. 1986 Madhya Pradesh 165, overruled. Siaram vs Nathuram and Ors., [1968] All. L.J. 576 and Ramdhan vs Bhanwarlal, A.I.R. approved. N.P. Ponnuswami vs Returning Officer, Namekkal Constitutency and others; , ; Shah Babulal Khimji vs Jayaban D. Kania & Anr., ; and National Telephone Company Ltd. vs Post Master General, [1913] A.C.546, referred to.

The assessee, assessed as an individual, derived income from "other sources" in the shape of interest, dividends etc. In the assessment year 1966 67 she claimed deduction of Rs.26,986 being interest paid on loans taken by her, under section 57(iii) of the Income Tax Act, 1961. The income Tax Officer found that out of the loans real investment was Rs.1,250 only. He disallowed the claim of Rs.10,275 on proportionate basis. The Appellate Assistant Commissioner relying upon the ratio of the decision in Bai Bhuriben Lallubhai vs Commissioner of Income tax, Bombay North Cutch and Saurashtra, [1956 ITR (XXIX) 543] dismissed the appeal of the assessee. Before the Tribunal the assessee contended: (1) that expenditure under the head of payment of income tax and wealth tax and annuity deposits should have been taken as revenue expenditure and the claim of interest in respect of such loans should have been admitted and (2) that the asses see instead of liquidating the investments which was return oriented, found it commercially expedient and viable to raise a loan instead of disturbing the investments and, therefore, the claim became admissible. The Tribunal reject ing the contentions and dismissing the appeal observed that the loans were taken for meeting her personal obligation like payment of taxes and deposit of annuity and these had nothing to do with the business. On reference, the High Court held that at the relevant time it was obligatory for the assessee to make the annuity deposit and the earning of interest through such deposit was merely incidental and that the portion of the loan was not intended to meet expenditure wholly and exclusively for the purpose of earning the income and. therefore. did not come under section 57(iii) of the Act. 1168 Dismissing the appeal of the assessee the Court. HELD: 1. Unless the claim comes within the purview of section 57(iii) of the Income Tax Act. 1961 it would not be admissi ble as a deduction. [1170C] 2. The test to apply is that the expenditure should be wholly and exclusively for the purpose of earning the in come. [1172C] Eastern Investments Ltd. vs Commissioner of income tax, West Bengal, and Commissioner of Income tax, West Bengal vs RaJendra Prasad Moody. , followed. In order that the claim for deduction could be sus tained, it was for the assessee to satisfy the Income Tax Officer that the loan, interest in respect of which is claimed as deduction, was laid out or expended wholly and exclusively for earning the income from out of which the deduction was claimed. [1170F G] 4. The Income Tax Authorities as also the High Court have clearly recorded a factual finding of facts that the expenditure in this case was to meet the personal liability of payment of income tax and wealth tax and annuity and that no part of the expenditure came within the purview ors. 57(ii) of the Act. [1171H 1172A, D] 5. This Court is inclined to agree with the High Court that so far as meeting the liability of income tax and wealth tax is concerned, it was indeed a personal one and payment thereof cannot at all be said to be expenditure laid out or expended wholly and exclusively for the purpose of earning income. So far as annuity deposit is concerned. the Tribunal and the High Court have come to the right conclu sion that the dominant purpose was not to earn income by way of interest but to meet the statutory liability of making the deposit. [1172B C] 6. Unless the loan is incurred for meeting the liability connected with the sources itself it would ordinarily be difficult to entertain the claims for deduction. [1172F]

The appellant, a banking company incorporated in the United Kingdom, carries on banking business in India and is assessed under the Income Tax Act, 1961. The appellant filed a return of its income for the assessment year 1972 73. During the assessment proceedings the Income Tax Officer issued a notice under section 142(1) of the Income Tax Act requiring the appellant to produce certain account books and documents. The appellant applied against the notice to the High Court of Calcutta under Article 226 of the Constitution. The High Court construing the notice in specifically limited terms directed the appellant to comply with it. The appellant preferred an appeal in the High Court. Meanwhile, pursuant to the direction by the learned single judge, the Income Tax Officer made an assessment order on March 31, 1977. Thereafter the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the consequent assessment order were quashed. But while doing so, the Division Bench also directed the Income Tax Officer to make a fresh assessment. Aggrieved by that direction, the appellant applied for, and obtained special leave to appeal to this Court. Dismissing the appeal, the Court ^ HELD: 1. The High Court was competent to make the order directing a fresh assessment since the limitation for making the assessment had not expired and no valuable right to be assessed had thereby accrued to the appellant. [769 D E] The facts of the case make it clear that the assessment proceedings remained pending during the entire period from March 17, 1975 to March 31, 1977 by virtue of successive stay orders of the Court. If regard be had to clause (ii) of Explanation 1 to section 153 which provides that in computing the period of limitation for the purposes of section 153 the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation. In computing the period for making the assessment, the Income Tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal 766 operation of the rule of limitation. The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation. [769 B D] 2. The character of an assessment proceeding of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High Court under Article 226 was attracted. Ordinarily, where the High Court exercises such jurisdiction it merely quashes the offending order, and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically reviewed before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order. Ordinarily the High Court does not substitute its own order for the order quashed by it. It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdiction in the inferior court or tribunal to entertain or to take the proceeding at all. In that event on the quashing of the proceeding by the High Court there is no revival at all. But although in the former kind of case the High Court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires. [769 F H, 770 A] 3. When passing such orders the High Court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties. The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised. The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it. [770 A C] In the present case, the appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income Tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course. In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled. In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation. Section 153(3)(i) removes the bar. But the appellant preferred the constitutional jurisdiction of the High Court under Article 226. If no order was made by the High Court directing a fresh assessment, he could contend that a fresh assessment proceeding is barred by limitation. That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition. It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice. It was not a defect affecting the fundamental jurisdiction of the Income Tax Officer to make the assessment. The High Court was plainly right in making the direction which it did. [770 C G] Director of Inspection of Income Tax (Investigation) New Delhi and Anr. vs Pooran Mall and Sons and Anr. @ 395; followed. 767 Cachar Plywood Ltd. vs Income Tax Officer, 'A ' Ward, Karimganj Dist. Cachar and Anr., (1978) 114 ITR (Cal.); approved. Rajinder Nath etc. vs The Commissioner of Income Tax, Delhi, ; distinguished. Pickles vs Falsham, 9 Tax Cases, 261, 288; Anisminic Ltd. vs The Foreign Compensation Commission & Anr. [1969] 1 All E.L.R. 208; Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes) ; distinguished.

The assessee respondent filed his Wealth Tax returns for the assessment years 1964 65 and 1965 66 on March 18, 1971, while he was required by section D 14(1) of the Act to file the return for the assessment year 1964 65 on or before June 30, 1964 and the return for the assessment year 1965 66 on or before June 30, 1965. The Wealth Tax officer completed the assessment for the said years on March 22, 1971 and also commenced proceedings for levying penalty under section 18(1) (a) of the Act for the late submission of returns. The Wealth Tax officer levied the penalties for different periods at different rates, as provided by the 1964 and 1969 Amendments. treating the failure to file the return in time as a "continuing offence". The orders levying penalties were upheld in appeal by the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar. A consolidated reference made by the Tribunal at the instance of the assessee was answered by the High Court of Punjab in favour of the assessee after rejecting the contention of the department that the default or failure to file the return in time was a continuing default and that the penalty had to be computed for the period prior to April 1, 1965 in accordance with section 18 as it stood prior to its amendment by the Wealth tax (Amendment) Act, 1964, for the period between April 1, 1965 to March 31, 1969 in accordance with section 18 of the Act as amended by the Wealth tax (Amendment) Act, 1964 and for the period between April 1, 1969 to March 18, 1971 (on which date the returns were filed) in accordance with section 18 of the Act as amended by the Finance Act, 1969. Aggrieved by the decision of the High Court, the Department has filed these appeals under Article 136 of the Constitution. G Dismissing the appeals, the Court ^ HELD 1:1. Where the default complained of is one falling under section 18(1) (a) of the Wealth Tax Act, the penalty has to be computed m accordance with the law in force on the last day on which the return in question had to be filed. Neither the amendment made in 1964 nor the amendment made in 1969 has retrospective effect. [434 C D] 420 1:2. Section 18 of the Wealth Tax Act does not require the assessee to file a return during every month after the last day to file it is over. Non performance of any of the acts mentioned in section 18(1) (a) of the Act gives rise to a single default and to a single penalty, the measure of which, however, is geared up to the time lag between the last date on which the return has to be filed and the date on which it is filed. The default, if any committed is committed on the last date allowed to file the return. The default cannot be one committed every month thereafter. [433 G H, 434 A] 1:3. The words "for every month during which the default continued" indicate only the multiplier to be adopted in determining the quantum of penalty and do not have the effect of making the default in question a continuing one. Nor do they make the amended provisions modifying the penalty applicable to earlier defaults in the absence of necessary provisions in the amending Acts. The principle underlying section 6 of the General Clauses Act is clearly applicable to these cases. [434 B C] 2:1. A liability in law ordinarily arises out of an act of commission or an act of omission. When a person does an act which law prohibits him from doing it and attaches a penalty for doing it, he is stated to have committed an act of commission which amounts to a wrong in the eye of law. Similarly when a person omits to do an act which is required by law to be performed by him and attaches a penalty for such omission, he is said to have committed an act of omission which is also a wrong in the eye of law. Ordinarily a wrongful act or failure to perform an act required by law to be done becomes a completed act of commission or of omission, as the case may be, as soon as the wrongful act is committed in the former case and when the time prescribed by law to perform an act expires in the latter case and the liability arising therefore gets fastened as soon as the act of commission or of omission is completed. The extent of that liability is ordinarily measured according to the law in force at the time of such completion. In the case of acts amounting to crimes the punishment to be imposed cannot be enhanced at all under our Constitution by any subsequent legislation by reason of Article 20(I) of the Constitution which declares that no person shall be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. In other cases, however, even though the liability may be enhanced it can only be a subsequent law (of course subject to the Constitution which either by express words or by necessary implication provides for such enhancement. [429 G H, 430 A D] 2:2. The distinctive nature of a continuing wrong is that the law that is violated makes the wrongdoer continuously liable for penalty. A wrong or default which is complete but whose effect may continue to be felt even after its completion is, however, not a continuing wrong or default. [430 D E] 2:3. The court should not be eager to hold that an act or omission is a continuing wrong or default unless there are words in the statute concerned which make out that such was the intention of the legislature. In the instant case when ever the question of levying penalty arises what has to be first considered is whether the assessee has failed without reasonable cause to file the return as re 421 quired by law and if it is held that he has failed to do so then penalty has to be levied in accordance with the measure provided in the Act. When the default is the filing of a delayed return the penalty may be correlated to the time lag between the last day for filing it without penalty and the day on which it is filed and the quantum of tax or wealth involved in the case for purposes of determining the quantum of penalty but the default however is only one which takes place on the expiry of the last day for filing the return without penalty and not a continuing one. The default in question does not, however, give rise to a fresh cause of action every day. [430 E H] 2:4. Where the wrong complained of is the omission to perform a positive duty requiring a person to do a certain act the test to determine whether such a wrong is a continuing one is whether the duty in question is one which requires him to continue to do that act. Breach or a covenant to keep the premises in good repair, breach of a continuing guarantee obstruction to a right of way, obstruction to the right of a person to the unobstructed flow of water, refusal by a man to maintain his wife and children whom he is bound to maintain under law and the carrying on of mining operations or the running of a factory without complying with the measures intended for the safety and well being of workmen may be illustrations of continuing breaches or wrongs giving rise to civil or criminal liability, as the case may be, de die in diem. [433 A D] Hole vs Chard Union, , quoted with approval. State vs A. Bhiwandiwalla, A. I. R. ; The State vs Kunja Behari Chandra and Ors. A.I.R. 1954 Patna 371, approved, Balkrishna Savalram Pujari and Ors. vs Shree Dayaneshwar Maharaj Sansthan and Ors., [1959] Supp. 2 S.C.R. 476, referred to.

Appeal No. 434 of 1960. Appeal by special leave from the judgment and order dated October 4, 1956, of the Hyderabad High Court in I.T.R. No. 116/5 of 1954 55. K. N. Rajagopal Sastri and D. Gupta, for the appellant. A, V. Viswanatha Sastri, S.N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondents. February 22. The Judgment of the Court was delivered by SHAH, J. M/s. Bhikaji Dadabhai & Co. herein. after called the assessees owned an oil mill at Khammamath in the area of the former State of Hyderabad. For the year of assessment Fasli 1357 (October 1, 1946, to September 30, 1947), the assessees returned an income of Rs. 50,384/ . The Income tax Officer found that the books of account maintained by the assessees were unreliable and by his order dated February 10, 1950, he assessed their total income at Rs. 1,63,131/ . The Income tax Officer had, before finalising the assessment, issued on December 22, 1949, a notice to the assessees under section 40 of the Hyderabad Income tax Act requiring them to show cause why penalty should not be imposed upon them and by order dated October 31, 1951, directed the assessees to pay by way of penalty Rs. 42,000/ in addition to the tax. This order was confirmed in appeal by the Appellate Assistant Commissioner. In appeal, the Income tax Appellate Tribunal observed that by virtue of the provisions of section 13 (1) of the Indian Finance Act, 1950, the Hyderabad Income tax Act had ceased to have effect and as the power to impose penalty under section 40 of the Hyderabad Income tax Act was not saved, the order imposing penalty was without jurisdiction, The Tribunal observed; 925 " The Income tax Officer may have been in error in imposing the penalty, but there was no appeal against the order of the Income tax Officer to the Appellate Assistant Commissioner. Section 42(1) of the Hyderabad Income tax Act gives a right to an assessee to appeal if he objects to an order under section 40 made by an Income tax Officer. Section 40 ceased to have effect. There can therefore be neither an order under section 40 nor an appeal against the order if an order.has been wrongly made. The remedy of the assessee lies elsewhere, and not by way of an appeal to the Appellate Assistant Commissioner," and on that view dismissed the appeal. At the instance of the assessees, the following questions were referred by the Tribunal to the High Court of Judicature at Hyderabad 1. Whether on 31 10 1951, the Income tax Officer, Warrangal Circle, had the power to impose a penalty under section 40(1) of the Hyderabad Income tax Act in respect of the assessment for the year 1357 F. ? 2. Whether the assessee had a right to appeal against the order of the Income tax Officer imposing the penalty ? 3. If the Appellate Assistant Commissioner did not have jurisdiction to hear the appeal, whether the order of the Appellate Assistant Commissioner is a nullity and therefore the order of the Income tax Officer erroneous, though it may stand until it is set aside by a competent authority ? The High Court answered the first and the third questions in the negative and the second question in the affirmative. The High Court observed that the Appellate Assistant Commissioner had power to entertain the appeal in which the question of the power of the Income tax Officer to impose a penalty was challenged, and the decision of the Appellate Assistant Commissioner was not without jurisdiction. The High Court also proceeded in a petition separately filed by the assessees to direct the Income tax Appellate Tribunal to set aside the order of the Income tax Officer imposing a penalty as a logical 926 consequence of the view the Tribunal had taken regarding the absence of power in the Income tax Officer to levy a penalty. Against the order passed by the High Court, this appeal with special leave is preferred. We are in agreement with the High Court that the appeal to the Appellate Assistant Commissioner was competent. Even if the Income tax Officer committed an error in passing the order imposing penalty because the conditions necessary for invoking that jurisdiction were absent, an appeal against his order on the ground that he was not competent to pass the order did lie to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner is under the Act constituted an appellate authority against certain orders of the Income tax Officer, and exercise of that jurisdiction is not made conditional upon the competence of the Income tax Officer to pass the orders made appealable. The Appellate Assistant Commissioner had as a court of appeal jurisdiction to determine the soundness of the conclusions of the Income tax Officer both on questions of fact and law and even as to his jurisdiction to pass the order appealed from. We are, however, unable to agree with the High Court that because of the repeal of the Hyderabad Income tax Act by the Finance Act, 1950, the power to impose a penalty in respect of the years preceding the date of repeal was lost. The State of Hyderabad merged with the Indian Union during the pendency of the proceedings before the Income tax Officer. Thereafter the Indian Legislature enacted the Finance Act, 1950, which by sub section (1) of section 13 in so far as it is material provided: " If immediately before the 1st day of April, 1950, there is in force in any part B State. any law relating to income tax or super tax. that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922. " 927 Manifestly, by section 13, the Hyderabad Income tax Act ceased to have effect as from April 1, 1950. But the operation of that Act in respect of levy, assessment and collection of income tax and super tax in respect of periods prior thereto for which liability to Income tax could not be imposed under the Indian Income tax Act, 1922, was saved. The Judicial Committee of the Privy Council in Commissioner of Income tax, Bombay Presidency and Aden vs Messrs. Khemchand Ramdas observed: " One of the peculiarities of most Income tax Acts is that the word 'assessment ' is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer." The Hyderabad Income tax Act also used the expression" assessment " in different senses. In certain sections, for instance sections 31 and 39 the expression is used as in the sense of mere computation of income; in other sections it is used in the sense of determination of liability and in certain other sections in the sense of machinery for imposing liability and procedure in that behalf. "By the Finance Act, 1950, the Hyderabad Income tax Act was expressly kept alive in respect of periods which include the assessment year in question for purposes of levy, assessment and collection of income tax. The High Court expressed the view that the word "assessment" in section 13 (1) included the whole procedure for imposing liability upon the taxpayer but not to the procedure for imposing a penalty. They thought that the Hyderabad Income tax Act dealt with liability to pay income tax and penalty in distinct provisions, both relating to imposition and recovery and that if the Legislature had intended to keep alive the Hyderabad Income tax Act for all purposes including the levy of penalty with respect to any particular year or years of assessment, it could have said so in terms clear and unambiguous instead of limiting the operation only to " levy, assessment and collection." In the view of the High Court, imposition of penalty (1) (1938) L.R. 65 I.A. 236; 928 was not a necessary concomitant or incident of the process of assessment, levy and collection of tax. The High Court proceeded upon the view that by saving the Hyderabad Income tax Act for the purposes. of levy, assessment and collection of income tax, the entire procedure for imposing liability to pay tax and. for collection of tax was saved, but penalty not being tax, provisions relating to imposition of and collection of penalty did not survive the repeal of the Hyderabad Income tax Act. This Court considered in C. A. Abraham vs The Income tax Officer, Kottayam(1) the question whether the expression " assessment " as used in section 44 of the Indian Income tax Act included the procedure for imposition of penalty in respect of a dissolved firm and it was observed: "The expression 'assessment ' used in these sections (provisions of Ch. IV of the Indian Income tax Act) is not used merely in the sense of computation of income and there is in our judgment no ground for holding that when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof. By section 28, the liability to pay additional tax which is designated penalty is imposed in view of the dishonest or contumacious conduct of the assessee." This court regarded penalty as an additional tax imposed upon a person in view of his dishonest or contumacious conduct. It is true that under the Hyderabad Income tax Act, distinct provisions are made for recovery of tax due and penalty, but that in our judgment does not alter the true character of penalty imposed under the two Acts. Nor are we able to agree that because in respect of the , the Indian Tariff Act, 1934, the , the Central Excise and Salt Act, 1944, and the Indian Post Offices Act, 1898, which were extended (1) ; 929 to the whole of India by section 11 of the Finance Act, 1950, and the provisions corresponding thereto were repealed by the proviso, and it was expressly provided that the previous operation of the corresponding law or any penalty, forfeiture or punishment ordered in respect of an offence committed against any such law or any investigation, legal proceeding or remedy in respect of such penalty, forfeiture or punishment or any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the Act had not been passed, that under sub section (1) of section 13 it was intended to prohibit the authorities otherwise competent in that behalf fro` commencing or continuing the proceeding for levying penalty even if the circumstances justify such a course. The scheme of the statutes specified in section 11 and which are repealed by sub section (2) of section 13 are somewhat different from the scheme of the Indian Income tax Act. Because by sub section (1) of section 13 of the Finance Act, 1950, the Hyderabad Income tax Act was to cease to operate as on April 1, 1950, except for the purposes of levy, assessment and collection of income tax and super tax, whereas in respect of other Acts specified in section 11 substantially provisions similar to those contained in section 6 of the General Clauses Act were enacted, an intention that proceedings for penalty may be commenced and continued under the Acts specified in section 11, whereas no such proceedings may be commenced or continued under the Hyderabad Income tax Act is not indicated. We are of the view that the High Court erred in holding that the proceedings for imposing the penalty could not be continued after the enactment of section 13 (1) of the Finance Act, 1950. The appeal will therefore be allowed and the answer to the first question will be recorded in the affirmative,. On the view taken by us, it is unnecessary to pass,any orders on the petition under article 226 of the Constitution which was presented to the High Court. The appellant will be entitled to his costs of the appeal in this Court and in the High Court. Appeal allowed.

The Income tax Officer found that the respondents ' books of accounts were unreliable and after assessing income for Fasli year 1357, corresponding to the year 1946 47, issued notice to the respondents on December 22, 1949, under section 40 of the Hyderabad Income tax Act to show cause why penalty should not be levied in addition to the tax and by an order dated October 31, 1951, directed payment of the said penalty. The State of Hyderabad merged with the Indian Union during the pendency of the proceedings before the Income tax Officer and by section 13 of the Finance Act, 1950, the Hyderabad Income tax Act ceased to have effect from April 1, 1950, but the operation of that Act in respect of levy, assessment and collection of income tax and super tax in respect of periods prior thereto for which liability to income tax could not be imposed under the Indian Income tax Act, was saved. The question was whether (a) the Income tax Officer had power on October 31, 1951, to impose a penalty under section 40(1) of the Hyderabad Income tax Act and (b) whether the assessee had a right to appeal against the order of the Income tax Officer imposing penalty and whether the Appellate Assistant Commissioner had jurisdiction to hear appeals or whether his order was a nullity. Held, that the power of the Income tax Officer to impose a penalty under section 40(1) of the Hyderabad Income tax Act in respect of the year preceding the date of the repeal of the Hyderabad Income tax Act was not lost because by section 13 of the Finance Act, 1950,,for the operation by the Hyderabad Income tax Act in respect of levy, assessment and collection of income tax and super tax in respect of periods prior to April, 1951, for which liability to income tax could not be imposed under the Indian Income tax Act, was saved and so the proceedings for imposing the penalty could be continued after the enactment of section 13(1) of the Indian Finance Act, 1950. Held, that the appeal against the order of the Income tax Officer on the ground that he was not competent to pass the order did lie to the Appellate Assistant Commissioner, whose jurisdiction was not made conditional upon the competence of the 924 Income tax Officer to pass the. orders made appealable; as a court of appeal he had jurisdiction to determine the soundness of the conclusions of the Income tax Officer both on the question of fact and law and even as to his jurisdiction to pass the order appealed from, and his order was not a nullity.

This was an appeal on a certificate of fitness granted by the High Court against its judgment on a reference made under Section 66(1) of the Indian Income tax Act ("the said Act"). The appellant/assessee owned some agricultural land, which the assessee developed into building sites. The assessee leased out the building sites to various parties. The leases were for 99 years. The assessee received amounts of 'salami ' or premium for the said leases. Question arose whether the assessee was liable to pay capital gains tax on the amounts of 'salami ' or premium received. The assessee contended before the Income tax Officer that no capital gains tax could be levied on the said leases as the land was agricultural and that Section 12 B of the said Act did not come into play as only lease hold rights had been conveyed by the assessee to the lessees under the leases in question. Both these contentions were rejected by the Income tax Officer, the Appellate Assistant Commissioner and the Income tax Appellate Tribunal. Arising from the decision of the Tribunal, two questions were referred to the High Court, viz. (1) Whether the land sold by the assessee constituted a capital asset within the meaning of Section 12 B of the said Act or was agricultural land as defined in Section 2(4A) of the Act, and (2) Whether the transaction of lease effected by the assessee amounted to a transfer within the meaning of Section 12 B of the said Act so as to attract liability for capital gains tax. The High Court answered both the questions in the affirmative and against the assessee. Leave was granted by the High Court to the assessee to appeal to this Court only in respect of the second question. 990 The appellant assessee had contended that Section 12 B of the said Act could have no application as the land in question was Inam land which must have been granted as a pure gift., to the ancestor of the assessee, and that Section 12 B was applicable only in the case of assets where there was a cost of acquisition. The respondent had urged that the assessee could not raise this contention as it did not arise out of the decision of the Tribunal and was not reflected in the questions referred by the Tribunal particularly in the question in respect of which the certificate of appeal had been granted. The Court dismissed the appeal upholding the submissions of the respondent. It was, ^ HELD:that the question in respect of which certificate of fitness had been granted, clearly related to one controversy, namely, whether the provisions of Section 12 B could be brought into play in this case as the transfer was of lease hold interest in immovable property for 99 years and not an outright sale or transfer of the complete interest of the transferor in the immovable property. The question as to whether Section 12 B could be brought into play where the property sold had not cost anything to acquire as it was gifted, had not been urged before the income tax authorities, the Tribunal or the High Court and was not covered by the decision of the Tribunal or the High Court. This case fell within the category of cases where the question of law concerned is neither raised before the Tribunal nor considered by it, and in such a case the question would not be a question arising out of the order of the Tribunal notwithstanding that it may arise on the findings given by it, as held by this Court in Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., ; Merely because a question of law might arise on the facts found by the Tribunal, this would not render it a question arising out of the decision of the Tribunal. [995B C,G] As regards the question whether the provisions of Section 12 B could be brought into play, although what was transferred was only lease hold interest in the lands in question, it was significant that the leases were for a long period of 99 years and in all the transactions of lease, premium had been charged by the assessee for the grant of the lease concerned. Under the leases, the assessee had parted with an asset of an enduring nature, namely, the rights to possession and enjoyment to the properties leased for 99 years subject to certain conditions regarding termination of the leases. It could not be said that the provisions of Section 12 B of the said Act could not be brought into play. The grant of the leases amounted to a transfer of capital assets as contemplated under Section 12 B of the said Act. [996G H;997A B] 991 C.I.T. vs Srinivasa & Setty, ; ; Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., [1961] 42 ITR p. 589 and Traders and Miners Ltd. vs Commissioner of Income Tax, Bihar and Orissa, , referred to.

Pursuant to the directions of the Income tax Appellate Tribunal, the Income tax Officer, determined the assessee 's capital gains under section 12B of the Income tax Act, 1922. He did not, however, make any order under section 23(3) of the Act, nor did he issue a notice of demand under section 29 of the Act. The assessee filed an application before the Commissioner of Income tax, under section 33A(2) of the Act, for revising the computation made by the Income tax Officer drawing his attention to a decision of the Bombay High Court in Baijnath 's case, , as to how the capital gains should be ascertained. That decision was based upon a consideration of the very documents which were the basis of the assessees ' claim. The Commissioner dismissed the revision petition as not maintainable, as well as on merits, ignoring the Bombay decision. Meanwhile, the assessee filed an application requesting the Income tax Officer to issue a notice of demand under section 29, to enable him to file an appeal, but the Officer declined to do so. The assessee filed a writ application in the High Court for issuing appropriate writs to the Commissioner and the Income tax Officer, but the High Court dismissed it in limine. In his appeal to this Court, the assessee contended that (i) the High Court erred in holding that the affidavit filed in support of the writ petition was not in accordance with law, and that even if there were any defects the High Court should have given him an opportunity to rectify them, and (ii) the High Court erred in distinguishing the Bombay decision and in holding that there was no force in the revision filed before the Commissioner, and that, the High Court should have directed the Commissioner to entertain the revision and dispose of it in accordance with law by giving suitable directions to the Income tax Officer. The respondent raised a preliminary objection that as the order of the Commissioner was an administrative act, article 226 of the Constitution could not be invoked. HELD:(i) As no appeal lay to the Appellate Assistant Commissioner against the calculations made by the Income tax Officer, the Commissioner had powers under section 33A(2) to revise the Income tax Officer 's order. The jurisdiction conferred on the Commissioner by the section is a judicial one, The nature of the jurisdiction and the rights decided carry with them necessarily the duty to act judicially in disposing of the revision. Further, the fact that a Division Bench of one of the High Courts in India had taken a view in favour of the assessee, indicated that the question raised was arguable and required serious consideration. Therefore, a writ of certiorari quashing the order of the Commissioner dismissing the assessee 's revision petition, should be issued. [544E G; 548D] 537 Sitalpore Colliery Concern Ltd. vs Union of India, , Additional Income tax Officer, Cuddapah vs Cuddapah Star Transport Co. Ltd. and Suganchand Saraogi vs Commissioner of Income tax, , overruled. Even if the Commissioner only made an administrative order in refusing, to give any direction to the Income tax Officer, the assessee would still be entitled to approach the High Court under article 226, and a writ of mandamus directing the Income tax Officer to discharge his statutory duty of passing the order and issuing the notice of demand in accordance with law, should be issued. [546C E] (ii)The affidavit filed on behalf of the assessee was complete and compiled with the rules made by the High Court. The affidavit spoke only of matters which were within the deponent 's own knowledge, because, the phrase "deponent 's own knowledge" is wide enough to comprehend the knowledge derived from a perusal of relevant documents. Even if the affidavit was defective in any manner, the High Court instead of dismissing the petition in limine should have given the assessee, a reasonable opportunity to file a better affidavit. [547F G, H] (iii)The High Court was also in error in holding that the decision of the Bombay High Court was given on different facts, for the facts in both cases were the same and they arose out of the same transaction. [548B C]

The respondent Board realised terminal tax on goods experted by the appellants. In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation. The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees. In second appeal the High Court held that the levy was illegal. The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others. On the question whether the levy could be said to be a thing done or purported to be done under the Act. Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation. [172 D] 1. (a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act. [172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed. (b) The terminal tax could not be imposed under any of The provisions of the Act. The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits. [173 F G 174 Al 2. The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950. With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law. But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force. the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act. But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder. The levy could not, therefore, be saved by cl. (b) of the proviso to section 2. on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses. The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired. [173A, F G]

The appellants, a partnership firm assessed under sections 23(3) and 26 A of the Income tax Act, were called upon by the Income tax Officer during the assessment year 1947 48 to explain how and when they came to possess 61 thonsand rupee currency notes which they had encashed on the 18th January, 1946, after the promulgation of the High Denomination Bank Notes (Demonetisation) Ordinance of 1946, under which such notes ceased to be legal tender on the expiry of the 12th of January, 1946. The assessees produced their cash book entries from the 20th December, 1946, to the 18th January, 1946, which were accepted as correct by the Income tax Officer, who, however, made no further scrutiny of the accounts, and,the entries showed that on the 12th of January, 1946, the cash balance in hand was Rs. 69,891 2 6. The case of the appellants was that the said notes were a part of the cash balance and in further support of their case they filed before the Appellate Assistant Commissioner three affidavits by persons actually making the payments, in respect of certain entries in the cash book to prove that Rs. 20,000 on the 28th December, 1946, Rs. 15,000 on the 6th of January, 1946, and Rs. 8,000, out of a sum of Rs. 8,500, on the 6th of January, 1946, were paid in thousand rupee notes. The Income tax Officer and the Appellate Assistant Commissioner in appeal, on a calculation of their own, held that the possession by the appellants of so many thousand rupee notes was an impossibility and that these notes must represent income from, undisclosed sources and as such be added to the assessable income of the appellants. Neither the Appellate Assistant Commissioner nor the Income tax Officer, who was present at the hearing of the appeal, called for the deponents in order to cross examine them with reference to their statement in the affidavits. The Appellate, Tribunal on appeal accepted the explanation of the assesses in respect of 31 of the notes but not with regard to the rest and rejected their application for a reference of the matter to the High Court. The assessees moved the High Court and the Tribunal was directed under section 66(2) to state 627 a case for its decision. In answering the main question, the High Court was of the opinion that the finding of the Tribunal was a finding of fact or an inference based on such finding and it was not possible to say that such finding or inference was unreasonable or arbitrary. Held (per curiam), that the High Court was in error in refusing to interfere with the finding of the Tribunal which was based on no evidence and the appeal must succeed. Per C.J. and BHAGWATI J. Conclusions based on facts proved or admitted may be conclusions of fact but whether a particular inference can legitimately be drawn from such conclusions may be a question of law. Where, however, the fact finding authority has acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, the court is entitled to interfere. Chunilal Ticamchand Coal Co. Ltd. vs Commissioner of Income tax, Bihar and Orissa, ([1955]) , applied. Cameron vs Prendergast (Inspector of Taxes), ([1940] 8 I.T.R. (Suppl.) 75), Bomford vs Osborne (H. M. Inspector of Taxes), ([1942] 10 I.T.R. (Suppl.) 27) and Edwards (Inspector of Taxes) vs Bairstow and Another, ([1955] , referred to. The High Court was in error in treating the finding of the Tribunal as a finding of fact and failed to apply the true principles of interference applicable to such cases. The entries in cash book and the statements made in the affidavits in support of the explanation. which were binding on the Revenue and could not be questioned, clearly showed that it was quite within the range of possibility that the appellants had in their possession the 61 high denomination notes on the relevant date and their explanation could not be assailed by a purely imaginary calculation of the nature made by the Income tax Officer or the Appellate Assistant Commissioner. The Tribunal made a wrong approach and while accepting the appelants ' explanation with regard to 31 of the notes, it had absolutely no reason to exclude the rest as not covered by it in absence of any evidence to show that the excluded notes were profits earned by the appellants from undisclosed sources. The appellants having given a reasonable explanation the Tribunal could not, by applying a rule of thumb, discard it so far as the rest were concerned and act on mere surmise. Per VENKATARAMA AYYAR J. The finding of the Tribunal that high denomination notes of the value Rs. 30,000 represented concealed profits of the appellants being unsupported by any evidence amounted to an error of law and was liable to be set aside. That so many notes of high denomination should have been held as part of 628 the cash for so long a time, might be highly suspicious but decisions must be founded on legal testimony and not on suspicion. The question whether the accounts were genuine or not was a pure question of fact and a finding that they were genuine was binding both on the Revenue and the subject.

The respondent imported 2,000 drums of mineral oil and the appellant confiscated 50 drums and imposed a personal penalty. The appeal of the respondent was dismissed by the Central Board of Revenue. The respondent filed a petition under article 226 of the Constitution in the Calcutta High Court. A Full Bench of the High Court held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in the case of Saka Venkata Subbha Rao. However, as the Central Board of Revenue had merely dismissed the appeal against the 564 order of the appellant, the High Court further held that it had jurisdiction to pass an order against the appellant. The appellant came to this Court after obtaining a certificate. Held that the appellant had merged into that of the Central Board of Revenue and hence no order could be issued against the appellant. It is only the order of the appellate authority which is operative after the appeal is disposed of. It is immaterial whether the appellate order reverses the original order, modifies it or confirms it. The appellate order of confirmation is as efficacious as an operative order as an appellate order of reversal or modification. As the appellate authority in this case was beyond the territorial jurisdiction of the High Court, it was not open to the High Court to issue a writ to the original authority which was within its jurisdiction. Election Commission, India vs Saka Vankata Subba Rao, , A. Thangal Kunju Mudatiar vs M. Venkitachalam Poiti, ; , Commissioner of Income tax vs M/s. Amritlal Bhogilal & Co. [1959] section C. R. 713 and Madan Gopal Rungta vs Secretary to the Government of Orissa, (1962) (Supp.) 3 S.C.R. followed. Barkatali vs Custodian General of Evacuee Property, A. 1. R. , overruled. Joginder Singh Waryam Singh vs Director, Rural Rehabilitation, Pepsu, Patiala, A. 1. R. 1955 Pepsu 91, Burhanpur National Textile Workers Union vs Labour Appellate Tribunal of India at Bombay, A. I. R. , and Azmat Ullah vs Custodian, Evacuee Property, A.I.R. 1955 All 435, approved. State of U. P. vs Mohammed Nooh, ; , distinguished.

The appellant, a private limited company, was assessed to income tax for the assessment years 1942 43, 1943 44 and 1944 45 by three separate orders dated January 26, 1944, February 12, 1944, and February 15, 1945, under section 23(3) of the Indian Income Tax Act on returns filed by it with statements of account. On March 28, 1951, three notices under section 34 of the Act were issued calling upon it to submit fresh returns for the said assessment years. The appellant filed the returns but thereafter applied to the High Court under article 226 of the Constitution for writs restraining the Income tax Officer from initiating assessment proceedings on the basis of the said notices on the ground, inter alia, that he had no jurisdiction to issue the said notices. In his report to the Commissioner of Income tax for obtaining sanction to initiate the said proceedings the Income tax Officer had stated as follows : " Profit of Rs. 5,46,002 on sale of shares and securities escaped assessment altogether. At the time of the original assessment the then I. T. O. merely accepted the company 's version that the sale of shares were casual transactions and were in the nature of mere change of investments. Now the results of the company 's trading from year to year show that the company has really been systematically carrying out a trade in the sale of investments. As such the company had failed to disclose the true intention behind the sale of the shares as such section 34(1)(a) may be attracted". The question for determination was whether in the circum stance the Income tax Officer was right in issuing notices on the assessee under section 34(1)(a) of the Act. Held, (per section K. Das, K. C. Das Gupta and N. R. Ayyangar, jj.), that before the Income tax Officer could issue a notice under $ '. 34(1)(a) of the Indian Income tax Act, two conditions precedent must co exist, namely, that he must have reason to believe (i) that income, profits or gains had been under assessed and (2) that such under assessment was due to non disclosure of material facts by the assessee. 242 Although what facts would be necessary and material for the assessment in a particular case must depend on the facts of that case, there could be no doubt that the burden of disclosing all the primary facts must invariably be on the assessee. The Explanation to section 34(1) made it clear that that burden could not be fully discharged by simply producing the account books and other documents, but the assessee must also disclose such specific items or portions thereof as are relevant to the assessment. But once he has done so, it is for the Income tax Officer to draw the proper inferences of fact and law therefrom and the assessee cannot further be called upon to do so for him. The Explanation does not enlarge the scope of the section so as to include " the disclosure " of such inferences. The question whether by the sale of shares the assessee in the instant case intended to change the form of investment or to make a business profit was one of an inferential fact and the failure to disclose such intention could not by itself amount to a failure or omission to disclose a material fact within the meaning of section 34(1)(a) of the Act. Where, however, the Income tax Officer has prima facie reasonable grounds for believing that there has been a non disclosure of a primary material fact, that by itself gives him the jurisdiction to issue a notice under section 34 of the Act, and the adequacy or otherwise of the grounds of such belief is not open to investigation by the Court. It is for the assessee who wants to challenge such jurisdiction to establish that the Income tax Officer had no material for such belief. Since, in the instant case, there was no non disclosure of a primary material fact which the assessee was bound to disclose under section 34(1)(a) of the Act, the Income tax Officer had no jurisdiction to issue the notices in question. It is incorrect to say that the question of under assessment by reason of non disclosure of a material fact was relevant only for the purpose of applying either the longer or the shorter period of limitation prescribed by the section and not for jurisdiction and, therefore, not a proper matter for investigation under article 226 of the Constitution. The High Courts have ample powers under article 226 of the Constitution, and are in duty bound thereunder, to issue such appropriate orders or directions as are necessary in order to prevent persons from being subjected to lengthy proceedings and unnecessary harassments by an executive authority acting without jurisdiction. Alternative remedies such as are provided by the Income tax Act cannot always be a sufficient reason for refusing quick relief in a fit and proper case. Per Hidayatullah, J. The Explanation to section 34(1) of the Indian Income tax Act clearly indicates that the duty of the assessee thereunder does not end by merely producing evidence or disclosing the primary facts, but also extends to the disclosure 243 of such other facts relating to status, agency, benami nature of the transaction, the nature of the trading and the like, which he knows but do not appear from the evidence, and which may be necessary for interpreting the evidence. If the evidence produced hides nothing and discloses everything, the assessee cannot be subjected to section 34 merely because the Income tax Officer misinterprets such evidence. But it is otherwise if the assessee raises a contention that is contrary to fact and requires the Income tax Officer to discover the truth for himself for that would be to suppress a material fact that would attract the section. Since, in the present case, an investment company dealing in stocks and shares, not only knowingly suppressed that fact but contended otherwise, there was non disclosure of a material fact necessary for its assessment, and sufficient to attract section 34(1) (a) of the Act. Per Shah, J. The expression " has reason to believe " in section 34(1)(a) of the Indian Income tax Act does not mean a purely subjective satisfaction of the Income tax Officer but predicates the existence of reasons on which such belief has to be founded. That belief, therefore, cannot be founded on mere suspicion and must be based on evidence and any question as to the adequacy of such evidence is wholly immaterial at that stage. Whether all the material facts necessary for the assessment had or had not been fully and truly disclosed in a particular case has to be examined, in the fight of the Explanation to section 34(1)(a). If there is disclosure of some facts but not all, a tax payer cannot resist reassessment on the plea that such non disclosure was due to the negligence or inadvertence on the part of the Income tax Officer to scrutinise the materials before him. Where the existence of reasonable belief that there bad been under assessment due to non disclosure by the assessee, which is a condition precedent to exercise of the power under section 34(1)(a) is asserted by the assessing authority and the record prima facie supports its existence, any enquiry as to whether the authority could reasonably hold the belief that the under assessment was due to non disclosure by the assessee of material facts necessary for the assessment must, be barred.

This appeal by special leave was directed against the order of the High Court asking the Income tax Appellate Tribunal under section 66(4) Of the Income tax Act to submit a supplementary ' statement of case on points, which were never raised by the parties nor decided by the Income tax Authorities or the Tribunal. The only question canvassed before them was whether certain cheques, which were received by the assessee at Bhavnagar having been cashed in British India, the monies in respect of them could be said to have been received in British India. The Tribunal held that the monies related back to the receipt of the cleques and were as such received at Bhavnagar. The question was whether the receipt of the cheques at Bhavnagar amounted to receipt of the sale proceeds at Bhavnagar. ' The High Court held that the mere receipt of the cheques by post at Bhavnagar was not conclusive in absence of a further finding as to whether the cheques were sent by post without any request, express or implied, having been made by the assessee and observed as follows " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference. It must not be forgotten that under sec. 66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our advisory jurisdiction. " Held, that the High Court had misconceived its powers under section 66(4) of the Act and its decision must be set aside. Section 66(4) of the Indian Income tax Act, which must be read with sections 66(1) and 66(2) Of the Act, did not empower the High Court to raise a new question of law which did not arise out of the Tribunal 's order or direct the Tribunal to investigate new and further facts necessary to determine the new question which had not been referred to it under s 66(1) or section 66(2) of the Act and direct the Tribunal to submit supplementary statement of case. Such additions and alterations in the statement of case as section 66(4) of the Act empowered the High Court to direct, could 250 relate only to such facts as already formed part of the record but were not included by the Tribunal in the statement of the case. Craddock (H. M. Inspector of Taxes) vs Zevo Finance Co. Ltd., ; Commissioner of Income tax, West Bengal vs State Bank of India, ; Industrial Development and Investments Co., Ltd. vs Commissioner of Excess Profits Tax, Bombay, [1957] 31 I.T.R. 688; Vadilal Ichhachand vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Ahmedabad, and Commissioner of Income tax vs Bhurangya Coal Co. [195S] , referred to. Commissioner of Income tax, Bihar & Orissa vs Visweshwar Singh, and Sir Sunder Singh Majithia vs Commissioner of Income tax, C. P. and U. P. [1942] 10 I.T.R. 457, considered.

Appeal No. 77 of 1957. Appeal from the judgment and decree dated the August 6, 1954, of the Calcutta High Court in Appeal from Original Decree No. 73 of 1952. M. C. Setalvad, Attorney General for India, W. section Barlingay and A. 0. Ratnaparkhi, for the appellant. A.V. Viswanatha Sastri and P. K. Chatterjee, for respondent No. 1. 1961. March 1. , J. This appeal arises from a suit filed by respondent 1 Durga Prosad Chamaria against respondent 2 the heirs of John Carapiet Galstaun and others in which he sought to recover Rs. 4 p 64,213 5 3 on the mortgaes in suit. He had prayed for a preliminary mortgage decree according to 0. XXXIV, r. 4 of the Code of Civil Procedure and had asked for the appointment of a receiver in that behalf. 'The said mortgages were created by delivery of documents of title to immovable properties by the mortgagor John Carapiet Galstaun who died pending the suit. The properties mortgaged consisted of three items all of which are situated in Calcutta. These items are 24, Amratolla Lane, 96, Karaya Road 142 and premises 167/1 and 167/5 Dhurrumtolla Street (Chandni Bazar). In the present appeal we are concerned with premises 167/1. Respondent 1 's case was that he had advanced several amounts on seven different occasions to the mortgagor between August 2, 1926, and November 27, 1931. According to the terms of the transaction no specific time for payment of the mortgage dues had been fixed, and it was agreed that the monies advanced would become due and be repaid on demand being actually made by the mortgagee. With this plea we are not concerned in the present appeal. It was further pleaded by the mortgagee that the mortgagor had acknowledged his liability of the mortgagee 's claim by letters of March 5, 1932, and February 17, 1943, which were signed by him. It is on the strength of these acknowledgments that the mortgagee purported to bring his claim within time the suit having been filed on May 18, 1944. Pending the suit the appellant was added as a party defendant on August 23, 1944. By his application made by respondent 1 in that behalf it was alleged that the appellant had become the auction purchaser of premises 167/1 at a sale held by the Sheriff of Calcutta on May 3, 1944, in execution of a decree passed in Suit No. 2356 of 1931 by the Calcutta High Court with notice of mortgage in favour of respondent 1. Since the said sale had been confirmed on July 6, 1944, the appellant bad become a necessary party to the suit. That is how the appellant became a party to the proceedings and was interested like the mortgagor in disputing the validity of the claim made by respondent1. The principal issue which arose between the parties in the suit was one of limitation. It was not seriously disputed that the letter written by the mortgagor on February 17, 1943, amounted to an acknowledgment and it helped to bring within time respondent 1 's claim in respect of the last advance of Rs. 2,500 made on November 27, 1931. Respondent 1 's case that the earlier letter of March ' 5, 1932, amounted to an acknowledgment was, however, seriously disputed by the appellant. If this letter is held to amount to a 143 valid acknowledgment two items of consideration pleaded by respondent I would be within time; they are Rs. 20,000 and Rs. 35,000 advanced on the same day , September 10, 1926. Mr. Justice Banerjee, who tried the suit on the Original Side of the Calcutta High Court, held that the letter in question did not amount to an acknowledgment, and so he found that only the last item of Rs. 2,500 was in time. In the result he passed a decree for Rs. 5,000 only in favour of respondent 1. Then respondent 1 took the dispute before the Court of Appeal in the Calcutta High Court. The Court of Appeal has upheld the case made out by respondent I in regard to the acknowledgment based on the letter of March 5, 1932, and in consequence it has been held that the principal amounts due to respondent 1 are Rs. 55,000 and Rs. 2,500, and at the rate of interest payable thereon at 8% simple, the total amount payable being subject to the maximum allowable under the Money lenders ' Act. In accordance with these findings a preliminary decree has been drawn. It is this decree which is challenged before us by the appellant who has brought his appeal to this court with a certificate issued by the Calcutta High Court; and the only point which is raised for our decision is whether the letter in question amounts to a valid acknowledgment under section 19 of the Limitation Act. The decision of this question would naturally depend upon the construction of the letter on which respondent 1 relies; but before reading the said letter it would be relevant to consider the essential requirements of section 19 which provides for the effect of acknowledgment in writing. Section 19(1) says, inter alia, that where before the expiration of the period prescribed for a suit in respect of any right, an acknowledgment of liability in respect of such right has been made in writing signed by the party against whom such right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. It would be noticed that some of the relevant essential requirements of a valid acknowledgment are that it must be made before the relevant period of limitation has 144 expired, it must be in regard to the liability in respect of the right in question and it must be made in writing and must be signed by the party against whom such right is claimed. Section 19(2) provides that where the writing containing the acknowledgment is undated oral evidence may be given about the time when it was signed but it prescribes that subject to the provisions of the , oral evidence of its contents shall not be received; in other words, though oral evidence may be given about the date oral evidence about the contents of the document is excluded. Explanation 1 is also relevant. It provides, inter alia, that for the purpose of section 19 an acknowledgment may be sufficient though it omits to specify the exact nature of the right or avers that the time for payment has not yet come, or is accompanied by a refusal to pay, or is coupled with &.,claim to a set off, or is addressed to a person other than the person entitled to the right. It is thus clear that acknowledgment as prescribed by section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words. Words used in the acknowledge judgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but must be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date 145 of the statement. In construing words used in the statements made in writing on which a plea of acknowledgment rests oral evidence has been expressly section excluded but surrounding circumstances can always be considered. Stated generally courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly G. without intending to admit the existence of jural relationship such intention could ' be fastened on the maker of the statement by an involved or far fetched process of reasoning. Broadly stated that is the effect of the relevant provisions contained in section 19, and there is really no substantial difference between the parties as to the true legal position in this matter. It is often said that in deciding the question as to whether any particular writing amounts to an acknowledgment as in construing wills, for instance, it is not very useful to refer to judicial decisions on the point. The effect of the words used in a particular document must inevitably depend upon the context in which the words are used and would always be conditioned by the tenor of the said document, and so unless words used in a given document are identical with words used in a document judicially considered it would not ,serve any useful purpose to refer to judicial precedents in the matter. However, since decisions have been cited before us both by the learned Attorney General and Mr. Viswanatha Sastri we propose to refer to them very briefly before turning to the document in question. The question as to what is an acknowledgment has been answered by Fry, L., J., as early as 1884 A. D. in Green vs Humphreys (1). This answer is often quoted with approval. "What if; an acknowledgment", asked Fry, L.J., and he proceeded, "in my view an acknowledgment is an admission by the writer that there is a debt owing by him, either to the receiver of the letter or to some other person on whose behalf the letter is received but it is not enough that he refers to a debt (1) (1884) 26 Ch. D 474, 481 146 as being due from somebody. In order to take the case out of the statute there must upon the fair construction of the letter, read by the light of the surrounding circumstances, be an admission that the writer owes the debt". With respect, it may be added, that this statement succinctly and tersely gives the substance of the provisions contained in section 19 of the Limitation Act. Mr. Sastri has relied on the decision of the Privy Council in Beti Maharani vs Collector of Etawah (1) in which the Privy Council has recognised that it would be legitimate for the purpose of construing a document to look at the surrounding circumstances and that oral evidence about the intention of the maker of the statement cannot be admitted for the purpose of construing the said statement. "Their Lordships", observed Lord Hobhouse, who spoke for the Board, "cannot follow the learned judges of the High Court in admitting the Collector to give oral evidence of his intentions for the purpose of construing the notice. But they may for that purpose properly, look at the surrounding circumstances". In Sukhamoni Chowdhrani vs Ishan Chunder Roy (2) the statements on which reliance was placed by the creditor was contained in the directions given by the debtor to apply surplus income "to the payment of the ijmali debts of us three co owners of which a list is given below". It was held that by this statement the defendant acknowledged a joint debt and "from that follow the legal incidents of her position as a joint debtor with the plaintiff, one of which is that he may sue her for contribution". In other words, admission about a joint debt amounted to an acknowledgment though the liability to be sued for contribution is a matter of legal inference from the said admission and it had not been specifically included in the statement in question. Mr. Sastri has also relied on the decision of the Full Bench of the Allahabad High Court in Munshi Lal vs Hira Lal (3) where it has been held that a document said to constitute an acknowledgment has to be construed in the context in which it is given and that (1) (1894) 22 I.A. 31, 41 (2) (1897) 25 I A 95 (3) I.L.R. [1947] All. 11. 147 where its language is not clear in itself the context must be examined to see what it is to which the words referred. The Court, however, added that its decision She did not mean that any equivocation in an acknowledgment can be cured by ascertaining what the probable intention of the acknowledger was. Similarly in L Swaminatha Odayar vs Subbarama Ayyar (1) the Madras High Court has held that an acknowledgment for liability under section 19 need not be express but may be implied from facts and circumstances under which a statement in a deposition was made but it cannot be implied as a matter of law. On the other hand, the learned Attorney General has strongly relied on an earlier decision of the Bombay High Court in Dharma Vithal vs Govind Sadvalkar (2). In that case certain statements made in the receipt given for the delivery of the land to the officer of the Court were relied upon as amounting to an acknowledgment. The said receipt referred to the suit and decree and the decree to which reference was thus made had set forth in ordinary course the then plain. tiff 's claim as resting on a mortgage. The contention was that the reference to the decree made the decree a part of the receipt and since the decree referred to the plaintiff 's claim as resting on a mortgage the receipt itself served as an acknowledgment of a mortgage subsisting in 1827. This plea was rejected by the High Court. The High Court held that all that the receipt admits by implication is that the land had been awarded by the decree to the party who passed the receipt. "To extend it", observed West, J., "so as to make it an admission of the reasoning and legal grounds stated in the decree, would be to go beyond what probably was present at all to the consciousness of the recipient when he acknowledged having been put into possession". The learned judge then added that "the intention of the law manifestly is to make an admission in writing of an existing jural relation of the kind specified equivalent for the purposes of limitation to a new contract". As we will make it clear when we deal with the document before us it would be realised (1) Mad. (2) Bom. 99. 148 that this case cannot assist the appellant. The receipt itself did not contain any admission about the jural, relation between the parties. It merely referred to the decree which had set out the material allegations made in the plaint. Now 5 it would be plainly unreasonable to attribute to the party passing the receipt an intention to make the admissions which may be inferred from the averments made in the plaint which were incidentally recited, and so the Bombay High Court naturally rejected the plea that the receipt amounted to a valid acknowledgment. Incidentally we may add that when West, J. referred to a new contract file had perhaps in mind the definition of acknowledgment under section 4 of Act XIV of 1859 which required a promise to pay in addition to the subsistence of jural relationship. The element of promise was omitted in the subsequent Act XV of 1877, and it continues to be omitted ever since. As we have already indicated, under the present law acknowledgment merely renews the debt and does not create a fresh cause of action. It is now necessary to consider the document on which the plea of acknowledgment is based. This document was written on March 5, 1932. It, however, appears that on November 26, 1931, another letter had been written by respondent 2 to respondent 1; and it would be relevant to consider this letter before construing the principal document. In this letter respondent 2 had told respondent 1 that the Chandni Bazar property was being sold the next morning at the Rekistrar 's sale on behalf of the first mortgagee and that the matter was urgent. , otherwise the property would be sacrificed. It appears that the said property was subject to the first prior mortgage and respondent 2 appealed to respondent 1 to save the said threatened sale at the instance of the prior mortgagee. It is common ground that respondent 1 paid to respondent 2 Rs. 2,500 on November 27, 1931 and the threatened sale was avoided. This fact is relevant in construing the subsequent letter. The said property was again advertised for sale on March 11, 1932, and it was about this sale that the 149 letter in question came to be written by respondent 2 to respondent 1 on March 5, 1932. This is how the letter reads: "My dear Durgaprosad, Chandni Bazar is again advertised for sale on Friday the 11th instant. I am afraid it will go very cheap. I had a private offer of Rs. 2,75,000 a few days ago but as soon as they heard it was advertised by the Registrar they withdrew. As you are interested why do not you take up the whole. There is only about 70,000 due to the mortgagee a payment of 10,000 will stop the sale. Yours sincerely, Sd. J. C. Galstaun. " Does this letter amount to an acknowledgment of respondent 1 's right as a mortgagee? That is the question which calls for our decision. The argument in favour of respondent 1 's case is that when the document refers to respondent 1 as ' being interested it refers to his interest as a puisne mortgagee and when it asks respondent 1 to take up the whole it invites him to acquire the whole of the mortgage interest including the interest of the prior mortgagee at whose instance the property was put up for sale. On the other hand, the appellant 's contention is that the word "interest" is vague and indefinite and that respondent 1 may have been interested in the property in more ways than one. In that connection the appellant relies on the statements made by respondent 1 in his evidence. He stated that he was interested in the property in many ways and he clarified by adding that in the first instance he was a mortgagee having a charge on the property so that if the mortgagor was not able to pay him the money then he could have given him the property or the appellant could have got the property from him. He also stated that at one time he was thinking of buying or taking lease of the property in order to liquidate the debt but he added that negotiations in regard to the lease had taken place in 1926 and they bad ended in failure. According to him no such negotiations had taken place in 150 1932. It is urged that when the letter refers to the interest of respondent 1 in the property in question it may be interest as an intending purchaser or as an intending lessee. In construing this letter it would be necessary to bear in mind the general tenor of the letter considered as a whole. It is obvious that respondent 2 was requesting respondent 1 to avoid the sale as he did on an earlier occasion in November, 1931. The previous incident shows that when the property was put to sale by the first mortgagee the mortgagor rushed to the second mortgagee to stop the sale, and this obviously was with a view to persuade the second mortgagee to prevent the sale which would otherwise affect his own interest as such mortgagee. The theory that the letter refers to the interest of respondent 1 as an intending lessee or purchaser is far fetched, if not absolutely fantastic. Negotiations in that behalf had been unsuccessful in 1926 and for nearly five years thereafter nothing was heard about the said proposal. In the context it seems to us impossible to escape the conclusion that the interest mentioned in the letter is the interest of respondent 1 as a puisne mortgagee and when the said letter appeals to him to take, up the whole it can mean nothing other than the whole of the mortgagee 's interest including the interest of the prior mortgagee. An appeal to respondent 1 to stop the sale on payment of Rs. 10,000, as he in fact had stopped a similar sale in November, 1931, is an appeal to ensure his own interest in the security which should be kept intact and that can be achieved only if the threatened sale is averted. We have carefully considered the arguments urged before us by the learned Attorney General but we see no reason to differ from the conclusion reached by the Court of Appeal below that this letter amounts to an acknowledgment. The tenor of the letter shows that it is addressed by respondent 2 as mortgagor to respondent 1 as puisne mortgagee, it reminds him of his interest as such mortgagee in the property which would be put up for sale by the first mortgagee, and appeals to him to assist the avoidance of sale, and thus acquire the 151 whole of the mortgagee 's interest. It is common ground that no other relationship existed between the parties at the date of this letter, and the only subsisting relationship was that of mortgagee and mortgagor. This letter acknowledges the existence of the. said jural relationship and amounts to a clear acknowledgment under a. 19 of the Limitation Act. It is conceded that if this letter is held to be an acknowledgement there can be no other challenge against the decree under appeal. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

In a mortgage suit brought by him, the respondent 1, the mortgagee, pleaded that limitation was saved by a letter written to him by the mortgagor, the respondent 2, which amounted to acknowledgment under section 19 of the Indian Limitation Act. There was a prior mortgage and before writing the letter in question the mortgagor had written another letter appealing to respondent 1 to save the property from being sold at the instance of the prior mortgagee. Thereupon the respondent No. 1 paid the required amount and the threatened sale was averted. The property was again advertised for sale and that was why the letter in question was written; it ran as follows, "Chandni Bazar is again advertised for sale on Friday the 11th instant. I am afraid it will go very cheap. I had a private offer of Rs. 2,75,000 a few days ago but as soon as they heard it was advertised by the Registrar they withdrew. As you are interested why do not you take up the whole. There is only about 70,000 due to the mortgagee a payment of Rs. 10,000 will stop the sale". The question was whether this letter amounted to an acknow ledgment of the respondent 1 's right as mortgagee under section 19 of the Indian Limitation Act. The trial judge held that it did not, but the Court of appeal took the contrary view. The auction purchaser appealed to this Court. Held, that it was obvious that the interest mentioned in the letter in the context of the previous one was none other than that of respondent 1 as a puisne mortgagee and the appeal to take up the whole meant the entirety of the mortgagee 's interest including that of the prior mortgagee. Since admittedly the only subsisting relation between the parties at the date of the letter was that of mortgagee and mortgagor and the letter acknowledged the existence of that jural relationship, it clearly amounted to an acknowledgment under section 19 of the Act. Held, further, that the essential requirement for sustaining a plea of acknowledgment under section 19 of the Act is that the statement on which it is sought to be founded must relate to a 141 subsisting liability, indicate the existence of the jural relationship between the parties and must be intended, either expressly or impliedly, to admit that jural relationship. The words used in a particular statement must be construed in the light of its own tenor and according to the context and unless the words used are identical and the interest is similar, previous decisions interpreting somewhat similar documents are not of much help. Green vs Humphreys,, , referred to. Beti Maharani vs Gollector of Etawah, (1894) L.R. 22 I.A. 3,, Sukkamoni Choudhrani vs Ishan Chunder Roy, (1897) L.R. 25 I.A. 95, Munshi Lal vs Hira Lal, I.L.R. 1947 All. II and Swaminatha Odayar vs Subbarama Ayyar, Mad. 548, considered. Dharma Vithal vs Govind Sadvalkar, Bom. 99, held inapplicable.

The appellant filed a civil suit in the High Court for specific performance of a contract to sell the suit property by the respondents to her. The High Court held the appellant liable to discharge the mortgage and directed her to deposit in Court a sum of Rs.3.5 lakhs with interest for the pur pose. The appellant paid the amount direct to the mortgagee, which the High Court refused to accept as due compliance with its decree. The appellant preferred appeals to this Court, which were disposed of on 29th November, 1979 with the direction that the appellant was to deposit within six months from the date of the order, the entire sum of Rs.3.15 lakhs together with interest. Purporting to comply with the aforesaid order of this Court, appellant deposited a sum of Rs.2,42,822.19 on 11 April, 7980 and filed two Civil Misc. Petitions in the High Court for a declaration that the payment was in compliance with the order of this Court and claimed as set off of the amount of Rs.5,96,687.19 paid by her earlier to the South Indian Bank, which she was entitled to recover from the respondent. The time limit fixed for fulfilling the two conditions set out in this Court 's order dated 29th November, 1979 having fallen on 29th May, 1980 and the High Court not having passed orders on the appellant 's two CMP 's the appel lant paid into the High Court a sum of Rs.6.02 lakhs on 29th May, 1980 by cheque purporting to comply with the first condition of this Court 's order. 820 The High Court dismissed the appellant 's CMP and refused to grant the declaration that the appellant had complied with the order of this Court dated 29th November. 1979, on the ground that the appellant was bound to comply with the Original Side Rules of the High Court which prescribed the procedure to be followed in depositing money into Court particularly Order XXXI Rules 1 to 6 which aimed at securing the deposit of the money in the Reserve Bank of India to the credit of a particular proceeding, on or before the speci fied date. In the appeal to this Court, on the question; whether payment made by the appellant on 29th May, 1980 by cheque of the amount of Rs.6.02 lakhs together with the amount depos ited earlier on 11th May, 1980 was in due compliance with this Court 's order dated 29th November, 1979. Allowing the Appeal and setting aside the order of the High Court, this Court HELD: 1. Payment by cheque is an ordinary incident of present day life, whether commercial or private, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment if the cheque is subsequently encashed in the ordinary course. [823D E] In the instant case, there is nothing in the order of this Court providing that the deposit by the appellant was to be in cash. The terms of the order dated November 29, 1979 are conclusive in this respect and it is the intent of that order which will determine whether payment by cheque within the period stipulated in that order was excluded as a mode in satisfaction of the terms of that order. The time for payment of governed by the order of this Court. [823E F] 2. Payment on the cheque being honoured and encashed relates back to the date of the receipt of the cheque, and in law the date of payment is the date of delivery of the cheque. [823F] Commissioner of Income Tax, Bombay South, Bombay vs Messrs Ogale Glass Works Ltd. Ogale Wadi, A.I.R. 1954 S.C. 429 referred to. In the instant case, there is nothing to suggest that the cheque was not honoured in due course and that the Bank had at any time declined to honour it for want of funds in the ordinary cause. [823G] 821 3. The conditions set forth in the order of this Court dated 29th November, 1979 have been complied with by the appellant substantially and she is entitled to the benefit of that order. [824C D]

Muthammal, the absolute owner of the suit properties, executed a Deed of Settlement dated May 17, 1925 (exhibit A 3) whereby she endowed the suit properties to a temple of her family deity. She constituted herself as the first trustee for her life and after that, her husband and mother were to be the trustees and after their demise, the respondents ' heirs were to be the trustees. Five years later i.e. On January 28, 1930, she purported to cancel and revoke the trust (settlement), by getting the Deed of Cancellation registered. Thereafter, certain mortgages were executed by her in respect of the properties and later on the properties were sold by her to the father of appellants Nos. I and 2. She died on October 1, 1960. The respondents plaintiffs, claiming to be the trustees of the endowment, filed a suit on August 29, 1962 for possession of the properties challenging the alienations that were made in favour of the appellants ' father. The appellants contested the suit and raised the plea of adverse possession and the suit being barred under Article 144 of the Act. The trial court held that the Deed of Settlement itself was not a genuine deed, but even if it were, the suit was barred under Article 144. In the appeal by respondents plaintiff, the Appellate Court held that Deed of Settlement was valid and genuine and in fact it effected a legal endowment in favour of the diet, the original settlor having disvested herself of the ownership completely and consequently the Deed of Cancellation was ineffective in law. The suit was regarded as one falling under article 134B of the Act and the suit having been filed within 12 years from the death of the settlor was held to be within time and the respondents Plaintiffs ' ' suit was decreed. In the second appeal filed by the appellants, the High Court confirmed the first Appellate Court 's decree. 810 on appeal to this Court, the appellants, relying on the decision in Srinivas vs Ramaswami,[1966]3 S.C R 120, contended that there was a resignation on the part of the settlor as a Trustee and such resignation, if not overt and express, must be deemed to have taken place by reason of the fact that she herself had executed and registered the Deed of Cancellation (Ex. B 1) on January 21, 1930 and thereafter she had alienated the proper ties in favour of the appellants ' father and she even left the village for quite a few years and since the suit was filed in the year 1962, long after the expiry of 12 years from such deemed resignation, it was barred. The respondents plaintiffs, however, contended that there was no plea of limitation specifically raised on the basis that there was any deemed resignation on the part of the settlor and as the parties did not lead any evidence focussing their attention on this aspect of the matter and if there be some evidence vaguely or generally led by the parties on this aspect the same should be ignored. alternatively, it was contended that even other wise by the mere execution of a Deed of Cancellation and indulgence in alienations of properties by the settlor in favour of the appellants ' father no deemed resignation should be implied for a wrongful Cancellation Deed, and a wrongful alienation cannot affect her character as a trustee of the properties under the Deed of Settlement which was complete and under which she had divested herself of the ownership of the properties irretrievably. The starting point of limitation for the suit must be held to be the date on which the settler died. Dismissing the appeal, ^ HELD: 1. Limitation in the instant case, will have to be regarded as having commenced on the date of the death of the settlor and the respondents plaintiffs ' suit would be within time. [814E] 2. Where a trustee wrongfully alienates some trust property and even if the entire trust property is alienated, he does not cease to be a trustee. By wrongfully executing a Deed of Cancellation the settlor cannot effectively revoke the settlement and if such settlor happens to be the trustee he shall continue to be the trustee of the settlement. [813 a F] In the instant case, there is a clear finding recorded by the first Appellate Court, and the High Court that the Deed of Settlement dated May 17, 1925 was valid and complete in all respects where under the settlor had divested herself of the properties which she had endowed to the temple, and both the Cancellation Deed as well as the alienations were ineffective and wrongful and, therefore, it could not be said that by indulging in these acts she had resigned her position as a trustee of the endowment. [813 F G] (3) The fact that the settlor had left the village for a few years is neither here nor there. The facts regarding performing of Puja of the deity in the temple by some other persons and contribution towards the expenses of the temple by some devotees are really equivocal and would not be conclusive of the matter on the point of the settlor having resigned inasmuch as the temple which was a village temple was already in existence, 811 to which only properties had been endowed and the temple was a public A religious institution to which the endowment had been made and as such the fact that certain expenses of the temple were contributed by devotees or members of the public would hardly be indicative of the fact that the settlor had resigned from the position as a trustee qua the endowed property. Similar, would be the position with regard to the fact that some persons were performing the Puja which would not be unnatural in the case of a public religious institution. [813H; 814A C] There could conceivably be a deemed resignation or a deemed removal but for inferring the same some additional facts would be required to be proved. The facts on which reliance had been placed by the appellants by themselves are insufficient to warrant the inference that there was a deemed resignation [814C D] Srinivas vs Ramaswami, [19661 3 S.C.R. 120, referred to.

The appellant filed a suit against the respondents for the recovery of Rs. 8216 due on a promissory note executed by respondent No. 1 for a sum of Rs. 6000. The plea taken in defence was that the suit was not. maintainable because the registration of the appellant under section 5(4) and r. 5 of the Orissa Money Lenders Act 1939 had become void on account of the money lent being in excess of the maximum amount of Rs. 2,000 which the appellant was authorised to invest in the business by his registration certificate. The contention was not accepted by the trial court but the High Court. accepting it, dismissed the suit. In appeal, before this Court, by special leave, it was urged on behalf of the appellant that the main Act did not provide for any restriction on the amount of capital that could be invested and that the rules went beyond the Act in making such a provision. HELD : In the absence of any specific provision in the Act providing for the fixing of the maximum capital which a money lender can invest in money lending business, it was not open to the State Government to frame a rule in that regard and the rules framed by it about mentioning, in the application, the maximum capital for which the registration certificate was wanted and the mention in the certificate of the amount of the maximum capital for which the certificate is granted, do not lead to the conclusion that the registration of the money lender will become void if be exceeds the limit of the maximum capital laid down in the registration certificate. [348 D] Sant Saranlal vs Parsuram Sahu , relied on.

After a preliminary decree was obtained by the appellants (mortgagees of an Estate including both Bakasht lands and other lands), the Bihar Land Reforms Act, 1950 came into force. The appellant filed petition for passing final decree. The Estate mortgaged vested in the State as a result of a notification issued under section 3(1) of the Act, and later a final decree was passed in the mortgage suit. Thereafter the appellants applied under section 14 of the Act and got determined the compensation to which they were entitled under the Act. But yet they filed an execution petition to execute the mortgage decree against the Bakasht land. The respondents resisted that execution by filing an application under section 47, Civil Procedure Code contending that the execution was barred under section 4(d) of the Act. That application was dismissed for default of the respondents. A second application raising, the same ground was filed by the respondents but this, too, was dismissed for their default. A third application raising the same ground was filed by the respondents and in this, the execution court overruled the objection raised by the respondents on the grounds (i) that the objection was barred by the principles of res judicata and (ii) that the bar of section 4(d) pleaded was not tenable. This decision was affirmed in appeal, but reversed in second appeal by the High Court. Dismissing the appeal this Court; HELD : (i) The objection was not barred by the principles of res judicata. Before a plea can be held to be barred by res judicata that plea must have been heard and determined by the court. Only a decision by a court could be res judicata, whether it be statutory under section 11, Civil Procedure Code or constructive as a matter of public policy on which the entire doctrine rests. An execution petition having been dismissed for the default of the decree holder through by the time petition came to be dismissed, the judgment debtor had resisted the execution on one or more grounds, does not bar the further execution of the decree in pursuance of fresh execution petitions filed in accordance with law. Even the dismissal for default of objections raised under section 47, Civil Procedure Code does not operate as res judicata when the same objections are raised again in the course of the execution. [911 B H] Maharaja Radha Parshad Singh vs Lal Sahab Rai & Ors. L.R. 17 I.A. 150, Pulvarthi Venkata Subba Rao vs Velluri Jagannadha Rao & Ors. ; , Lakshmibai Anant Kondkar vs Ravi Bhikaji Kondkar, XXXI B.L.R. 400, Bahir Das Pal & Anr. v, Girish Chandra Pal, A.I.R. 1923 Cal. 287, Bhagwati Prasad Sah vs Radha Kishun Sah & Ors. A.I.R. 1950 Pat. 354, Jethmal & Ors. vs Mst. Sakina, A.I.R. 1961 Rai. 1959 Bishwanath Kundu vs Smt. Subala Dassi, A.I.R. 1962 Cal. 272, referred to. 909 Ramnarain vs Basudeo, I.L.R. XXV Pat. 595, disapproved. (ii)Proceedings under section 4(d). of the Bihar Land Reforms Act, 1950 included execution proceedings and the execution could not be proceeded with. The only remedy open to the appellants was to get compensation under Chapter IV of the Act. [913 G, H] Reading sections 3, 4 and 6 together, it followed that all Estates notified under section 3 vested in the State free of all encumbrances. The quondum proprietors and tenure holders of those Estates lost all interests in those Estates. As proprietors they retained no interest in respect of them whatsoever. But in respect of the lands enumerated in section 6 the State settled on them the rights of raiyats. Though in fact the vesting of the Estates and the deemed settlements of raiyat rights in respect of certain classes of lands included in the Estates took place simultaneously, in law the two must be treated as different transactions; first there was a vesting of the Estates in the State absolutely, free of all encumbrances. 'Men followed the deemed settlement by the State of raiyat 's rights on the quondum proprietors. Therefore in law it would not be correct to say that what vested in the State were only those interests not coming within section 6. [913 C E] Section 4(d) provided that "no suit shall lie in any civil court for the recovery of any money due from such proprietor (proprietor whose estate has vested in the State) or tenure holder the payment of which is secured by a mortgage of, or is a charge on, such estate or tenure and all suits and proceedings for the recovery of any such money which may be pending on the date of vesting shall be dropped". Proceedings in this section undoubtedly included execution proceedings. [1913 F] Ramnarain vs Basudeo I.L.R. XXV Pat. 595, Raj Kishore vs Ram Pratap, ; ; , Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad, ; and Krishna Prasad & Ors. vs Gauri Kumari Devi, (1962] Supp. 3 S.C.R. 564, referred to. Sidheshwar Prasad Singh vs Ram Saroop Singh, 1963 B.L.J.R. 802, majority view disapproved.

The appellant landlord executed a lease in respect of the disputed premises in favour of respondent 2 for three years as far back as 1 4 1942. In 1948, a suit was brought by the appellant for eviction of the tenant for non payment of rent on the ground of conversion of the user of the premises. The suit for possession was however dismissed but a decree dated 31 11 1948 for arrears of rent was passed and it was held that Laxmi Bank was the real tenant. Subsequently, the Bombay High Court ordered the Bank to be wound up and in the winding up proceedings, the High Court appointed an Official Liquidator who on 16 2 1961 sold the tenancy rights to respondent No. 1. The sale was confirmed by the High Court on the same date and as a result thereof respondent No. 1 took possession the premises on 24 2 1961. On 5 1 1961, the landlord appellant filed an application under the Delhi Rent Control Act for eviction of Laxmi Bank. On 31 7 1961, a decree for eviction was passed in favour of the appellant. On 22 1 1963, respondent No. 1 filed a suit for declaration that he was a tenant of the landlord appellant. The suit was dismissed for non prosecution on 5 5 1964 and an application to set aside the ex parte order was also dismissed and the appeal against that order also failed. Thereafter respondent No. 1 filed an application under Section 25 of the Delhi Rent Control Act for recalling the warrant of possession issued by the Court in pursuance of the decree dated 31 7 1961 in favour of the appellant. The Rent Controller allowed it on 20 12 1966. An appeal to the Rent Controller Tribunal was ordered by order dated 25 11 1968 in favour of the appellant. A second appeal filed by respondent No. 1 to the High Court was allowed in his favour and the Rent Controller 's order allowing recalling of the warrant of possession was restored. Hence the appeal by special leave by the landlord. Allowing the appeal, the Court ^ HELD: 1. The application of respondent No. 1 under Section 25 of the Delhi Rent Control Act is clearly barred by the principle contained in order IX Rule 9 Civil Procedure Code. It was the appellant who brought the previous suit which resulted in a decree for eviction of the tenant on 31 7 1961 a date when the Ist respondent had already taken possession of the premises by virtue of transfer made by the Official Liquidator. There is nothing to show that respondent No. 1 was a tenant within the meaning of Delhi Rent Control 445 Act so as to maintain an application under section 25 of the Act, when in fact he was an unlawful sub lessee. [447A, E, F G] Suraj Ratan Thirani and Ors. vs Azamabad Tea Co. and Ors. ; ; applied. The language of section 14(b) of the Delhi Rent Control Act is wide enough not only to include any sub lease but even an assignment or any other mode by which possession of the tenanted premises is parted. In view of the wide amplitude of section 14 (b), it does not exclude even in involuntary sale. [448D E] In the instant case, the official Liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the official liquidator had transferred the tenancy interest to respondent No. 1 under the order of the Court, it was on behalf of the original tenant. It was undoubtedly a voluntary sale which clearly fell within the mischief of section 14 (1) (b) of the Delhi Rent Control Act. Assuming that the sale by the Official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by section 14 (b) of Delhi Rent Control Act. [448A C] Krishna Das Nandy vs Bidhan Chandra Roy, A.I.R. 1959 Cal. 181 Overruled.

The appellant 's predecessor in interest, respondent herein, was the owner of two properties consisting of a 'built up property ' and a 'vacant property ' in the city of Calcutta. The built up property comprised of 414.56 sq. mtrs. of land of which 321 sq. was covered by a build ing with a dwelling unit therein and the said property was constructed long before the Urban Land (Ceiling and Regula tion) Act, 1976 came into force. The second property com prised of 339.65 sq. of vacant land. The Act came into force on February 17, 1976 but under Section 2A of the Act the appointed day in relation to State of West Bengal was 28th January, 1976. Thus between the appointed day and the date of enforcement of the Act there was a 20 days ' gap. On 8th July, 1978 the respondent entered into an agree ment with the appellant to sell the vacant property. Since both the properties were covered by the Urban agglomeration as specified in category 'A ' in Scheduled 1 to the 1976 Act, under which the ceiling limit prescribed was 500 sq. , the appellant and the respondent gave a notice of the pro posed sale under Section 26 of the Act to the competent authority. The competent authority held that the respondent was holding 25421 sq. of land in excess of the ceiling limit. The excess land was determined by totalling 414.56 sq. of the built up property and 339.65 sq. mtrs. of vacant property to 754.21 sq. , and substracting 502 therefrom 500 sq.mtrs. resulting in 254.21 sq. mtrs. in excess of the ceiling limit. Accordingly the competent authority issued order vesting the excess land in the State. Against the decision of the competent authority the respond ent preferred an appeal before the Appellate Authority which was dismissed in default. In the meantime the appellant filed a suit against the respondent for specific performance of the agreement dated 8th July, 1978 which was decreed and consequently a deed of conveyance was executed in favour of the appellant and the possession of the property was also given to her. Subsequently the appellant came to know of the dis missal of the respondent 's appeal. Thereupon she filed a Review Petition before the Appellate Authority stating that she had become the owner of the vacant property and prayed for retrieval of the same from being treated as excess land in the hands of respondent which was dismissed. The appel lant filed a writ petition in the High Court and a Single Judge allowed the same. On appeal by State a Division Bench of the High Court reversed the judgment of the Single Judge. Against the decision of the Division Bench, appeal was filed in this Court. Setting aside the judgment of the Division Bench of the High Court and allowing the appeal, this Court, HELD: 1. The primary objective of the Urban Land Ceiling and Regulation Act, 1976 is to fix a ceiling limit on the holding of vacant lands, conditioned as they are on the appointed day, and as held on the date of commencement of the Act. [512 F] 2. Under Section 3 of the Urban Land (Ceiling and Regulation) Act, 1973 no person is entitled to bold any vacant land in excess of the ceiling limit. Ceiling limit of vacant land in case of every person like the predecessor in interest of the appellant is 500 sq. as set up under Section 4. [508 E F] 2.1 However, as per Section 2(g), 'Vacant land ' does not include land of three categories. The first category is land on which construction of a building is not permissible under building regulation in force in the area in which such land is situated. The second category is of land occu pied by any building in an area, where there are building regulations, which has 503 been constructed upon, or is under construction on the appointed day, with the approval of the appropriate authori ty, and the land appurtenant tO such building. Thus if the building stood constructed on the land prior to January 28, 1976, the land occupied under the building is not vacant land. It also covers the land on which any building was in the process of construction on January 28, 1976 with the approval of the appropriate authority. Additionally, the land appurtenant to these two kinds of buildings is also not "vacant land". The third category likewise conditioned is of land occupied by any building in an area where there are no building regulations, which has been constructed before January 28, 1976 or is in the process of construction on such date, and the land appurtenant to these two kinds of buildings. [510A D] 2.2 The expression "land appurtenant" as defined in Section 2(g) when related to any building in an area where there are building regulations as well as in an area where there are no building regulations reveals that the addition al extent as permitted is based on the principle of conti guity. The expression applies to buildings constructed before the "appointed day" as well as to buildings, con struction of which commenced before the "appointed day", and was in progress on that day. Therefore, if the construction of a building with a dwelling unit therein had begun after the appointed day, then it is all the same "any other land" to be reckoned for calculating the extent of vacant land held by a person. And if the construction of a building with a dwelling unit therein on land had been completed or was in progress by and on the appointed day, then it is not "any other land" to be reckoned for calculating the extent of vacant land held by a person. [512G H, 513A B] The built up property in question had been constructed prior to the commencement of the Act. Therefore, it is outside the purview of "vacant land". If that is excluded from being reckoned towards calculating the extent of vacant land held by the predecessor in interest of the appellant, the vacant land in the vacant property cannot be declared excess for that is within the permissible limits. Even if no land is left as land appurtenant to the built up area, then 93.56 sq. mtrs. the remainder plus 339.65 sq. of the unbuilt property would total up to the figure less than 500 sq. ; which is again within the permissible limit. Accordingly the entire proceedings towards declaring excess land in the hands of the appellant and her predecessor in title are quashed. [513C E] 504 State of U.P. & Or3. L.J. Johnson & Ors. , held inapplicable. Union of India etc. V.B. Chaudhary etc. ; ; Maharao Sahib Shri Bhim Singhji etc. vs Union of India & Ors., , referred to. Eastern Oxygen vs State AIR 1981 M.P. 17; Prabhakar Narhar Pawar vs State, AIR 1984 Bom. 122; State vs Radha Raman Aggarwal, AIR 1987 All. 272, cited. In the scheme of sub section (9) of Section 4 of the Act the visible contrast between "vacant land" and "any other land" held by a person on which there is a building with a dwelling unit therein is prominent. The said "any other land" is reckoned and brought at par with the "vacant land" for the purpose of calculating the final extent of vacant land. The expression "vacant land" in the first portion of the provision connotes land minus land under buildings constructed or in the process of construction before and on the appointed day, and the expression "vacant land" in the latter portion of the provision connotes the sum total of "vacant land" of the first order and distinctly the "other land" on which is a building with a dwelling unit therein of which construction commenced after the appointed day, and the land appurtenant thereto. Such an interpreta tion is required by the context as otherwise the concept of the appointed day and the gap period would be rendered otiose. The legislature cannot be accused to have indulged in trickery in giving something with one hand and taking it away with the other. "Any other land" in the sequence would thus mean any other built upon land except the one excluded from the expression "vacant land" on account of it being occupied by a building which stood constructed. or was in the process of construction, on the appointed day. [510F H, 511A B] 4. Section 5 is reflective of the scheme of the Act in as much as transfers of vacant land within the gap period are ignorable, and likewise, vacant land brought under construction of building by a person within the j gap period is also ignorable for the purposes of calculat ing the extent of vacant land, so that the provision of law are not defeated by human ingenuity. [512 BC] 5. Though Sub section (11) of Section 4 is not happily worded, yet when meaningfully construed in the context, it means that a building which 505 gets excluded by virtue of the definition of "vacant land" gets clothed with the protective cloak for not being reck oned again as any other land, over which there is a building with a dwelling unit therein. This provision means to convey that what is not vacant land under sub clauses (ii) and (iii) of clause (q) of Section 2 cannot go to add up as "vacant land" under sub section (9) of Section 4 by descrip tive overlapping. To wipe out the distinction of "vacant land" and "any other land" as demonstrated in sub section (9) of section 4 is to strangulate and destroy the spirit and life blood of the "appointed day" and the gap period. [512 D F]

The respondents were members of a Cooperative housing society and 'had created a mortgage on their property in favour of the society. As an amount due under the mortgage was not paid, the matter was referred to the Registrar of Cooperative Societies and he made an order on May 1, 1957 directing the respondent to pay the amount due from August f. 1953 till the debt was discharged. He further directed that if the amount was not paid, the property could be sold in satisfaction of the amount. The amount was not paid as directed and the property was therefore sold on April 7, 1958 to the appellant. As an application was made by the respondents on May 3, 1958 under O. XXI, r. 90 the sale could not be confirmed under O. XXI, r. 92 until this application was disposed of. The proceedings on the application continued up to October 7, 1958 when an order was passed with the consent of the parties whereby the respondents were granted time till November 21, 1958 to deposit the amount due and the application under O. XXI r. 90 was dismissed as withdrawn. When the matter came up before the executing court on November 22, the court noted that no amount bad been deposited and although an application was made on behalf of the respondents for a further extension of time, the executing court held that as the society decree holder and the auction purchaser were not willing to extend time, the court could not extend time which had been given under an agreement of the parties by way of compromise. The court therefore confirmed the sale under O. XXI r. 92. After appeals to the District Judge and a single bench of the High Court, a Division Bench, in a Letters Patent Appeal, held that O. XXXIV r. 5 would apply in a case of 'this kind and that even if it did not apply. it was a fundamental principle that before a mortgagor could be pre vented from making the payment and redeeming 'the property. his rights must have come to an end and they would come to an end only when his title was lost by confirmation of sale. The court allowed the appeal holding that the application for extension of time was wrongly rejected by the executing court as it had the power to grant an extension. It further directed that as some amount had been paid by he respon dents, if on making up the accounts it was found that any additional amount was due the court would give reasonable time for this to be deposited. On appeal to this Court, HELD : The order of the executing court refusing extension of time and confirming the sale in favour of the appellant under O. XXI r. 92 was correct. [702B] 696 It was not open to the executing court to extend time without the consent of parties, for time between October 7, 1958 to November 21, 1958 was granted by consent of parties. Section 148 of the Code of Civil Procedure would not apply in these circumstances. [701H] Though O. XXXIV r. 5(1) recognises the right of the judgment debtor to pay the decretal amount in an execution relating to a mortage decree for sale at any time before the confirmation of sale, the rule does not give any power to the court to grant time to deposit the money after the final decree has been passed. It is not open to the court to go on fixing date after date and postponing confirmation of sale merely to accommodate a judgment debtor. A harmonious construction of O. XXXIV r. 5 and O. XXI r. 92 makes it clear that if the provisions of O. XXI r. 92(1) apply the sale must be confirmed unless before the confirmation the mortgagor judgment debtor has deposited the amount as permitted by O. XXXIV r. 5. [699D E. H; 700E] Janak Rai vs Gurdial Singh ; , referred to.

Appeal No. 272 of 1956. Appeal from the judgment and decree dated June 28, 1954, of the former Nagpur High Court, in First Appeal No. 107 of 1946. M. C. Setalvad, Attorney General for India, Purshottam Trikamdas, section T. Khirwadkar and I. N. Shroff for the appellant. Achhru Ram, A. R. Chaubey and Naunit Lal for the respondents. February 22. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Nagpur High Court. The brief facts necessary for present purposes are these. One Ramchandar Jat originally owned Annas 10/8 share in Mauza Tamalawadi while the rest belonged to others. Ramchandar executed a simple mortgage deed on July 27, 1920, in favour of Seth Ram Jiwan and two. minors Ram Narain and Radhey Sham. The plaintiffs. respondents are the representatives of the mortgagees. On August 27, 1926, the defendant appellant purchased Annas /5/4 share belonging to the other share holders in the village. Thereafter, the appellant brought a 915 suit against Ramchandar who was lambardar of the village for profits, in which 9, decree was passed against Ramchandar. In execution of that decree the appellant purchased the entire Annas /10/8 share of Ramchandar in the village about the year 1932. In consequence, the appellant became the owner of the entire village subject to the mortgage of the respondents on Annas /5/4 share therein. On July 27, 1932, the respondents sued Ramchandar on the basis of their mortgage deed and a preliminary decree for sale was passed in March, 1937. To this suit the appellant was also a party. The preliminary decree was followed by a final decree and thereafter the property was put to sale and was purchased by the respondents on March 1, 1940. This sale was confirmed on April 12, 1940, and a sale certificate was granted to the respondents. So by the year 1940 the respondents were the owners of Annas /5/4 share in the village while the appellant was the owner of Annas /10/8 share. The appellant was also a lambardar. Ramchandar Jat held sir land in certain khasras with a total area of 252 49 acres. On the sale of Ramchandar 's share to the appellant, Ramchandar became an ex proprietary tenant of his sir land. Thereafter Ramchandar was ejected from his exproprietary tenancy sometime in 1936 and the lands came into possession of the appellant. There were certain other lands which were nominally recorded as Muafi Khairati in the name of Ramchandar 's mother but were actually in the possession of Ramchandar. It appears that Ramchandar was ejected from these lands also and they came into, the possession of the appellant. Further the appellant as a lambardar came into possession of certain other lands by surrender or otherwise. The respondents filed a suit for partition before the Sub Divisional Officer, Hard&, in 1942. In that suit they claimed half share in the lands of Ramchandar and his mother which came into. the possession of the appellant. They also claimed a share in other lands which came into the possession of the appellant as lambardar. Their case was that these lands were 916 accession to the mortgage in their favour and they were therefore entitled to a proper share in them '. This claim was resisted by the appellant before the Sub Divisional Officer. On October 20, 1943, the Sub Divisional Officer passed an order which in effect rejected the contention of the respondents and accepted the plea of the appellant. Thereupon the respondents filed the present suit for a declaration in the civil court in 1944 claiming that they were entitled to a proportionate share in the lands specified in the plaint. The suit was resisted by the appellant and his contention was that the respondents had purchased specific khudkashat and chhotaghas plots and that they therefore could not be allowed anything more than what was mentioned in the decree and the sale certificate which were the basis of their title. As the specific lands with respect to which the respondents claimed a declaration in this suit were not mentioned in the sale certificate, they were not entitled to any share in them. A large number of issues were framed by the trial court, which decreed a part of the claim put forward by the respondents but dismissed the rest. Consequently, the respondents went up in appeal to the High Court. The appeal was allowed so far as the respondents ' claim to one half share in the sir plots held by Ramchandar was concerned. Further, they were allowed one third share in the lands held by the mother of Ramchandar and also in certain other lands which came into the possession of the appellant as lambardar subject to payment of certain amounts. This was followed by an application by the appellant for leave to appeal to this Court and a certificate was granted by the High Court. That is how the matter has come up before us. The main contention of the appellant before us is that the mortgage deed of 1920 which is the basis of the title of the respondents did not include the sir plots in the possession of, Ramchandar nor the plots of Ramchandar 's mother. Nor were these plots included in the suit which was brought by the respondents on the basis of the mortgage deed. Further, the sale certificate also did not include these plots, though 917 some other plots were mentioned therein. Therefore, the respondents were not entitled to these plots as accession to the mortgage. This brings us to a consideration of the mortgage in favour of the respondents. The mortgage was without possession and the property mortgaged was mentioned in these terms: " I do hereby mortgage without possession half share /5/4, five annas and four pies, area 678.31 acres, jama sarkar Rs. 326/10/8 together with khudkashat, chhotaghas, big shrubs, abadi, gair abadi, cultivated and that lying vacant, and the rights and privileges appertaining to water, forests, chahat, gardens, and right of cultivation, malguzari and trees of every kind whether giving fruits or no fruits and prohibited and unprohibited wood with entire rights and prvileges appertaining to the village. " It will be seen that what was mortgaged was the entire half share of Ramchandar in /10/8 share which he owned in the village. It is true that the mortgage goes on to describe certain other things but that in our opinion is merely by way of precaution, for even if the part underlined* was not there in the mortgage, the respondents being the mortgagees of /5/4 share would be entitled to everything contained in that share. The underlined* part of the mortgage therefore does not cut down the amplitude of the mortgage with respect to the entire /5/4 share out of /10/8 share of Ramchandar. It is true that sir is not specifically mentioned in the mortgage but as the mortgage was of the entire /5/4 share out of /10/8 share it will include (unless there is a specific exclusion of sir) the area of sir also pertaining to the share mortgaged. In this connection our attention was drawn to as. 68 and 69 of the Central Provinces Land Revenue Act, No. 11 of 1917, which was in force at the relevant time. Section 68 deals with sir land and section 69 wit khudkashat. Sir is defined in section 2 (17) and khudkashat is defined in section 2 (5) as " that part of the home farm of a mahal which is cultivated by the proprietor as such and which is not sir land. " Thus though sir land may be a part of the home farm it is a different entity Here printed in italics. 918 from khudkashat land. Reference was also made to sections 49 and 50 of the Central Provinces Tenancy Act, No. 1 of 1920 (hereinafter called the Tenancy Act) which deal with transfer of sir land. Under section 49 (1) a proprietor who temporarily or permanently loses whether under a decree or order of a civil court or by transfer or otherwise his right to occupy any portion of his sir land as a proprietor shall at the date of such loss, become an occupancy. tenant except where he has obtained a sanction under section 50 of the Tenancy Act. Further under section 49 (2) there is a prohibition on the registration of documents which purport to transfer all the rights of a proprietor in big sir land without reservation of the right of tenancy specified in sub section It is urged for the appellant that the reason why sir land was not mentioned in the mortgage deed of 1920 was that otherwise sanction of the Revenue Officer would have been required under section 50 of the Tenancy Act. Now section 50 provides that if a proprietor desires to transfer the proprietary rights in any part of his sir without reservation of a right of occupancy specified in section 49(1) he may apply to the Revenue Officer and if such Revenue Officer is satisfied that the transferor is not wholly or mainly an agriculturist or that the property is self acquired or has been acquired within the twenty years last preceding, he shall sanction the transfer. Sections 49 and 50 in our opinion only come into play when the proprietor making a transfer loses his right to occupy any portion of his sir land temporarily or permanently and sanction has to be obtained under section 50 only where the transfer is to be made without reservation of the right of occupancy. But the mortgage in this case is a simple mortgage and there was no transfer of possession under it. Therefore the proprietor Ramchandar never lost his right to occupy his sir land by this mortgage and there was therefore no necessity for him to make any reservation in that respect or to apply for sanction under section 50, for he was not losing the right to occupy his sir at all. But that does not mean that when he mortgaged his entire share of /5/4 out of /10/8 share,, he was excluding from the mortgage the area of sir 919 corresponding to the share mortgaged. As the mortgage deed of 1920 stands, it is a mortgage of all the proprietary rights in /5/4 share including the proprietary right in the sir pertaining to that share ; but as the proprietor was not losing his right to occupy the sir land, the mortgage being without possession, it was not necessary for him to make any application under section 50 of the Tenancy Act. We are therefore of opinion that the appellant cannot take advantage in the circumstances of the fact that no application was made under section 50 of the Tenancy Act and therefore there was no effect of this mortgage on the sir rights. As we read the mortagage it clearly affected the sir Tight also pertaining to /5/4 share and it was not necessary to make an application under section 50 of the Tenancy Act, for the mortgagor was not losing possession of his sir and there would be no question of any ex proprietary tenancy arising in his favour, to relinquish which he would have to apply under section 50. Turning now to the plaint in the mortgage suit we find that the property subject to the mortgage is mentioned in para. 2 thereof inexactly the same terms as in the mortgage deed. In para. 13 it is again recited that the mortgagor mortgaged /5/4 share out of his /10/8 share. Paragraph 13 then goes on to say that on the date of the mortgage, the mortgagor had certain khudkashat and chhotaghas lands and both cultivating and proprietary rights in them pertaining to half share only were liable to be sold. No mention was made of sir in this paragraph. But that in our opinion was not necessary, for the mortgage included the mortgage of sir land also pertaining to /5/4 share though without possession. The prayer in the suit was for sale of the mortgaged property together with khudkashat, etc. ; but this again was a mere matter of precaution, for in any case the entire proprietary right in sir, khudkashat, etc., relating to /5/4 share would be sold on a decree following on the mortgage. Then coming to the sale certificate we find that it certifies that the respondents had purchased /5/4 share in the village with abadi, khudkashat, chhotaghas and all rights pertaining to the 'share. It is true that 920 khudkashat and chhotaghas are specifically mentioned in the sale certificate but the words " all rights pertaining to the share " appearing in the sale certificate would include such proprietary rights in the sir land as belonged to the share mentioned in the sale certificate. We are, therefore, of opinion. that so far as sir land is concerned, the proprietary right in it pertaining to /5/4 share was mortgaged and the respondents by their sale certificate got a right in the sir land also. Now what happened after the mortgage deed in favour of the respondents was that the appellant purchased the entire /10/8 share of Ramchandar subject to the mortgage of the respondents in 1932. At that time Ramchandar became an ex proprietary tenant of his entire sir relating to this share under section 49 of the Tenancy Act. In 1936 Ramchandar was ejected from the ex proprietary tenancy which came in the possession of the appellant as lambardar and has apparently since then remained in his possession. The case of the respondents is that in 1936 their mortgage was subsisting and the sir land which thus came into the possession of the appellant on the extinction of the ex proprietary tenancy became an accession to the mortgage and, therefore, they as mortgagees were entitled to half share in the lands which thus came into the possession of the appellant. We have already pointed out that the mortgage covered the sir plots also so for as the proprietary rights in them were concerned. Therefore, when Ramchandar 's ex proprietary rights came to an end and the land came into the possession of the appellant and became khudkashat, the mortgage would cover this khudkashat land to the extent of the mortgagees ' share therein. It is, true that if Ramchandar 's ex proprietary tenancy had continued, the mortgagee would have no right to ask for half share in it; but when the ex proprietary tenancy was extinguished and this land came in the possession of the lambardar mortgagor it, was an accession to the mortgage under section 70 of the Transfer,of Property Act and the mortgagees could claim a share in it. , It was however urged that accession to be available to 921 the mortgage must be a legal accession. We however see no illegality in the accession which took place. There is also no doubt that the accession took place when the mortgage was still subsisting. Therefore, we agree with the High Court that on the ex proprietary tenancy being extinguished, the sir land which Would otherwise have remained in the exclusive possession of Ramchandar as an ex proprietary tenant became an accession to the mortgaged property and the respondents would be entitled to half of it on their purchasing the /5/4 share in execution of the decree on the mortgage. The fact that the rent of an ex proprietary tenant is due to the person whose ex proprietary tenant he becomes by virtue of the sale or mortgage with possession would make no difference after ex proprietary tenancy is extinguished, for on such extinction the land would go to the entire proprietary body and would thus in this case be an accession to the mortgage to the extent of the share mortgaged. This brings us to the lands in the name of Ramchandar 's mother. It appears that these lands came into the possession of Ramchandar after the mortgage but before the institution of the mortgage suit. They were nominally recorded in the name of his mother and in 1932 after his entire share was purchased by the appellant lie was recorded as an occupancy tenant of these lands. Later the appellant came into possession of them apparently as a lambardar. It is not clear when and how the appellant got possession of them. There can be no doubt however that his possession was for the entire body of proprietors and the respondents would be entitled to a share in them. But it was urged that the claim of the respondents to these lands was barred by 0. 11, r. 2 of the Code of Civil Procedure, because they were not specified in the plaint based on the mortgage deed of 1920. Reliance in this connection is placed on Hazarilal vs Hazarimal (1) and Seth Manakchand vs Chaube Manoharlal (2). These cases in our opinion do not apply, because they are cases of foreclosure while in (1) A. I. R. , (2) A.I.R. 1944 P.C 46, 922 the present case the respondents ' suit was for sale of the share mortgaged with them. Further in the plaint, when specifying the khudkashat plots it wag made clear that they were khudkashat on the date of the mortgage; the respondents thus did not specify the khudkashat plots on the date of the plaint. Though they had specified some plots in the plaint which were mentioned in the sale certificate also, the suit " as for the sale of the entire /5/4 share and that would include khudkashat lands pertaining to the share existing at the time when the suit was filed. It is not necessary in a suit for sale to specify the lands in the possession of the mortgagor specifically and they would pass on sale along with the share sold. The claim, therefore, would not be barred under 0. 11, r. 2, on the ground that these plots entered in the name of the mother of Ramchandar were not specifically mentioned in the plaint. This leaves certain lands which came into the possession of the appellant as a lambardar in the ordinary course of management. The respondents would clearly be entitled to a share in these lands also on payment of proportionate expenses incurred by the appellant in the course of suits in which he came into possession. This is what the High Court has ordered and we see no reason to disagree with that view. The appeal, therefore, fails and is hereby dismissed with costs. Appeal dismissed.

One Ramchandar executed a simple mortgage deed without possession of his share in the property in dispute in favour of the respondents and others the relevant Portion of which ran thus :" I do hereby mortgage without possession half share, five annas and four pies, area 678 31 acres, jama sarkar Rs. 326/10/8 together with Khudkashat, chbotaghas, big shrubs, abadi, gair abadi, cultivated and that lying vacant, and the rights and privileges appertaining to water, forests, chahat, gardens, and right of cultivation, malguzari and trees of every kind whether giving fruits or no fruits and prohibited and unprohibited wood with entire rights and privileges appertaining to the 'village." After the mortgage Ramchandar 's share was sold to the appellants and certain other lands recorded in Ramchandar 's mother 's name also came into the possession of the appellant. The main questions arising for decision were whether the mortgage included the sir land of Ramchandar and whether the other lands coming into the possession of the appellant were accession to the mortgage. Held, that as the mortgage deed stood it was a mortgage of all the proprietary rights in the mortgagor 's share in the property including the proprietary right in the sir pertaining to that share. As the mortgage was without possession the mortgagor was not losing possession of his sir and it was not necessary for him to make an application under section 50 of the Central Provinces Tenancy Act relating to the reservation of a right of occupancy. Sections 49 and 50 come into play when the proprietor making a transfer loses his right to occupy any portion of his sir land temporarily or permanently. Although in the plaint of the suit based on the mortgage no mention was made of sir, the entire proprietary right in sir, khudkashat etc. relating to the mortgagor 's share would be sold on a decree passed in the suit. The words " all rights pertaining to the share " appearing in the sale certificate following the execution of the decree in the mortgage suit passed in favour of the respondents would include the mortgagor 's proprietary rights in the sir land and the respondents by their sale certificate would get a right 'in the sir land also. 914 As the appellant had purchased the entire share of Ram chandar who was later ejected from his ex proprietary tenancy which came into the possession of the appellant as lambardar his sir land which thus came into the appellant 's possession while the mortgage was subsisting became an accession to the mortgage under section 70 Of the and the mortgagees were entitled to half share in the lands which came into the appellant 's possession. The lands recorded nominally in the name of Ramchandar 's mother but in the actual possession of the former having also came into the possession of the appellant as lambardar were held by him for the entire body of proprietors and the respondent would be entitled to a share in them. The respondent 's claim to those lands were not barred by 0. II, r. 2 of the Code of Civil Procedure merely because they were not mentioned in the plaint of the mortgage suit. Hazarilal vs Hazarimal, A.I.R. 1923 Nag. 130 and Seth Manakchand vs Chaube Manohar Lal, A. I.R. , held not applicable.

One Kalu Ram was the owner of 90 Kanals of land. He sold this land in favour of three brothers, Kewal Ram, Chet Ram and Kuldip Ram for a consideration of Rs.65,000 by a regis tered sale deed dated 1.8.1966. Kewal Ram is residing in Village Badala in Jullunder District. Chet Ram and Kuldip Ram were residing at 71, Windsor Road, Forest Gate, London. Ram Lubhai, minor daughter of Kalu Ram filed a suit for possession of the land on the ground that she being the daughter of the vendor had superior right of pre emption as against the vendees who were strangers. Kewal Ram alone was served in the suit. The other two were not served. Substi tuted service was, therefore, taken for service on them by publication in a vernacular paper. The suit was decreed on 31.7.1969 against all the three defendants, ex parte against Chet Ram and Kuldeep Ram. Kewal Ram filed an appeal against this decree and judgment. He made his brothers Chet Ram and Kuldip Ram as proforma respondents giving their village address for service. In the appeal also they were served by substituted service. The appeal was heard on 5.1.1971 and was dismissed. On 24.3.1971, Kuldip Ram and Chet Ram filed an applica tion under Order 9, Rule 13 of C.P.C. in the Trial Court for setting aside the ex parte decree against them on the ground that they were neither served in the Trial Court nor in the Appellate Court. The Trial Court 786 accepted the application and set aside the decree passed. Against this order dated 10.1.1972, the plaintiff filed a revision petition in the High Court of Punjab and Haryana as C.R.P. No. 147 of 1972. The High Court felt that there was no error of jurisdiction in the order sought to be revised, but held that since Kewal Ram had contested the suit, there was no ground to set aside the decree against him. On this around, the petition was partly allowed. The decree against Kewal Ram was allowed to stand but was set aside against the other two. The review petition filed by Smt. Ram Lubhai was dismissed by the High Court. Hence the appeals by special leave. Dismissing the appeals, the Court, HELD: It is well settled that when a decree of the Trial Court is either confirmed, modified or reversed but the Appellate decree, except when the decree is passed without notice to the parties, the Trial Court decree gets merged in the appellate decree. But when the decree is passed without notice to a party, that decree will not, in law, be a decree to which he is a party. Equally so in the case of an appel late decree. In this case these two persons were not served in the suit. A decree was passed ex parte against them without giving them notice of the suit. In law, therefore, there is no decree against them. In the appeal also they were not served. If they had been served in the appeal, things would have been different. They could have put for ward their case in appeal and got appropriate orders passed. But that is not the case here. That being so, there is no bar for an application by them before the Trial Court under Order IX, Rule 13, to set aside the ex parte decree against them. [689G H; 690A B] There is no error of law in allowing a joint decree to stand against the person who contested throughout while setting aside the ex parte decree passed against others without serving them personally on admitting the application under Order IX Rule 13 C .P.C. [690C]

The appellant purchased the suit property by a regis tered sale deed dated 27th December, 1950 for a considera tion of Rs.7,000. On 1st January, 1951, the respondent executed a rent agreement in favour of the appellant ac knowledging her as landlady at Rs.80 per month. The mother of the appellant died in 1963. In 1974, the respondent filed a suit against the appellant for conveyance of the suit property in his favour on the basis of a 'ya dast ', alleged to have been written by the mother of the appellant on 24th December, 1950 in his favour providing for conveyance of the property in his favour after .paying the sale price of Rs.7,000 and Rs.1,000 for registration ex penses. This 'yadast ' was however neither stamped, regis tered, nor attested. It was marked as exhibit A 11. The Trial Court decreed the respondent 's suit relying on the 'yadast '. On appeal the Additional District Judge after detailed examination of all the facts involved in the case and the evidence of the parties, came to the finding that the appel lant acquired title to the property on the basis of the sale deed which was a registered document in her favour and that the suit property was leased out to the respondent under a rent agreement, and that as the mother of the appellant was not a party to the sale deed she had no right to agree o convey the property or to ask her daughter to convey the same in favour of the respondent. He also came to the con clusion that the Yadast was not a genuine document but a forged one which was just got up for the purposes of the suit. He accordingly allowed the appeal, and held that the suit for specific performance was further barred as it was filed more than 20 years after the alleged 'Yadast '. 834 The High Court in Second Appeal, however interfered with the findings of fact arrived at by the lower Appellate Court solely on the basis that the evidence of the scribe of the 'Yadast ' was not discussed by the lower appellate Court, and accordingly allowed the Second Appeal. In the Special Leave Petition to this Court, it was contended on behalf of the appellant that the suit for specific performance of the contract could only be decreed against the executant of the contract provided the executant had a right to dispose of the property about which the suit was filed, and that there was no question of law on the basis of which the High Court exercised jurisdiction under Section 100 C .P.C. and interfered with the findings of fact. Allowing the appeal, this Court HELD: 1. Section 100 C.P.C. clearly indicates that the High Court had the jurisdiction to interfere only when a substantial question of law is involved and even then it is expected that such a question shall be so framed although the court is not bound by that question as the proviso indicates. There may be some other substantial questions of law which may need decision and which can be so decided. [838G H] In the instant case, the Single Judge of the High Court has chosen to interfere with the findings of fact solely on the basis of one ground, that the evidence of the scribe of the 'Yadast ' PW 2 was not discussed by the lower appellate court, and its failure has affected the validity of the finding rendered by it. This was no substantial question of law, much less a question of law on which the High Court could interfere with the findings of fact. At best the questions on which the High Court chose to interfere could be said to be questions of appreciation of evidence. [837H; 839F] 2. The suit for specific performance of the contract could only be decreed against the executant of the contract provided the executant had a right to dispose of the proper ty about which the suit is filed. [836H; 837A] In the instant case, admittedly the mother of the appel lant who, was alleged to have executed the 'Yadast ' was not the owner of the property. Both the parties to the 'Yadast ' were strangers to the sale deed, and the sale deed does not refer to any one of them nor there is anything in the sale deed to indicate that it was not an out and out sale. [837D] 835

The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947. The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree. On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court. The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable. Held, that the decree was not executable at Allahabad. Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure. On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code. None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court. which passed the decree within the meaning of section 39. Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code. The decree could not be executed under the provisions of section 43 of the Code at any time. After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State". There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State". Nor could the decree be executed under section 44 as that section was also inapplicable to this decree. Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective. Per Sarkar and Das Gupta, JJ. Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure. Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. The Allahabad Court was not the court which passed the decree. Section 39 empowers the court which passed the decree to transfer it for execution to another court. The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure. The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code. The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order. Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend. The decree of the Gwalior Court did not fall within this section as it stood before the Constitution. A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State". These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State". The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,. The section after adaptation in 1950 580 applied only to decrees of revenue courts. Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.

A civil suit was flied by the appellant herein against the respondent herein in the year 1973 praying for a decree for specific performance of the contract, in the alternative for a decree for a total sum of Rs. 16,000 including the earnest money of Rs.5,000 on averments inter alia that she had entered into an agreement dated 16.9.71 with the Re spondent for the purchase of a property with 2 Kohlus of 20 H.P. electric Motor etc., installed therein and jointly owned by the Respondent with her step mother in law Smt. Lajwanti, for a consideration of Rs.50,000; that in case Smt. Lajwanti did not join in the execution of the sale deed, the Respondent would sell her half share of the property for half the sale price; that pursuant to this agreement the Respondent handed over to the Plaintiff appel lant possession of her share of the property but later as arbitration proceedings were going on between the Respondent and her co sharer Smt. Lajwanti, the Respondent took back the said agreement (styled as receipt) and thereafter ille gally took possession of the property from the appellant and declined to execute the sale deed in terms of the agreement. The Respondent contested the suit on the pleas that she never intended to sell the suit property to the Plaintiff; that the agreement was a mere paper transaction brought into being for putting pressure on her co sharer; that the agree ment being not scribed on a proper stamped paper was inad missible in evidence; that the agreement related only to the moveable property; that no advance money was paid as alleged and lastly that pursuant to the compromise between the parties dated 9.1.72 350 the agreement dated 16.9.71 stood destroyed. The trial Court disallowed the agreement Exhibit PW I I/A which constituted the foundation of the claim as inad missible in evidence and dismissed the suit. The High Court on revision, allowed the revision peti tion of the appellant with the direction to the trial court to impound the document in accordance with law and then proceed with the case. Respondent 's Petition for special leave against that order was dismissed by this Court. Consequent to these orders of the Supreme Court and the High Court the Trial Court tried the suit afresh and passed a decree for specific performance which was affirmed by the Additional District Judge on appeal. However on second appeal the High Court held that there was no valid and enforceable contract as evidenced by Exhibit PW. II/A and thus instead of the decree for specific performance granted a decree for Rs.5,000 only by way of refund of the earnest money. Hence this appeal by special leave by the Plaintiff. Dismissing the appeal and upholding the finding of the High Court, this Court, HELD: The specific performance of a contract is the actual execution of the contract according to its stipula tions and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipula tions and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of Course, on the plaintiff. If the stipulations and terms are uncertain and the parties are not ad idem there can be no specific performance, for there was no contract at all. [362D E] Where there are negotiations, the Court has to determine at what point, if at all, the parties have reached agree ment. Negotiations thereafter would also be material if the agreement is rescinded. In the instant case the defence of there having not been a contract for lack of consensus ad idem was available to the defendant. [363F; 364B] The jurisdiction of the Court in specific performance is discretionary. When a promise is made in an alternative form and one 351 alternative is impossible to perform, the question whether the promiser ' is bound to perform the other or is altogether excused depends on the intention of the parties to he ascer tained from the nature and terms of the contract and the circumstances of the particular case. [362F] The expression 'otherwise pay back the advance and compensation in the same amount ' is capable of being inter preted as payment of the amount as alternative to perform ance. Of course the amount advanced and the compensation was stipulated to he the same amount. That, however, would not effect the real character of the promise. [361G]

The appellants and the five respondents were displaced persons. The Deputy Custodian of Nizamabad District allotted about 60 acres of land to the five respondents. The allotment was by way of lease. There was no condition imposed upon them that they should cultivate the lands personally. While the lease was continuing in force, the Government of India issued a Press Note on November 13, 1953 by which they announced that they had decided to allot evacuee agricultural land in Hyderabad State to displaced persons whose claims for agricultural land had been verified under the Displaced Persons (Claims) Act, 1950. The appellants made an application in pursuance of this notifi cation and on May 4, 1954 the land now in dispute, though under a subsisting lease in favour of the respondents, was allotted to them. In the mean time the , came into force on October 9, 1954. Under Section 20 of this Act, the Regional Settlement Com missioner issued Sanads in favour of appellants in respect of these lands. Both the appellants and the respondents claimed these disputed plots. The matter went up to the Deputy Chief Settlement Commissioner. He referred the case of both parties to the Government of India for action under section 33 of the Act. The matter was considered under section 33 of the Act by the Deputy Secretary in the Rehabilitation Ministry who upheld the contentions of these respondents. The result was that the allotment made in favour of the appellants was set aside. It is the legality of this order that is challenged in this appeal. Held (i) The order of the Central Government was covered by section 33 of the Act as one dealing with and rectifying an error committed in relation to a "thing done or action taken" with respect to a rehabilitation grant to a displaced person. Not merely the order of the Regional Settlement Commission rebut the entire question as to whether the respondents as original allottees by way of lease were entitled to the relief of restoration was referred to the Central Government by reason of the order of the Deputy Chief Settlement Commissioner. Both the parties were heard on all the points by the Central Government before the orders were passed and it would not therefore be right to consider that the matter in issue before the Central Government was namely the correctness of the order of the Regional Settlement Commissioner, which read in vacuo might not be comprehended within section 39 of the Act. (ii) It is manifest that a Sanad can be lawfully issued only on the basis of a valid order of allotment. If an order of allotment which is the basis upon which a grant is made 104 is set aside it would follow, and the conclusion is inescapable that the grant cannot survive, because in order that grant should be valid, it should have been effected by a competent officer under a valid order. If the validity of that order is effectively put an end to, it would be impossible to maintain unless there were any express provision in the Act or in the rules, that the grant still stands. On the facts of this case it was held that where an order making any allotment was set aside the title which was obtained on the basis of the continuance of that order also fell with it. Partumal vs Managing Officer, Jaipur, I.L.R. , distinguished. Balwant Kaur vs Chief Settlement Commissioner (Lands), I.L.R. [1964] Punjab 36, approved.

By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam. The appellant thought it fit in the circumstances to grant compensatory allowance to all its employees in September 1959. It was not made through any standing order or circular. Thereafter there was another notification by the Central Government dated December 8, 1960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled lo draw both. this was to remain in force for five years. In view, however, of the notification dated December 8, 1960, the management thought that the contents of the circular were binding on the company and therefore they unilaterally. without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959. This concession was withdrawn with effect from July 1960. The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw he concession granted by it unilaterally. The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as s.9A of the , has not been complied with by the Company the management was not legally entitled to with draw the concession of the Assam Compensatory Allowance granted to. the employees. This appeal has been preferred by the management on the basis of the specials leave granted by this Court. It was contended for the appellant (i) that the compensatory allowance was given purely on the basis of ' the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (ii) that even if the provisions, of s.9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and, therefore, it was not necessary to give any notice to them before withdrawing the concession of the, compensatory allowance. Rejecting the contentions and dismissing the appeal, ^ HELD: (i) 'There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted. Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor. were they taken into confidence, nor any attempt was made to open a dialogue with them on this question. So far as the compensatory allowance is concerned it was given in order to enable the workers to meet the high cost of living in a far off and backward area like Assam. It had absolutely no casual connection with the housing subsidy or house rent allowance which was a different type of concession. Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the need of their 111 workers. In these circumstances, the conclusion is irresistible that the grant of compensatory allowance was an implied condition of service so as to attract the mandatory provisions of section 9A of the Act. Twenty one days notice has to be given to the workmen. This was not done in this case. [113C 114B] Workman of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal Hyderabad and others, [1961] 2 L.L.J. 526, Bhiwani Textile Mills vs Their The Workman and others , Oil and Natural Gas Commission vs The Workman ; , Hindustan Lever Ltd. vs Ram Mohan Ray and Other ; , and M/s. Tata Iron and Steel Co. Ltd. vs The Workman and others[1972] 2 S.C.C 383, referred to. (ii) The compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can one be made dependent on the other. the object of these two concessions is quite different and both of them serve quite different purposes. [118A B] .

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

Appeals Nos. 173 to 175 of 1960. 134 Appeals from the judgment and orders dated March 11, 1958, of the Bombay High Court in I. T. R. No. 36 of 1957. of. A. V. ViSwanatha Sastri, section M. Dubash and G. Gopalakrishnan, for the appellants. K. N. Rajagopal Sastri and D. Gupta, for respondents. March 1. The Judgment of the Court was delivered by KAPUR, J. These are three appeals pursuant to a certificate under a. 66A(2) of the Indian Income tax Act, 1922 (hereinafter called the 'Act), against the judgment and orders of the High Court of Bombay in Income tax Reference No. 36 of 1957. The appeals though directed against the same order are three in number because each partner of the firm has brought a separate appeal. The firm was carrying on the business of wine merchants at Bombay and came into existence prior to April 1, 1939. The firm had been assessed to income tax under the provisions of the Income tax Act of 1918. The firm which was registered under the provisions of the Income tax Act of 1922 (hereinafter termed the Act) was dissolved on March 24, 1945, and from the day following that i.e. March 25, 1945, a Private limited company i.e. section section Miranda and Co. Ltd. succeeded to the business of the firm. A claim made under section 25(4) of the Act to the effect that no tax was payable on the profits of the registered firm for the period between April 1, 1944, to March 24, 1945, was allowed. In respect of the chargeable accounting period April 1, 1944, to March 24, 1945, the registered firm was taxed to excess profits tax under the Excess Profits Tax Act, 1940. It also deposited as required certain sums of money tinder section 10 of the Finance Act, 1942, read with section 2 of the Excess Profits Tax Ordinance, 1943. In accordance with those provisions the firm became entitled to repayment of a portion of the excess profits tax amounting to a sum of Rs. 2,35,704. The shares of the three partners who are respective appellants in 135 the three appeals were James Miranda Rs. 58,926, Donald Miranda Rs. 58,926 and Mrs. N. Q. Miranda Rs. 1,17,854. It was submitted that the amount refunded, was business profit and therefore exempt con from tax under section 25(4) of the Act. The Income tax Officer rejected that submission and the share of each of the appellants was assessed to income tax and super tax and the balance after deducting the same he repaid to each of the partners but he computed the rate applicable to the tax by including the appellants ' total business income which was exempt under s;. 25(4) of the Act. On appeal this assessment was confirmed but on further appeal the Income tax, Appellate Tribunal held that the sum which was refunded was income from business and was therefore, exempt from income tax under section 25(4) of the Act. At the instance of the Commissioner of Income tax, the Tribunal referred the following question of law for the opinion of the High Court: "Whether the repayment of excess profits tax made by the Central Government in pursuance of Section 10 of the Indian Finance Act, 1942, or Section 2 of the Excess Profits Tax Ordinance, 1943, is profits from business for the purposes of Section 25(4) of the Indian Income tax Act?" The High Court held that the amount so refunded was income from other sources taxable under section 12 of the Act and the appellants were therefore not entitled to the benefit of section 25(4) of the Act. In dealing with the nature of the tax the learned Chief Justice said: .lm15 "Clearly the view of the Legislature was that this income should be treated as a statutory income with the consequences that must necessarily follow by reason of its being a statutory income. " It was argued on behalf of the appellants that the amount refunded was income, profits and gains from business and fell under section 10 of the Act and was therefore exempt under section 25(4) of the Act. For the determination of this question it is necessary to refer to the relevant provisions of the Excess Profits Tax Act, 1940, and the Finance Act, 1946. Section 12(1) of the Excess Profits Tax Act was as follows: 136 .lm15 section 12(1) "The amount of the excess profits tax payable in respect of a business for any chargeable accounting period diminished by any amount allowable by way of relief under the provisions of section 11 or section 11 A shall, in computing for the purposes of income tax or super tax the profits and gains of that business, be allowed to be deducted as an expense incurred in that period.", The relevant part of section 11(11) of the Indian Finance Act, 1946, provided: "Any sum being excess profits tax repaid in respect of any chargeable accounting period under the provision; of section 10 of the Indian Finance Act, 1942, or of section 2 of the Excess Profits Tax Ordinance, 1943, shall be deemed to be income for the purposes of the Indian Income tax Act 192 2, and shall, notwithstanding the provisions of section 34 of that Act, be treated as income of the previous year which constitutes or includes the chargeable accounting period in respect of which the said sum is repayable: Provided that any such sum repaid in respect of any profits which are. also assessable to excess profits tax under the law in force in the United Kingdom shall be treated, for the purpose of assessment to income tax and super tax, as income of the previous year during. which the repayment is made. " It is not necessary to quote section 10(1) of the Finance Act, 1942, or the relevant provisions of the Excess Profits Tax Ordinance, 1943. Section 12(1) of the Excess Profits Tax Act shows that the amount of excess profits tax payable ,in respect of a business for any chargeable accounting period was an allowable expenditure. Under section ll(ll) of the Indian Finance Act, 1946, any excess profits refunded under the provisions of Indian Finance Act, 1942, or of section 2 of the Excess Profits Tax Ordinance, 1943, were deemed to be income and were to be treated as income of the previous year which constituted or which included the chargeable accounting period in respect of 'which the said sum was repayable. Thus the sum repaid was 137 to be treated as income for the purposes of the Act for the previous year, notwithstanding section 34 of the Act. The preamble of the Excess Profits Tax Act shows that the object of that Act was to impose a tax on profits arising out of certain businesses. Therefore when any portion of the tax collected on excess profits tax was refunded under the provisions of the Finance Act, 1942 or the Excess Profits Tail, Ordinance, '1943, it necessarily had the same quality which it had before the amount which was charged with the payment of tax had under the provisions of those Acts. In a, judgment of this Court, Mc Gregor. and Balfour Ltd. vs Commissioner of Income Tax, West Bengal (1), the amount received as a refund by the assessee was held to be income for the purpose of the Act and for assessment it was treated as income of the previous year. After reference in that case to R. 4(1) of the Rules applicable to oases I and II of Schedule 'D '. of the English Income Tax Act, 1918 (8 and 9 Geo. V, c. 40), it was observed "The object and purpose of the legislation in each case is the same, and though the two provisions are not ipsissima verba, they are substantially in the same words and also in pari materia. There can be no doubt that the intention underlying the two provisions is the same and the language is substantially similar. " Thus this Court was of the opinion that the intention of the legislature ins. 11(14), of the Indian Finance Act, 1946, which was the section applicable in that case and of R. 4(1) of the English Income Tax Act was the same. The operative words of section 11(11) of the Finance Act, 1946, and of section 11(14) of that Act are almost identical. It would, thus appear that the amount of excess profits tax was an allowable deduction for the purpose of computation of the business profits of an, assessee under section 12(1) of the Excess Profits Tax Act and when it or a portion of it wag refunded it had to be treated as income of the assessee. When it was deposited with 138 the Central Government it was a portion of the profits of the business of the assessee and when it was returned to the assessee it must be restored to its character of being a part of the profits of a business. It cannot be said that its nature changes merely because it is refunded as 'a consequence of some provisions in the Finance Act or the Excess Profits Tax Ordinance. Its nature remains the same. The effect of the deposit under the Acts above mentioned, was as if a slice of the business profit was taken and deposited with the Central Government Treasury and then when it was found that a larger amount had been deposited than was exigible a portion of it was returned. By being put in a Government Treasury it does not cease to be what it was before i.e. profits of a business. As we have said it is significantly clear from the very preamble of the Excess Profits Tax Act i.e., it was a tax imposed on profits arising out of certain businesses. An argument was raised on behalf of the Commissioner that the tax was not paid out of the profits of the business, but in respect of the profits. That is immaterial; it was charged, levied and paid on the amount by which the profits during any chargeable accounting period exceeded the standard profits. It would be mere quibbling with words if one were to say that it was not a slice taken out of the profits of a business. In the cage Mc Gregor and Balfour Ltd. vs Commissioner,of Income Tax (1) this Court quoted with approval the observation, of the Master of the Rolls in A. & W. Nesbitt Ltd. vs Mitchell (1) where it was said: "But in respect of what is that payment made? It is not a legacy, it is not a sum which has fallen from the skies; it is a sum which is repaid because there was too large a sum paid by the company to the revenue authorities over the whole period 'during which Excess Profits Duty was paid, and that sum, means and is intend to represent a repayment of a sum which was paid by them in respect of the duty charged upon the excess profits of their trading. It comes back,, therefore, not having lost its character but being still the repayment of a sum too much, it is true but a sum taken (1) (2) , 217, 218 139 out of the profits which were made by the company in the course of its trading, profit,; which at the time they were made were subject to income tax and subject to excess profits duty, and that is the character of the repayment that has been made. " The amount deposited comes back without losing its character. No doubt the words in the English Rule are "shall be treated as profits for the year in which the payment is received", and in B 11(11) of the Indian Finance Act, 1946, such sum has to be treated as income of the previous year but as pointed out by this Court in Balfour and Mc Gregor case (1), the intention underlying the two provisions is the same and even the language used in the two provisions is substantially the same. Counsel for the Commissioner drew our attention to Kirke 's Trustees vs Commissioners of Inland Revenue (2), and it was submitted that the Lord Chancellor held at p. 329 that for the amount so received the assessment falls to be made under Case VI of Schedule 'D '. Lord Shaw of Dunfermline at p. 332 said that the repayment was to be treated as trading profits for the year of repayment and therefore assessable as such under Schedule 'D '. He was also of the opinion that the charge was to be one under Case VI. Lord Sumner said that it became a minor matter to decide whether the charge was to be made under Case I or Case VI but this is little consolation to the respondent (the Commissioner of Income tax) because Case VI was also dealing with taxes in respect of annual profits and gains which do not fall in one of the other cases. In our opinion the amount refunded did not lose its character which it had before the deposit and therefore it is an erroneous view to take that the income was assessable under section 12 of the Act and not under B. 10. If it was income falling under section 10, as in our opinion it was, then the appellants were entitled to get the benefit of section 25(4) of the Act and the amount was not liable to taxation. The appeals are therefore allowed with costs. One hearing fee. Appeals allowed.

The appellants were partners in a registered firm which was dissolved on March 24, 1945. A private limited company succeeded to the business of the firm from March 25, 1945. For the accounting period April 1, 1944, to March 24, 1945, the firm was assessed to excess profits tax under the Excess Profits Tax Act, 1940. It had deposited certain sums of money as required under section 10 of the Indian Finance Act, 1942, read with section 2 Of the Excess Profits Tax Ordinance, 1943, and in accordance with those provisions became entitled to repayment of a portion of the excess profits tax. The appellant 's claim before the Income. tax Officer under section 25(4) of the 'Indian Income tax Act, 1922, that no tax was payable on the profits of the firm for the period between April 1, 1944, to March 24, 1945, was allowed, but their plea that the amount of refund of the excess profits tax was business profit and therefore similarly exempt from tax, was rejected. The High Court, on a reference, took the view that the amount refunded was income from other sources taxable under section 12 Of the Indian Income tax Act, 1922, and that, therefore, the appellants were not entitled to the benefit of section 25(4) Of that Act. Held, that in view of section 12(1) of the Excess Profits Tax Act, 1940, and section II(II) of the Indian Finance Act, 1946, the amount refunded was income from business for the purposes of the Indian Income tax Act, 1922, and did not lose its character which it had before the deposit. It fell under section 10 of the Indian Income tax Act and was, therefore, exempt under section 25(4) of that Act. Mc Gregor and Baljbur Ltd. vs Commissioner of Income tax, Bengal, and A. & W. Nesbitt Ltd. vs Mitchell, [1926] II T.C. 2II, relied on.

The appellant was carrying on the business of a railway contractor in a place in the district of R. In April 1943, the Income tax Officer of R which was under the charge of the Commissioner of Income tax, Bengal (Mufassil), served a notice under section 22(2) of the Indian Income tax Act, 1922, on the appellant who in pursuance of the notice filed the return on February 28, 1944. The Income tax Officer then served notices on him under SS. 22(4) and 23(2) Of the Act for the production of books, etc., but before the final assessment was made, the Central Board of Revenue by an order passed under section 5(2) of the Act, transferred the appellant 's case along with some other assessment cases, to the Commissioner of Income tax (Central), Calcutta. On February 11, 1948, the Income tax Officer, Calcutta, to whom the appellant 's case was assigned, issued notices again under SS. 22(4) and 23(2) of the Act and after making the usual enquiries made the assessment order on March 15, 1948. The appellant 's appeals to the Appellate Assistant Commissioner and then to the Appellate Tribunal raising objections to the legality of the transfer of his case to Calcutta and to the jurisdiction of the Income tax Officer, Calcutta, were dismissed. The Appellate Tribunal held that as the objection related to the place of assessment it was not competent for the Tribunal to go into that question. The appellant then made an application to the Commissioner of Income tax for reference under section 66(1) of the Act, but this was dismissed on the ground that the assessee never raised any objection before the Income tax Officer to his jurisdiction and that, in any case, the question of jurisdiction could not arise out of the order of the Tribunal. An application filed by the appellant to the High Court under section 66(2) of the Act was dismissed and though the order of dismissal was not taken up on appeal, the appellant filed an appeal to the Supreme Court against the order of the Appellate Tribunal. It was contended for the appellant that under section 64(1) and (2) of the Act he was entitled to be assessed by the Income tax Officer of the area within which the place of his business was situate, that the 302 assessment by the Income tax Officer of Calcutta was illegal assumption of jurisdiction and that, in any case, the order of transfer by the Central Board of Revenue under section 5(2) of the Act was not valid because, if it wanted to transfer the assessment proceedings from the file of one Income tax Officer to another it could be done only under section 5(7A) and not under section 5(2). Held : (1) Sub section (7A) of section 5 which confers on the Central Board of Revenue the power to transfer any case from one Income tax Officer to another is not a provision which in any way modifies or cuts down the power given to the Central Board of Revenue under sub section 2 of section 5 which enables it to specify as to which of the Commissioners would perform functions in respect of different areas, persons, incomes or cases or classes thereof. The two sub sections are complementary and operate in two separate spheres. Pannalal Binjraj vs Union of India, ; and Bidi Supply Co. vs Union of India, ; , distinguished. In the present case, the Central Board of Revenue directed the Commissioner of Income tax (Central), Calcutta, to exercise his functions in respect of certain cases including the case of the appellant and that fell under section 5(2) and not under section 5(7A). The order of transfer was, therefore, valid. (2)The jurisdiction of the Income tax Officer, Calcutta, to make the assessment on the appellant cannot be challenged, in view of sub section 5(a) of section 64 of the Act, under which sub sections (1) and (2) of section 64 have no application to an assessee in respect of whom anorder has been made by the Central Board of Revenue under S.5(2) of the Act. (3) Objections as to the place of assessment cannot be raised in appeal either before the Appellate Assistant Commissioner or before the Appellate Tribunal. Wallace Brothers & Co. Ltd. vs Commissioner of Income tax, Bombay, Sind and Baluchistan, and Seth Kanhaiyalal vs Commissioner of Income tax, [1936] 5 I.T.R. 739, relied on. Dayaldas Kushiram vs Commissioner of Income tax (Central), and Dina Nath Hem Raj vs Commissioner of Income tax, All. 616, distinguished. Consequently, as the question as to the place of assessment could not arise out of the order of the Appellate Tribunal no such question of law could be referred to the High Court.

A Hindu undivided family consisting of the father (Karta) and his three sons carried on business. Land was acquired in the name of the Karta and the price was paid out of the books of the family, and a building was constructed on the land. Another building was constructed on another plot of land. On a partial partition of the above Hindu undivided family its business was taken over by a partnership firm consisting of the Karta and the two elder sons and the firm debited a certain sum of money in the building account of the firm for the assessment year 1955 56 and a similar sum in respect of the other property for the assessment year 1956 57. The appellants (assessees) who were members of the partnership firm, filed separate returns in their individual status for the assessment years 1955 56 and 1956 57 claiming that the two properties belonged to the four members of the family in their individual capacity. The Income Tax Officer however regarded the properties as belonging to the partnership firm, and in the assessment proceedings of the firm for the said years, estimated the cost of construction at a higher figure, than the cost disclosed, and made additions accordingly to the returned income of the firm. Allowing the appeals of the partnership firm the Appellate Assistant Commissioner deleted the additions holding that as the money was advanced by the firm and debited to the account of each co owner, the partnership firm was not the owner of the properties and therefore it could not be said to have earned any concealed income. The Income Tax Officer then initiated proceedings under section 147(a) of the I.T. Act 1961 against the individual assessees for the assessment years 1955 56 and 1956 57 and the additions on account of concealed income originally made in the assessments of the partnership firm were divided between the assessees and included in their individual assessment, rejecting the plea of the assessees that there was no case for invoking the said section, as they had already disclosed that they had invested in the properties when filing their original individual returns. On appeal the Appellate Assistant Commissioner though agreeing that there was no default on the part of the assessees to warrant proceedings under section 147(a) and though ordinarily the assessments would be barred by limitation, maintained the assessments on the ground that section 153(3)(ii) of the Act applied. 273 The Income Tax Appellate Tribunal though rejecting the contention that the assessees were not covered by the expression "any person" in section 153(3)(ii), pointed out that the provision could not be availed of by the Income Tax Officer as there was neither any "finding" nor a "direction" on the earlier order of the Appellate Assistant Commissioner in consequence of which, or to give effect to which, the impugned assessment could be said to have been made and that no opportunity had been afforded to the assessees of being heard as was required by Explanation 3 to section 153(3) before that earlier order was made. It held that the Appellate Assistant Commissioner had no jurisdiction to convert the assessments made by the Income Tax Officer under section 147(a) to "assessments passed under section 153(3)(ii)". The High Court on Reference by the Tribunal observed that the finding that the properties did not belong to the partnership firm and therefore the excess amount of the cost of construction could not be regarded as the concealed income of the firm, was necessary for the disposal of the appeals filed by the firm and as a corollary it was held that the buildings belonged to the co owners. This necessitated the "direction" to the Income Tax officer that he was free to assess the excess amount in the hands of the co owners. It held that the Appellate Assistant Commissioner could convert the provisions of section 147(i) into those of section 153(3)(ii) of the Act and that the provisions of section 153(3)(ii) of the Act applied to the case. In the assessee 's appeals to this Court on the question whether section 153(3)(ii) can be invoked. Allowing the appeals, ^ HELD: (1) The provisions of section 153(3)(ii) of the Income Tax Act, 1961 are not applicable to the instant case. [280 C] (2) The expression "finding" and "direction" are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. [277G] (3) Where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A 's income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A 's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. The same principles apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year. [278A B] (4) It is now well settled that the expression "direction" in section 153(3) (ii) of the Act must mean an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or court is empowered to give while deciding the case before it. [278C] 274 5. (i) Section 153(3) (ii) is not a provision enlarging the jurisdiction of the authority or court. It is a provision which merely raises the bar of limitation for making an assessment order under section 143 or section 144 or section 147. [278D] Income Tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; N. Kt. Sivalingam Chettiar vs Commissioner of Income tax, Madras, ; referred to. In the instant case all that has been recorded is the finding that the partner ship firm is not the owner of the properties. The finding proceeds on the basis that the cost has been debited in the accounts of the four co owners. But that does not mean, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees. The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees. That is plainly required by Explanation 3 to section 153(3). The finding contemplated in Explanation 3, is a finding that the amount represents the income of another person. [278H 279B, D] (ii) It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals. [279C] (iii) The observation of the Appellate Assistant Commissioner cannot be described as such a finding in relation to the assessee. [279D] (iv) It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the co owners. The observation that the Income Tax Officer "is free to take action" cannot be described as a "direction". A direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and direction of the Income Tax Officer whether or not to take action it cannot be described as a direction. [279E F] (v) The order of the Appellate Assistant Commissioner contains neither a 'finding ' nor a 'direction ' within the meaning of section 153(3)(ii) of the Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have been taken. [279G] Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., ; referred to.

For the assessment year (1945 46) the assessable income of the appellant bank was computed by the Income tax Officer by splitting up its income into two heads " interest on securities " and " business income ", and deducting the business loss from interest on securities. In the previous year the assessment showed a loss which was computed by setting off the " business loss against " interest on securities The appellant claimed that in the computation of its profits for the assessment year in question it was entitled to set off the carried over loss of the previous year under section 24(2) Of the Indian Income tax Act, 1922. The Income tax Officer rejected the claim on the ground that the loss was under the head " business " and so could not be set off against income from securities under section 24(2) of the Act. Both the Income tax Appellate Tribunal and the High Court, on reference, held that in view of sections 6, 8 and 10 of the Act " interest on securities " could not be treated as business income and therefore the appellant could not claim a set off under section 24(2). On appeal to the Supreme Court it was contended for the appellant that (1) sections 8 and 10 should be so read that where the securities in the hands of an assessee are trading assets, section 8 would be excluded, being restricted to capital investments only, and the matter would fall under the head " business " within section 10, and (2) in any case, even if the income from securities fell under section 8, the appellant would be entitled to a set off under section 24(2) because it carried on only one business, namely banking, and the holding of securities by it was part of the said business. Held, that the scheme of the Indian Income tax Act, 1922, is that the various heads of income, profits and gains enumerated in section 6 are mutually exclusive, each head being specific to cover the item arising from a particular source and, consequently, " interest on securities " which is specifically made chargeable to tax under section 8 as a distinct head, falls under that section and cannot be brought under section 10, whether the securities are held as trading assets or capital asset," 80 Commissioner of Income Tax vs Chunnilal B. Mehta, Salisbury House Estate Ltd. vs Fry, (1930) 15 T. C. 266, Commercial Properties Ltd. vs Commissioner of Income Tax, Bengal, and H. C. Kothari vs Commissioner of Income Tax, Madras, , relied on. The question whether the holding of securities by the appellant formed part of the same business within section 24(2), could not be decided in the absence of a finding that the securities in question were a part of the trading assets held by the appellant in the course of its business as a banker, and the case was remitted to the High Court for a fresh decision on the reference after getting from the Tribunal a fuller statement of facts.

An assessment order was passed in respect of the turn over of the appellant firm for the year 1975 76 by the Sales Tax Officer on 7.2.1979. Thereafter, the Sales Tax Officer issued a notice under s.21 of the Uttar Pradesh Sales Tax Act, 1948, proposing to make a reassessment on the ground that the mandi cess and arhat (commission) had escaped assessment and directed the appellant to appear along with its account books on 18.1. The Sales Tax Officer passed the order under s.21 on the same date holding that the appellant was not liable to pay any more tax. In the year 1982 the appellant filed four applications under s.22 for rectification of the mistakes in the assess ment orders for assessment years 1975 76, 1976 77, 1977 78 and 1978 79 on the ground that the turnover in respect of purchases made on behalf of Ex U.P. principals had been wrongly assessed to sales tax. All the four applications were rejected by the Sales Tax Officer on merits. The appellant preferred appeals and the Appellate Au thority allowed the appeals relating to the assessment orders for the assessment years 1976 77, 1977 78 and 1978 79 on merits but dismissed the appeal in respect of the assess ment order for the assessment year 1975 76 on the ground that the application for rectification had been filed beyond three years from the date of the original order of assess ment and was thus barred by limitation. The appellant filed second appeal before the Sales Tax Tribunal in respect of the assessment year 1975 76. The Department also preferred second appeals in respect of the orders of assessment for assessment years 1976 77, 1977 78 and 1978 79. The Tribunal allowed the appeal 141 of the appellant holding that the rectification application made in respect of the assessment order for the assessment year 1975 76 was within limitation as the original order dated 7.2.1979 had ceased to exist on the re opening of the assessment and the final order had been passed on 18.1. 1980 within three years from the date of the application for rectification which had been filed on 4.11.1982. However, the appeals of the Department were dismissed. Out of the four revision applications filed by the Department, the High Court dismissed three applications and allowed the revision application in respect of the applica tion for rectification of the assessment order for the assessment year 1975 76 holding that the application for rectification had been filed beyond three years from the date of the original order dated 7.2. 1979 and that the order dated 18. 1. 1980 had no effect on the question of limitation. In the appeal to this Court, on behalf of the appellant it was contended that on the issue of the notice under s.21 of the Act original assessment order ceased to be in force and that the only order of assessment in respect of assess ment year 1975 76 which should be taken into consideration for all purposes including the application for rectification of mistake is the order dated 18.1. On behalf of the State it was contended that since no order of reassessment had actually been passed in the in stant case on 18.1. 1980 but only an order discharging the notice issued under s.21 of the Act had been passed the original order of assessment passed on 7.2. 1979 continued to remain in force. Allowing the appeal, HELD: 1. The judgment of the High Court is set aside and the decision of the Tribunal restored. [150G] 2. Section 21 of the Uttar Pradesh Sales Tax Act, 1948, authorises the assessing authority to make an order of assessment or reassessment. It says that if the assessing authority has reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under the Act, or any deduc tions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider neces 142 sary assess or reassess the dealer or tax according to law. [149G H;150A B] 3. Section 21 of the Act does not require the assessing authority to pass an order deciding whether it is necessary to proceed with the inquiry under that section or not before passing an order of assessment or reassessment under that section. The only order which the assessing authority is required to make under s.21 after a notice is issued to the dealer under that section is an order of assessment or reassessment. [150C D] 4. Once a notice is issued for ,purposes of making reassessment the earlier proceedings become re opened and the initial order of assessment ceases to be operative. The effect of the re opening of the assessment is to vacate or set aside the initial order of assessment and to substitute in its place the order mode on reassessment and that the result of the re opening of the assessment is that a fresh order for reassessment would have to he made in respect of all matters including those matters in respect of which there is no allegation of the turnover escaping assessment. [148H;149A B] 5. Once an assessment order hod been rectified and it was sought to make a further rectification of that order the period of limitation for making such further rectification would commence not from the date of the original assessment order but from the date of the earlier rectification order. [148G H] Deputy Commissioner of Commercial Taxes vs H.R. Sri Ramulu; , ; Shinde Brothers etc. vs Deputy Commissioner, Raichur, A.I.R. 1967 S.C. 15 12; Commissioner of Income tax, Excess Profits Tax, Hyderabad, Andhra Pradesh V. Jagan Mohan Rao & Others, ; Commis sioner of Sales Tax, Madhya Pradesh vs M/s. H.M. Esufali, H.M. Abdulali, Siyaganj, Indore, ; and International Cotton Corporation (P) Ltd. vs Commercial Tax Officer, HubIi & Ors., [1975] 2 S.C.R. 345, followed. The order dated 18.1. 1980 is an order of reassess ment notwithstanding the fact that a regular order of reas sessment has not been passed. The order passed on 18.1. 1980 should be construed as a fresh order of assessment passed under s.21 of the Act and the initial order of assessment dated 7.2.1979 should be deemed to be the order passed again on 18.1.1980. [149E F] 7. If the assessee is able to show any error apparent on the record from the order of assessment dated 7.2. 1979 the appellant is entitled to 143 succeed in its application for rectification provided it is made within the prescribed time, i.e., three years from the date of the order passed under s.21 of the Act. [149E F] Deputy Commissioner of Commercial Taxes vs H.R. Sri Ramulu, ; , referred to. It should be held that the assessing authority had adopted the earlier order dated 7.2.1979 as the order of assessment passed at the conclusion of the proceedings under s.21 of the Act. The period of limitation for the applica tion for rectification should, therefore, be calculated from the date of the order under s.21 of the Act, i.e. 18.1.1980. [150F]

The respondent Board realised terminal tax on goods experted by the appellants. In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation. The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees. In second appeal the High Court held that the levy was illegal. The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others. On the question whether the levy could be said to be a thing done or purported to be done under the Act. Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation. [172 D] 1. (a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act. [172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed. (b) The terminal tax could not be imposed under any of The provisions of the Act. The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits. [173 F G 174 Al 2. The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950. With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law. But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force. the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act. But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder. The levy could not, therefore, be saved by cl. (b) of the proviso to section 2. on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses. The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired. [173A, F G]

The petitioners registered firm has its head office in Calcutta where its books of account are kept and maintained and where it has its banking account, the members of the firm being citizens of India. Since its inception the firm has all along been assessed to income tax by the Income Tax Officer, District III, Calcutta. The assessments for the years 1948 49 and 1949 50 were made by the Income Tax Officer, District III, Calcutta. Notices under section 22(2) of the Income Tax Act were issued to the petitioner by the Income Tax Officer, District III, Calcutta to submit returns for the years 1950 51, 1951 52, 1952 53, 1953 54 and 1954 55. The Income Tax Officer, District III, Calcutta made assessment for the year 1950 51 on 18 12 1954 being satisfied that the principal place of business of the petitioner was in Calcutta. On the 25th January 1955 the petitioner received a letter from the Income Tax Officer, District III, Calcutta that in pursuance to orders dated 13th December 1954 under section 5(7 A) of the Income Tax Act its assessment records were transferred from that office to the Income Tax Officer, Special Circle, Ranchi with whom the petitioner was to correspond in future regarding its assessment proceedings. The order stated that the Central Board of Revenue "hereby transfers the case of" the petitioner. The petitioner had no previous notice of the intention of the Income Tax authorities to transfer the assessment proceedings from Calcutta to Ranchi nor bad it an opportunity to make any representation against such decision. 'When called upon to submit its return for the assessment year 1955 56 the petitioner by an application under article 32 of the Constitution contended that sub section (7 A) of section 5 of the Indian Income Tax Act, 1922 and the order of transfer made thereunder were unconstitutional in that they infringed the fundamental rights guaranteed to the petitioner under articles 14, 19(1)(g) and 31 of the Constitution. section 64 of the Indian Income Tax Act makes provisions for determining the place of assessment. Sub section (1) of that section provides 268 that where an assessee carried on a business, profession or vocation at any place he shall be assessed by the Income Tax Officer of that area in which that place is situate or where the business, profession, or vocation is carried on at more than one place by the Income Tax Officer of the area in which the principal place of business, profession or vocation is situate. In all other cases, according to sub section (2), an assessee shall be assessed by the Income Tax Officer of the area in which he resides. If any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to represent his views by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board of Revenue. The section is imperative in terms and gives a valuable right to the assessee. By amending the Indian Income Tax Act 1922 by the Indian Income Tax (Amendment) Act, 1940 (Act XL of 1940) by adding to clause (b) of sub section (5) of section 64 the words "in consequence of any transfer made under sub section (7 A) of section 5" and by adding subsection (7 A) to section 5 the benefit conferred by the provisions of subsection (1) and sub section (2) of section 64 is taken away and is to be deemed not to have existed at any time as regards the assessee with regard to whom a transfer is made under sub section (7 A) of section 5. Held that as under section 22(2) of the Act, the notice and the return are to be confined to a particular assessment years sub section (7 A) of section 5 contemplates the transfer of such a "case" i.e. the assessment case for a particular year. The provision that such a transfer may be made "at any stage of the proceedings" obviously postulates proceedings actually pending and "stage ' I refers to a point in between the commencement and ending of those proceedings. Further the transfer contemplated by the sub section is the transfer of a particular case actually pending before an Income Tax Officer of one place to the Income Tax Officer of another place. Accordingly such an omnibus wholesale order of transfer dated 13th December 1954 as was made in the present case is not contemplated by the sub section and therefore the impugned order of transfer which was expressed in general terms without any reference to any particular case and without any limitation as to time was beyond the competence of the Central Board of Revenue and the petitioner was still entitled to the benefit of the provisions of subsections (1) and (2) of section 64. The impugned order is discriminatory against the petitioner and violates the fundamental right guaranteed to it by article 14 of the Constitution in as much as the income tax authorities by an executive order unsupported by law picked out the present petitioner and transferred all his cases by an omnibus order unlimited in point of time,which order is calculated to inflict considerable inconvenience and harassment on the petitioner. BOSE J. Section 5(7 A) of the Indian Income Tax Act is ultra vires article 14 of the Constitution and so is section 64(5)(b) in so far as it 269 makes an order under section 5(7 A) as it now exists, inviolate. The power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced however briefly, to writing so that men may know that the powers conferred on these quasi judicial bodies are being justly and properly exercised. Chiranjit Lal Chowdhury vs The Union of India ([1950] S.C.R. 860), Budhan Chowdhry and others vs The State of Bihar, ([1955] 1 S.C.R. 1045), Dayaldas Kushiram vs Commissioner of Income Tax Central (I.L.R. ; [1940] 8 I.T.R. 139), Eshugbai Eleko 's case ; , The State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284), Ram Prasad Narayan Sahi and Another vs The State of Bihar and Others ' ([1953] S.C.R. 1129), Bowman 's case ([1917] A.C. 406), Coal Control case ([1954] S.C.R. 803), State of Madras vs V. G. Bow ([1952] S.C.R. 597), and Liversidge vs Sir John Anderson ([1942] A.C. 206), referred to.

In Union of India vs Bombay Tyres International Ltd., ; , this Court held that under s.4 of the Central Excise and Salt Act, 1944, only those expenses which were incurred on account of factors contributing to the product 's value upto the date of sale or the date of deliv ery at the factory. gate were liable to be included in the assessable value. On November 14/15, 1983 the Court made a clarificatory order wherein it was stated that discounts allowed in the trade (by whatever name called) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, and that such allowance and the nature of discount should be known at or prior to the removal of the goods and should not be disallowed only because they were not payable at the time of each invoice or deducted from the invoice price. The respondent Rubber Factory claimed various deductions of the nature of post manufacturing expenses for determining the assessable value of their products under s.4 of the Act which were disallowed 847 by the Excise authorities. Its writ petitions were, however, allowed by the High Court. In appeals by the Union of India for setting aside the High Court judgment it was contended for the respondent: (a) that the TAC/ Warranty discount, which was sought to be deducted for determining the assessable value, satisfied all the criteria of a trade discount stipulated in the clarifi catory order; (b) that the claim for deduction of product discounts prompt payment discount, year ending discount and campaign discount was justified on the same reasoning; (c) that the interest on finished goods from the date the stocks were cleared till the date of sale was a proper deduction for determination of the assessable value; (d) that the claim for deduction of interest on receivables (sundry debtors for sales) was justified on the ground that this cost was inbuilt in the price and was incurred on account of the time factor between the delivery of goods and realisa tion of moneys; (e) that the overriding commission allowed to the Hindustan Petroleum Corporation for exclusive sale of company 's products through their dealer net work was also of the nature of a discount; (f) that the cost of distribution at the duty paid sales depot was a proper deduction; (g) that the difference between the lower price at which the product was sold to the Government and the price charged from ordinary dealer was of the nature of a discount; (h) that the claim for deduction of special secondary packaging charges squarely falls within s.4(4)(d)(i) of the Act, and (i) that the company was entitled to the deduction of excise duty paid on processed typecord under s.4(4)(d)(ii). The respondents also disputed the method of computation of 'assessable value ' in a cure duty price at a factory gate sale and contended that such value was to be arrived at by first deducting the predetermined excise duty added to the factory price and only thereafter the permissible deductions were to be deducted. Disposing of the appeals, the Court, HELD: 1.1 The respondent company is not entitled to the deduction of TAC/Warranty discount for determining assessa ble value of tyres since it does not come within s.4(4)(d)(ii) of the Central Excise and Salt Act, 1944. [856H, 857A, 855H] 1.2 Even though giving of TAC/Warranty is established by practice for the wholesale trade or capable of being decid ed, what is really relevant is the nature of the traction. It is not a discount on the 848 tyres already sold, but relate to the goods which are being subsequently sold to the same customers. It is in the nature of a benefit given to the customers by way of compensation for the loss suffered by them in the previous sale. [8S6B] 1.3 A trade discount of any nature could be allowed to be deducted provided it is known at or prior to the removal of the goods. In the instant case, this condition precedent is not satisfied as the committee decided the claim for TAC/Warranty subsequent to the removal of the tyre. [856C] 1.4 The analogy of Rule 96 of the Central Excise Rules, 1944 relating to abatement of duty of defective tyres cannot be made applicable to justify the claim for deduction of the TAC/Warranty discount. A tyre being sold as a "seconds" or "defective" would be sold at a discount, such discount being known before the goods were removed/cleared, thereby also satisfying the pre condition of s.4(4)(d,(ii) of the Excise Act. The assessable vase and price list submitted would be one relating the 'seconds ' tyres. [856G] Union of India vs Bombay Tyres International Ltd., [1984] 17 ELT 329, referred to. 2.1 The respondent is entitled to deduction of 'prompt payment discount ' which is a 'trade discount ' given to the dealers by the company. It is established under the terms of sale or by established practice and is known at or prior to the removal of the goods [857E F] 2.2 The company is not entitled to deduction of the 'year ending discount '. The allowance of the discount is not known at or prior to the removal of the goods. The calcula tions are made at the end of the year and the bonus at the said rate is granted only to a particular class of dealers. This is computed after taking stock of the accounts between the company and its dealers. It is not in the nature of a discount but in the nature of a bonus or an incentive much after the invoice is raised and the removal of the goods is complete. [857G 858A] 2.3 The campaign bonus cannot be a permitted deduction to the company. The allowance of the discount is not known at or prior to the removal of the goods. The qnantum is unascertained at the point of removal. The discount is not on the wholesale cash price of the articles sold but is based an the total sales effected of a particular variety of tyre calculated after the removal. [858D] 849 3.1 Expenses incurred on account of several factors which have contributed to the product 's value upto the date of sale, which apparently would he the date of delivery at the factory gate, are liable to he included in the assessa ble value. [858F] 3.2 The company was justified in claiming deduction of interest an finished goods until they were sold and deliv ered at the factory gate. But interest on finished goods from the date of delivery at the factory gate up to the date of delivery from the sales depot would be an expense in curred after the date of removal from the factory gate and it would, therefore, not he liable to he included since it would add to the value of the goods after the date of remov al from the factory gate. [858G H] Union of India vs Bombay Tyres International Ltd., ; , referred to. The interest cost and expenses on sundry debtors or interest on receivables is an expense subsequent to the date of sale and removal or delivery of goods and, therefore, the company would not he eligible to claim deduction on this account. [859H] 5. The overriding commission paid by the company to the Hindustan Petroleum Corporation for sale of their products exclusively through HPC dealer network is not deductible. It was agreed to in consideration of the COrporation not agree ing to enter upon agreement with any other tyre manufactur ing company vis a vis by reason of the respondent undertaking not to enter upon any agreement with any other oil company. It is a compensation granted for the sale of company 's products through HPC dealers and is a commission for services rendered by the agent. It is not a discount known at or prior to the removal of the goods. [859A C] 6. The cost of distribution incurred at the duty paid sales depots is not to he included in the assessable value in case the wholesale dealers take delivery of the goods from outside such godown. The wholesale dealers having taken delivery of the goods manufactured by the company and there being a removal of the goods from the factory gate, the cost of distribution at duty paid sales depots cannot he taken into account for the purpose of determining the assessable value of the goods. [859H 860A] Union of India & Ors. vs Duphar Interfram Ltd., , referred to. 850 7. Merely because the product is sold at a lower price to the Government it cannot be said that the difference in price with reference to an ordinary dealer and the Govern ment is a discount to the Government. The position that there can be different price lists of articles of similar description sold to different classes of dealers or differ ent classes of buyers in wholesale is specifically recog nised under s.4(1)(a), proviso (1) of the Act. The lower price for the Government constitutes a normal price for it as a class of buyer and no deduction on this head is liable to the company for the purpose of determination of the assessable value of the article. [860D, C, E] 8.1 Section 4(4)(d)(i) of the Act read with the Explana tion thereto makes it apparent that the 'secondary packag ing ' done for the purpose of facilitating transport and smooth transit of the goods to be delivered to the buyer in the wholesale trade cannot be included in the value for the purpose of assessment of excise duty. If a packaging is not necessary for the sale of the product in the wholesale market at the factory gate, the same cannot be included in the value for the purpose of assessment of excise duty. [860 FG] 8.2 In the instant case, the secondary packaging for tread rubber consists of cardboard cartons and wooden cases. This secondary packing is not employed merely for the pur pose of facilitating transport or smooth transit but is necessary for selling the tread rubber in the wholesale trade. The cost of these cardboard cartons and wooden cases or any other special secondary charges incurred by the company on tread rubber could not, therefore, be excluded from its assessable value. [861A, D, E F] Union of India & Ors. vs Godfrey Philips India Ltd., and Bombay Tyres International Ltd. vs Union of India & Ors., Bombay High Court M.P. No. 1534 of 1979 decided an January 7, 1986, referred to. The company is eligible for deduction from selling price of tyre of excise duty paid on processed tyre cord. This is in accord with s.4(4)(d)(ii) of new s.4 of the Act. [862F G] 10.1 The assessment of excise duty both in relation to s.4 and in relation to the Valuation Rules is now subject to the definition contained in s.4(4)(d) of the Act. The 'va lue ' as defined thereunder is to be arrived at after the cost of packaging of a durable nature or a returnable nature as also amounts of duty of excise, sales tax and other taxes and trade 851 discount allowed in accordance with the normal practice of wholesale trade is determined. It is implicit that no excise duty is payable on an element of excise duty in the price. The value as contemplated under s.4 cannot include a compo nent of excise duty. [863AB] 10.2 The aggregate of the assessable value, the permis sible deduction and the excise duty is equal to the selling price (cure duty paid). The excise duty is only known as a ratio of the assessable value when an ad valorem duty is included in the cure duty paid selling price. The quantum of excise duty cannot be pre deducted or pre determined till the assessable value is known. It is only the permissible deductions in concrete monetary terms and amount which are known. The cum duty paid sale price being available for computation and the value of deduction permitted being also known, the assessable value and the excise duty as a ratio of the assessable value can be only found by first deducting the permissible deductions from the cum duty paid selling price and thereafter computing the value by dividing the difference by (1 +rate of excise duty). This method has both a legal and mathematical basis. To reverse this sequence is to mis interpret the scheme and the mode of levy of excise duty on the assessable value. [864E G, 865B, 865G] 10.3 Where the factory price is not a cure duty price, the first step in arriving at the assessable value is to deduct the permissible deductions and thereafter to compute the excise on an ad valorem basis by applying the tariff rate to the assessable value. [865D]

Appeal No. 395 of 1959. Appeal by special leave from the Award dated November 25, 1957 of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 24 of 1956. N. C. Chatterjee, D. H. Buch and K. L. Hathi, for the appellants. M. C. Setalvad, Attorney General for India, J. B. Dadachanji and section N. Andley, for the respondent Nos. 1 and 2. M. C. Setalvad, Attorney General for India, Dewan Chaman Lal Pandhi and I. N. Shroff, for the respondent No. 3. 1960. November 30. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave in an industrial matter. It appears that the appellants were originally in the service of the Scindia Steam Navigation Co. Ltd. (hereinafter called the Scindias). Their services were transferred by way of loan to the Air Services of India Limited (hereinafter referred to as the ASI). The ASI was formed in 1937 and was 813 purchased by the Scindias in 1943 and by 1946 was a full subsidiary of the Scindias. Therefore from 1946 to about 1951, a large number of employees of the, Scindias were transferred to the ASI for indefinite periods. The Scindias had a number of subsidiaries and it was usual for the Scindias to transfer their employees to their subsidiary companies and take them back whenever they found necessary to do so. The ' appellants who were thus transferred to the ASI were to get the same scale of pay as the employees of the Scindias and the same terms and conditions of service (including bonus whenever the Scindias paid it) were to apply. The Scindias retained the right to recall these loaned employees and it is the case of the appellants that they were entitled to go back to the Scindias if they so desired. Thus the terms and conditions of service of these loaned employees of the ASI were different from those employees of the ASI who were recruited by the ASI itself. This state of affairs continued till 1952 when the Government of India contemplated nationalisation of the existing air lines operating in India with effect from June 1953 or thereabouts. When legislation for this purpose was on the anvil the appellants felt perturbed about their status in the ASI which was going to be taken over by the Indian Air Lines Corporation (hereinafter called the Corporation), which was expected to be established after the , No. XXVII of 1953, (hereinafter called the Act) came into force. They therefore addressed a letter to the Scindias on April 6, 1953, requesting that as the Government of India intended to nationalise all the air lines in India with effect from 1 June, 1953, or subsequent thereto, they wanted to be taken back by the Scindias. On April 24, the Scindias sent a reply to this letter in which they pointed out that all persons working in the ASI would be governed by cl. 20 of the Air Corporation Bill of 1953, when the Bill was enacted into law. It was also pointed out that this clause would apply to all those actually working with the ASI on 103 814 the appointed day irrespective of whether they were recruited by the ASI directly or transferred to the ASI from the Scindias or other associated concerns. It was further pointed out that if the loaned employees or others, employed under the 'ASI, did not want to join ,the proposed Corporation they would have the option not to do so under the proviso to cl. 20(1) of the 'Bill; but in case any employee of the ASI whether loaned or otherwise made the option not to join the proposed Corporation, the Scindias would treat them as having resigned from service, as the Scindias could not absorb them. In that case such employees would be entitled only to the usual retirement benefits and would not be entitled to retrenchment compensation. Finally, it was hoped that all those in the employ of the ASI, whether loaned or otherwise, having been guaranteed continuity of employment in the new set up would see that the Scindias would not be burdened with surplus staff, requiring consequential retrenchment of the same or more junior personnel by the Scindias. On April 29, 1953, a reply was sent by the union on behalf of the appellants to the Scindias. It was pointed out that the loaned staff should not be forced to go to the proposed Corporation without any consideration of their claim for re absorption into the Scindias. It was suggested that the matter might be taken up with the Government of India and the persons directly recruited by the ASI who were with other subsidiary companies might be taken by the proposed Corporation in place of the appellants. It seems that this suggestion was taken up with the Government of India but nothing came out of it, particularly because the persons directly recruited by the ASI. who were employed in other subsidiary companies did not want to go back to the ASI. In the meantime, the Scindias issued a circular on May 6,1953, to all the employees under the ASI including the loaned employees, in which they pointed out that all the persons working with the ASI would be governed by cl. 20(1) when the Bill became law and would be absorbed in the proposed Corporation, unless 815 they took advantage of the proviso to cl. 20(1). It was also pointed out that such employees as took advantage of the proviso to el. 20(1) would be treated as having resigned from service and would be entitled to usual retirement benefits as on voluntary retirement, and to nothing more. It was also said that their conditions of service would be the same until duly altered or amended by the proposed Corporation. The circular then dealt with certain matters relating to provident fund with which we are however not concerned. It appears that the Act was passed on May 28, 1953. 20(1) of the Act, with which we are concerned, is in these terms: "(1) Every officer or other employee of an existing air company (except a director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement) employed by that company prior to the first day of July, 1952, and still in its employment immediately before the appointed day shall, in so far as such officer or other employee is employed in connection with the undertaking which has vested in either of the Corporations by virtue of this Act, become as from the appointed date an officer or other employee, as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the existing air company if its undertaking had not vested in the Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation : Provided nothing contained in this section shall apply to any officer or other employee who has, by notice in writing given to the Corporation concerned prior to such date as may be fixed by the Central Government by notification in the official gazette 816 intimated his intention of not becoming an officer or other employee of the Corporation." After the Act was passed, notice was sent on June 17, 1953, to each employee of all the air companies which were being taken over by the proposed Corporation m and he was asked to inform the officer on special duty by July 10, 1953, if he desired to give the notice contemplated by the proviso to section 20(1). A form was sent in which the notice was to be given and it was ordered that it should reach the Chairman of the Corporation by registered post by July 10. The appellants admittedly did not give this notice as required by the proviso to section 20(1). In the meantime on June 8, 1953, a demand was made on behalf of the appellants in which the Scindias were asked to give an assurance to them that in the event of retrenchment of any loaned staff by the proposed Corporation within the first five years without any fault, the said staff would be taken back by the Scindias. Certain other demands were also made. The Scindias replied to this letter on July 3 and pointed out that they could not agree to give an assurance to take back the loaned staff in case it was retrenched by the proposed Corporation within the next five years. We are not concerned with the other demands and the replies thereto. On July 8, a letter was written on behalf of the appellants to the Scindias in which it was said that the appellants could not accept the contention contained in the circular of May 6, 1953. Though the appellants were carrying on this correspondence with the Scindias, they did not exercise the option which was given to them under the proviso to section 20(1) of the Act,. by July 10, 1953. First of August, 1953, was notified the appointed day under section 16 of the Act and from that date the undertakings of the "existing air companies" vested in the Corporation established under the Act (except the Air India International). So on August:1, 1953, the ASI vested in the Corporation and section 20(1) of the Act came into force. Hence as none of the appellants had exercised the option given to them under the proviso, they would also be governed by the said provision, 817 unless the contention. raised on their behalf that they could in no case be governed by section 20(1), is accepted. The tribunal came to the conclusion that, whatever the position of the appellants as loaned staff from the Scindias to the ASI, as they were informed on May 6, 1953, of the exact position by the Scindias and they did not ask for a reference of an industrial dispute immediately thereafter with the Scindias and as they" ' did not exercise the option given to them by the proviso to section 20(1) before July 10, 1953, they would be governed by section 20(1) of the Act. In consequence, they became the employees. of the Corporation as from August 1, 1953 and would thus have no right there after to claim that they were still the employees of the Scindias and had a right to revert to them. The consequence of all this was that they were held not to be entitled to any of the benefits which they claimed in the alternative according to the order of reference. It is this order of the tribunal rejecting the reference which has been impugned before us in the present appeal. The main contention of Mr. Chatterjee on behalf of the appellants is that they are not governed by section 20 (1) of the Act and in any case the contract of service between the appellants and the Scindias was not assignable and transferable even by law and finally that even if section 20(1) applied, the Scindias were bound to take back the appellants. We are of opinion that there is no force in any of these contentions. 20(1) lays down that every officer or employee of the "existing air companies" employed by them prior to the first day of July, 1952, and still in their employment immediately before the appointed day shall become as I from the appointed day an officer or employee, as the case may be, of the Corporation in which the undertakings are vested. The object of this provision was to ensure continuity of service to the employees of the "existing air companies" which were being taken over by the Corporation and was thus for the benefit of the officers and employees concerned. It is further provided in section 20(1) that the terms of service etc. would be the same until they are duly altered by the Corporation. One should have thought that the employees of the air 818 companies would welcome this provision as it ensured them continuity of service on the same terms till they were duly altered. Further there was no compulsion on the employees or the officers of the "existing air companies" to serve the Corporation if they did not want to do so. The proviso laid down that any officer or other employee who did not want to go into the service of the Corporation could get out of service by notice in writing given to the Corporation before the date fixed, which was in this case July 10, 1953. Therefore, even if the argument of Mr. Chatterjee that the contract of service between the appellants and their employers had been transferred or assigned by this section and that this could not be done,, be correct, it loses all its force, for the proviso made it clear that any one who did not want to join the Corporation, was free not to do so, after giving notice upto a certain date. Mr. Chatterjee in this connection relied on Nokes vs Doncaster Amalgamated Collieries Ltd. where it was observed at p. 1018 "It is, of course, indisputable that (apart from statutory provision to the contrary) the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A 's consent, which is the same thing as saying that, in order to produce the desired result,, the old contract between A and X would have to be terminated by notice or by mutual consent and a new contract of service entered into by agreement between A and Y." This observation itself shows that a contract of service may be transferred by a statutory provision; but in the present case, as we have already said, there was no compulsory transfer of the contract of service between the "existing air companies", and their officers and employees to the Corporation for each of them was given the option not to join the Corporation, if he gave notice to that effect. The provision of section 20(1) read with the proviso is a perfectly reasonable provision and, as a matter of fact, in the interest of employees themselves. But, Mr. Chatterjee argues that section 20(1) will only apply to those who were in the employ of the "existing air companies"; it would not (1) , 819 apply to those who might be working for the "existing air companies" on being loaned from some other company. In other words, the argument is that the, appellants were in the employ not of the ASI but of the Scinaias and therefore section 20(1) would not apply to them and they would not become the employees of the Corporation by virtue of that provision when they failed to exercise the option given to them by the proviso. According to him, only those employees of the ASI who were directly recruited by it, would be covered by section 20(1). We are of opinion that this argument is fallacious. It is true that the appellants were not originally recruited by the ASI. They were recruited by the Scindias and were transferred on loan to the ASI on various dates from 1946 to 1951. But for the purposes of section 20(1) we have to see two things: namely, (i) whether the officer or employee was employed by the existing air company on July 1, 1952, and (ii) whether he was still in its employment on the appointed day, (namely, August 1,1953). Now it is not disputed that the appellants were working in fact for the ASI on July 1, 1952, and were also working for it on August 1, 1953. But it is contended that though they were working for the ASI they were still not in its employment in law and were in the employment of the Scindias because at one time they had been loaned by the Scindias to the ASI. Let us examine the exact position of the appellants in order to determine whether they were in the employ of the ASI or not. It is not disputed that they were working for the ASI and were being paid by it; their hours of work as well as control over their work was all by the ASI. From this it would naturally follow that they were the employees of the ASI, even though they might not have been directly recruited by it. It is true that there were certain special features of their employment with the ASI. These special features were that they were on the same terms and conditions of service as were enjoyed by the employees of the Scindias in the matter of remuneration, leave, bonus, etc. It may also be that they could not be, dismissed by the ASI and the Scindias may have had to take action in case it was 820 desired to dismiss them. Further it may be that they could be recalled by the Scindias and it may even be that they might have the option to go back to the Scindias. But these are only three special terms of their employment with the ASI. Subject to these special terms, they would for all purposes be the employees of the ASI and thus would in law be in the employment of the ASI both on July 1, 1952 and on August 1, 1953. The existence of these special terms in the case of these appellants would not in law make them any the less employees of the ASI, for whom they were working and who were paying them, who had power of control and direction over them; who would grant them leave, fix their hours of work and so on. There can in our opinion be no doubt that subject to these special terms the appellants were in the employ of the ASI in law. They would therefore be in the employ of the ASI prior to July 1, 1952 and would still be in its employ immediately before August 1, 1953. Consequently, they would clearly be governed by section 20(1). As they did not exercise the option given to them by the proviso to section 20(1), they became the employees of the Corporation from August 1, 1953, by the terms of the statute. The last point that has been urged is that even if section 20(1) applies, the Scindias are bound to take back the appellants. Suffice it to say that there is no force in this contention either. As soon as the appellants became by force of law the employees of the Corporation, as they did so become on August 1, 1953, in the circumstances of this case, they had no further right against the Scindias and could not; claim to be taken back in their employment on the ground that they were still their employees, in spite of the operation of section 20(1) of the Act. Nor could they claim any of the alternative benefits specified in the order of reference, as from August 1, 1953, they are by operation of law only the employees of the Corporation and can have no rights whatsoever against the Scindias. We are therefore of opinion that the tribunal 's decision is correct. The appeal fails and is thereby dismissed. There will be no order as to costs. Appeal dismissed.

Section 20(1) of the (XXVII of 1953), read with the proviso, is a perfectly reasonable provision and in the interest of the employees and it is not correct to say that it can apply only to the direct recruits of the existing air 812 companies and not at all to loaned employees working under them. The two conditions of its applications are (i) that the officer or employee was employed by the existing air company on July 1, 1952, and (ii) that he was still in its employment on August 1, 1953, the appointed day. In the instant case where the appellants who had been recruited by the Scindia Steam Navigation Co., Ltd., and on purchase by it of the Air Services of India Ltd., loaned to the latter, and were working under its direction and control on and between the said dates and being paid by it, Held, that in law they were the employees of the Air Ser vices of India from the appointed day, notwithstanding the existence of certain special features of their employment, and as such governed by section 20(1) of the Act and since they did not exercise the option given to them under the proviso, they became employees of the Corporation established under the Act and ceased to have any rights against the original employers. Nokes vs Doncaster Amalgamated Collieries Ltd., [1940] A.C. 1014, considered.

The appellants, a firm of brokers, entered into a contrct for the sale and purchase of a quantity of jute under a "sold note" addressed to the respondents which they signed as "A & Co., brokers" and a "bought note" of the same date and for the same quantity of jute addressed to a third person in which also they signed as "A & C0. , brokers ". The" sold note" contained the usual arbitration clause under which all matters, questions, disputes, differences and/or claims, arising out of and/or concerning, and/or in connec tion and/or in consequence of, or relating to, the contract . . shall be referred to the arbitration of the Bengal Chamber of Commerce. " A dispute having arisen with regard to a matter which admittedly arose out of the contract evidenced by the sold note, the appellants referred the dispute for arbitration. The respondents raised before the arbitrators the further contention that as the appel lants were only brokers they were not entitled to refer the matter to arbitration. The arbitrators made an award in favour of the appellants. The respondents made an applica tion to the. High Court under the Indian Arbitration Act for setting aside the award: Held that, assuming that it was open to the respondents to raise this objection at that stage, inasmuch as this further dispute 793 was also one which turned on the true interpretation of the contract and the respondents must have recourse to the contract to establish their claim, this was also a dispute arising out of or concerning the contract and as such fell within the arbitration clause, and the award could not be set aside under the Indian , on the ground that it was beyond jurisdiction and void. Heyman vs Darwins Ltd. ([1942.] A.C. 356) referred to.

A partnership of two partners was dissolved on the death of one of them on August 24, 1957 and the business was taken over by the surviving partner on his own account. The services of the employees were not interrupted and there was no alteration in their terms of employment. In proceedings for assessment to income tax for the assessment year 1958 59 it was urged on behalf of the firm that an amount of Rs. 1,41,506 taken into account under the head "gratuity payable to workers of the business" in settling the accounts of the firm till August 24, 1957 was a permissible outgoing. The Income tax Officer rejected the claim and the Appellate Assistant Commissioner confirmed his order. However, the Tribunal, in appeal, held that on the dissolution of the firm, the workmen became entitled to retrenchment compensation under section 25FF of the and the firm was therefore entitled to the deduction. The High Court, upon a reference, confirmed this view. On appeal to this Court, HELD : The amount claimed by the assessee as a permissible allowance in his profit and loss account could not be regarded as properly admissible either under section 10(1) or under section 10(2)(xv) of the Income Tax Act, 1922. [735 B] Under the proviso to section 25FF the liability.to pay retrenchment compensation arose for the first time after the closure of the business and not before. It arose not in the carrying on of the business, but on account of the transfer of the business. It was not therefore a liability of a revenue nature and could not be treated as a permissible deduction under section 10(1). [733 H] Alex A. Apcar (Jr.) & Company vs M. V. Gan and Others, A.I.R, , referred to. Anakpalia Cooperative Agricultural and Industrial Society vs Its, Workmen & Others, , Calcutta Company Ltd. vs Commissioner of Income tax, West Bengal, and Owen (H. M. Inspector of Taxes) vs Southern Railway of Peru Ltd., , distinguished. Where accounts are maintained on the mercantile system, if liability to make a payment has arisen during the time the business is carried on. and the expenditure is for the purpose of carrying on the business, it may be deductible under Section 10(2)(xv) but where the liability is during the whole of the period that the business is carried on wholly contingent and does not raise any definite obligation during that time it cannot fall L9Sup. CI/67 3 728 within the expression "expenditure laid out or expended wholly or exclusively" for the purpose of the business. [734 D E) Commissioner of Income tax, Madras vs Indian Metal and Metallurgical Corporation, and Standard Mills Company Ltd. vs Commissioner of Wealth tax, Bombay, , relied on.

A dispute arose between the appellant and his employees in the "Motor Garage department" in respect of the claim made by the employees for retrenchment and other compensation and leave facilities. The Government of the State of Rajasthan, 'on December 18, 1957, referred under section 10 of the , the above mentioned dispute to the Industrial Tribunal, Rajasthan. Two preliminary objections were raised before the Industrial Tribunal by the appellant against the maintainability of the reference: (1) That without the sanction of the Union Government under section 87B of the Code of Civil Procedure, the reference to the Industrial Tribunal was incompetent. (2) That on the date when the reference was made no Industrial Tribunal was constituted under section 7A of the as amended by Act 36 of 1956, and on reconstitution of the Tribunal, the reference became incompetent. The Tribunal rejected both the objections. The High Court also dismissed the writ petition filed by the appellant challenging the validity of the order of the Tribunal. Hence this appeal. Held, (i) Section 86 read with section 87 of the Code of Civil Procedure in terms protects a Ruler from being "sued" and not against the institution of any other proceeding which is not in the nature of a suit. A proceeding which does not commence with a plaint or petition in the nature of a plaint, or where the claim is not in respect of a dispute ordinarily triable in a civil court, would prima facie not be regarded as falling within section 86 Code of Civil Procedure. Section 86 of the Code excludes the jurisdiction of the civil courts and must be strictly construed. It does not debar the commencement of proceedings for adjudication of an 1/SCI New Delhi/64 1 2 industrial dispute for two reasons:neither party to the proceeding is saed by the initiation of the proceeding and the Tribunal is not a court. (ii) Article 362 of the Constitution declares that in the exercise of legislative and executive power by the Union and the State due regard shall be had to the guarantee or assurance given under any covenant or agreement with respect to the personal rights, privileges and dignities of the Ruler of an Indian State. These rights, privileges and dignities which are, for historical reasons, recommended to be respected, avail the Rulers of Indian States in their status as Indian citizens and not in recognition of any sovereign authority continuing to remain vested in them. In the present case, the appellant has also, since the Constitution, been a citizen of India, and his recognition as Ruler under article 366(22) of the Constitution has not altered that status, but as a citizen he is assured a privileged position. (iii) By sub section (2) of the Rajasthan Industrial Trjbunal (Constitution and Proceedings) Validating Act, 1959, the Tribunal originally constituted under section 7 of the , before the Act was amended by Act 36 of 1956, is to be deemed to have been duly constituted under section 7A, and the reference made on December 18, 1957 is to be deemed to have been made as if the Tribunal were constituted under section 7A of the amended Act. The Validating Act is, because of Item 22 List III of the Seventh Schedule to the Constitution, within the competence of the State Legislature. As the Act was reserved for the consideration of the President and has received his assent, by virtue of article 254(2) it must prevail in the State of Rajasthan. Mundra Metal Works Private Ltd. vs State of Rajasthan, W.P.No. 107/58, referred to.

A dispute having arisen between the appellant employer and its workmen regarding the employment of contract labour in the appellant 's mills, the union representing the workmen which is the respondent in the present case after serving notice on the appellant under section 42(2) of the Bombay Industrial Relations Act made reference to the Industrial Court under section 73A of the Act demanding the abolition of the system of employing contractors ' labour and the permanent increment of employees in the respective departments. The contention of the appellant, inter alia, was that the Industrial Court had no jurisdiction to decide the dispute which was within the exclusive jurisdiction of a Labour Court under item (6) of Sch. III of the Act, and that any award directing the abolition of contract labour would contravene the appellant 's fundamental right to carry on business under article 19(1)(g) of the Constitution. The Industrial Court decided that the Industrial Court would have jurisdiction as the matter was covered by item (2) of Sch. 11 of the Act and that there was no contravention of the fundamental rights of the appellants. On appeal the Labour Appellate Tribunal, held, that the Industrial Court had jurisdiction to decide the matter although it was not covered by item (2) of Sch. 11 of the Act. As regards the question of contravention of the fundamental right it held that the question whether the restriction imposed was reasonable depended upon the facts of each case and the matter was outside the powers of a court of appeal. Eventually it set aside the entire award on the merits. On appeal 'by the appellant by special leave, Held, that the Industrial Court had jurisdiction to deal with the matter. Whatever might be the ambit of the word "employment" used in item (6) of Sch. III, if a matter was covered by Sch. 11 it could only be referred to the Industrial Court under section 73A. A question relating to the abolition of contract labour inevitably raised a dispute relating to matters contained in items (2), (9) and (10) of Sch. 11, namely, permanent increase in the number of 343 persons employed, the employees ' wages, hours of work and rest intervals and could, therefore, be referred only to an Industrial Court. The power given to the Industrial Court which was a quasi judicial tribunal to decide whether contract labour should be abolished or not would not make the definition of "industrial " matter" in so far as it referred to the mode of employment an section unreasonable restriction on the fundamental right of the employer to carry on his trade and as such there was no contravention of his fundamental right by providing in section 3(18) that an "industrial matter" included also the mode of employment of the employees.

The appellants in Civil Appeal No.3012 of 1990 were Directors of a Company, which was owning a Jute mill. Due to lock out and strike in the Jute industry, the Company de faulted in the payment of the provident fund dues. The appellants applied under Section 633 of the for being relieved of liability for delayed as well as non payment of the provident fund and other ancillary dues. A Single Judge of the High Court passed a consent order, allowing the outstanding provident fund dues to be paid in monthly instalments of Rs.50,000 each until the entire liability was paid oH. As the Provident Fund authorities accepted this course, summons were not served on the Regis trar of Companies, since what was sought to be recovered were the dues under the Provident Fund Act. The Single Judge also granted an injunction restraining the respondents from initiating any criminal procccdings against 339 the appellants or any of them for non payment or delayed payment of the provident fund. On appeal by the Regional Provident Fund Commissioner, the Division Bench held that any proceeding referred to in section 633 of the Act would mean only under the provisions of the Act, and that section 633 of the Act had no applica tion in respect of any liability under any other Act. Hence the appeal. Applications claiming relief under section 633 were dismissed in the connected cases also, resulting in the appeals, and Special Leave Petition, being filed before this Court. On behalf of the appellants in Civil Appeal No. 3012 of 1990, it was contended that section 633 was very wide in its amplitude and there was no justification to restrict its application to only proceedings arising under the Act, that when proceedings were taken in relation to breach of trust, which was an offence under Indian Penal Code, against an officer of a company, it would be opentn him to plead before the concerned Magistrate that he had acted honestly and reasonably, and if the Court came to the conclusion that he should fairly be excused it would relieve him; that under sub section (2), it was an anticipatory action, and the High Court also exercised a similar power as it was exercising power under subsection (1), and if it was restricted only in respect of any liability under the , then the protection extended under section 633 was last, and that similarly, under section 32 of the , which dealt with offences by Companies under that Act the burden was upon the person concerned to prove that the offences were committed without his knowledge or consent and, but for that proof, the statute deemed him to be guilty; therefore, if protection was not afforded against such a sweeping provision, the entire purpose of Section 633 would be rendered nugatory. On behalf of the appellants in one of the connected appeals it was contended that the definition of "Court" contemplated with respect to any matter relating to a compa ny, and that the Court having respective jurisdiction as provided under Section 2(11) was with respect to any offence under the Act, the Court of a first class Magistrate or, as the case may be, a Presidency Magistrate having jurisdiction to try such offence, that this section would show that where like the appellants they were not working directors, they could not be subject to prosecution and that was where Section 633 stepped in and afforded protection, even if it were a liability arising 340 under any other Act, for instance, like delayed payment or nonpayment of provident fund. On behalf of the respondent Regional Provident Fund Commissioner it was contended that any proceeding occurring under Section 633 could not relate to a proceeding other than one arising out of , that each one of the other Acts not only defined penalty but also laid down the penalty, and therefore, merely because the appellants were officers of the company, it could not mean that section 633 could be availed of; otherwise, the consequences would be disastrous and the penal provision of all other Acts would be rendered ineffective, that Section 14 of the laid down the penalty for the offences of companies and was dealt with in Section 14 A, and the explanation to the said sec tion also talked of as to what a company would mean for the purpose of the section, and, therefore, where an elaborate procedure was contemplated under those sections for recovery of the dues and the Provident Fund Act, being a social welfare legislation, that could not be rendered illusory by extending the benefit under Section 633 of the ; similarly, Section 86 of the Employees ' State Insurance Act, providing for prosecution also dealt with Companies, and, the explanation under that Section specifically stated as to what would be a Company or Director for the purpose of that section and hence, no interference was called for. Dismissing the cases, this Court, HELD: 1.1 Under Section 633 of the , relief cannot be extended in respect of any liability under any Act other than the . [354 C] 1.2 The expression 'any proceeding ' occurring under Section 633 cannot be read out of context and treated in isolation. It must be construed in the light of the penal provisions. Otherwise, the penal clauses under the various other Acts would be rendered ineffective by application of Section 633. Again, if Parliament intended Section 633 to have a coverage wider than the Act, it would have specifi cally provided for it. Moreover, it is a sound rule of construction to confine the provisions of a statute to itself. [349 D E] 1.3 While referring to any proceeding under sub section (2) of Section 633 the Parliament intended to restrict it only to the proceeding arising out of negligence, default, breach of trust, misfeasance or breach of duty in respect of dutics prescribed under the provi 341 sions of the . Further, examining the sub section with reference to the context and the placement of the sub section, the only conclusion that is possible is the proceedings for which relief under this sub section could be claimed or the proceedings against the officer of a company for breach of the provisions of the . Sub section (2) cannot apply to proceedings instituted against the officer of the company to enforce the liability arising out of violation of provisions of other statutes. [349 F G] 1.4 Sub section (3) requires notice to be given to the Registrar of Companies. This indicates that powers under sub section (2) must be restricted in respect of proceedings arising out of the violation of the Companies Act 1349 H] 1.5 Merely because section 32 of the contains a stringent provision, it cannot be held that Section 633 of the Companies Act could be invoked for of fences under Section 32 of the Industrial Disputes Act. 1354 D] Customs and Exicise Comrs. vs Hedon Alpha LId. , 2 ALL ER 697 CA. referred to. Halsbury 's Laws of England, (Fourth Edition) 7(1) Companies, para 652; Pennington 's Company law. 4th Edn., 1979, P.548, 23rd Edn. 1982, Vol. I p. 881 and 5th Edn. 1985 p.679 680, referred to. 2.1 The authority to take action under the Provident Fund Act as seen from Section 14 of the said Act is a Com missioner while the procedure so far as the Companies Act is concerned, under Section 621 it is on a complaint in writing of the Registrar or of a shareholder of a company, or of an officer authorised by the Central Government in this behalf that action can be taken. Since ii is mandatory for the Court to givc notice to the Registrar of Companies or such other person, if any, as it thinks necessary. as required under sub section (3) of Section 633, if Section 633 is interpreted so as to include proceedings under Acts other than the Companies Act it will be open to the Court to give such relief under this Section without giving notice to the authority competent to prose cute in respect of liabilities under the other laws or upon giving notice to other concerned and not the Registrar. Thus, the mandatory requirement of sub section (3) can easily be bye passed. Further, if relief under Section 633 is extended, officers who would be deemed to have committed the offence under Section 14 A of the 342 Provident Fund Act, because sub section (1) states that every person who was responsible to the company as well as the company shall be deemed to be guilty of the offence and liable for such offence would get the benefit and escape the rigour of Scction 14 A. The explanation also makes it abun dantly clear that all companies covered by the Companies Act would be companies within the meaning of explanation. On the contrary, those companies failing under the explanation to Section 14 A would not be companies under the Companies Act. [355 C F] 2.2 Thus in the case of a company falling under the explanation to Section 14 A of the Provident Fund Act which does not come within the purview of the Companies Act, the liability of the persons would be governed only by section 14A(1) and (2) of the Provi dent Fund Act. They will not be entitled to any relief under Section 633. The benefit avail able under a social welfare legislation, namely, the Employ ees ' Provident Fund Act cannot be defeated in this manner. 1355 G HI

FACTS this appeal is by special leave against the judgment of the high court of punjab and haryana confirming the conviction of the accused. the facts of the case in brief are that in view of the chinese invasion air field at sirsa required to be extended for which purpose the ministry of defence, govt. of india took steps to acquire some lands of agriculturists pursuant to which a notification dated november 27, 1962 was issued under section 4 of the land acquisition act 1894 for acquiring 51.79 acres of land situated in the state of ahmedpur. on the next day another notification was issued under section 6 of the land acquisition act on november 28, 1962 and in view of the emergency action under section 17 was taken for obtaining possession of the land with a view to its development. the lands which were acquired belonged to several land holders including moti ram and p.w. 12 kewal chand. the collector gave his award on 26-2-63 in respect of these lands, which actually measured 49.47 acres, at rs. 1350 per acre amounting to rs. 66,784.50 np. apart from this amount compensation was also awarded for standing crop amounting to rs. 11,073.13 np. the case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the appellant. he sold the crop to moti ram and kewal chand for rs. 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the contractor. a chargesheet was filed against the appellant under section 5 (1) (c) and 5 (1) (d) read with 5 (2) of the prevention of corruption act on 5-8-1966 after obtaining sanction from the govt. of india, ministry of home affairs. ARGUMENT the learned advocate for the appellant has meticulously taken us through the entire documentary and oral evidence and commented at length upon the various contradictions and incongruities in the case of the prosecution with a view to establishing that when the appellant took possession of the land there was no crop standing on it-that tile possession of the land 'was in fact delivered to telu ram, contractor on 10-1-1963; that the said contractor had admitted 'that possession of the entire land was received by him; that he carried on the construction work in extending the aerodrome; that 200/250 donkeys were also used for doing the work by reason of which the crop was damaged before tehsildar had put the appellant in possession of the land and as a matter of fact there was no crop thereon when he got the possession of the land. it was also contended that the high court had not considered the contradictions in the earlier statement made by some of the witnesses to the military authorities and that it relied on many of the documents for affirming the conviction of the appellant without their actually being put to, him under section 342. it is further contended that the stand taken by the prosecution was that 'the persons who we're permitted to cut the crops bad' not committed any offence. ISSUE whether the facts were sufficient to sustain the sanction under 5(1)(c) even if the charge under 5(1)(d) had failed. this question in turnwill depend upon what are the ingredients of the offences under 5(1)(c) and (d) read with section 5(2). there was utter confusion in respect of the date on which possession of the acquired land was given to the appellant and the date on which it was given to the contractor for carrying on the work, as also in respect of the fact whether there was any crop standing when the appellant took possession of the land and at what period of time the crop was cut and the work commenced. ANALYSIS though it is desirable that the facts should be referred to in the sanction itself, nonetheless if they do not appear on the face of it, the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities. it is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded. it is apparent that the facts which the central govt. considered for the purposes of according sanction were (a) that the appellant as a public servant was entrusted with crops situated on the land acquired for the extension of air field, sirsa ; (b) that by abusing his position as a public servant he allowed the standing crops to be cut from the said land. c. that by corrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage of rs. 2500 as the value of the crops to be cut from the land and/or he dishonestly or fraudulently misappropriated that sum by converting it into his own use instead of depositing the said sale price in the govt. treasury. it would be seen therefore that under section 5(1)(c) a public servant will be said to commit the offence of misconduct in hi&; duties if he dishonestly allows any other persons to convert to his own use property which is entrusted to the said public servant the facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under section 5(1)(c) also in their contemplation. no work had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given. nothing is specifically mentioned about possession of the acquired land being given to him on that date. re no basis for sanction for a charge under section 5(1)(c. a person could not be charged merely with the breach of a particular provision of the order; he must be charged with the commission of certain acts which constitute a breach, and it is to that prosecution that is for having done acts which constitution breach of the order-that the sanction 'is required. in the present case -there is nothing on the face ,of the sanction, and no extraneous evidence, to show that the sanctioning authority knew the facts alleged to constitute a breach of the order, and the sanction is invalid. the case of jaswant singh v. the state of puniab. 1957 indlaw sc 59 was also cited by the respondent's advocate in support of the contention that the trial of two offences requiring sanction was not valid. STATUTE the facts disclose the commission of the offence of criminal misconduct as defined in section 5(1)(d) read with section 5(2) of the prevention of corruption act 1947 by major som nath accused. under 5(1)(c)-a public servant is said to commit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise converts for' his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, and under (d) if he by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.

The respondent, as plaintiff, filed a suit against the appellant, as defendant, in the Original side of the Bombay High Court for the enforcement of its claim for a large amount of over Rs. 40 lakhs. The appellant not only contested the claim but also made a counter claim. The appellant made a request that in the event of a decree being passed against them, they may be allowed to pay the decretal amount in instalments. A single Judge dismissed the counter claim and passed a decree in favour of respondent and allowed the decretal amount to be paid in instalments. Delivery of Judgment which commenced on 12th December 1980 was concluded on 16th December 1980, upon which the advocates for the appellant addressed a letter to the Prothonotary and Senior Master, High Court, requesting that the accompanying memorandum of appeal be taken on file. This appeal which was numbered 36 of 1981 26 was filed on 20th January, 1981. The appeal was directed against the order in respect of instalments. On 21st January 1981, when the matter was called for admission before a Division Bench the appellant asked for leave to withdraw the appeal and the appeal was allowed to be withdrawn. A week after the withdrawal of appeal No. 36 the appellant filed an appeal against the judgment taking grounds relating to the merits of the case and also the direction as to instalments. This appeal was numbered 44 of 1981. After this appeal was heard on merits for a few days, the respondent raised a preliminary objection that because the appellant had earlier filed appeal No. 36 against the provision regarding instalments and which had been withdrawn, the present appeal No. 44 was not maintainable. The Division Bench upheld the preliminary objection and dismissed appeal No. 44 on the ground that the appellant had by filing appeal No. 36 against the provision relating to instalments abandoned its right to challenge the decree on merits. The appellant contended in this Court that the filing of earlier appeal No. 36 or the withdrawal thereof does not affect the right of appellant to prefer appeal No. 44 against the decree on merits. Appeal No. 36 was filed against the order of the High Court passed under Order 20, r. 11 of the Code of Civil Procedure in regard to instalments only and not against the decree. Appeal No. 36 had been filed soon after the judgment had been pronounced and long before the decree incorporating the order regarding instalments had been drawn up. Appeal No. 36 must be considered to be an appeal against the order and not against the decree. The right to prefer an appeal is a creature of statute. The order regarding instalments is not appealable under C.P.C. and such an order cannot also be considered to be a 'Judgment ' within the meaning of clause 15 of the Letters Patent. Appeal No. 36 which was against the order regarding instalments was incompetent and was therefore no appeal in the eye of law and for all legal purposes was non est. Even if appeal No. 36 has to be considered an appeal against the decree in view of amended provision of Order 20, r. 11 of C.P.C., the said appeal still must be held to be incompetent and no appeal in the eye of law as the appeal was filed without a certified copy of the decree and was even withdrawn before a certified copy of the decree could be filed. Appeal No. 44 filed against the decree in terms of the provisions contained in the Original Side Rules of Bombay High Court becomes a proper and competent appeal as the earlier appeal No. 36 was not a valid appeal in the eye of law. The provisions of Order 2, r. 2 and Order 23, r. 1 of C.P.C. do not in any way affect the maintainability and the merits of appeal No. 44 as the cause of action and the subject matter of appeal No. 44 are entirely different from the cause of action and the subject matter of appeal No. 36. The appellant did not waive his statutory right to file the appeal. The appellant by his conduct has also not disentitled himself to file Appeal No. 44. Appeal No. 36 was filed on the advice of lawyer under mistaken belief; mistaken advice of a lawyer cannot be the foundation of a plea of estoppel. No prejudice has been caused to the respondent by filing and withdrawal of appeal No. 36 by the appellant. The respondent contended that in view of the amended provisions of Order 20, r. 11, the order regarding instalments which is required to be incorporated in the decree necessarily forms a part of the decree. In view of the 27 provisions contained in Order 2, r. 2 and Order 23, r. 1 of C.P.C. it was open to the appellant to prefer an appeal against the decree or to appeal against any part thereof. The appellant preferred to file appeal No. 36 only against the part of the decree relating to instalments and not against the decree as a whole. The filing of appeal restricted to the directions as to the instalments bars a subsequent appeal against the decree on merits. The appellant having obtained a benefit or advantage under the decree to the prejudice of respondent cannot now question the correctness of the decree passed. Allowing the appeal, ^ HELD: The provisions of Order 20, r. 11, Order 41, r. 1 Order 5, r. 2 and Order 23, r. 1 of the Code of Civil Procedure do not deprive the appellant of his right to file appeal No. 44. [54 D] The right to prefer an appeal is a right created by statute. A right of appeal may be lost to a party in appropriate cases by the provisions of law and also by the conduct of the party. The law of limitation may deprive the party of the right he may enjoy to prefer an appeal. Also in appropriate cases a party may be held to have become disentitled from enforcing the right to appeal which he may otherwise have. [46 A C] In the instant case the defendant appellant did have a right of appeal against the decree by virtue of the provisions of section 96 read with Order 41 of Civil Procedure. The appeal has been filed within the period of limitation, The law of limitation, therefore, does not defeat the right of the appellant to file an appeal. [46 C D] Order 20, r. 11 makes provisions for postponement of payment of money decree and of its payment in instalments and lays down the procedure for directing payment of a money decree in instalments. The amendment introduced in 1976 to Order 20, r. 11 requires that any provision directing the payment of the amount decreed shall be postponed or shall be made by instalments may be incorporated in the decree. The direction regarding payment of the decretal amount is an independent order which is required to be incorporated in the decree and it can only be incorporated in the decree when the decree is drawn up. It retains the character of an order till it is so incorporated in the decree. The rules of the Original Side of the Bombay High Court make necessary provisions as to the drawing up of a decree. In view of procedure laid down in the rules for the drawing up of a decree, there is bound to be a time lag between the judgment and the drawing up of a decree, in which the order regarding instalment is to be incorporated. Appeal against any provision granting instalments or refusing to grant instalments will not be competent if the direction granting or refusing to grant instalments is considered to be an order. Such an order is not appealable under the Code. Such an order will also not be a 'judgment ' within the meaning of clause 15 of the Letters Patent and will not be appealable as such if however, the direction with regard to instalments is considered to be a part of the decree, an appeal will undoubtedly lie as an appeal from a decree. [47 D E, 41 G H, 41 C D, 47 F H] 28 The provisions of Order 20, r. 11 do not deprive the appellant in the instant case of his right to prefer an appeal against the decree. The earlier appeal No. 36 of 1981 had been filed long before the decree in which the order regarding instalments under Order 20, r.11 of the Code was to be incorporated had been drawn up. As at the time of filing the earlier appeal No. 36 the order regarding instalments had not been incorporated in the decree, the order retained its character of an order. The earlier appeal No. 36 at the time when it was filed, should therefore be regarded as an appeal against an order. The precipe filed for the drawing up of the order, the letter to the Prothonotary and Senior Master of the High Court by the Advocates for the appellant, the memorandum of appeal filed and the amount of stamp furnished on the memorandum are facts which go to indicate that the earlier appeal had been filed against the order regarding instalments treating the same to be an order. The appeal No. 36 must therefore be held to be incompetent. If the earlier appeal No. 36 were to be considered to be an appeal against the decree, the appeal would still be incompetent, because the appellant had furnished the amount of stamp necessary for preferring an appeal against the order and the requisite stamp in respect of an appeal against a decree had not been affixed. [46 E, 48 D E, 48 H, 49 A B, 48 B, 43 D C] Under Order. 41, r.1, every appeal has to be preferred in the from of a memorandum signed by the appellant or his pleader and presented to the court or to such officer as it appoints in that behalf, and has to be accompanied by a copy of the decree appealed from, and of the judgment on which it is founded. Rule 1 empowers the appellate court to dispense with the filing of the judgment but there is no jurisdiction in the appellate court to dispense with the filing of the decree. The requirement that the decree should be filed alongwith the memorandum of appeal is mandatory and in the absence of the decree the filing of the appeal would be incomplete, defective and incompetent. So long as the certified copy of the decree is not filed there is no valid appeal in the eye of law. Though by virtue of the provisions of the Original Side Rules of the Bombay High Court the earlier appeal could be permitted to be filed without a certified copy of the decree or order, the appeal would not be valid and competent unless the further requirement of filing the certified copy had been complied with. [49 G H, 50 A, 53 C, F] In the instant case, at the time when the earlier appeal No. 36 had been withdrawn, the certified copy of the decree had not been filed. The said appeal without the certified copy of the decree remained an incompetent appeal. The withdrawal of an incompetent appeal which would indeed be no appeal in the eye of law cannot in any way prejudice the right of any appellant to file a proper appeal, if the right of appeal is not otherwise lost by lapse of time or for any other valid reason. [52 F G] Order 2, r.2, contemplates that at the time of the institution of the suit, the whole of the claim which the plaintiff is entitled to make in respect of the cause of action, has to be made and also deals with the consequences of non compliance with the requirements of the said rule. It is doubtful whether the principles underlying this rule can be said to be applicable to an appeal. This rule is applicable only to suits and cannot in terms apply to appeals. Even if 29 an appeal be considered to be a continuation of a suit for certain purposes, the provision of this rule cannot in terms be made applicable to an appeal in view of the scheme of the said rule and the language used therein. [53 F G, 53 E F] In the instant case the provisions of Order 2, r.2 of the Code do not stand in the way of the appellant in the matter of filing the subsequent appeal No. 44. Even if the principles underlying Order 2, r.2 are considered as applicable to an appeal the maintainability of the appeal No. 44 cannot be held to be affected in any way as the cause of action in respect of the present appeal is entirely different from the cause of action on which the earlier appeal was filed. [23 A B, G] Order 23, r.1 of the Code does not also stand in the way of the maintainability of the instant appeal No. 44. Apart from the incompetency of the earlier appeal No. 36, the subject matter of the said appeal was entirely different from the subject matter of the present appeal. [53 H, A B] The provisions of the Code of Civil Procedure contained in Order 20, r.11, Order 2. r. 2 and Order 23,r. 1 do not in terms deal with any question in relation to the right of appeal or the extinguishment thereof. These provisions do not by themselves confer any right of appeal on a party or deprive any party of the right of appeal which a party may enjoy. These are not the statutory provisions which either confer a right of appeal on a party or deprive a party of any such right. [54 B C] A mere prayer for postponement of payment of decretal amount or for payment thereof in instalments on the basis of the provisions contained in Order 20, r.11 (1) of the Code at a time when the decision in the suit is yet to be announced can never be considered to amount to such conduct of the party as to deprive him his right to prefer an appeal against any decree, if ultimately passed, and to disentitle him from filing an appeal against the decree. [55 G H] In the matters of litigation the litigant who is not expected to be familiar with the formalities of law and rules of procedure is generally guided by the advice of his lawyers. The statement of the lawyers recorded by the Division Bench in its judgment clearly goes to indicate that the lawyer had advised filing of the earlier appeal under mistaken belief. The act done by the defendant appellant on the mistaken advice of a lawyer cannot furnish a proper ground for depriving the defendant appellant of his valuable statutory right of preferring an appeal against the decree. The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant appellant as to disentitle him to maintain the present appeal. [56 C, D; F, G] The present appeal No. 44 had been filed long before the decree had been drawn up, and, there can be no question of execution of any decree at the time when that appeal was filed. The question of the defendant appellant having obtained an advantage under the decree does not therefore really arise. [59 A B] 30

Appeal No. 264 of 1960. Appeal by special leave from the Award dated October 12, 1959, of the Industrial Tribunal, Bombay in Reference (IT) No. 81 of 1959. section T. Desai, Sukumar Ghose and B. N. Ghose, for the appellant. C. L. Dhudia and K. L. Hathi, for the respondents. April 3. The Judgment of the Court was, delivered by GAJENDRAGADKAR, J. This appeal by special leave is directed against the award passed by the industrial tribunal in a matter which was referred to it under section 36A(2) of the , for interpretation of certain terms of the award made by the said tribunal on April 28, 1951, in Reference No. 168 of 1950. It appears that a dispute had arisen between the appellant M/s. Jeewanlal (1929) Ltd. and its workmen in regard to certain demands made by the respondents against the appellant in 1950. The said dispute was referred for adjudication as a result of which an award was passed which, inter alia, provided for a gratuity scheme. Some provisions of this award have been referred for interpretation in the present reference. On August 31, 1957, resignation submitted by the appellant 's employee Bhanu Bala was accepted by the appellant. The said employee had joined the appellant 's service in 1929 but there was a break in the continuity of his service for nearly 81 months because he had remained absent from duty without permission or leave from. February 14, 1945 to the end of October, 1945. According to the appellant the said employee was not entitled to any gratuity under the scheme framed by the award. Even so the appellant offered him Rs. 1,165 and odd on compassionate grounds. The employee was not willing to accept that amount because he claimed that he was entitled to Rs. 2,282.50 nP. by way of gratuity. The demand thus made by the employee led to an industrial dis pute which was taken by the employee before the 720 First Labour Court at Bombay under section 33C of the Act. The Labour Court entertained the application, decided the point in dispute in favour of the employee and directed the appellant to pay him Rs. 1,781 80 nP. as gratuity. The appellant then moved the Bombay High Court for a writ under articles 226 and 227 on the ground that the Labour Court had no jurisdiction to entertain the application made before it by the employee. This writ petition was allowed and the order passed by the Labour Court was quashed. It was at this stage that the Government of Bombay referred the question of interpretation of the term "continuous service" contained in the award of 1951 to the Industrial Court under section 36A(1) of the Act. That is how the Industrial Court was possessed of the matter. It has held that the words "continuous service" I as used by the tribunal when it framed the award in question mean service not broken or interrupted by the termination of the contract of employment by either the employer or the employee or by operation of law. It is this interpretation the correctness of which is challenged by the appellant in its present appeal. The relevant part of the gratuity scheme which was framed by the tribunal in the earlier reference reads thus: (i) On the death of an employee while in the service of the company or on an employee becoming physically or mentally disabled to continue further in service half a months wages for each year of service subject to a maximum of ten months ' wages to be paid to him or to his heirs, executors, assigns or nominees as the case may be. (ii) On the termination of his service by the company after five years ' continuous service Gratuity at the same rate as above. (iii)On voluntary retirement or resignation of an employee after 15 years ' continuous service Gratuity at the same rate as above. As we have already seen the employee Bhanu Bala resigned and his resignation was accepted in August, 1957. He claimed the benefit of el. (iii) whereas the 721 appellant contended that the said employee had not been employed in continuous service for the requisite period because there was a break in his service between February 14, 1945, to the end of October, 1945, and that affected the continuity of his employment which made his claim incompetent under el. (iii). This contention has been rejected by the tribunal. Mr. section T. Desai contends that in interpreting the words "continuous service" in cl. (iii) we should compare the provisions of section 49B(l) along with the explanation in the Indian Factories Act, 1934 (XXV of 1934) as well as section 79(1) along with explanation (1) in the Indian (63 of 1948) prior to its amendment in 1954; and he argues that unauthorised absence from work should normally cause a break in service so that if an employee, after uNauthorised absence from work, is allowed to resume after such unauthorised absence he should not be entitled to claim continuous service in view of the break in his service. In support of this argument reliance has been placed on the decision of this Court in Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd. (1). In that case this Court has held that the continuity of the service of the workers was interrupted by the illegal strike and so they were not entitled to claim holidays with pay under section 49B(1) of the Indian . It would, however, be noticed that the said decision turned upon the definition of the word "strike" in section 2(q) of the , read with the relevant provision of section 49 B of the Indian Factories Act, 1934; and there can be no doubt that in a different context the same words can and often have different meanings. As this Court has observed in Budge Budge Municipality vs P. It. Mukherjee (2), "the same words may mean one thing in one context and another in different context. This is the reason why decisions on the meaning of particular words or collection of words found in other statutes are scarcely of (1) ; (2) , 198. 91 722 much value when we have to deal with a specific statute of our OWn; they may be helpful but cannot be taken as guides or precedents". Therefore, the meaning attributed to the words "continuous service" in the context of the Factories Act may not have a material bearing in deciding the point in the present appeal. The same comment falls to be made in regard to the argument based on the definition of the expression "continuous service" contained in section 2(eee) of the . The said section provides that "continuous service" means uninterrupted service and includes service which may be interrupted merely on account ' of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workmen. This definition is undoubtedly relevant in dealing with the question of continuous service by reference to the provisions of Industrial Disputes ' Act but its operation cannot be automatically extended in dealing with an interpretation of the words "continuous service" in an award made in an industrial dispute unless the context in which the expression is used in the award justifies it. In other words, the expression "continuous service" may be statutorily defined in which case the definition will prevail. An award using the said expression may itself give a definition of that expression and that will bind parties in dealing with claims arising from the award. Where, however, the award does not explain the said expression and statutory definitions contained in other Acts are of no material assistance it would be necessary to examine the question on principle and decide what the expression should mean in any given award '; and that is precisely what the tribunal had to do in the present case. "Continuous service" in the context of the scheme of gratuity framed by the tribunal in the earlier reference postulates the continuance of the relationship of master and servant between the employer and his employees. If the servant resigns his employment service automatically comes to an end. If the employer terminates the service, of his employee that 723 again brings the continuity of service to an end. If the service of an employee is brought to an end by the operation of any law that again is another instance where the continuance is disrupted; but it is difficult to hold that merely because an employee is absent without obtaining leave that itself would bring to an end the continuity of his service. Similarly, participation in an illegal strike which may incur the punishment of dismissal may not by itself bring to an end the relationship of master and ser vant. It may be a good cause for the termination of service provided of course the relevant provisions in the standing orders in that behalf are complied with; but mere participation in an illegal strike cannot be said to cause breach in continuity for the purposes of gratuity. On the other hand, if an employee continues to be absent from duty without obtaining leave and in an unauthorised manner for such a long period of time that an inference may reasonably be drawn from such absence that by his absence he has aban doned service, then such long unauthorised absence may legitimately be held to cause a break in the continuity of service. It would thus always be a question of fact to be decided on the circumstances of each case whether or not a particular employee can claim continuity of service for the requisite period or not. In our opinion, therefore, the view taken by the tribunal is substantially right though we would like to make it clear that in addition to the cases where according to the tribunal continuity of service would come to an end there would be the class of cases where long unauthorised absence may reasonably give rise to an inference that such service is intended to be abandoned by the employee. With this modification we confirm the award and dismiss the appeal. There would be no order as to costs. Appeal dismissed.

One Bbanu Bala had joined the appellant 's service as a workman in 1929 and resigned in 1957. During this period of his service he had remained absent from duty without permis sion or leave for nearly 8 months between February, 1945, to 718 October, 1945. Under an Award made between the company and its workmen a scheme was framed wherein the concerned clause was that "on voluntary retirement or resignation of an employee after 15 years continuous service gratuity at the same rate as above. " Dispute arose with regard to the question of granting gratuity to Bhanu Bala who claimed the benefit of the said clause and the company denied the claim on the ground that the said employee had not been in continuous service for the requisite period because there was a break in his service and that affected the continuity of his employment which made his claim incompetent. The question was as to the interpretation of the term "continuous service" contained in the Award of 1951. Held, that in different context the same word can often have different meanings and the expression "continuous service" would always be a question of fact to be decided on the circumstances of each case whether or not a particular employee can claim continuity of service for the requisite period. Where the expression "continuous service" was statutorily defined then the definition would prevail; and where an award itself gave a definition of the expression that would bind the parties in dealing with claims arising from the award but where the award did not explain the expression "continuous service" and statutory definitions contained in other Acts were of no material assistance it would be necessary to examine the question on principle and decide what the expression should mean in any given award. "Continuous service", in the context of the scheme of gratuity, postulates the continuation of relationship of master and servant between the employer and employees which could come to an end either by act of parties, i.e., by resignation or termination of service, or by the operation of law; but the continuity of service would not come to an end merely because an employee was absent without obtaining leave; though. there would be cases where long unauthorised absence may reasonably give rise to an inference that such service was intended to be abandoned by the employee. For the purpose of gratuity mere participation in an illegal strike could not be said to cause breach in the continuity of service though it may he a good cause for its termination, provided the relevant provisions in the Standing Orders in that behalf were complied with. Buckingham and Carnatic Co. Ltd. vs Workers of the Bucking ham and Carnatic Co. Ltd.; , , distinguished. Budge Budge Municipality vs P. R. Mukherjee, [1953] 1 L.L.J. 195, referred to. 719

The appellant was a shareholder of a company known as Mafatlal Gagalbhai and Co., Ltd. The Company with its registered office at Bombay was at all material times resident in British India. It was also doing business in the former Baroda State and used to keep its profits derived in that State with Mafatlal Gagalbhai Investment Corporation, Navsari. In the year 1949 Mafatlal Gagalbhai and Co. Ltd. declared dividends out of profits which had accrued partly in British India and partly in the Indian State. The appellant was assessed to income tax on the dividends earned by her. She did not bring those dividends into British India and claimed the benefit of para. 4 of the Merged States (Taxation Concessions) Order. The Tribunal held that the income did not accrue to the appellant in the Baroda State but it did not decide the question whether she was entitled to the benefits of the Taxation Concessions Order. The High Court on a reference to it held that para. 4 of the Taxation Concessions Order. did not apply to the assessee but it did not decide the other question as to where the income had accrued to the assessee. On appeal by special leave the appellant contended, inter alia, that since the Tribunal had not gone into the question of the applicability to the assessee of the Concessions Order and had not expressed any opinion thereon, the High Court could not raise the question on its own and decide it: Held, that the High Court exceeded its jurisdiction in going outside the point of law decided by the Tribunal and deciding a different point of law. Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal. It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order. New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax, , Scindia Steam Navigation Co. Ltd. vs Commissioner of Income tax, , Commissioner of Incometax vs Breach Candy Swimming Bath Trust, and Ismailia Grain Merchants Association vs Commissioner of Incometax, [1957] 31 I.T.R. 433, distinguished. Mash Trading Co. vs Commissioner of Income tax, , considered.

Respondent No. 1 a Private Limited Company, was sanctioned a loan of Rs.30 lakh by the Appellant Corporation for the setting up of a factory. To secure this loan a mortgage deed of certain properties was executed by the Company and Respondents 2 to 4 as its directors had executed a personal Surety Bond without any security for its repayment. After obtaining a part of the sanctioned loan, which was to be given in phases, the Company became disinterested in availing of the balance amount. Consequently the Corporation demanded back the amount ahead taken together with interest and on the company 's failure to do so, it took over the Industrial Concern under section 29 of the Act and initiated steps to realise its dues by putting the property to sale. Having failed to recover the amount as no adequate offer was forthcoming despite repeated advertisements, it filed a petition before the Bombay High Court under sections 31 and 32 of the Act both against the Company as well as its directors sureties praying for a decree in the sum of Rs. 15,87,391.20 to be passed against them jointly and severally. The respondents contested the petition contending (a) that a petition under sections 31 and 32 of the Act could be filed only before the City Civil Court and the High Court had no jurisdiction to entertain it, (b) that no money decree can be passed under sections 31 and 32 of the Act, and (c) that the provision in the Act relating to enforcement of the 481 liablity of surety were ultra vires of Article 149 of the Constitution. The learned single judge relying on an earlier decision of the Bombay High Court reported in 1987 Mah. L.J 243 held that the High Court had to entertain the petition but on merits took the view that no money decree could be passed under sections 31 and 32 even against the sureties and since in the instant case the sureties had not given any security except their personal guarantee, the same could be enforced only in the ordinary course and not under the special machinery provided under the Act. In view of his findings on the first two pleas no arguments were entertained on the last plea and accordingly the petition was dismissed. The Division Bench while dismissing the appeal not only upheld the finding of the single Judge on merits but also overruled the decision reported in and held that the High Court had no jurisdiction to entertain a petition under sections 31 and 32 of the Act. The Corporation came up in appeal before this court by special leave against this decision of the High Court of Bombay. The impugned judgement was assailed by the Appellant Corporation both on merites and on the plea of juridiction. The respondents in reply asserted that the findings of the High Court on both pleas were unassailable. Allowing the appeal, by a majority decision, HELD: A. By the Full Court (i)The extent of the liability stated in the application as contemplated by sub section (2) of section 31 of the Act would represent the value of the claim of the Corporation and if since value is upto Rupees Fifty Thousand, the application would lie in the City City Court and if it is more than that amount it would lie in the High Court. This interpretation would give meaning and relevance to the words "having jurisdiction" used in sub section (11) of section 32. A different interpretation would render superfluous or otiose not only the words "having jurisdiction" but also the words and in the absence such court, by the High Court, occurring in the said sub section (11) inasmuch as in a Presidency town, in terms of territorial jurisdiction, the jurisdiction of the City Civil Court and of the High Court is co terminus [495D F] (ii) In the instant case the extent of liability of the surety being more than Rupees fifty thousand, the application could only have been filed and was rightly filed in the High Court and the finding in the 482 judgment under appeal to the contrary for holding that the High Court had no jurisdiction to entertain the application cannot be sustained. [497A] B. Per N. D. Ojha, J. for himself and Ranganathan, J. (iii) There can be no doubt that the term, "any surety" used in clause (aa) in sub section (1) of section 31 of the Act, will include not only a surety who has given some security but also one who has given only a personal guarantee. In our opinion, in a case where the relief claimed in the application under section 31(1) of the Act is for enforcing the liability of a surety who has given only a personal guarantee, sub section 4(A) of section 32 where no cause is shown and clause (da) of sub section (7) where cause is shown, contemplate cutting across and dispensing with the provisions of the Code of Civil Procedure from the stage of filing a suit to the stage of obtaining a decree against the surety, the passing of an order which can straightaway be executed as if it were a decree against the surety which may be passed in the event of suit being filed. [498F, 499E] (iv) In the absence of any provision such as sub section (8) of section 32 of the Act applying the manner provided in the Code for the execution of a decree against a surety only "as far as practicable" the entire provision contained in this behalf in the Code shall be applicable. This would be so in view of the use of the expression "any other law for the time being applicable to an industrial concern" used in section 46B of the Act. That the Code is applicable to an industrial concern also is not in dispute and cannot be doubted. [50OH 501A] (v) Even in the absence of section 46B of the Act the provisions of the Code would have been attracted in the matter of enforcing the liability of a surety in view of the decision of this Court in National Sewing Thread Co. Ltd. vs James Chadwick & Bros. Ltd., ; inasmuch as the District Judge while exercising jurisdiction under sections 31 and 32 of the Act is not a persona designate but a court of ordinary civil jurisdiction. [501B D] (Per section C. Agrawal, J. Dissenting.) It cannot be comprehended that while making provision which would enable passing of an order in the nature of a money decree against a surety on an application under section 31 of the Act, Parliament would have refrained from making a corresponding provision prescribing the procedure for carrying into effect such an order. It 483 appears to be more in consonance with the scheme of the Act and the object underlying sections 31 and 32 that by introducing the amendments in sections 31 and 32 of the Act the Parliament intended to place the surety on the same footing as the principal debtor so as to enable the Financial Corporation to obtain relief against the properties of the principal debtor as well as the surety [515E G] If considered in this perspective, the expression "enforcing the liability of any surety" in clause (aa) of section 31(1) would mean enforcing the liability of a surety in the same manner as the liability of principal debtor is enforced, by attachment and sale of property keeping in view that the proceedings under sections 31 and 32 of the Act are akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree. The relief of a money decree sought against the sureties respondents 2 to 4 was not maintainable and the said relief could not be granted to the appellant in proceedings under section 31 of the Act. As a result, the petition filed by the appellant must be dismissed and for the same reason this appeal must fail. [515G 516A, 516D E] Munnalal Gupta vs Uttar Pradesh Financial Corporation & Anr. ,A.I.R. 1975 Allahabad 416; Thressiamma Varghese vs K. section F. Corporation, A.I.R. 1986 Kerala 222; Maharashtra State Financial Corporation vs Hindtex Engineers Pvt. Ltd., ; Kayastha Training & Banking Corporation Ltd vs Sat Narain Singh, All. 433; M. K. Ranganathan & Anr. vs Government of Madras & Ors. ,[1955] 2 S.C.R. 374; The Central Talkies Ltd., Kanpur vs Dwarka Prasad, ; , referred to. Maganlal V. MIS. Jaiswal Industries, Neemach & Ors., ; ; M/s. Everest Industrial Corporation & Ors. vs Gujarat State Financial Corporation, [1987] 3S.C.C. 597; Parkash Playing Cards Manufacturing Co. vs Delhi Financial Corporation, ; Gujarat State Financial Corporation V. Natson Manufacturing Co. Pvt. Ltd. & Ors., , distinguished. West Bengal Financial Corporation vs Gluco Series Pvt. Ltd. ,A.I.R. , approved.

The appellant carried on the business of manufacturing and selling pharmaceutical products in Greater Bombay. In disputes arising bet the appellant and the respondents the Industrial Tribunal had to deal with questions relating to dearness allowance, classification of grades and fixation of wages and the incentive bonus scheme as modified 'by the company. In appeal against the award of the Tribunal, HELD : (i) The decisions of this Court in Gramophone Company Ltd. vs its Workmen and The Indian Link Chain Manufacturers Ltd. vs Their Workmen show that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate. The latter decision is directly in point to the effect that provision for depre ciation cannot be deducted. [582E., 585B C] Gramophone Company Ltd. vs Its Workmen, and The Indian Link Chain Manufacturers Ltd. vs Their Workmen, , applied. Ahmedabad Millowners ' Association Etc. vs The Textile Labour Association, ; , referred to. (ii)So long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region there is no reason why they should not be taken into account for purposes of being teated as comparable units, provided that the tests for such purposes as laid down by this Court are satisfied. The object of industrial adjudication is to secure as far as possible uniformity of service conditions among industrial units in the same region,. if a concern having foreign collaboration properly satisfies the tests of comparability it would be improper to regard such unit as uncomparable merely on the ground that it is a concern with foreign collaboration or interest and that the unit with which it is sought to be compared is entirely of Indian origin and resources. [591A C] Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen, [1957] I.C.R. Bombay 1206 and Alembic Chemical Works Ltd. Baroda vs Its, Workmen ; , Hindustan Antibiotics Ltd. vs The Workmen and Ors., ; , relied on. (iii)On the materials before it the Tribunal was justified in treating M/S. Burroughk Wellcome & Co. as a unit comparable with the appellant. 568 The fact that Burroughs Wellcome employed a lesser labour force did not deserve much importance because the business performance of the two companies was equal. Once Burroughs Wellcome Co. was treated as a comparable unit the wage scales awarded by the Tribunal could not be considered to be unjustified. [598G 599A D] Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and Ors., , applied. (iv)On the facts of the case it was not possible to disagree with the view of the Tribunal that the impact of the Drugs (Price Control ) Order will not be such as to affect materially the business prospects of the appellant company. If the Order materially affects the prosperity of the appellant 's trade it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order their financial position has weakened to such an extent that they cannot bear the burden of the wage structure fixed by the present award, the matter may have to be examined on its merits. [598B C] Williamsons (India) Private, Ltd. vs Its Workmen, , referred to. (v)The Tribunal had acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories. The objection based on section 10(4) of the must be rejected. [599E 600B] (vi)When the Tribunal raised in the gratuity scheme the ceiling limit from 15 months to 17 1/2 months according to the pattern obtaining in Buroughs Wellcome Company there was no question of principle involved justifying an objection by the appellant company. [60OC D] (vii)There were different systems of dearness allowance for the operators and the clerical and subordinate staff in the appellant company. That such a different system of dearness allowance for employees working under the same employer is not warranted is clear from the decisions of this Court in the cases of Greaves Cotton & Co. and Bengal Chemical & Pharmaceutical Works Ltd. Therefore the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant. [600E F] Greaves Cotton and Co. and Ors. vs Their Workmen, ; and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen; , , relied on. (viii)From the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points. At the time when the demand for revision of wages scales and dearness allowance was made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high. That clearly showed that the workmen bad made out a case for revision of wage scales and dearness allowance. The contention of the appellant that because a system of dearness allowance already existed there should be no revision of the same, could not be accepted. [6O2C; 601A] Co. ; and Remington and of India vs Its Workmen, , followed. 569 (ix)When the slab, system of dearness allowance was prevailing in the industry in the region the Tribunal committed no error in introducing a similar pattern in the case of the appellant. [603C D] Kamani Metals & Alloys Ltd. vs Their Workmen, ; , referred to. (x)In regard to the incentive Bonus Scheme the Tribunal had stated that the necessary material for that purpose had not been made available and as such it had not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index. This Court could do nothing further,in this 'regard and the result would be that observations made by the Tribunal will have full, effect. [604G H]

The petitioner was serving as an officiating Teleprinter Supervisor at Jaipur when the employees of the Posts and Telegraphs Department went on strike from the midnight of July 11, 1960, throughout India and there was a similar strike at Jaipur. The petitioner 's case was that he was on duty that day from 12 noon to 8 p.m. and after his duty was over, he did not go home but went to the dormitory where he fell asleep as he was tired. On hearing some noise he woke up at 11 30 p.m. and wanted to go home but was arrested by the police under the Essential Services Maintenance Ordinance, No. 1 of 1960. The criminal charge was however withdrawn. On July 21, 1960, a chargesheet was served on the petitioner in the following terms: "That Shri Radhey Shyam Sharma I C/S Telegraphist, CTO Jaipur committed gross misconduct in that on the midnight of the 11th July, 1960, he took part in a demonstration in furtherance of the strike of the P. & T. Employees in violation of the orders dated 8 7 1960 issued by the Government of India under the 'Essential Services Maintenance Ordinance, 1960 (1 of 1960) ' prohibiting strikes in any Postal, telegraph or telephone service". The enquiry officer found him guilty of the charge and ordered that his pay should be reduced in the time scale by three stage,% for a period of two years and on restoration the period of reduction was not to operate to postpone his future increments. 0n appeal, the Director General considered the whole matter on merits and rejected the appeal. In this Court it was urged that the punishment imposed upon the petitioner was violative of his fundamental rights under articles 19(1)(a) and (b), reliance being placed on two cases of this court in Kameshwar Prasad vs State of Bihar and O. K. Ghosh vs E. X. Joseph; that sections 3, 4 and 5 of the Ordinance were ultra vires, as they contravened article 19(1.)(a) and (b) and that in any case there was no evidence on which it could ' be found that the charge against him had been proved. Held: The provisions of the Ordinance in sections 3, 4 and 5 did not violate the fundamental rights enshrined in article 19(1)(a) and (b). A perusal of article 19(1) shows that there is no fundamental right to strike, and all that the ordinance provided was with respect to any illegal strike as provided in the Ordinance. There was no provision in the Ordinance which in any way restricted those fundamental rights. It was not in dispute that Parliament had the competence to make a law in the terms of the Ordinance and therefore the President had also the power to promulgate, such an Ordinance. 404 The competence of the legislature therefore being not in dispute it cannot be held that the Ordinance violated the fundamental rights guaranteed under article 19(1)(a) and (b). All India Bank Employees Association vs National Industrial Tribunal, ; , referred to. The two cases relied on by the petitioner have no relevance in connection with the charge in the present case. The punishment given to the petitioner cannot therefore be set aside on the ground that the charge was in violation of the fundamental rights guaranteed under article 19(1)(a) and (b). Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369 and O. K. Ghosh vs E. X. Joseph, [1963] Supp. 1 S.C.R. 789, held inapplicable. If on the undisputed facts the authorities came to the con clusion that the petitioner acted in furtherance of the strike 'Which was to commence half an hour later and was thus guilty of gross misconduct, it could not be said that there was no evidence on which the authorities concerned could find the charge framed against the petititoner proved.

The appellant was employed in the State Bank of Patiala, The Mall, Patiala from July 13, 1973 till August 21, 1974, when her services were terminated. Despite some breaks in service for a few days, the appellant had admittedly worked for 240 days in the year preceding August 21, 1974. According to the workman, the termination of her service was "retrenchment" within the meaning of that expression in Section 2(OO) of the , since it did not fall within any of the excepted cases mentioned in Section 2(OO). Since there was "retrenchment", it was bad for non compliance with the provisions of section 25 F of the . On the other hand, the contention of the management was that the termination of services was not due to discharge of surplus labour. It was due to the failure of the workman to pass the test which would have enabled him to be confirmed in the service. Therefore, it was not retrenchment within the meaning of section 2(OO) of the . The Presiding Officer, Central Government, Industrial Tribunal cum Labour Court, accepted the management 's contention and decided against the workman appellant. Hence the appeal by special leave. Allowing the appeal, the Court ^ HELD: (i) The discharge of the workman on the ground that she did not pass the test which would have enabled him to be confirmed was "retrenchment" within the meaning of section 2(OO) and, therefore, the requirements of section 25F had to be complied with. [892 F G] (ii) Section 2(OO) of the uses a wide language particularly the words "termination. for any reason whatsoever". The definition "retrenchment" expressly excludes termination of service as a "punishment inflicted by way of disciplinary action". It does not include, voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill health. The Legislature took special care to mention that these were not included within the meaning of "termination by the employer of the service of a workman for any reason whatsoever". This emphasises the broad interpretation to be given to the expression "retrenchment". [887 E H, 888 A] 2. If due weight is given to the words "the termination by the employer of the service of a workman for any reason whatsoever" and if the words 'for any reason whatsoever" are understood to mean what they plainly say, it is difficult to escape the conclusion that the expression 'retrenchment ' must include every termination of the service of a workman by an act of the employer. The underlying assumption, of course, is that the undertaking is running as an under 885 taking and the employer continues as an employer but where either on account of transfer of the undertaking or on account of the closure of the undertaking the basic assumption disappears, there can be no question of 'retrenchment ' within the meaning of the definition contained in section 2(OO) of the Act. [888 A C] Hariprasad Shivshankar Shukla vs A.D. Divakar [1957] SCR 121: applied. By introducing section 25 FF and Section 25 FFF, Parliament treated the termination of the service of a workman on the transfer or closure of an undertaking as "deemed retrenchment". The effect was that every case of termination of service by act or employer even if such termination was a consequence of transfer or closure of the undertaking was to be treated as 'retrenchment ' for the purposes of notice, compensation etc. " The expression "termination of service for any reason whatsoever" now covers every kind of termination of service except those not expressly included in section 25F or not expressly provided or by other provisions of the Act as 25 FF And 25 FFF. [888 C F] 4. The manifest object of Section 25 FF and section 25 FFF is to so compensate the workman for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment. The non inclusion of 'voluntary retirement of the workmen, retirement of workmen, on reaching the age of superannuation, termination of the service of a workman, on the ground af continued ill health ' in the definition of 'retrenchment ' clearly indicate and emphasise the true object of 25F, 25 FF and 25 FFF and the nature of the compensation provided by those provisions." [888 F H] Indian Hume Pipe Co. Ltd. vs The Workman ; followed. The submission that notwithstanding the comprehensive language of the definition of retrenchment ' in section 2(OO) the expression continues to retain its original meaning, namely, discharge from service on account of surplus age is not correct. It cannot be assumed that Parliament was undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant. [889 D E] Hariprasad Shivshankar Shukla vs A.D. Divakar [1957] SCR 121, Hindustan Steel Ltd. vs The Presiding Officer, Labour Court Orissa & Ors. ; State Bank of India vs Shri N. Sundaramoney ; Delhi Cloth and General Mills Ltd. vs Shambunath Mukherjee & Ors. ; ; explained and followed. Management of M/s Willcose Buckwell India Ltd. vs Jagannath & Ors. AIR 1974 S.C. 1164; Employees in Relation vs Digmoden Colliery vs Their Workmen ; ; distinguished. L. Robert D 'Souza vs Executive Engineer, Southern Railway and Anr. (1979) KLJ Kerala 211; The Managing Director, National Garage vs J. Gonsalves (1962) KLJ 56. Goodlas Nerolac Paints vs Chief Commissioner, Delhi ; Rajasthan State Electricity Board vs Labour Court ; over ruled.

Since 1942 the respondents had been making ex gratia pay ments to their employees (appellants) in addition to wages and salaries, but these were not regular and in 956, no ex gratia payments were made at all. The appellants claimed that their right to be paid bonus had become an implied term of agreement or a condition of service and, at any rate, it should be paid as customary bonus, and relied on the case of The Graham Trading Co. (India) Ltd. vs Its Workmen, ; The evidence showed that though the payments were made from 1942 to 1952 it was made clear every time that the payments were made as ex gratia: Held, (1) Where payments are made to workers ex gratia and are accepted as such, it is not possible to imply a term of service on the basis of an implied agreement to pay bonus. (2) that there cannot be a customary payment of bonus between employer and employee where terms of service are governed by contract, express or implied, except where the bonus may be connected with a festival, whether Puja in Bengal or some other equally important festival in any other part of the country. The Graham Trading Co. (India) Ltd. vs Its Workmen, ; , explained. (3) that for the year 1956 one month 's basic wage should be paid as Puja bonus to the subordinate staff as it has become customary and traditional in the respondents ' concerns, 383

Under the Standing Orders of the appellant company, its employees were entitled to five holidays with pay on specified dates during each year. Furthermore, by an agreement with the respondents ' union, the company had agreed to grant an additional day 's holiday with pay, thus raising the total number of paid annual holidays to six. In 1958 the Kerala Industrial Establishments (National and Festival Holidays) Act, 1958, was passed and section 3 of the Act required every employer to declare holidays on every 26th January, 15th August and 1st May, and to grant four additional festival holidays each year, on dates to be fixed by the Inspector after consulting the employer and the employees. The number of paid holidays was thus statutorily fixed at 7. In 1962, the company obtained the Inspector 's decision on the four festival holidays and declared the dates on which such holidays would be given. At that time, while an industrial dispute between the company and its employees was pending. the respondents filed applications under section 33A of the , before the Tribunal. It was contended in these applications that the statutory provision in section 3 for 7 paid holidays did not override or abrogate the existing arrangement as to paid holidays and that the holidays to be given under section 3 would be in addition, to the holidays which the appellant was bound to give the respondents under existing arrangements; and that the appellant 's attempt to limit the nUmber of paid holidays to 7 during 1962 was contrary to the terms of employment evidenced by the existing arrangement and therefore violative of section 33. This contention was upheld by the Tribunal. In appeal to this Court, HELD: Under section 3 the statutory requirement is 7 paid holidays each year. If under an existing arrangement the employees were entitled to more than 7 paid holidays, such more favourable right was protected by section 11. The scheme of section 11 clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones and, in the present case, would operate only to raise the total number of holidays from 6 under the existing arrangements to 7 paid holidays in accordance with section 3. [764 B E]

Appeals Nos. 41 44 of 1960. 182 Appeals 'by special leave from the judgment and order dated April 13, 1956, of the former Nagpur High Court in Misc. Civil Case No. 27 of 1954. K. N. Rajagopal Sastri and D. Gupta, for the appel. J. M. Thakar, section N. Andley, Rameshwar Nath, P. L. Vohra and J. B. Dadachanji, for the respondent. March 6. The Judgment of the Court was delivered by KAPUR, J. These are four appeals by the Commissioner of Income tax in Income tax Reference made under section 66 A(2) of the Income tax Act (hereinafter termed the 'Act '). The question for decision is whether the respondent is "an association of persons" within the meaning of section 3 of the Act. The appeals relate to two Income tax assessments and two Excess Profits Tax assessments the former for the year,% 1946 47 and 1947 48 respectively, corresponding to the accounting years February 1, 1945, to September 30,1945, and October 1, 1945, to August 21, 1946, the latter are in regard to chargeable account. ing periods February 1, 1945, to September 30, 1945, and October 22, 1945, to March 31, 1946. The decision of the Excess Profits Tax appeals is consequent upon the decision of the Income tax appeals. The facts may now be stated: In 1945 the Deputy Commissioner of Buldana evolved a scheme for the distribution of cloth in his district and with the sanction of the Government of C. P. appointed four persons, viz., Haji Ahmed Haji Ali & Co., Bhanji Kuwarji, Trimbaklal Tribhovan Das and Deolal Rangulal as sole agents for the import of cloth from mils in various places in India and for distribution of the same to retailers. Two of them Haji Ahmed Haji Ali & Co. and Bhanji Kuwarji carried on the business as from February 1, 1945, to the end of September 1945. The profits of the business in proportion of the capital contributed by these persons were distributed between these two persons. After September 1945 there was a change in the group of importers and some others also joined the group and the profits of 183 the subsequent period were similarly distributed between the members of the group as it was then constituted in proportion to the capital contributed by each of them. On March 12, 1947, the Income tax Officer issued a notice under section 22(2) of the Act to the respondent callinga upon it to submit a return of the income of the group for the assessment year 1946 47. This was served on Haji Ahmed Haji Ali & Co but that firm did not furnish any return contending that there was no privity of contract among members of ;the group. A notice was then issued under section 22(4) of the Act and on the production of the books, the Income tax Officer ascertained the income for the year ending September 1945 and assessed liability for payment of income tax under section 23(4) of the Act. He assessed the 'respondent as "an association of persons" both for purposes of Income tax and Excess Profits tax. An application under section 27 of the Income tax Act was dismissed by the Income tax Officer. Similarly for the year 1947 48 a notice was again issued and served on Haji Ahmed Haji Ali & Co. and similarly the group was assessed as an association of persons to Income tax and it was also assessed to Excess Profits tax for the period October 22, 1945, to March 31, 1946, and an application under section 27 of the Income tax Act was dismissed in regard to this period also. Appeals were taken against the orders of assessments of Income tax and Excess Profits tax but they were dismissed by the Appellate Assistant Commissioner. Appeals were then taken to the Income tax Appellate Tribunal but they also were dismissed by an order dated April 18, 1950. An application for making a reference to the High Court was dismissed by the Tribunal but an order was obtained from the High Court under section 66(2) of the Act and four questions were. ordered to be referred to the High Court. The question relevant for the appeals is the following. ",Whether under the facts and circumstances of the case, the Buldana District Main Cloth Importers ' Group constituted an 'Association of persons ' within the meaning of section 4 of the Income tax Act, 184 1922, and was liable to be assessed to income tax and excess profits tax in that status?" The order of the Tribunal dated April 18, 1950, shows that for different periods the group which imported the cloth was differently constituted but Haji Ahmed Haji Ali & Co. was a common member. The books relating to the business were maintained by Haji Ahmed Haji Ali & Co. and every time there was a change in the constituents of the group separate set of books was maintained by them and the profits from those enterprises were divided between the various persons who formed the group at the material times. It was contended before the Tribunal that there was no "Association of persons" and that the cloth imported was issued to the importers who sold the cloth on their own account. The Tribunal however found: "The accounts themselves show that the import and distribution of cloth was done on joint basis. The purchases were on,joint account, the sales were on joint account, the profit was first ascertained on the joint account and then distributed according to their agreed share of profits. In: our opinion the assessment has been rightly made on the status of an association of persons. " The High Court, when the matter went to it after the statement of the case by the Tribunal, held that before a group of persons could be called an "association of persons" it had to be established that they were in the nature of partners, i.e., the members of the group of their own volition or free will had joined in a venture with a view to earn profits. As the members of the group were appointed by the Deputy Commissioner a,% importers their participation could not be held to be of free will but it was under compulsion and therefore they were not an "association of persons" within the meaning of the Act. The High Court referred to and relied upon various cases to which it is not necessary to make any reference. As to what constitutes an association of persons was laid down by this Court in the Commissioner of Income tax, Bombay North vs Indira Balkrishna (1) and in 185 Mohammad,Noorulla vs Commissioner of Income tax decided on January 18, 1961, where the business was carried on as one unit and by the consent of all the parties who were heirs of deceased Mohammad Omer Sahib and during the period when an administration B suit between them was being fought in courts of law. In the present case the Tribunal has found that the It import and distribution of cloth which was the business carried on by the respondent, was dune on a joint basis. The purchases were joint; so were the sales and the profits were ascertained on a joint basis and then distributed according to the capital contributed by each member of the group. This finding which is one of fact makes the respondent an "association of persons" and it makes no difference that the business was carried on because the Deputy Commissioner of the district had appointed the members constituting the group to import and distribute the cloth in the district. The respondent, it. is not disputed, worked the scheme which was framed by the Deputy Commissioner and the working of the scheme produced profits and it made no difference that the scheme was at the instance of or under the control of the Deputy Commissioner. Dealing with the argument of similar control Sarkar, J., in Commissioner of Income tax, Madhya Pradesh & Bhopal vs Vyas and Dhotiwala (2) observed as follows: "The Tribunal thought that since the scheme was completely under the control of the Deputy Commissioner the assessees could not be said to have carried on business by working the scheme. We are unable to see that the fact of the control of the Deputy Commissioner can prevent the working of the scheme by the assessees from being a business carried on by them. In our view, it only comes to this that the asaessees had agreed to do business in a certain manner. " We are in respectful agreement with this observation. In our view the respondent was an association of (1) [1961] 3 S.C.R.513. (2) [1959] Supp. 1 S.C.R. 39,43 196 persons and was rightly so assessed to Income tax and Excess Profits Tax. The appeals are therefore allowed with costs. One hearing fee. Appeals allowed.

A scheme for the distribution of cloth was evolved by the Deputy Commissioner of the District who appointed a group of persons as sole agents for the import of cloth from Mills and distribution of the same to retailers. Though for different periods the group was differently constituted, one of the members, firm 'H ' remained a common member. The profits of the business were distributed amongst the members of the group in proportion of the capital contributed by them. The Income tax Officer issued notice under section 22(4) Of the Indian Income tax Act, and on production of books of account assessed the respondent as an "Association of Persons". The High Court was of the opinion, inter alia that before a group of persons could be called an "Association of Persons" it had to be established that they were in the "nature of partners", which was not so in the instant case, as the members of the group were appointed by the Deputy Commissioner as importers; the participation of the group could not be held to be of free will but under compulsion and therefore they were not an "Association of Persons" within the meaning Of section 3 Of the Indian Income tax Act. Held, that where a business is carried on and the profits ascertained on a joint basis, and then distributed according to the capital contributed by each. member of the group, the group is an "Association of Persons" and it makes no difference that the scheme which produced profits was at the instance of or under the control of the Deputy Commissioner or that he had appointed the members constituting the group. Commissioner of Income tax, Bombay North vs Indira Bal krishna; , , referred to. Mohamed Noorullah vs Commissioner of Income tax, ; , relied on.

The appellant used to invest his cash surplus in shares and securities and maintained an account book called Book No. 1 relating thereto. During the period from 1930 to 1941 42 he purchased a large number of shares and securities which by the accounting year 1941 42 were of a value Rs. 1491 lacs. He sold certain shares and securities of the value of several lacs and made certain amount of profit on those sales. In 1940 the appellant borrowed a large amount of money from his brother, the Maharaja of Darbhanga and opened a new account named account No. 2 which contained all entries regarding shares purchased and sold out of the money borrowed from the Maharaja. In the assessment year 1944 45 to 1948 49 the profits made by the (1) ; 288 appellant from purchase and sale of shares amounted to several lacs and the Income tax Officer held those to be liable to income tax as business profits. The Appellate Assistant Commissioner upheld the assessments but excluded the profits for the years 1944 45. On appeal by both the parties the Appellate Tribunal held on the evidence that the appellant was to be regarded as a dealer in shares and securities and therefore the profits were assessable to income tax. The High Court stated the following two questions under section 66(2) of the Income tax Act and answered them in the affirmative: "(1) Whether in the circumstances of the case, there is material to support the finding of the Appellate Tribunal that the assessee was a dealer in shares and securities with respect to each of the account and, therefore, liable to be taxed? (2)Whether having regard to the finding of the Appellate Tribunal in respect of 1941 42 assessment, it was open to the Appellate Tribunal in the present case to hold that the profits and transactions of sale and purchase of shares and securities amounted to profits of business and so liable to be taxed?" On appeal by special leave the appellant contended inter alia, that being a Zamindar the buying and selling of shares was not his normal activity and he did not carry on any such business but his purchases and sales were in the nature of investments of his surplus monies and therefore the excess amounts received by sales were capital receipts being merely surplus and not profits. Held, that on the materials produced and on the facts proved the appellant must be held to have been rightly assessed. The principle applicable to such transactions is that when an owner of an ordinary investment chooses to realise it and obtains a higher price for it than the original price paid by him, the enhanced price is not a profit assessable to income tax, but where as in the present case what is done is not merely a realisation or a change of investment but an act done in what is truly the carrying on of a business the amount recovered as appreciation will be assessable. G.Venkataswami Naidu & Co. vs The Commissioner of Income tax, [1959] Supp. 1 S.C.R. 464, Oriental Investment Company Ltd. vs The Commissioner of Income tax, ; , Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income tax, Bihar and Orissa, (1943) L.R. 70 I.A. 180, discussed. The substantial nature of the transactions, the manner in which the books were maintained, the magnitude of the shares purchased and sold and the ratio between the purchases and sales and the holding justified tile Tribunal to come to the conclusion that the appellant was dealing in shares as business. The High Court could not interfere with those findings and it rightly answered the questions in the affirmative. There is no such thing as res judicata in income tax matters 289 and it was quite open to the Appellate Tribunal to give the finding that it did.

The appellant, a private limited company, was incorporated in 1954 in the former Kotah State which had integrated with the United States of Rajasthan in 1949. The United States of Rajasthan became State of Rajasthan, a Part B State. The Indian Finance Act, 1950, made the Indian Income tax Act, 1922, applicable to Part B States with effect from April 1, 1950, whereupon Rajasthan became a taxable territory. The Income tax (Amendment) Act, 1953, amended section 14(2)(C) of the Indian Income tax Act, 1922. Thereupon the Income tax authorities sought to tax the profits and income of the appellant for the assessment year 1950 51 who claimed exemption under section 14(2)(C) of the Indian Income tax Act, 1922, as it stood before the amendment in 1953. The question for decision was whether in view of the decision of this Court in Madan Gopal 's case it was still open to the appellant to contend that the amendment operated from April 1, 1950 and that income accrued prior to April x, 1950, was still exempt although the exemption was withdrawn only from April 1, 1950. Held, that the withdrawal of the exemption in the assessment year 1950 51 conversely affected the income of the previous year 1949 50. The application of the Indian Income tax Act made Rajasthan a taxable territory subject to the Indian Income tax law and Parliament was competent to enact a new law for the area, just as it did for the whole of the rest of India. The fiction in the amendment made in section 14(2)(C) made the exemption in respect of liability to tax the income for the year 1949 50 to disappear as if it had never been granted and obliterated the exemption. The whole purpose and intent of the amendment was to reach this result from the assessment year 1950 51 onwards, and there could be no saving. The argument assumes the premise that the Income tax Act was incorporated in the Indian Finance Act, 1950, but there is neither precedent nor warrant for the assumption that when one Act applies another Act to some territory, the latter Act must be taken to be incorporated in the former Act. It may be otherwise, if there were words to show that the earlier Act is to be deemed to be re enacted by the new Act. 454 Union of India vs Madan Gopal Kabra, ; , referred.

Dismissing the Revenue appeal by special leave, the Court ^ HELD: (1) The credit entries made in the books of a statutory agent do not by themselves amount to receipt by assessees who are non residents as long as the amounts so credited in their favour are not at their disposal or control. [592 F] The non resident assessees in this case neither received nor could be deemed to have received the sums in question when their accounts with the statutory agent were credited, since a credit balance without more only represents a debt and a mere book entry in the debtor 's own books does not constitute payment which will secure discharge from the debt. They cannot, therefore, be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period. [592 F G] P. V. Raghava Reddi & Anr. vs Commissioner of Income tax [1962] Supp. 2 S.C.R. 596, distinguished. (2) Under clause (a) of the Explanation to clause (i) of sub section (1) of section 9 of the Income Tax Act. in the case of the business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India. If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India. [593 B D] 588 In the instant case the non resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by clause (a) of the Explanation to section 9(1)(i) of the Act. The commission amounts which were earned by the non resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India. [593 E G] Commissioner of Income tax, Punjab vs R. D. Aggarwal & Co. & Anr. and M/s. Carborandum Co. vs C.I.T. Madras ; , referred to.

The appellant firm which carried on business as forest lessees and timber merchants in the former Kapurthala State was assessed to, and paid, income tax, for the account year 1945 46 under the Income tax law which was then in force in the said State. Subsequently Kapurthala State integrated into what was known as Pepsu and the Patiala Income tax Act, 2001, was made applicable and, came into force in the integrated State. Later still the Indian Finance Act, 1950 (26 of 1930), applied the Indian Income tax Act to Part B States which had emerged as a result of political changes and section 13 Of the Indian Finance Act repealed the Income tax laws obtaining in Part B States except for the purposes of levy assessment and collection of income tax and Super tax relating to the period mentioned therein. On November 4, 1953, the Commissioner of Income tax, Punjab (i) etc. purporting to act under section 5, sub sections (5) and (7A) of the Indian Income tax Act ordered the assessment of the appellant firm to be done by the Income tax Officer, Special Circle, Ambala and not by the Income tax Officer, B Ward, Patiala, who would ordinarily be the competent assessing authority for the firm under section 64 Of the Indian Income tax Act. On March 12, 1953, the Income tax Officer, Special Circle, Ambala, issued a notice purporting to be under the Patiala Income tax Act of Samvat 2001 to the appellant firm for filing a return of its income and total world income as he believed that the income had been underassessed. The appellant then filed an application under article 226 of the Constitution in the High Court for writs of prohibition, certiorari, quo warranto etc. against the Income tax Officer, Special Circle, Ambala, and the Commissioner of Income tax, Punjab (i) etc. regarding the reassessment of the income of the firm for the account year 1945 46. The High Court dismissed the said petition and this appeal was filed on a certificate granted by the High Court. The contentions of the appellant inter alia, were that the Income tax Officer, Special Circle, Ambala, had no jurisdiction to issue a notice under section 34 893 of the Patiala Income tax Act of Samvat 2001, and that only the Income tax Officer, B Ward, Patiala, was the competent authority as he was the locally situated Income tax Officer and would have jurisdiction under section 64(1) of the Income tax Act. The transfer of the case by the Commissioner of Income tax by his order of November 4, 1954, was characterised as ultra vires and incompetent. The argument that the words of section 13 Of the Indian Finance Act, 1950, did not include reassessment was abandoned in view of the decisions of this Court in Lakshmana Shenoy vs The Income tax Officer, Ernakulam, [1959] S.C.R. 751. It was further contended that the Commissioner in acting under section 5(5) of the Patiala Income tax Act was required to consult the Minister in Charge whose place was taken by the Central Board of Revenue under the Indian Finance Act, 1950. Held, that although the Commissioner of Income tax was required to consult the Central Board of Revenue his failure to do so did not render his order ineffective however wrong it might be from the administrative point of view. The provision about consultation must be treated as directory and the Commissioner 's power could not be questioned by the assessee on the ground of failure to consult the Central Board of Revenue. State of U.P. vs Manbodhan Lal Srivastava, [1958] S.C.R. 553, K. section Srinivasan vs Union of India, ; , Montreal Street Railway Company vs Normandin, L.R. 1917 A. C. 170 and Biswanath Khemka vs The King Emperor, , followed. The Commissioner while transferring the case may have referred to the Indian Income tax Act and not to the Patiala income tax Act but the exercise of the power would be referable to a jurisdiction which conferred validity upon it and not to a jurisdiction under which it would be nugatory. Pitamber Vajirshet vs Dhandu Navlapa, I.L.R. , followed. A case which was not pending at the time of transfer could not be transferred under sub section (7A) of section 5 of the Patiala Act but it could be transferred from one Income tax Officer to another under sub section (5) Of section 5 of the Patiala Act which was kept alive for assessment and reassessment relating to previous years. Sub section (7A) makes special provision for transfer of pending cases and is not prejudicial to the general powers granted by sub section Bidi Supply Co. vs Union of India, ; , refer red to.

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

A Hindu undivided family was carrying on business in Bombay, Madras and the Mysore, being treated as a single assessee and its relevant accounting period was 10th October, 1941, to 8th November, 1942. During this period, the Mysore branch purchased goods from the Bombay head office and the Madras branch of the value of Rs ' 2 lakhs odd. The In tax 'Officer estimated these purchases of the Mysore in British India at Its. 3 lakhs and its profits at Rs 75,000 on the sale of these goods in Mysore. In view of the provisions of section 42 of the Indian Income tax Act, half of this profit, i.e., to the extent of Rs. 37,500, was deemed to accrue or arise in British India because of the business connection of the L non resident branch in British India: Held, that, on the facts and circumstances of the case, the Income tax Officer was right in applying the provisions of section 42 1 of the Income tax Act and holding that RS. 37,500 were deemed to accrue in British India and in including in the assessment a portion thereof. Held also, that section 42 sub sections (1) and (3), cover Cases of both residents as well as non residents. Commissioner of Income tax vs 'Western India Life Insurance Co. dissented from. Sutlej Cotton Mills Ltd. V. Commissioner of Income tax, West Bengal (A.I.R. 1950 Cal. 551), Commissioner of Income tax/Excess Profits Tax, Madras vs Parasuram Jethanand (A.I.R 1950,Mad. 631), Commissioner of Income tax. Bombay V. Ahmedbhai Umarbhai & Co. ([1950] S.C.R. 335), referred to. 445

The appellant, a resident of the once independent State of Udaipur, held 266 shares in the Mewar Industries Ltd., a company registered in that State. There was no law in the State of Udaipur imposing tax on income and it was on April 1, 1950that for the first time the residents of Rajasthan, in which the State had merged, became liable to pay such a tax. On January 18, 1950, the Company went into liquidation and on April 22, 1950, the liquidator distributed a portion of the assets among the shareholders, the appellant receiving a sum of Rs. 26,000. This sum represented the undistributed profits of the company which had accrued during the six accounting years preceding the liquidation. The income tax authorities included this sum in the taxable income of the appellant for the assessment year 1051 52 holding that it was dividend as defined in section 2(6A)(c) of the Indian Income tax Act. Under section 2(6A)(c) the distribution of accumulated profits which arose during the " six previous years " preceding the date of liquidation would be dividend. Section 2(1) defined " previous year " to mean the year which was previous to.the assessment year. The appellant contended that " previous years " in section 2(6A)(c) must be read in the light of the definition is section 2(1) and as in the present case there had been no law imposing a tax prior to April 1, 1950, the profit for the years 1943 44 to 1948 49 cannot be held to be profits which " arose during the six previous years ", and consequently could not be taxed as dividend as defined in section 2(6A)(c) of the Indian Income tax Act. Held, that the said sum was dividend within the meaning of section 2(6A)(c) of the Act and was liable to tax. The definitions given in section 2 Of the Act applied unless there was anything repugnant in the subject or context. It would be repugnant to the definition of " dividend " in section 2(6A)(c) to import into the expression " six previous years " the definition of " previous year " in section 2(ii) of the Act. By the expression "previous years " in section 2(6A)(c) of the Act was meant the financial years preceding the year in which liquidation took place. Commissioner of Income tax, Madras vs K. Srisivasan and Gopalan, , referred to. 205

Appeal No. 20 of 1960. Appeal from the judgment and decree dated September 5, 1956, of the Judicial Commissioner 's Court at Ajmer in Civil First Appeal No. 3 of 1956. B. D. Sharma, for the appellant. M. C. Setalvad, Attorney General of India, C. L. Agarwala, M. K. Ramamurthy, R. K. Garg, D. P. Singh and section C. Agarwal, for the respondents I and 3. 1961. April 3. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal by the,, plaintiff against the judgment and decree of the Judicial Commissioner, Ajmer, confirming the decree of the trail Judge dismissing the suit. it comes before us on a certificate under articles 132(1) and 133(1)(c) of the Constitution granted by the High Court of Rajasthan after the Reorganisatiion of the States. The suit was filed by the appellant for recovery of Rs. 23,998 12 0 as price of goods supplied in the year 1947 to the Ruler of Jaipur State, (including interest) and damages suffered by the appellant due to the refusal of the defendants to take delivery of some other goods similarly ordered. In addition to the ex Ruler of Jaipur, his Military Secretary and one Mohabat Singh, an employee of the ex Ruler, were also joined as defendants, on the plea that they had placed the orders as agents of, the ex Ruler. The suit was filed on February 28, 1951. The ex Ruler raised the plea that the suit was incompetent, as the consent of the Central Government under section 87 B of the Code of Civil Procedure was not obtained and asked that the suit be dismissed. The other defendants denied the claim and also their lability on various grounds. It may be mentioned the Military Secretary (second 704 defendant) has since died, and this appeal is now directed against the ex Ruler and Mohabat Singh only. The Subordinate Judge held that though the suit was filed prior to the enactment of section 87 B by section 12 of the Code of Civil Procedure (Amendment) Act, 1951 (11 of 1951), it could not be continued against the ex Ruler. He adjourned the hearing for four months to enable the appellant to obtain the necessary consent. The appellant applied to the Central Government for its consent, but it was refused. He also applied in revision to the Judicial Commissioner, contending that section 87 B of the. Code of Civil Procedure offended the equality clause in article 14 of the Constitution and was thus void, but the Judicial Commissioner rejected the contention. He also refused a certificate on the ground that there was no final order as required by article 132(l)of the Constitution. The suit was subsequently dismissed against all the three defendants. In regard to the ex Ruler, it was held that no suit lay against him without the consent of the Central Government, and in regard to the remaining defendants, it was held that they were protected by section 230 of the Indian Contract Act. Sub section (3) of that section was held inapplicable, inasmuch as a suit could be filed against the ex Ruler with the consent of the Central Government. The appellant appealed to the Judicial Commissioner, Ajmer, but the appeal was dismissed. He obtained a certificate, as stated above, and this appeal has been filed. Two main questions have been raised in this appeal. The first is that the dismissal of the suit against the ex Ruler was erroneous. In support of this contention, it is urged that section 87 B of the Code of Civil Procedure is ultra vires the Constitution in view of article 14, and, in the alternative, that section 87 B, even if valid, cannot apply to this suit, which was pending when the section was enacted. The right to continue the suit being a substantive right, cannot, it is submitted, be taken away except by a law which is made applicable to pending actions, either expressly or by necessary intendment. Against the other respondent, it is contended that he was liable as an agent or at least, as a 705 sub agent, in view of the provisions of section 230(3) of the Indian Contract Act. We are not concerned with the merits of the claim, and they have not been mentioned at the bearing. We shall begin by considering whether section 87 B is ultra vires and void. It is said that it discriminates in favour of ex Rulers of Indian States by creating an immunity from civil actions. Prior to the present Constitution, Part IV of the Code of Civil Procedure contained provisions in respect of suits in particular cases. This was divided into three parts. Sections 79 to 82 dealt with suits by or against the Crown or Public Officers in their official capacity and section 88 provided for suit of interpleader. We are not concerned with them. Sections 83 to 87 dealt with suits by aliens and by or against Foreign Rulers and Rulers of Indian States. Sections 83 and 84 provided respectively when aliens and foreign States may sue. Section 85 provided for the appointment by Government of persons to prosecute or defend Princes or Chiefs. Section 86 provided for suits against Princes, Chiefs, Ambassadors and Envoys. It created partial ex territoriality by granting them exemption from civil jurisdiction except when an action was brought with the consent of the Central Government. The first sub section provided: "Any such Prince or Chief, and any ambassador or envoy of a foreign State, may in the case of the Ruling Chief of an Indian State with the consent of the Crown Representative, certified by the signature of the Political Secretary, and in any other case with the consent of the Central Government, certified by the signature of a secretary to that Government, but not without such consent, be sued in any competent Court. " The remaining four sub sections dealt with the kinds of suits and the conditions under which they could be brought and certain other aspects Of ex territoriality. Section 87 laid down the style of Princes or Chiefs as parties to suits. After the coming into force of the Constitution, 89 706 certain adaptations were made by the President by the Adaptations of Laws Order 1950, but we are not concerned with them. Suffice it to say that the protection continued in view of article 372 of the constitution (unless it was void under the Chapter on Fundamental Rights) till we come to the enactment of Act 11 of 1951. The impact of the Fundamental Rights provisions on section 86 as originally enacted and on the new section 87 B being the same, we need not consider the matter separately. When the Indian States integrated with British India, the Rulers of States and the Government of India entered 'Into covenants and agreements. In those covenants, it was agreed that the privileges, dignities and titles of the Indian Princes would be continued to be recognised. When the Constitution was enacted, the assurance in the covenants was respected, and article 362 was included in the Constitution. It reads: "In the exercise of the power of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State, due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause (i) of Article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State." The reference to article 291 merely indicates that those covenants or agreements were meant which the Ruler of any Indian State had entered into with the Central Government before the commencement of the Constitution. This description is not repeated in article 362, but is incorporated by reference. The mention of article 291 in article 362 has no further significance, and the generality of the assurance in the latter Article is not lessened. The privilege of ex territoriality and exemption from civil jurisdiction except with the consent of the Central Government was one of long standing, and when the Amendment Act of 1951 was passed, sections 83 to 87 were reenacted. We are not concerned with all the changes that were made, and reference to some 707 of them is unnecessary. Section 86 was amended by deleting all references to Ruling Chiefs of Indian States and the first sub section was reenacted as follows: "86. (1) No Ruler of a foreign State may be sued in any court otherwise competent to try the suit except with the consent of the Central Government certified in writing by a Secretary to that Government:" (proviso omitted). Sub section (3) gave protection against arrest and, except with the consent of the Central Government, against execution of decrees against the property of any such Ruler. Section 87 laid down the style of foreign Rulers as parties to suits. Section 87 A was added to define "foreign State" and "Ruler" and to make the exemption only available to a State and its head, recognised as such by the Central Government. Section 87 B, with which we are concerned, was specially enacted in respect of suits against Rulers of former Indian States. It provided: "87 B. (1) The provisions of section 85 and of sub sections (1) and (3) of section 86 shall apply in relation to the Rulers of any former Indian State as they apply in relation to the Ruler of a foreign State. (2) In this section (a)former Indian State 'means any such Indian State as the Central Government may, by notification in the Official Gazette, specify for the purposes of this section; and (b) 'Ruler ' in relation to a former Indian State, means the person who, for the time being, is recognised by the President as the Ruler of that State for the purposes of the Constitution. " By this provision, which is very much the same as the former section 86, the privilege previously enjoyed by the Rulers of Indian States was continued. In this historical background, the question of dis crimination raised in the appeal must be examined. It is easy to see that the ex Rulers form a class and the special legislation is based upon historical considerations applicable to them as a class. The Princes 708 who were, before integration, sovereign Rulers of Indian States, handed over, after the foundation of the Republic, their States to the Nation in return for an annual Privy Purse and the assurance that their personal rights, privileges and dignities would be respected. The Constitution itself declared that these rights, etc., would receive recognition. A law made as a result of these considerations must be treated as based on a proper classification of such Rulers, who had signed the agreement of the character described above it is based upon a distinction which can be described as real and substantial, and it bears a just relation to the object sought to, be attained. It is further contended that the Article speaks of privileges but not of immunities, and we were referred to certain other Articles of the Constitution where "immunities" are specifically mentioned. It is not necessary to refer to those Articles. Immunity from civil action may be described also as a privilege, because the word "Privilege" is sufficiently wide to ' include an immunity. The Constitution was not limited to the choice of any particular words, so long as the intention was clearly expressed. In our opinion, the words "personal rights and privileges" are sufficiently comprehensive to embrace an immunity of this character. It is, therefore, clear that the section cannot be challenged as discriminatory, because it arises from a classification based on historical facts. It is next contended that section 87 B only applies the provisions of sub sections (1) and (3) of section 86, that tile words of the latter section are not retrospective, that the suit was filed before the enactment of section 87 B, and that the substantive right of the plaintiff to continue his suit could not be taken away in the absence of express language or clear intendment. The words of section 86(l) are "No Ruler of a foreign State may be sued in any court. This precludes, it is said, only the initiation of a suit and not the continuance of a suit already filed before the section was enacted. In our opinion, these arguments cannot be accepted. The word "sued" means not only the filing of a suit or a civil proceeding but also their pursuit through Courts. A person 709 is sued not only when the plaint is filed, but is sued also when the suit remains pending against him. The word "sued" covers the entire proceeding in an action, and the person proceeded against is sued throughout the duration of the action. It follows that consent is necessary not only for the filing of the suit against the ex Ruler but also for its continuation from the time consent is required. In view of the amplitude of the word "sued", it is not necessary to consider generally to what extent pending cases are affected by subsequent legislation or refer to the principles laid down in The United Provinces V.,, Atiqa Begum (1), Venugopala Reddiar vs Krishnaswamy Reddiar (2) or Garikapatti Veeraya vs N. Subbiah Choudhury (3). If the language of section 86 read with section 87 B were applicable only to the initiation of a civil suit, these cases might have been helpful; but since the words "may sue" include not only the initiation of a suit but its continuation also, it is manifest that neither the suit could be filed nor maintained except with the consent of the Central Government. In Atiqa Begum 's Case (1), Varadachariar, J. referred to the two principles applicable to cases where the question of retrospectivity of a law has to be considered. They are that vested rights should not be presumed to be affected, and that the rights of the parties to an action should ordinarily be determined in accordance with the law, as it stood at the date of the commencement of the action. But, the learned Judge pointed out that the language of the enactment might be sufficient to rebut the first, and cited the case of the Privy Council in K. C. Mukherjee vs Mst. Ram Ratan Kuer (4). Here, the matter can be resolved on the language of the enactment. The language employed is of sufficient width and certainty to include even pending actions, and the contrary rule applies, namely, that unless pending actions are saved from the operation of the new law,they must be taken to be affected. The word "sued ", as we have shown, denotes not only the start but also the continuation of a civil action, and the (1) [1940] F.C.R.110 (2) (3) [1957] S.C.R.4ss. (4) Pat. 710 Prohibition, therefore, affects not only a suit instituted after the enactment of section 87 B but one which, though instituted before its enactment, is pending. In our judgment, the present suit was incompetent against the first defendant, the ex Ruler of Jaipur. It is contended that defendants 2 and 3 acted as the agents of the ex Ruler and placed the order with the appellant. The position of the Military Secretary since dead) was on a different footing, but it is conceded that no cause of action against him survived, because the appeal has abated against him. Mohabat Singh, who is the third defendant, cannot be described as an agent of the ex Ruler, because his connection with the orders placed was merely to sign the letters purporting to emanate from the Military Secretary. Those letters he signed "for the Military Secretary". He was not acting as the agent of the ex Ruler but was performing the ministerial act of signing the letters on behalf of the Military Secretary. This cannot be said to have constituted him an agent. The suit against him was, therefore, misconceived, whatever might have been said of the Military Secretary. In our opinion, the dismissal of the suit was justified in the circumstances of the case. The appeal fails, and is dismissed with costs. The appellant will pay court fee on the memorandum of appeal, as he was allowed to file this appeal as a pauper. Appeal dismissed.

The appellant filed a suit for the recovery of money as price of goods supplied against the Ex Ruler of Jaipur. Subsequently section 87 B was introduced in the Code of Civil Procedure making the provisions of section 86 in respect of suits against rulers of foreign States applicable to the rulers of former Indian States. The Ex Ruler raised the plea that the suit was incompetent as the consent of the Central Government had not been obtained as required by section 87 B. The appellant contended: (i) that section 87 B violated article 14 Of the Constitution and was void, (ii) that section 87 B did not apply to the continuation of a suit pending at the time when section 87 B was enacted but only to the filing of a suit after the enactment of that section. Held, that section 87 B did not violate article 14 Of the Constitu tion and was not void. Section 87 B of the Code of Civil Procedure merely continued the privilege which was formerly enjoyed by the Rulers of Indian States and in regard to which the covenants entered into by the Ex Rulers and the Government of India provided for their continuance. This agreement about the privileges was further assured by article 362 Of the Constitution. The Ex Rulers thus formed a class and the special legislation was based upon historical considerations applicable to them as a class. The classification was based on a distinction which was real and substantial and it bore a just relation to the object sought to be attained. Held, further, that the suit was incompetent against the Ex Ruler of Jaipur. The protection of section 87 B read with section 86 applied both to the filing of a suit and to its, pursuit through the courts. Section 86 provides that "No Ruler. . may be sued in any court. . . A person is "sued" not only when the plaint is filed against him, but is "sued" also when the suit remained pending against him. The word "sued" covers the entire proceedings in an action. Consequently, the consent of the Central Government was necessary not only for the filing of the suit against the Ex Ruler but also for its continuation from the time consent was required. 703 Held, further, that section 87 B was on its terms applicable to pending suits and there was no saving in favour of pending actions. K. C. Mukherjee vs Mst. Rath Ratan Kuer, Pat. 268, applied.

The appellant was convicted and sentenced under r. 125(a) Defence of India Rules for contravening el. 4(b) of the Maharashtra Jwar (Restriction on purchases and sale and control of movement) Order, 1964, for contravening Buldana District Price Control Order, 1965; and for contravening el. 3 of the Maharashtra Foodgrains (Declaration of Stock) (Second) Order, 1964. The Magistrate further ordered that the maddamal (Juar) before the court be confiscated by the Government. The .appellant appealed unsuccessfully to the Sessions Judge. But the High Court set aside the conviction and sentence under el. 3 of the Maharashtra Food Grains (Declaration of Stock) Order, and maintained the other convictions in an appeal to this Court the appellant contended that (i) the High Court having set aside the conviction under el. 3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964 the order for forfeiture could not be maintained because the Maharashtra Jwar (Restriction on Purchase 'and sale and control of movement) Order,/964, and the Buldana District Jwar (Price Control) Order 1965 did not contain any provision authorising the court to forfeit; and (ii) r. 141(2) of the Defence of India Rules, 1962 was ultra vires because it laid down a rule of evidence contrary to the law contained in section 114 of the Indian Evidence Act. HELD: (i) The order of forfeiture was illegal. The only provision contained in the Maharashtra Jwar (Restriction on Purchase and Sale and Control of Movement) Order, 1964, is regarding forfeiture of packages covering or receptacles in which any stocks of juar are found. This does not enable the Court to order forfeiture of juar. The Buldana District Juar (Price Control) Order authorises the Collector to seize stocks but does not enable the Court to forfeit juar. [274 H] (ii) r. 141(2) is within the powers conferred by section 3(1) of the Defence of India Act. The fact that the rule is contrary to an existing Act does not matter because section 43 of the Defence of India Act provides that "the provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act." [275 F G]

The appellants, one a Sub Divisional Officer and the other a Naib Tehsildar, were entrusted with the duty of allotting land to displaced persons. The first respondent forcibly occupied the land allotted to B. On May 9, 1958, the first appellant ordered that B and other allottees similarly situated would be given possession of lands allotted to them on May 20, 1958. On May 16, 1958. the first respondent and others threatened with dispossession filed petitions in the High Court under article 226 of the constitution and obtained interim stay of delivery of possession till May 19, 1958, when the petitions would come up before the Division Bench for admission. On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958. The notice of the first stay order reached the appellants on May 19, 1958, but no notice of the second order was officially communicated to them till May 21, 1958. It was alleged that on May 20, 1938, the appellants, although informed of the second stay order by certain interested persons and the Advocate for one of the parties, formally dispossessed the respondent in disobedience of the Court 's order and handed over possession of the land to B. On the complaint of the respondent the High Court field that the .appellants were guilty of contempt of Court and, instead of committing them for contempt, administrated a warning as the appellants honestly believed that they were not bound to stay delivery of possession in absence of an official communication. The appellants appealed by special leave. Held, (per Das and Subba Rao, JJ.)that in a case of contempt for disobedience of a prohibitive order, as distinguished from an order of affirmative nature, it was not necessary to show that notice of the prohibitory order was served upon the party against whom it was granted. It would be sufficient if it was proved that the party had notice of it aliunde. N.Baksi vs O. K. (Thosh, A. T. R. (19.)7) Patn. 528, referred to. 128 There may be circumstances where officials entrusted with the carrying out of a legal order might have valid reasons to doubt The authenticity of the order conveyed to them by interested parties. But in the present case there could hardly be any such reasons. The appellants had really no justification for doubting the authenticity of an order communicated to them by an Advocate. Held, further. that in a matter relating to contempt of court, there cannot be both justification and apology. shareef vs The Hon 'ble Judges of the High Court of Nagpur; , , referred to. Although the appellants might have honestly believed that they were not bound to bold their band in absence of an official communication, that would be no defence to the charge of contempt of court, but only a relevant consideration in awarding the sentence. Per Daval, J. Contempt proceedings are criminal or quasi criminal in nature and it is essential that before any action can be taken the accusation must be specified in character. In the instant case, the respondent did not state that he was formally dispossessed. This would 'be for some reason if actual posssssion had been delivered. He could not be said to have come to court with clean hands. Further, the finding of the High Court that the appellants delivered possession honestly believing that they were not bound not to do so in the absence or the official communication meant that there was no defiance of the High Court 's order. There could be no willful disobedience since there was no belief in the existence of the order. It may not be necessary that the party against whom a prohibitory order was made must be served with the order, but it should have notice of the order before it could be expected to obey. Such notice must be from sources connected with the court passing the order. The alleged knowledge of the party cannot be made, to depend on the veracity of the witnesses examined by the party praying for action. In re Bryant L.R (1987 6) In Ex Parte Langly, Exparte Smith. In re Bishop L. R. and The Seraglio. L. R. , discussed.

This appeal by the plaintiffs is against an order of rever sal dtd.7/10th February, 1975 passed by the Gujarat High Court. Plaintiff No.1 first appellant is the contractor and Plaintiffs Nos. 2 to 4, the other appellants. are the jagir dars of the farmer State of chhota Udepur. The Jagirdars sold some teak trees to plaintiff No.1, contractor. With effect from 1.8.1954, the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953 was made applicable to village Nalej,and no compensation was awarded to the Jagir dars in lieu of the trees, as they had sold them to appel lant No.1 (since dead) and now represented by his legal representatives. The contractor made an application to the Collector of Baroda under Sourashtra Felling of Trees Act for permission to cut the trees in question, which was forwarded to Mamlatdar of Chhota Udepur who granted the same on 25.9.1961 as a consequence whereof the contractor started cutting the trees. The Prant Officer, Chhota Udepur however, prevented the contractor from cutting the trees whereupon the contractor represented the matter before the Divisional Forest Officer and the State Government but was told that the Jagirdars had no right to the trees standing in the reserved forest area and in the waste land. The Government sold the trees already cut for Rs. 15786 and also sold the other trees to some other persons. The Jagirdars and the contractor filed a suit against the State of Gujarat and the Divisional Forest Officer. Chhota Udepur, District, Baroda for rendition of accounts, for declaratio of the plaintiffs ' title to the trees, for a declaration of the right of the contractor to cut the trees and to remove the same, and for direction to the State to issue the necessary authorisation and transit passes for cutting and removing the trees in question in favour of the contractor. Decree for the balance of the amount of Rs. 14518.18 after adjusting Rs. 1267.82 already received was also sought. The trial court partly decreed the suit holding that the jagir dars were the full owners of the trees and as such the 564 565 contractor had also become the full owner thereof. The State was also ordered to pay Rs. 14518.18 with proportionate costs and interest at 4 per centum per annum on this amount from the date of decree till realisation. The State of Gujarat appealed against that order to the High Court of Gujarat contending (i) that under Forest Rules of Chhota Udepur State, Chotta Udepur State had exercised rights over three kinds of forest reserved, protected and open, the State of Gujarat was thus competent to issue notification under sec. 4 of the Indian Forest Act, 1947. (ii) under the rules, Mahuda and teak trees were reserved trees and they are prohibited from being cut; (iii) under the Jagir Abolition Act, Section 5, the solid vested in the jagirdar and not the trees; hence Jagirdars could not have sold the trees and (iv) the agreement executed between the contractor and the Jagirdars was not enforceable at law; the contractor could not claim any right/interest under the same. The High Court negatived all the contentions and the rights accruable to the contractor under the agreement and allowed the appeal of the State and dismissed the suit filed by the appellants. Hence this appeal by the appellants. Dismissing the appeal, this Court HELD: The trees in question stood on the area which was declared as reserved forest under the forest rules framed by the Chhota Udepur State. [512 B] Once it is established that during the time of existence of erstwhile State of Chhota Udepur an area admeasuring 290 acres and 14 gunthas in village Nalej was declared as re serve forest and jagirdars had no right at all in the trees standing in such area of reserved forest, the Jagirdars cannot be considered to have acquired a greater right on 28.7.48 when the Forest Rules of Chhota Udepur State were repealed by the Application of Laws Order. [514 C D]

The respondent in the two appeals was compulsorily retired by an order dated 20 4 74 under Rule 16(3) of the All India Services (Death cum Retirement) Rules, 1958. The respondent challenged the said order by filing a Writ Petition before the Andhra Pradesh High Court. A single Judge of that Court allowed the petition. The said decision was affirmed by the Division Bench in appeal. Allowing the appeals by certificate the Court, ^ HELD: 1. An analysis of Rule 16(3) of the All India Services (Death cum Retirement) Rules, 1958 clearly shows that the following essential ingredients of the Rule must be satisfied before an order of compulsory retiring a Government servant is passed: (i) that the member or the service must have completed 30 years of qualifying service or the age of SO years (as modified by notification dated 16 7 1969); (ii) that the Government has an absolute right to retire the Government servant concerned because the word "require" confers an unqualified right on the Central Government servant; (iii) that the order must be passed in public interest; and (iv) that three months ' previous notice in writing shall be given to the Government servant concerned before the order is passed. [742 G H. 713 A B] . The provision gives an absolute right to the Government and not merely a discretion, and, therefore implied it excludes the rules of natural justice. [743 B] 2. Compulsory retirement after the employee has put in a sufficient number of years of service having qualified for full pension is neither a punishment nor a stigma so as to attract the provisions of Article 311(2) of the Constitution. In fact, after an employee has served for 25 or 30 years and is retired on full pensionary benefits, it cannot be said that he suffered any real prejudice. [743 C D] 3. The object of Rule 16(3) is to weed out the dead wood in order to maintain a high standard of efficiency and initiative in the State service. It is not necessary that a good officer may continue to be efficient for all times to come. It may be that there may be some officers who may possess a better initiative and higher standard of efficiency and if given chance the work of the Government might show marked improvement. In such a case compulsory retirement of an officer who fulfils the conditions of Rule 16(3) is undoubtedly in public interest and is not passed by way of punishment. Similarly, there may be cases of officers who are corrupt or of doubtful integrity and who may be considered fit for being compulsorily retired in public interest. Since 737 they have almost reached the fag end of their career and their retirement would A not cast any aspersion, nor does it entail any civil consequences. Of course, it may be said that if such officers were allowed to continue they would have drawn their salary until the usual date of retirement. But, this is not an absolute right which can be claimed by an officer who has put in 30 years of service or attained the age of 50 years. Rule 16(3) does nothing of the sort of attaching stigma. [743 D H] 4. The jurisprudential philosophy of Rule 16(3) and other similarly worded provisions like F.R. 56(j) and other rules relating to Government servants is noteworthy. Rule 16(3) as it stands is one of the facets of the doctrine of pleasure incorporated in Article 310 of the Constitution and is controlled only by those contingencies which are expressly mentioned in Article 311. If the order of retirement under Rule 16(3) does not attract Article 311(2), it is manifest that no stigma of punishment is involved. The order is passed by the highest authority, namely, the Central Government in the name of the President and expressly excludes the application of rules of natural justice. [744A C] The safety valve of public interest is the most powerful and the strongest safeguard against any abuse or colourable exercise of power under this Rule. Moreover, when the Court is satisfied that the exercise of power under the rule amounts to a colourable exercise of jurisdiction or is arbitrary or malafide, it can always be struck down. While examining this aspect of the matter the Court would have to act only on the affidavits, documents annexures, notifications and other papers produced before it by the parties. It cannot delve deep into the confidential or secret records of the Government to fish out materials to prove that the order is arbitrary or malafide. The court, has, however, the undoubted power subject to any privilege or claim that may be made by the State. to send for the relevant. confidential personal file of the Government servant and peruse it for its own satisfaction without using it as evidence. [744 C E] The main object of Rule 16(3) is to instil a spirit of dedication and dynamism in the working of the State Services so as to ensure purity and cleanliness in the administration which is the paramount need of the hour as the services are one of the pillars of our great democracy. Any element or constituent of the service which is found to be lax or corrupt, inefficient or not up to the work or has outlived his utility has to be weeded out. Rule 16(3) provides the methodology for achieving the object. [744 E G; Before the Central Government invokes the power under Rule 16(3), it must take particular care that the rule is not used as a ruse for victimisation by getting rid of honest and unobliging officers in order to make way for incompetent favourites of the Government which is bound to lead to serious demoralisation in the service and defeat the laudable object which the rule seeks to sub serve. If any such case comes to the notice of the Government the officer responsible for advising the Government must be strictly dealt with. [744 G H] Compulsory retirement contemplated by Rule 16(3) is designed to infuse the administration with initiative and activism so that it is made poignant and piquant, specious and subtle so as to meet the expanding needs of the nation which require explanation of "fields and pastures now". Such a retirement 738 involves no stain or stigma nor does it entail any penalty or civil consequences. In fact the rule merely seeks to strike a just balance between the termination of the completed career of a tired employee and maintenance of top efficiency in the diverse activities of the administration. [745 A B] An order of compulsory retirement on one had causes no prejudice to the Government servant who is made to lead a restful life enjoying full pensionary and other benefits and on the other gives a new animation and equanimity to the services The employees should try to understand the true spirit behind the rule which is not to penalise them but amounts just to a fruitful incident of the service made in the larger interest of the country. Even, if the employee feels that he has suffered, he should derive sufficient solace and consolation from the fact that this is his small contribution to the country for every good cause claims its martyr. [745 B D] Shyam Lal vs State of U.P., ; ; T. G. Shivcharan Singh and Ors. vs The State of Haryana A.I.R. ; Union of India vs Col. J. N. Sinha and Anr., [1971] 1 SCR 791; M. V. Puttabhatta vs The State of Mysore and Anr., ; ; State of Assam & Anr. etc. vs Prasanta Kumar Das etc. [19731 3 S.C.R. 158 & 167; Tara Singh etc. vs State of Rajasthan and Ors. ; ; Mayenghaon Rahamohan Singh vs The Commissioner (Admn.) Manipur and Ors., ; ; applied. Before passing an order under Rule 16(3), it is not an entry here or an entry there which has to be taken into consideration by the Government but the overall picture of the officer during the long years of his service that he put in has to be considered from the point cf view of achieving higher standards of efficiency and dedication so as to be retained even after the officer has put in the requisite number of years of service. [750 C D] Under the various rules on the subject, it is not every adverse entry or remark that has to be communicated to the officer concerned. The superior officer may make certain remarks while assessing the work and conduct of the subordinate officer based on his personal supervision or contact. Some of these remarks may be purely innocuous or may be connected with general reputation of honesty or integrity that a particular officer enjoys. It will indeed be difficult if not possible to prove by positive evidence that a particular officer is dishonest but those who have had the opportunity to watch the performance of the said officer from close quarters are in a position to know the nature and character, not only of his performance but also of the reputation he enjoys. Therefore on the ground of non communication of adverse remarks, the impugned orders cannot be set aside. [748? G H, 749 A] R. L. Butail vs Union of India and ors., and union of India vs Col. J. N. Sinha and Anr., [1971] 1 SCR 791; applied. State of Uttar Pradesh vs Chandra Mohan Nigam & Ors., ; referred to. Madan Mohan Prasad vs State of Bihar and Ors., ; distinguished. All that is necessary is that the Government of India, before passing an order under Rule 16(3) should consider the report of the Review Committee 739 which is based on full and complete analysis of the history of the service of A the employee concerned. [753 F G] In the instant case, it was clearly pleaded by the appellants ill the High Court that the report of the Review Committee was in fact considered by the Government of India before passing the impugned order. An examination of the confidential file also confirms this. [753 G H 754 A] State of U.P. vs Chandra Mohan Nigam and Ors. and section R. Venkataraman vs Union of India and Anr., [19,9] 2 SCR 202; distinguished. Chief Security officer, Eastern Railway & Anr. vs Ajay Chandra Bagchi ; overruled. In the instant case (a) there is no legal error in the impugned order passed by the Government of India, retiring Mr. Reddy. The order is not arbitrary as could be seen from the material of the record. The Government of India acted on the orders passed by the Home Minister concerned who had considered the report of the Review Committee in its various aspects. There is nothing to show that Reddy was victimised in any way. On the other hand, the history Of his service shows that he was always given his due. He was taken by the I.P.S. and allotted the year 1952. He was promoted to the selection grade also at the proper time. The order of suspension was withdrawn and the department enquiry was dropped and the officer was reinstated and later promoted as D.I.G. These facts completely militate against the concept of victimisation. [756 F H, 757 A] (b) The impugned order is a bonafide order and does not suffer from any legal infirmity. [757 G]

One Ranendra died unmarried on November 16, 1952 leaving the alleged will (Exhibit 1) executed on November, 8, 1952. Ranendra left behind him three brothers Jitendra Chandra Bose, Gopendra and Manindra plaintiff No. 1. Manindra and Jogendra (Plaintiff No. 2) had been appointed executors of the will. By the will Ranendra bequeathed one half of his properties to his nephew, Bhabesh, who was the son of his younger brother, Phanindra, who had predeceased him, and the remaining half to his younger brother Manindra for life, and after Manindra 's death to Bhabesh absolutely. The executors of the will as aforesaid filed an application before the Subordinate Judge. Alipore, for probate of a will executed by Ranendra. Jitendra entered caveat and filed a written statement and contested application for probate. During the pendency of the suit, Jitendra died and his heirs who were substituted, contested the suit. The contentions were that Ranendra was not in a physical or mental condition to execute a will; he was in a semi conscious state of mind and had not the testamentary capacity to execute the alleged will and that the alleged will was brought into existence at the instance, and under the influence of the propounder Manindra; that the signatures of Ranendra on the will were not genuine. The trial court found that the signatures of the testator and the attesting witnesses were genuine and that the provisions of the will was neither unfair nor unnatural. But the trial court dismissed the suit and refused to grant probate of the will on the ground that there were certain "doubts and suspicions about the condition of the testator 's mind on 8 11 1952". In appeal before the High Court, the decree of the trial court was set aside and the propounder was granted probate of the will. Dismissing the appeal by certificate granted by the Calcutta High Court under Article 133(1)(b) of the Constitution, the Court, ^ HELD: 1.1. The mode of proving a will does not ordinarily differ from that of proving any other document except to the special requirement of attestation prescribed in the case of a will by section 63 of the Successions Act. [1191 D] 1:2. The onus of proving the will is on the propounder and in the absence of suspicious circumstances surrounding the execution of the will, proof of test a 1189 mentary capacity and the signature of the testator as required by law is sufficient to discharge the onus. Where, however, there are suspicious circumstances, the onus is on the propounder to explain them to the satisfaction of the court before the court accepts the will as genuine. Even where circumstances give rise to doubts, it is for the propounder to satisfy the conscience of the court. The suspicious circumstances may be as to the genuineness of the signatures of the testator, the condition of the testator 's mind, the dispositions made in the will being unnatural, improbable or unfair in the light of relevant circumstances, or there might be other indications in the will to show that the testator 's mind was not free. In such a case the court would naturally expect that all legitimate suspicions should be completely removed before the document is accepted as the last will of the testator. If the propounder himself takes the prominent part in the execution of the will which confers a substantial benefit on him, that is also a circumstance to be taken into account, and the propounder is required to remove the doubts by clear and satisfactory evidence. If the propounder succeeds in removing the suspicious circumstances the court would grant probate, even if the will might be unnatural and might cut off wholly or in part near relations. [1191 D H 1192 A] Shashi Kumar Banerjee & Ors.v. Subodh Kumar Banerjee & Ors, A.I.R. 1964 S.C. 529; H. Venkatachala Iyengar vs B.N. Thimmajamma & Ors., [1959] Supp. 1 S.C.R. 426; Rani Purnima Devi and Another vs Kumar Khagendra Narayan Dev and Another, followed. A circumstance would be "suspicious" when it is not normal or is not normally expected in a normal situation or is not expected of a normal person. [1192 A B] 1:4. A careful perusal of the eleven circumstance shows that they are by no means suspicious circumstances and stand self explained. On the contrary the following circumstances lend strong support to the plaintiffs ' case of genuineness and valid execution of the will: (i) Gopendra one of the brothers, who has not been given anything under the will had filed a written statement stating that the "has no objection to the grant of probate inasmuch as the will is executed and attested according to law"; (ii) the disposition under the will is quite fair and there are no suspicious circumstances in it at all; (iii) as there were litigations between the two groups of the brothers, the will was the natural outcome to avoid further future litigation. B C] Harmes and Anr vs Hinkson, , referred to.

M/s. Parekh Automobiles Ltd., respondent No. 1, had been allotted retain outlet by Indian Oil Corporation, respondent No. 2, for sale of its petroleum products at Dangiawas, which was outside the limits of the appellant. Respondent No. 2 had its depot near Raikabag Station at Jodhpur where it stored petroleum products for supply to various pump stations situated within the limits of the appellant as well as situated outside its limits. Respondent No. 2, being a public sector undertaking, was provided current account facilities under section 133 of the Rajasthan Municipalities Act, 1959, and so respondent No. 2 had not to pay octroi tax on such consignments at the time of entry of goods within the limits of the appellant. For this purpose, respondent No. 2 was provided with the export facilities and supplied with entry passes under Rule 13 of the Rajasthan Municipal Octroi Rules 1962. Under rule 13(4), the amount of duty payable, in the case or persons who had the current account facilities, was determined and collected on the basis of the total amount of goods that had come in as reduced by the total amount of goods that had gone out, the balance being presumed to have been consumed, used or sold within the municipal limits. It was alleged that the appellant suspended the current account facility under section 133 of the Act and took the stand that octroi would be charged from Respondent No. 2 on the goods brought within the municipal limits if these were sold within the limits of the appellant although such goods were mean for use and consumption of the consumers outside the municipal limits. As a consequence of this action of the appellant, respondent No. 2 charged octroi duty on supplies made to respondent No. I at Dangiawas by adding the amount of octroi tax in the bills. Respondent No. 1 filed a writ petition in the High Court praying inter alia for a direction or an order restraining the Municipal Council from realising any tax on diesel, etc. which were supplied to respondent No.1 at Dangiawas by respondent No. 2, and for refund of octroi tax already paid. It was contended on behalf of respondent No. 1, in the High Court, that the Municipal Council had no jurisdiction to levy octroi on the goods brought within the municipal limits but not sold, consumed or used therein and subsequently exported outside the said limits; that actual sale took place only at Dangiawas and since neither the sale nor the consumption nor the use of the petroleum products in ques tion took place within the limits of the municipa 50 lity of Jodhpur, and Municipal Council was not entitled to levy any octroi thereon; alternatively, even if the sale was held to have taken place at Jodhpur, still, octroi could not be levied as the goods so sold were meant for use of con sumption outside the municipal limits; and that the word 'sale ' occuring under section 104 of the Municipalities Act could not be read without reference to use or consumption, as sale simplicitor by itself did not attract the levy of octroi, unless the goods were meant for use or consumption of the ultimate consumer in the area of the Municipal Council. The defence of the Municipal Council was that because the sale took place at Jodhpur, octroi was chargeable irre spective of the fact where it was consumed or used; that as soon as the goods entered the octroi limits, it gave rise to taxable event unless a declaration as contemplated under rule 9 had been made; that respondent No. 2 did not make the declaration as required by rule 9 and rule 13(4) of the Octroi Rules; and that under sub rule (4) of rule 13 the goods exported were to be lessened only if such goods had not been sold within the municipal limits and were exported out within a period of six months from the date of entry. The claim of refund was contested on the ground that there was no privity of contract between respondent No. 1 and the Municipal Council as the demand of octroi was not made from respondent No. 1. The case of the Indian Oil Corporation, respondent No. 2, was that under the terms of the agreement respondent No. 2 was obliged to transport petroleum products out of its depots and supply petroleum products to its dealers at the destination in its own truck tankers, and till the supplies were made at the destination, the goods were at the risk of respondents No. 2 and therefore the goods were sold at the retail outlet where the deliveries were made and not at Jodhpur. The learned Single Judge did not permit the petitioners to raise the question that the sale took place only outside the municipal limits of Jodhpur since that involved an investigation into facts which could not be undertaken in a writ petition, and proceeded on the footing that the sale of the products in question took place within the limits of Jodhpur. He, however. accepted the contention of IOC and the dealer that even if the sale was taken to have been effected within Jodhpur, no octroi was leviable as admittedly the goods had been sold in Jodhpur only for their onward trans mission for use and consumption in Dangiawas outside the municipal limits. The prayer for refund of the octroi tax was, however, refused. The Division Bench dismissed the appellant 's appeal and partly allowed the appeal filed by respondent No. 1. On the basis of the judgments of this Court in Burmah Shell Oil Storage & Distribution Co. India Ltd. vs The Belgaum Borough Municipality, [1963] Supp. 2 SCR 216 and Hiralal Thakorlal Dalai vs Broach Municipality, [1976] Supp. SCR 82 wherein it was held that the sine qua non for levy of octroi was con sumption, and that the sale in order to attract levy of octroi shall be for the purpose of use or consumption 51 of the ultimate consumer, the Division Bench held that sale simplicitor would ot attract the levy of the octroi, that the word 'sale ' in this context had to be read with refer ence to the use or consumption and 'use, consumption and sale ' had to read in a disjunctive manner. The Division Bench further held that rule 13 was a special provision in regard to; the persons who had been granted current account facilities and this rule was not subject to either rule 6 or rule 9 but was an overriding rule independent of rules 6 and 9. The Division Bench was of the opinion that section 133 of the Municipalities Act, alongwith rule 13 of the octroi Rules left no doubt that no conclusive presumption of the goods having been brought within the municipal limits for consumption, use or sale therein could be drawn in cases where special current account facilities had been given to a person. The Division Bench also held that the claim of refund by respondent No. 1 was not maintainable. The Bench however directed that the Municipal Council would have to refund to the Indian Oil Corporation, respondent No. 2, the amount of octroi duty paid on the petroleum products re exported by it to Dangiawas outlet for supply to respondent No. 1, who would recover the same from the Indian Oil Corporation. M/s. Motilal Padampat Sugar Mills Co. Ltd. vs State of Uttar Pradesh & Ors., ; and State of Madhya Pradesh & Anr. vs Bhailal Bhai, ; , relied upon. Before this Court, the parties reiterated their conten tions raised before the High Court. In addition, it was contended on behalf of the appellant that there was nothing in the two judgments of this Court to the effect that if goods were brought into a local area for sale to a dealer who then transported the goods outside the local area for sale to consumers, no octroi would be chargeable. It was further contended that during the period in dispute, as also today, there was no current account facility to the respond ent No. 2 under rule 13 of the Octroi Rules and as admitted ly the respondent No. 2 was not complying with the require ments of rules 6 and 9 of the said Rules and not filing any declaration, the Municipal Council had the right to treat the goods brought within the Municipal limits, as those brought for consumption, use or sale under sub rule (2) of rule 9 of the said Rules and thereby attracting octroi. On the other hand, it was contended on behalf of the respond ents that it was incorrect to say that the current account facility was suspended or withdrawn. Dismissing the appeal, this Court, HELD: (Sabyasachi Mukharji and M.H. Kania, JJ. Per Sabyasachi Mukharji, J). (1) The High Court was right in holding that it was difficult and inappropriate under Article 226 to determine the question as to where the sale 52 took place, and that even if the sale took place within the octroi limits of Jodhpur Municipal Council for the use or consumption of the ultimate consumer outside the octroi limits of Jodhpur then the taxable even did not take place in the octroi limits of Jodhpur. [66F G] (2) In view of the decisions of this Court and in view of the language of section 104 of the Municipalities Act and the facts, the High Court was right in holding that no octroi was leviable on petroleum products re exported out side the municipal limits for consumption and use outside the municipal limits. [65F] Burmah Shell Oil Storage & Distributing Co. Ltd. vs The Belgaum Borough Municipality, [1963] Supp. 2 SCR 216 and Hiralal Thakorelal Dalai vs Broach Municipality & Ors., [1976] Sup. SCR 82, followed. (3) In view of the facts of this case, the title passed to the goods outside the municipal limits even in respect of the petroleum products which were sold within the municipal limits. If the goods were brought within the municipal limis for the purpose of sale (sale means passing of the title to the purchaser), then different considerations might have applied. [73D] (4) Analysis of Section 133 and the current account facility therein indicates that only on the goods for use, consumption or sale, octroi is leviable. Under this provi sion, octroi tax is paid at the tune of settlement of peri odical account, say after every month. Thus, question of complying with rule 6 or rule 9 does not arise as they apply when octroi tax is paid at the time of entry of goods. The delivery of entry passes and transport passes is only to facilitate settlement of octroi account on goods which have been retained in Municipal area for use and consumption. [73H; 74A] (5) A perusal of section 133 would show that current account facility is provided by substantive section, whereas rule 13 is procedure provided with ' the object of providing facility of settlement of account of payment of octroi tax. In other words, according to rule 13(4), octroi tax is charged on quantity mentioned in entry passed minus the quantity mentioned in transport passes, i.e., on quantity of petroleum products used or consumed within the Municipal limits of Jodhpur Municipality. [75A B] (6) In view of the confused state of pleadings and averments, it was not possible to hold that current account facilities were withdrawn or cancelled. If that is the position, then there is no question that the High Court was right in the order it passed and the direction it gave. [75E] Per Ranganathan, J. (1) When goods arrive at an octroi outpost, they may be coming in either for consumption, use or sale within the municipal limits or for transportation outside these limits. Rule 9 requires every person bringing goods within the municipal limits to make a declaration as to what the goods are intended for. [77E] 53 (2) Under the normal procedure for the assessment and collection of octroi duty, the declaration under Rule 9 becomes important and the terms of the declaration deter mines the incidence of the duty. Rule 13, however, contem plates a totally different scheme for the assessment and collection of octroi for the special type of cases. [78C D] (3) A comparison of the two sets of provisions will make it clear that they are two independent and mutually exclu sive modes of assessment and collection of duty. Under the cash system of payment, a declaration under rule 9 is abso lutely essential. The mode of collection of duty in respect of a person having current account facilities, however, does not depend upon any such declaration or upon the mode of utilisation of the goods as indicated in such declaration, because in the case of the current account holders, the duty payable in respect of the entirety of the goods brought in is straightaway debited to his account on the basis of entry passes. The duty payable in respect of the goods transported outside is later on credited to his account on the basis of the transport passes. [79E G] (4) The High Court was fully justified in holding that the terms of rules 6 and 9 have no relevance to the payment of duty in cases covered by the current account facility envisaged under rule 13, and that the present case cannot be brought within the terms of proviso to rule 9(2) on the basis of a deemed consumption, use or sale within the munic ipal limits. In cases where rule 13 applies, rule 9 is excluded. [80B] (5) The present case is governed by the terms of rule 13 and the Indian Oil Corporation is entitled to go on paying octroi duty on the basis of the goods brought by it within the Municipality less the goods transported outside the Municipality, may be in pursuance of a sale within the Municipality, so long as such sale is in pursuance of an intention that the goods should be consumed or used outside the Municipal limits. [80G] (6) The appellant should not be permitted to raise at this stage a new plea that the current account facility granted to the Indian Oil Corporation had been revoked when all along, in the earlier proceedings in the High Court, the case had proceeded on the footing that the Indian Oil Corpo ration had been having and continued to have current account facilities.

The petitioner was serving as an officiating Teleprinter Supervisor at Jaipur when the employees of the Posts and Telegraphs Department went on strike from the midnight of July 11, 1960, throughout India and there was a similar strike at Jaipur. The petitioner 's case was that he was on duty that day from 12 noon to 8 p.m. and after his duty was over, he did not go home but went to the dormitory where he fell asleep as he was tired. On hearing some noise he woke up at 11 30 p.m. and wanted to go home but was arrested by the police under the Essential Services Maintenance Ordinance, No. 1 of 1960. The criminal charge was however withdrawn. On July 21, 1960, a chargesheet was served on the petitioner in the following terms: "That Shri Radhey Shyam Sharma I C/S Telegraphist, CTO Jaipur committed gross misconduct in that on the midnight of the 11th July, 1960, he took part in a demonstration in furtherance of the strike of the P. & T. Employees in violation of the orders dated 8 7 1960 issued by the Government of India under the 'Essential Services Maintenance Ordinance, 1960 (1 of 1960) ' prohibiting strikes in any Postal, telegraph or telephone service". The enquiry officer found him guilty of the charge and ordered that his pay should be reduced in the time scale by three stage,% for a period of two years and on restoration the period of reduction was not to operate to postpone his future increments. 0n appeal, the Director General considered the whole matter on merits and rejected the appeal. In this Court it was urged that the punishment imposed upon the petitioner was violative of his fundamental rights under articles 19(1)(a) and (b), reliance being placed on two cases of this court in Kameshwar Prasad vs State of Bihar and O. K. Ghosh vs E. X. Joseph; that sections 3, 4 and 5 of the Ordinance were ultra vires, as they contravened article 19(1.)(a) and (b) and that in any case there was no evidence on which it could ' be found that the charge against him had been proved. Held: The provisions of the Ordinance in sections 3, 4 and 5 did not violate the fundamental rights enshrined in article 19(1)(a) and (b). A perusal of article 19(1) shows that there is no fundamental right to strike, and all that the ordinance provided was with respect to any illegal strike as provided in the Ordinance. There was no provision in the Ordinance which in any way restricted those fundamental rights. It was not in dispute that Parliament had the competence to make a law in the terms of the Ordinance and therefore the President had also the power to promulgate, such an Ordinance. 404 The competence of the legislature therefore being not in dispute it cannot be held that the Ordinance violated the fundamental rights guaranteed under article 19(1)(a) and (b). All India Bank Employees Association vs National Industrial Tribunal, ; , referred to. The two cases relied on by the petitioner have no relevance in connection with the charge in the present case. The punishment given to the petitioner cannot therefore be set aside on the ground that the charge was in violation of the fundamental rights guaranteed under article 19(1)(a) and (b). Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369 and O. K. Ghosh vs E. X. Joseph, [1963] Supp. 1 S.C.R. 789, held inapplicable. If on the undisputed facts the authorities came to the con clusion that the petitioner acted in furtherance of the strike 'Which was to commence half an hour later and was thus guilty of gross misconduct, it could not be said that there was no evidence on which the authorities concerned could find the charge framed against the petititoner proved.

Case No. 275 of 1951. Appeal under article 132 (1) of the Constitution of India from the Judgment and Order dated April 11, 1951, of the High Court of Judicature at Calcutta (Das Gupta and Mookerjee JJ.) in Criminal Revision Case No. 1028 of 1950 arising out of the Order dated November 23, 1950, of the Presidency Magistrate, 8th Court, Calcutta, in P. R. Case No. 2107 of 1950. N.C. Chakravarti for the appellant. B.Sen for the respondent. M.C. Setalvad, Attorney General for India (P. A. Mehta, with him), for the intervener. December 5. The Judgment of the Court was delivered by BOSE J. This is an appeal under article 132 (1) of the Constitution. Leave to appeal was granted by the High Court at Calcutta. 84 646 The appellant was convicted under section 7 (1) of essential Supplies (Temporary Powers) Act of 1946 for an offence said to have been committed on the 24th of October, 1950 The conviction was on At two counts: (1) for selling cloth above the controlled rate and (2) for not issuing a cash memo. The sentence was rigorous imprisonment for three months and a fine of Rs. 200 with another three months in default. The trial was before the 8th Presidency Magistrate at Calcutta who adopted a summary procedure. There was an application for revision before the High Court but it was dismissed. An application for leave to appeal to this Court was then filed. It was granted on a ground which was not taken either in the original court or in the revision before the High Court, namely that the Essential Supplies Act of 1946 under which the appellant was convicted was not in force on the 24th of October, 1950, and so there could be no conviction under it. The validity of this Act was challenged in Joylal Agarwala vs The State(1) but this Court he Id that the Act was valid up to the 31st of March, 1950, that being the life of the Act at the date relevant to that case. It is necessary to explain that the Act is a temporary Act and that its life has been extended from time to time after the date of its first expiry for a year at a time. The latest extension at the date of the previous case was up to the 31st of March, 1950. We therefore start with the position that the Act was a good Act up till that date. The Act was further extended up till the 31st of March, 1951, by a resolution dated the 20th of December, 1949. This is the extension with which we are concerned and which is now challenged, the argument being that there was no legislative body in existence on that date competent to extend the life of the Act for another year. The Gazette notification setting out the resolution is in the following terms (1) ; 647 `` New Delhi, the 22nd December, 1949. No. F. 7 WL (1) 47. The following resolution which wag passed by the Constituent Assembly (Legislative) at its meeting held on the 20th of December, 1949, is hereby published for general information : In pursuance of the proviso to section 4 of the India (Central Government and Legislature) Act, 1946, as adapted by the India (Provisional Constitution) Order, 1947, this Assembly hereby approves the extension of the period mentioned in sections 2 and 3 of the said Act for a further period of twelve months commencing on the first day of April, 1950. " It has to be seen whether the body which passed that resolution had the power to extend the Act. It can be accepted, because of the decision in Joylal Agarwala vs The State(1), that the Constituent Assembly had authority on 25th of February, 1948, and again on 23rd of March, 1949, to make two successive extensions of the Essential Supplies Act of a year each. The only question, therefore, is whether any body continued to have that power on the dates material here. The extensions jug t referred to were brought about as follows. The Constituent Assembly derived its authority to pass the above resolution from section 4 A of the India (Central Government and Legislature) Act of 1946. This was an Act of the British Parliament which originally conferred on the British Houses of Parliament the power of approving by resolution the extension of the period fixed by section 4. Later, the Indian Independence Act of 1947 was passed by the British Parliament and in exercise of the powers conferred by sections 9 and 19 of that Act the Governor General by an Adaptation Order substituted the words " Dominion Legislature " for the words " Houses of Parliament " and thus enabled the Dominion Legislature to exercise the powers of Parliament in this behalf. At the same time, the (1) ; 131. 648 Governor General introduced section4 A into the British Act of 1946, the India (Central Government and Legislature) Act, 1946, by way of adaptation and conferred on the Constituent Assembly the, powers of the Dominion Legislature. Thus the Constituent Assembly became empowered to extend the period fixed in section 4 by the passing of a resolution and that in its turn had the effect of extending the life of the Essential Supplies Act of 1946, because section 1 (3) of that Act says that it shall cease to have effect on the expiration of the period mentioned in section 4 of the India (Central Government and Legislature) Act of 1946. Now section 4 A provides that the Constituent Assembly shall have the powers of the Dominion Legislature under the British Act " until other provision is made by or in accordance with a law made by the Constituent Assembly under sub section (1) of section 8 of the Indian Independence Act, 1947. " Turning to sub section (1) of section 8 we find that the British Parliament invested the Constituent Assembly with all the powers of the Dominion Legislature " for the purpose of making provision as to the constitution of the Dominion. " That power it exercised and drew up the Indian Constitution, but in doing so it decided to bring the constitution into being in two instalments and it did that by enacting article 394 and enacting in it that that article and certain others, including article 379, should come into force " at once " at once being the 26th of November, 1949 while the remaining articles were to come into force on the 26th of January, 1950. Now article 379 (1) provides that `` Until both Houses of Parliament have been duly constituted and summoned to meet for the first session under the provisions of this Constitution, the body functioning as the Constituent Assembly of the Dominion of India immediately before the commencement of this Constitution shall be the Provisional 649 Parliament and shall exercise all the powers and perform all the duties conferred by the provisions of this Constitution on Parliament. " It was argued on behalf the appellant that because of this article the Constituent Assembly disappeared as a law making body on and after the 26th of November, 1949, and that its place was taken by the Provisional Parliament referred to by that article, and as the resolution of the 20th December, 1949, purports to be a resolution of the Constituent Assembly (Legislative) and not of the Provisional Parliament, it is a resolution of a body which no longer had authority to enact laws or pass a resolution of this kind affecting the laws of the land. The learned Attorney General argues, on the other hand, that the Constituent Assembly continued to function as such and to retain its right to exercise its dual functions of constitution making and law making right up to the last stroke of midnight on the 25th of January, 1950. The very next second, when a new day ushered in a new era for this country, it ceased to exist as a Constituent Assembly and its place was taken by the Provisional Parliament of India. We need not decide this point, for even if the Provisional Parliament was intended to function on the 26th of November, 1949, and not from the 26th of January, 1950, it is clear that the Constituent Assembly was to continue in existence till " the commencement of the Constitution" which, by article 394, is the 26th of January, 1950. Consequently, the power conferred on it as a designated body, by the English statute, as adapted by the Governor General, could be validly exercised on the 20th of December, 1949, and was so exercised when it passed,the resolution of that date. The Provisional Parliament was not a body authorised to exercise the special power of approving the extension of the period mentioned in section 4 of the English statute as that was not one of "the powers conferred by this Constitution on Parliament," nor can bringing the Provisional Parliament into existence on the 26th of November, 1949 650 ( assuming that to be the case) be regarded as other provision" made by the Constituent Assembly within the meaning of section 4 A of the English Act. It follows the Constituent Assembly was not deprived of these specially designated powers on the date of the resolution. The next question is whether the Constituent Assembly had the power to extend the life of this particular piece of legislation beyond the 26th of January, 1950. The question was posed in this way. It was conceded that the Essential Supplies Act was validly extended up to the 31st of March, 1950. The resolution which extended its life for another year beyond this was passed on the 20th of December, 1949, but it was argued that it could not take effect till after the expiry of the previous extension, that is, not until the 1st of April, 1950. But by that time the Constitution had come into being and so neither the Constituent Assembly nor the Provisional Parliament could have extended the life of the temporary Act after its expiration on the 31st of March, 1950, because of Explanation III to article 372. It follows that the Constituent Assembly which purported to effect the extension ahead of time could not do, in anticipation, what the Constitution says cannot be done after its commencement. There is nothing in this contention. The resolution of the 20th December, 1949, took immediate effect and its effect was to alter the date fixed for the expiration of the period mentioned in section 4 of the English statute from the 31st of March, 1950, to the 31st of March, 1951. The Essential Supplies Act fixed the date for its own expiration as the date flied for the expiration of the period mentioned in section 4 above. Accordingly, it was an Act which was alive immediately before the 26th of January, 1950, and which was due, at that time, to expire of its own force, not on the 31st of March, 1950, but on the 31st of March, 1951, and as this was a law in force immediately before the commencement of the Constitution 651 it continued in force, because of article 372(1) and Explanation III, until it was due to expire. That exhausts the constitutional points. We bold that there was a body in existence. at all material times competent to extend the life of the Act up till the 31st of March, 1951, and that it did so extend its life on the 20th of December, 1949. The Act continued in force until after the Constitution and therefore was a living Act at the date of the offences, namely the 24th of October, 1950. Counsel then sought to attack the conviction on other grounds but a,,; the leave to appeal was confined to the constitutional points be cannot so far as that is concerned, be permitted to travel further. Of course, it would have been competent for him to file a separate petition for special leave to appeal on the other points but had be done so it would have followed the usual course and he would have been obliged to obtain special leave in the usual way. We therefore treated this part of the argument as one asking for special leave to appeal. We heard him fully and are of opinion that these remaining points are not ones on which special leave to appeal should be granted. We therefore reject this irregular petition for special leave to appeal on its merits. The appeal filed under article 132 (1) is also dismissed. Appeal dismissed. Agent for the intervener: G. H. Rajadhyaksha.

The Essential Supplies (Temporary Powers) Act, 1946, a temporary Act which was being extended from time to time after the date of its first expiry, for a year at a time, was extended up to the 31st March, 1951, from the 31st March, 1950, by a resolution passed by the Constituent Assembly (Legislative) at a meeting held on the 20th December, 1949. The appellant who was convicted for an offence committed under the Act on the 24th October, 1950, contended that the Constituent Assembly had no power to extend the Act in view of, the provisions of article 379 (1) of the Constitution, and that at any rate it had no power to extend the duration of the Act beyond the 26th January, 1950 645 Held, that, even assuming that under article 379 (1) the Provi sional Parliament was intended to function from the 26th November, 1949, and not from the 26th. January, 1950, as the Constituent Assembly was to continue in existence till the 26th January 1950, the power conferred on it as a designated body by the India (Central Government and Legislature) Act, 1946, of the British Parliament as adapted by the India (Provisional Constitution) Order, 1947, could be validly exercised on the 20th December, 1949, and was so exercised when it passed the resolution on that date. The Provisional Parliament was not a body authorised to exercise the special power of approving the extension of the period mentioned in section 4 of the India Act of 1946 as that was not one of the powers conferred by the Constitution on the Provisional Parliament, nor can bringing the Provisional Parliament into existence on the 26th November, 1949, assuming that to be the case, be regarded as " other provision " made by the Constituent Assembly within the meaning of section 4 of the India Act of 1946. Held further, that the resolution extending the life of the Act beyond the 26th of January, 1950, was not invalid, as it came into immediate effect and not on the 1st of April, 1950, when the previous extension expired. Accordingly the Act with its duration extended by virtue of the resolution was an Act immediately in force before the commencement of the Constitution anti so was saved by article 372 (1) and Explanation III.

The respondent was appointed as a temporary clerk in an engineering division of the Government. The attempt of another clerk to impersonate and appear for him in a depart mental examination was detected. The Executive Engineer obtained explanations from both the clerks and reported the matter to the Superintending Engineer, who brought the matter to the notice of the ChiefEngineer. The Chief Engi neer wrote to the Superintending Engineer to award suitable punishment. The Superintending Engineer passed the order that the respondent a "temporary clerk is hereby served with one month 's notice to the effect that his services shall not be required after one month from the date of receipt of this notice. " The respondent filed a suit challenging the order on the ground that the termination was one passed by way of punishment and therefore attracted Art 311 of the constitution;. and since the provisions of the Article had not been complied had not been complied with the order was void. The Trial Court and the First Appellate Court dismissed the suit. But the High Court went,through the official correspondence preceding the passing of the impugned order, and observing that a close scrutiny of the facts on record showed that the order was passed by way of punishment on the basis of the enquiry proceeding and as a result of the recommendation by the Executive Engineer followed by the direction issued by Chief Engineer, allowed the second appeal. Allowing the appeal to this Court, HELD :(1) It is no longer open to any one to urge that the constitutional position in regard to cases of the present nature is not clear. An examination of the deci sions of this Court shows that there is no real conflict in their ratio decidendi. Even if there is a conflict, the proper course for a High Court is to find out and follow the opinion expressed by larger benches of this Court in preference to those expressed by smaller benches of this Court. This practice is followed by those Court itself and has hardened into a rule of law. [475B C] Union of India & Anr. K.S. Subramanian; , , followed. State of U.P. & Ors vs Sughar Singh [1974] 2 .S.C.R. 335: ; , The State of Punjab vs P.S. Cheema A.I.R. 1975 S.C. 1096, Satish Chandra Anand vs The Union of India ; , Shyam Lal vs State of U.P. ; , Parshotam Lal Dhingra vs Union of India ; , Gopi Kishore Prasad vs Union of India AIR. , The State of Orissa & ,Anr. vs Ram Narayan Das ; , Madan Gopal vs State of Punjab [1963] 3 S.C.R. 716, Rajendra Chandra Banerjee vs Union of India ; , Champakal Chimanlal Shah vs The Union of. India , Jagdish Mitter vs Union of India A.I.R. 1964 S.C. 449, State of Punjab & Anr. vs Shri Sukh Raj Bahadur ; , Union Of India 463 & Ors. R.S. Dhaba , State of Bihar & Ors. vs Shiva Bhikshuk Mishra R.S. Sial vs The State of U.P. & Ors. , Shamsher Singh & Anr. vs State of Punjab ; and The Regional Manager & Anr. vs Pawan Kumar Dubey [1976] 3 S.C.R. 540 referred to. (2) Before it is held that an order terminating the services of a Government servant amounts to punishment the Court must hold that either of the two tests,namely, (a) that the servant had a right to the post or (b) that he had been visited with evil consequences such as forfeiture of pay etc., is satisfied. Therefore, an order terminating the services of a temporary servant or probationer under the Rules of employment and without anything more will not attract article 311. Where a departmental enquiry is contem plated but an enquiry is not in fact proceeded with, article 311 will not be attracted unless it can be shown that the order, though. unexceptionable in form, is made following a report based on misconduct. Even though misconduct, negli gence, inefficiency or other disqualification may be the motive for the order of termination, if a right exists under the contract or the rules to terminate his services, then article 311(2) is not attracted unless the misconduct or negli gence is the very foundation of the order. Where there are no express words in the impugned order itself ' which throw a stigma on the Government servant, the Court would not delve into secretariat files to discover whether some kind of stigma could be inferred on such research. [469 A B; 473 C; 471 H; 475 F] Parshotam Lal Dhingra vs Union of India [1958] S.C.R. 828, R.S. Sial vs The State of U.P. & Ors. [1974] 3 S.C.R. 754, Shamsher Singh & Ant. vs State of Punjab ; and 1. N. Saksena vs State of Madhya Pradesh ; followed. (3) The respondent was a temporary hand and had no right to the post. Under the contract of service and the service rules applicable to him the State had the right to terminate his services by giving him one month 's notice. The order ex facie is an order of termination of service sim pliciter. It does not cast any stigma on the respondent nor does it visit him with evil consequences, nor is it founded on misconduct. Therefore, the respondent could not invite the Court to go into the motive behind the order and claim the protection of article 311(2) of the Constitution. [475 D E] (4) The High Court failed to appreciate the true legal .and constitutional position and upset the concurrent findings of fact arrived at by the Courts below, ignoring the well settled principle of law that a second appeal cannot be entertained on the ground of erroneous findings of fact, however, gross the error might seem to be. [475 G H] Paras Nath Thakur vs Smt. Mohani Das & Ors. [1960] 1 S.C.R. 271. Sri Ramanuja Jeer & Ors. vs Sri. Ranga Ramanuja Jeer & Anr. ; , P. Ramachandra Ayyar vs Ramalingam ; and Madamanchi Ramappa & . Anr. vs Muthaluru Bojappa ; , referred to.

The appellant was being prosecuted for offences under sections 120 B, 420, 471 and 468 read with section 34 I P.C., Section 167 (72) of the Sea Customs Act and Section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act 1947. At the time when the charge sheet was filed and the special judge took cognizance against the appellant sometime in October, 1970, the appellant ceased to be a public servant and, therefore, no sanction under Section 6 of the Prevention of Corruption Act, 1947 was obtained. The departmental enquiry against the appellant ended in his dismissal but the President of India allowed his appeal and set aside the order of removal from service passed by the Collector of Customs against him with directions to treat the period of absence from 5 9 1967 till the date of reinstatement as under suspension, and to institute de novo proceedings against the appellant after rectifying the defect in the charge sheet. While the departmental proceedings were going on, the trial against the appellant proceeded to its logical end except the arguments being heard. The appellant on being reinstated filed an application before the special Judge praying that all further proceedings be dropped as the prosecution against the appellant was initiated in the absence of a proper and valid sanction having been obtained under Section 6 of the Prevention of Corruption Act. The special Judge rejected it and the High Court confirmed the rejection. Dismissing the appeal by special leave, the Court ^ HELD: 1. Section 6(1) of the Prevention of Corruption Act, 1947 applies only where at the time when the offence was committed the offender was acting as a public servant. If the offender had ceased to be a public servant then section 6 would have no application at all. Furthermore, the point of time when the sanction has to be taken must be the time when the Court takes cognizance of an offence and not before or after. If at the relevant time, the offender was a public servant no sanction under section 6 was necessary at all. [835E F] In the instant case, no sanction under section 6 of the Act was necessary, as the appellant had ceased to be a public servant at the time when the cognizance of the case was taken against him by the special Judge. [836E] section A. Venkataraman vs The State, ; C. R. Bansi vs State of Maharashtra, ; followed. 833 2. A deeming provision cannot be pushed too far as to result in a most anomalous or absurd position. A deeming provision should be confined only for the purpose for it is meant. [837C, 838A] Commissioner of Sales Tax, U.P. vs The Modi Sugar Mills Ltd., ; ; Braithwaite & Co. India Ltd. vs Employees ' State Insurance Corporation; , ; Bengal Immunity Co. Ltd. vs State of Bihar and Ors., ; Commissioner of Income Tax, Bombay City vs Elphinstone Spinning and Weaving Mills Co. Ltd., 40 I.T.R. 142; applied. In the instant case: (a) The order of the President reinstating the appellant and creating a legal fiction regarding the period of suspension must be limited only so far as time period of and the incidents of suspension were concerned and could not be carried too far as to project it even in cases where actions had already been taken. [838A B] (b) The dismissal was not a nullity so as to vitiate all proceedings. The order passed by the President was not an order on merits. It was merely an order passed by the President in an appeal an a departmental enquiry and the appellant succeeded because of a manifest defect in the charge sheet. The President never intended that the appellant should be deemed to have been reinstated even for the purpose of section 6 of the POCA, 1947 so as to nullify actions completed, consequences ensued or transactions closed. In fact when the President observed that the appellant shall be deemed to have been placed under suspension from the date of the original order of dismissal it merely meant that for the purpose of certain civil consequences flowing from the order of the President namely the grant of subsistence allowance or other benefits the order would be deemed to be retroactive in character. [837A C] (c) At the time when actual cognizance by the Court was taken the appellant ceased to be a public servant having been removed from service. If some years later he had been reinstated that would not make the cognizance which was validly taken by the Court in October, 1970, a nullity or render it nugatory, so as to necessitate the taking of a fresh sanction. [838B C]

By these two petitions, the petitioner challenged the constitutional validity of the Bombay Land Requisition Act, 1948, as amended by the two amending Acts of 1950, and the enforceability of an order of requisition made by the Governor of Bombay under section 6 (4) (a) of the Act. The petitioner as the widow of the tenant claimed to be in possession, while the case made on behalf of the Government was that the tenant had before his death vacated the premises and handed over possession to a lodger. A copy of the order of requisition was affixed to the premises and the petitioner moved the High Court for a writ of mandamus, but the petition was dismissed. The Act was passed by the State Legislature on April 11, 1948, and by the first amending Act its life was extended for two years and by the second the words " the purpose of the State or any other public purpose" were substituted for the words ,,any purpose" occurring in section 5 of the Act with retrospective effect from the date of the Constitution. The Act came up for consideration in a previous decision of this Court and arguments were confined to grounds other than those specifically covered by that decision. It was contended on behalf of the petitioner that the Act was in conflict with article 3I (2) and became invalid at the commencement of the Constitution and the amending Acts, for which the assent of the President had admittedly not been obtained, were ineffective under article 31 (3) of the Constitution. It was further contended that sections 5 and 6 of the Act which made the relevant findings of the Government conclusive had the effect of impairing the powers of the Court, that it was nevertheless open to the Court to judge whether the facts found constituted vacancy in law and, lastly that the order in question was ineffective as the tenant was dead on the date it was made. Held, that the contentions raised on behalf of the petitioner must be negatived. 93 722 The constitutional validity of the Act was no longer open to question under articles 19 (1) (f) and 31 (2) of the Constitution in view of the decision of this Court in State of Bombay vs Bhanji Munji (1955) 1 S.C.R. 777. The Act, which did not obviously come within the mischief of cl. (6) of article 31, fell within the saving clause, cl. 5 (a), of the Article and was an existing law within the meaning of the Constitution and, therefore, valid at the commencement of the Constitution, although it did not contain the expression " for a public purpose " as required by cl. (2) of the Article. Clause (3) of the Article, which in terms applied to laws made after the commencement of the Constitution, had no application to the amending Acts which were in no way concerned with the main substantive provisions of the Act already passed, and the want of the President 's assent in no way affected their validity. As the Act was valid at the commencement of the Constitution and continued to be so thereafter, not being in any way inconsistent with the provisions of Part III of the Constitution so as to attract the operation of article 13, the Amending Acts were equally valid in law. Held further, that although in a proper case the High Court or this Court in the exercise of their special jurisdictions under the Constitution had power to determine how far the provisions of the Act had or had not been complied with, the finding of the State Government under section 5 Of the Act that the tenant had not actually resided in the premises for a continuous period of six months immediately preceding the date of the order,and that under s.6, the premises had become vacant at about the time indicated in the order, are conclusive and not collateral so as to be liable to be re opened and could not, therefore, be questioned either in this Court under article 32 or in the High Court under article 226 of the Constitution. Rai Brij Raj Krishna vs section K. Shaw, ; applied. Hubli Electricity Co. Ltd. vs Province of Bombay, (1948) L.R. 76 I.A. 57, held inapplicable. Mohsinali Mohomed Ali vs The State of Bombay, (1951) 53 Bom. L.R. 94: A.I.R. 1951 Bom. 303, referred to. The words " or otherwise " occurring in explanation (a) to section 6 of the Act could not be construed as ejusdem generis with the words immediately preceding them and must be held to cover all possible cases of vacancy due to any reason whatsoever. Skinner & Co. vs Shaw & Co., (I893) , referred to. An order of requisition passed under section 6 (4) (a) of the Act was not of the nature of an order passed in a judicial proceeding and the death of one of the parties could not make it wholly ineffective, the only consequence being that his name as one of 723 the parties to be served under section 13 Of the Act must be removed from the order.

The appellants, two of the electors of the Akola Constituency of the Madhya Pradesh State Assembly, filed an Election Petition against Respondent No. 1, the successful candidate in the election held on December 13, 1951, and the three other respondents who having been validly nominated went to the polls but were defeated. The Election Petition, under Section 80 of the Representation of the People Act of 1951, was admittedly time barred by one day. The Election Commission condoned the delay under the proviso to Section 85 of the Act and constituted a Tribunal for the trial of the petition. On pleadings of the parties, nine issues were framed by the Tribunal which are covered by the following questions: (1) Whether the election petition was presented by a properly authorised person. (2) Whether there was sufficient cause for presentation of the petition one day out of time. (3) Whether the petition was defective for non joinder of certain parties as respondents. (4) Whether the petition was defective for want of proper verification. (5) Whether,the petition was defective for vagueness of the particulars relating to the corrupt practices set out in Schedule A thereto. The Tribunal found only the first of the above points in favour of the petitioners by a majority. But in respect of the other four points, it held against the petitioners unanimously. As a result of the adverse findings on these four points, the petition was dismissed without any trial on the merits. It is against this dismissal that the appellants have now come up to this Court on obtaining special leave. When the delay in submitting an election petition is condoned 429 by the Election Commission in exercise of its power under the proviso to Section 85 of the Representation of the People Act (Act XLIII of 1951), it is not open to the Election Tribunal, under Section 90(4) of the Act, to reconsider the question of limitation. Even if, according to the requirement of Section 82 of the Representation of the People Act, any of the necessary parties other than the returned candidate has not been impleaded, the petition is not liable to be dismissed in limin on that sole ground; but it is a matter to be taken into consideration at the appropriate stage with reference to the final result of the case. Section 83(1) of the Act provides that an election petition has to be verified in the manner provided for verification of pleadings under the Code of Civil Procedure. Clauses (2) and (3) of rule 15 in Order VI of the Code lay down the procedure for verification of pleadings. Apart from those cases where the date of the pleading and the verification may be relevant and important, it would be a wrong exercise of discretionary power to dismiss an application on the sole ground of the absence of the date of verification. In such a case the applicant should normally be called upon to remove the lacuna by adding a supplementary verification indicating the date of the original verification and the reason for the earlier omission. The requirement of "full particulars" of corrupt practices in Section 83(2) of the Act, is one that has got to be complied with, with sufficient fullness and clarification, so as to enable the opposite party to meet the allegations against him fairly, and so as to prevent the enquiry from being turned into a rambling and roving inquisition. The primary responsibility for furnishing full particulars of alleged currupt practices and for filing a petition in full compliance with Section 83 (2) of the Act is that of the petitioners. If they fail to do so initially it is their duty and responsibility to remove the defects when opportunity is available. Tribunals, however, should not take an all too narrow view of their function in dealing with the various alleged defects in the petition and dismiss it on the ground of want of particulars. They should call for better particulars and if that order was not complied with strike out such of the charges as are vague. The petitioners also alleged that the returned candidate was disqualified to stand because he had interest in contracts with the Government. But the Tribunal ignored these allegations and without enquiring into their truth dismissed the petition on the ground that the allegations relating to the charge of corrupt practices were vague, Held that it was not in the interest of purity of elections that such allegations of disqualification should be ignored and that it was a matter which called for enquiry. Case remitted for enquiry with reference to the allegations that the returned candidate was disqualified and the charge of corrupt practice, which was held to be not vague. Dinabandhu vs Jadumoni ( ; and Jagan Nath vs Joswant ([1954] S.C.R. 892), followed, 430

Nine persons including K instituted a suit for ejectment and recovery of rent against two defendants and obtained a decree, but on appeal, the District judge set aside the decree against defendant No. 2. The plaintiffs then filed a second appeal in the High Court on February 29, 1952, and while the appeal was pending K died on September 8, 1955. No application for bringing his legal representatives on the record was, however, made within the prescribed time, and the appeal abated so far as K was concerned. When the appeal of the appellants other than K came up for hearing on September 1, 1958, a preliminary objection was taken for the respondents that the entire appeal had abated on the ground that the interest of the surviving appellants and the deceased appellant were joint and indivisible and that in the event of the success of the appeal there would be two inconsistent and contradictory decrees. The appellants claimed that the appeal was maint. ainable on the grounds that the surviving appellants could have filed the appeal against the entire decree in view of the provisions of O. 41, r. 4, of the Code of Civil Procedure, that they were, therefore, competent to continue the appeal even after the death of K and the abatement of the appeal so far as he was concerned, and that the Court could have reversed or varied the whole decree in favour of all the original plaintiffs and could have granted relief with respect to the rights and interests of K as well. Held (1) that the provisions of r. 4 of 0. 41 of the Code of Civil Procedure were not applicable, since the second appeal in the High Court was not filed by anyone or by even some of the plaintiffs as an appeal against the whole decree, but was filed by all the plaintiffs jointly, and the surviving appel 550 lants could not be said to have filed the appeal as representing K. (2) that an appellate court had no power to proceed with the appeal and to reverse and vary the decree in favour of all the plaintiffs or defendants under O. 41, r. 4, of the Code of Civil Procedure, when the decree proceeded on a ground comm. on to all the plaintiffs or defendants, if all the plaintiffs or the defendants appealed from the decree and any of them died and the appeal abated so far as he was concerned under O. 22, r. 3. Ramphal Sahu vs Babu Satdeo Jha, I.L.R. 19 Pat. 870; Amin Chand vs Baldeo Sahai Ganga Sahai, I.L.R. ; Baij Nath vs Ram Bharose, I.L.R. 1953 (2) All. 434; Nanak vs Ahmad Ali, A.I.R. 1946 Lah. 399; Pyarelal vs Sikhar, Chand, I.L.R. 1957 M.P. 21; Raghu Sutar vs Narusingha Nath, A.I.R. 1959 Orissa 148 ; Venkata Ran Rao vs Narayana, A. I.R. and Sonahar Ali vs Mukbul Ali, A.I.R. 1956 Assam 164, approved. Shripad Balwant vs Nagu Kusheba, I.L.R. ; Satula Bhattachariya vs Asiruddin Shaikh, I.L.R. and Somasundaram Chettiar vs Vaithilinga Mudaliar, I.L.R. , disapproved. (3) that the provisions of O. 41, r. 33 were 'not applicable since the appeal by the surviving appellants was not competent in the circumstances of the case. Mohomed KhaleeJ Shirazi & Sons vs Lee Tanneries 53 I.A. 84, relied on.

Dismissing the appeal by certificate, the Court ^ HELD: (1) The trichotomy originating with the Government of India (High Court Judges) Order, 1937, continued under section 10(2) of the Independence Act, 1947 and finally adopted by the does not suffer from any legal or constitutional infirmity and, on the other hand, has the sanction of the Constitution itself. [612 F] (2) The trichotomy is good not only because it was adopted by the Constitution till legislation was enacted under Article 221(2) thereof, but also because it was necessitated by reason of High Court Judges being drawn from three different sources, namely, Indian Civil Service, State Judicial Services and directly from the Bar. All the High Court Judges though holding equivalent posts are thus not similarly situated, particularly in regard to the payment of pension and other retirement benefits. The classification so made is a reasonable classification based on intelligible differentia having a proper nexus to the object to be achieved and there is thus no question of any violation of Articles 14, 221 and 314 of the Constitution. [610 H 611 A, C; 612F] (3) It is a cardinal principle of interpretation of statutes that the legislature does not use meaningless language and that every word used by it must be presumed to have some meaning even though the phraseology employed may sometimes be obscure or ambiguous. [608 F] The expression "who is a member of the Indian Civil Service" appearing in clause (a) of section 15 of the 1954 Act cannot be just ignored as being inapplicable to an existing situation and thus rendered otiose. What was meant was to describe as a class High Court Judges who had earlier been members of the Indian Civil Service so that they could be distinguished from High Court Judges who had not been such members. Although the Indian Civil Service ceased to function as a Service of the Secretary of State for India after the 15th of August 1947 when the 1947 Act was enforced, its members were automatically appointed to corresponding posts under the Crown in connection with the affairs of the Dominion of India or of a Province by virtue of the provisions of sub clause (1) of clause 7 of the India (Provisional Constitution) Order, 600 1947. The Indian Civil Service was not abolished in so many words and on the other hand, its members were given the right to continue in service on and after the 15th August, 1947 under the same conditions of service as were applicable to them immediately before that date as made out by sub sections (1) and (2) of section 10 of the 1947 Act. [608 G 609A, C D] All that sub section (1) enacted was that the provisions of the Government of India Act, 1935 ceased to operate in relation to appointments to the civil services of, and civil posts under, the Crown in India, by the Secretary of State but sub section (2) fully preserved the rights of and conditions of service applicable to holders of appointments already made by the Secretary of State, the only difference being that in place of the Secretary of State the employers of the incumbents became the respective Governments concerned. [610 B C] (4) The second proviso to section 14 of the 1954 Act has no application to the appellant inasmuch as he was not in actual receipt of a pension for his services in the Indian Civil Service under proviso to para 10 of Part D of second Schedule to the Constitution as added by the Constitution (Seventh Amendment) Act, 1956. The appellant having accepted appointment as a High Court Judge in continuation of his service as a District Judge, he never became entitled to pension for the period preceding his elevation to the Bench. Further he did not claim such a pension until the Accountant General requested him to indicate his option in accordance with the proviso to section 15 of the 1954 Act. The claim to two pensions, therefore, is inadmissible. [611E, H, 612D]

The appellant 's four children, the respondents in the appeal, two of whom were majors and two were minors, filed an application under section 488 of the Criminal Procedure Code in September, 1963 for an order requiring the appellant to pay them maintenance. The Trial Court allowed the application and fixed the monthly amounts to be paid as maintenance to each of the children. The appellant 's revision application was dismissed but one filed by the respondents was allowed whereby the Additional Sessions Judge submitted the case to the High Court with recommendations to enhance the maintenance allowance. The High Court accepted, the reference and thereafter, on an application by the appellant granted a certificate under article 134(1)(c) for an appeal to this Court. It was contended on behalf of the appellant that (i) section 488 Cr. P.C. was impliedly repealed by section 4 of the Hindu Adoptions and Maintenance Act 78 1956 insofar as it applied to Hindus; (ii) that the word "child" in section 488 means a minor; and (iii) that the maintenance fixed for two of the major children was based on wrong principles and was excessive inasmuch as expenses for education had been taken into consideration. HELD : Dismissing the appeal : (i)There was no inconsistency between Act 78 of 1956 and section 488 Cr. P.C. Both could stand together. The Act of 1956 is an Act to amend and codify the law relating to adoptions and maintenance among Hindus. The law was substantially similar before when it was never suggested that there was any inconsistency with section 488 Cr. The scope of the two laws is different. Section 488 provides a summary remedy and is applicable to all persons belonging to all religions and has no relationship with the personal law of the parties. [568 A B] Ram Singh vs State, A.I.R. 1963 All. 355; Mahabir Agarwalla vs Gita Roy, ; and Nalini Ranjan vs Kiran Rani, A.T.R. 1965 Pat. 442; approved. (ii)The word "child" in section 488 does not mean a minor son or daughter and the deal limitation is contained in the expression "unable to maintain itself". If the concept of majority is imported into the section, a major child who is an imbecile or otherwise handicapped will fall outside the purview of this section. If this concept is not imported, no harm is done for the section itself provides a limitation by saying that the child must be unable to maintain itself. The older a person becomes the more difficult it would, be to prove that he is unable to maintain himself. [569 F H] 566 Shaikh Ahmad Shaikh Mahommad vs Ba Fatma, I.L.R. [1943] Bom. 38, 40; Jagir Kaur vs Jaswant Sinqh ; , 84; in the matter of the Petition of W.B. Todd, (1873) 5 N.W.P. High Court Reports 237; and Bhagat Singh vs Emperor, 6 I.C. 960; referred to. Purnasashi Devi vs Nagendra Nath, A.I.R. 1950 Cal. 465; and State vs Ishwarlal, I.L.R. ; approved. Amiritliammal vs Marimuthu, A.I.R. 1967 Mad. 77; disapproved. (iii)While it was not necessary to decide whether expenses for education can be given under section 488, in the present case, the Court below were right in taking into consideration the situation at the time of passing the order i.e. that the two major children were college students. [570 G H]

Appeals Nos. 235 and 236 of 1960. Appeals from the judgment and decree dated January 23, 1959 of the Assam High Court at Gauhati in Civil Rules Nos. 138 and 139 of 1958. N. C. Chatterjee, Amjad Ali and K. R. Chaudhari, for the appellant (in C. A. No. 235 of 1960). D. N. Mukherjee, for the appellant (In C. A. No. 236 of 1960). section M. Lahiri, Advocate General, Assam and Naunit Lal, for the respondents. April 4. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two appeals arise out of two writ petitions Nos. 138 and 139 of 1958 filed respectively by the two appellants, Sonapur Tea Co. Ltd., of 15 D Sambhunath Pandi Street, Calcutta 9, and Musst. Mazirunnessa, wife of Abdul Gafur of Village Bhoknamari, District Kamrup, in which they challenged the validity of the Assam Fixation of Ceiling on Land Holdings Act I of 1957 (hereafter called the Act). The said writ petitions have been dismissed by the Assam High Court substantially on ground that since the impugned Act falls within the protection of article 31A the challenge made by the two appellants to the several provisions of the Act under articles 14, 19(1)(f) and 31(2) cannot be entertained Having dismissed the writ petitions principally on this ground the High Court granted certificates to both the appellants to come to this Court in appeal, 726 and so it is with the said certificates that the two appeals have been brought to this Court. It is not necessary to set out the material facts leading to the two writ petitions in any detail. It would be enough to say that under section 5 of the, impugned Act notices had been served on both the appellants by the respondent Deputy Commissioner and Collector of Kamrup calling upon them to submit a return giving the particulars of all their lands in the prescribed form and stating therein the selection of plot or plots of land (not exceeding in the aggregate the limits fixed under section 4) which they desired to retain under the provisions of the Act. The appellants contended before the High Court that the impugned Act under which this notice had been served on them was invalid and ultra vires and so they wanted the notice issued under section 5 to be quashed. That is the only relevant fact which needs to be stated for deciding the present appeals. The Act received the assent of the President on December 7, 1956, and was published in the official State Gazette on January 16, 1957. Subsequently it was amended by the amending Act XVII of 1957 and assent was obtained to the amendment thus made on November 8, 1957. By a notification issued by the State Government on February 7,1958, the amended Act came into force on February 15, 1958. It is relevant to consider briefly the broad features of the Act. It has been passed because the Legislature deemed it necessary to make provision for the imposition of limits on the amount of land that may be held by a person in order to bring about an equitable distribution of land. That being the object of the Act the principal provision of the Act imposes a ceiling on existing holding by s.4. The act extends to the seven Districts specified in section 1(2), and from its operation are excepted the lands specified in cls. (a) to (c) of s.2. These clauses refer to lands belonging to any religious or charitable institution of a public nature, lands held for special cultivation of tea or purposes ancillary thereto and lands exceeding 150 bighas utilised for large scale cultivation of citrus in a compact block by any person before January 1, 1955, lands 727 utilised by efficiently managed farms on which heavy investments or permanent structural improvements have been made and whose break up is likely to lead to a fall in production, and lands held by a sugar factory or a co operative farming society for cultivation of sugarcane for the purpose of such factory. It would thus be noticed that the measure of agrarian reform introduced by the Act has made exceptions in regard to lands which it thought should be left out of the operation of the Act in the interest of the economy of the State. Section 3 is the definition section. It defines land as meaning land which is or may be utilised for agricultural purposes or purposes subservient thereto and includes the sites of buildings appurtenant to such land. Under section 3(g) the word 'landholder ' has the meaning assigned to it in the Assam Land and Revenue Regulation, 1886 (Regulation I of 1886). 'Landlord ' under section 3(h) is a person immediately under whom a tenant holds but does not include the Government; and 'owner ' under section 3(i) includes proprietor, land holder or settlement holder as defined in section 3 of the Assam land and Revenue Regulation I of 1886 but it does not include Government. Section 3(o) defines 'tenant ' as meaning a person who holds land under another person and is, but for a special contract would be, liable to pay rent for that land to the other person, and includes a person who cultivates the land of another person on condition of delivering a share of the produce. These are the only definitions which are relevant for our purpose. Section 4 which is the key section of the Act prescribes ceiling on existing holding. The limit prescribed is 150 bighas in the aggregate subject to its provisos. Section 5 empowers the appropriate authorities to call for submission of returns by persons holding lands in excess of the ceiling. Section 8 empowers the State Government to acquire such excess lands by publishing in the official gazette a notification to the effect that such lands are required for public purpose, and such publication shall be conclusive evidence of the notice of acquisition to the person or persons holding such lands. Acquisition of excess lands prescribed by section 8 is followed by the vesting of the said 728 lands in the State under section 9. On publication of the notification under section 8 all such excess lands shall stand transferred to the State Government from the date of the publication of the said notification free from encumbrances by their original owner or owners. Under section 11 the Collector is authorised to take possession of the said lands. Section 12 prescribes the principles of compensation. and provides the manner in which the said compensation should be apportioned between the owner and the tenant; and s.13 provides for the manner of payment of such compensation. Under section 14 ad interim payment of compensation can be made as specified. These are the relevant provisions in Chapter 11 which deals with ceiling on existing holding and acquisition of excess land. Chapter III deals with the disposal of excess land. Under section 16(l) if there is any cultivating tenant in occupation of the land acquired from an owner then he shall have the option of taking settlement of such land within a prescribed period on the following conditions, namely, (a) that the area of land so settled together with any other lands held by him or any member of his family either as tenant or as owner shall not exceed in the aggregate the limit fixed under section 4, and (b) that he shall pay to the State Government in one or more equal annual installments not exceeding five an amount fixed by it but not exceeding the compensation payable by the State Government for acquisition thereof, provided that he shall have the right to adjust any amount which he is entitled to receive as compensation under the provisions of the Act against an equal amount which he is liable to pay under el. Section 16(2) provides that on payment of full amount under sub section (1) above the land shall be settled with a tenant with the status of a landholder. Under section 18 it is provided that if a tenant in occupation of any land acquired under section 8 does not take settlement of such land he shall acquire no right, title and interest in the land and shall be liable to be ejected. Chapter IV deals with excess land under annual lease and provides for its taking over. Chapter V puts a ceiling on future 729 acquisition, and chapter VI provides for ceiling for resumption of land from tenants for personal cultivation by the landlord. Chapter VII provides for the establishment of a Land Reform Board, and lays down its functions,while chapter VII contains miscellaneous provisions. That briefly is the scheme of the Act. The question which arises for our decision is whether this Act is protected under article 31A of the Constitution. This Article has been construed by this Court on several occasions in dealing with legislative measures of agrarian reforms. The object of such reforms generally is to abolish the intermediaries between the State and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the State. Article 31A(l)(a) provides that, notwithstanding anything contained in article 13, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by article 14, article 19 or article 31, provided that, where such law is a law made by the Legislature of a State, the provisions of this Article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. We have already seen that the assent of the President has been obtained both for the Act as it was originally passed and for the amending Act which subsequently modified some of the provisions of the original Act, and so the requirement prescribed by the proviso to article 31A(l)(a) is satisfied. That raises the question as to whether the rights of the appellants which are undoubtedly taken away or abridged constitute rights in relation to an "estate" as defined by article 31A(2)(b). We have already seen the definitions of land, landholder, landlord and tenant prescribed by section 3(f),(g),(h) and (o). It is common ground that the lands sought to be acquired fall within an "estate" as defined by article 31 A(2). Do the rights vesting in the appellants amount 92 730 to rights in relation to an "estate"? For deciding this question it would be necessary to consider the provisions of the existing law relating to tenure in force in Assam at the relevant time. The existing law relating to land tenure is to be found in the provisions of the a Assam Land and Revenue Regulation, 1886 (Regulation I of 1886). Section 3(g) of the said Regulation provides that a 'landholder ' means any person deemed to have acquired the status of a landholder under section 8. No hen we turn to section 8 we find that it provides the manner in which the status of a landholder can be acquired; and section 9 provides for the rights of such landholders. Under section 9 a landholder shall have a, permanent, heritable and transferable right of use and occupancy in is land subject to the payment of revenue, taxes, cesses and rates from time to time legally assessed or imposed in respect of the land. The remaining two clauses of this section need not be considered. It would be noticed that the expression "rights in relation to an estate" is of a very wide amplitude and as such the context requires that it must receive a very liberal interpretation. Thus considered there can be no doubt that the rights of the appellants which have been extinguished undoubtedly constitute "rights in relation to an estate" as defined by article 31A (2) (b). Indeed this position is not seriously disputed by Mr. Chatterjee who fairly conceded that having regard to the decisions of this Court in Thakur Raghubir Singh vs The State of Ajmer (Now Rajasthan) (1), Sri Ram Ram Narain Medhi vs The State of Bombay( ') and Atma Ram vs The State of Punjab (3 ) he would not be able to contend that the view taken by the High Court is erroneous. Faced with this difficulty Mr. Chatterjee attempted to argue that the Act is a colorable piece of legislation and should be struck down as such. His argument is that though ostensibly it purports to be a measure of agrarian reform its principal object and indeed its pith and substance is to acquire the property covered by its provisions and make profit by disposing of the (1) [1959] Supp. 1 S.C.R. 478. (2) [1959] Supp. 1 S.C.R. 489. (3) [1959] Supp. 1 S.C.R. 748. 731 same in the manner provided by Chapter III. Mr. Chatterjee seemed to suggest that the Legislature should not have made it necessary for the tenants to exercise an option for taking settlement under section 16 because the exercise of the said option involves the liability to pay the prescribed amount though in five installments, and that, according to Mr. Chatterjee indicates that the State wanted to make profit out of the bargain. Mr. Chatterjee 's grievance is against the provisions of section 18 also under which a tenant who does not opt for settlement is liable to be evicted. We are not impressed by this argument. The doctrine of colorable legislation really postulates that legislation attempts to do indirectly what it cannot do directly. In other words, though the letter of the law is within the limits of the powers of the Legislature, in substance the law has transgressed those powers and by doing so it has taken the precaution of concealing its real purpose under the cover of apparently legitimate and reasonable provisions (Vide: K. G. Gajapati Narayan Deo vs The State of Orissa) This position is not and can not be disputed. Is Mr. Chatterjee, however, right when he contends that the pith and substance of the Act and indeed its main object is to acquire property and dispose of it at a profit? That is the question which calls for our decision. In our opinion the answer to this question must obviously be against the appellants. The whole object of the Act which is writ large in all its provisions is to abolish the intermediaries and leave the lands either with the tiller or the cultivator. With that object ceiling has been prescribed by section 4, provisions have been made for the acquisition of excess. lands, and disposal of excess lands in favour of the tenants have been provided for. It is significant that in settling the lands upon the tenants it is expressly provided that the payment which the tenant may have to make and that too in one or more easy installments not exceeding five will never exceed the compensation payable by the State Government for acquisition (1) ; 732 thereof. This provision clearly negatives the assumption made by Mr. Chatterjee that any profit is intended to be made in the matter of disposal of excess lands. The State is paying compensation to the persons dispossessed under the principles prescribed by section 12; amongst the persons entitled to such compensation tenants are included, and when the State proceeds to settle lands on tenants it expects them to pay a fair amount of price for the land and puts a ceiling on this price that it shall never exceed the amount of compensation payable in respect of the Paid land. In our opinion this provision is very fair and reasonable and it would be idle to attack it as a piece of colorable legislation. We have already seen that the settlement of land on the tenants would make them landholders and that is the basic idea of the Act. If a tenant does not agree to take settlement it cannot be helped and so the land would then have to be taken from him and given over to somebody else who would be prepared to take settlement. It is thus clear that the object of putting ceiling on existing holding is to take over excess lands and settle them on actual cultivators Or tenants and that is the essential feature of agrarian reform undertaken by several States in the country. The Act conforms to the pattern usually followed in that behalf and the attack against its validity on the around that it is a colorable piece of legislation must therefore fail. In the result we hold that there is no substance in the two appeals. They are accordingly dismissed with costs one set of hearing. Appeals dismissed.

These appeals arose out of. two petitions filed in the High Court under article 226 of the Constitution challenging the constitutional validity of the Assam Fixation of Ceiling on Land Holding Act, 1957. The High Court in dismissing the petitions held that the impugned Act was protected by Art, 31A of the Constitution. The Act was a measure of agrarian reform and imposed limits on land to be held by persons in order to bring about its equitable distribution. The Act as originally passed as also its subsequent amendment received the assent of the President and this satisfied the requirement of the proviso to article 31A(1)(a) of the Constitution. The question, therefore, was whether the rights of the appellants which were taken away or abridged by the impugned Act were "rights" in relation to an estate within the meaning of article 31A(2)(b) of the Constitution. Held, that the expression " 'rights ', in relation to an estate" in article 31A(2)(b) of the Constitution is of a very wide amplitude and construed liberally, as it must be, and considered in the light of the provisions of sections 3(g) and 9 of the Assam Land and Revenue Regulation, 1886, the existing law relating to tenures, and the relevant definitions contained in the impugned Act, there could be no doubt that the rights of the petitioners, which the impugned Act extinguished, fell within the expression. Thakur Raghubir Singh vs The State of Ajmer, [1959] Supp. 1 S.C.R. 478, Sri Ram Reim Narain Medhi vs The State of Bombay, [1959] Supp. 1 S.C.R. 489 and Atma Ram vs The State of Punjab, [1959] Supp. 1 S.C.R. 748, referred to. A colourable legislation is one in which the Legislature transgresses the lawful limits of its legislative powers ,and "conceals its real purpose under the cover of apparently legitimate and reasonable provisions and thus seeks to do indirectly what it cannot do directly. K. G. Gajapathi Narayan Deo vs The State of [1954] S.C.R. 1, referred to. 725 It was not correct to say that the impugned Act was a colourable legislation whose concealed purpose was to make profit by disposing of land in the manner provided by Ch. III or that by pith and substance it was a profit making measure or that sections 16 and 18 of the Act were devices to that end. This is broadly contradicted by the whole object of the Act which is a measure of agrarian reform, writ large on all its provisions and clearly negatived by section 4 Of the Act which provides that in no case can the payment made by the tenant in getting the settlement exceed the amount of compensation payable by the Government in acquiring the land.

These appeals were preferred by tenants against the judgment of the High Court in civil revisions. Respondent Mahabir Prasad had executed a registered deed dated 8th December, 1966 with regard to premises in question, giving the benefits arising out of the said properties to his grandsons and their mother Smt. Sulochana Devi. He informed the tenants to make payment of rent to Smt. Sulochana Devi in terms of the said deed. Later, Mahabir Prasad executed a registered deed of cancellation dated 3rd November, 1970, cancelling the aforesaid deed dated 8th December, 1966 and debarring the grandsons and their mother from the right to realise rent and informed the tenants about the said deed of cancellation. Subsequently, Mahabir Prasad instituted suits in the Court of the Judge, Small Causes against the appellant tenants for recovery of arrears of rent and their eviction on the ground that in spite of their being informed of the deed of cancellation, they had not paid rent to him. The appellants contended that the deed dated 8th December, 1966, could not be unilaterally cancelled by Mahabir Prasad, and the rent claimed by him had already been paid by them to Smt. Sulochana Devi. The title of Mahabir Prasad to realise rent was disputed by the appellants who had contended that the suit involving a question of title was not cognizable by a Court of Small Causes. The Judge, Small Causes, decreed the suits. The appellants filed revisions before the District Judge who dismissed the same. Further revisions filed by the appellants in the High Court were also dismissed. The appellants moved this Court for relief by special leave against the Judgments of the High Court. PG NO 238 PG NO 239 Allowing the appeals, the Court, HELD: The provisions of section 23 of the Provincial Small Cause Courts Act (the Act) were clearly attracted in these cases and the plaints in the cases ought to have been returned for presentation to a Court having jurisdiction to determine the title. It is true that Section 23 does not make it obligatory on the Court of Small Causes to invariably return the plaint once a question of title is raised by the tenant, and that in a suit instituted by the landlord against his tenant on the basis of contract of tenancy, a question of title could also incidentally be gone into and that any finding recorded by a Judge, Small Causes, in this behalf could not be res judicata in a suit based on title, but it cannot be gainsaid that in enacting section 23 the Legislature must have had in contemplation some cases in which the discretion to return the plaint ought to be exercised in order to do complete justice between the parties. On facts, these are cases in which~ in order to do ' complete justice between the parties the plaints ought to have been returned for presentation to a court having jurisdiction to determine the title so that none of the parties was prejudiced. [242E, H, 243A C, F] Judgments and decrees of the courts below were set aside and the Judge, Small Causes was directed to return the plaints of the cases for presentation to the appropriate Court as contemplated by section 23 of the Act. [243F G]

The appellant joined the Indian Civil Service in 1933 and was thereafter allotted to the State of Assam. On July 29, 1964 he was appointed as Secretary to the Government of India "until 'further orders". On June, 20, 1966 he received a letter from the Cabinet Secretary advising him that in relation to the question of building up a higher level of administrative efficiency it had been decided by the Government that the appellant should revert to his parent State, or proceed on leave preparatory to retirement, or he should agree to accept some post lower than that of Secretary to the Central Government. After the appellant had made representations to the Cabinet Secretary and the Prime Minister, he received another letter from the Cabinet Secretary in September, 1966. affirming the Government 's decision that the appellant 's services would be placed at the disposal of his parent State of Assam or he could proceed on leave preparatory to retirement. The appellant challenged these orders by a writ petition under article 226 of the Constitution on the ground that the orders were violative of article 311(2). The High Court dismissed the petition and a Letters Patent appeal was also rejected. It was contended on behalf of the appellant that the reversion of the appellant to the Assam Service amounted to a reduction in his rank on the ground that he held a higher post in the Government of India and there was no post equal to it under the Assam Government; the post of the Chief Secretary in the Assam Government was equal to the Post of a Joint Secretary in the Government of India and his reversion would therefore indirectly mean a reduction in his rank and also in his emoluments because the highest post in Assam did not carry a salary equal to that of a Secretary in the Government of India. He also contended that the letters from the Cabinet Secretary spoke of his unsatisfactory work and cast a stigma on him; his reversion must, therefore, be treated as a penalty and as the procedure laid down under article 311(2) was not followed, the orders of the Government of India could not be sustained. On the other hand it was contended on behalf of the Government that the appellant was on deputation and the deputation could be terminated at any time; that his orders of appointment clearly showed that the appointment was "until further orders" and he had no right to continue in the Government of India if his services were not required; his reversion to his parent State did not amount either to any reduction in rank or a penalty and the orders were therefore quite legal. HELD : allowing the appeal, It was clear on the facts that the appellant was being reduced in rank with a stigma upon his work without following the procedure laid down in article 311(2) of the Constitution. [229 G H] 221 As a Secretary to the Central Government the appellant held a tenure post, which was normally for a period of five years and he could expect to continue in that post until 29th July, 1969. Nothing turned upon the words of the notification "until further orders" because all appointments to tenure posts had the same kind of order. He was not therefore on a deputation which could be terminated at any time. The fact that it was found necessary to break into the appellants 's tenure period close, to its end must be read in conjunction with the three alternatives offered to him and these clearly demonstrated that the intention was to reduce him in rank by sheer pressure of denying him a Secretaryship. [229 B D] The letter addressed to the appellant in June, 1966, containing the ,Offer of a lower post in Delhi was a clear pointer to the fact of his (]emotion. It clearly told him that his reversion was not due to any exigency of service but because he was found wanting. This was not a case of reverting the appellant to Assam at the end of a deputation or tenure and the final alternative that he could retire clearly showed that the Government was bent upon removing him from his present post. As there was no post in the Assam State Service carrying the same emoluments as those of a Secretary to the Central Government, on the facts of the present case the appellant 's reversion to Assam meant a reduction in rank within the meaning of article 311(2). [228 A B; 229 F]

In a suit for partition of bakash land a preliminary decree was passed. The defendants appellants, claiming to be in actual possession of the bakasht land, filed a petition contending that the consequence of section 6. of the Bihar Land Reforms Act, 1950 (which came into force in the meanwhile) was to put an end to the proprietor 's possession of the bakasht land by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof, and therefore, no final decree could be passed. The trial court accepted the contention and dismissed the plaintiff 's application for passing final decree. In appeal, the High Court set aside the order. In appeal to this Court, HELD : Even if the appellants were in actual khas possession within the meaning of section 2(k) of the Act, it must be held that the plaintiff respondent, who was a co sharer, was in constructive possession through the appellants, as, under the law, possession of one co sharer is possession of all co shares. The appellants did not claim to be trespassers on the property neither did they claim any title to the lands adversely to the respondent. The deeming provision of section 6 must, therefore, enure for the benefit of all, who in the eye of land) would be regarded as in actual possession. Therefore, the respondent had not lost his share in the bakasht lands and had a right to his share in them, though not as tenure holder or proprietor, but as a raiyat under the provisions of the Act. [645 E G] P. L. Reddy vs L. L. Reddy, ; , 202, followed. Surajnath Ahir vs Prithitnath Singh, , Ram Ran Baijal Singh vs Behari Singh alias Bagandha Singh, , section P. Shah vs, B. N. Singh; , and Mahant Sukhdeo Das vs Kashi Prasad, Tewari referred to.

The appellant was the assignee of a mortgage dated 14 12 1911, executed by A, which comprised. lands belonging to the mortgagor and also a mortgage executed by the respondents in his favour on 19 7 1909. The appellant instituted a suit in the court of the Subordinate Judge of Kakinada, for the recovery of the amount due on the mortgage, dated 14 12 1911, and prayed for sale of the hypotheca. The respondents were impleaded as defendants but did not appear. The suit was decreed ex parte, and in execution of the decree, the properties of the respondents, mortgaged to A on 19 7 1909, were brought to sale, and purchased by the decree holder. The respondents then instituted the present suit in the District Court of East Godavari which then bad jurisdiction over the properties in suit, for a declaration that the decree obtained by the appellant was fraudulent and inoperative and could not affect their title. The plaint was later on amended and a prayer added that the properties might be partitioned and the respondents put in separate possession of their share. The trial Judge dismissed the suit and the District Court in appeal affirmed his decision. Before the High Court in second appeal it was contended for the first time that the decree in question did not direct a sale of the mortgaged properties but a sale of the mort gagee 's rights under the mortgage deed dated 19 7 1909 and as such the sale of the properties was void. The High Court having called for a finding from the District Court as to what was sold, it was 939 found by that Court that the decree bad really directed a sale of the mortgagee 's rights and not of the properties mortgaged and that there was excessive execution. It was, however, of opinion that the point should have been taken before the executing court and the suit in so far as it claimed relief on the basis of excessive execution was barred under section 47 of the Code of Civil Procedure. The High Court declined to entertain the objection that the suit was barred under section 47 as it had not been taken in the written statement and was raised for the first time in second appeal, and decreed the respondent 's suit. It was contended for the appellant that the High Court should have entertained the objection and held that the suit was so barred. Held, that the appellant should be permitted to raise the contention. The point relating to excessive execution had never been specifically raised except before the High Court and the allegations in the plaint were vague and obscure. It is a pure question of law which requires no further investigation of facts and was understood and debated as such by the parties before the District Court. That it was well settled that the question whether an execution sale was in excess of the decree and, therefore, not warranted by it could be raised as between the parties only by an application under section 47 of the Code before the executing court and not by a separate suit. J. Marret vs Md. K. Shirazi & Sons (A.I.R. 1930 P. C. 86), Venkatachalapathy Aiyen vs Perumal Aiyen ([1912] M.W.N. 44), Biru Mohata vs Shyania Charan Khowas ([1895] I.L.R. , Abdul Karim vs Islamunnissa Bibi ([1916] I.L.R. 38 All. 339) and Lakshminarayan vs Laduram ([1931] A.I.R. , approved. That the court, however, had the power to treat the plaint in the suit as an application under section 47 subject to any objection as to limitation or jurisdiction. That the application was not barred under article 165 as it ap plied only to applications for restoration to possession by persons other than judgment debtors and bad no application to the present case. Vachali Bohini vs Kombi Aliassan '([1919] I.L.R. 42 Mad. 753), Batnam Aiyar vs Krishna Doss Vital Doss ([1897] I.L.R. , Basul vs Amina ([1922] I.L.R. and Bahir Das vs Girish Chandra ([1922] A.I.R. 1923 Cal. 287), approved. Nor could article 166 apply since it had application only where the sale was voidable and not void and had to be set aside. That the article applicable to a case of a void sale such as the present was article 181 of the Indian Limitation Act. Seshagiri Rao vs Srinivasa Rao ([1919] I. , Bajagopalier vs Bamanujachariar ([1923] I.L.R. 47 Mad. 288), Manmothanoth Ghose vs Lachmi Devi ([1927] I.L.R. 55 Cal. 96), Nirode Kali Boy vs Harendra Nath (I.L.R. [1938] 1 Cal. 280), and 119 940 Md We Gyan vs Maung Than Byu (A.I.R. 1937 Rang. 126), ap proved. That the starting point of limitation for an application under article 181 would be the date of dispossession by the purchaser and not the date of the void sale which had no existence in law and the plaint in the present suit, treated as an application, having been filed ,within 3 years of such dispossession was in time. Chengalraya vs Kollapuri (A.I.R. , approved. That the District Court of East Godavari to whose jurisdiction the properties had been transferred before the present suit was instituted had by reason of such transfer acquired an inherent jurisdiction over them and if it entertained an application for execution with reference to them such action was no more than an irregular assumption of jurisdiction and no objection to jurisdiction having been taken by the appellant at the earliest opportunity he must be deemed to have waived it and, consequently, there was no legal bar to treating the plaint as an execution application under section 47 of the Code. Balakrishnayya vs Linga Bao, (I.L.R. , applied. Case law discussed.

Against the judgment of the Single judge of the Punjab High Court dated January 5, 1953, in which he followed the decision of a Division Bench holding that section 7A of the Delhi and Ajmer Rent Control Act, 1947, was unconstitutional and void, the appellants preferred an appeal under the Letters Patent. Meanwhile the judgment or the Division Bench was brought up by way of appeal to the Supreme Court, and as the appeal was getting ready to be heard, the appellants made an application on January 5, 1959, for special leave to appeal to the Supreme Court against the judgment of the Single judge. No notice was given to the respondent to the application, and special leave was granted ex parte. The Letters Patents appeal was thereafter withdrawn by the appellants. When the appeal came on for hearing in due course, the respondent raised an objection to the hearing of the appeal on the grounds that the application for special leave was barred by limitation, that there were no sufficient reasons for condoning the long. delay of four years, and that the special leave granted ex parte should be revoked. 243 Held, that, in the peculiar circumstances of the case, leave should not be revoked. Expect in very rare cases, if not invariable, the Supreme Court should adopt as a settle rule that the delay in making an application for special leave should not condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant of the leave. Desirability of the Rules of the Supreme Court being amended suitably pointed out.

While dismissing, by its order dated 8 4 71, the writ petition filed by the appellant challenging the findings of the appellate and revisional orders passed by the Collector of Central Excise, Bombay and the Government of India respectively holding that the appellant had been rightly assessed and called upon to pay excise duty in respect of cloth manufactured in some powerlooms and purported to have been purchased by him from the owners of those powerlooms, the Bombay High Court, by its order dated 12th January, 1972 granted certificate of fitness to appeal under Article 133(1)(a) against the said judgment. Dismissing the appeal, the Court, ^ HELD: 1. The books of accounts produced by the appellant before the excise authorities contained clear evidence of the fact that the appellant himself was the owner of the yarn alleged to have been sold by Tejpal to the powerloom owners and that the appellant got back that very yarn in the shape of cloth after it was woven into cloth. Consequently the appellant himself was the manufacturer of the cloth in question and liable to excise duty in respect of the cloth so got manufactured in the powerlooms of private owners. [182G H; 183D]

The vendors sold the suit land,to the appellants (vendees) by a registered deed of sale for Rs. 43,000/ . The ' respondents filed the suit for possession by pre emption of the land in payment of Rs. 30,000/ on the allegations that the respondents were on the date of sale tenants of the land under the vendors. I They also alleged that the sale took place for Rs. 30,000/ only and the re maining amount was fictitiously mentioned in the deed of sale. The suit was ' dismissed on the ground that one suit on behalf of the four plaintiffs who were tenants of different parts of the land, was not maintainable. On appeal the suit was remanded for re trial. At the trial on remand, two plaintiffs withdrew from the suit. The trial court directed the remaining two plaintiffs respondents Sohan Lal and Nathi to deposit Rs. 6,300/_ and Rs. 5.670/ respectively on or before 1 April, 1969 less 1/5th of the pre emption amount already deposited by them. The Trial Court gave the respondent Sohan Lal a decree for possession by pre emption in respect of Killa Nos. 14/1 . 17 and 18/1 of Rectangle 37. The plaintiffs respondents, aggrieved by the order filed an appeal alleging that the decree should have been Passed for the whole of the land because the respondent Sohan Lal was also a tenant of Killa , No. 24 of Rectangle 37 under the vendors. On 29 July 1969. the Additional District Judge passed a decree for possession by pre emption in favour of respondent Sohan Lal of Killa No. 24 of Rectangle 37 on payment of Rs. 9,100/ and he was also directed to deposit this amount on or before 20 August, 1969. The decree in favour of Nathi was maintained without charge. The appellants filed an appeal before the High Court and it was contended before the High Court that respondents did not deposit the decretal amount by l April, 1969 as directed by the Trial Court and, therefore, the suit was liable to be dismissed under order 20 Rule 14 of the Code of Civil Procedure. The High Court accepted the appeal of the appellants against the plaintiff Nathi and dismissed the appeal against the plaintiff respondent Sohan Lal. The High Court said that since the lower appellate court granted Sohan Lal decree for one more Killa and directed that the amount would be Rs. 9,100/ . the respondent was to comply with the appellate decree and not the decree of the Trial Court. Allowing the appeal by special leave, ^ HELD: (1) The directions given by the Trial Court are mandatory under the provisions contained in order 20 Rule 14 of the Code of Civil Procedure. A decree in terms of order 20 Rule 14, imposes obligations on both sides and they are so conditioned that performance by one is conditional on performance bt the other. [600E F, G]. Naguba Appa vs Namdey reported in A.I.R. l 954 S.C. 50 and Dattaraya S/o Keshav Tawalay vs Shaikh Ali and Anr.[1969] 2 S.C.R. 514 relied on. (ii) It is only if the plaintiffs respondents had obtained another order from the lower appellate Court granting any order of stay that the lower appellate court might have considered the passing of appropriate order in favour of pre emptors. The High Court should have allowed the appellants ' appeal and not made any distinction in dismissing plaintiffs respondent Nathi 's suit and allowing Plaintiff respondent Sohan Lal any extension of time to make the payment. [601F G] 599

Appeal No. 86 of 1957. Appeal from the judgment and decree dated April 13, 1955, of the Madras High Court in A. section No. 673 of 1950. M. C. Setalvad, Attorney General for India, M. section K. Sastri, section Gopalaratnam and section Narasimhan, for T. K. Sundara Raman, for the appellant. A. V. Viswanatha Sastri and R. Gopalakrishnan, for the respondents. February 24. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Madras High Court. The facts lie in a narrow compass and may be briefly stated. One Viswanatha Iyer, who died in 1927 had a number of properties. He had no male issue but left two daughters surviving him who were minors at the time of his death. He had a brother Seetharama Iyer who died in 1934. The appellant is the third son of Seetharama. He was treated as a foster son (abhimanputra) by Viswanatha and was also minor at the time of his death. Viswanatha made a will on October 4, 1927. By this will he appointed his brother Seetharama a guardian of his minor daughters as well as of his foster son. He left the management of his properties to his brother and provided that as soon as his minor daughters attained majority Seetharama should give to them per head one veli of nanja land and one veli of punja land in vattam No. 149 in village Nagampadi 976 and further provided that the said Seetharama should deliver possession of the remaining properties to Balakrishnan, immediately after he attained majority. It was also provided in the will that Seetharama should pay to the minor daughters the income from the properties devised to them after the death of the testator. It appears that after the death of the testator, Seetharama remained in possession of the entire properties and thereafter on his death Balakrishnan came to be in possession of them. It appears that after the two daughters were married and became major, Balakrishnan paid them certain monies as due to them out of the income of the properties in May, 1942. Thereafter he used to pay 224 kalam of paddy and Rs. 175/in cash towards their properties after deducting the kist each year. In 1949 the two daughters claimed possession of their lands and their claim was that they were entitled in law having regard to the provisions of the will to select their respective one veli of anja land and one veli of punja land from out of the land in vattam 149. The appellant did not accept this right of selection and contended that the daughters were entitled to their lands taking into account lands of good and bad quality. Consequently, the daughters filed this suit in July, 1949, and claimed in Schedules and D of the plaint certain properties out of vattam 149 on the ground of selection made by them. The suit was resisted by the appellant who was prepared for a partition of land according to quality but was not prepared, to accept the right of selection claimed by the daughters. It was further contended on his behalf that in any case on the construction of the will it was for Seetharama to give such land as he chose to the daughters and not for the daughters to make the selection. The trial court upheld the contention of the daughters and decreed the suit. There was then an appeal to the High Court which was dismissed. The appellant then applied for leave to appeal and was granted 'a certificate; and that is how the matter has come tip before us. 977 Two questions arise. for decision in the present appeal. The first is whether the legatees have a right to make a selection in a case of this kind. The second is whether on a construction of the will the right of selection was in Seetharams or in the legatees. The High Court has held that the English rule of benevolent construction that a legatee has a, right to choose in such circumstances applies to India also and has further held that on the construction of the will in this case the right to choose was in the legatees and not in Seetharama. The learned Attorney General on behalf of the appellant contends that the English rule of construction which gives the right of selection to a devise was evolved to avoid uncertainty and make the subject of gift reducible to certainty. He also refers to a. 89 of the , No. XXXIX of 1925, which lays down that " a will or bequest not expressive of any definite intention is void for uncertainty " and urges that in view of this specific provision in the Succession Act it was not necessary to import the artificial rule of construction evolved in England to avoid uncertainty. Now the provision of section 89 applies only to those cases where a will is so indefinite that it is not possible to give any definite intention to it at all. The illustration to that section shows that it applies only where it is impossible to ascertain the intention of the testator from the words used in the will. For example, where the will uses the words " I bequeath money, wheat, oil or the like, without saying how much ", it is obviously impossible to ascertain the intention of the testator as to the quantity bequeathed and therefore such a will would be void for uncertainty. But there may be wills which use words which are not so uncertain that a definite intention cannot be ascribed to the testator under those words. It is to meet such cases that the English rule of selection by legatees was evolved. There are three possibilities which may &rise in cases where a will is not so uncertain as not to be capable of ascribing a definite intention to the testator. In the first case the testator himself may indicate what 978 he intends to bequeath and that indication is sufficient identify the property bequeathed. In such cases to there is no difficulty, for the testator has himself made the selection and the selection must be given effect to. The second case may be where the testator himself does not make a selection but nominates a, third person who may select the object of his bounty meant for the legatee. In such a case also there can be no difficulty and the person so nominated will make the selection. The third case is where the testator has not indicated the selection himself and has not nominated a, third person to make the selection; but still the gift is not so uncertain as to be void. It is in such cases that English Courts have evolved the benevolent rule that the testator intended to give the selection to the legatee and once the selection is made by the legatee the will takes effect. This case has been exemplified in Jarman on Wills, 8th edition, Vol. I, p. 477. The first example is where a, man devised two sores out of four sores that lay together and it was held that this was a good devise and the devise would elect. In another case a testator devised a message and ten acres of land surrounding it, part of a larger number of acres, the choice of such ten acres was held to be in the devise (see Hobson vs Blackburn(1). The principle in these oases was evolved in Peck vs Halsey (2). In that case the testatrix had bequeathed some of her best linen to her grandchildren. It was held that the legacy was void for uncertainty and the Master of the Rolls said that" if it were such or so much of my best linen as they should choose, or as my executors should choose for them, this would be good, and by the choice of the legatees or executors is reducible to a certainty. " In Tapley vs Eagleton (3), the testator devised " two houses in King Street " to the legatee. He however had three houses in King Street and the question &rose whether the devise was bad for uncertainty. Jessel, M. R. held that the words meant " two of my (1) ; ; , (2) (1726) 2 P. Wms. 387 ; (3) (1979) 12 Chz D 683. 979 houses in King Street " and that two of the houses oat of three passed to the legatee who was entitled to elect which two he would take. Reliance in this case was placed on an earlier case Duckmanton vs Duckmanton (1). There the testator had two closes of land in Ridgway Field. He devised one to one son and another to another son without indicating which was to go to which son. It was held that the devise was good and the case was one for election, the first devisee having the first choice. The same view was taken in Knapton vs Hindle(2), which was a more difficult case inasmuch as the devise was of one house each to the nephews and nieces of the testatrix without names being mentioned, The court however held following the analogy of Roman law that under the will there was a choice to the nephews and nieces and that in case of disagreement among them, the choice was to be determined by lots. It is urged that this is an artificial rule of construction and there is no reason to apply it to India. The rule was evolved by English Courts in order that where the testator 's intention to make a gift was clear and there was only some uncertainty (but not such complete uncertainty as could not be resolved at all) that may be avoided by giving a choice to the legatee. The rule seems to be a common sense rule to give effect to the intentions of a testator which clearly show that he intended to bequeath something which could be made definite by choice. We do not see why such a rule of common sense to give effect to wills which are not quite uncertain and which can be made certain should be called an artificial rule. We also do not see why in appropriate cases this rule of common sense should not be extended to India. We have already said that it is only when the uncertainty is so great that there is no way of resolving it and finding out the intention of the testator that section 89 comes into play. But where the uncertainty is of a less degree and the intention of the testator to gift certain property is clear, though there may be some difficulty because there is more property of that kind than actually bequeathed, that (1) (1860) 5 N. 219; ; , (2) [1941] ch. 125 980 the benevolent rule should be applied to carry out the intention of the testator which is otherwise clear. The matter has come up for consideration in two cases in the Madras High Court. In the first case, Narayanaswami Gramani vs Periathambi Granmni (1), the testator owned land measuring one kani and three quarters. He made a will by which he devised one kani thereof to the plaintiff in that suit. The plaintiff filed a suit to recover one kani selected by him out of the land in quest ion; and the point to be decided was whether the plaintiff was entitled to select and thus make the bequest which the testator wanted to give him certain. It was not urged in that case that the gift was altogether void for uncertainty, for the intention of the testator to give one kani out of one kani and three quarters of land was clear and certain and difficulty only was as to which part of one kani and three quarters should go to the legatee. The High Court held in that case as follows: "In a case like the present the devisee has clearly the right to choose. It has been lon g settled that if a man devises two acres out of four acres that lie together, this is a good devise and the devisee shall select. (Jarman on Wills, 5th Edition, page 331). " The matter came up again in Bharadwaja Mudaliar vs Kolandavelu Mudaliar (2). In that case the will gave to the legatee " six acres of good irrigated nanja lands in the village of Pudur ". The testator had 19.40 acres of land answering to the description. The legatee died without having made the selection. His heir brought a suit and wanted to select. It was held that the bequest was not void for uncertainty and that the heir would be entitled to six acres on partition but was not entitled to selection. Wallis C.J. remarked that "in England such a bequest would have been held void for uncertainty but for the benevolent rule of construction that the testator is intended to have left the choice to the legatee." He also pointed out that the accepted view in England was that the will could not be read as intending that (1) Mad. 460. (2) (1915) 29 M.L.J. 717. 981 heirs of a legatee should be allowed to make the election in the event of the legatee dying without having made it. He therefore distinguished the earlier case of Narayanasami Gramani (1) on that ground and then went on to remark about the English rules as follows: "These are, however, somewhat artificial rules to apply to the will of a Hindu agriculturist who was no doubt familiar with the ordinary process of partitioning lands by the Court in a partition suit and I think it much more likely that his intention was that in the absence of agreement the lands in question should be partitioned by the court than that the legatee should be left to make a selection for himself. " As pointed out by the High Court in the present case these observations of Wallis C.J. were Unnecessary in the case before him, as he was dealing with a case where the legatee had died without making the selection. We think that the further English rule that the legatee 's heir cannot make the selection is also based on common sense, for the testator never had the legatee 's heirs in his mind when he made the bequest his intention could only be in a case where selection was necessary that the legatee should make the selection. It seems to us therefore that where it is not possible to say on the construction of a will that the testator himself indicated the selection or appointed a third person to make the selection but still intended to make a gift which could be made certain by selection made by the legatee, the English rule of construction that in such cases the testator intended the legatee to select should be applied in India also and the decision in Narayanasami Gramani 's case (1) is correct. The fact that there are ways of partition available to agriculturists in India would make no difference to the application of the rule, for we take it that there are ways of partition available to parties in England also. The application of this rule would avoid unnecessary litigation also, for once it is known that in such cases the selection is with the legatee the difficulty arising out of such wills could be easily resolved without recourse to courts. For this reason (1) Mad. 460. 982 also we think that this rule of benevolent construction of wills of this description should be applied to India also. In this connection we may refer to two other cases to which the learned Attorney General drew our attention. The first is Asten vs Asten (1). That was a case where the gift failed for uncertainty. The testator had made bequests to his several sons of certain houses. In each case the house was described as "all that newly built house, being No. Sudeley Place, Cotsfield Road. " There were four newly built houses in Sudeley Place belonging to the testator and the description of all the houses was the same. In those circumstances it was held that the will was void for uncertainty, for there was no way by which the will could be made certain. The intention of the testator was clearly to select the house himself to be given to each son and therefore there could be no question of the legatees making the selection in the order in which they were named in the will. This case does not in any way detract from the benevolent rule of construction evolved in English law. Romer J. himself pointed out that he was prepared to hold that where a testator save one of similar properties to each of several legatees without saying anything more, he intended prima facie to give the right of selection to the legatees according to the priority of the bequests. But he pointed out that " it is, of course, essential that the will should not show that the testator was bequeathing any particular one of the properties to the legatee who desires to select, for the selection by the testator is incompatible with the view that he intended the legatee to select. " That was a case where on the construction of the will it was held that the testator himself intended to select but the selection failed, because of the uncertainty in the will. The second case is Bishop vs Holt (2). In that case the testatrix by her will gave her 140 shares in the Crown Brewery Company to the legatee for her life with remainder in trust for her children. She held 40 fully paid up shares and 240 partly paid up shares in (1) (1894] (2) 983. the Brewery. A question arose as to from where these 140 shares were to come. It was held that they were to come out of the 240 partly paid up shares on the ground that the testatrix 's intention was clear, for she only held 40 fully paid up shares and it could not have been intended that 140 shares should have come partly from the fully paid up shares and partly from partly paid up shares. The decision in that case was that the testatrix 's own selection could be spelt out of the will and once that was so no question of any selection by the legatee &rose. This case therefore does not in any way weaken the rule of benevolent construction by which the legatee is entitled in certain circumstances to make a selection. These two cases therefore have no application to the facts of the present case and do not detract from the rule of benevolent construction in cases where the testator has not made or intended to make the selection himself or has not nominated a third person to make the selection. This brings us to the second point, namely, whether the testator on the construction of this will intended his daughters to select. The main argument on behalf of the appellant in this connection is that on a fair and reasonable construction of the will the testator intended his brother Seetharama to select for the daughters and that as his brother had died without making the selection, the lands devised to the daughters must now be partitioned in the ordinary course. It is not disputed that if the intention of the testator was not to give the selection to his brother, the case would clearly be of the third kind indicated by us above and the daughters would have the right to select. We have already pointed out that by this will the testator appointed Seetharama as the guardian of his minor daughters as well as of his foster son, namely, the appellant. Then he said as follows: "He (Seetharama) shall as soon as the minors attain majority give to the female children per head immediately they attain majority one veli of nanja land and one veli of punja land in the said vattam No. 149 out of the aforesaid properties and he shall 984 deliver possession of the remaining properties to my son immediately after, he attains majority. " The argument is that these words show that it was Seetharama who was to make the selection and give the devised land to the two daughters and stress is laid on the words "he shall give to the female children." These words are contrasted with the words " he shall deliver possession of the remaining properties to my son." Now it is clear that there are no express words in the will which show that Seetharama shall select the land to be handed over to the two daughters. Can it be said merely because in one case the words used are " he shall give to the female children " and in the ' other case the words are "he shall deliver possession to my son" that by the use of the former words the testator was giving the right of selection to Seetharama ? As we read the will it seems to us that though the words are different in the case of daughters as compared to the words used in the case of the foster son, the meaning of the testator is the same, namely, that Seetharama who was the guardian of the three children will be in possession so long as the three children were minor and shall deliver possession of the properties to the children as and when they became major. We do not think that the testator meant something different in the case of the daughters because he used the words " he shall give to the female children " in contrast with the words " he shall deliver possession. . " used in the case, of the appellant. In the context the words in our opinion mean the same. Therefore the direction of the testator was that as soon as the children obtain majority the guardian will deliver possession to them of the respective lands bequeathed to them. We cannot therefore read this sentence in the will to mean that the testator was giving the right of selection to Seetharama in the case of the property which he was bequeathing to his daughters; nor is there anything in the words of the will which would lead to the inference that the testator intended that the daughters would get their lands after taking into account the good and bad quality of the land. If that were the intention of the testator he should have given them a share in the 985 vattam (No. 149) and not a, specific area of land of both nanja and Punja lands. Or be could have made this position clear, even if he wanted to indicate the extent of land, by using words which would indicate that good and bad quality land would be taken into account in computing the area to be given to the daughters. There are no words in the will from which it can be inferred that Seetharama was nominated by the testator to make the selection ; nor are there any words from which it can be inferred that the testator intended that the daughters should get the area of land devised to them taking into account the good and bad quality. The case, therefore, squarely comes in the third class of cases mentioned above by us, i.e., the testator had indicated with sufficient clarity what he wanted his daughters to get. The difficulty has arisen because vattam No. 149 has 21.38 acres of nanja land and 16.99 acres of punja land while each daughter is given 6.66 acres each of nanja and punja lands. The gift cannot be said to be void for uncertainty within the meaning of section 89, for it can be made certain by the selection of the daughters and is not so uncertain that it is impossible to make it certain. The vattam is indicated from which the land is to come, the area of nanja and punja lands to be taken by each daughter is fixed. But the area of two kinds of land in the vattam is more than that given to the daughters; it must in the circumstances be held that the testator intended that each daughter will select the land devised out of the vattam. In this view of the matter, there is no force in this appeal and it is hereby dismissed with costs. Appeal dismissed.

One Viswanatha Iyer who had two minor daughters but no male issue treated his brother Seetharama Iyer 's son, the appel lant, as a foster son and before his death made a will by which he left the management of his properties to his brother and provided that as soon as his minor daughters attained majority Seetharama should give them each one Veli of nanja land and one Veli of punja land in vattam No. 149 in village Nagampadi and should give possession of the remaining property to the appellant on his attaining majority. The daughters after attaining majority claimed possession of their land alleging that they were entitled under the will to select their respective one Veli of nanja land and one Veli of punja land out of the land in Vattam 149. A suit filed by the daughters on that allegation was decreed by the trial court and the decree was affirmed by the High Court holding that the English rule of benevolent construction that a legatee has a right to choose in such circumstances applied to India and that on the construction of the will in this case the right to choose was in the legatees and not in Seetharama. Held, that section 89 of the , which lays down that "a will or bequest not expressive of any definite intention is void for uncertainty", applies only to those cases where a will is so indefinite that it is not possible to give any definite intention to it at all; but there may be wills which use words which are not so uncertain that a definite intention cannot be ascribed to the testator under those words and it is to meet such cases that the English rule of selection by legatees was evolved. This rule of benevolent construction which is based on common sense and by which wills not quite uncertain can be made certain cannot be called an artificial rule and there is no reason why it should not be extended to India in appropriate cases. Narayanasami Gramani vs Periathambi Gramani, (1895) I.L.R. , approved. Bharadwaja Mudaliar vs Kolandavelu Mudaliar, (1915) 29 M.L.J. 717, discussed. Hobson vs Blackburn, ; ; , Peck vs Halsey, ; (1726) 2 P. Wms. 387; , Tapley vs Eagleton, , Duckmanton vs Duckmanton ; (1860) 5 H. & N. 220; and Knapton vs Hindle, , referred to. 975 Asten vs Asten, and Bishop vs Holt, , held inapplicable. The gift in the present case was not void for uncertainty within the meaning of section 89 of the Succession Act for it could be made certain by the selection of the daughters. The testator had clearly indicated what he intended his daughters to get but the difficulty arose because the area of the vattam was more than what was given to the daughters; it must be held in the circumstances of the case that the testator intended that each daughter would select the land devised out of the vattam. There were no words in the will from which it could be inferred that Seetharama was nominated by the testator to make the selection.

K the mortgagee of certain Mokarrari tenures obtained a decree on his mortgage and put it into execution. Pending execution, C the mortgagor having failed to pay the rent of the mortgaged and some other tenures they became liable to be sold for the realisation of the arrears of rent under a certificate issued for the purpose. K whose security was thereby jeopardised paid the arrears and became under section 171 of the Bihar Tenancy Act a mortgagee of the tenures for the amount paid and entitled to possession of them till repayment. K thereafter took possession of the tenures. After C had died in 1941, the respondent claiming to represent his estate as receiver and executor under his will sued the appellant who had succeeded to K 's interest, for redemption of the mortgages on the allegation that K and the appellant had realised from the rents of the tenures in their possession more than what was due. The suit was decreed by the trial court. The appellant appealed to the High Court at Patna. While the appeal was pending there the Bihar Land Reforms Act, 1950, came into force and as a result of a notification issued under it all the tenures became vested in the State of Bihar free from all encumbrances and the proprietors, tenure holders and all other persons ceased to have any interest in them but became entitled to compensation for the divestment. As required by section 14 of the Land Reforms Act, the appellant filed a claim before the officer appointed under the Act in respect of his mortgages on the tenures and such claim was adjudge at a certain sum on notice to C 's representatives which adjudication later became final under section 18. Under the provisions of the Land Reforms Act, the amount so found due became payable out of the compensation awarded to the proprietors and tenureholders. Thereafter the appeal before the High Court came up for hearing. The appellant contended that in view of the provisions of section 35 of the Land Reforms Act a civil court must 120 be deemed to have no jurisdiction to decide any question concerning claims under mortgages of tenures vested in the Government under the Act. The High Court rejected this contention observing that the Act barred a suit by a mortgagee only and not a suit by a mortgagor and confirmed the decree. ^ Held, that though the Act did not expressly bar a suit by a mortgagor for redemption, that was the practical and inevitable effect of it. The mortgage accounts could not be taken over again by the civil court when they had been taken under the Act and the decision in the proceedings under the Act had become final. Held, further, in the proceedings under the Act to ascertain the claim of a creditor, the debtor was entitled to show what had been paid to the creditor or what the creditor had realised from the mortgaged property. Held, also, that after a mortgagor had been divested of the mortgaged property under the Act a redemption decree would be infructuous as the mortgagor would not then be entitled to have it reconveyed to him. Neither would it then be in the power of the mortgagee to convey that property. In fact the mortgagor having been divested of the property and lost his right of redemption. Query Whether if the mortgagee had realised from the profits of the mortgage property more than what was due him on his mortgage, a suit by the mortgagor refund would lie ?

The predecessor in interest of the appellants filed a suit under two mortgages claiming as principal and interest in respect of the first mortgage a sum of Rs. 51,200 and in respect of the second mortgage a sum of Rs. 60,200. The trial court applying section 17 of the Mysore Money Lenders Act, 1939 held that the principal amount of the loan in the case of the first mortgage. deed was the consideration shown therein, namely Rs. 20,000, and similarly the principal amount under the second mortgage was Rs. 24,000. Accordingly the trial court passed a decree for the amount of Rs. 44,000 towards principal under the two mortgages and an equal amount as laid down in the aforesaid section 17, towards interest. The High Court in appeal held that the principal amount of the original loan was Rs. 15,017 8 0 in respect of the first mortgage and Rs. 22,954 in respect of the second mortgage the aggregate being Rs. 37,971.50 Np. The High Court therefore passed a decree for Rs. 37,971.50 Np. as principal and the same amount as interest. The High Court further held that this would be the arrears of interest to which the appellants would be entitled up to the date fixed for payment of the redemption money by its judgment. The High COurt also made a direction that the principal amount would carry interest at 6% per annum from the date fixed for redemption till realisation. The appellant in appeal to this Court by certificate urged: (i) that the High Court was wrong in reopening the accounts in respect of loans prior to the two mortgage deeds which 'formed the consideration for the two mortgage deeds in suit and it should have held, like the trial court, that the principal amount was Rs. 44,000 for the mortgages; (ii) that the arrears of interest under section 17 of the Act should be interpreted to mean arrears only up to the date of the institution of the suit, and the High Court should have granted future interest subsequently instead of granting it only with effect from the date fixed for redemption. The Court also had to consider whether there was a conflict 'between O. 34 r. 11 of the Code of Civil Procedure and section 17 of the Act. HELD: (i) Section 17, in prescribing the maximum amount of arrears of interest to be allowed, refers to "the principal of the original loan" and not "the principal of the loan". If the latter expression had been used, it could have been argued in the present case that the sums of Rs. 20,000 and Rs. 24,000 which purported to be the principal amounts of the two loans evidenced by the two mortgage deeds in suit, were the principal amounts of the loans to be taken into account in 1083 working out the maximum amount of interest permissible under section 17 of the Act. The expression "the principal of the original loan" makes it clear that, in determining the amount of arrears of interest allowable, the court must go behind the transaction of the loan and found out what was the actual cash originally advanced as principal and ignore all the interest that may have been added subsequently to that original advance in order to make up the consideration for the loans in suit. In the present case therefore the High Court was justified in looking at the transactions prior to the two mortgage deeds to find out what were the actual cash amounts originally advanced which, together with interest and after adjustment of accounts formed the principal amounts for the two mortgage deeds. (ii) Section 17 is in the form of a directive to a Court not to pass a decree on account of arrears of interest for a sum greater than the principal of the original loan. Obviously, the directive is to be carried out by the court at the time of passing the decree and, consequently, it would be at that time that the court will see how much it is awarding for arrears of interest. The maximum prescribed for the arrears of interest must, therefore be held to be the maximum amount in respect of interest payable up to the date of the decree when the court carries out the directive laid down in this section. The decree of an appellate court takes effect _from the date of the decree of the original court, so that no question can arise of holding that the arrears of interest under section 17 of the Act must be computed up to the date on which the High Court passed the decree. (iii) There is no conflict between O '. 34 r. 11 C.P.C. and section 17 of the Act. Section 17 confines itself to laying down the maximum of arrears of interest to be allowed up to the date of the decree and is not concerned with the interest that is to be allowed for the period thereafter. Admittedly the Code of Civil Procedure was applicable to the present suit and consequently interest subsequent to the date of the decree had to be awarded in accordance with O. 34 r. 11 C.P.C. The interest under the mortgage deeds was payable @ 1% per mensem but under the provisions of the Act read with the provisions of the Usurious Loans Act (Mys. Act ix of 1923) the fair interest payable on the loan would be @ 9 ' per cent per annum. [The Court gave appropriate directions for the calculation of interest.]

Meriappa Gounder respondent No. 1 in C.A. 466/69 and appellant 1 in C.A. 2375/69 filed a suit on August 23, 1950 in the District Court, Trichur, for specific performance of an agreement dated May 22, 1950 made by one Soliappa Chettiar. The said Soliappa Chettiar pleaded inability to perform the contract in view of the refusal of one Neelakanta Iyer a lessee of the factory to give up possession. Pending the suit Late Kochivareed, husband of the appellant in C.A. 466/69 obtained an assignment of the lease from Neelakanta Iyer on March 5, 1951. On March 8, 1951 Soliappa Chettiar executed a sale deed of the suit property in favour of one George Thatil, a nephew of Kochivareed. In the course of the proceedings the trial court appointed a Receiver to manage the suit property. On March 21, 1951, Late Kochivareed obtained a lease, of the suit property at a rent of Rs. 15,000/ for a period of one year which was renewed for another year from the Receiver and a sum of Rs. 30,000/ SO collected as rent for two years was deposited in the Court by the Receiver. The District Court on August 28, 1952 decreed the suit for specific performance and mesne profits at a reduced rate of Rs. 15,000/ per annum, instead of at Rs. 30,000/ per annum as claimed. Against the decree two appeals were filed in the High Court by Kochivareed and George Thatil. The High Court allowed the appeals and dismissed the suit by its judgment dated March 21, 1953. The appeal filed by Meriappa Gounder (CA 129/56) was allowed by this Court as per its judgment and decree dated April 22, 1958. On the question of the liability of the mesne profits, the present appeals arose out of interpretation of the direction (e) of this Court 's decree dated April 22, 1958. Allowing the appeals by certificate in part the Court ^ HELD: 1. Mesne profits being in the nature of damages, no invariable rule governing their award and assessment in every case can be laid down and the "Court may mould it according to the justice of the case". Even so one broad basic principle governing the liability for mesne profits is discernible 59 from section 2(12) of the Code of Civil Procedure which defines 'mesne profits ' to mean 'those profits which the person in wrongful possession of property actually received or might with ordinary deligence have received therefrom together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession." [68G H, 69A] Wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defandant 's liability therefor, Generally, the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits. But, where the plaintiff 's dispossession, or his being kept out of possession can be regarded as a joint or concreted act of several persons, each of them who participants in the Commission of that act would be liable for mesne profits even though he was not in actual possession and the profits were received not by him but by some of his confederates. Possession through another, such as a tenant may be sufficient to create liability for mesne profits, if such possession is wrongful. [69A C and G] 2. In such a case, where the claim for mesne profits is against several tresoassers who had combined to Keep the plaintiff out of possession, it Is open to the Court to adopt either of the two courses. It may by its decree hold all such trespassers jointly and severally liable for mesne profits leaving them to have their respective rights adjusted in a separate suit for contribution; or it may, if there is proper material before it ascertain and apportion the liability of each of them on a proper application made by the defendant during the same proceedings. [69C D] 3. A decree under Order XX Rule 12 of C.P.C., directing enquiry into mesne profits, howsoever expressed must be construed to be a decree directing the enquiry in conformity with the requirements of Rule 12(1)(c), 80 that the decreeholder is not entitled to mesne profits for a period (commencing from the date of the institution of the suit) extending beyond three years from the date of the preliminary decree. [69E Fl Chitturi Subhanna vs Kudappa Subbanna, ; ; referred to. The words "whichever event first occurs" in sub clause (c)(iii) of clause I of Rule 12 of Order XX Civil Procedure Code imply that the maximum period for which future mesne profits can be awarded is three years from the date of the decree for possession and mesne profits, finally passed. The period of three years is to be computed from the date of decree of this Court i.e. from April 22, 1958 and it will expire on the date on which possession was delivered or relinquished by the defendant in favour of the decreeholder pursuant to that decree. In other words, the decree mentioned in sub clause (iii) of clause (c) would be the appellate decree dated April 22, 1958 of this Court. The period of three years mentioned in the said subclause is, therefore, to be reckoned from April 22, 1958. [73G H, 74A B] 5. Section 144 of the Code of Civil Procedure, in terms, says that for the purpose of the restitution, the Court may make any orders, including orders for the payment of interest, damages compensation and mesne profits which are properly consequential on variation or reversal of the decree. [77A B] There is nothing in the decree, dated April 22, 1958 of this Court which expressly or by implication, prohibits the payment of interest on the sum of 60 Rs. 30,000/ withdrawn by defendant 3 by way of restitution. The trial court had rightly allowed interest. [77B C] 6. The decree dated April 22, 1958 of this Court was a composite decree, partly final, and party preliminary. It was final in so far as it granted the reliefs of specific performance and possession on deposit of the price by the Plaintiff. It was preliminary in as much as it directed an inquiry with regard to the assessment of mesne profits and as to who out of the defendants was/were liable for payment of those mesne profits. But? it laid down in no uncertain terms that only such of the defendants would be liable for mesne profits "as may have been in possession of the property". This direction in the decree means that only the defendant or defendants found in actual possession and enjoyment of the property would be liable for mesne profits. [70A C] In the instant case: (a) The third defendant was in sole, actual possession and control of the suit property from March 3, 1951, when he obtained the alleged assignment of lease in his favour from Neelakanta Iyer. In terms of the decree of this Court, therefore defendant 3 alone is liable for mesne profits in respect of the period he was in possession (excepting the period during which the property was under the management of the Court Receiver). [71E F] (b) The contention that the possession of defendant 2 was the legal possession of an owner while that of defendant 3 was derivative possession of a lessee or licensee under the former is not correct, since at no stage, in the Courts below defendant 3 took up the position that he was in derivative possession of the property under defendant 2. Nor was there even a whisper in the pleadings that defendant 2 and defendant 3 were joint tortfeasors and therefore jointly and severally liable for mesne profits. [69H, 70C, G] (c) There is nothing in the decree of this Court dated April 22 1958, indicating that the amount deposited by the plaintiff towards the price should have been sel off against the liability of defendant 3 for mesne profits. On the contrary, it allowed deduction of the amounts found due against defendant 1 and defendant 2 from the deposit of Rs. 85.000/ to be made by the plaintiff towards the price, and further directed that after such deduction, the balance of such deposit made by the plaintiff, if any, shall be paid to the third respondent (defendant 2) who is the assignee of the second respondent (defendant 1) pendente lite. [71F H] (d) The plaintiff was not bound to suffer a set off in favour of defendant 3, merely because defendant 2 or his assignee withdrew the price deposited by the plaintiff without furnishing any security for its refund or adjustment towards the liability of defendant 3, there being no evidence whatever, on record to show that such withdrawal was the result of any collusion or conspiracy between the plaintiff and defendant 2 and defendant 3. Even assuming that both defendants 2 and 3 were liable for mesne profits jointly and severally, then also, the plaintiff could at his option. recover the whole of the amount of mesne profits from either of them; and how such inter se liability of the defendants was to be adjusted or apportioned was a matter between the defendants only. [72A C] (e) Defendant 3 entered into possession of suit property under a l assignment of sham lease from Neelakanta Iyer on March 5, 1951 during the 61 pendency of the plaintiffs suit, which was instituted on August 25, 1950. The A plaintiff had deposited Rs. 50,000/ sometimes after the presentation of the plaint. Under the agreement of the sale, dated May 22, 1950 made by defendant 1 in favour of the plaintiff, the total sale considerations was fixed @ Rs. 90,003/ . Out of it Rs 5,003/ had been paid to defendant I on the very date of the agreement. It was further stipulated that out of the balance, Rs. 50,000/ would be paid by the plaintiff purchaser at the time of the registration of the sale deed which was to be executed and registered on or before July 15, 1950. It was further stipulated that on payment of the further sum of Rs. 50,000/ the plaintiff would be entitled to be put in possession of the suit property. Thus when defendant 3 entered into possession, first under the garb of an assignee of sham lease from Neelkanta Iyer, and then further purchased the property with his on funds in favour of defendant 2 pendente lite, he was fully conscious that he was purchasing a litigation. His possession was therefore wrongful qua the plaintiff from its inception [72E H] (f) Disallowance of the claim for deduction for interest on the deposit of Rs. 50,000 which the plaintiff had withdrawn on August 19, 1953 and had redeposited on 9 2 1959 is incorrect. The defendant is entitled to interest @ 6% per annum for the said period, after deduction the interest for the period during which the property was under the management of the Receiver. [74D E] (g) The plaintiff`s claim for mesne profits @ the rate of Rs. 25,000/ has correctly been negatived. Since the plaintiff did not object to the lease granted by the Receiver to defendant 3 on an annual rental of Rs. 15,000/ and since he did not produce any other reliable evidence, the High Court was not wrong in holding that the mesne profits should be on the basis of this rental value of Rs. 15,000/ [76A C] (h) The plaintiff, in view of the long drawn out litigation is entitled to interest @ 6% per annum upto March 29, 1959. [76E F]

The predecessor in interest of the present appellant applied to the land officer of the respondents for the settlement of the subject,matter of dispute, situated in,Jamshedpur. The land was let out to him as tenant from month to month at a rent of Re. 1 / per month. There was no document creating the lease. The application for settlement contained averments to the effect that the applicant wanted it 1 for garden purposes" that he agreed to hold the land "on monthly tenancy" and that would abide by the "house building rules". Following a notice to quit the respondents who are the owners of the plot filed a suit for eviction of the appellant and for arrears of rent. The defence raised was that there was no monthly tenancy and the lease was for agricultural and horticultural purposes and the appellant was an agricultural tenant within the meaning of sections 4 and 6 of the Chotanagpur Tenancy Act who has fixity of tenure. _The trial court upheld the contention and on appeal it was confirmed by the Subordinate Judge. On second appeal the High Court of Patna held that the lease was not for agri cultural purposes and ordered eviction. The present appeal is by way of special leave granted by this Court. The main contention before this Court was that since the application for Jew made it clear that the land was for "garden 2 purpose" the appellant was raiyat within the meaning of section 6 of the Act. Held, that the statement of the purpose had to considered alongwith the other facts mentioned in the document, viz. that the application was for a monthly tenancy, and that the applicant agreed to abide by the house building rules. On such consideration, it was clear that the lease was not for horticultural or agricultural purposes.

The defendant was a tenant of the plaintiffs. The defendant was in arrears of rent for one year to the extent of Rs. 1,020. On April 11, 1959 the plaintiffs served a notice on the defendant requiring him to remit to them Rs. 1,020 within one month from the date of service of notice, failing which suit for ejectment would be filed. This notice was received by the defendant on April 16, 1959. On June 25, 1959 the defendant sent a reply to the notice enclosing with it a cheque for Rs. 1,320. This amount consisted of the rental arrears as well as the rent due right up to June 30, 1959. The plaintiffs accepted the cheque and cashed it and gave a fresh notice on July 9, 1959 requiring the defendant to vacate the premises by the end of the month of July. The defendant did not vacate the premises. Then the plaintiffs filed a suit to eject the defendant upon the ground that the latter was in arrears of rent for one year and had failed to pay the arrears within one month of the service of the notice dated April 11, 1959 upon him. From the undisputed facts it was clear that the defendant was in fact in arrears of rent and had failed to pay it within the time prescribed by cl. (a) of section 4 of the Madhya Pradesh Accommodation Control Act, 1953. Held:(i) Though the notice dated April 11, 1959 could be construed to be composite notice under section 4(a) of the accommodation Act and section 106 of the it was ineffective 240 under section 106 of the because it was not a notice of 15 clear days. In the present case, the defendant had only 14 clear days ' notice. Subadini vs Durga Charan Lal, I.L.R. and Gobind Chandra Saha vs Dwarka Nath Patita, A.I.R. 1915 Cal. 313, approved. Harihar Banerji vs Ramsashi Roy, L.R. 45 I.A. 222, dis tinguished. (ii)The suit was actually based upon the notice dated July 9, 1959 which gave more than 15 days ' clear notice to the defendant to vacate the premises. This notice was a valid notice under section 106 of the . (iii)The contention that a suit under cl. (a) of section 4 of the Act is not maintainable unless a tenant is in arrears on the date of the suit, cannot be sustained. If this contention had to be accepted it would be virtually rewriting the section by saying "that the tenant was in arrears of rent at the date of suit" in place of that the "tenant has failed to make payment etc. " It is certainly not open to a court to usurp the functions of a legislature. Nor again, is there scope for placing an unnatural interpretation on the language used by the legislature and impute to it an intention which cannot be inferred from the language used by it by basing ourselves on ideas derived from other laws intended to give protection to the tenants from eviction by landlords. (iv)The ground set out in cl. (a) of section 4 need not be shown by the landlord to exist at the date of institution of the suit. All that is necessary for him to establish is that the tenant was in fact in arrears, that he was given one month 's notice to pay up the arrears and that in spite of this he failed to pay these arrears within one month of service of notice on him. (v)The effect of cl. (a) of section 4 is merely to remove the bar created by the opening words of section 4 on the right which a landlord has under section 106 of the to terminate a tenancy of a tenant from month to month by giving a notice terminating his tenancy. The character of the tenancy as one from month to month remains; but to it is added a condition that the unfettered right to terminate the tenancy conferred by section 106 will be exercisable only if one of the grounds set out in section 4 of the Accommodation Act is shown to exist. (vi)By cashing the cheque for Rs. 1,320 the plaintiffs did not waive all rights which accrued to them under the notice dated April 11, 1959. No right under section 106 of the had accrued to them because of the ineffectiveness of the notice in so far as the termination of tenancy was concerned and, therefore, no question of waiver with respect to that part of the notice arises. So far as the right accruing under section 4(a) of the Accommodation Act is concerned, the defendant having been under liability to pay rent even after the giving of notice the acceptance of the rent by the plaintiffs would not by itself of operate as waiver.

An application by the respondent for permission to build a cinema on a site within the City of Bombay was rejected by the Commissioner of Police, Bombay. The respondent applied for reconsideration of his application and the Commissioner, acting on the advice of the Cinema Advisory Committee, granted the application on the 16th July, 1947, though he indicated in an affidavit flied later that but for this advice he would have refused the application again. Subse quently, under instructions from Government the Commissioner sent the following communication to the respondent: "I am directed by Government to inform you that the permission to erect a cinema at the above site granted to you under the office letter dated 16th July, 1947, is hereby canceled. " The respondent applied to the High Court of Bombay for an order under section 45 of the Specific Relief Act directing the Commissioner of Police, Bombay, to withdraw the cancellation and to grant permission for the erection of the cinema, and the High Court directed the Commissioner of Police "to withdraw the order of cancellation passed by him." The Commissioner of Police appealed to the Supreme Court. Held, (i) that there was nothing in the letter dated 16th July, 1947, to indicate that the decision was not that of the Commissioner himself given in the bona fide exercise of the discretion vested in him. The sanction was not conse quently invalid merely because the Commissioner decided to accept the advice of the Cinema Advisory Committee even though without that advice he would not have granted the permission. (ii) There was no valid cancellation of the license because (a), the order of cancellation communicated to the respondent 'was one made by the Government of Bombay and not by the Commissioner on his own authority;he acted in the matter only as a transmitting agent; (b), under the rules framed under 136 section 22 (1) (f), (1) (g) and (n) of the City of Bombay Police Act 1902 the Government of Bombay had no power to cancel of license once issued. The only person vested with authority to grant or refuse a license for the erection of a building to be used for purposes of public amusement is the Commissioner of Police. (iii) The relief sought by the respondent of an injunction to direct the Commissioner of Police to grant permission for the erection of a cinema could not be granted because he had already granted permission and there was no valid order of cancellation. (iv) The other relief asking for an injunction directing the commissioner to withdraw the cancellation also could not be granted because Rule 250 vests the Commissioner with an absolute discretion in the matter. (v) Though there was no specific provision of law compel ling the Commissioner to exercise the discretion vested in him under Rule 250, inasmuch as the enabling power vested by Rule 250 was vested in the Commissioner for the welfare of the public at large it was coupled with a duty to exercise it when the circumstances so demanded. The Commissioner could consequently be ordered under section 45 of the Specific Relief Act to exercise his discretion and decide whether the licence should or should not be cancelled. (vi) The words "any law" in section 45 do not mean statutory law alone but embrace all kinds of law whether referable to a statutory provision or otherwise. Therefore the perform ance of duties under the rules can be compelled under the provi sions of section 45. (vii) There was no other specific and adequate legal remedy open to the respondent within the meaning of section 45 for though the respondent could have ignored the so called order of cancellation , he could only have done so. at his peril as it purported to emanate from the State Government and was served by a public officer. The remedy of injunction was not a proper and adequate remedy in the circumstances of the present case. (viii) The petition was not incompetent under section 46 of the Specific Relief Act as there had been a demand of justice and a denial thereof within the meaning of the section in the circumstances of the case. (ix) Public orders, publicly made, in exercise of a statu tory authority cannot be construed in the light of explana tions subsequently given by the officer making the order of what he meant or of what was in his mind, or what he intend ed to do. As such orders are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed ' they must be construed objec tively with reference to the language used in the order itself. 137 Julius vs Lord Bishop of Oxford (5 App. Cas, 214), Alcock, Ashdown & Co vs Chief Revenue Authority (50 I .A. 227) referred to.

Muthammal, the absolute owner of the suit properties, executed a Deed of Settlement dated May 17, 1925 (exhibit A 3) whereby she endowed the suit properties to a temple of her family deity. She constituted herself as the first trustee for her life and after that, her husband and mother were to be the trustees and after their demise, the respondents ' heirs were to be the trustees. Five years later i.e. On January 28, 1930, she purported to cancel and revoke the trust (settlement), by getting the Deed of Cancellation registered. Thereafter, certain mortgages were executed by her in respect of the properties and later on the properties were sold by her to the father of appellants Nos. I and 2. She died on October 1, 1960. The respondents plaintiffs, claiming to be the trustees of the endowment, filed a suit on August 29, 1962 for possession of the properties challenging the alienations that were made in favour of the appellants ' father. The appellants contested the suit and raised the plea of adverse possession and the suit being barred under Article 144 of the Act. The trial court held that the Deed of Settlement itself was not a genuine deed, but even if it were, the suit was barred under Article 144. In the appeal by respondents plaintiff, the Appellate Court held that Deed of Settlement was valid and genuine and in fact it effected a legal endowment in favour of the diet, the original settlor having disvested herself of the ownership completely and consequently the Deed of Cancellation was ineffective in law. The suit was regarded as one falling under article 134B of the Act and the suit having been filed within 12 years from the death of the settlor was held to be within time and the respondents Plaintiffs ' ' suit was decreed. In the second appeal filed by the appellants, the High Court confirmed the first Appellate Court 's decree. 810 on appeal to this Court, the appellants, relying on the decision in Srinivas vs Ramaswami,[1966]3 S.C R 120, contended that there was a resignation on the part of the settlor as a Trustee and such resignation, if not overt and express, must be deemed to have taken place by reason of the fact that she herself had executed and registered the Deed of Cancellation (Ex. B 1) on January 21, 1930 and thereafter she had alienated the proper ties in favour of the appellants ' father and she even left the village for quite a few years and since the suit was filed in the year 1962, long after the expiry of 12 years from such deemed resignation, it was barred. The respondents plaintiffs, however, contended that there was no plea of limitation specifically raised on the basis that there was any deemed resignation on the part of the settlor and as the parties did not lead any evidence focussing their attention on this aspect of the matter and if there be some evidence vaguely or generally led by the parties on this aspect the same should be ignored. alternatively, it was contended that even other wise by the mere execution of a Deed of Cancellation and indulgence in alienations of properties by the settlor in favour of the appellants ' father no deemed resignation should be implied for a wrongful Cancellation Deed, and a wrongful alienation cannot affect her character as a trustee of the properties under the Deed of Settlement which was complete and under which she had divested herself of the ownership of the properties irretrievably. The starting point of limitation for the suit must be held to be the date on which the settler died. Dismissing the appeal, ^ HELD: 1. Limitation in the instant case, will have to be regarded as having commenced on the date of the death of the settlor and the respondents plaintiffs ' suit would be within time. [814E] 2. Where a trustee wrongfully alienates some trust property and even if the entire trust property is alienated, he does not cease to be a trustee. By wrongfully executing a Deed of Cancellation the settlor cannot effectively revoke the settlement and if such settlor happens to be the trustee he shall continue to be the trustee of the settlement. [813 a F] In the instant case, there is a clear finding recorded by the first Appellate Court, and the High Court that the Deed of Settlement dated May 17, 1925 was valid and complete in all respects where under the settlor had divested herself of the properties which she had endowed to the temple, and both the Cancellation Deed as well as the alienations were ineffective and wrongful and, therefore, it could not be said that by indulging in these acts she had resigned her position as a trustee of the endowment. [813 F G] (3) The fact that the settlor had left the village for a few years is neither here nor there. The facts regarding performing of Puja of the deity in the temple by some other persons and contribution towards the expenses of the temple by some devotees are really equivocal and would not be conclusive of the matter on the point of the settlor having resigned inasmuch as the temple which was a village temple was already in existence, 811 to which only properties had been endowed and the temple was a public A religious institution to which the endowment had been made and as such the fact that certain expenses of the temple were contributed by devotees or members of the public would hardly be indicative of the fact that the settlor had resigned from the position as a trustee qua the endowed property. Similar, would be the position with regard to the fact that some persons were performing the Puja which would not be unnatural in the case of a public religious institution. [813H; 814A C] There could conceivably be a deemed resignation or a deemed removal but for inferring the same some additional facts would be required to be proved. The facts on which reliance had been placed by the appellants by themselves are insufficient to warrant the inference that there was a deemed resignation [814C D] Srinivas vs Ramaswami, [19661 3 S.C.R. 120, referred to.

Appeal No. 375 of 1956. Appeal from the judgment and decree dated July 27, 1953, of the Madras High Court, in A. section No. 623 of 1949. A. V. Viswanatha Sastri and section Venkata Krishnan, for the appellants. M. C. Setalvad, Attorney General for India, R. Ganapathy Iyer and G. Gopalakrishnan, for the respondent. February 27. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Madras High Court. The brief facts necessary for present purposes are these: The present suit was brought by Muthappa Chettiar (hereinafter referred to as the respondent) against K. Thiagarajan Chettiar (hereinafter called the appellant) and the Saroja Mills Ltd. In 1939 these two persons thought of doing business jointly by securing managing agencies of some mills. In that connection they carried on negotiations with two mills, namely, Rajendra Mills Limited, Salem and the Saroja Mills Limited, Coimbatore (hereinafter called the Mills). The managing agency of the Mills was with the Cotton Corporation Limited. On October 4, 1939, the said Corporation transferred and assigned its rights to the appellant and the respondent under the name of Muthappa and Co. On November 15, 1939, the Mills at an extraordinary general meeting of the shareholders accepted Muthappa and Co. as the managing agents and made the necessary changes in the Articles of Association. Later the appellant and the respondent obtained the managing agency of the Rajendra Mills Limited, Salem. The managing agents of this mill were Salem Balasubramaniam and Co. Ltd. Muthappa and Co. purchased all the shares of the Salem Balasubramaniam and Co. and thereafter carried on the business of the managing agency of this mill in the name of Salem Balasubramaniam and Co. Ltd. In November 1940 the appellant and the respondent entered into a written partnership agreement with respect to 1001 the managing agency business of the two mills. We shall consider the terms of this agreement later and all that we need say at this stage is that turns were fixed for the appellant and respondent to look after the actual management of the two mills and the appellant 's turn was the first and he therefore came into actual control of the two mills. Soon after however disputes arose between the appellant and the respondent with respect to the managing agency of the Rajendra Mills Limited, which resulted in various suits being filed between the partners, to which we shall refer later. Eventually on March 4, 1943, the appellant gave notice to the respondent terminating the partnership, considering it as a partnership at will. This was followed by the directors of the Mills terminating the managing agency of Muthappa, and Co. on the ground that company had ceased to exist and also on the ground that quarrels between the partners of the firm were not conducive to good management of the Mills. This was notified to the respondent on March 22, 1943. This action of the directors was approved in a meeting of the shareholders of the Mills on September 29, 1943, and necessary modifications were again made in the Articles of Association. In between on April 17, 1943, the respondent had filed a suit for a declaration that Muthappa and Co. continued to be the managing agents of the Mills and for obtaining possession of the office of managing agents for himself or along with the appellant and also for a permanent injunction restraining the Mills from appointing any other managing agents. This suit was dismissed by the trial court on the ground that it was not maintainable under section 69 of the Indian Partnership Act, No. IX of 1932 (hereinafter called the Act), though the trial court gave findings on other issues also. The respon dent went up in appeal to the Madras High Court against the decree in that suit. This appeal was dismissed on July 8, 1948, as the High Court held that the finding of the subordinate judge that the suit was not maintainable under section 69 of the Act was correct. The High Court however made it clear that it was 1002 expressing no opinion on the correctness 'or otherwise of the other findings recorded by the subordinate Judge. While this appeal was pending the respondent brought the present suit on February 28, 1946. In this suit he prayed for dissolving the firm Muthappa and Co., for accounts and for damages against the appellant and the Mills. The main contention of the respondent in the suit was that the alleged dissolution of partnership by the appellant and the removal of Muthappa; and Co. from the managing agency of the Mills 'were part of a scheme of fraud conceived by the Appellant which was actively connived at by the mills in order to defeat and defraud the respondent of 'his legitimate dues and his right to continue and act as the 'managing agent of the Mills. The damages claimed were estimated at the figure of five lacs of rupees to be recovered from both the appellant and the Mills or from either of them. In the alternative the respondent claimed that even if Muthappa and Co. had been removed validly from the managing agency on September 29, 1943, he was entitled to account from the appellant from November 15, 1939, to September 29, 1943. The suit was resisted by both the appellant and the Mills and their case was that the partnership was one at will and therefore ',Was validly terminated by the appellant by notice. It Was further contended that in any case the Mills were within their rights in terminating the managing :,agency of Muthappa and Co., as that firm had ceased to exist and there were interminable disputes between the partners. Fraud and collusion were denied and it 'was alleged that it was the respondent 's conduct which compelled the appellant to give notice of termination of partnership and the Mills to terminate the managing agency. The Mills took a further plea, namely, that so far as they were concerned, the suit was barred under section 69 of the Act. The trial court held that the firm of Muthappa and Co. *as a partnership at will and therefore was legally dissolved by the appellant by giving notice dated March 4, 1943. It further held that no case of fraud 1003 had proved and that the termination of the managing agency was legal. As to the Mills the trial court held that the suit against them was barred under section 69 of the Act. In consequence the suit against the Mills was dismissed in toto and the prayer for damages was also rejected. The trial court however directed the appellant to account for the profits earned from the inception of the partnership business till March 4, 1943, when the partnership was terminated by the appellant by notice. Thereupon the respondent went up in appeal to the High Court. The High Court held that the suit against the Mills was barred under section 69 of the Act, though it was made clear that if there were assets of the partnership firm in possession of the Mills the respondent would be entitled to recover them. The High Court however ordered the Mills to bear their own costs in both the courts on the ground that the Mills were guilty of fraud. As to the case against the appellant, the High Court held that the partnership was. not a partnership at will and therefore it could not be dissolved by notice by the appellant. It further held that the appellant fraudulently and in collusion with the Mills purported to dissolve the partnership by issuing an illegal notice and to have the managing agency terminated by the Mills, and in consequence the termination of the managing agency was illegal. On the view therefore that the partnership as well as the managing agency continued and on a review of the circumstances, the High Court held that this was a fit case for dissolving the partnership and fixed March 10, 1949, 'which was the date of the decree of the trial court as the date from which the partnership would be dissolved. Consequently it modified the decree of the trial court and passed a preliminary decree for accounts against the appellant in respect of the firm Muthappa and Co. from November 15, 1939, to March 10, 1949. and added that the respondent could also recover any amount found due to him on taking accounts against the partnership assets, if any, in the hands of the Mills. The appellant thou applied for a certificate to 1004 appeal to this Court which was granted; and that is how the matter has come up before us. The first question therefore that arises for our deter mination is whether the partnership in this case is a partnership at will and it is necessary to refer to the terms of the partnership agreement to determine this question. After reciting that the management of the. Mills was being carried on in the name and style of Muthappa and Company and of the Rajendra Mills Limited in the name and style of Salem Balasubramaniam and Co. Limited, the partnership agreement goes on to say that the partners shall get in equal shares the salary, commission, profit, etc. , that may be realised from the aforesaid managing agencies. It provides for carrying on the management in rotation once in four years, the appellant to manage for the first four years and thereafter the respondent to manage for the next four years and in the same way thereafter. It further provides that the partners and their heirs and those getting their 'rights shall carry on the management in rotation. The accounts were to be made once in every year after the closing of the yearly accounts of the two mills. There were then provisions as to borrowing with which we are not con cerned. The agreement further provides that in case either partner thinks of relinquishing his right of management under the agreement it shall be surrendered to the other partner only but shall not be transferred or sold to any other person whatever. Finally it is provided that the two partners shall carry on the affairs of the firm by rotation, once in four years and the income realised thereby shall be divided year after year and the partners and their heirs shall get the same in equal shares and thus carry on the partnership management. The contention on behalf of the appellant is that as this partnership does not fall under section 8 of the Act and is not within the two exceptions under section 7, it is a partnership at will. Section 7 provides that where no provision is made by contract between the partners for the duration of the partnership, or for the determination of the partnership, the partnership is partnership at will. Section 8 provides that a person may 1005 become a partner with another person in particular adventures or undertakings. Section 43 provides that where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. On the other hand if the partnership is not at will, a. 42 applies and is in these terms: "Subject to contract between the partners a firm is dissolved (a) if constituted for a fixed term, by the expiry of that term; (b) if constituted to carry out one or more adventures or undertakings, by the completion thereof; (c) by the death of a partner; and (d) by the adjudication of a partner as an insolvent. " Section 44 provides for dissolution by the court. The High Court was of the view that looking to the terms of the partnership it could not be held to be a partnership at will and that under section 7 it will be a case of a partnership the duration of which as well as the determination of which were fixed. The High Court was further of the view that section 8 of the Act would also apply to the partnership in question as the evidence showed that the partners had entered into partnership in order to carry on the business of managing agency of the two mills and such business was an under taking, As we read the terms of the agreement it seems to us clear that the intention could not be to create a partnership at will. The partners contemplated that the management would be carried on in rotation between them in four yearly periods. It was also contemplated that the heirs of the partners would also carry on the management in rotation. Considering this provision as well as the nature of the business of partnership it could not be contemplated that the partnership could be brought to an end by notice by either partner. The intention obviously was to have a partnership of some duration, though the duration was not expressly fixed in the agreement. Now section 7 contemplates two exceptions to a partnership at will. 1006 The first exception is where there is a provision in the contract for the duration of partnership; the second exception is where there is provision for the determination of the partnership. In either of these cases the partnership is not at will. The duration of a partnership may be expressly provided for in the contract; but even where there is no express provision, courts have held that the partnership will not be at will if the duration can be implied. See Halsbury 's Laws of England, Third Edition, Vol. 28, p. 502, para. 964, where it is said that where there is no express agreement to continue a partnership for a definite period there may be an implied agreement to do so. In Crawshay vs Maule (1) the same principle was laid down in these words at p. 483: " The general rules of partnership are well settled. Where no term is expressly limited for its duration, and there is nothing in the contract to fix it, the partnership may be terminated at a moment 's notice by either party. Without doubt, in the absence of express, there may be an implied, contract as to the duration of a partnership." The same principle in our opinion applies to a case of determination. The contract may expressly contain that the partnership will determine in certain circumstances; but even if there is no such express term, an implied term as to when the partnership will determine may be found in the contract. What we have therefore to see is whether in the present case it is possible to infer from the contract of partnership whether there was an implied term as to its duration or at any rate an implied term as to when it will determine. It is clear from the terms of the contract of partnership that it was entered into for the purpose of carrying on managing agency business. Further the term relating to turns of the two partners in the actual management and the further term that these turns will go on even in the case of their heirs in our opinion clearly suggest that the duration of the partnership would be the same as the duration of the managing agency. We cannot agree that this means that the partnership (1) ; 483. 1007 would become permanent. In any case even if there is some doubt as to whether the terms of this contract implied any duration of the partnership, there can in our opinion be no doubt that the terms do imply a determination of the partnership when the managing agency agreement comes to an end. It is clear that ' the partnership was for the sole business of carrying on the managing agency and therefore by necessary implication it must follow that the partnership would determine when the managing agency determines. Therefore on the terms of the contract in this case, even if there is some doubt whether any duration is implied, there can be no doubt that this contract implies that the partnership will determine when the managing agency terminates. In this view the partnership will not be a partnership at will as section 7 of the Act makes it clear that a partnership in which there is a term as to its determination is not a partnership at will. Our attention was drawn in this connection to a term in the contract which lays down that either partner may withdraw from the partner. ship by relinquishing his right of management to the other partner. That however does not make the partnership a partnership at will, for the essence of a partnership at will is that it is open to either partner to dissolve the partnership by giving notice. Relinquishment of one partner 's interest in favour of the other, which is provided in this contract, is a very different matter. It is true that in this particular case there were only two partners and the partnership will come to an end as soon as one partner relinquishes his right in favour of the other. That however is a fortuitous circumstance; for, if (for example) there had been four partners in this case and one of them relinquished his right in favour of the other partners, the partnership would not come to an end. That clearly shows that a term as to relinquishment of a partner 's interest in favour of another would not make the partnership one at will. We may in this connection refer to Abbott vs Abbott (1). That was a case where there were more than two partners and it was (1) 1008 provided that the retirement of a partner would not terminate the partnership and there was an option for the purchase of the retiring partner 's share by other partners. It was held that in the circumstances the partnership was not at will and it was pointed out that only when all the partners except one retired that the partnership would come to an end because there could not be a partnership with only one partner. We are, therefore, in agreement with the High Court that the contract in this case disclosed a partnership the determination of which is implied, namely, the termination of the managing agency and, therefore, under section 7 of the Act it is not a partnership at will. In the circumstances it is unnecessary to consider whether the case will also come under section 8 of the Act. The next question that arises is whether the managing agency has been terminated legally ; for if that is so the partnership would also be determined. This takes us to the history of the relations between the partners after the partnership came into existence. It seems that disputes arose between the partners some time in 1941 in connection with the Rajendra Mills Limited which was one of the mills included in the managing agency business. The respondent filed a suit on March 4, 1942, against the appellant and Salem Balasubramaniam and Co. Limited with respect to the 'allotment of shares in the managing agency company On March 11, 1942, the respondent filed another suit, this time on the basis of debentures which he hold against the Mills, praying for a decree against the Mills with respect to the debenture amount. , On June 17, 1942, the respondent filed a third suit with respect to the Rajendra Mills Limited for a declaration that the respondent was a partner owning half share in the managing agency of the Rajendra mills Limited ' On the same day the respondent filed a fourth suit against the appellant, his son and Salem Balasubramaniam and Co. Limited with respect to certain actions taken by the managing agency company. On July 15, 1942, the appellant filed a counter suit against the respondent and the managing agency company relating to the Rajendra Mills Limited for a 1009 declaration that the respondent had no interest in the managing agency company and for further reliefs. There is no doubt, therefore, that the relations between the partners were very strained in 1942. The respondent admitted in his statement that from the end of 1941 there was enmity between him and the appellant and there were vital differences between them and litigation was going on, though he said that in spite of the enmity he was willing to co operate with the appellant if the amount of which he had been defrauded were paid to him, on accounting. So far as the litigation with respect to the Rajendra Mills Limited was concerned the respondent lost and it was held that he had withdrawn from the partnership of the managing agency company with respect to that mill. As to the suit on debentures, the money was deposited in court and the dispute was only about costs. That matter also went up to the High Court and finally the High Court refused to allow costs to the respondent. It was in this strained atmosphere between the partners that the appellant gave notice dated March 4, 1943, terminating the partnership with respect to the Mills considering it as a partnership at will. We have however held that the partnership was not a partnership at will and the notice given by the appellant could not, therefore, terminate it legally. But the question still remains whether the managing agency of the Mills was terminated legally ; for if that was so the partnership would also come to an end on the date the managing agency was terminated in view of what we have held above. The High Court has examined the circumstances in this connection and has come to the conclusion that the appellant fraudulently and collusively with the Mills got the managing agency terminated and, therefore, the termination of the managing agency was illegal. We are unable to agree with this view of the High Court. It is, therefore, necessary to examine the circumstances in which the termination came about. The appellant sent a copy of his notice dated March 4, 1943, terminating the partnership to the Mills also. The respondent sent a reply to this notice in which he claimed that the partnership was 1010 not at will and the appellant was not entitled to terminate it, and a copy of this reply was also sent to, the Mills on March 16, 1943. On March 22, 1943, the directors of the Mills held a meeting. In that meeting the directors decided that as the partners of Muthappa and Company were unable to get on in harmony with each other and were involved in litigation and several suits were going on between them and on account of their differences the work of the Mills was suffering and was, likely to suffer and also because Muthappa and Company had ceased to exist and had lost its right of management and was no longer in a position to manage the Mills, it became necessary to appoint other managing agents. Thus by this resolution the managing agency of Muthappa and Company was terminated for two reasons: (1) that there were differences between the partners of the managing agency company and the work of the Mills was suffering and was likely to suffer, and (2) that Muthappa and Company had come to an end and, therefore, had lost its right of management. It appears that before this resolution was passed the appellant had been purchasing shares of the Mills in the market and had acquired a controlling interest therein. The High Court, therefore, thought that the hidden hand of the appellant was visible behind this resolution of the directors of the Mills, the more so as the appellant 's son was nominated by the same resolution to administer the whole affairs of the Mills subject to the control and direction of the board of directors till such time as suitable managing agents were appointed. This action of the board of directors was confirmed at a general meeting of the shareholders on September 29, 1943. The High Court thought that as the appellant had acquired a controlling interest in the Mills he was behind the resolution of the directors of March 22 1943, and the resolution of the general meeting of the shareholders of September 29, 1943. It may be that the appellant having acquired a controlling interest in the Mills had a good deal to do with the resolutions; but that in our opinion would not necessarily make his 1011 conduct fraudulent and the termination of the managing agency agreement illegal. It is not in dispute that there was no agreement between the partners that either of them would not purchase shares of the Mills in open market. We do not therefore see anything improper in the conduct of the appellant when he purchased the shares of the Mills in open market and managed to acquire the controlling interest therein. The appellant obviously had two capacities: in one capacity he was a partner of the respondent in the managing agency business, in the other capacity he was a large shareholder of the Mills and as such shareholder it was certainly his interest to see that the interest of the Mills did not suffer. The crucial question therefore is whether the action taken by the Mills by the two resolutions is such as would be taken by any prudent company when faced with the situation with which the Mills was faced in the present case. There can in our opinion be no doubt that any company when faced with a situation in which the Mills was in this case, and finding that the two partners of its managing agency firm were fighting tooth and nail and there was no love lost between them and also finding that the interest of the Mills was suffering and was likely to suffer because of the bad blood between the two partners of the managing agency, was bound to take steps to protect its own interests. The fact that the major shareholder in the Mills also happened to be a partner in the managing agency would not disentitle him from acting in the interest of the Mills as a major shareholder. We may in this connection refer to Morarji Goculdas and Co. vs Sholapur Spinning and Weaving Co. Ltd. and Others(1). In that case a question arose whether the termination of the managing agency agreement was illegal on the ground of misconduct. It was found in that case that there were quarrels between the partners of the managing agency firm of such a nature and duration as to impair seriously their capacity to discharge their duty to the company as managing agents and to affect prejudicially the interests of the company. It was held that : (1) 129 1012 " In each case the question must be whether the misconduct proved, or reasonably apprehended, has such a direct bearing on the employer 's business or on the discharge by the employee of that part of the employer 's business in which he is employed, as to seriously affect or to threaten to seriously affect the employer 's business or the employee 's efficient discharge of his duty to his employer. " If on the facts and circumstances of the case it was so, the termination of the managing agency would be justified. In the present case there can be no doubt that the quarrels between the two partners of the managing agency firm were so serious and of such duration as to impair their capacity to discharge their duty to the Mills as managing agents and to affect the interests of the Mills prejudicially. Therefore, if the directors of the Mills came to that conclusion it is in our opinion not correct to say that conclusion was arrived at fraudulently, simply because a major shareholder happened to be the appellant. We may in this connection refer to the observations of Younger L.J. in Commissioners of Inland Revenue vs Sansom (1) : " No doubt there are amongst such companies, as amongst any other kind of association, blacksheep; but in my judgment such terms of reproach as I have alluded to should be strictly reserved for those of them and of their directors who are shown to deserve condemnation, and I am quite satisfied that the indiscriminate use of such terms has, not infrequently, led to results which were unfortunate and unjust, and in my judgment this is no case for their use. " These remarks are in our opinion apposite in the present context. It is true that the appellant had a hand as a major shareholder in the two resolutions and this was never hidden; but it is equally true that in the circumstances then existing any prudent board of directors and any body of shareholders interested in a company would act in the manner in which the board of directors and the shareholders of the Mills (1) , 514. 1013 acted in the present case. We cannot therefore agree with the High Court that this is a case where the board of directors and the shareholders acted fraudulently in collusion with the appellant, for we cannot forget that the appellant as a major shareholder of the Mills could legitimately act to protect them and the action taken was such as any board of directors and any body of shareholders would bona fide take. In the circumstances we are of opinion that the resolution of the board of directors terminating the managing agency agreement, confirmed by the general meeting of the shareholders, did legally terminate the managing agency between the Mills and Muthappa and Company. It is true that in these resolutions a second reason was given for the termination, viz., that Muthappa and Co. had come to an end because of the notice of March 4. That legal position is in our view incorrect; but that apart there were otherwise sufficient reasons for the Mills to terminate the managing agency in the circumstances with which it was faced. The next question that arises is as to when the managing agency can be said to have been terminated, i.e., whether on March 22, 1943, or on September 29, 1943. Now under s.87 B(f)of the Indian Companies Act, No. VII of 1913, which was then in force, the appointment of a managing agent, the removal of a managing agent and any variation of a managing agent 's contract of management shall Dot be valid unless approved by the company by a resolution at a general meeting of the company. This provision clearly shows that a managing agent may be appointed and removed by the board of directors, though such appointment and removal is subject to the approval by the company by a resolution at a general meeting of the company. We agree with the High Court that when the company at its general meeting approves of an appointment or of a removal, the approval takes effect from the date of the appointment or removal by the board of directors. On this view therefore, when the general meeting in this case approved the action of the board of directors, the removal became valid and came into effect from March 22, 1943. 1014 Therefore, the managing agency agreement in this case was validly terminated on March 22, 1943. As we have already held that there was an implied term in the contract of partnership that it will determine when the managing agency agreement with the Mills terminates, the partnership in the present case must under the contract be deemed to have determined on March 22, 1943. Therefore, the respondent will be entitled to an account only from November 15, 1939, to March 22, 1943. The learned Attorney General however referred us to sections 9, 10 and 13(f) of the Act and his contention was that. the appellant must account for all the profits made by him out of the managing agency business, even after March 22, 1943. Unders.10 every partner has to indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm and under section 13(f) a partner has to indemnify the firm for any loss caused to it by his wilful neglect in the conduct of the business of the firm. In the first place, such a case was not made out in the plaint by the respondent; in the second place we are of opinion that sections 10 and 13(f) have no application to the facts of the present case. We therefore reject this contention. That leaves the question of costs. So far as Saroja Mills Limited are concerned, we are of opinion that they are entitled to their costs throughout from the respondent as their action in terminating the managing agency has been held by us to be legal and valid. As to Thiagarajan Chettiar we are of opinion that in the circumstances of this case, the order of the subordinate judge that Muthappa Chettiar (respondent) and Thiagarajan Chettiar (appellant) should bear their own costs is just and we order them to bear their own costs throughout. We therefore allow the appeal in part and order that accounts will be taken from November 15, 1939,. to March 22, 1943, as between Thiagarajan Chettiar and Muthappa Chettiar. The respondent will pay the costs of Saroja Mills Limited throughout; but Muthappa Chettiar and Thiagarajan Chettiar will bear their own costs throughout. Appeal allowed in part.

The appellant and the respondent entered into a written partnership with respect to the managing agency business of two mills, the terms of which were, inter alia, that the management shall be carried on in rotation once in four years, the appellant to manage for the first four years and thereafter the respondent to manage for the next four years and in the same way thereafter. 999 It further provided that the partners and their heirs and those getting their rights shall carry on the management in rotation. Soon after disputes arose between the partners and the appellant gave notice to the respondent terminating the partnership treating it as a partnership at will, and the directors of the mills in their turn terminated the managing agency on the ground that the quarrels between the partners were detrimental to the good management of the mills. Thereafter the respondent brought a suit against the appellant and the mills for dissolution of the partnership firm and damages alleging that dissolution of the partnership by the appellant by notice was fraudulent and connived at by the mills. The trial court held that the partnership was at will and the termination of the managing agency was, legal and disallowed damages. On appeal by the respondent the High Court held that the partnership was not a partnership at will and could not be dissolved by notice by the appellant. The termination of the managing agency was also held to be illegal. appeal by the appellant with a certificate of the High Court: Held, that considering the provision that the management would be carried on in rotation between the partners in four yearly periods and that the heirs of the partners would also carry on the business in rotation the intention was obviously to have a partnership of some duration, though the duration was not expressly fixed in the agreement. The duration of a, partnership may be expressly provided for in the contract but even when there is no express provision, courts have held that the partner. ship will not be at will if the duration can be implied. Grawshay vs Manle, Swans 495; ; , followed. The contract in this case disclosed a partnership the deter mination of which was implied, namely, the termination of the managing agency and, therefore, under section 7 of the Partnership Act it was not a partnership at will and was not legally terminable by the notice given by the appellant. In view of the strained atmosphere between the partners there was sufficient reason for the mill to terminate the managing agency and the resolution of the board of directors terminating the managing agency agreement confirmed by the general meeting of the shareholders, did terminate the managing agency. There was neither any fraud nor collusion by the mills with the appellant. Morarji Gokuldas and Co. vs Sholapur Spinning and Weaving Co. Ltd. and Others, and Commissioners of Inland Revenue vs Sansom, , referred to. The partnership in the present case must be deemed to have determined on the date of the passing of the resolution by the board of directors terminating the managing agency. Sections 10 and 13(f) of the Partnership Act have no application to the facts of the case.

The appellant company was engaged in the manufacture and sale of matches in four places in India, including Bareilly, in which there were factories as well as sales offices. As an incentive to larger production of matches the company introduced in 1945 a Production Bonus Scheme which was made 561 applicable to workmen engaged in the factory in making matches as also to those working in the factory office. In 1947, it was withdrawn in its application to the sales office. The workmen of the sales office consisting of clerical staff as also salesmen and inspectors of salesmen made a claim to Production bonus painting out that there should be no discrimination between the employees in the same company. The company resisted the claim on the grounds : (1) that the sales office was entirely independent of the factory; and (2) that the salesmen, retail salesmen and inspectors employed by the sales office were not workmen within the meaning of the U.P. The facts showed : (1) that there was interdependence of the two activities viz., manufacture of matches in the factory and their sale by the sales office, inasmuch as (a) the sales office could not exist without the factory, (b) the factory itself could not conveniently function without a sales organization. and (c) the factory arranged its volume of production in accordance with the programme made from time to time by the sales manager; (2) that the sales office and the factory had the same banking account, though separate cheque books were maintained and operated upon ; (3) that the financial forecasts that were made for the Bareilly branch from time to time made no distinction between the disbursements in the sales office and the factory ; (4) the rules and practice in connection with the recruitment, control and discipline of man power, as also documents, including letters of appointment and standing orders and the muster rolls were kept distinct and separate between the factory and the sales office; and (5) the sales office paid rent to the factory fir the area occupied by it by means of book adjustments. The evideuce also showed that 75% of the time of the workmen in the sales office was devoted to writing work. Held that, on the facts, there was functional integrality and inter dependence or community of financial control and management of the sales office and the factory in the appellant company and that the two must be considered part of one and the same unit of industrial production. Held further, that the inspectors, salesmen and retail salesmen were workmen as defined in the U.P.

The appellant was paying a tax at the rate of one anna per unit weight of cotton, under section 66(1)(b) of the Central Provinces Municipalities Act. 1922, from 1936. In all 1941 the rate of tax was increased to 4 as. In 1952, the appellant filed a suit for recovery of the excess,tax paid within 3 years of the date of suit. It was contended that after the coming into force of section 142A of the Government of India Act, 1935, on 1st April 1939, till 25th January 1950, a tax in excess of Rs. 50 per annum could not be imposed by the respondent, and, after the coming into force of the Constitution the upper limit of the tax was raised to Rs. 250 per annum under article 276 of the Constitution; and that as the appellant was already paying more than this amount per year even at the rate of one anna, the enhanced rate of 4 annas was illegal. The trial court decreed the suit for recovery from the Municipal Committee of excess tax paid by the appellant within 3 years of the date of suit but on appeal, the High Court held that the suit was bad for non compliance with the requirements of section 48 of the Act, according to which a suit for anything done or purported to be done under the Act shill be instituted only after the expiration of 2 months after serving a written notice and within six months from the date of the accrual of the alleged cause of action. In its appeal to this Court, the appellant contended that it was a case of recovery of an illegal tax and therefore, a, claim for its refund fell outside the provisions of section 48. The respondent contended that (i) since the ban was not upon the rate of tax but upon the excess collection thereof, the collection of a tax above the constitutional limit was not without jurisdiction but only illegal or irregular and therefore, the suit would be in respect of a matter "Purported to be done under the Act" and the provision of section 48 would apply, and (ii) on the basis of Raleigh Investment Company Ltd. vs Governor. General in Council, (74 I.A. 50) the suit was barred by section 84(3) of the Act, which enacts that no objection shall be taken to any assessment in any other manner than is provided in the Act. HELD (Per K. Subba Rao, J. R. Mudholkar and V. Ramaswami JJ.): (i) Since the respondent had no authority to levy a tax beyond what section 142A of the Government of India Act, 1935, or what article 276 permitted, the assessment proceedings were void in so far as they purported to levy a tax in excess of the permissible limit and authorise. Its collection, and the assessment order would be no answer to the suit for the recovery of the excess amount, and therefore, the suit was maintainable. [522G H] The Constitution is the fundamental law of the land and it is unnecessary to provide in any law that anything done in disregard of the Constitution is prohibited, Such a prohibition has to be read into 500 every enactment, and where such prohibition exists or can be implied, anything done or purported to be done by an authority must be regarded as wholly without jurisdiction, and is not entitled to a protection of the law under colour of which that act was done. [512A B; 516B C] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar.[1964] 8 S.C.R. 178, followed. (ii)A tax can be recovered only if it is "payable" and it would be payable only after it is assessed. It is therefore futile to contend that the ban placed by section 142A of the Government of India Act and article 276 of the Constitution, extends only to recoveries and not to an earlier stage. [513G] It is true that the respondent had jurisdiction to recover an amount up to the constitutional limit. But it cannot be contended that merely because of this, the recovery by the respondent of an amount in excess of the constitutional limit was only irregular or at the worst illegal. Where power exists to assess and recover a tax up to a particular limit and the assessment or recovery of anything above that amount is prohibited, the assessment or recovery of an amount in excess is wholly without jurisdiction. To such a case, the statute under which action was purported to be taken can afford no protection. Indeed, to the extent that it affords protection it would be bad. But it is the duty of the court to so construe it as to avoid rendering the provision unconstitutional, that is, to construe section 48 as affording protection only if what was done was something which could legally have been done by the respondent but was wrongly done by it, and reject a construction which will invalidate the provision. [515B; 516B H] (iii)The appellant 's suit could not be barred even if section 84(3) of the Act is interpreted in the same way as the Privy Council interpreted section 67 of the Income tax Act, in the Raleigh Investment Co. 's case. Unlike the Income tax Act the Act does not provide a machinery for making a claim for refund or repayment on the ground of the un constitutionality of the levy, and the jurisdiction of the civil court in cases of refund is not taken away. Even in the class of cases to which the provisions of sections 83 and 85 of the Act, which are the only provisions providing a machinery under the Act for challenging an assessment, apply, they cannot be said to provide a sufficiently effective remedy to an assessee. A reference to the High Court is only at the discretion of the appellate or revisional authority and the person aggrieved has no right to move the High Court. Besides, in the Raleigh Investment Co. 's case, the expression "assessment made under this Act was given too wide a construction, because, it is difficult to appreciate how taking into account an ultra vires provi sion, which in law must be regarded as not being a part of the Act at all, will make the assessment as one under the Act. [517G; 518B, F, H; 519A B; 520D F; 521H] The exclusion of the jurisdiction of the civil court is not to be readily inferred but such exclusion must either be explicitly expressed or clearly implied. One of the corollaries flowing from the principle that the Constitution is the fundamental law is that the normal remedy of a suit will be available for obtaining redress against the violation of a constitutional provision. Moreover the provisions of article 265 of the Constitution preclude the levy or collection of a tax except by authority of law, which means only a valid law. There was no corresponding provision in the various Acts for the governance of India which preceded the Constitution and the decision in the Raleigh Investment Co. 's case was given in that context. Further under article 501 226, the Constitution has provided a remedy to a citizen to obtain redress in respect of a tax levied or collected under an invalid law, and this remedy will not be affected by any provision like section 67 of the Income tax Act, or section 84(3) of the Act. [520G H; 521C E] Thus, when the question merely is whether the assessment had been made according to law, the respondent having jurisdiction over the subject matter and the assessee, the provisions of section 84(3) may be a bar to a suit. But, where the question raised is as to the jurisdiction of the respondent to proceed against the assessee, and levy on or collect from him an amount in excess of that permitted by the Constitution, the matter would be entirely out of the bar of that provision. [522E G] Per Raghubar Dayal and Bachawat, JJ. (dissenting): The appellant 's suit for the recovery of the tax realized in excess of Rs. 250 a year was rightly dismissed, as the correctness of the assessment of the tax could not be challenged by a suit in a civil court in view of section 84(3) and as the provisions of section 48, requiring the giving of notice to the respondent and the institution of the suit within a certain period, had not been complied with. [534H; 535A B] The suit was in essence a suit for, first, modifying the amount assessed and then to decree the payment of the amount held to have been paid in excess of the tax as modified by the court. But the act of assessing the tax or the consequential act of collecting the amount cannot be broken up into two acts, one, upto the legal limit and the other in excess of it. The act of assessment or of collection therefore was an act done by the respondent under the provisions of the Act, though it acted wrongly in assessing the tax at an excessive figure, and consequently in collecting an amount in excess of that which could have been legally collected. The suit was therefore fully covered by section 48 and had to be dismissed. [526E H] In view of section 84(3), exclusive jurisdiction to determine the correctness of the amount assessed is given to the authorities mentioned in section 83. The result is that no other authority can enter into the question of the correctness of the assessment on grounds of law or fact, and therefore the appellant 's suit was barred from the cognizance of the civil court. [527G] Raleigh Investment Co. Ltd. vs Governor General in Council, L.R. 74 I.A. 50 and Firm of Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , , followed. Poona City MuniciPal Corporation vs Dattatraya Nagesh Deodhar, ; , distinguished.

The respondents dealt in gunnies. They first entered into contracts with two Mills agreeing to purchase gunnies at a certain rate for future delivery, and also entered into agreement with third parties, by which they charged something extra from those third parties and handed over the delivery order known as kutcha delivery order. The Mills however did not accept the third parties as contracting parties, but only as the agents of the appellants and delivered the goods against the kutcha delivery orders, and collected the Sales Tax from the third parties. The tax authorities treated these transactions between the appellant and the third parties as fresh sales and sought to levy sales tax again, which the appellants contended, was not demandable as there were no second sales; the delivery of a kutcha delivery order did not amount to a sale of goods, but was only an assignment of a right to obtain delivery of gunnies which were not in existence and not appropriated to the contract; this was only an assignment of a forward contract. Held, that the agreements between the parties showed that third parties were not recognised by the sellers. A delivery order being a document of title to goods, the possession of such a document not only gave the right to recover the goods but also to transfer them to another by endorsement or delivery. There being two separate transactions of sale, one between the Mills and the original purchasers and the other between the original purchasers and third parties, tax was payable at both the points. The Sales Tax officer, Pilibhit vs M/s. Budh Prakash jai Prakash; , , Poppatlal Shah vs The State of Madras, ; , and The State of Andhra vs Kolla Sreeramamurthy, decided on June 27, 1957, referred to.

The appellant carried on the business of manufacturing and selling pharmaceutical products in Greater Bombay. In disputes arising bet the appellant and the respondents the Industrial Tribunal had to deal with questions relating to dearness allowance, classification of grades and fixation of wages and the incentive bonus scheme as modified 'by the company. In appeal against the award of the Tribunal, HELD : (i) The decisions of this Court in Gramophone Company Ltd. vs its Workmen and The Indian Link Chain Manufacturers Ltd. vs Their Workmen show that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate. The latter decision is directly in point to the effect that provision for depre ciation cannot be deducted. [582E., 585B C] Gramophone Company Ltd. vs Its Workmen, and The Indian Link Chain Manufacturers Ltd. vs Their Workmen, , applied. Ahmedabad Millowners ' Association Etc. vs The Textile Labour Association, ; , referred to. (ii)So long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region there is no reason why they should not be taken into account for purposes of being teated as comparable units, provided that the tests for such purposes as laid down by this Court are satisfied. The object of industrial adjudication is to secure as far as possible uniformity of service conditions among industrial units in the same region,. if a concern having foreign collaboration properly satisfies the tests of comparability it would be improper to regard such unit as uncomparable merely on the ground that it is a concern with foreign collaboration or interest and that the unit with which it is sought to be compared is entirely of Indian origin and resources. [591A C] Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen, [1957] I.C.R. Bombay 1206 and Alembic Chemical Works Ltd. Baroda vs Its, Workmen ; , Hindustan Antibiotics Ltd. vs The Workmen and Ors., ; , relied on. (iii)On the materials before it the Tribunal was justified in treating M/S. Burroughk Wellcome & Co. as a unit comparable with the appellant. 568 The fact that Burroughs Wellcome employed a lesser labour force did not deserve much importance because the business performance of the two companies was equal. Once Burroughs Wellcome Co. was treated as a comparable unit the wage scales awarded by the Tribunal could not be considered to be unjustified. [598G 599A D] Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and Ors., , applied. (iv)On the facts of the case it was not possible to disagree with the view of the Tribunal that the impact of the Drugs (Price Control ) Order will not be such as to affect materially the business prospects of the appellant company. If the Order materially affects the prosperity of the appellant 's trade it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order their financial position has weakened to such an extent that they cannot bear the burden of the wage structure fixed by the present award, the matter may have to be examined on its merits. [598B C] Williamsons (India) Private, Ltd. vs Its Workmen, , referred to. (v)The Tribunal had acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories. The objection based on section 10(4) of the must be rejected. [599E 600B] (vi)When the Tribunal raised in the gratuity scheme the ceiling limit from 15 months to 17 1/2 months according to the pattern obtaining in Buroughs Wellcome Company there was no question of principle involved justifying an objection by the appellant company. [60OC D] (vii)There were different systems of dearness allowance for the operators and the clerical and subordinate staff in the appellant company. That such a different system of dearness allowance for employees working under the same employer is not warranted is clear from the decisions of this Court in the cases of Greaves Cotton & Co. and Bengal Chemical & Pharmaceutical Works Ltd. Therefore the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant. [600E F] Greaves Cotton and Co. and Ors. vs Their Workmen, ; and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen; , , relied on. (viii)From the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points. At the time when the demand for revision of wages scales and dearness allowance was made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high. That clearly showed that the workmen bad made out a case for revision of wage scales and dearness allowance. The contention of the appellant that because a system of dearness allowance already existed there should be no revision of the same, could not be accepted. [6O2C; 601A] Co. ; and Remington and of India vs Its Workmen, , followed. 569 (ix)When the slab, system of dearness allowance was prevailing in the industry in the region the Tribunal committed no error in introducing a similar pattern in the case of the appellant. [603C D] Kamani Metals & Alloys Ltd. vs Their Workmen, ; , referred to. (x)In regard to the incentive Bonus Scheme the Tribunal had stated that the necessary material for that purpose had not been made available and as such it had not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index. This Court could do nothing further,in this 'regard and the result would be that observations made by the Tribunal will have full, effect. [604G H]

% The appellant No. 1, J.K. Cotton Spinning and Weaving Mills Limited, has a composite mill wherein it manufactures fabrics of different types, for which yarn is obtained at an intermediate stage, and the yarn is processed in an integrated process in the said composite mill for weaving the same into fabrics. The Central Board of Excise issued a Circular dated September 24, 1980, purporting to interpret the rules 9 and 49 of the Central Excise Rules, 1944 (the Rules) and directing the subordinate excise authorities to levy and collect excise duty in accordance therewith. The Board further directed vide the said Circular that the use of the goods in the manufacture of another commodity even within the place premises specified in this behalf by the Central Excise officers in terms of the powers conferred under rule 9 of the Rules, would attract duty. As the implementation of the Circular worked to the prejudice of the appellants, they filed a writ petition in the High Court, challenging the validity of the Circular. During the pendency of the said writ petition, the Central Government issued a Notification dated February 20, 1982, amending the rules 9 and 49 of the Rules, with section 51 of the Finance Act, 1982, providing that the amendments in the rules 9 and 49 shall be deemed to have, and to have always had, the effect with retrospective effect from the date on which the Rules came into force i.e. February 28, 1944. Upon the amendments of the rules 9 and 49, with retrospective effect of the amendments, the appellants amended their writ petition above said to challenge the constitutional validity of Section 51 of the Finance Act abovementioned and the amendments to the rules 9 and 49. 701 The High Court allowed the writ petition in part. It held (i) that section 51 and the rules 9 and 49 as amended were valid, (ii) the retrospective effect allowed by section 51 would be subject to the provisions of sections 11A and 11B of the (the Act), (iii) the yarn produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving into fabrics, would be liable to payment of excise duty in view of the amended provisions of the rules 9 and 49, but the sized yarn actually put into the integrated process would not again attract excise duty. The appellants then filed this appeal (Civil Appeal No. 297 of 1983) before this Court by certificate. Dismissing the Appeal, the Court, ^ HELD: The decisions of various High Courts cited, deal with the rules 9 and 49 of the Central Excise Rules, 1944, as they stood before they were amended by the Government Notification dated February 20, 1982. In this case, what is involved is the interpretation of the said two rules after their amendment and the constitutional validity of the rules as amended. The amendments to the rules 9 and 49 are quite legal and valid. Section 51 of the Finance Act, 1982, giving retrospective effect to the said amendments is also legal and valid. The apprehension of the appellants that the amendments to rules 9 and 49 having been made retrospective from the date the rules were framed, that is, February 28, 1944, the appellants may be called upon to pay enormous amounts of duty in respect of the intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity, is not right. In view of section 11A of the Finance Act, there is no cause for such an apprehension. Under Section 11A(1), the excise authorities cannot recover duties not levied or not paid or short levied or short paid or erroneously refunded beyond the period of six months, the proviso to section 11A not being applicable in the present case. Thus though section 51 has given retrospective effect to the amendments of rules 9 and 49, it must be subject to the provision of section 11A of the Act. Section 51 does not contain any non obstante clause, nor does it refer to the provision of section 11A, and it is difficult to hold that section 51 overrides the provision of section 11A. [712F H; 714D F] The appellants are liable to pay excise duty on the yarn 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 702 integrated process of manufacture of fabrics, it appears to be not so. After the yarn is produced, it is sized, and thereafter, subjected to a process of weaving the same into fabrics. As the Court has held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. [720G H: 721A B] The High Court has rightly held that the appellants are not liable to pay excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. The judgment of the High Court affirmed. [721B C] In view of the decision of the Court in the Civil Appeal No. 297 of 1983, the Civil Appeals Nos. 2658 and 4168 of 1983 also dismissed. [721D] The Province of Madras vs Boddu Paidanna and Sons AIR ; Caltex oil Refining (India) Ltd. vs Union of India & Ors. , Delhi Cloth and General Mills Co. Ltd. vs Joint Secretary, Government of India, ; Modi Carpets Ltd. vs Union of India, ; Synthetics and Chemicals Ltd. Bombay vs Government of India, , Devi Dayal Electronics and Wires Ltd. vs Union of India, [1982] E.L.T. 33; Oudh Sugar Mills Ltd. vs Union of India, [1980] E.L.T. 327, Oudh Sugar Mills Ltd. vs Union of India, [1982] E.L.T. 927, Maneklal Harilal Spg. & Mfg. Co. Ltd. vs Union of India, ; Nirlon Synthetic Fibres & Chemicals Ltd. vs Shri R.K. Audim; Assistant Collector & Ors. In Misc. 491 of 1964, unreported judgment of Bombay High Court, dated April 30, 1970, Jawaharmal vs State of Rajasthan & Ors., ; ; Rai Ramkrishna and Ors. vs State of Bihar, ; , K.P. Verghese vs The Income Tax officer, Ernakulam; , and Senior Electric Inspector and Ors. vs Laxmi Narayan Chopra, ; , referred to.

The Managing Agents of the appellant company withdrew certain sums of money from its a count with the respondent (1) Mad. 871. (2) Lah. (3) (4) I.L.R. (5) (6) Pat. 106 (7) (1953) I.L.R. K. All. 64. (8) Pat. 653 Bank, which the company had by a resolution authorised the Managing Agents to operate on. The Managing Agents had no other account with the said Bank. The company brought the suit, out of which the present appeal arises, against the Bank for recovery of the said amounts on the ground that the cheques issued by the Managing Agents had been wrongfully honoured by the Bank in that they were signed by them without describing themselves as Directors of the Managing Agents firm and on behalf of the company, as required by the resolution. The trial judge decreed the suit except with regard to a part of the claim which he found to have actually been received by the company. The appeal court dismissed the suit holding that the Bank had paid in good faith and that the company was not entitled to rely on section 89 of the Indian Companies Act. Held, that the court of appeal was right in holding that section 89 of the Indian Companies Act could not be invoked by the appellant in the present case. There can be no doubt that before a negotiable instrument can be enforced against a company under section 89 of the Indian Companies Act, it must on the face of it show that it was drawn, made, accepted or endorsed by the company, and this may be done either by showing the name of the company itself on the instrument, or by statement of the person making the instrument that he was doing so on behalf of the company. Sadasuk janki Das vs Sir Kishan Pershad, Cal. 663, applied. The Bank of Bombay vs H. R. Cormack, Born, 275 and Miles ' claim, , referred to. But the said principle is applicable only to the claim made against a company on a negotiable instrument and cannot be extended to a dispute between a bank and its constituent where the claim is not so based and proceeds on the basis that in honouring the cheques wrongfully drawn the bank acted improperly. Mahony vs East Holiford Mining Co., (1875) 7 Eng. & Irish Reports 869, referred to. Held, further, that the object of the resolution as well as its effect was merely to conform to the requirements of section 89 of the Indian Companies Act, 1913, and not to prescribe any condition precedent independently of that section.

Under an agreement dated July 11, 1945, the appellants were appointed managing agents of the Coimbatore Spinning and Weaving Co. Ltd., for 20 years, and certain remuneration was provided for them including 10% commission on the net profits of the company due and payable yearly immediately after the accounts of the company were closed and commissions on purchases and capital expenditure of the company. Prior to October 1, 1944, the appellants were the managing agents of the Coimbatore Mills Agency Ltd., who were the managing agents of the Coimbatore Spinning and Weaving Co. Ltd. The year of account of the appellants ended on March 31, of the company on June 30, and of the Agency Company on September 30. For the assessment year 1945 46 the appellants submitted a return of their income which included the stipulated remuneration and commissions. This return was accepted by the Income tax Officer, and Excess Profits Tax liability for the chargeable accounting period ending March 31, 1945, was also worked out on that basis. A return of income was submitted by the appellants for the assessment year 1946 47 which included commission for the period 1 4 45 to 30 6 45 on purchases of cotton and stores and on capital expenditure. The Tax Officer directed that the commission on purchases and capital expenditure be taken into account 272 for the year April 1, 1945, to March 31, 1946, and that the receipts be computed accordingly. The assessment for 1945 46 was then reopened under section 34 of the Income tax Act under section 15 of the Excess Profits Tax Act and as a result of apportionment made by the application of r. 9 of Sch. 1 of the Excess Profits Tax Act, the liability of the appellants for Income tax and Excess Profits 'fax was revised and fresh assessments were made. The orders of assessment were confirmed by the appellate authorities. Held, that as in the instant case the chargeable accounting period for the assessment of Excess Profits Tax and the year of account of the company did not tally, by the assessment of income made on the assumption that they did tally, there had resulted under assessment and it was open to the Tax Officer to take action under section 15 of the Excess Profits Tax Act. The Excess Profits Tax Officer acted properly in apportioning under r. 9 of Sch. 1 the commission received by the appellants. Rule 9 of Sch. 1 of the Excess Profits Tax Act is enacted in general terms and it is applicable to all contracts which are intended to be operative for fixed periods. If, for the performance of the entire contract, remuneration is payable at certain rates the profits earned out of that remuneration must be apportioned in the manner prescribed by 19 if the performance of the contact extends beyond the accounting period. E. D. Sassoon & Co., Ltd. vs The Commissioner of Income tax, Bombay City; , , distinguished.

87 of 1957. Petition under article 32 of the Constitution of India for enforcement of fundamental rights. B. D. Sharma, for the petitioner. N. section Bindra, R H. Dhebar and T. M. Sen, for the respondents. March 7. The Judgment of the Court was delivered by MUDHOLKAR, J. In this petition under article 32 of the Constitution the petitioner contends that the provisions of the (XXXI of 1950) and in particular those of section 2 (d) and sub section (4) of section 40 are unconstitutional. According to him the effect of the order passed against him by the Custodian of Evacuee Properties under sub section (4) of section 40 of the Act is to take away his 191 property without the authority of law. He further contends that the order of the Custodian amounts to discrimination in practice against the petitioner. These are the two main heads under which the arguments advanced before us could be classified. The relevant facts may now be stated. The petitioner purchased 195 51 acres of land in the former Bhopal State from one Babu Rehmatullah on June 23, 1950, for a consideration of Rs. 3,500. Rehmatullah was declared to be an intending evacuee by the Assistant Custodian of Evacuee Property. Eventually he left India for Pakistan on June 20, 1951. On June 12, 1951, the Assistant Custodian of Evacuee Property issued a notice to the petitioner to show cause why the land which he had purchased from Rehmatullah should not be declared to be "evacuee property". After hearing the petitioner the property was declared to be evacuee property on August 8, 1951. The petitioner challenged that order in appeal as well as in revision as provided in the Act but was unsuccessful. A writ petition preferred by him before the Judicial Commissioner, Bhopal, was dismissed in limine on July 14, 1954. He has, therefore, come up to this Court under article 32 of the Constitution. The first point pressed 'before us by Mr. B. D. Sharma, on behalf of the petitioner is that the provisions of the Evacuee Property Act and particularly those of sections 2 (d) and 40 (4) are unconstitutional, because they enable the State to take away property without paying any compensation therefore as required by article 31 (2) of the Constitution. The short answer to this contention is that the provisions of a law made in pursuance of any agreement entered into between the Government of India and the Government of any other country or otherwise With respect to property declared by law to be evacuee property will not be affected by the provisions of cl. 2 of article 31. This is clear from the provisions of article 31(5)(b)(iii) which rules is thus: "Nothing in clause (2) shall affect 192 (b) the provisions of any law which the State may hereafter make (iii) in pursuance of any agreement entered into between the Government of the Dominion of India or the Government of India and the Government of any other country, or otherwise, with respect to property declared by law to be evacuee property. Mr. Sharma, however, contends that the protection afforded by the aforesaid clause must be limited to a law which itself declares any property to be evacuee property and not to a law which empowers an authority to declare any property as evacuee property. We cannot accept the contention. The words "property declared by law to be evacuee property" would necessarily include property which could be declared as evacuee property. A law relating to evacuee property would concern itself with laying down the criteria for determining what property is to be considered as evacuee property and could not be expected to specify the particular properties which are to be treated as evacuee properties. The protection afforded by the constitutional provision which we have quoted above is not restricted as suggested by Mr. Sharma but extends to a law which provides for the determination of the criteria for declaring property to be evacuee property. The next argument of learned counsel is that the property in question is not evacuee property and that the provisions of article 31(1) of the Constitution are a bar against taking it away. It is difficult to appreciate the argument. What article 31(1) prohibits is "deprivation of property save by authority of law". No doubt the petitioner can say that he is deprived of his property because of the declaration made by the Custodian that it is evacuee property. But then this declaration has been made in pursuance of a law enacted by Parliament. If, as contended by him, we had held that the law is unconstitutional the position would have been different. The next contention of learned counsel is that cls. (a) and (c) of section 40, sub section (4) are ultra vires because 193 they confer arbitrary power upon the Custodian. The reason for raising the contention is that an application made by the petitioner to the Custodian under section 40 for confirming the sale in his favour was rejected by him on the ground that the evacuee did not act , in good faith in effecting the sale. Sub section (4) of section 40 P.reads thus: "The Custodian shall hold an inquiry into the application in the prescribed manner and may reject the application, if the is of opinion that: (a) the transaction has not been entered into in good faith or for valuable consideration, or (b) the transaction is prohibited under any law for the time being in force, or (c) the transaction ought not to be confirmed for any other reason. " We are concerned here only with cl. (a) of section 40(4) to which the Custodian resorted and not with cl. We would, therefore, limit our remarks to el. Subsection (4) of section 40 enables the Custodian to hold an inquiry regarding the genuineness or validity of a transaction sought to be confirmed and cl. (a) empowers him to refuse to confirm it if he finds that it was not entered into in good faith. According to learned counsel the words "good faith" are vague and "slippery" and do not furnish any standard or a norm which has to be conformed to by the Custodian. Apart from the fact that the words "good faith" occur in a number of statutes and have acquired a definite meaning in courts of law, it may be pointed out that the power conferred by sub section (4) of section 40 is in the nature of a judicial power and, therefore, the absence of a standard for the determination of the question would not render the provision unconstitutional. Learned counsel wanted to contend that the absence of good faith on the part of the transferee was not sufficient and could not be regarded as a ground for refusing recognition to the transfer and that unless it is shown that the transferee was also lacking in good faith the transfer had to be confirmed under sub section (4) of section 40. He, however, did not press the contention 194 when it was pointed out to him that in Rabia Bai vs The Custodian General of Evacuee Property (1), this Court has upheld the order of the Custodian refusing to confirm the transfer on the ground that the evacuee had effected it in bad faith. The last contention of learned counsel is that he has been discriminated against by the Custodian in the matter of confirmation of the transaction. He said that prior to the sale of the land to him by Rehmatullah, the latter had sold a house to some nurses and that sale was found to be for inadequate consideration but in spite of that it was confirmed by the Custodian while the sale in his favour, though found to be for an adequate consideration was not confirmed. We would repeat that the order of the Custodian is a judicial order and merely because he may have gone wrong in dealing with one case we cannot hold that the petitioner has been discriminated against. The petition is wholly without basis and is accordingly dismissed without costs. Petition dismissed.

The petitioner purchased some land from R. R. was declared to be an intending evacuee and be left for Pakistan. The Assistant Custodian issued a 'notice to the petitioner to show cause why the land should not be declared to be evacuee property, and after hearing the petitioner he declared the land to be evacuee property. An appeal and a revision against the order were unsuccessful. The petitioner also applied to the Custodian under section 40 Of the , for confirmation of the sale but his application was rejected under section 40(4)(a) on the ground that the evacuee did not act in good faith in effecting the sale. The petitioner contended that section 2(d) of the Act defining evacuee property and section 40(4) empowering the custodian to reject an application for confirmation violated article 31(2) as they enabled the State to take away property without the authority of law. Held, that the provisions Of SS. 2(d) and 40(4) were not affected by article 31(2) in view of article 31(5)(b)(iii) of the Constitution. The protection of article 31 (5)(b)(iii) was not limited to a law which itself declared any property to be evacuee property but extended to a law which empowered an authority to declare any property as evacuee property and laid down the criteria for the declaration. Section 40(4)(a) of the Act which empowered the Custodian to reject an application for confirmation on the ground that the transaction had not been entered into in good faith could not be challenged as conferring arbitrary powers on the Custodian. The power was in the nature of a judicial power and the absence of a standard for the determination of the question could not render the provision unconstitutional.

The appellant, a displaced person from Lahore, was the owner of a house there and on the 10th of October, 1947, she arranged to have it exchanged with certain lands in a village in the State of Delhi, belonging to M, an evacuee. On the 23rd of February, 1948, she made an application to the Additional Custodian of Evacuee Property (Rural), Delhi, for confirmation of the transaction of ex 1118 change under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947, as amended in 1948 and applied to the State of Delhi. Under section 5 B of the Act an order if passed by the Custodian or Additional Custodian would not be subject to appeal or revision, and would become final and conclusive. But the application was not disposed of until the 20th of March, 1952, and on that date the Additional Custodian passed an order confirming the exchange. In the meanwhile, there were changes in the law relating to evacuee property by which the East Punjab Act as applied to the State of Delhi witness repealed and re enacted, and ultimately Central Act XXXI of 1950 was passed which, among other things, conferred by section 27 revisional powers on the Custodian General. The Custodian General issued a notice under section 27 to the appellant and, after hearing her, set aside the order of confirmation and directed the matter to be reconsidered by the Custodian. It was contended for the appellant that the order of confirmation by the Additional Custodian was not open to revision, on the ground that on the filing of the application in 1948 the appellant got a vested right to have it determined under section 5 A, with the attribute of finality and conclusiveness under section 5 B attaching to such determination, and that the subsequent repeal and re enactment of these provisions cannot affect such a right, in view of section 6 of the General Clauses Act, and section 58(3) of Act XXXI of 1950. Held (i) that section 6 of the General Clauses Act (X of 1897) was not applicable to the case, as section 58(3) of Act XXXI of 1950 was a self contained provision indicative of the intention to exclude the operation of section 6; (ii)that the right to a determination with the attribute of finality, assuming that such a right exist,. ;, is not a vested right and it does not accrue until the determination is in fact made, when alone it becomes an existing right. Colonial Sugar Refining Co. Ltd. vs Irving ([1905] A.C. 369) and Delhi Cloth & General Mills Co. Ltd. vs Income Tax Com missioner ([1927] I.L.R. ; 54 I.A. 421), distinguished; (iii)that the words "the repeal shall not affect the previous operation of the repealed law" in section 58(3) of Act XXXI of 1950 cannot be construed as meaning "the repeal shall not affect the future operation of the previous law"; and (iv)that the scheme underlying section 58(3) is that every matter to which the new Act applies has to be treated as arising, and to be dealt with, under the now law except in so far as certain consequences have already ensued or acts have been completed prior to the new Act, to which it is the old law that will apply. In view of section 58, the application of the appellant for con firmation pending on the date when Act XXXI of 1950 came into force, had to be dealt with and disposed of under this Act and the order of confirmation passed in 1952 was subject to the revisions power of the Custodian General under s, 27 of the said Act, 1119 Quaere. Whether a right of appeal in respect of a pending action can be treated as a substantive right vesting in the litigant on the commencement of the action.

The point in controversy in these petitions was the con stitutional validity of the Punjab Security of Land Tenure Act (Punj. X Of 1953), as amended by Act XI of 1955, which sought to "provide for the security of land tenure and other incidental matters ". The impugned Act which admittedly dealt with holdings as defined by the Punjab Land Revenue Act, 1887, limited the area which might be held by a land owner for the purpose of self cultivation and thereby released surplus area to be utilised for resettling ejected tenants ; and by section 18 conferred upon the tenants the right to purchase from the land owners the lands held by them and thus themselves to become the landowners on prices which would be below the market value. It was contended on behalf of the petitioners, who were,landowners affected by the impugned Act, that under Entry 18 in List II of the Seventh Schedule to the Constitution, the State Legislature was incompetent to enact a law limiting the extent of the land to be held by a land owner and that the provisions of the impugned Act contravened the petitioners ' fundamental rights under articles 14, 19(1)(f)and 31 of the Constitution. Held, that the contentions must fail. The words " rights in or over land " and " land tenures occurring in Entry 18 in List 11 of Seventh Schedule to the Constitution were sufficiently comprehensive to include measures of land tenure reforms, such as the impugned Act, that sought to limit the extent of land in cultivating possession of the landowner in order to release larger areas of land to be made available for cultivation by tenants and that Entry read with article 246(3) of the Constitution gave the State Legislature exclusive power to enact such measures. Such determination of the relation of landlord and tenant as was contemplated by section 18 and other provisions of the impugned Act, which sought to convert a tenant into a land owner, was well within the ambit of Entry 18. 749 The United Provinces vs Mst. Atiqa Begum, and Megh Raj vs Allah Rakhi, (1946) L.R. 74 I.A. 12, referred to. It was beyond doubt that the impugned Act substantially modified the land owner 's rights to hold and dispose of his property in any estate or portion thereof and thus fell within the purview of article 31A(1)(a) of the Constitution and was immune from any attack on the ground that it contravened articles 14, 19and 31 of the Constitution. The observations made by this Court in Thakur Raghubir Singh vs Court of Wards, Ajmer, ; , in connection with another Act, with absolutely different provisions, must be limited to the facts of that case and were wholly inapplicable. Thakur, Raghubir Singh vs Court of Wards, Ajmer, ; , distinguished and held inapplicable. The words " any estate or of any rights therein " occurring in article 31A(1)(a) read in the light of article 31A(2) included any kinds of rights either quantitative or qualitative in the area encompassed by an estate or any portion of it and thus included holdings as defined by the Punjab Land Revenue Act, 1887, and any shares or portions thereof. Regard being had to the legal maxim that the greater must include the less, it was, inappropriate to suggest that the Constitution should have specifically mentioned "portion of an estate" in article 31A if it intended to give that Article such a comprehensive construction. Bhagirath Ram Chand vs State of Punjab, A.I.R. 1954 Pun. 167, approved. State of Punjab vs section Kehar Singh, (1958) 60P.L.R. 461, dis approved. Ram Narain Medhi vs The State of Bombay, [1959] SUPP. (1) S.C.R. 489, applied. Hukam Singh vs The State of Punjab, , referred to.

The Punjab High Court has jurisdiction to issue a writ under article 226 of the Constitution to the Income tax Investigation Commission located in Delhi and investigating the case of the petitioner under 5 of the Taxation on Income (Investigation Commission) Act, 1947, although the petitioners were assessees within the U.P. State and their original assessments were made by the Income tax authorities of that State. Article 226 of the Constitution confers on all the High Courts new and very wide powers in the matter of issuing writs which they never possessed before. There are only two limitations placed upon the exercise of such powers by a High Court; one is that the power is to be exercised "throughout the territories in relation to which it exercises jurisdiction", that is to say, the writs issued by the court cannot run beyond the territories subject to its jurisdiction. The other is that the person or authority to whom 739 the High Court is empowered to issue writs "must be within those territories" and this ,implies that they must be amenable to its jurisdiction either by residence or location within those territories. The remedy provided in article 226 of the Constitution is a discretionary one and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. Ryots of Garabandho vs Zamindar of Parlakimedi (70 I.A. 129) and Election Commission v; Saka Venkata Subba Rao ; referred to.

The father of the appellant owned considerable agricultural property in Pakistan and he with the members of his family moved over to India on partition. The appellant 's father had some unsatisfied claim for allotment and on December 29. 1955 he was allotted some plots in Urban area within a certain municipality. The appellant 's father died in 1952 and the allotment made was actually to the appellant in lieu of the claim of his father. On the allotment being made, a sanad was issued to the appellant by the Managing Officer. When the appellant tried to take possession of these lands, disputes were raised by respondents Nos. 4 and 5. These respondents moved the Assistant Settlement Commissioner for cancellation of the allotment on the ground that these disputed plots were within an "urban area" within the meaning of r. 2(h) of the Displaced Persons, Compensation and Rehabilitation Rules, 1955 and, therefore, the allotment to the appellant was contrary to law. The Assistant Settlement Commissioner accepted the contention of the res pondents and allowed the appeal and cancelled the allotment. The appellant then applied to the Chief Settlement Com missioner in revision. He rejected the petition. Then the appellant moved a petition under articles 226 and 227 of the Constitution before the High Court. This petition was also dismissed. the High Court granted certificate of fitness under article 133 of the Constitution and hence the appeal. Held:(i) Where an order making an allotment was set aside by the Assistant Commissioner or Settlement Commissioner the title which was obtained on the basis of the continuance of that sanad or order also fell with it. Shri Mithoo Shahani vs Union of India, ; , relied on. (ii)The contention of the appellant that r. 2(h) of the Displaced Persons Compensation and Rehabilitation Rules, 1955, was unconstitutional as contravening article 14 of the Constitution must fail. This contention is based on the basis of the proviso to Rule 2(h). Rule 2(h) was framed under section 40 of the Act. This rule along with other rules came into force on May 21, 1955. The allotment was made to the appellant on December 29, 1955 and the Sanad was issued two days later. In other words the allotment in favour of the appellant was after the rule came into force and was not one "already made" as stated in the proviso to r. 2(h). Therefore, if on the date of the allotment the land was in an urban area, the allotment would be governed by the main para of the definition and the proviso, had no application. 193 The discrimination is said to consist in the rule having drawn a dividing line at the date when it came into force, for determining whether the allotment was valid or not. Such a contention is patently self contradictory. Every law must have a beginning or time from which it operates, and no rule which seeks to change the law can be held invalid for the mere reason that it effects an alternation in the law. It is sometimes possible to plead injustice in a rule which is made to operate with retrospective effect, but to say that a rule which operates prospectively is invalid because thereby a difference is made between the past and the future, is one which cannot be accepted.

The petitioner and his two associates were convicted and sentenced under section 302 read with section 34, I.P.C. On appeal, the High Court maintained the conviction of the petitioner but acquitted his associates giving them the benefit of doubt. The Petitioner applied to this Court for grant of special leave to appeal under article 136 but the same was dismissed. By this petition under article 32 the petitioner sought issuance of a writ of mandamus directing the State to forbear from giving effect to the judgment and sentence passed by the trial court as also the judgment of the High Court as well as the order passed by this Court dismissing the special leave petition on the ground that his conviction was illegal and therefore his detention in jail was in violation of article 21 read with articles 14 and 19. Dismissing the petition, ^ HELD: The propriety of asking for a declaration in these proceedings under article 32 that conviction of the petitioner by the High Court for an offence punishable under section 302 read with section 34 I.P.C. is illegal, particularly when this Court has declined to grant special leave under article 136 cannot be appreciated. Nor can the petitioner be heard to say that his detention in jail amounts to deprivation of the fundamental right to life and liberty without following the procedure established by law in violation of article 21 read with articles 14 and 19. When a special leave petition is assigned to the learned judges sitting in a Bench, they constitute the Supreme Court and there is a finality to their judgment which cannot be upset in these proceedings under article 32. Obviously, the Supreme Court cannot issue a writ, direction or order to itself in respect of any judicial proceedings and the learned judges constituting the Bench are not amenable to the writ jurisdiction of this Court. [470 D F] Shankar Ramchandra Abbyankar vs Krishnaji Dattatreya Bapat, ; , referred to.

The petitioners, who were displaced persons from Pakistan owning land therein, were also co sharers in a joint khata owned by some evacuees in a suburban village in East Punjab. On their displacement they were in the first instance temporarily allotted agricultural land in that village. Subsequently, as a result of the readjustment of allotments of the suburban land amongst the various groups who had quasi permanent allotments therein, which had to be carried out according to certain rules and instructions, the allotments of the petitioners were cancelled. The case of the petitioners was that the allotment to them was on a quasi. permanent basis and that, therefore, they had acquired certain rights in the land which constituted property, and they contended that the order cancelling the allotment was in violation of their fundamental rights to property under articles 19(1)(f), 31(1) and 31(2) of the Constitution of India. Though the petitioners were allottees of agricultural land on the basis of a quasi permanent allotment it was admitted that they were not able to get a sanad under the rules for the lands originally allotted to them, when only they could obtain permanent property in the land. It was not disputed that the cancellation of the allotment was under the purported exercise of powers under the provisions of the , and the rules framed thereunder taken with some executive instructions. Held, that the interest of a quasi permanent allottee does not constitute 'property ' within the meaning of articles 19(1)(f), 31(1) or 31(2) of the Constitution of India, and accordingly the orders cancelling the allotments could not amount to violation of fundamental rights under those Articles. The basic features of the interest of a quasi permanent allottee are that the ultimate ownership of the land is still recognised to be that of the evacuee and the allotment itself is liable to resumption or cancellation with reference to the exigencies of the administration of evacuee law. The interest so recognised is, in its essential concept, provisional though with a view to stabilisation and ultimate permanence. An interest in land owned by another in such a situation cannot be fitted into any concept of property in itself, 103 802 Julius vs Lord Bishop of Oxford, , distin guished. Property in order that it may fall within the scope of article 9(1)(f) must be capable of being the subject matter of "acquisition and disposal". But the interest of a quasi permanent allottee arises by statutory grant to a person of a specified class and is not capable of being acquired by an ordinary citizen in any of the normal modes. Nor is it capable of being disposed of by the allottee himself by way of sale, mortgage, gift or will. Consequently, article 19(1)(f) cannot apply to the case. In order that article 31(1) may apply it is not enough that there is deprivation, but such deprivation must be without the authority of law. In the present case the quasi permanent allotments of the petitioners were cancelled in enforcement of a right of resumption or cancellation which is an incident of such property, and hence the Article has not been infringed. The interest of a quasi permanent allottee cannot be brought within the scope of article 3i(2) as it stood prior to the amendment. The words "taking possession" or "acquisition" there are inappropriate in respect of the rights which constitute quasi permanent tenure. In view of the word "deemed" occurring in article 31(2A) it appears likely that the amendment to article 31(2) was intended to be retrospective, but even then the amended Article taken with article 31(2A) is equally inapplicable as it contemplates acquisition or requisitioning (and taking possession) as a result of transfer of the ownership or of the right to possession. Suraj Parkash Kapur vs The State of Punjab, (1957) LIX P.L.R. 103, in so far as it purported to decide that the interest in the land allotted to a quasi permanent allottee constitutes "property" which attracts the protection of fundamental rights under the Constitution, is disapproved. Though a quasi permanant allotment does not carry with it a fundamental right to property under the Constitution, the rights of the allottee as recognised in the statutory rules are important and constitute the essential basis of a satisfactory rehabilitation and settlement of displaced land holders. Until such time as the land holders obtain sanads to the lands, these rights are entitled to zealous protection of the constituted authorities according to administrative rules and instructions binding on them and of the courts by appropriate proceedings where there is usurpation of jurisdiction or abuse of exercise of statutory powers.

One Smt. Ram Kali, widow of Tikam Singh, was the land holder of the agricultural lands in dispute situated in villages Agaota and Khaiya Khera in District Bulandshahr (U.P.). On June 14, 1915 Smt. Ram Kali, who was a Sirdar and a "disabled person" falling within section 157(1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, executed a registered deed of lease fora period of five years in favour of Uttam Singh and Murli Singh (the predecessors in title of the respondents) but before the expiry of the period of five years she died in August, 1945 and Dan Sahai, who was also "disabled person" within the meaning of section 157(1) of the Act, (her husband 's real brother and predecessors in title of the appellants) inherited her interest. After the expiry of the period of registered lease Uttam Singh and Murli Singh continued to hold the lands as tenants from year to year under Dan Sahai. In consolidation proceedings a question arose, whether Uttam Singh and Murli Singh, who were lessees (adhivasis) under Smt. Ram Kali and Dan Sahai acquired the status of Sirdars, being entitled to be treated so under section 240B of the Act or they remained Asamis of the plots in dispute. The Division Bench of the Allahabad High Court, relying on the earlier view taken by its Full Bench in Smt. Maya vs Raja Dulaji and others , decided the appeals in favour of the respondents by holding that they were not Asamis but had become Sirdars. Hence the appeals by certificate by successors in title of Ram Kali and Dan Sahai. Allowing the appeals, the Court ^ HELD: 1. On true construction of section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act the benefit thereof would be available to the land holder on the date of vesting, if the same land holder or his predecessor existing on the material dates was a person or persons belonging to one or more clauses mentioned in section 157(1) of the Act. [378 C D] Since, in the instant case, which falls under sub clause (a) of clause (h) on the date of actual letting Smt. Ram Kali was a "disabled person" and since on the next material date, namely, April 9,1946 Dan Sahai (successor in interest of Smt. Ram Kali) was also a disabled person, the land holder on the date of vesting who incidentally happened to be Dan Sahai would be entitled to the benefit of section 21(1)(h) and the respondents (successors of Uttam Singh and 369 Murli Singh) would remain Asamis and cannot be said to have become Sirdars within the meaning of section 240B of the U.P. Zamindari Abolition and Land Reforms Act, 1950. [378 E F] 2. Section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 provides that every person occupying or holding land in any one of the capacities mentioned in clause (h) on the date immediately preceding 1 7 1952 shall be deemed to be an Asami thereof notwithstanding anything contained in the Act, if the land holder or if there are more than one all of them were "disabled persons" within the meaning of section 157(1) both on the date of letting as well as on April 9, 1946 where the letting has taken place prior to April 9, 1946 or were disabled persons on the date of letting if the letting has occurred after April 9, 1946. [373 A B] 3:1. It is true that clause (h) contains the phrase "where the land holder or if there are more than one land holder all of them were person or persons belonging" to any one or more than one of the clauses mentioned in section 157(1) of the Act. Under section 3(26) of the Act, the definition of "landholder" as given in the U.P. Tenancy Act, 1939 has been adopted since the expression is not defined in the Act. The expression "land holder" who obviously is a possessor of interest in land under section 3(11) of the U.P. Tenancy Act, 1939 means a person to whom rent is payable, and under section 3(1), ibid. by legal fiction it shall include his predecessor in interest as also successor in interest to whom the rent was or is payable. It is such definition that will have to be read in the U.P. Zamindari Abolition and Land Reforms Act wherever that expression occurs. Therefore the expression "land holder" occurring in section 21(1)(h) of the Act must mean a person to whom rent is payable and by fiction would include his predecessor in interest. Read in this light there would be no question of adding the words predecessor in interest of the land holder in section 21(1)(h) as that would be implicit in the term "land holder" on account of deeming provision of section 3(1) read with section 3(11) of the U.P. Tenancy Act, 1939. [375 G H, 376 A, D F] 3:2. Section 157(1) of the U P. Zamindari Abolition and Land Reforms Act permits leases by disabled persons and provides that a Bhumidar or on an Asami holding land in lieu of maintenance allowance under section 11, who is a disabled person falling under any of the clauses (a) to (g), may let the whole or any part of his holding, "provided that in the case of a holding held jointly by more persons than one, but one or more of them but not all are subject to the disabilities mentioned in clauses (a) to (g), the person or persons may let out his or their share in the holding". Having regard to the proviso under which even in the case of a joint holding a lease of his share by a disabled land holder is permissible and the same is liable to be separated by a partition, the expression "all of them" must refer to all such land holders who were disabled land holders on the material dates. When under the proviso to section 157(1) a lease of his share by a disabled land holder in joint holding (held along with a non disabled person) is expressly permitted and under section 157(2) the Court has to determine such share of the disabled lessor and partition the same on an application being made in that behalf, it cannot be said that the Legislature intended to deprive the protection of section 21(1)(h) to such disabled land holder simply because on the date immediately preceding the date of vesting such land holder comes to hold the 370 land jointly with some other non disabled land holder. On true construction of the crucial phrase occurring in clause (h) it is not possible to read into the provision the additional requirement, namely, that the identity of the land holder or land holders must remain unchanged up to the date of vesting. [376 G H, 377 A, B D, G H] Further the scheme of the U.P. Zamindari Abolition and Land Reforms Act is different from the Agra Tenancy Act, 1926 and U.P. Tenancy Act, 1939. In each of the two provisions of these two Acts express words have been used conferring personal rights on the individuals concerned which is not the case with section 21(1)(h) of the Zamindari Abolition and Land Reforms Act. [378 B C] Smt. Maya vs Raja Dulaji and Ors. [1 over ruled. Dwarika Singh vs Dy. Director of Consolidation All W.C. 213 1981 All. L.J. 484 approved.

Appeal No 621 of 1960. Appeal. by special leave from the Award dated January 15, 1960, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 94 of 1959, 712 B. Sen and I. N. Shroff, for the appellant. C. L. Dhudia and K. L. Hathi, for the respondent. April 3. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. Two demands made by the respondents, the workmen of the appellant company, the Garment Cleaning Works, Bombay, were referred for industrial adjudication to the industrial tribunal under section 12(5) of the , XIV of 1947. These demands were for gratuity and provident fund respectively. The tribunal has framed a gratuity scheme and has passed an order that the appellant should draw up a scheme of provident fund on the lines of the model provident fund scheme drawn by the Government under the Employees ' Provident Funds Act, 1952 (XIX of 1952), with a rate of contribution of 6 1/4 per cent. of total wages. Both the gratuity scheme as drawn up and the directions as to the drawing up of a provident fund scheme are challenged by the appellant by its present appeal which it has brought to this Court by special leave. In regard to the direction as to the gratuity scheme the argument which has been urged before us by Mr. Sen is that the problem of starting such a scheme should have been considered on an industry cum region basis and considerations relevant to the said basis should have been taken into account. In support of this argument he has relied upon a judgment of this Court in The Bharatkhand Textile Mfg. Co. Ltd. & Ors. vs The Textile Labour Association, Ahmedabad (1). In that case the industrial court had no doubt dealt with a claim for gratuity made by the workmen on the industry cum region basis, and an attack against the validity of the said approach made by the employer in regard to the scheme was repelled by this Court. It would, however, be noticed that all that this Court decided in that case was that it was erroneous to contend that a gratuity scheme could never be based on industry cum region basis, and in support of this conclusion several considerations were set forth in the (1) [1960]3 S.C.R. 329. 713 judgment. It is clear that it is one thing to hold that the gratuity scheme can in a proper case be framed on industry cum region basis, and another thing to say that industry cum region basis is the only basis on which gratuity scheme can be framed. In fact, in a large majority of cases gratuity schemes are drafted on the basis of the units and it has never been suggested or held that such schemes are not permissible. Therefore the decision in the case of the Bharatkhand Textile Mfg. Co. Ltd.( ') does not support the proposition for which Mr. Sen contends. Mr. Sen has then criticised some of the provisions in the gratuity scheme. Clause (ii) (a) of the gratuity scheme provides that on retirement or resignation of a workman after ten years ' service ten day 's consolidated wages for each year 's service should be awarded as gratuity. Mr. Sen quarrels with this provision. He contends that no gratuity should be admissible under this clause until and unless fifteen years ' service has been put in by the employee. In support of this argument Mr. Sen has referred us to certain observations made by this Court in the case of The Express Newspapers (Private) Ltd. & Anr. vs The Union of India & Ors. In that case the provisions of section 5 (1)(a) (iii) of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955), was struck down on the ground that its provisions violated the fundamental right guaranteed by article 19(l)(g) The conclusion of this Court was that the provision for gratuity made by the said clause to an employee who had put in three years ' service imposes an unreasonable restriction on the employer 's right to carry on business and is therefore liable to be struck down as unconstitutional. Dealing with that provision this Court incidentally observed that where the employee has been in continuous service of the employer for a period of more than fifteen years he would be entitled to gratuity on his resigning his post. Mr. Sen contends that this observation indicates that an employee who resigns his post cannot be entitled to any gratuity (1) ; (2) , 154. 90 714 unless he has put in fifteen years ' service. In our opinion, the observation on which this argument is based was not intended to lay down a rule of universal application in regard to all gratuity schemes, and so it cannot be made the basis of an attack against a gratuity scheme where instead of fifteen years ' service 10 years ' minimum service is prescribed to enable an employee to claim gratuity at the rate determined if he resigns after ten years, service. Therefore, we do not think that the provision of cl. (ii)(a) can be successfully challenged as being unreasonable. Clause (iv) is then challenged by Mr. Sen. This clause provides that if a workman is dismissed or discharged for misconduct causing financial loss to the works gratuity to the extent of the loss should not be paid to the workman concerned. Mr. Sen contends that this clause is inconsistent with the principles on which gratuity claims are generally based. Gratuity which is in the nature of retrial benefit is based on long and meritorious service, and the argument is that if the service of an employee is terminated on the ground of misconduct it would not be open to him on principle to claim gratuity because misconduct puts a blot on the character of his service and that disqualifies him from any claim of gratuity. In this connection he has referred us to the definition of 'retrenchment ' contained in section 2 (oo) of the . Retrenchment, according to the definition, means, inter alia, the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. Mr. Sen suggests that the retrenchment benefit and gratuity are payments made to the employee for a similar purpose, and if dismissal of an employee for misconduct does not entitle him to a claim for retrenchment benefit so should gratuity be denied to him in case he is dismissed for misconduct. A similar argument is based on the rules framed under the Employees ' Provident Funds Act, 1952. Rule 71 of the Provident Funds Scheme Rules provides for certain deductions from the account of a member dismissed for Serious and willful misconduct. By analogy 715 it is urged that this rule also shows that a dismissed employee is not entitled to gratuity. We are not impressed by these arguments. On principle if gratuity is earned by an employee for long and meritorious service it is difficult to under,stand why the benefit thus earned by long and meritorious )service should not be available to the employee even though at the end of such service lie may have been found guilty of misconduct which entails his dismissal. Gratuity is not paid to the employee gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer, and when it is once earned it is difficult to understand why it should necessarily be denied to him whatever may be the nature of misconduct for his dismissal. Then, as to the definition of retrenchment in the , we are not satisfied that gratuity and retrenchment compensation stand exactly on the same footing in regard to the effect of misconduct on the rights of workmen. The rule of the provident fund scheme shows not that the whole provident fund is denied to the employee even if he is dismissed but it merely authorises certain deductions to be made and then too the deductions thus made do not revert to the employer either. Therefore we do not think that it would be possible to accede to the general argument that in all cases where the service of an employee is terminated for misconduct gratuity should not be paid to him. It appears that in awards which framed gratuity schemes sometimes simple misconduct is distinguished from gross misconduct and a penalty of forfeiture of gratuity benefit is denied in the latter case but not in the former, but latterly industrial tribunals appear generally to have adopted the rule which is contained in el. (ii) (b) of the present scheme. If the misconduct for which the service of an employee is terminated has caused financial loss to the works, then before gratuity could be paid to the employee he is called upon to compensate the employer for the whole of the financial loss caused by his misconduct, and after this compensation is paid to the employer if any balance from the gratuity claimable 716 by the employee remains that is paid to him. On the whole we are not satisfied that the clause thus framed by the Industrial Tribunal in the present case needs to be revised. The last contention raised by Mr. Sen in regard to the gratuity scheme has reference to cl. (v) of the scheme. This clause provides that for calculating years of service the entire service of the workmen should be taken into account. Mr. Sen contends that though the word "continuous" has not been used either in cl. (v) or in clauses (i), (ii) and (iii) we should make it clear that the service referred to in all the said clauses referred to continuous service. This position is not disputed by Mr. Dudhia for the respon dents. We would accordingly make it clear that the service referred to in clauses (i), (ii) and (iii) refers to continuous service. That takes us to the appellant 's grievance against the direction issued by the Tribunal in regard to the framing of the provident fund scheme on the lines of the model provident fund scheme drawn by the Government in the Employees ' Provident Funds Act. Mr. Sen contends that in issuing this direction the tribunal has not properly assessed the extent of the financial obligation which the scheme would impose upon the appellant and the limited nature of its financial capacity. It appears that when the appellant produced its balance sheet and other relevant papers it claimed privilege under section 21 of the . Inevitably the Tribunal could not discuss the figures disclosed by the said books in its award though it must have examined the said figures carefully. In the result the tribunal has naturally contented itself with the general observation as to the financial position of the appellant. It has observed that the question to consider in framing the provident fund scheme is whether the employer has made good profits, whether its future is assured, whether it has capacity to build up adequate reserves. Having thus posed the question the Tribunal ha, , come to the conclusion that the appellant satisfies all these requirements. Mr. Sen contends that the 717 tribunal did not take into account the fact that the appellant has no reserve&, and that it had borrowed large loans. We do not see how that would enable the appellant now to agitate a question which is purely a question of fact. Mr. Sen realised the difficulties in his way because, since his client had claimed the privilege of section 21 the Tribunal was fully justified in not discussing the figures in its award. He, therefore, faintly suggested that we may remand the case subject to any order as to costs that we may deem fit to make and ask the Tribunal to reconsider the matter in the light of the relevant documents, and he assured us that he would not claim privilege under section 21 after remand. This request is plainly untenable. If the appellant wanted the tribunal to consider the figures and state its conclusions in the light of the said figures in its award it need not have claimed privilege under section 21 at the trial. It is now too late to suggest that the privilege be waived and that the matter be considered afresh by the tribunal or by us in the appeal. Therefore we see no reason to interfere with the direction given by the Tribunal in regard to the framing of the provident fund scheme. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

The Industrial Tribunal, on a reference under section 12 Of the , framed a gratuity scheme for the appellant company. The company challenged the validity of some of the provisions of the scheme on the grounds, inter alia, (1) that the scheme was framed on the basis of the units, while it should have been done on industry cum region basis, (2) that the scheme provided for the award of gratuity on the retirement or resignation of a workmen after ten years ' service instead of fixing the period as fifteen years, and (3) that cl. (ii)(b) of the scheme which provided that if a workman was dismissed or discharged for misconduct causing financial loss to the works, gratuity to the extent of the loss should not be paid to the workman concerned, was erroneous, because, on principle, misconduct put a blot on the character/of his service and that disqualified him from any claim of gratuity. Held:(1) that industry cum region basis is not the only basis on which a gratuity scheme could be framed and one framed on the basis of the units cannot be challenged as in valid. The Bharatkhand Textile Manufacturing Co. Ltd. vs The Textile Labour Association, Ahmedabad, ; , explained. (2) that the clause in the scheme prescribing ten years ' minimum service to enable an employee to claim gratuity is valid. The Express Newspapers (P.) Ltd. vs Union of India, , explained. (3) that gratuity is not paid to an employee gratuitously or merely as a matter of boon, but is paid to him for the service rendered by him to the employer; consequently he should not be wholly deprived of the benefit thus earned by long and meritorious service even though at the end of such service he might have been found guilty of misconduct which entailed his dismissal. Accordingly, cl. (ii)(b) of the scheme is a valid provision.

The appellant company was engaged in the manufacture and sale of matches in four places in India, including Bareilly, in which there were factories as well as sales offices. As an incentive to larger production of matches the company introduced in 1945 a Production Bonus Scheme which was made 561 applicable to workmen engaged in the factory in making matches as also to those working in the factory office. In 1947, it was withdrawn in its application to the sales office. The workmen of the sales office consisting of clerical staff as also salesmen and inspectors of salesmen made a claim to Production bonus painting out that there should be no discrimination between the employees in the same company. The company resisted the claim on the grounds : (1) that the sales office was entirely independent of the factory; and (2) that the salesmen, retail salesmen and inspectors employed by the sales office were not workmen within the meaning of the U.P. The facts showed : (1) that there was interdependence of the two activities viz., manufacture of matches in the factory and their sale by the sales office, inasmuch as (a) the sales office could not exist without the factory, (b) the factory itself could not conveniently function without a sales organization. and (c) the factory arranged its volume of production in accordance with the programme made from time to time by the sales manager; (2) that the sales office and the factory had the same banking account, though separate cheque books were maintained and operated upon ; (3) that the financial forecasts that were made for the Bareilly branch from time to time made no distinction between the disbursements in the sales office and the factory ; (4) the rules and practice in connection with the recruitment, control and discipline of man power, as also documents, including letters of appointment and standing orders and the muster rolls were kept distinct and separate between the factory and the sales office; and (5) the sales office paid rent to the factory fir the area occupied by it by means of book adjustments. The evideuce also showed that 75% of the time of the workmen in the sales office was devoted to writing work. Held that, on the facts, there was functional integrality and inter dependence or community of financial control and management of the sales office and the factory in the appellant company and that the two must be considered part of one and the same unit of industrial production. Held further, that the inspectors, salesmen and retail salesmen were workmen as defined in the U.P.

The appellant was in the service of Respondent firm from April,1944 till he resigned on 24.5.83. The employer did not determine the amount of gratuity payable to the appellant. Appellant furnished the necessary application for payment of gratuity and since no action was taken by the employer, the appellant approached the statutory controlling authority for gratuity and interest thereon. The employer contested. The controlling authority determined the amount of gratuity at Rs.16,380 and directed the employer to pay the same along with compound interest at 9%. On appeal by the employer, the appellate authority confirmed the determination of gratuity but set aside the order for payment of interest. This appeal by special leave is in regard to payability of interest on gratuity. The appellant relied on the provisions of the Interest Act and section 34 of the Code of Civil Procedure, also. Dismissing the appeal, HELD: If It is only when the Collector issue a certificate for recovery of the dues as a public demand that interest as provided under Section 8 is admissible. [745Hl 1.2 In the instant case the appellant is not entitled to interest on the amount of gratuity found due to him. The controlling authority had directed interest as provided in Section 8 to be paid, which the Appellate Authority had vacated. From the facts of this case, it is clear that the stage for action under section 8 had not been reached in as much the appellant had not applied for recovery of gratuity to the Collector. [745G H] PG NO 742 PG NO 743 2. There was no provision in the Act for payment of interest when the same was quantified by the controlling authority and before the Collector was approached for its realisation. In fact, it is on the acceptance of the lacuna in the law that Act 22 of 1987 brought about the incorporation of sub section (3A) in Section 7. But that provision has prospective, and not retrospective application. [746A B] 3. The provisions of the Interest Act and the provisions of Section 34 of the Code of Civil Procedure would be of no avail to the appellant since no notice was given demanding interest and the controlling authority is not a court for falling back on section 34 of the Code. [746C]

A textile mill in Madhya Pradesh employed about a thousand workers. The mill was owned by a firm, the appellant in the Second Appeal. A fire broke out in the Mill doing appreciable damage to some of the machines. From a letter of the Insurance company, the extent of the damage caused, was ascertained to be about Rs. 37,420/ . In terms of the last notice given by the employers the mills did not commence work but instead, the management transferred the mills to the company which had been incorporated on 8th December 1959. From the facts it was clear, that the damage to the machinery was insignificant as against the total assets transferred to the company and the damage was not such that it was not possible to run the mills at all. Respondents 2 to 346 in the Second Appeal applied under section 33C(2) of the Industrial Disputes Act to the Labour Court claiming lay off compensation for the period they remained idle. The Labour Court held that there had been a lay off within the meaning of section 2(K KK) of Industrial Disputes Act and except 'badli ' workers the employees were entitled to compensation for the full period of 18 months. The appellants in both the appeals, filed writ petitions before the High Court for quashing the order of the Labour Court and the High Court raised several issues and ultimately remanded the matters back to the Labour Court for recording fresh evidence as to whether the applicants presented themselves for work at the appointed time at least once a day within the meaning of section 25E(ii). On the application of the appellants the High Court granted certificates under article 133 (1) (a) of the Constitution. The point urged by the appellants was that if a claim is made on the basis of a lay off and the employer contends that there was no lay off but closure it is open to a labour court to entertain an application under section 33C(2). It is more so when the dispute was not between a solitary workman on the one hand and the employer on the other but a whole body of workmen ranged against their employer who was faced with numerous applications before the labour court for computation of benefit in terms of money. Dismissing the appeals, HELD : (i) From the facts and circumstances of the Case, it was clear that the business of the company was continuing. They, in fact, continued to employ several employees and their notices say that some portion of the mills would continue to work. The Labour Court 's jurisdiction could not be ousted by a mere plea denying the workmen 's claim to the computation of benefit in terms of money. The Labour Court must go into the matter and come to a decision as to whether there was really a closure or a lay off. If it took the view that there was a lay off, it would be acting within its jurisdiction if it awarded compensation in terms of the provisions in Ch. The High Court is right in upholding the decision of the Court. [591 E H] 581 (ii) Section 33C(2) takes within the purview, rases of workmen who claim that the benefits to which they were entitled should be computed in terms of money, even though the right to the benefit on which their claim is based, is disputed by their employers. In other words, the Labour Court may enquire into all such acts or disputes which are incidental to the main dispute, [588 C D] (iii) Section 25C provides for the measure of compensation to be awarded in cases of lay off of workers. The claim to compensation of every workman who is laid off is one which arises under the statute itself and section 25C, provides for a benefit to the workman which is capable of being computed in terms of money under section 33C(2), of the Act. The scheme of the Act is that an individual workman can approach a labour court for computation of compensation in terms of section 25C of the Act and he is not concerned to see whether other co workers will adopt the same course or not. The fact that a number of workers make claims of identical nature cannot make any difference to the individual workman who prefers the claim, The mere fact that a large number of persons makes a claim, of the same nature against the employer does not change the nature of the dispute so as to take it out of the pale of section 7 of the Act and render the dispute one which can only be dealt with by an industrial tribunal. [588 E H] Central Bank of India Ltd. vs P. section Rajagopalan, ; , followed. , Mining Engineer vs Rameshwar, [1968] 1 S.C.R. 140, U.P. Electric Supply Co. vs R. K. Shukla, ; , Ramkrishna Ramnath vs Presiding Officer, Nagpur, and Sawatram Mills vs Baliram, [1966] 1 S.C.R. 764, referred to and distinguished.

Because certain industrial disputes were pending before the Industrial Tribunal at the relevant time between the appellant and its employees, the appellant filed an application under section 33(2), (b) asking for approval of action which it proposed to take against its employee the respondent. The appellant urged that this application was made as a matter of abundant caution and it wanted the Tribunal to consider the question as to whether the respondent was a workman concerned in the relevant industrial dispute at all before dealing with the merits of the application. The Tribunal, being of the view that if the appellant thought that s, 33 did not apply, it should withdraw the application and take the consequences, dealt with the merits of the application. In appeal by special leave: HELD: The Tribunal was in error in not considering the preliminary point raised by the appellant that the respondent was not a workman concerned with the main industrial dispute and as such the application made by it was unnecessary. [431E] It is plain that in a situation like the present, where judicial decisions differed on the construction of the words "workman concerned in such dispute", even if the appellant took the view that the workman against whom it was taking action was not a workman concerned with the main industrial disputes, it would be justified in refusing to take the risk of deciding the said point for itself. It would he legiti mate for an employer to make an application under section 33 without prejudice to his case that section 33 did not apply. [431D E] Case law referred to.

Two matters in dispute between the management of a paints manufacturing company and their workmen, namely: (1) the are of retirement of the workmen and (ii) the introduction of a gratuity scheme for them, were referred to the Industrial Tribunal. Before the reference was made the workmen were entitled to work so long as they were physically and mentally fit. The Tribunal fixed the age of retirement for clerical and subordinate staff at 58 years and for the factory workmen at 55 )rears. The Tribunal also introduced a gratuity scheme. It fixed 5 years minimum service in order to enable a workman to earn gratuity and while fixing 21 days ' basic wage or salary as the quantum for gratuity for each completed year of service, included dearness allowance in the words "basic wage or salary. " Both the management and workmen appealed to this Court. The workmen contended that : (i) the age of retirement both for the staff of the head office and the factory workmen should be fixed at 60 years, and (ii) 30 days ' wages instead of 21 days should have been fixed as the quantum for gratuity. The management objected to the minimum period of five years to enable a workman to earn gratuity even in the case of voluntary retirement or resignation and contended for a longer minimum of service. The management also urged that dearness allowance should not be included in the basic wages for fixing the quantum of gratuity. HELD:(i) The award of the Tribunal should be modified, fixing :he age of retirement, for the clerical and subordinate staff as well as for the factory workmen, whether existing or future,at the age of 60 years. [527 E] Age of retirement of 55 years was fixed in the last century in government service and had become the pattern for fixing the age of retirement everywhere. But considering the improvement in the standard of health and increase in longevity, the age of retirement should be fixed ordinarily it the higher level of 60 years. Since the work in the factory in the present case was not particularly arduous as compared to that of the clerical and subordinate staff, even in the case of factory workmen there s no reason why the age of retirement should be fixed at a lower level, specially when the management could always terminate the services of a workman if he becomes physically or mentally incapable of working, before the age of retirement. With the age of retirement at 60 years here will be the added advantage that more experienced workmen will be available to the management and that would be a cause for greater efficiency. As there are no valid and cogent reasons for making a difference in the age of retirement of existing workmen and those employed in future, the future workmen, both clerical and subordinate staff as 524 well as factory workmen, should also have the benefit of the same age of superannuation. [526 B D; 527 B D] (ii)No case for increasing the quantum of gratuity from 21 days basic wage to 30 days ' basic wage had been made out by the workmen, especially when there was a provident fund scheme also in force in the concern and the workmen, were thus getting two retiring benefits. [529 H] (iii)In the case of voluntary retirement or resignation by an employee before reaching the age of superannuation, the minimum period of qualifying service for gratuity should be 10 years, and not 5 years as prescribed by the Tribunal. [528 E] The reason for pro tiding a longer minimum period of earning gratuity in the case of voluntary retirement or resignation is to see that workmen do no ' leave one concern after another, after putting in the short minimum service qualifying for gratuity; and gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation. [527 A B] (iv)Gratuity should be paid at the rate of 21 days ' basic wage or Wary for each completed year of service, but such basic wage would not include dearness or any other allowance. [529 F] As the gratuity scheme was being introduced for the first time in the concern, it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wages, excluding dearness allowance, especially when there was another retiring benefit in the shape of provident fund already existing in the concern. [529 E] Case law reviewed.

This appeal raised a short question as to the interpretation of sub section (4)(a) of section 4 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 ("the Bombay Rent Act"). The appellants were the sub tenants of the respondent No. 1 Firm in respect of the premises called Gala No. 4 in a godown. Respondent No. 1 Firm were the tenants of the said godown, having taken a lease of the building from the Bombay Port Trust. The appellants were in occupation of the said Gala under written agreements executed from time to time for one year each. The last such agreement expired on 19th October, 1971. The respondent No. 1 Firm served a notice on the appellants on 13th January, 1972 to hand over possession of the said gala on the ground that the period of lease had expired. By notice dated February 3, 1972, the respondent No. 1 Firm terminated the tenancy of appellants and then filed a suit in the City Civil Court against the appellants to recover possession of the premises in dispute inter alia on the ground that the period of lease had expired. The appellants took up the contention that they were not liable to be evicted as they were entitled to protection under the provisions of the Bombay Rent Act. The City Civil Court decreed the suit. On appeal by the appellants, the High Court (Single Judge,) holding that the notice of termination of tenancy dated 3rd February, 1972, was a valid notice and the provisions of the Bombay Rent Act did not apply to the premises in question, upheld the decree of eviction passed by the City Civil Court. Letters Patent appeal against this judgment was dismissed by a Division Bench of the High Court. The appellants then moved this Court for relief by special leave. Dismissing the appeal, the Court, 907 ^ HELD: The only submission made by the appellants before the Court was that the said premises, viz, Gala No. 4, were entitled to the protection of the provisions of the Bombay Rent Act and the respondent No. 1 Firm was not entitled to a decree for eviction as no grounds for eviction under the Act had been made out. [910G] The question raised was whether the protection of the sub section (4)(a) of section 4 of the Bombay Rent Act was available to the sub lessee in a building leased by the lessee from the Government or a local authority or put up by a lessee of the land belonging to the Government or a local authority but not under any building lease or pursuant to any obligation imposed on the lessee to put up a building. In this case, the entire building in which the premises in question, namely, Gala No. 4 were situated, belonged to the Bombay Port Trust. It was nowhere contended at any stage by the appellants that the building in which the said premises were situated was put up by the respondent No. 1 Firm. The Court was, therefore, not directly concerned with the position of a sub lessee in a building put up by a lessee of the land taken from the Government or a local authority without being under any obligation to do so. [913D F] A plain reading of sub section (1) of section 4 of the Bombay Rent Act makes it clear that the provisions of the Bombay Rent Act are not applicable to premises belonging to the Government or a local authority. Sub section (4)(a) only takes out from the scope of the exemption conferred by section 4(1) "a building erected on any land held by any person from the Government or a local authority under an agreement, lease, licence or other grant, although having regard to the provisions of such agreement, lease, licence or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be". If this provision were to be as including any building put up or erected on land held by any person from the Government or a local authority, the result would be that such protection would be available even against the Government or a local authority and the provision of sub section (1) of section 4 may be rendered largely nugatory. The provisions of sub section (4)(a) were never intended to take away the immunity conferred upon the premises belonging to the Government or a local authority, and if the provisions of section 4(4)(a) were to be construed as urged by the appellants, this immunity would be rendered practically nugatory. A plain reading of the provisions of sub section (4)(a) in the context clearly shows that there is no intention therein to take a building put up by the Government or a local authority from the scope of the exemption conferred by sub section (1) of section 908 4. The language of sub section (4)(a) and sub section (1) of section 4 of the Bombay Rent Act, read together, suggests that it was only in respect of a building put up by the lessee on the Government land or the land belonging to a local authority under a building agreement that the sub lessees were taken out of the exemption contained in sub section (1) of section 4 and allowed the benefit of the provisions of the Bombay Rent Act. It was significant that the exemption granted under the earlier part of sub section (1) of section 4 is in respect of the premises and not in respect of the relationship. In order to confer the protection of the provisions of the Bombay Rent Act on the sub lessees occupying the premises in any building erected on the government land or the land belonging to a local authority irrespective of the question who has put up the building as against the lessees of the land but without affecting the immunity conferred on the government or local authorities as contemplated by sub section (1) of section 4 of the Bombay Rent Act, the Court would have to practically rewrite the provisions of section 4, and it was not open to the Court to do that. The argument of the appellants, therefore, could not be accepted. The learned Judge of the High Court was right in coming to the conclusion that the premises in question were not entitled to the benefit of the provisions of the Bombay Rent Act. [914A H;915A] The decision of this Court in Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461 cited by the appellants was of no assistance to the case before the Court, and the decision of this Court in Maneklal and Sons vs Trustees of Port of Bombay and Others, cited by the appellants, far from supporting the submission of the appellants, militated against it. [916D] There was no merit in the appeal and it must fail. Taking the facts and circumstances of the case into consideration, the Court directed that the appellants would not be evicted from the premises in question until December 31, 1988. [916E] The Court observed that if the intention of the legislature was that the protection should be given to the sub lessee against the lessee in a building taken on lease by the lessee from the government or a local authority, it was for the legislature concerned to make appropriate amendments in the Bombay Rent Act and it was not open for the Court to re write the provisions of sub section (4)(a) of section 4 of the Bombay Rent Act on the ground of any such intention as suggested by Dr. Chitale counsel for the appellants. [916F] 909 Bhatia Co operative Housing Society Ltd. vs D.C. Patel, ; Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl. 3 S.C.R. 461; Maneklal and Sons vs Trustees of Port of Bombay and Others, and Ram Bhagwandas vs Municipal Corporation of the City of Bombay, , referred to.

Section 4(2) of the provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days ' wages based on the rate of wages last drawn by the employee concerned. The employers sought to pay gratuity by dividing the workman 's monthly wages by 30 and computing the 15 days ' wages on that basis but the workman demanded that his monthly wages should be taken as what he got for 26 working days and not by taking half of his wages in a month of 30 days. The Controlling Authority upheld the workman 's contention. In dismissing the employer 's petition under article 227 of the Constitution the High Court observed that a worker received a full month 's wages not by remaining on duty for all the 30 days within a month but by remaining on work and doing duty for only 26 days and, therefore, gratuity payable to him should be calculated on this basis. Dismissing the employers ' appeals, ^ HELD: The view taken by the authorities, and upheld by the High Court, is not in any way unreasonable. Although a month is understood to mean 30 days, the manner of calculating gratuity payable under the Act to employees who worked for 26 days a month followed by the High Court cannot be called perverse. [67C] Treating monthly wages as wages for 26 working days is not new or unknown. The expression "average of the basic wage" occurring in an award has been interpreted by this Court to mean the wage earned by a workman during a month divided by the number of days for which he has worked and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable to the workman. [67D & H] Delhi Cloth and General Mills Company Ltd. vs Workmen and others etc., [1969]]2 SCR 107, referred to.

Appeals Nos. 148 to 150 of 1960. Appeals by special leave from the judgment and order dated October 31, 1956, of the former Nagpur High Court in Misc. Civil Case No. 184 of 1953. K. N. Rajagopala Sastri and D. Gupta, for the appellants. J. M. Phakar, section N. Andley, J. B. Dadachanji and Bameshwar Nath, for the respondents. March 7. The Judgment of the Court was delivered by HIDAYATULLAH, J. These appeals, by special leave, have been filed by the Commissioner of Income tax, Madhya Pradesh, against the assessee, an individual, by name Seth Khushal Chand Daga. The assessee was a partner in a firm, Messrs. R. B. Bansilal Abirchand of Nagpur. In the year of account ending Diwali, 1941, he received his share of assets and property from this firm, and started business of his own. In the same year, his sources of income were speculation, allowance from Government as treasurer, house property and dividends. The assessee had received some profits from his share in an unregistered firm against which were set off his losses in his individual business, and the Income tax Officer, who made the assessment, determined the loss to be carried forward, at Rs. 53,840. The assessee appealed against the assessment, but did not question the loss which had been determined. For the year, 1942 43, the assessee claimed to reopen the question of the loss to be carried forward, stating that it was Rs. 2,11,760. This contention was not accepted by the Department, and on appeal, by the Tribunal. The contention was, however, raised again by him in the assessments for the years, 194849 and 1949 50. In these years, he had profits from 188 his share in the unregistered firm, Rs. 1,82,773 and Rs. 1,39,922 respectively, against which were set off his losses in his individual business, Rs. 1,18,913 and Rs. 60,589 respectively. The contention of the assessee was that the profits which he had derived. from the unregistered firm could not be set off against the loss in his individual business, as the profits of the unregistered firm had borne tax not in his hands but in those of the firm. This contention was rejected by the Department; but on appeal to the Tribunal, it was accepted. On the Tribunal being moved to make a reference, it referred four questions. Two of those questions dealt with matters also arising out of these assessments, but they have not been mentioned by us in this judgment. The two questions pertaining to these appeals were: "(1) Whether the assessee was competent in law to raise a question with regard to the determination of loss for the assessment year 1941 42 as finally determined in appeal, in the course of proceedings for the assessment year 1942 43 when the loss brought forward from 1941 42 was being set off ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss suffered by the assessee from his personal business (including his share of . loss from another firm) cannot be set off under Section 24(1) against his taxed share income from an unregistered firm?" These questions were answered by the High Court against the Commissioner, who has now appealed, with special leave. It was conceded by the learned counsel for the Commissioner that the second question has now been decided by this Court in Seth Jamnadas Daga vs The Commissioner of Income Tax (1), and that the answer must be against the Department. That portion of the case was thus not argued. As regards the first question, the only contention raised was that the loss which had been determined and ordered to be carried forward must be deemed to (1) ; 189 have become final, because no appeal was filed against that determination. But it appears that the procedure laid down by a. 24(3) under which the Income tax Officer has to notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of that section was not followed. No doubt, under section 30 an appeal lies, if the assessee objects to the amount of loss computed and notified under section 24; but inasmuch as the Income tax Officer had not notified the loss computed by him by order in writing, an appeal could not be taken on that point. In our opinion, the assessee was, therefore, entitled to have the loss re determined in a subsequent year. Learned counsel for the Commissioner stated that the Department was not very anxious for the decision, because this particular assessee has had only losses in the years following, and no loss would be occasioned to the Revenue, if the losses brought forward be redetermined. But that is a matter, with which we are not concerned. In our opinion, the judgment of the High Court impugned before us was correct in the circumstances of the case. The appeals fail, and are dismissed with costs. One hearing fee. Appeals dismissed.

For the accounting year 1941 the assessee 's profits from his share in an unregistered firm were,. set off against his losses in the individual business and the Income Tax Officer determined the loss to be carried forward at RS. 53,840, but did not notify to the assessee by order in writing the amount of the loss as computed by him as required by section 24(3) of the Act. The assessee appealed against the assessment but did not question the amount of the loss which had been determined. In the year 1942 43 the assessee claimed to reopen the question of the loss to be carried forward stating that it was RS. 2,116760. This contention was rejected by the Tribunal. The contention was again raised by the assessee in the assessment years 1948 49 and 1949 50. The question was whether the loss which had been determined and ordered to be carried forward must be deemed to have become final because no appeal was filed against that determination. Held, that computation of the amount of loss under section 24 Of the Income tax Act does not become final unless the Income tax Officer notifies by order in writing, the amount of the loss as computed by him to the assessee. The assessee was entitled to have 187 the loss redetermined in a subsequent year though he had not filed an appeal against the determination of the loss but no appeal could be filed in the absence of an order in writing. Seth jamnadas Daga vs The Commissioner of Income tax, ; , applied.

In respect of assessment year 1965 66, the Income tax Officer issued notices to the assessee under section 148 read with sections 142(1) and 143(2) of the Act on the ground that income has escaped assessment in respect of three cash credit entries totaling Rs. 1 lakh. The assessee challenged the notices by way of writ petitions before the High Court. The High Court gave a finding that the notice was within jurisdiction only in respect of an entry of Rs.30,000 and in respect of the other two entries viz. Rs.40,000 and Rs.30,000 it directed the Income tax Officer not to reopen the assessment. These two appeals are against the High Court 's judgment. The appeal by ReVenue, by certificate, is in respect of the two entries of Rs.40,000 and Rs.30,000 and the other appeal of the assessee, by special leave, is in respect of the entry of Rs.30,000. On behalf of the Revenue, it was contended that once the High Court sustained the notice in respect of a sum of Rs.30,000, that gave full jurisdiction to the Income tax Officer to reopen the assessment and that the High Court should not have examined time tenability of the assessee 's contention in regard to the two transactions of Rs.30,000 and Rs.40,000 and that aspect should have been left to be considered by the Income tax Officer while making the reas sessment. The contention of the assessee was that the notice was issued more than 7 years after the assessment was completed and was also beyond the period of limitation, viz., four years, that the escapement of the income from assessment had not resulted from failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. 605 Allowing the appeal of the assessee, and dismissing the appeal by the Revenue. HELD: 1. The notice issued under section 148 of the Act is quashed. It was not for the High Court to examine the valid ity of the notice under section 148 in regard to the two items if the High Court came to the conclusion that the notice was valid at least in respect of the remaining item. Whether the Income tax Officer while making the reassessment would take into account the other two items, should have been left to be considered by the Income tax Officer in the fresh assess ment proceeding. [610C D] CIT. Punjab, H.P. & Bilaspur, Simla vs Jagan Nath Ma heshwary, 32 AIR 418 and Pulavarthi Viswanadham vs CIT. A.P., approved. V. Jagan Mohan Rao & Ors. vs CIT & Excess Profits Tax, A.P., and Parimisetti Seetharamamma vs CIT, referred to. 2.1 The three amounts mentioned in the notice under section 148 of the Act were found in the assessee 's account by the Income tax Officer when he examined the same in course of the assessment proceedings. He had called upon the assessee to substantiate the genuineness of the transactions and the assessee had produced material to support the same. The Income tax Officer accepted the documents produced and treated all the three transactions to be genuine and on that footing completed the assessment. The primary facts were before the Incometax Officer at the time of the regular assessment and he called upon the assessee to explain to his satisfaction that the entries were genuine and on the basis of materials provided by the assessee, satisfaction was reached. It was then open to the Income Tax Officer to make further probe before completing the assessment if he was of the view that the material provided by the assessee was not sufficient for him to be satisfied that the assessee 's contention was correct. [610E H] 2.2 The expression 'material facts ' used in section 147(a) referred only to primary facts and the duty of the assessee was confined to disclosure of primary facts and he had not to indicate what factual or legal inferences should properly be drawn from primary facts and this clause did apply to the facts of the present case as the alleged escapement of income for assessment had not resulted from failure on the part of the assessee to disclose fully and truly all materi al facts necessary for its assessment for that year. The notice in the instant case, did not indicate 606 Whether it was a case covered by cl. (a) or cl. On the finding of this Court that cl. (a) was not invokable, the power under cl. (b) could be called in aid under section 149(1)(b) of the Act within four years from the end of the relevant assessment year. Admittedly, the notice has been issued beyond a period of four years and, therefore, the notice itself was beyond the time provided under the law. The High Court overlooked to consider this aspect of the matter. [610H; 611A C] Calcutta Discount Company Ltd. vs ITO, , followed.

The respondent assessee had a gross agricultural income of more than Rs. 1 lakh in 1355 Fasli (July 1, 1947 to June 30, 1948). In response to a notice issued by the Assistant Collector under section 15(3) of the U.P. Agricultural Income tax Act, 1948, the assessee filled a return of his income and the said officer made an assessment though under section 14(2) of the Act Jurisdiction to assess in cases when the gross income exceeded Rs. 1 lakh lay within the Collector. The, Collector thereafter made a reassessment under section 25 read with section 16(4) within the period of limitation prescribed under the former section i.e. "within one year of the end of the year in which the income had escaped assessment". In appeal by the respondent the Agricultural Income tax Commissioner set aside the orders of the Collector and also of the Assistant Collector and directed the Collector to make a fresh assessment after giving notice to the res pondent. The Board of Revision held that the Commissioner had rightly decided that the orders in question were invalid but that the Commissioner was not empowered to set aside the order of the Assistant Collector which was not challenged before him. However the Board suo motu set aside the order of the Assistant Collector and directed that fresh assess ment be made "according to law". The High Court in reference under section 24(4) held that having regard to the limitation provided in section 25 the Board could not in 1952 direct the Collector to make a fresh assessment for the period in question. The State of Uttar Pradesh appealed to this Court. It was contended on behalf of the State that: (1) The Assistant Collector could make assessment even in cases when the gross income exceeded Rs. 1 lakh. (2) The notice under section 15(3) issued by the Assistant Collector not having been set aside by the higher authorities, the Collector could, as directed by the Board, make an assessment without transgressing any restrictions in section 15(3) or section 25. (3) without a fresh notice under section 15(3) the Collector had the power by virtue of the notice under section 15(1), to assess the income of the respondent on the return made pursuant to the notice issued by the Assistant Collector. (4) Since notice under 9. 25 for reassessment of the escaped income had been issued by the Collector within the period prescribed by section 25(3) and the notice was otherwise valid, assessment proceedings directed by the Board could be founded by the Collector on that notice. HELD : (i) Reading sub section (1) & (2) together there can be no doubt that the Collector is the assessing authority within his revenue jurisdiction with unlimited jurisdiction and the Assistant Collector in charge of a sub division is the assessing authority within his revenue jurisdiction with power only in cases in which the gross agricultural income of the assessee 162 does not exceed Rs. 1 lakh. The Assistant Collector is not entitled to make assessment in such a case relying on the generality of the provisions of section 14(1). [167 F G] (ii) When the Assistant Collector arrived at the conclusion that the gross income of the respondent exceeded Rs. 1 lakh the proceedings initiated by him including the issue of the notice must, unless that conclusion is set aside by a superior authority, be treated as unauthorised, for the power to issue a notice under section 15(3) is only conferred upon the assessing authority and the assessing authority within the meaning of section 2(6) s a person authorised to assess agricultural income tax. There is no provision in the Act or the Rules for transfer of proceedings from the Assistant Collector to the Collector when the Assistant Collector in dealing with a return finds that he has no jurisdiction. The Collector therefore could not in the present case make reassessment on the basis of the return filed under section 15(3). In fact having regard to the terms of the order passed by the Board it was clear that the notice under section 15(3) issued by the Assistant Collector had been quashed by the Board. [168 B F] (iii) If the proceedings for assessment were commenced on a 'return made pursuant to an invalid notice, and the proceedings for assessment were set aside on the ground of want of jurisdiction of the authority making the assessment the entire proceeding must be deemed to be vacated and relying upon the return made to the authority who had assessed the income another authority cannot proceed to assess the income of the assessee. Mere issue of a notice under section 15(1) could not come to the aid of the Collector in commencing fresh assessment proceedings many years after the date on which that notice was issued on a return which was not made; to him. [168 H 169 B] (iv) The notice under section 25 issued by the Collector must also be deemed to have been quashed by the Board. The Collector had therefore, under the direction given by !he Board, to issue a fresh notice before a proceeding for assessment could be started and a fresh assessment could not be based on the earlier notice. [169 E]

In respect of the accounting years ending March 31, 1957 and March 1958 respectively on the voluntary returns submitted by the respondent, the Income Tax Officer 'E ' Ward District II (1) Calcutta completed the assessment for these years (1957 58 and 1958 59) on total incomes of Rs. 7000/ and Rs. 7500/ respectively, the same having been made in the status of unregistered firm consisting of three partners, namely Asha Devi Vaid, Santosh Devi Vaid and Sugni Devi Vaid with equal shares. On August 2, 1962, the Commissioner of Income Tax issued notice to show cause why the said assessments should not be cancelled under section 33B of the Act as he felt that the completed assessments were erroneous as being prejudicial to the interests of the Revenue and the Income Tax Officer 'E ' Ward District II(1) Calcutta had no territorial jurisdiction over the case of the assessee. The notice was served on the assessee on August 3, 1962 and the hearing was fixed by the Commissioner for August 6, 1962. On the ground that none appeared and there was no application for adjournment, the Commissioner passed his order under section 33B ex parte on that date. By his said order the Commissioner cancelled the assessments made by the Income Tax Officer on three grounds (a) that some of the partners were minors and were not competent to enter into any partnership agreement with the result that the status of unregistered firm assigned to the assessee by the Income Tax Officer was clearly wrong and as such the assessments deserved to be cancelled; (b) that the books of accounts were unreliable and they were not properly examined by the Income Tax Officer with the result that the assessments made were prejudicial to the interests of the revenue and (c) that the Income Tax Officer has no territorial jurisdiction over the case which fell in the jurisdiction of Income Tax Officer, District III Calcutta and directed the Income Tax Officer having proper jurisdiction to make fresh assessments after examining the records of the assessee in accordance with law. The appeals preferred to the Appellate Tribunal under section 33B(3) were accepted. Finding that the Commissioner 's order passed at 11.30 A.M. ex parte was bad in as much as the notice served upon the assessee permitted filing of objections at any time during the course of August 6, 1962 and the objections were in fact filed later in the day, the Tribunal remanded the case with the direction to dispose it of afresh after giving due opportunity to the respondent assessee. On a reference to the High Court at the instance of the appellant, the 269 High Court held: (a) the assumption of jurisdiction by the Commissioner under section 33B of the Income Tax Act was valid in law; (b) the Tribunal acted properly in vacating or cancelling the Commissioner 's order, but, (c) the Tribunal did not act properly in directing the Commissioner to act under section 33B(1) because the period of limitation of two years prescribed under section 33(2)(b) for him to act under section 33B(1) had expired. In doing so, the High Court held that the provision of sub section 2(b) was absolute and covered even a revisional order of the Commissioner passed in pursuance of a direction given by any appellate authority. Allowing the appeal by Certificate, the Court ^ HELD: 1. Under sub section (1) of section 33B of the Income Tax Act, power has been conferred upon the Commissioner to revise Income Tax Officer 's orders but the exercise of such power is regulated by the two conditions mentioned therein namely, (a) he must consider the order sought to be revised to be erroneous as being prejudicial to the interests of the revenue and (b) he must give an opportunity to the assessee of being heard before revising it. Sub section (2)(b) prescribes a period of limitation in negative words by providing that "no order shall be made under sub s(1) after the expiry of two years from the date of the order sought to be revised". Sub s.(3) confers on the assessee a right to prefer an appeal to the Appellate. Tribunal against the Commissioners ' order made under sub s.(1) while sub section (4) indicates the power of the Appellate Tribunal in dealing with such appeal by providing that "such appeal shall be dealt with in the same manner as if it were an appeal under sub s.(1) of section 33". Two things stand out clearly on a fair reading of the two concerned provisions, namely, sub s.(2)(b) and sub s.(4). The bar of limitation contained in sub section (2)(b) is on the Commissioner 's power to pass revisional orders under sub section (1) and the same appears to be absolute in the sense that it applies to every order to be made under sub s.(1). At the same time sub s.(4) confers on the Appellate Tribunal very wide powers which it has while dealing with an appeal under section 33(1). In other words, the Appellate Tribunal has power "to pass such orders thereon (i.e. on the appeal) as thinks fit. " The word "thereon" restricts the jurisdiction of the Appellate Tribunal to the subject matter of the appeal which merely means that the Tribunal cannot adjudicate or give a finding on a question which is not in dispute and which does not form the subject matter of the appeal but the words "pass such orders thereon as it thinks fit" include all the powers (except possibly the power of enhancement) which are conferred on the Assistant Appellate Commissioner by section 31 and consequently the Tribunal has authority in exercise of its appellate powers to set aside the order appealed against and direct fresh assessment in the light of the observations made by it in its judgment. In other words, similar power is possessed by the Appellate Tribunal while dealing with the appeal under sub s.(4) of section 33B. [275 A H, 276 A] Hukamchand Mills 's case, ; applied. Two principles of construction are relating to casus omissus and the other in regard to reading the statute as a whole are well settled. Under the first principle, a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and 270 for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. [277 B, 278 A B] Artemiou vs Procopiou, , Luke vs Inland Revenue Commissioner and 577 Quoted with approval. The object of introducing Section 33B with effect from March 30, 1948 was to confer revisional powers upon the Commissioner to correct the erroneous orders of an Income Tax Officer in so far as they were prejudicial to the interests of the revenue. The language of the sub sec.(1) clearly suggests that the said power was contemplated to be exercised suo motu by the Commissioner inasmuch as the opening words show that it was upto the Commissioner to call for and examine the record of any proceedings under the Act and on examination of the record if he were satisfied that any order passed by an Income Tax Officer was erroneous as being prejudicial to the interests of the revenue he could revise the same after giving an opportunity to the assessee of being heard. It is true that sub s.(2)(b) thereof prescribed a period of limitation on his power by providing that no order shall be made under sub s.(1) after the expiry of the two years from the date of the order sought to be revised by the Commissioner and a literal construction of sub s.(2)(b) also suggests that the bar of limitation imposed thereby was absolute in the sense that it applied to every kind of order to be made under sub s.(1) and no distinction was made between a suo motu order and an order that might be made by him pursuant to a direction given by any appellate or other higher authority. Sub s.(3) conferred on an assessee a right to prefer an appeal to the appellate Tribunal against the Commissioner 's order made under sub section (1) and under sub s.(4) the Tribunal had authority to deal with the impugned order of the Commissioner in such manner as it deemed fit in exercise of its appellate powers; for instance, it could confirm the impugned order, it could annul that order, or it could after vacating it remand the case back to the Commissioner for making a fresh assessment in the light of the observations made by it in its judgment or it could after calling for a remand report, rectify the erroneous order of the Income Tax Officer. Further there was no period prescribed within which an appeal against the impugned order of the Commissioner had to be disposed of by the Tribunal and in the normal course on rare occasions such appeals would have been heard and disposed of before the expiry of two years from the date of the Income Tax Officer 's order which was regard as erroneous by the Commissioner. More often than not such appeals would come up for hearing after the expiry of the said period of two years a fact fully known and within the contemplation of the Legislature when it introduced the section in the Act in 1948. [278 E H, 279 A D] 4. The Legislature did not intend to attenuate or curtail the appellate powers which it conferred on the appellate Tribunal in very wide terms under sub s.(4) by enacting sub section 2(b) prescribing a time limit on the Commissioner 's power to reverse an erroneous order of the Income Tax Officer when the Commissioner was seeking the exercise the same not suo motu but in pursuance of or obedience to a direction from the appellate authority. Any contrary and literal construction would lead to manifestly absurd result, because in a given 271 case, like the present one where the appellate authority (Tribunal) has found (a) the Income Tax Officer 's order to be clearly erroneous as being prejudicial to the interests of the revenue and (b) the Commissioner 's order unsustainable as being in violation of principles of natural justice; it would be difficult for the appellate authority to exercise its powers. Obviously it could not withhold its hands and refuse to interfere with Commissioner 's order altogether, for, that would amount to perpetuating the Commissioner 's erroneous order, nor could it merely cancel or set aside the Commissioner 's wrong order without doing anything about the Income Tax Officer 's order, for that, would result in perpetuating the Income Tax Officer 's order which had been found to be manifestly erroneous as being prejudicial to the revenue. Moreover, in exercise of its appellate powers it was open to the Tribunal itself to call for a remand report from either the Commissioner or the Income Tax Officer and rectify the Income Tax Officer 's erroneous order after giving opportunity to the assessee and in doing so no question of limitation would arise. It was equally open to the Tribunal to set aside the Commissioner 's order and remand the case directly to the Income Tax Officer giving requisite direction to rectify his erroneous order and thereupon the Income Tax Officer would carry out the Tribunal 's direction for, admittedly, the bar of limitation under sub s.(2)(b) was only on the Commissioner 's power to make an assessment afresh and not on the Income Tax Officer. If this be the correct position then it is gravely anomalous that the Tribunal should not be in a position to set aside the Commissioner 's order and remand the case back to the Commissioner for making a fresh assessment because in the meantime two years ' period of limitation has expired, for, it would mean that the Tribunal was prevented from achieving the desired effect directly through the Commissioner but it could do so indirectly through the Income Tax Officer. A literal construction placed on sub s.(2) (b) would lead to such manifestly absurd and anomalous results, which, were not intended by the Legislature. Therefore, the words of sub section 2(b) should be construed as being applicable to suo motu orders of the Commissioner in revision and not to orders made by him pursuant to a direction or order passed by the Appellate Tribunal under sub s.(4) or by any other higher authority. Such construction will be in consonance with the principle that all parts of the section should be construed together and every clause thereof should be construed with reference to the context and other clauses thereof so that the construction put on that particular provision makes a consistent enactment of the whole statute. [279 D H, 280 A G] Commissioner of Income Tax vs Kishoresingh Kalyan Singh Solanki, ; approved. It is well settled that the principle that the fiscal statute should be construed strictly is applicable only to taxing provisions such as a charging provision or a provision imposing penalty and not to those parts of the statute which contain machinery provisions and by no stretch could section 33B be regarded as charging provision. [281 C D] 6. A casus omissus has not to be readily inferred and it could not be inferred from the mere fact that both sections 33B and 34(3) together with the second proviso were inserted simultaneously in the Act by the same Amending Act of 1948 and that in the case of former a relaxing provision was not made as was made in the case of the latter provision, firstly because the two provisions operated in distinct fields and secondly it would be improper to do so without compar 272 ing the various stages of amendments through which each set of these Provisions had undergone since inception. The further aspect the Legislature has in the 1961 Act made the requisite provision removing or relaxing the bar of limitation, in section 263(3), is, not of much importance. Irrespective of the question whether the second proviso to section 34(3) was enacted ex majore cautella or not (over which conflicting views obtain) it is clear that section 263(3) of the 1961 Act must be regarded as an ex majore cautella provision. Admittedly, at the time when the said provision was enacted in the 1961 Act, the Bombay view held the field and there was no decision to the contrary of any other High Court. Obviously, therefore, the enactment of section 263(3) must be regarded as declaratory of the law which was already prevailing and this position has been clarified in the Notes on Clauses of the Income Tax Bill 1961 where it has been stated that sub cl. (3) of section 263 was new and had been added to get over the difficulty experienced in (wrongly stated 'caused by ') the Bombay High Court 's decision in Solanki 's case. The enactment of an ex majore cautella provision in the 1961 Act would, therefore, be a legislative recognition of the legal position that obtained as a result of judicial pronouncement qua the 1922 Act. [281 E H, 282 A] C.I.T. vs Sabitri Devi Agarwalla, over ruled. Pooran Mall 's case, ; relied on.

Respondent was residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State,. His income arising therein during the accounting year 1949 50 was sought to assessed to income tax 'for the year 1950 51 under the Indian Income tax Act 'as amended by the Indian Finance Act. He presented ' a petition under article 226 to the High Court praying 542 for the issue of a writ directing the Union of India not to assess income tax on his income which had accrued to him prior to April 1, 1950, because no income tax was leviable in Rajasthan (except in the State of Bundi) under any provision of law in force there. The High Court having accepted his petition, the Union of India preferred the present appeal to the Supreme Court. Section 3 of the Finance Act 1950 (Act XXV of 1550) made certain amendments in the Indian Income tax Act with effect from the 1st day of April, 1950" and substituted therein the present el. (14 A) in section 2 in place of previous el. (14 A) defining "taxable territories". Held, that under sub el. (i) of el. (b) of the proviso, the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of section 4 A of the Indian Income tax Act "as respects any period" The words "any period" mean any period before or after March 31, 1950. Respondent was therefore resident in the taxable territories during the accounting year 1949 50 and his income, whetherderived within or without the taxable territories was taxable under section 4 sub section (I) cl. (b) sub el. (ii) of the Indian Income tax Act. Further, all that section 2 (14 A) does is to define what the ex pression "taxable territories" means in certain cases and for certain purposes. wherever that expression is used in the various provisions of the Indian Income tax Act, and as the expression is used in the charging section 4 in connection with the conditions which are to determine liability to tax, sub el. (iii) of cl. (b) of the definition must, when read with section 4 of the Indian Income tax Act, have reference to chargeabiiity of income and not merely to its computation, and therefore sections 3 and 4 of the Indian Income tax Act read in the light of the definition in proviso (b) to the amended section Y. (14 A) and section 2 of the I inance Act, 1950, authorise the imposition of Indian income tax and super tax on the income derived by the respondent in the year 1949 50 in the territory of Rajasthan. Held also, that while it is true that the Constitution has no restrospective operation except where a different intention clearly appears, it is not correct to say that in bringing into existence now legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively. Articles 245 and 246 reda with entry No. 82 of List I of the Seventh Schedule empower Parliament to make laws with to taxes on income for the whole territory of India and limitation or restriction is imposed in regard to retroactive legislation &ad it is, therefore competent for Parliament to make a law imposing a tax on the income of any year prior to the the amendment of section 2, cl (14 A) of the Indian income tax Act by the Finance act by the Finance act the Indian Income tax Act by the Finance ,1950, so as to the authorise the levy of the authorise the levy of tax on income accuring in the territory of Rajasthan in the year 1949 50 ie therefore valid.

Section 24(2)(iii) of the Indian Income Tax Act, 1922 as it stood in 1955 provided that a business loss which was not wholly set off should be carried forward from year to year. In consequence of an amendment to the section made in 1957 the carry forward of unabsorbed loss could not be effected for more than eight years. After setting off unabsorbed losses for the assessment years 1949 50 and 1950 51 the Income Tax officer directed that the loss remaining unabsorbed in the year 1950 51 be carried forward. The assessee 's plea that the unabsorbed loss of the year 1950 51 should be set off against the business income of the assessment year 1960.61 was rejected by the Income Tax officer on the ground that the unabsorbed loss of the year 1950 51 could not be carried forward for more than eight years. The assessee was unsuccessful in appeal before the Appellate Assistant Commissioner and the Appellate Tribunal. The High Court answered the reference against the Assessee. In appeal to this Court it was contended that by virtue of section 24(2) (iii) of the Act, as it stood before its amendment in 1957, the assessee had acquired a vested right to have the unabsorbed loss carried forward from year to year until it was completely set off and that the subsequent amendment limiting the period to eight years could not divest the assessee of the vested right already accrued to him. Dismissing the appeal, ^ HELD: The unabsorbed loss of the assessment year 1950 51 could not be carried forward for more than eight years and consequently could not be set off against the business income of the assessment year 1960 61. [909 C] 1. (a) It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication right claimed by an assessee under the law in force In a particular assessment year is ordinarily available only in relation to a proceeding pertaining to that years. [908 G, 909 B] Commissioner of Income Tax, West Bengal vs Isthmian Steamship Lines, and Karimtharuvi Tea Estate Ltd. vs State of Kerala ; referred to. 907 (b) When an assessment for the assessment year 1960 61 was to be made A and section 24(2) was invoked it was the section in force as ill that assessment year which had to be applied. There is no question of the assessee possessing any vested right under the law as it stood before the amendment. [908 H, 909 A B] 2. The direction of the Appellate Assistant Commissioner that the unabsorbed loss should be carried forward have meaning only if the law in force in the relevant assessment year permits the unabsorbed loss to be carried forward into the assessment of that year the instant case the Appellate Assistant Commissioner assumed that the law permitted the unabsorbed loss to be carried forward into future year. But that was not the law in the relevant assessment year and therefore the assessee could derive no advantage from that direction. [909 D E] Commissioner of Income Tax Kerala vs Helen Rubber Industries Ltd. , distinguished.

Dismissing the Revenue appeal by special leave, the Court ^ HELD: (1) The credit entries made in the books of a statutory agent do not by themselves amount to receipt by assessees who are non residents as long as the amounts so credited in their favour are not at their disposal or control. [592 F] The non resident assessees in this case neither received nor could be deemed to have received the sums in question when their accounts with the statutory agent were credited, since a credit balance without more only represents a debt and a mere book entry in the debtor 's own books does not constitute payment which will secure discharge from the debt. They cannot, therefore, be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period. [592 F G] P. V. Raghava Reddi & Anr. vs Commissioner of Income tax [1962] Supp. 2 S.C.R. 596, distinguished. (2) Under clause (a) of the Explanation to clause (i) of sub section (1) of section 9 of the Income Tax Act. in the case of the business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India. If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India. [593 B D] 588 In the instant case the non resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by clause (a) of the Explanation to section 9(1)(i) of the Act. The commission amounts which were earned by the non resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India. [593 E G] Commissioner of Income tax, Punjab vs R. D. Aggarwal & Co. & Anr. and M/s. Carborandum Co. vs C.I.T. Madras ; , referred to.

The Income tax officer, Dacca, acting under the Bengal Agricultural Income tax Act, 1944, sent by registered post a notice to the Manager of an Estate belonging to the Tripu ra State but situated in Bengal, calling upon the latter to furnish a return of the agricultural income derived from the Estate during the previous year. The notice was received by the Manager in the Tripura State. The State, by its then Ruler, instituted a suit in June, 1946, against the Province of Bengal and the Income tax Officer, in the court of the Subordinate Judge of Dacca for a declaration that the said Act in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff was ultra vires and void, and for a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff. The suit was subsequently transferred to the Court of the Subor dinate Judge of Alipore. The partition of India under the Indian Independence Act took place on the 158h August 1947, and the 2 Province of East Bengal in which the Estate was situated, was substituted as a defendant in the place of the Province of Bengal on an application made by it, and in its written statement it contended that the court of Alipore which was situated in West Bengal had no jurisdiction to proceed with the suit. The High Court of Calcutta, reversing the order of the Subordinate Judge of Alipore held that the provisions of the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabili ties)Order, 1947, did not apply to the case and, as the matter was accordingly governed by the rules of internation al law, the court of Alipore had no jurisdiction to proceed with the suit: Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ. (FAZL ALI J. concurrinG) The suit was not one with respect to any property transferred to East Bengal by the Indian Independence (Rights, Property and Liabilities) Order, 1947, nor was it a suit in respect of any "rights" transferred by the said Order, inasmuch as the Province of East Bengal obtained the right to levy income tax not by means of any transfer under the said Order, but by virtue of sovereign rights which were preserved by section 18 (3) of the Indian Independence Act, 1947, and article 12 (2) of the said Order had no application to the case. Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA AND CHANDRASEKHARA AIYAR J.J. (FAZL ALI J, dissenting.) (i) Since the object of the Indian Independence (Rights, Property and Liabilities) Order, 1947, was to provide for the initial distribution of rights, properties and liabili ties as between the two Dominions and their Provinces, a wide and liberal construction, as far as the language used would admit, should be placed upon the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for. The words "liability in respect of an action able wrong" should not therefore be understood in the re stricted sense of liability for damages for completed acts, but so as to cover the liability to be restrained by injunc tion from completing what on the allegations in the plaint are illegal or unauthorised acts which have been commenced. As the Province of Bengal was, on the: allegations in the plaint, liable to be restrained from proceeding with an illegal assessment, that liability was, accordingly, a liability in respect of "an actionable wrong other than breach of contract" with in the meaning of article 10 (2) (a) of the above said Order; and, as the cause of action arose wholly in Dacca within the Province of East Bengal, that liability passed to the province of East Bengal under article 10 (2) (a), the latter must be deemed to be substituted as a party to the suit and the suit must continue in the court of the Subordinate Judge of Alipore, under Art.4 of the Indian Independence (Legal Proceedings) Order, 1947. (ii) Assuming that the cause of action did not wholly arise 3 in Decca, article 10 (9.) (c) would apply and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal. (iii) As the suit was not one "to set aside or modify any assessment made under the Act", section 65 of the Bengal Agricultural Income tax Act, 1944, had no application and the suit was therefore one in respect of an "actionable" wrong within the moaning of article 10 (2) (a). Per FAZL ALI J. The words "liability in respect of an actionable wrong other than breach of contract" in article 10 of the Indian Independence (Rights, Property and Liabili ties) order 1947, refer to liability capable of being ascer tained in terms of money such as liability for damages for tort and not liability in any abstract or academic sense. Even if a meaning, as wide ' as they can bear in a legal context, is given to the words "actionable wrong" and "liability" two elements are necessary to constitute an actionable wrong, namely, (i) an act or omission amounting to an infringement of a legal right of a person or breach of duty towards him, and (ii) damage or harm resulting there from. The mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act, 1944, by the Income tax Officer is not an actionable wrong because no right known to law is infringed thereby and no action for damages can be main tained in respect of such an act, even assuming that the Income tax Officer had exceeded his powers or acted under an invalid provision of law. No "liability for an action able wrong" was thus involved in the suit and no liability in respect of such a wrong could therefore be said to have been transferred to the Province of East Bengal within the meaning of article 10 (2.) of the said Order so as to entitle the plaintiff to continue the suit against the Province of East Bengal under article 10 (2). For the purpose of understanding the full scope of section 65 of the Bengal Agricultural Income tax Act, 1944 it is necessary also to read the latter part which provides that no suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under the Act. " The latter part of the section clearly excludes the jurisdiction of the courts to prevent the Income tax Officer from proceeding with an assessment which has been started and the section must on a fair construction be held to bar all suits in connection with such assessment whether against the State or an Income tax Officer of the State. If, therefore, no suit or action lies, there cab be no liability for an actionable wrong. [The nature of actionable wrongs and torts discussed.] Judgment of the Calcutta High Court reversed.

minal Appeal No. 109 of 1960. Appeal by special leave from the judgment and order dated April 18, 1958, of the Andhra Pradesh High Court in Criminal, Misc. Petition No. 1421 of 1957. H. J. Umrigar and T. M. Sen, for the appellant. The respondent did not appear. March 8. The Judgment of the Court was delivered by MUDHOLKAR, J. The State of Andhra Pradesh has come up in appeal against the order passed in revision by the high Court of Andhra Pradesh quashing the charges framed against nine persons by Mr. Syed Firasath Hussain, Special Judge, Vijayawada. The revision petition was preferred by only two of those persons. The accused No. 1 Parthasarathi, who was a lower division clerk in the Central Excise Circle Office at Narasaraopet was in charge of the TP 1 permit books (transport permit) intended for issue to Central Excise Officers for granting permits to persons applying bona fide for licences to transport tobacco. According to the prosecution two of those books containing 25 permit forms each were found missing from the aforesaid office. The allegation is that Parthasarathi sold those books to the remaining accused for a consideration of Rs. 400. It was found during the investigation that seven permit forms from out of these books bad been used for transport of non duty paid tobacco after blanks in those forms had been filled and the signa tures of certain Central Excise Officers forged on them. Further, according to the prosecution, accused nos. 2 to 8 got authorisation letters prepared with the help of accused No. 9 'by forging the signatures of the supposed consignors of the tobacco. With the help of 197 these documents the accused nos. 2 to 8 are said to have transported tobacco to the licensed premises of certain persons and received payments for the tobacco delivered to them. The prosecution alleged that all this was done by all the accused by entering into a conspiracy, the object of which was to procure and utilise blank TP 1 forms, fill them in, forge the signatures of Central Excise Officers and use them as genuine for the purpose of transporting tobacco without paying duty upon it. The charge sheet states that the accused nos. 1 to 9 have committed the offence under section 120 B, Indian Penal Code read with a. 5(2) of Prevention of Corruption Act, 1947 (II of 1947). It further states that the accused No. 1 had committed offenses under section 5(1)(c) and 5(1)(d) of Prevention of Corruption Act, 1947 as also offenses under sections 420, 463 and 464, Indian Penal Code. The accused nos. 2 to 8 are said to have abetted all these offenses. Each of these accused is in addition said to have committed offenses under section 420, Indian Penal Code. The Subordinate Judge, Vijayawada was appointed as Special Judge under the provisions of section 6 of the Criminal Law Amendment Act, 1952 (II of 1952) to try offenses under the Prevention of Corruption Act, 1947. He framed the following charges: "CHARGE NO.1. That you, Accused 1 to 9 on or about 19 9 1953 to 5 11 53 agreed to do by illegal means to wit, A 1 being a public servant in the Central Excise Department dishonestly sold two blank T.P. 1 books for Rs. 350 to one late Jogayya and obtained pecuniary advantage for himself and A 2 to A 8 and that A 9 forged 7 T.P. 1 forms, out of the above two books, which forged T.P. 1s were used by A 2, A 3, A 5, A 7, A 8 with the assistance of A 4 and A 6 and cheated the merchants of Markapur and Cumbum by using the said forged T.P. 1s for the above purpose of cheating; and that the above acts were done by all of you in pursuance of a conspiracy and that thereby you A 1 have committed an offence punishable under Section 120B of the I.P.C. read with and (d) punishable under Sec. 5(2) of the Prevention of Corruption Act and also under Sec. 109 I.P.C. read with Sec. 490, 466 and 467 of the I.P.C. and that you,A 2 to A 9 under See. 120 B read with Sec. 5(1)(c) and (d) punishable under See. 5(2) of Act 11 of 1947 and See. 420, 466 and 467 and 471 I.P.C. and within my cognizance. CHARGE NO. That you A 1, being a public servant in the Central Excise Department, being a Lower Division Clerk in the office of the Superintendent of Central Excise, Narasaraopet Circle, since 1951 and in such capacity were entrusted since 1951 with blank T.P. 1 books dishonestly sold two of the above said T.P. 1 books under your control to one late Jogayya for Rs. 350, in or about the month of April, 1953 and dishonestly, fraudulently misappropriated the said amount and thereby committed the offence of misconduct punishable under Section 5(2) read with See. 5(1)(c) of the Prevention of Corruption Act, 11 of 1947 and within my cognizance. CHARGE NO. 111. That you A 1, in the above capacity, by corrupt and illegal means, and by abusing your position as a public servant, obtained for yourself an amount of Rs. 350 being the sale proceeds of the two Blank T.P. 1 books, from one late Jogayya and obtained for A 2 to A 8, a pecuniary advantage of Rs. 10,120 14 0, th e amount of revenue due to the Central Govern ment and thereby committed the offence of Criminal misconduct punishable under See. 5(2) read with Sec. 5(1)(d) of the Prevention of Corruption Act 11 of 1947 and within my cognizance. CHARGE TO. That you, A 9, on or about the days between September and November, 1953 forged 7 blank T.P. ls Nos. 610432, 610443, 610460,610448,61044, 610468, 610446 as if they are documents to have been made by the Central Excise Officials in their official capacity by filling up the same within false particulars and fixing the signatures of different 199 Central Excise Officials so as to show that they are genuine T.P. 1 permits 'hat you thereby committed an offence punishable under Section 466 I.P.C. and within my cognizance. CHARGE No. V. That you, A p, on or about the days between September and November, 1953 forged the 7 T.P. 1 permits mentioned in Charge No, IV purporting to be valuable securities with intent and that they may be used for transporting tobacco as duty paid tobacco and that you thereby committed an offence punishable under Section 467 of the I. P. C. and within my cognizance. CHARGE No. VI. That you, A 2 to A 8, on, or about the days between 12 9 53 and 5 11 53 at Chodavaram, Satulur, Velpur and Tenali dishonestly used the above seven forged T.P. Is mentioned in Charge No. IV as genuine, Which you know at the time you used them as forged documents and transported 26,989 lbs. non duty paid tobacco as duty paid tobacco by quoting the above fictitious documents as proof of payment of duty and that you ' thereby committed an offence punishable under Section 465 and 471 of the I.P.C. and within my cognizance. CHARGE No. VII. That you, A 2 to A 8, on or about the days between 19 9 53 and 6 11 53 at Cumbum and Mar kapur cheated (1) B. Ranga Subbayya of Cumbum (2) P. C, h. Venkata Subbaiah and (3) Shri B. Seshaiah of Markapur and thereby dishonestly inducing them to deliver you, Rs. 10,994 10.3, was the property of the above said persons; and that you thereby committed an offence punishable under Section 420 I.P.C. and within my cognizance. " While seven of the accused persons were content with the charges,, two preferred an application for revision before the High Court which, as already stated, accepted it and quashed the charges and directed the Special Judge to frame fresh charges on the lines indicated in the judgment. 200 Mr. Umrigar, who appears for the State of Andhra Pradesh, while conceding that Charge No. 1 as it stands, is involved and obscure and requires to be reframed takes exception to the observation of the High Court that the charge is bad for multiplicity. ,It not quite clear what the High Court me ant. If it meant that separate charges should be framed for different offenses there can be no objection; but if it meant that all these accused cannot be tried at the same trial then we have no doubt that it was in error. The High Court pointed out that this is an omnibus charge containing as many as 203 offenses and that it is 'in direct violation of sections 234, 235 and 239 of the Code of Criminal Procedure. No doubt, sub section (1) of section 234 provides that not more than three offenses of the same kind committed by an accused person within the space of 12 months can be tried at the same trial. But then section 235(1) provides that if in any one series of acts so connected together as to form the same transaction more offenses than one are committed by the same person, he may be charged with and tried at one trial for every such offence. Therefore, where the alleged offenses have been committed in the course of the same transaction the limitation placed by section 2314(1) cannot operate. No doubt, the offence mentioned, in charge No. 1 is alleged to have been committed not by just one person but by all the accused and the question is ' whether all these persons can be jointly tried in respect of all these offenses". To this kind of charge s.239 would apply. This section provides that the following persons may be charged and tried together, namely: (1) persons accused of the same offence committed in the course of the same transaction; (2) persons accused 'of an offence and persons accused of abetment or an attempt to commit such an offence; (3) persons accused of different, offenses committed in the course of the same transaction. Clearly, therefore, all the accused persons could be tried together in respect of all the offenses now comprised in charge No. 1. We, however, agree with 201 Mr. Umrigar that it would be desirable to split up charge No. 1 suitably go that the accused persons will not be prejudiced in answering the charges and in defending themselves. The learned Judge has hold, following a decision of a single Judge in In re Venkataramaiah (1) that no charge of conspiracy is permissible for committing which the conspiracy was entered into and which had actually been committed. In that case the learned Judge had observed as follows at p. 132: "Where the matter has gone beyond the stage of more conspiracy and offences are alleged to have been actually committed in pursuance thereof, these two sections are wholly irrelevant. Conspiracy, it should be borne in, mind, is one form of abetment (see section 107 I.P.C.) and where an offence is alleged to have been committed by more than two persons, such of them as actually took part in the commission should be charged with the substantive offence, while those who are alleged to have abetted it by conspiracy should be charged with the offence of abetment under section 109 I.P.C. The Explanation to section 109 makes this quite clear. An offence is said to be committed in consequence of abetment, when it is committed in pursuance of the conspiracy, and the abettor by conspiracy in made punishable (under section 109) with the punishment provided for the actual offence. " We are unable to accept this view. Conspiracy to commit an offence is itself an offence and a person can be separately charged with, respect to such a conspiracy. There is no analogy between section 120B and section 109 I.P.C. There may be an element of abetment in a conspiracy; but conspiracy is something more than an abetment. Offences created by section 109 and 120B, I.P.C. are quite distinct and there is no warrant for limiting the prosecution to only one element of con spiracy, that is, abetment when the allegation is that what a person did was something over and above that. Where,& number of offences are committed by (1) A.I.R. 1935 Mad. 130, 132. 202 several persons in pursuance of a conspiracy it is usual to charge them with those, offences as well as with the offence of conspiracy to commit those offences. As an instance of this we may refer to the case in section Swaminatham vs State of Madras (1). Though the point was not argued before this Court in the way it appears to have been argued before the Madras High Court and before the High Court of Andhra Pradesh, this Court did not see anything wrong in the trial of several persons accused of offences under section 120B and section 420 I.P.C. We cannot, therefore, accept the view taken by the High Court of Andhra Pradesh that the charge of conspiracy was bad. If the alleged offences are said to leave flown out of the conspiracy the appropriate form of charge would be a, specific charge in respect of each of those offences along with the charge of conspiracy. Before leaving this point we would like to refer to the decision in R. vs Dawson (2) which Mr. Umrigar very fairly brought to our notice, respondents being ex parte. In that case Finnemore J. who delivered the judgment of the Court observed: "Now with regard to the first count for con spiracy. . this court feels it is desirable 'Jo say something. This court has more than once warned of the dangers of conspiracy counts, especially these long Conspiracy counts, which one counsel referred to as a mammoth conspiracy. Several reasons have been given. First of all if there are substantive charges which can be proved, it is in general undesirable to complicate matters and to lengthen matters by adding a charge of conspiracy. Secondly, it can work injustice because it means that evidence, which otherwise would be inadmissible on the substantive charges against certain people, becomes inadmissible. Thirdly, it adds to the length and complexity of the case so that the trial may easily be well High unworkable and impose a quite intolerable strain both on the Court and on the jury. The learned Judges in fact quashed the conviction (1) A.I.R. 1957 S.C. 340, 343, 344. (2) [1960] 1 All. E.R. 558, 563. 203 for conspiracy in the case before them. We agree that it is not desirable to charge the accused persons with conspiracy with the ulterior object of letting in an evidence which would otherwise be inadmissible and that it is undesirable to complicate a trial by introducing a large number of charges spread over a long period. But then this is only a question of propriety and it should be left to the Judge or the magistrate trying the case to adopt, the course which he thinks to be appropriate in the facts and circumstances of the case. It cannot be said as a matter of law that such a trial is prohibited by the Code of Criminal Procedure. The High Court has further held that the learned Special Judge had no jurisdiction to try the offences under section 120B read with sections 466, 467 and 420 because he was appointed a Special Judge under the Criminal Law Amendment Act only for trying offences under the Prevention of Corruption Act. No doubt, he was appointed in the circumstances stated by the High Court, and therefore he will have that jurisdiction which he is competent to exercise under the Prevention of Corruption Act or the Criminal Law Amendment Act. Section 6 of the former provides that the State Government may appoint a Special Judge to try the following offences: (a) an offence punishable under section 161, section 165 or section 165A of the Indian Penal Code (Act XLV of 1860) or sub section (2) of section 5 of the Prevention of Corruption Act, 1947 (11 of 1947); (b) any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in clause (a). Sub section (1) of section 7 provides that notwithstanding any. thing contained in the Code of Criminal Procedure, 1898 or in any other law the offences specified in sub section (1) of section 6 shall be triable by special judges only. Sub section (3) of section 7 provides that when trying any case, a special judge may also try any offences other than an offence specified in section 6 with which the accused may under the Code of Criminal Procedure, 1898 be charged at the same trial. 204 Clearly, therefore, accused No. 1 could be tried by the Special Judge for offences under 'section ' 120 B read With sections 466, 467 and 420 I.P.C. Similarly the other accused who are, said to have abetted these offences could also be tried by the Special Judge. The view of the High Court is thus erroneous and its directions with respect to these offences are set aside. The High Court has further held that the provisions of a 196A(2) of the Code of Criminal Procedure have not been complied with and therefore the charges in respect of offences under as. 466 and 467 could not be enquired into by the Special Judge; section 196A(2) of the Code of Criminal Procedure reads thus: "No Court shall take cognizance of the offence of criminal conspiracy punishable under section 120B of the Indian Penal Code, (2) in a case where the object of the conspiracy is to commit any non cognizable offence, or a cognizable offence not punishable with death, imprisonment for life or rigorous imprisonment for a term of two years, or upwards, unless the State Govern ment, or a Chief Presidency Magistrate or District Magistrate empowered in this behalf by the State Government, has, by order in writing, consented to the initiation of the proceedings: Offences under sections 466 and 467 are admittedly non cognizable and, therefore, it would seem from the plain language of sub section (2) that for the offences under section 120 B read with sections 466 and 467, I.P.C. the sanction of the Government will be necessary. Mr. Umrigar referred us to the decision in Durgadas Tulsiram Sood vs State (1) and said that since the object of the conspiracy was to cheat the Government, that is, to commit an offence under section 420 I.P.C. and the offences under as. 466 and 467 were only means to that end, the trial was not vitiated simply because no sanction was obtained for prosecuting the accused for offences of criminal conspiracy to commit non cognizable offences; under as. 466 and 467 I.P.C. We do not think it necessary to say anything on the point because in (1) I.L.R. 205 any case the case has to go back to the Special Judge for re framing the charges and there is time enough for the Government to consider whether it should accord sanction to the prosecution of the various accused for the non cognizable offences alleged to have been committed by them in pursuance of conspiracy, assuming of course, that sanction is necessary. In the result we allow the appeal and set.aside the order of the High Court and direct the Special Judge to, frame fresh charges and proceed with the trial. The matter has been pending for a long time and we direct that the trial will proceed with. all expedition. Appeal allowed. Retrial ordered.

The High Court quashed the charges framed against the respondents. The charge sheet stated that accused 1 to 9 had committed offenses under section 12oB of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act, 1947, and that accused No. had committed offenses under SS. 5(1)(c) and 5, (i)(d) of the Prevention of Corruption Act and SS. 463, 464 Of the Indian Penal Code and accused 2 to 8 abetted all the offenses and each of the accused in addition had committed offenses under section 420 Of the Indian Penal Code. The High Court directed the Special judge to frame fresh charges inter alia on the ground that charge No. 1 was an omnibus charge containing as many as 203 offenses and that it was direct violation of SS. 234, 235 and 239 Of the Code of Criminal Procedure. Further that the Special judge had no jurisdiction to try the offenses under section 120B read with SS. 466, 467 and 420 Of the Indian Penal Code because he was appointed a Special judge under the Criminal Law Amendment Act, only for trying offenses under Prevention of Corruption Act. The question was whether all the accused, persons could be jointly tried in respect of all these offenses. Held, that when several persons had committed offenses, in the course of the same transaction, they could jointly be tried in respect of all those offenses under section 239 Of the Code of Criminal Procedure and the limitation placed by section 234 Of the Code could not come into operation, but the charges should be suitably split up so that the accused persons would not be prejudiced in answering the charges and defending themselves. Held, further, there is no analogy between section 120B and section Log of the Indian Penal Code. There may be an element of abetment in a conspiracy which is an offence by itself but conspiracy is something more than abetment for which a person could separately be charged. Offenses created under SS. 109 and 120B of the Indian Penal Code are quite distinct and there is no warrant for limiting the prosecution to only one element of conspiracy, that is, abetment when the allegation is that what a person did was something over and above that. If the alleged offenses flow out of the conspiracy the appropriate form of charge would be a specific charge in respect of each of those offenses along with the charge of conspiracy. Held, further, that the introduction of a large number of charges spread over a long period was a question of propriety and it should be left to the judge or the Magistrate trying the case to adopt the course which he thought to be appropriate in the facts and circumstances of the case. Held, also, that while a special judge appointed under section 6 of the Criminal Law Amendment Act has jurisdiction to try cases under section 5 of the Prevention of Corruption Act he can under section 7(3) Of the Criminal Law Amendment Act try other offenses under the Criminal Procedure Code for which the accused can be charged at the same trial. 196 In re Venkataramaiah, A.I.R. 1938 Mad. 130, disapproved. section Swaminatham vs State of Madras, A.I.R. 1957 S.C. 340, R. vs Dawson, [1960] 1 All E.R. 558 and Durgadas Tulsiram Sood vs State, I.L.R. , referred to.

The respondent, a sub inspector of police, was charged with acceptance of Rs. 100 as a bribe from two persons, B and P, for dropping a case which he had instituted against B under the Essential Supplies (Temporary Powers) Act, 1946. The prosecution case was that when the demand for the bribe made by the respondent could not be avoided, B and P approached the Anticorrosive Department, and it was arranged that the respondent should be paid at the police station the bribe money in the shape of currency notes produced by B and P and initialled by M, who was in charge of the Anti Corruption Department, and that M, along with a Deputy Superintendent of the Department and a first class Magistrate, should be at the police station at the time of payment, dressed as ordinary villagers ; that as soon as the amounts in notes were received by the respondent the officers disclosed their identity, that thereupon the respondent tried to throw away the currency notes but that as a result of the officers catching hold of his hands the notes were found in his hand except one which was missing and that as a result of a search made in the presence of two search witnesses later the missing note was also found. The respondent was tried by the Special judge who accepted the prosecution evidence and found him guilty of the offence under section 161 of the Indian Penal Code. On appeal to the High Court the learned single judge who disposed of the appeal held that the respondent could not be convicted because (1) there was no independent witness to support the testimony of the " raiding party " consisting of the two bribegivers and the three officers, (2) the search witnesses did not prove the transaction nor were they present at the time of the occur rence, and (3) the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , had laid down an invariable rule that in cases of this nature the testimony of those witnesses who form what is called " the raiding party " must be discarded, unless that testimony is corroborated by independent witnesses. The State appealed by special leave : Held, (1) that the evidence of the two search witnesses provided independent corroboration in a material particular to 196 the testimony of the raiding party, because the missing currency note, one of the series testified to by the raiding party, could be found where it was actually found only if the testimony of the raiding party was true. (2)that corroboration need not be by direct evidence that the accused committed the crime; it is sufficient even though it is merely by circumstantial evidence of his connection with the crime. Rameshwar vs The State of Rajasthan, ; , followed. (3)that the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , has not laid down any inflexible rule that the evidence of the witnesses of the raiding party must be discarded in all cases in the absence of any independent corroboration. The correct rule is that if any of the witnesses are accom plices, their evidence is admissible in law but the judge must warn the jury of the danger of convicting the accused on the uncorroborated testimony of an accomplice ; if the case is tried without the aid of a jury, the judge should indicate in his judgment that he had this rule of caution in mind and give reasons for considering it unnecessary to require corroboration; if, however, the witnesses are not accomplices but are merely partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested in the same way as any other interested evidence is tested, and in a proper case, the Court may look for independent corroboration before convicting the accused person. If a Magistrate puts himself in the position of a partisan or interested witness, he cannot claim any higher status and must be treated as any other interested witness.

The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years. By an order dated May 31, 1962, he was convicted by magistrate and sentenced to rigorous imprisonment. He was also ordered to pay fine. At the time of his conviction, he was 16 years old. The was extended to Gurgaon on September 1, 1962 and hence at the time of his conviction the magistrate had no power or duty to make any order under the Act. The appeal of the appellant was dismissed by the Additional Sessions Judge, Gurgaon by his order dated Sep tember 22, 1962. His revision petition was also dismissed by the High Court on September 27, 1962. No ground was taken either before the Additional Sessions Judge or High Court that the provisions of the should be applied in the case. After the dismissal of the revision petition, appellant filed a criminal miscellaneous petition requesting the High Court to exercise its powers under section 11 of the Act and pass orders under sections 3, 4 or 6 of the Act. The application was also dismissed by High Court. The appellant filed a petition in the High Court for the grant of a certificate of fitness to appeal to this Court and one of the grounds taken was that High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 of the Act. The certificate having been refused by High Court, the appellant came to this Court by special leave. Accepting the appeal, Held (Per Subba Rao and Das Gupta, JJ.): The order of the High Court be set aside and High Court be directed to make an order under section 6 or if it so desires, remand the case to the Sessions Court for doing so. It is true that ordinarily, this court is reluctant to allow a party to raise a point for the first time before it, but in this case, both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act. It is true that the appellant did not bring the provisions of the Act to the notice of the Court till after the disposal of the revision petition, but that does not absolve the court from discharging its duty under the Act. The appellate court in appeal or the High Court on revision can, in exercise of the powers conferred under section 11 of the Act, make an order under section 6(1). The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology. It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him. The Act distinguishes offenders below 21 years of age and those 677 above that age and offenders who are guilty of committing an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence. While in the case of offenders who are above the age of 21 years, absolute discretion is given to the court to release them after admonition or on probation of good conduct, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to imprisonment unless it is satisfied that having regard to the circumstances of the case, including the nature of the offence and the character of the offenders, it is not desirable to deal with them under sections 3 and 4 of the Act. An order under section 1 1 (1) of the Act can be made by any court empowered to try and sentence the offender to imprisonment and also by High Court or any other court when case comes before it on appeal or in revision. The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order. The phraseology used therein is wide enough to enable the appellate court or High Court, when the case come before, it, to make such an order. It was purposely made comprehensive as the Act was made to implement a social reform. As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the legislature should have prohibited the exercise of such a power even if the case was pending against the accused at one stage or other in the hierarchy of tribunals. The term "court" in section 6(1) includes an appellate court as well as revisional court. Per Raghubar Dayal, J. (dissenting) When a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the could apply, and such finding, be it of the trial court or of the appellate court, is arrived at before the application of the Act, the court of appeal or revision cannot take action under section 11(1) of the Act when the case comes before it in appeal or revision. It is true that appellate courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings. Such a ground is not available in the present case. Ramji Missar vs State of Bihar, [1963] Supp. 2 S.C.R. 745, referred to.

The Respondent was an Income Tax Officer He was tried a d convicted of the offence under section 161 Indian Penal Code read and section 5(2) read with section 5(1) (d) of the Prevention of Corruption Act The prosecution produced among other , PWs the managing partner of a firm known as M/s Hind Fertilizer , Bhavnagar an assessee before the accused from whom a bribe of Rs. 12 , 500 was demanded and accepted on 14.3.1972 Sri Parikh Manager Postal Store Department witness to the trap laid against the accused and Mr Judeja (PW 9) the Dy. Supdt. of Police The defence of the accused was that the prosecutions version of how the currency notes were seized from him was false and that PWs 2 gone to the toilet The Additional Special Judge Ahmedabad accepted the prosecution version convicted the respondent of the offences with which he was charged and sentenced hi n to undergo rigorous imprisonment for one year and to pay a fine of Rs. 2 000 on each of the two counts On appeal the High Court of Gujarat acquitted the accused of both the offences. Hence the State appeal by special leave of the Court Allowing the appeal , the Court. ^ HELD 1 1 From the evidence of PWs 2 3 and 9 it is clear beyond doubt that a sum of R 12 500 Was paid to and received by the accused as a bribe and therefore his conviction by the Trial Court was wrongly set aside by the High Court This is not a case where the views were reasonably possible The only possible view was that the accused was guilty of both the offences under section 161 Indian Penal code and section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act , 1947 [741G H] 734 1.2 In the instant case , both Parikh (PW 3) and Panchal (not examined) arc certainly independent witnesses. Both of them are government servants belonging to a different department , and if Inspector Sharma thought that they could be called as independent panch witnesses , no motive can be imputed to the investigating agency and no aspersions can be cast on the said witnesses. The evidence of Parikh was truthful. His evidence substantiates the evidence of PW 2 , about the acceptance of the bribe by the accused and his keeping the money in a folded newspaper. From the circumstances that the accused did not keep open the doors of his house expecting PW 2 , that he was in conversation with PW 2 for more than 40 minutes instead of sending him away after taking the alleged bribe , the colour of the solution had changed to yellow when the Chemical Examiner , examined it and that the failure to examine Sharma the inspector no adverse inference can be drawn against the prosecution. In fact , the prosecution offered Sharma for cross examination and kept him ready in court. The counsel for the accused stated that since the witness had already been dropped by the prosecution , he did not want to examine him unless the court directed him to do so. After the failure of the counsel of the accused to take advantage of the offer made by the prosecution it is not open to the accuses in the appeal by special leave to comment upon the so called failure of the prosecution to examine Inspector Sharma as a witness. [740B D , F; 741B , B E] 2.1 In appreciating oral evidence , the question in each case is whether the witness is a truthful witness and whether there is anything to doubt his veracity in any particular matter about which he deposes. Where the witness is found to be untruthful on material facts that is an end of the matter. Where the witness is found to be partly truthful or spring from tainted sources , the court may take the precaution of seeking some corroboration , adequate and reason. able to meet the demands of the situation. [738F G] 2.2 But a Court is not entitled to reject the evidence of a witness merely because they are government servants , who , in the course of their duties or even otherwise might have come into contact with investigating officers and who might have been requested to assist investigating agencies. If their association with the investigating agencies is unusual , frequent designed , there may be occasion to view their evidence with suspicion. But merely because they are called in to associate themselves with the investigation as they happened to be available or it is convenient to call them , it is no ground to view their evidence with suspicion. Even in cases where officers who in the course of their duties , generally assist the investigation agencies , there is no need to view their evidence h suspicion as an invariable rule. For example , in rural areas , investigating officers would ordinarily think of calling in the village officers , such as , the Headman , the Patel or Patwari to act as punch witnesses , as they are expected to be respectable persons of the locality. It does not mean that their evidence should be viewed with suspicion because they are government servants or because they are generally associated with investigating agencies whenever there is a crime in the village. For that matter it would be wrong to reject the evidence of police officers either on the mere ground that they are interested in the success of the prosecution. [708H; 739A D] 735 2.3 The court may be justified in looking with suspicion upon the evidence of officers who have been demonstrated to have displayed excess of zeal in the conduct and success of the prosecution. But to reject the evidence of all official witnesses as the High Court has done in the present case , ii going far too far. It is extremely unfair to a witness to reject his evidence by merely giving him a label. [739D E]

Held (Per MEHR CHAND MAHAJAN C. J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ., section R. DAS J. dissenting) that the effect of the declaration in the case of The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act (XXV of 1949) is void under article 13(1) of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, is to render part of section 13(b) of the Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable. In view of the constitutional invalidity of a part of section 13(b) of the Bombay Prohibition Act having been declared void by the Supreme Court, that part of the section ceased to have legal effect in judging cases of citizens and must be regarded as null and void in determining whether a citizen was guilty of an offence. The clear enactment of article 141 of the Constitution leaves no scope in India for the application of the American doctrine that "the declaration by a court of unconstitutionality of a statute which is in conflict with the Constitution affects the parties only and there is no judgment against the statute and it does not strike the statute from the statute book. " In India, on the other hand, once a law has been struck down as unconstitutional by the Supreme Court, no notice can be taken of it by any Court because after it is declared as unconstitutional it is no longer law and is null and void. The bare circumstance that a citizen accused of an offence under section 66(b) of the Bombay Prohibition Act is smelling of alcohol is compatible both with his innocence as well as his guilt. The smell of alcohol may be due to the fact that the accused had contravened the enforceable part of section 13(b) of the Bombay Prohibition Act or it may well be due to the fact that he had taken alcohol which fell under the unenforceable and inoperative part of the section. Therefore the onus was laid on the prosecution to prove that the (I) ; 79 614 alcohol of which he was smelling came under the category of prohibited alcohol within the meaning of the enforceable part of section 13(b). Per section R. DAS J. : The declaration in the case of The State of Bombay and Another vs F. N. Balsara gives a citizen who has consumed or used liquid medicinal or toilet preparations a defence to a charge under section 66(b) read with section 13(b) of the Bombay Prohibition Act and it is for the accused person to prove the facts on which that declaration of law is based. The State of Bombay and Another vs F. N. Balsara ([1951] S.C.R. 682) explained. Kesava Madhava Menon vs The State of Bombay ([1951] S.C.R. 228) followed. rangarao Bala Maize vs The State ([19511 54 Bom. L. R. 325), In re Kanakasabai Pillai (A.I.R. 1940 Mad. 1) and Norton vs Shelby County ; referred to.

The State Transport Authority issued a notification under the , calling for applications for the grant of two stage carriage permits for the route Madras to Chidambaram. A large number of applications were received. The authority granted the first permit to one of the applicants and for the second it decided to call for fresh applications. The appellant, as also a number of other applicants, appealed to the State Transport Appellate Tribunal. The Tribunal confirmed the grant of the first permit and as regards the second it allowed the appeal of the appellant and directed that it should be granted to him. Respondent No. 1 moved the High Court under Art.226 of the Constitution for the issue of a writ of certiorari and the single Judge who heard the matter held that the Appellate Tribunal had overlooked relevant considerations, and allowed irrelevant considerations to prevail and so made the Rule absolute. A Letters Patent appeal was preferred by the appellant. The Division Bench affirmed the order of the single Judge on the ground that the Appellate Tribunal had overlooked material considerations in favour of the respondent No. 1 and dismissed the appeal The appellant came to this Court by special leave and it was contended on his behalf that in issuing the writ of certiorari the High Court exceeded its jurisdiction under article 226 of the Constitution. Held: (per Gajendragadkar, Wanchoo, Shah and Dayal JJ.). The contention raised on behalf of the appellant was well founded and must prevail. A writ of certiorari is issued for correcting errors of jurisdiction committed by courts or tribunals, in cases where they exceed their jurisdiction or fail to exercise it or exercise it illegally or improperly, i.e. where an order is passed without hearing the party sought to be affected by it or where the procedure adopted is opposed to principles of natural justice. The jurisdiction to issue a writ of certiorari is a supervisory one and in exercising it, the court is not entitled to act as a court of appeal. That necessarily means that the findings of fact arrived at by the inferior court or tribunal arc binding. 65 An error of law apparent on the face of the record can, however, be corrected by a writ of certiorari, but not an error of fact however grave it may appear to be. A writ of certiorari can also be issued if it is shown that in recording a finding of fact, admissible and material evidence has, not been admitted, or inadmissible evidence affecting the impugned finding has been admitted. A finding of fact based on no evidence would also be an error of law and as Such amenable to such a writ. But a finding of fact cannot be challenged in such a proceeding on the ground that the relevant and material evidence was insufficient to sustain the finding. Adequacy or sufficiency of evidence or an inference of fact to be drawn from the evidence or finding of fact are entirely within the jurisdiction of the Tribunal. Hari Vishnu Kamath vs Syed Ahmed Ishaque, ; , Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam, ; and Kaushalya Devi vs Bachittar Singh, A.I.R. 1960 S.C. 1168, relied on. It is neither possible nor desirable to define or describe all cases of errors which can be said to be errors of law apparent on the face of the record. Whether or not an error is such an error would depend on the facts and circumstances of each case and the nature and scope of the law misconstrued or contravened. It was not open to a party on the authority of the decision of this Court in K.M. Shanmugam vs S.R.V.S. (P) Ltd., to come to the High Court under article 226 to have all questions of fact reconsidered so as to invoke the plea of 'public interest ' under section 47 of the . K. M. Shamnugam vs S.R.V.S. (P) Ltd., 1 [1964] 1 S.C.R. 809, held inapplicable. In the present case the controversy centered round the fact whether the respondent No. 1 had a workshop at Chidambaram, one of the two terminii of the route and that the tribunal had failed to duly consider some evidence in that connection. That argument was an argument related to appreciation of evidence and as such was outside the purview of a proceeding for a writ of certiorari. The High Court was therefore, in error in issuing the writ of certiorari. In issuing a writ and in making it absolute, care should be taken to draw the order accurately. Unless allegations are made against them, the State Transport Authority or the Appellate Tribunal should not be represented through lawyers. Their position in ordinary cases is just the same as that of courts and other tribunals. Per Subba Rao J. Where the tribunal ignores or fails to investigate a material circumstance germane to a question of public 1 SCI/64 5 66 interest under section 47 of the Act put forward by a claimant for permit and gives a finding against him, that finding is vitiated by an error of law apparent on the face of the record and is liable to be quashed by a writ of certiorari. and the Appellate Tribunal failed to consider the specific claim of the respondent 1 as to the existence of his workshop at Chidambaram and was, therefore, right in setting aside their orders. The High Court could not be said to have exceeded its jurisdiction under article 226 of the Constitution. This was a clear case where the Tribunal made a finding that was based on no evidence and was contrary to the specific claim made before it. Since the first respondent had secured the highest number of marks, this claim, if substantiated, would tilt the balance in his favour. This Court would not interfere in such a matter in the exercise of its extraordinary jurisdiction under article 136 of the Constitution to set aside the High Court 's order.

The appellant was convicted under section 8 read with section 16 of the Prevention of Food Adulteration Act by the Sub Divisional Magistrate, Jalaun and sentenced to six months rigorous imprisonment, the minimum sentence awardable under the P.O.F.A. 1950. In appeal the Session Court reversed it, but in further appeal by the State against his acquittal and reversal of the trial court decision, the High Court of Allahabad set aside the Session 's orders and restored that of the trial court. Dismissing the appeal by special leave the Court, ^ HELD: 1. Sections 8 and 9 of the Prevention of Food Adulteration Act, 1950 as amended by section S of the Amending Act 49 of 1964 cannot be read as repealing the old sections and empowering the Central Government or the State Government to appoint the Public Analyst or the Food Inspector after the coming into force of the amending Act, implying that any prior appointment o '. a Public Analyst or Food Inspector stood repealed. [345A] 2 Whether the notifications of the Government in 1968 appointing the public Analyst and the Food Inspector with retrospective effect from March 05 are valid or not need not be looked into because being an amendment Act, the appointment of the Public Analyst and the Food Inspector made by the State Government continued to be valid. [345B C] 3. The amended sections 8 and 9 do not in any way repeal sections 8 and 9 as they originally stood. As to the effect of the amendment the language of the amending sections will have to be examined to find out whether the original conditions were intended to be repealed. The amending provisions should be held as part of the original statute. [345D E] 4. Whenever the amended section has to be applied subsequent to the date of the amendment, the unamended provisions of the Act have to be read along with the amended provisions as though they are part of it. Reading the amended section, it is clear that there is no provision, express or implied, repealing the existing provisions or the rules made thereunder. The section will have to be construed as being in addition to what had already existed. The effect will be that the power of the State Government which already existed under the unamended section and the appointments made thereunder preserved and the action taken under the amended sections with be in addition to the powers of the State Government and the appointments which had already been made. [345F G] 342 Nagar Mahapalika, Lucknow vs Ram Dhani, A.I.R. 1971 All. 53 approved. The contention that the analysis of the milk after 44 days must yield to an adverse inference against the State as to adulteration cannot be accepted. [346A] In the present case there is evidence of the Food Inspector that he added formalin as a preservative and the report of the Public Analyst that no change had taken place in the constituents of milk which would have interfered with the analysis. This statement of the analyst was not challenged in any of the courts below. Apart from the statement of the Analyst not having been questioned, in this case it is admitted that formalin was added to the milk by the Food Inspector. The Food Inspector added 16 drops of formalin in each of the bottles and had them sealed properly. Rule 20 of the Prevention of Food Aduleration Rules requires that in the case of milk, cream Dahi, Khoa and Gur a preservative known as "formalin", that is to say, a liquid containing about 40 per cent of 'formaldehyde ' in aqueous solution in the proportion of 0.1 ml. (two drops) for 25 ml. Or 25`grams shall be added. There is also the clear evidence of Public Analyst that no change had taken place in the constituents of milk which would interfere with the analysis.[346D G, 347A] Babboo vs State, A.I.R. 1970 All 122; approved. Dattappa Mahadappa vs Secy. , Municipal Committee, Baldana, A.I.R. 1951 Nag.191 referred to.

These two appeals arise out of the judgments in two Election Petitions before the Andhra Pradesh High Court questioning the election of respondent No. 1 as a Member of Parliament from Srikakulam No. 1 Parliamentary constituency in the 8th General Election to the House of the People on the ground that Shri N .T. Rama Rao the Chief Minister of Andhra Pradesh as well as respondent No. 1 gave certain speeches and certain advertisements were got published by Shri N.T. Rama Rao through the Publicity Department of the Govt. of Andhra Pradesh in the newspapers containing certain statements which are alleged to amount to a corrupt practice within the meaning of Section 123(1)(A) of the Representa tion of the People Act 1951. Dismissing the appeals, this Court, HELD: That these advertisements and speeches amount to nothing more than statements extorting the achievements of the Government of the State of Andhra Pradesh under the Telegu Desham party headed by N.T. Rama Rao, Chief Minister and contain normal election promises and these advertise ments donot amount to corrupt practices falling within the scope of sub clause (b) of clause (A) of sub section (1) of Section 123 of the said Act. [337H; 338A] Ghasi Ram vs Dal Singh & Ors., ; at pp. 109 110; Bhanu Kumar Shastri vs Mohal Lal Sukhadia & Ors., ; at p. 543 and Harjit Singh Mann vs section Umrao Singh & Ors., ; at p. 510, referred to.

Appeals Nos. 666 and 667 of 1957. N. C. Chatterjee and G. C. Mathur, for the appellant. A. V. Viswanatha Sastri, K. N. Rajagopala Sastri and T. M. Sen, for the respondents. March 8. The judgment of the Court was delivered by HIDAYATULLAH, J. These two appeals raise a common question of law, and it is convenient to deal with them together. They have been filed (with certificate) against a judgment of the High Court of Orissa, by Jagannath Agarwala, who sought to enforce a claim he had against the former State of Mayurbhanj and the ex Ruler of Mayurbhanj. They arise out of two petitions under article 226 of the Constitution, for writs of mandamus, etc., which the High Court of Orissa dismissed by its order under appeal. It appears that in the year 1943 the Maharaja, of 207 Mayurbhanj entered into an agreement or arrangement with Jagannath Agarwala for establishing a business for the manufacture of industrial alcohol and essential oils and for purchases of wheat and barley in the Punjab. Civil Appeal No. 666 of 1957 relates to the establishment of the manufacturing business, and Civil Appeal No. 667 of 1957, to the purchases of wheat and barley. With reference to the establishment of the business, the appellant urges that it was agreed that the capital required would be contributed by the parties in equal shares, and that the profit and loss would also be shared equally. As regards the purchases, the appellant was to advance such money as might be required, and the State of Mayurbhanj was to provide necessary permits and facilities for transport. In furtherance of this agreement, the appellant urges that he established a factory and started the business, but the Maharaja, instead of contributing his share of the capital, asked the appellant to do so on his behalf, promising to pay him the amount. The factory was constructed, and, it appears, it went into production, but later closed down, suffering a total loss of Rs. 2,80,875 9 3. In the first case, therefore, the claim of the appellant against the Maharaja and the State was Rs. 1,40,400 odd. In the second case, the appellant advanced a sum of Rs. 50,000 and also incurred a further expenditure of Rs. 3,741 7 9. The State of Mayurbhanj failed in its promise of procuring the necessary permits and facilities for transport, and the appellant was, therefore, required to sell the foodgrains in the Punjab, and thus incurred a loss of Rs. 14,844 0 3. The appellant alleges that the Maharaja promised to pay the 'amount. From January 1, 1949, the Mayurbhanj State merged with the Province of Orissa, and on the same day, the Government of Orissa promulgated the Administration of Mayurbhanj State Order, 1949 under section 4 of the Extra Provincial Jurisdiction Act, 1947 (47 of 1947). That Order allowed claims against the State of Mayurbhanj to be preferred to Government for its 208 consideration. Clause 9 of the Order, in so far as it is material, is as follows: "9. Claims against Ruler of the State. (a) The Administrator shall as soon as possible publish a notification in the Gazette in English and in vernacular calling upon all persons having pecuniary claims, whether immediately enforceable or not, against the State or the Ruler of the State in his capacity as Ruler of that State, to notify the same in writing to the officer authorised, by the Administrator in this behalf (hereinafter called the said officer) within three months from the date of the notification. (b) The notice shall also be published at such places and in such other manner as the Administrator may by special or general order direct. (c) Every such claimant shall, within the period specified in sub paragraph (a) notify to the said officer in writing his claim. with full particulars thereof and any claim presented after the expiration of such period shall be summarily rejected. (d) Every document including entries. in book.% of account in the possession of or under the control of the claimant on which he bases his claim shall be produced before the said officer along with the statement of the claim: (f) Nothing in the preceding sub paragraphs shall apply to any pecuniary claim of Government or any local authority. (g) The said officer shall after making such enquiry as he may deem fit, decide which claims notified under sub paragraph (c) are to be allowed in whole or in part and which are to be disallowed, and on his decision being confirmed by the Administrator, the said officer shall give written notice of the same to the claimants. The decision of the Administrator shall be final and shall not be liable. to be called into question in any Court whatsoever. ' (h) No court shall have jurisdiction to investigate 209 any pecuniary claim against the State or against the Ruler of the State in his capacity as Ruler of that State and such claim shall be determined only in accordance with the provisions of this paragraph. (i) The Administrator may delegate his powers under this paragraph to any officer subordinate to him not below the rank of an Additional District Magistrate. (j) The provisions of this paragraph shall not apply to any claim against the State based on a cause of action which arose on or after the 1st January 1949 and such claim shall be disposed of in accordance with the laws applied or continued in force under paragraph 5. " The appellant preferred his two claims for the consideration of the Claims Officer, who was dealing with such claims on behalf of the Administrator. The Claims Officer made a report to the Administrator on June 20, 1951 in respect of the first claim, and after examining the merits, gave his conclusions as follows: "Considering the evidence laid by the Claimant before me in support of his claim, I find that he is entitled to a sum of Rs. 1,37,785 13 7 1/2. It has been urged by the Claimant that interest @ Rs. 4 per cent. per annum should be allowed to him till the date of repayment of his dues. He has been allowed interest from 1 4 43 to 28 2 49 and,, I think, he should get interest thereafter @ Rs. 4 per cent. per annum till the date of repayment of his dues. As regards the Claimant 's demand for half share of further advances made by the Claimant after filing of this claim case, it cannot be entertained in this case. Submitted to the Revenue Commissioner, Orissa, Cuttack through the District Magistrate, Mayurbhanj as required under Clause 9(g) of the Administration of Mayurbhanj State Order, 1949. " In the other case, he made a report on November 5, 1951 that the appellant had substantiated his claim for Rs. 14,844 0 3, and was also liable to be paid interest amounting to Rs. 5,303 14 0. This report was 27 210 submitted to the Member (Third), Board of Revenue, Orissa, Cuttack, through the District Magistrate, Mayurbhanj. On June 28, 1952, the appellant received a Memo randum from the Deputy Secretary, Board of Revenue, Orissa, Cuttack, which read as ' follows: "Dear Sri Agarwalla, With reference to your petitions dated 1 10 51 and 7 9 50. I am directed to say that the claims have been rejected as Government have been advised that they are barred by limitation. Yours sincerely, Sd. Govind Tripathy". It appears that the appellant applied for review, and he was asked on November 8, 1952 to produce before the Board any document or documents in his possession to show that these were continuing businesses and also to point out the law that no claim of a continuing business could be barred by limitation. The documents on which the appellant presumably relied before the Board of Revenue have not been printed in the record of this Court, but on April 2, 1953, the solicitors of the appellant were informed that the Board of Revenue had declined to review the matter. It appears also that, in the first case, even before the merger the Revenue Minister, Mayurbhanj State, had rejected the claim put forward by the appellant by his order dated October 26, 1948, to the following effect: "The State need not recognise the claims put forward by Mr. J. Agarwalla, as there was really no formation of any Joint Stock Company nor any written agreement entered into and finally settled. B. Mohapatra (Revenue Minister, Mayurbhanj)". It was in these circumstances, that the two petitions under article 226 of the Constitution were filed. The High Court dismissed them. From the order of the High Court, it appears that two points alone were urged before it. The first was that the decision of the 211 Claims Officer should have gone to the Board of Revenue as a whole and not to a single Member and the second was that the appellant should have been served with a notice by the Board before the recommendations of the Claims Officer were rejected, and, as has now been argued before this Court, allowed a hearing. The first point was not argued before us, and it seems that the appellant has accepted the decision of the High Court that the Third Member was competent to hear and dispose of these cases. The second point alone has been argued, and. needs to be considered. The case was argued by Mr. N. C. Chatterjee on behalf of the appellant as illustrating a patent breach of the principles of natural justice. He contended that his client was entitled to a proper hearing before the report in his favour was rejected, and relied upon the following cases: Shivji Nathubai vs The Union of India (1), New Prakash Transport Co. Ltd. vs New Suwarna Transport Co. Ltd. (2), Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam (3) and Gullapalli Nageswara Rao vs Andhra Pradesh State, Road Transport Corporation (4). In reply, Mr. A. V. Viswanatha Sastri contended that the rejection of the claim was an act of State, and that the new Sovereign State could not be compelled by a process of the municipal courts to accept a liability of the old Ruler, and though the new Sovereign State might make such enquiry as it chose, it was not compelled to give a hearing to the claimant. In his rejoinder, Mr.Chatterjee contended that the act of State was over, when the new Sovereign State invited claims under a law passed for the purpose, and proceeded to consider the evidence tendered in support of the claim He also contended that by the admission of the claim by the Claims Officer the act of State was over, and that any further consideration of the report had to comply with the rules of natural justice, laid down by this Court in the cases cited by him. What is an act of State and when it ceases to apply between a new Sovereign and the subjects of a State (1) ; (3) ; (2) (4) [1959] SUPP. 1 S.C.R. 319. 212 conquered, acquired or ceded to the new Sovereign, has been the subject of several decisions of this Court. In M/s. Dalmia Dadri Cement Co. Ltd. vs The Commissioner of Income tax (1) and The State of Saurashtra vs Memon Haji Ismail Haji (2), it has been held that unless the new Sovereign, either expressly or impliedly admits the claim. , the municipal courts have no jurisdiction in the matter. The question to consider is whether such a stage had been reached in the enquiry which had been commenced. No doubt, the plea that this was a part of an act of State was not specifically raised before the High Court; but, as pointed out by the Judicial Committee ' in Vale Singh Ji Joravar Singh vs Secretary of State for India (3), no plea is really needed. It is clear from the Order, which was made under the Extra Provincial Jurisdiction Act, that claims were being asked to be entertained only for investigation and not for acceptance. It is the acceptance of the claim which would have bound the new Sovereign State and the act of State would then have come to an end. But short of an acceptance, either express or implied, the time for the exercise of the sovereign right to reject a claim was still open. In Vaje Singh Ji 's case (3), enquiries were made by Captain Buckle and again in 1868, and the two enquiries lasted 16 years before the rejection of the claims, and the rejection was still upheld as an act of State. Vaje Singh Ji 's case (3) has been relied upon by this Court in the two cases referred to, in the argument of Mr. A. V. Viswanatha Sastri. It would, therefore, appear that the act of State could not be said to have come to an end, when the Government allowed claims to be preferred, or when their own Officer made his report. The Claims Officer was not a part of the municipal courts, and Government cannot be said to have submitted itself to the jurisdiction of the municipal courts, when it entrusted the enquiry to him. Nor can the investigation of claims be said to have conferred a civil right upon the claimants to enforce their claims against the State. In our opinion, enquiry was for the benefit of the State and not (1) [1959] S.C.R. 729. (2) ; (3) (1924) L.R. 51 I.A. 357. 213 for conferring rights upon likely claimants. It was always open to the Government to admit any claim, even though reported adversely by the Claims Officer, though such a contingency might have been very remote. Equally, therefore, the Government had the paramount right to reject a claim, which its Claims Officer considered good but on which the Government held a different opinion. In short, till there was an acceptance by the Government or some officer of the Government, who could be said to bind the Government, the act of State was still open, and, in our opinion, it was so exercised in this case. Mr. Chatterjee contended that at least within the four corners of the Order, the appellant had a right to be heard, and that he did not have a proper bearing. If the Member, Board of Revenue, entertained some doubt about the claim being within time, he might have heard the party. That this was an enquiry mainly to ascertain whether a claim should or should not be recognised is obvious enough. It was in no sense a trial of any issue between the appellant and the Government. To judge such an action with the same rigour with which a judicial enquiry or trial is judged is to convert the enquiry into a civil suit. The appellant was fully heard by the Claims Officer, and the only question was whether the claim was within time. Even there, the Member, Board of Revenue, asked the appellant to submit all documents and arguments in support of his contention that the claim was within limitation, and to that extent, the appellant had his say. Whether the Member, Board of Revenue should have gone further and given a viva voce hearing was a matter entirely for that Officer to choose, and there was nothing under the law to compel him. Though we think that such an opportunity might have been afforded to the appellant, we cannot say that this was a matter which entitled him to a writ. In this view of the matter, the appeals fail, and are dismissed. But, in the circumstances of the case, there shall be no order as to costs. Appeals dismissed.

The appellant had two money claims against the Maharaja of Mayurbhanj State. From January 1, 1949, the State merged with the Province of Orissa. Clause 9 of the Administration of Mayurbhanj State Order, 1949, promulgated by the Government of Orissa, provided for the issuing of a notification for calling upon all persons having pecuniary claims against the Maharaja to notify the same to an officer authorised in that behalf. After issue of the notification the appellant preferred his two claims before the Claims Officer. The Claims Officer made a report substantially accepting the claims. This report was submitted to the Member (third), Board of Revenue. Without giving the appel lant any hearing the claims were rejected on the ground that they were barred by limitation. The appellant applied for a review and submitted the documents on which he relied but again without giving the appellant a hearing the Board of Revenue declined to review the matter. The appellant contended 206 that there was a breach of the principles of natural justice in the Board of Revenue deciding the matter without giving the appellant a proper hearing. The respondent contended that the rejection of the claims was an act of State, that the new Sovereign State could not be compelled by the courts to accept the liability of the old Ruler, that though the new Sovereign State might make such enquiry as it chose it was not compelled to give a hearing to the appellant. The appellant replied that the act of State was over when the claims were invited and accepted by the Claims Officer. Held, that the rejection of the claims was an act of State and could not be challenged. Unless the new Sovereign, either expressly or impliedly, admitted the claims, the municipal courts had no jurisdiction in the matter. The act of State did not come to an end when Government allowed the claims to be preferred or the Claims Officer made his report. The enquiry was for the benefit of the State and not for conferring rights on the claimants. Till there was an acceptance of the claims by the Government or some officer who could be said to bind the Government, the act of State was still open. Dalmia,Dadri Cement Co. Ltd. vs Commissioner of Income tax, [1959] S.C.R 729 State of Saurashtra vs Mmemon Haji Ismail Haji, ; and Vaje Singh ji joravar Singh vs Secretary of State for India, (1924) L.R. 51 I.A. 357, relied on.

% Under an agreement with the respondent landlord, the appellant had been appointed to do worshipping in a temple as pujari to look after the management of two dharamshalas and to cultivate three agricultural, lands, and for all these services, he had been allowed to take crop share the whole crop from the lands cultivated by him, instead of his being paid any wages in cash. The respondent filed a suit for possession of the agricultural lands. The appellant 's defence was that he was a deemed tenant as understood under section 6 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958, and was in lawful cultivation of the lands. The Naib Tahsildar, who decided the suit, passed an order, holding the appellant to be a tenant. The Sub Divisional officer, in appeal by the respondent, set aside the order of the Naib Tahsildar and remanded the matter. Against the order of the Sub Divisional officer, the appellant appealed in revision to the Maharashtra Revenue Tribunal. The Revenue Tribunal set aside the order of the Sub Divisional officer and restored that of the Naib Tahsildar. The respondent moved the High Court. The High Court decided that the appellant was not entitled to claim the rights of a deemed tenant, and quashed the orders of the authorities below holding the contrary view. The appellant appealed to this Court by Special Leave against the order of the High Court. Allowing the appeal, the Court, ^ HELD: The appellant was lawfully cultivating the lands, having been permitted to do so by the landlord. He was not a member of the landlord 's family, nor was he his hired labourer. The landlord did not belong to any of the classes specified in Sub Section (2) of section 41. The appellant was rendering service as pujari and the service of looking after the dharamshalas, and for these services, he had been given the right to cultivate the lands and appropriate the crop share the entire 673 crop instead of being paid any wages in cash. The appellant was not hit by the provisions of clause (b) of Sub section (1) of section 6 of the Act, and he must be held to be a deemed tenant under the provisions of section 6. [676G H;677B C] Dahya Lal and others vs Rasul Mohammad Abdul Rahim, ; at 6, 7, referred to.

The appellant manufactures steel tubes in the outskirts of Ahmedabad city. It started its business in 1960, went into production since 1964 and waggled from infancy to adulthood with smiling profits and growling workers, punctuated by smouldering demands, strikes and settlement until there brewed a confrontation culminating in a head on collision following upon certain unhappy happenings. A total strike ensued whose chain reaction was a whole sale termination of all employees followed by fresh recruitment of workmen defacto breakdown of the strike and dispute over restoration of the removed workmen. As per the last settlement between the management and the workmen of 4th August, 1972, it was not open to the workmen to resort to a strike till the expiry of a period of five years; nor could the management declare a lock out till then. Any dispute arising between the parties, according to the terms arrived at were to be sorted out through negotiation or, failing that by recourse to arbitration. The matter was therefore, referred to an arbitrator and the arbitrator by his award held the action cf the management warranted. The respondent challenged the decision of the arbitrator under Article 226/227 of the Constitution and the High Court of Gujarat reversed the award and substantially directed reinstatement. Hence the appeals both by the Management and the workmen. Dismissing the appeals and modifying the awards substantially, the Court ^ HELD: (By Majority) Per Iyer J. On behalf of D. A. Desai J. and himself. (i) The basic assumption is that the strike was not only illegal but also unjustified. [210 H] 147 (ii) The management did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings; even though with legal finesse, the formal order was phrased in harmless verbalism. [211 A] (iii) The action taken under the general law or the standing orders, was illegal in the absence of individualised charge sheets, proper hearing and personalise punishment if found guilty. None of these steps having been taken, the discharge orders were still born. But, the management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment. [211 B C] (iv) Section 11A of the does take in an arbitrator too, and in this case, the arbitral reference, apart from section 11A is plenary in scope. [211 C D] (v) Article 226 of the Constitution, however restrictive in practice Is a power wide enough in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and more importantly this extra ordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand. What the Tribunal may in its discretion do the High Court too under Article 226, can, if facts compel so. [211 D E] (vi) The Award, in the instant case, suffers from a fundamental flaw that it equates an illegal and unjustified strike with brozen misconduct by every workman without so much as identification of the charge against each, after adverting to the gravamen of his misconduct meriting dismissal. Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge. There must be active individual excess such as master minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role. Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong. An indicator of the absence of such grievous guilt is that the management, after stating in strong terms all the sins of workmen, took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service, suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen in the lingering strike. Furthermore, even though all sanctions short of punitive discharge may be employed by a Management, low wages and high cost of living, dismissal of several hundreds with disastrous impact on numerous families is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the industry, the welfare of the workmen and the broader justice that transcends transcient disputes. The human dimensions have decisional relevance. The discharge orders though approved by the Arbitrator are invalid. [211 E H, 212 A B] HELD FURTHER: 1. In a society, capital shall be the brother and keeper of labour and cannot disown this obligation of a partner in management, especially because social justice and Articles 43 and 43A are constitutional mandates. The policy directions in Articles 39, 41, 42, 43 and 43A speak af the right to an adequate means of livelihood, the right to work, humane conditions of work, living wages ensuring a decent standard of life and enjoyment of leisure and participation of workers in management of industries. De hors these 148 mandates, law will fail functionally. Suck is the value vision of Indian Industrial Jurisprudence. [155 B, G H, 156 A] 2. Jural resolution of labour disputes must be sought in the law life complex beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory tests, in the economic basics of industrial justice which must enliven the consciousness of the Court and the corpus juris. [154 F G] The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace making zone, disentangle the differences, narrow the mistrust gap and convert them through consensual steps, into negotiated justice. Law is not the last word in justice, especially social justice. Moreover in an hierarchical system, the little man lives in the short run but most litigation lives in the long run. So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, the Management and Union. [157 C E] The anatomy of a dismissal order is not a mystery, once it is agreed that substance, not semblance, governs the decision. Legal criteria are not so slippery that verbal manipulations may outwit the Court. The fact is the index of the mind and an order fair on its face may be taken at its face value. But there is more to it than that, because sometimes words are designed to conceal deeds by linguistic engineering. The form of the order of the language in which it is couched is not conclusive. The Court will lift the veil to see the the nature of the order. [171 G H. 172 A] If two factors motive and foundation of the order co exist, an interference of punishment is reasonable though not inevitable. If the severance of service is effected the first condition is fulfilled and if the foundation or causa causans of such severance is the servant 's misconduct, the second is fulfilled. If the basis or foundation for the order of termination is clearly not turpitudes or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa. These canons run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements. The law cannot be stultified by verbal haberdashery because the Court will lift the mask and discover the true face. [172 C E] Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed. The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is. If thus scrutinised the; order has a punitive flavour in cause or consequence, it is dismissal. If it falls short of this test, it cannot be called a punishment. A termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal even if he had the right in law to terminate with an innocent order under the standing order or otherwise. Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature. Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to terminate. Given 149 an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination are given and non injurious terminology is used. [173 E H, 174 A] On the contrary, even if there is suspicion of misconduct, the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with. He may not like to investigate nor take the risk of continuing a dubious servant. There it is not n dismissal, but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found. For, in fact, misconduct is not then the moving factor in the discharge, What is decisive is the plain reason for the discharge, not the strategy of a non enquiry or clever avoidance of stigmatising epithets. If the basis is not misconduct, the order is saved. [174 B D] Management of Murugan Mills vs Industrial Tribunal ; ; Chartered Bank vs Employees ' Union ; ; Western India Automobile Association vs Industrial Tribunal, Bombay ; Assam Oil Co. vs Workmen; , ; Tata Oil Mills Co. vs Workmen, ; @ 130; Tata Engineering & Locomotive Co. Ltd. vs S.C. Prasad & Anr. ; L. Michael and Anr. vs M/s. Johnson Pumps India Ltd., ; Workmen of Sudder Office, Cinnamore vs Management, , Municipal Corporation of Greater Bombay vs P.S. Malvankar; , ; referred to. Every wrong order cannot be righted merely because it was wrong. It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like. [182 P G] While the remedy under article 226 is extraordinary and is of Anglosaxon vintage, it is not a carbon copy of English processes. Article 226 is a sparing surgery but the lancet operates where injustice suppurates. While traditional restraints like availability of alternative remedy hold back the Court, and judicial power should not ordinarily rush in where the other two branches fear to tread. judicial daring is not daunted where glaring injustice demands even affirmative action. The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the subject belongs to the Court 's province and the remedy is appropriate to the judicial process. There is a native hue about article 226, without being anglophilic or anglophobic in attitude. Viewed from this jurisprudential perspective the Court should be cautious both in not over stepping as if Article 226 were as large as an appeal and not failing to intervene where a grave error has crept in. And an appellate power interferes not when the order appealed is not right but only when it is dearly wrong. The difference is real, though fine. [182 G H, 183 A B] The principle of law is that the jurisdiction of the High Court under Article 226 of the Constitution is limited to holding the judicial or quasi judicial powers within the leading sings of legality and to see that they do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under the Act. So long as the hierarchy of officers and appellate authorities created by the statute function within their ambit the manner in which they do so can be no ground for interference. The power of judicial supervision of the High Court under Article 227 of tho Constitution (as it then stood) is not 150 greater than those under Article 226 and it must be limited to seeing that a tribunal functions within the limits of its authority. The writ power is large, given illegality and injustice even if its use is severely disciplinary. The amended Article 226 would enable the High Court to interfere with an Award of the industrial adjudicator if that is based on a complete misconception of law or it is based on no evidence, or that no reasonable man would come to the conclusion to which the Arbitrator has arrived. [15 E G 1 86 D E] Navinchandra Shanker Chand Shah vs Manager, Ahmedabad Cooperative Department Stores Ltd., @ 140; approved. Rohtas Industries & Anr. vs Rohtas Industries Staff Union and Ors. ; followed. Nagendranath Bata and Anr. vs The Commissioner of Hills Divisions and Appeals, Assam & Ors. , ; ; Engineering Mazdoor Sabha vs Hind Cycle Lrd. [1963] Suppl. 1 SCR 625; State of A.P. vs Sreeeama Rao, ; @ 33; P. H. Kalyani vs M/s Air France, Calcutta, ; ; referred to. "Tribunal" simpliciter has a sweeping signification and does not exclude Arbitrator. A tribunal literally means a seat of justice, may be, a commission, a Court or other adjudicatory organ created by the State. All these are tribunal and naturally the import of the word, in Section 2(r) of the , embraces an arbitration tribunal. [188 E F H 189 A] Dawking vs Rokely, L.R. 8 Q.B. 255; quoted with approval. An Arbitrator has all the powers under the terms of reference, to which both sides are party, confer. In the instant case, the Arbitrator had the authority to investigate into the propriety of the discharge and the veracity of the mis conduct. Even if section 11A of the is not applicable, an Arbitrator under Section 10A is bound to act in the spirit of the legislation under which he is to function. A commercial Arbitrator who derives his jurisdiction from the terms of reference will by necessary implication be bound to decide according to law and when one says "according to law", it only means existing law and the law laid down by the Supreme Court being the law of land, an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A. [196 B D] Union of India vs Bungo Steel Furniture (P) Ltd. ; ; referred to. Per Koshal J. (Contra) 1. The orders of discharge could not be regarded as orders of their dismissal and were on the other hand, orders of discharge simpliciter properly passed under Model Standing order 23. [235 C D] (a) Clauses (3) and (4) of M.S.O. 25 speak of an inquiry only in the case of an order falling under sub clause (g) of clause (1) of that M.S.O. The only sub clause of clause (1) of M.S.O. 25 to which the provisions of clauses (3) and (4) of that M.S.O. would be attracted is sub clause (g) and if an order of discharge falls under M.S.O. 23, an inquiry under clauses (3) and 151 (4) of M.S.O. 25 would not be a pre requisite thereto even though such an a older is mentioned in sub clause (f) clause (1) of that M.S.O. [222 H, 223 A] (b) Under M.S.O.s. 23 and 25, the Management has the powers to effect termination of the services of an employee by having recourse to either or them. In action taken under M.S.O. 23, no element of punishment is involved and the discharge is a discharge simpliciter; and that is why no opportunity to the concerned employee to show cause against the termination is provided for. Dismissal, however, which an employer may order is in its very nature, a punishment, the infliction of which therefore has been made subject to the result of an inquiry (having the semblance of a trial in a criminal proceeding). Exercise of each of the two powers has the effect of the termination of the services of the concerned employee but must be regarded, because of the manner in which each has been dealt with by the M.S.O. as separate and distinct from the other. [223 C E] (c) To contend that once it was proved that the order of discharge of a workman was passed by reason of a misconduct attributed to him by the management, the order cannot but amount to an order of dismissal is wrong for two reasons. For one thing, clause (1) of M.S.O. 25 specifically states in sub clauses (f) that a workman guilty of misconduct may be discharged under M.S.O. 23. This clearly means that when the employer is satisfied that a workman has been guilty of misconduct he may [apart from visiting the workman with any of the punishments specified in sub clauses (a), (b), (c), (d) and (e) of clause (1) of M.S.O. 25] either pass against him an order of discharge for which no inquiry precedent as, provided for in clauses (3) and (4) of M.S.O. 25 would be necessary, or may dismiss him after holding such an inquiry which of the two kinds of order, the employer shall pass is left entirely to his discretion. [223 E H] It is true that the employer cannot pass a real order of dismissal in the garb of one of discharge. But that only means that if the order of termination of services of an employee is in reality intended to push an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome, the order even though specified to be an order of dismissal covered by sub clause (g) of clause (1) of M.S.O. 25. On the other hand if no such intention is made out the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee. That is how M.S.Os. 23 and 25 have to be interpreted. M.S.O. 25 specifically gives to the employer the power to get rid of "a workman guilty of misconduct ' by passing an order of his discharge under M.S.O. 23. [224 A D] Secondly, the reasons for the termination of service of a permanent workman under M.S.O. 23 have to be recorded in writing and communicated to him if he so desires, under clause (4 A) thereof. Such reasons must obviously consist of an opinion derogatory to the workman in relation to the performance of his duties, and whether such reasons consist of negligence, work shirking or of serious overt acts like theft or embezzlement, they would in and case amount to misconduct for which he may be punished under M.S.O. 25. There being no case in which such reasons would not amount to misconduct, the result is that M.S.O. 23 would be render otiose if termination of service thereunder for misconduct could be regarded as a dismissal and such a result strikes at the very root of accepted canons of interpretation. If it was open to the Court to. "lift 152 the veil" and to hold an order of discharge to amount to dismissal merely because the motive behind it was a misconduct attributed to the employee, the services of an employee could be terminated without holding against him an inquiry such as is contemplated by clauses (3) and (4) of M.S.O. 25. [224 D G] Bombay Corporation vs Malvankar ; ; applied. Merely because it is the reason which weighed with the employer in effective the termination of services would not male the order of such termination as one founded on misconduct, for such a proposition would run counter to the plain meaning of clause (1) of M.S.O. 25. For an order to be "founded" an misconduct, it must be intended to have been passed by way of punishment, that is, it must be intended to chastise, or cause pain in body or mind or harm or loss in reputation or money to the concerned worker. If such an intention cannot be spelled out of the prevailing circumstances, the order of discharge or the reasons for which it was ostensibly passed, it cannot be regarded as an order of dismissal. Such would be the case when the employer orders discharge or the interests of the factory or of the general body of workers. [226 A C] Chartered Bank, Bombay vs The Chartered Bank Employees Union, ; ; The Tata Oil Mills Co. Ltd. [1964] 2 SCR p. 123; The Tara Engineering and Locomotives Co. Ltd. vs S.C. Prasad, ; Workmen of Sudder Office, Cinnamore vs Management, followed. The real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention with which it was passed. If the intention was to punish, that is to chastise, the order may be regarded as an order of dismissal; and for judging the intention, the question of mala fides (which is the same thing as colourable exercise of power) becomes all important. If no mala fides can be attributed to the management, the order of discharge must be regarded as one having been passed under M.S.O. 23 even though the reason for its passage is serious misconduct. (2) The arbitrator could not exercise tho power conferred on a Tribunal under section 11A of the 1947 Act and could not therefore interfere with the punishment awarded by the Management to the workmen (even if the discharge could be regarded a punishment). [235 D E] Throughout the I.D. Act, while 'arbitrator ' would include an umpire, a Tribunal would not include an arbitrator but would mean only an Industrial Tribunal constituted under the Act unless the context makes it necessary to give the word a different connotation. In sub section (1) of section 11, the word 'Tribunal ' has been used in accordance with the definition appearing in clause (r) section 2 because an arbitrator is separately mentioned in that sub section. In sub sections (2) and (3) of that section a Board, a Labour Court, a Tribunal and a National Tribunal have been invested with certain powers. A Tribunal as contemplated by sub sections (2) and (3) then, would not include an arbitrator. [233 A B] It is a well settled canon of interpretation of statutes that the language used by the Legislature must be regarded as the only source of its intention unless such language is ambiguous, in which situation the Preamble to the Act, the statement of objects of and Reasons for bringing it on the statute book and 153 the purpose underlying the legislation may be taken into consideration for ascertaining such intention. That the purpose of the legislation is to fulfil a socio economic need, or the express object underlying it does not come into the picture till an ambiguity is detected in the language and the Court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted. It is thus not permissible for the Supreme Court to take the statements of objects and Reasons or the purpose underlying the enactment into consideration, while interpreting section 11A of the I.D. Act. [231 F G, 234 Cl 3. The High Court exceeded the limits of its jurisdiction in interfering with the said punishment, in the instant case, purporting to act in the exercise of its powers under Article 227 of the Constitution of India. [235 E F] The High Court, while discharging its functions as envisaged by that Article, does not sit as a Court of Appeal over the Award of the Arbitrator but exercises limited jurisdiction which extends only to seeing that the arbitrator has functioned within the scope of his legal authority. In this view of the matter it was not open to the High Court to revise the punishment (if the discharge is regarded as such) meted out by the Management to the delinquent workmen and left intact by the arbitrator whose authority in doing so has not been shown to have been exercised beyond the limits of his jurisdiction. [234 G E, 235 A C] Nagendra Nath Bora and Anr. vs The Commissioner of Hills Division and Appeals, Assam and Ors. , ; ; P. H. Kalyani vs M/s Air France, Calcutta, ; , of A.P. vs Sree Rama Rao, ; ; Navinchandra Shakerchand Shakerchand Shah vs Manager Ahmedabad Cooperative Stores Ltd, ; referred to.

A dispute regarding amendment of rules relating to privilege leave etc. arose between the Ahmedabad Millowners ' Association and the union of workmen employed in the textile industry. After conceliation proceedings were declared by the Conciliator to have failed, the union referred the dispute to the Industrial Court under section 73A of the Bombay Industrial Relations Act, 1946. The Industrial Court decided against the Millowners who filed a writ petition in the ' High Court and thereafter appealed to this Court. It was urged on behalf of the appellants that (i) section 73A was violative of article 14 of the Constitution since it gave a right to the workers union to make a reference but not to the employer (ii) the Act had not been made applicable to the cotton industry at Ahmedabad under section 2(4) and it was not applicable under section 2(3) because the Bombay Industrial Disputes Act, 1938 was repugnant to Central) and must be deemed to have been repealed. HELD:(i) Section 73A was not violative of article 14. Whenever any industrial dispute arises the employer can always ensure arbitration of that dispute by making an offer to the union under section 66 of the Act whereupon a registered and approved union is compelled to agree to submission of the dispute to arbitration. Clearly therefore there was no need to make any Provision empowering the employer to make a reference of the dispute for arbitration to the Industrial Court. On the other hand if a Union wants a dispute to be settled and even offers that the dispute be submitted to arbitration under section 66 of the Act, the employer can refuse, whereupon the union would be left without any remedy. It is obvious that section 73A was enacted to fill this gap and place the union on with the employer so as to enable the union to have any dispute = by arbitration even when the employer does not agree to arbitration. This section, in these circumstances did not at all require that the right granted to the union should also be granted to the employer. [441 G H] There was no difference in the procedure to be followed by the Industrial Court in a reference under section 73A and that to be followed when the reference is under section 66. In both the procedure under section 92 had to be followed. [443 E F] (ii)Chapter V of the Bombay Industrial Disputes Act 1938 was not repugnant to the Central Act of 1947 and therefore continued to be in force, and consequently under section 2(3) of the Bombay Industrial Relations Act 1947 the latter Act became applicable to the industry of the appellants and did not require a notification under section 2(4) to make it applicable [446 G H; 447 A B] 438 Ex Parte McLean, ; Victoria and Others vs The Commonwealth of Australia and Others, ; , Zaverbhai Amaidas vs The State of Bombay, [1955] 1 S.C.R. 799, Ch. Tika Ramji & Ors. vs The State of Uttar Pradesh & Ors., and Deep Chand vs The State of Uttar Pradesh and Others, [1959] Supp. 2 S.C.R. 8.

The disputes regarding bonus to be paid to the ' workmen of the appellant mill and other cotton textile mills in Greater Bombay for the year 1952 and 1953 were referred to the Industrial Court under the provisions of the Bombay Industrial Relations Act, 1946, and while the references were pending, an agreement was arrived at between the Mill owners ' Association, Bombay, and the Rashtriya Mills Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry with respect, to payment of bonus for the years 1952 to 1957, providing inter alia for payment of bonus even where a mill made actual loss, the minimum bonus being 4.8 per cent. , of the basic wages earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years. This agreement was registered and was made enforceable as an award (1) L.L.R. (2) A.I.R. 1937 Mad. 763. 106 against those mills which were parties thereto. The appellant; however, did not sign, the agreement, and its case before the Industrial Court was that it had been continuously making losses from 1950 to 1955. On July 31, 1956, the Government of Bombay issued a notification under section 114(2) Of the Act directing that the award made by the Industrial Court aforesaid, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant. The appellant challenged the validity of section 114 on the grounds (1) that it offended article 14 Of the Constitution inasmuch as it gave an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others, (2) that it offended article 19(i)(g) in that it put an unrea sonable restriction on a person 's right to carry on business, and (3) that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act. In any event, the appellant contended that the notification was bad, because (a) it was made while a reference was pending in an Industrial Court and, therefore, took away the jurisdiction of, that Court to decide the pending references and (b) the notification went beyond the powers conferred on the State Government by section 114 since under that section the Government was bound by the decisions of the Full Bench in view of section 95A, but in the present case it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where it had made no profits. Held (Sarkar, j., dissenting), that the notification dated July 31, 1956, was beyond the powers conferred on the State Government under section 114(2) Of the Bombay Industrial Relations Act, 1946, and must, therefore, be struck down, There are three limitations on. the power of the State Government when acting under section 114(2): (1) that it is limited by the subject matter of the agreements, or settlement, submission or award sought to be extended, (2) that it has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of the Supreme Court, and (3) that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator and the State cannot do 'what an 'adjudicator cannot do under the Act. Action taken by the State Government under section 114(2) is a proceeding under the Act within the meaning Of section 95A of the Act. The New Maneckchowk Spining Co. Ltd. and others vs The Textile Labouy Association, [1961] 3 S.C.R. I, relied on. Per Sarkar, J. (1) Section 114 of the Bombay Industrial Relations Act, 1946, does not offend article 14 Of the Constitution. The object of the Act is the settlement of industrial disputes and 107 attainment of industrial peace and the section does not confer absolute and arbitrary power. (2) The restrictions imposed by section 114(2) are reasonable and have been put in the interest of the general public. Consequently, the section does not contravene article 19(i)(g). Bijay Cotton Mills Ltd. vs The State of Ajmer, ; , referred to. (3) The provisions of the Act must be read together and in cases in which power under section 114(2): has been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing. (4) The issue of a notification under section 114(2) is not a proceeding as contemplated by section 95A and, therefore, any question of complying with any Full Bench decision does not arise. (5) Section 114 directly permits and contemplates a notification which would produce a result in variance with a decision of the Supreme Court and, therefore, a notification duly issued under that section cannot be said to have been issued, mala fide. Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , referred to. (6) The Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside.

The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short). On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act. The Assistant Collector dismissed the application. The respondents appealed to the Additional Commissioner. The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal. The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries. The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal. Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land. The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits. On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession. This application and the subsequent appeals were rejected by the authorities. Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities. Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act. The Assistant Collector decreed the suit. The Additional Commissioner allowed the appeal filed by the respondents. The Board of Revenue dismissed the appellants ' second appeal. The appellants filed a writ petition in the High Court. A single Judge of the High Court dismissed the writ petition. A Division Bench of the High Court dismissed the special appeal filed by the appellants. Hence this appeal. The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act. Dismissing the appeal, ^ HELD. 1. The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2. The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '. So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '. The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding. The proceeding may as well fail for some other defect. Not all such defects can be said to be analogous to defect of jurisdiction. Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '. Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits. Such defect could be said to be of the like nature ' as defect of jurisdiction. Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14. [300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to. In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered. In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree. [298C D; E] 4. In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied. It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence. But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding. The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue. The cause of action was the reversal of the order of the Additional Commissioner. When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act. It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession. It had nothing to do with the order of the Additional Commissioner. Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution. [301B; 299A; 298G H; 299A] 5. Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act. [301G] 6. In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49. [302A B] 7. The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force. Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land. Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act. The respondents did move such an application which ultimately was accepted by the Additional Commissioner. Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants. [294H; 296D G] 290

The appellant firm held mining lease of a colliery on the condition to continue the work, without voluntary intermission, in a skillful and workman like manner. The partners fell out amongst, themselves, the work of the colliery stopped, wages of the labourers were not paid, the essential services stopped working, and the colliery began to get flooded. The State Government stepped in and made a promise to the essential workmen that their wages would be paid and this saved the colliery. The State Government gave a notice asking the firm to remedy the defect within sixty days failing which it would take over the colliery. As the firm did nothing to remove the defects and did not request for extension of time, the State Government took over the colliery and terminated the lease. The firm filed a revision before the Central Government. The Central Govern ment asked for the comments of the State Government and invited the firm to make its own comment upon the reply of the State Government. Taking the entire matter into consideration, the Central Government rejected the revision. In appeal to this Court, the firm contended that the action by the State Government was arbitrary and highhanded and that the Central Government did not give a hearing to the firm and also did not give any reasons in its order dismissing the revision. HELD:The action of the State Government far from being arbi trary or capricious was not only right but proper. This$ was hardly a case in which any act ion other than rejecting the application for revision was called for and a detailed order was really not required because after all the Central Government was merely approving the action taken in the case by the State Government, which stood completely vindicated. [108 B C] The Mineral Concession Rules make it incumbent on the Central Government to obtain the comments of the State Government upon the application for revision and cast a duty on the Central Government to afford an opportunity to the applicant to make representations in respect of the comments of the State Government. This procedure was correctly followed and the Central Government thus had a detailed discussion of the pros and cons of the case before it. [107 G]. Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala, [ ; , Madhya Pradesh Industries Ltd. vs Union of India. [1966] J.S.C.R. 466 and Aluminium Corporation of India Ltd. vs Union of India and Ors., C.A. No. 635/64, dated 22 1965] referred to. 105 The firm did not fulfil its obligations under the lease and, whatever the reason, it was guilty of voluntary intermission in the working of the colliery and of endangering it by neglect. This entitled the State Government to step in and determine the lease under the terms of the lease and the provisions of the Mineral Concession Rules. [107 C D].

In the execution proceedings to satisfy a decree dated 14 10 1958 for title and recovery of possession of certain "ganju Bhogra lands" obtained by the appellant against the State, the Notified Area Council. Rourkela claimed the suit lands by an application u/o XXI Rule 58 r/w sections 37 and 38 Code of Civil Procedure. The said application was rejected. A revision against it was also dismissed with the observation that the council was free to file a regular suit for adjudication of its rights. When the appellant took out a fresh application for execution u/s 47 of the Code` of Civil Procedure, the Council which never filed any suit, and the respondent State which never appealed against the original decree, opposed the execution application on the ground that the decree became infructuous by virtue of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The Executing court upheld the objection and dismissed the execution petitition. On appeal the Additional District Judge, by his order dated 2 5 1970, held that the decree was executable resulting in a second appeal to the High court by the respondent State. The High Court allowed the appeal by its order dated 4 11 1974 holding that as the decree holder was not in actual physical possession of the land, the tenure has vested in the State free from all encumbrances u/s 3 of the Act and the decree was rendered "non est". Dismissing the appeal by special leave, the Court, ^ HELD: (1) As a result of the abolition of the village office under section 3 of the OMTA, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land" stood extinguished by virtue of the provision of clause (b) of section 3, and ail settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant, stood cancelled under section 3(c). The right of the appellant to receive emoluments was also deemed to have been terminated under Cl. (d) and by virtue of Cl. (f), his bhogra land stood resumed and "vested absolutely" in the State free from all encumbrances. Section 3 of the Act, in fact, expressly provided that this would be the result, notwithstanding anything in law, usage, settlement, grant, sanad, order or "in any judgment, decree or order of a court. " All these consequences ensued with effect from April 1, 1966 the date of coming into force of the orissa Merged territories (Village offices Abolition) Act, 1963. From that date, the appellant suffered from these and other disabilities enumerated in section 3 of the Act, the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession was, therefore, lost to him as it vested "absolutely" in the State Government free from all encumbrances. The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act and there is nothing wrong in holding that the decree was rendered incapable of execution by operation of law. [77 D H] (2) Under sec. 5 of orissa Merged Territoies ((Village offices Abolition) Act, 1963, once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled" with rights of occupancy thereunder. The settlement of the land contemplated by sec. S had to be with the holder of the village office and the other persons who were enjoying it (or part of it) and as his co sharers, as tenants under him or his co sharers, but that was to be so on the condition 76 that "each such person, namely, the holder of the village office and his cosharers or the tenants under the holder of the office or his co sharers was in separate and actual cultivating possession" of the land immediately before April, 1966. The words "each such person" occurring in sub section I of Sec. 5 include the holder of the village office so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and cultivating possession of the "bhogra land" immediately before April 1, 1966. There is nothing in sub section I of Sec. 5 to justify the argument that the interpretation of the words "each such person" should be such as to exclude the holder of v the village office from its purview. [78 E, F H] State of orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974) decided on 27 6 1975 (orissa High Court) over ruled; Meharabansingh and Ors. vs Nareshaingh and ors. (held not applicable). (3) The provisions of sec. 9 do not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land. stood resumed and vested absolutely in the State Government free from all encumbrances. [80 E] (4) The normal consequences arising out of the rejection of the application under o. XXI, r. 58, Civil Procedure Code and the failure to institute the suit thereafter, were rendered nugatory by the express provisions of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The question of executability of the decree did not arise. [81 A B] [The Court left open to the authorities concerned to examine the question of settlement of the land under section 5(1) of the orissa Merged Territories (Village Dr offices Abolition) Act, 1963, with liberty to the village officer to rely upon such matters as may be available according to law.]

Appeals Nos. 7 to 9 of 1959. Appeals by special leave from the judgment and order dated June 25,1955, in cases Nos. 0551 R CG/ 54, 0602 R/CG/54 and 0503 R/CG/54 of 1954. Achhru Ram and B. R. L. Ayengar, for the appellants. Gopal Singh and T. M. Sen, for the respondents. March 10. The Judgment of the Court was delivered MUDHOLKAR, J. These are appeals by special leave from three orders against an order passed on March 12, 1954 by the Custodian General, Evacuee Property, disposing of three revision petitions, two of which were preferred by one Bharoo Mal (since deceased) 247 and one by his wife, and now widow, Padma Devi. Even though a common order was passed by the Custodian General, three appeals have been preferred before this Court. The facts leading upto the appeals are briefly as follows: An agreement was entered into between Bharoomal and one Nanan Begum on April 11, 1948 for the exchange of Bharoomal 's properties,at Sukkar in Sind, Pakistan for Nanan Begum 's properties at Lucknow. Prior to that, on April 7, 1948 a similar agreement was entered into between Padma Devi and one Tahir Ali. It is common ground that in pursuance of the agreement Bharoomal and Padma Devi entered into possession of the properties obtained by them in exchange from Nanan Begum and Tahir Ali respectively and the latter entered into possession of the. properties belonging to the former situated in Sukkar. The deed of exchange was to be executed within two years of the date of agreement; but in fact it was never executed. Consequently in the year 1950 Bharoomlal and Padma Devi instituted three suits for specific performance. These suits were decreed and sale deeds conveying certain properties to Bharoomal and certain properties to Padma Devi were executed by the Court in February, 1952. In October, 1949 the U. P. Administration of Evacuee Property Ordinance, 1949 (1 of 1949) was promulgated and shortly thereafter the Administration of Evacuee Property (Chief Commissioners Provinces) Ordinance, 1949 (12 of 1949), promulgated by the Central Government, was extended to the United Provinces replacing U. P. Ordinance 1 of 1949. Nanan Begum and Tahir Ali having migrated to Pakistan, Bharoomal and Padma Devi made three applications under cl. 25(2) of the Central Ordinance for confirmation of the exchanges in their favour. These applications were granted by the Deputy Custodian of Evacuee Property in the year 1950. Sometime in the year 1951 the Custodian of Evacuee Property suo motu revised the orders of the Deputy Custodian passed in the year 1950 on the ground that the agreements on the basis 248 of which the applications for confirmation were made by Bharoomal and Padma Devi do not amount to transfers and that consequently they could not be, confirmed. He also held that the, deeds of transfer obtained by Bharoomal and Padma Devi from the court were not confirmed by the Custodian and that, therefore, the possession of Bharoonal and Padma Devi over the properties in question which wore admittedly evacuee properties was unauthorised. He, therefore, ordered that possession of the properties be taken back from Bharoomal and Padma Devi and that they should be required to account for the rent& and profits realised by them from these properties. These persons preferred applications for revision before the Custodian General of Evacuee Property. Their applications were, as already stated, rejected by him. In the appeal to this Court the only ground pressed is that the Custodian had no jurisdiction to pass an order requiring the appellants to render accounts of the rents and profits from the properties in their possession. Mr. Achhruram, who appears for them, accepts the position that the orders of the Deputy Custodian of Evacuee Property passed in the year 1950 confirming the transfers were rightly set aside by the Custodian in revision. Therefore, only a short question falls to be determined by us and that is whether the Custodian was right in further ordering the appellants to render accounts of rents and profits from the properties in their possession. We asked Mr. Gopal Singh, who appears for the Custodian General, to show us any provision in the Act or in the rules which authorises the Custodian of Evacuee Property to direct a person who is alleged to be in unauthorised possession of evacuee property to render accounts for rents and profits of those properties without resorting to the ordinary remedy provided by law, that is by way of suit. Mr. Gopal Singh contends that as soon as Nanan Begum and Tahir Ali migrated to Pakistan their property in India automatically vested in the Custodian of Evacuee Property under cl. 5(1) of the U. P. Ordinance 1 of 1949 and continued to vest under Central 249 Ordinance No. XII of 1949 which replaced the U. P. Ordinance. By virtue of sub section (2) of section 8 of the (XXXI of 1950) which came into force on April 18, 1950, the property which is vested in the Custodian under any law repealed by the Act shall be deed to be evacuee property within the meaning of the Act and shall be deemed to have vested in the Custodian appointed under that Act. The Central 1 Ordinance XII of 1949 was one of the laws repealed by the Act. He then referred to section 10 and contended that thereunder the Custodian has the power to recover from an unauthorised occupant of evacuee property the rents and profits realised by him during the period of his unauthorised occupation. Sub section (1) of section 10 reads thus: "Subject to the provisions of any rules that may be made in this behalf, the Custodian may take such measures as lie considers necessary or expedient for the purposes of securing, administering, preserving and managing any evacuee property and generally for the purpose of enabling him satisfactorily to discharge any of the duties imposed on him by or under this Act and may, for any such purpose as aforesaid, do all acts and incur all expenses necessary or incidental thereto. " According to him the words "for the purposes of securing, administering,preserving and managing any evacuee property"effectively confer on the Custodian power to recoverrents and profits of the property from the person in possession. There is nothing in the words relied on from which a power of the kind contended for by learned counsel can be deduced. Sub section (2) of section 10 specifically enumerates some of the powers of the Custodian. Learned counsel was not able to point to anything in the sub section which confers power on the Custodian to recover rents and profits from a person in unlawful possession of the properties. Learned counsel then referred to r. 10 and said that this rule would entitle the Custodian to determine and recover rents and profits from unauthorised occupants of evacuee property. Sub rule 1 32 250 of r. 10 undoubtedly authorises the Custodian to recover possession of property from the evacuee or from a person whether holding on behalf of, or under the evacuee or otherwise and not having a lawful title to possession thereof as against the Custodian. There is nothing in this sub rule which further entitles the Custodian to determine and recover rents and profits from an unauthorised occupant of evacuee property. Sub rule 2 of r. 10 empowers the Custodian to issue a notice to a tenant or a licensee in possession of evacuee property whom the Custodian cannot eject or does not want to eject. For one thing this sub rule cannot apply to a person who :Is alleged to be in unauthorised occupation of evacuee property. Then again it does not confer any power on the Custodian to determine rents and profits or to recover rent in a summary manner. In the circumstances we must hold that this provision also does not help the respondent. Such being the legal position, we must quash and set aside that portion of the order of the Custodian, confirmed by the Custodian General, which requires the appellants to pay rents and profits in respect of properties of Nanan Begum and Tahir Ali in their possession. Both parties will, however, be at liberty to take such steps is may be open to them at law for establishing or enforcing their respective claims. Costs of the appeal will be borne by the respondents. As the appeals were argued together there will be only one hearing fees. Appeals allowed.

The appellants exchanged their property in Pakistan with the property of an evacuee in India. They applied for confir mation of the transaction which was granted by the Deputy Custodian. Later, the Custodian revised the order and set aside the confirmation and ordered the ejectment of the appellants from the properties which were the subject of exchange. He further ordered that they should render accounts of the rents and profits realised by them from this property. The appellants contended that the Custodian bad no jurisdiction to pass any order requiring them to render accounts of the rents and profits. Held, that the Custodian bad no power under the Adminis tration of Evacuee Property Act to direct a person in unauthorised possession of evacuee property to render accounts of rents and profits thereof without resorting to the ordinary remedy provided by law, that is, by way of suit.

In the Civil Suit No. 203 of 1955, on the original side of the Bombay High . Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79. On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962. The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution. The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable. An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply. During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code. The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable. On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court. Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed. (3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution. The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated. and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India. 150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity. [154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable. Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied. (2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor. A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law. The Additional Judicial Commissioner was competent to take notice of the change in the law. [154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716. Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed. (3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons. vs Firm Hansraj Nathuram ; , followed. (4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa. But, that does not put the respondent/decree holder out of Court. The decree could be transferred and was valid and executable. But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa. Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966. [156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable. [156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa. [157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom. 125, 127, approved. (7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law. In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court. The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also. [158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965. the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act. Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force. Hence, the contention the matter in accordance with the law that was in force. Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct. [158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]

The respondent plaintiffs filed a suit for partition and allotment of one half share of the suit house and the move able properties. One Faqir Chand had 3 sons, Nathubhai, Lallubhai and Nanabhai. Nanabhai was the defendant in the suit whose legal representatives are appellants. Lallub hai 's heirs are the plaintiffs. According to the plain tiffs the three brothers were members of a Joint Undivided Hindu Family. According to the respondents the properties were never partitioned though the three brothers were stay ing and messing separately and each branch carried on its business separately. The respondents also challenged the validity of the sale deed executed by Bai Kashi the widow of Nathubhai in favour of the appellants on the ground that the sale was not for legal necessity. The appellants contended that the three brothers were separate and each branch used to do its business separately. That as far as the suit house was concerned it was divided though not by metes and bounds and that the brothers lived in separate portions of the house. The appellants claimed that they were entitled to 2/3 share on the house. The Trial Court found that the 3 brothers had separated before the deaths of Nathubhai and Lallubhai. It also found that the defendant and his broth ers had separated and the suit house was also divided as alleged by the defendant. It came to the conclusion that the defendant had failed to prove that there was any legal necessity for Bai Kashi to sell the share in the suit house and that after Bai Kashi 's death the respondent was entitled to one half share in the suit house. The Trial Court found that Bai Kashi became entitled to one ' half share of her husband in the suit house under the Hindu Women 's Rights to Property Act, 1937. As her interest was only a limited interest known as Hindu Women 's Estate when Bai Kashi died in January 1956, she had not become the full owner of the share under the . The court was of the view that on the death of Bai Kashi her share would go to the reversioners. The court held that the parties were governed by Mayukh school which over rules the Mitakshara school and, therefore, after the death of Bai Kashi the defendant and plaintiff No. 1 would inherit together to the share of Nathubhai. The court held that the claim of the plaintiff for one half share should be decreed though there was no specific claim on the plea of separation and heir ship. The High Court dismissed the appeal and confirmed the findings of the Trial Court. In an appeal by Special Leave the appellants contended that the respondents ' plea that the 3 brothers were joint and the share of Bai Kashi was inherited by the remaining two branches by survivorship having been negatived by the courts below the suit ought to have been dismissed and that the court erred in making out a new case of succession to the property of Bai Kashi without necessary pleadings. Allowing the appeal partly, HELD: 1. On the question whether the respondents are entitled to one half share on her death has not been dealt with by the High Court. This Court agreed with the concur rent findings of the Trial Court and the High Court that the family was separate and that the sale deed by Bai Kashi in favour of the appellants was not for legal necessity. However, the claim of the respondent for partition and allotment of 1/3 share by metes and bounds 921 cannot be resisted. Though the brothers became separate admittedly there was no division by metes and bounds. There is also no dispute that the respondents are entitled to 1/3 share in the house. [924 A C] 2. The High Court did not deal satisfactorily with the contention of the defendant that the Trial Judge erred in saying that Bai Kashi had only a widow 's estate when she died in the absence of any issue as to who were heirs of the deceased Bai Kashi. On the question whether respondents are entitled to succeed to Bai Kashis 1/2 share, the Court remitted the matter to the High Court for consideration. [924 C D]

The appellant and the respondent, who were displaced persons from West Pakistan, were allotted lands in the same village. At the instance of certain persons, the first allotment was cancelled and there was a re allotment. The respondent was aggrieved by this order and on September 27, 195o, he filed a review application before the Deputy Commissioner for restoration of the original allotment but it Was dismissed on May 12 , 1951 Against this order the respondent preferred a revision application to the Additional Custodian. who dismissed the same on August 25, 1952. Thereupon, the respondent filed a revision application before the Custodian General on October 30, 1952. To this revision on the Custodian was made a party; but the appellant was made a party by order of the Custodian General on August 25, 1953. After bearing the parties the Custodian General on September 29, 1954, cancelled part of the re allotment made in favour of the appellant. appellant contended: (i) that the revision application to the Custodian General was barred by time, and (ii)that the ' Custodian General had no power to cancel the allotment. Hold, that the revision application was not barred by time. Rule 31(5) provides that :a revision petition to the Custodian General "shall ordinarly be made within sixty days of the 38 298 order sought to be revised". This rule is only a rule of guidance and not one of limitation and in law a revision can be entertained even after sixty days if the Custodian General in his discretion thinks fit to entertain it. In the present case the revision was filed within the time but the appellant was impleaded after the period of sixty days had expired. But it could not be said that the Custodian General acted perversely or unreasonably in entertaining the revision. Held, further, that the Custodian General had the power to cancel the allotment made on December 2, 1949. Under r. 14(6) the Custodian could not, after July 22, 1952, cancel an allotment except under certain specified circumstances; but the second proviso to r. 14(6) permitted the Custodian General, in exercise of his powers of revision under section 27 , to cancel an allotment made by a lower authority on or before July 22, 1952.

The respondents in Civil Appeal No. 639 of 1985 claimed possession of the property sold by one Nathu on November 22, 1972 by way of pre emption on the ground that they had superior rights being father 's brother 's sons of Nathu covered under Section 15(1)(a) THIRDLY of the Punjab Pre emption Act, 1913. The claim was decreed and the alienees ' appellants appeal to the District Judge as also the High Court did not succeed. Hence this appeal by Special Leave. In Civil Appeal No. 911 of 1971 respondent No. 1 was the owner of some agricultural property in which appellants plaintiffs claimed to be the cultivating tenants. Respondent No. 1 sold the aforesaid property on July 22, 1959. The appellants tenants filed a suit on July 21, 1960 for a decree for possession by pre emption. The Trial Court, the first appellate court as also the High Court took the view that on the date when the sale took place, the appellants had no right of pre emption and, as such, the claims was not maintainable. Allowing the appeals, ^ HELD: (In C.A. No. 639 of 1983) 1. The decree passed by the trial court as upheld in the first and second appeals must be reversed in view of the decision of the Supreme Court in Atam Prakash vs State of Haryana, ; holding clauses First, Secondly and Thirdly in section 15(1)(a) as ultra vires the Constitution. Therefore, section 15(1)(a) THIRDLY is and was not available to the respondents plaintiffs to base their claim of pre emption upon. [380D] 379 (In C.A. No. 911 of 1971) 2. All the three Courts have gone wrong in dismissing the claim of the appellants plaintiffs. They are found entitled to pre empt the alienees under section (15)(1)(a) FOURTHLY of the Act as amended by Act of 1960. [381E; 382D E] 3.1 It is a well settled principle of law that when the legislature makes provision for a deeming situation to give effect to the mandate of the legislature, all things necessary to effect retrospective intention must be deemed to have existed. [382C D] 3.2 With effect from February 4, 1960 section 15 of the Punjab Pre emption Act 1913 was amended by Act 10 of 1960. The inevitable consequence of the retrospective operation of section 31 is to make the substantive provisions of section 15 also retrospective. It follows that by the fiction introduced by retrospective operation, the rigths which the appellants claimed under the amended provisions of section 15 must be deemed to have vested in them at the relevant time. Therefore, the appellants must be presumed to have had a right to pre empt on the date of sale. [380F G; 381G; 382B C] Amir Singh & Anr. vs Ram Singh & Ors., , referred to.

The eviction of the Respondent 'from the appellants premises, which was used as a factory, was decreed and application for execution of an order for possession was made. The respondents resisted the execution on the plea that the machinery installed in the factory could not be re moved without the prior permission of chief Inspector of Factories as provided by the East Punjab Factories (Control of Dismantling) Act. The premises was allowed. Both parties appealed. The appellate Court took of the machinery was stayed, but the Possession of the part the premises was allowed. Both parties appealed. The appellate Court took the view that the machinery and spare parts were lying practically in all the rooms, and the locking and sealing of the factory would result in its closure which would be against the provisions of the Act, and therefore directed the appellant to pursue the matter with the State Government. The order dated April 22, 1953 was not challenged by any appeal. But the appellant restarted the execution proceedings in which it was held that the State Government had refused permission for demolition of the factory, so the file was ordered to be consigned to the record room. 'Me appellant filed an appeal, which was dismissed, but in further revision the High Court by its order dated July 13, 1955 observed that on the record it was not possible to decide whether the execution of the decree would defeat the provisions of section 3 of the Act, so it set aside the order and directed the executing court to give decision on points that arose under section 3 of the Act. 'Me executing court found that the provisions of the Art did not prohibit the execution and as such the respondents were liable to ejectment but since the application had become over a year old it would be 'struck off the file with liberty to make a fresh application. The respondents appealed. The District Judge held that the Act did not apply to involuntary dismantling of factories and that the issue raised by the executing court did not arise but in fact it had been decided against the appellant by the High Court in revision. The appellant 's appeal to High Court was dismissed by a Single Judge, and in the Letters Patent Appeal, it was held that the delivery of possession was not barred in execution of decree by the Act, but the matter had become res judicata in consequence of the decisions in the first execution application and the decision of the High Court dated July 13 1955 in the second execution applica tion. Allowing the appeal, HELD : The Act does not bar the delivery of possession in execution, of a decree. It makes no reference to any decree for Possession against the owner of a factory. By ordering delivery of possession of the premises, the executing court does not make an order for dismantling a factory and a bailiff charged with execution of a warrant for possession, does not infringe the provision of law by rendering possession of the property to the decree holder. [510 C D] 507 There was no final order about the inexecutability of the decree on the first application for execution. Further the High Court by its order dated July 13, 1955, did Dot decide the question as to whether the decree for possession would be inexecutable in view of the Act. It stated expressly that it was not possible for it to decide whether the execution of the decree would defeat the provisions of the Act, and being unable to come to a decision on the record it remanded the matter to the court of execution. It found itself unable to interpret the section on the evidence beforeit. The proceedings subsequent to the remand order culminated in theorder of the Division Bench from which the present appeal arose. The order dated July 13, 1955 was not a final order which put a seal on the proceedings. [510 F H]

Pursuant to the directions of the Income tax Appellate Tribunal, the Income tax Officer, determined the assessee 's capital gains under section 12B of the Income tax Act, 1922. He did not, however, make any order under section 23(3) of the Act, nor did he issue a notice of demand under section 29 of the Act. The assessee filed an application before the Commissioner of Income tax, under section 33A(2) of the Act, for revising the computation made by the Income tax Officer drawing his attention to a decision of the Bombay High Court in Baijnath 's case, , as to how the capital gains should be ascertained. That decision was based upon a consideration of the very documents which were the basis of the assessees ' claim. The Commissioner dismissed the revision petition as not maintainable, as well as on merits, ignoring the Bombay decision. Meanwhile, the assessee filed an application requesting the Income tax Officer to issue a notice of demand under section 29, to enable him to file an appeal, but the Officer declined to do so. The assessee filed a writ application in the High Court for issuing appropriate writs to the Commissioner and the Income tax Officer, but the High Court dismissed it in limine. In his appeal to this Court, the assessee contended that (i) the High Court erred in holding that the affidavit filed in support of the writ petition was not in accordance with law, and that even if there were any defects the High Court should have given him an opportunity to rectify them, and (ii) the High Court erred in distinguishing the Bombay decision and in holding that there was no force in the revision filed before the Commissioner, and that, the High Court should have directed the Commissioner to entertain the revision and dispose of it in accordance with law by giving suitable directions to the Income tax Officer. The respondent raised a preliminary objection that as the order of the Commissioner was an administrative act, article 226 of the Constitution could not be invoked. HELD:(i) As no appeal lay to the Appellate Assistant Commissioner against the calculations made by the Income tax Officer, the Commissioner had powers under section 33A(2) to revise the Income tax Officer 's order. The jurisdiction conferred on the Commissioner by the section is a judicial one, The nature of the jurisdiction and the rights decided carry with them necessarily the duty to act judicially in disposing of the revision. Further, the fact that a Division Bench of one of the High Courts in India had taken a view in favour of the assessee, indicated that the question raised was arguable and required serious consideration. Therefore, a writ of certiorari quashing the order of the Commissioner dismissing the assessee 's revision petition, should be issued. [544E G; 548D] 537 Sitalpore Colliery Concern Ltd. vs Union of India, , Additional Income tax Officer, Cuddapah vs Cuddapah Star Transport Co. Ltd. and Suganchand Saraogi vs Commissioner of Income tax, , overruled. Even if the Commissioner only made an administrative order in refusing, to give any direction to the Income tax Officer, the assessee would still be entitled to approach the High Court under article 226, and a writ of mandamus directing the Income tax Officer to discharge his statutory duty of passing the order and issuing the notice of demand in accordance with law, should be issued. [546C E] (ii)The affidavit filed on behalf of the assessee was complete and compiled with the rules made by the High Court. The affidavit spoke only of matters which were within the deponent 's own knowledge, because, the phrase "deponent 's own knowledge" is wide enough to comprehend the knowledge derived from a perusal of relevant documents. Even if the affidavit was defective in any manner, the High Court instead of dismissing the petition in limine should have given the assessee, a reasonable opportunity to file a better affidavit. [547F G, H] (iii)The High Court was also in error in holding that the decision of the Bombay High Court was given on different facts, for the facts in both cases were the same and they arose out of the same transaction. [548B C]

The appellant purchased certain land from one A in 1946. Although the land was valued at more than Rs. 100 no registered deed of sale was executed. In 1949, A was declared an evacuee and the appellant was given notice by the Deputy Custodian of Evacuee Property to show cause why the land should not be declared evacuee property. No appearance was put in by the appellant in answer to the notice and the land was declared evacuee property. The appellant represented to the departmental authorities that he had become owner of the land before the Evacuee Property law came into force. The Custodian did not accept the plea and observed that if the appellant was aggrieved by the decision he could obtain a declaration of his rights from a competent court. The appellant therefore filed a suit which was contested by the department on the ground that section 46 of the Administration of Evacuee Property Act was a bar. The subordinate Judge held that the court had jurisdiction because of section 53A disagreed with the Subordinate Judge and reversed his decision. The appellant then came to this Court by special leave. HELD : The scheme of the Evacuee Property Act clearly is that when the property admittedly belongs to the evacuee any person claiming the property or any interest or right therein has, on receipt of a notice under section 7(1), to appear before the authorities entitled to deal with the matter under the Act. Any person aggrieved by an order of such an authority made under 3. 7 has the right to appeal under section 24 and if necessary to go in revision under section 27. The Act thus provides a complete machinery for a person interested in any property to put forward his claims before the competent authorities. Having provided this machinery the Act by section 46 bars the jurisdiction of civil and revenue courts to entertain or adjudicate upon any question whether any property or any right or interest in any property is or is not evacuee property. Any transferee from an evacuee claiming the property or any right or interest therein has to avail of the remedies under the Act and cannot go to a civil court. The fact that in the present case the Custodian in his order said that the appellant could go to a competent court could not confer jurisdiction on the Court. Nor could it be said on the facts found that the appellant had become the owner of the property before 1947, for, admittedly the property was worth more than Rs. 100 and without a registered sale deed it was not possible for the title to pass. It way be that if A tried to get back the property section 53 A of the Transfer of Property Act would come to the aid of the appellant in de 215 fence. But the present suit had been filed to establish the right of the appellant as owner of the property and in such a suit the appellant could not take the benefit of section 53 A. [217 B 218 B]

Appeal No. 270 of 1960. Appeal from the judgment and order dated February 21, 1956, of the Andhra Pradesh High Court in Case Reference No. 4 of 1955. K. N. Rajagopal Sastri and D. Gupta, for the appellant. H. J. Umrigar, Thiyagaraja and G. Gopalakrishnan, for the respondents. March 10. The Judgment of the Court was delivered by 30 234 SHAH, J. The assessees are a firm carrying on business at Kurnool, of manufacturing ground nut oil and cake. Under the Madras General Sales Tax Act IX of 1939, the assessees were entitled to a rebate of sales tax paid on goods purchased by them and used in the manufacturing process. The assessees maintained their books of account according to the Samvat Year ending with Diwali. The system of accounting was a mixture of mercantile and cash. Purchases and sales of goods on credit were duly entered in the books of account. The sales tax actually recovered by the tax authorities was debited when paid and amounts if any refunded were credited when received. The assessees had adopted the system which was permitted by the Act of paying tax calculated on the turnover of the previous year of account. Under this system, tax was provisionally assessed by the Sales Tax Officer on the basis of the turnover of the previous year, and thereafter the liability was adjusted at the end of the year of account in the light of the actual turnover of that year, and of rebate allowed in respect of groundnuts pressed into oil. As a result of the final adjustment made by the sales tax authorities, in some years the assessees were assessed to 'pay tax in excess of the amount provisionally assessed and in others they obtained refund of the excess tax paid under the provisional assessment. The following tabular statement shows the official years for sales tax, provisional demands made by the sales tax authorities, the final demands and the adjustments made in that behalf. Official Provi Filial Adjustment Year sional Refund/Addi ended. demand. demand. tional levy. Rs. Rs. Rs. Rs. 31 3 1942 2,679 1 872 807 31 3 1943 3,046 2,863 183 31 3 1944 14,509 18,402 3,893 31 3 1945 47,276 20,037 27,239 31 3 1946 45,315 13,379 31,936 For the assessment year 1946 47 (corresponding to the year of account October 18, 1944 to November 4,1945), the assessees claimed in their assessment to 235 income tax to deduct Rs. 49,633 being the amount of sales tax paid under a provisional assessment. In the year ending 31 3 1945, the assessees had paid Rs. 47,276 as sales tax provisionally assessed. They also had paid in that year Rs. 3,894 in adjustment of the liability for the previous year towards sales tax due. After giving credit for Rs. 1,537 received as rebate, the total sales tax liability under the provisional assessment was Rs. 49,633. The Income tax Officer accepted this claim, and debited it from the income in the assessment year 1946 47 in assessing the taxable income of the assessees. Deduction of salestax actually paid under provisional assessment less rebates was permitted by the Income tax Officer not only in the assessment year 1946 47 but also in the earlier years. The Excess Profits Tax Officer had also adopted for the chargeable accounting period prior to October 18, 1944 the same method of computation, but for the chargeable accounting period October 18,1944 to November 4, 1945, the Excess Profits Tax Officer allowed out of the amount of Rs. 47,276 debited to sales tax only Rs. 17,055 as properly attributable to that period in computing the Excess Profits Tax liability. According to the Excess Profits Tax Officer, the excess amount paid under he provisional assessment i.e., Rs. 30,221 could not be taken into account, because under r. 12 of Sch. 1 of the Excess Profits Tax Act, expenditure in excess of the amount reasonable and necessary for the business was not a permissible deduction. In appeal against the order of the Excess Profits Tax Officer, the Tribunal affirmed the order. Against the order passed by the Tribunal confirming the order of the Excess Profits Tax Officer, the assessees applied for and obtained an order referring the following question to the High Court of Judicature of Andhra Pradesh, "Whether there are materials for the Tribunal to hold that the aforesaid sales tax payments of Rs. 30,221 were unreasonable and unnecessary having due regard to the requirements of the business and not consequently deductible under r. 12 of Sch. 1 of the Excess Profits Tax Act?" 236 The High Court answered the question in the negative and against the order of the High Court, this appeal is preferred with leave under section 66A(2) and (3) of the Income Tax Act read with section 21 of the Excess Profits Tax Act. It is manifest that the assessees had not altered the method according to which their accounts were maintain Id. Year after year, they were paying tax provisionally assessed by the Sales tax Officer on the turnover of the previous year subject to adjustment at the close of the year of account. This system of payment of tax under provisional assessments was not adopted with a view to evade,, tax liability. Nor was recovery of the amounts ordered to be refunded to the assessees delayed because of any deliberate, inaction on the part of the assessees. It is not found that excess tax on inflated returns was paid in anticipation of the repeal of the Excess Profits Tax Act. The assessees for reasons of convenience adopted, as they were entitled under the Madras General Sales Tax Act, a system of payment of tax on provisional assessment based on the turnover of the, previous year subject to final adjustment to be made at the end of the year. The assessees could opt for the system of paying sales tax on provisional assessment, but the liability to pay tax imposed was on that account not voluntarily incurred. This system produced no direct benefit to the business and adjudged in retrospect, it undoubtedly reduced the taxable income; but if otherwise the payment was reasonable and necessary having regard to the requirements of the business, it was not liable to be ignored in assessing the Excess Profits Tax liability of the assessees. By r. 12 of Sch. 1 of the Excess Profits Tax Act, it is provided that "in computing the profits of any chargeable accounting period, no deduction shall be allowed in respect of expenses in excess of the amount which, the Excess Profits Tax Officer considers reasonable and necessary having regard to the requirements of the business;. ". It is for the Excess Profits Tax Officer to decide whether the deductions claimed are reasonable and necessary having regard to the requirements of the 237 business. But the reasonableness and necessity of the expenditure sought to be deducted in assessing Excess Profits Tax liability must be adjudged in the light of commercial expediency. The payments made by the assessees were in discharge of obligation imposed lawfully and were necessary for the proper conduct of the business. By section 10 of the Madras General Sales Tax Act, the assessees were obliged within 15 days from the date of service of the notice of assessment to pay tax and in default, the amount was liable to be recovered as if it were an arrear of land revenue. Again, by section 15, if the assessees failed to submit the return as required by the provisions of the Act or the rules made thereunder or failed to pay the tax within the time prescribed, they were liable to be penalised. Payments made in satisfaction of liability which arises by virtue of the assessment made by the Sales Tax Officer cannot be called unreasonable. Payment of sales tax as assessed being obligatory and necessary for the purpose of carrying on the business, it must in our opinion be deemed to satisfy the requirements of r. 12 of Sch. 1 of the Excess Profits Tax Act. The Excess Profits Tax Officer was, in our opinion, in error in thinking that the tax paid was in excess of the requirements of the business. We are also of the view that the Tribunal was in error in holding that by seeking to deduct only the tax properly attributable to the actual turnover during the chargeable accounting period, the Excess Profits Tax Officer was not seeking to disturb the method of accounting which was followed by the assessees and was accepted by the taxing authorities for many years. Counsel for the Commissioner submitted that the rules relating to advance provisional assessment and levy of tax framed under the Madras General Sales Tax Act, 1939 were inconsistent with the provisions of the Act and the assessees should have raised this contention and have obtained a decision from the court before paying tax on provisional assessment and not having done so, payments made cannot be regarded as either reasonable or necessary. Counsel says that in In re M. P. Kumraswami Raja (1), the Madras High (1) [1955] 6 Sales Tax Cases 113. 238 Court has declared this scheme of taxation on provisional assessment ultra Vires. But the reasonableness or the necessity of payments under r. 12 Sch. 1 of the Excess Profits Tax Act must be ascertained in the light of what may be regarded as commercially expedient and not on any legalistic considerations. It would not be expected of a businessman to start a litigation in respect of a tax which the Legislature of the State was competent to levy on the ground that the method devised for computing the tax liability was ultra vires. The tax was duly assessed and paid and the reasonableness and necessity must be adjudged in the light of the circumstances then prevailing and not in the light of subsequent developments. It may also be noticed that since the Madras High Court 's decision in In re Kumaraswami Raja 's case (1), the Madras Legislature by the Madras General Sales Tax Amendment Act VIII of 1955 retrospectively validated the levy. By virtue of this Act, assessments made provisionally and the levy of the tax were to be regarded as valid notwithstanding any initial incon sistency between the provisions of the Act and the Rules framed thereunder. It may also be pointed out that no such question was referred to the High Court and not even an argument appears to have been raised in the High Court on this question. We are of the view that the High Court was right in answering the question in the negative. The appeal therefore fails and is dismissed with costs. Appeal dismissed. (1) [1955] 6 Sales Tax Cases 118.

The respondents were entitled to a rebate of sales tax on goods purchased by them and used in their manufacturing process. They had adopted the system which was permissible under law, 233 of paying sales tax provisionally assessed by the Sales Tax Officer on the basis of turnover of the previous year, the liability being adjusted at the end of the year of account in the light the actual turnover of that year, as a result of which, in some years the respondents were assessed to pay tax in excess of the amount provisionally assessed, in others they obtained refund of the excess tax paid under the provisional assessment. The Income Tax Officer recognised the system and permitted deduction of sales tax actually paid under the provisional assessment. The Excess Profits Tax Officer had in assessing liability to excess profits tax for previous periods adopted the same method of computation, but for the chargeable accounting period, he did not allow the deduction of the full amount of tax provisionally debited to the sales tax, because in his view it was not reasonable and necessary expenditure and thus not a permissible deduction. The question was whether the sales tax payments were unreasonable and unnecessary having due regard to the requirements of the business and consequently not deductible under r. 12 Sch. 1 of the Excess Profits Tax Act. Held, that it is for the Excess Profits Tax Officer to decide whether the deductions claimed are reasonable and necessary having regard to the requirements of the business. But the reasonableness and necessity of the expenditure sought to be deducted under r. 12 Sch. 1 of the Excess Profits Tax Act in assessing excess profits tax liability must be adjudged in the light of commercial expediency, and not on any legalistic consideration. Payments made in satisfaction of liability which arises by virtue of assessment made by the Sales Tax Officer cannot be called unreasonable. Payment of sales tax as assessed being obligatory and necessary for the purpose of carrying on the business, it must be deemed to satisfy the requirements of r. 12 of Sch. 1 of the Excess Profits Tax Act. In re M. P. Kumaraswami Raja, (1955) 6 Sales Tax Cases 113, referred to.

The respondent was carrying on business as an excise con tractor in the Civil and Military Station of Bangalore in the State of Mysore, called the retroceded area. The jurisdiction ' over this area was originally exercised by the Governor General in Council by virtue of an agreement with the Maharaja of Mysore, and the income tax law applicable was the Indian Income tax Act, 1922. On July 26, 1947, the retroceded area was given back to the State of Mysore but the income tax law in force in that area prior to that date continued to have effect and be operative till June 30, 1948, on which date was promulgated the Mysore Income tax Act and Excess Profits Tax (Application to the Retroceded Area) (Emergency) Act, 1948, the effect of which was that the Indian Income tax Act, 1922, stood repealed and the Mysore Income tax Act, 1923, came into force subject to certain saving provisions. On August 5, 1948, was promulgated the Retroceded Area (Application of Laws) Act, 1948. Between 1947 and 1950 there were political and constitutional changes which ultimately resulted in Mysore becoming a Part B State within the Constitution of India. The legal effect of these changes was that the income tax law applicable to the retroceded area till June 30, 1948, was the Indian Income tax Act, 1922 ; from July 1, 1948, the Mysore Income tax Act, 1923, became applicable except that the Indian Income tax Act continued to apply in respect of the total income chargeable to income tax in the retroceded area prior to July 1, 1948, and the provisions of that Act as in force in the retroceded area prior to that date applied to all proceedings relating to the assessment of such income upto the stage of assessment and determination of income tax payable thereon. This position continued till April 1, 1950, when the Finance Act, 1950, came into force and as a result the Indian Income tax Act, 1922, became applicable again to the retroceded area, subject to the saving provisions of section 13(1) of the former Act. In respect of the assessment for the four years between 1945 and 1949, the respondent was assessed to income tax under the law then in force in that area; subsequently, in 1954 the Income tax Officer served a notice on the respondent under section 34 of the Indian Income tax Act, 1922, for the purpose of assessing " escaped " or " under assessed " income chargeable to income tax for the said years. The respondent challenged the jurisdiction of the Income tax Officer to take proceedings under section 34 or to make an order of re assessment on the grounds inter alia (1) that section 34 Of the Indian Income tax Act, 1922, was not saved by section 13(1) of the Finance Act, 1950, because what was saved was the prior law " for the purposes of the levy, assessment and collection of income tax ", which expression did not include re assessment proceedings, (2) that the 787 financial agreement made between the President of India and the Rajpramukh of Mysore dated February 28, 1950, rendered the impugned proceedings unconstitutional and void, (3) that the Indian Income tax Act, 1922, as in force in the retroceded area stood repealed on June 30, 1948, by the Mysore Income tax and Excess Profits (Application to the Retroceded Area) (Emergency) Act, 1948, and the saving provisions in section 5(b) thereof or in para (2), sub para (b) of Sch. A to the Retroceded Area (Application of Laws) Act, 1948, did not save section 34 in so far as it permitted re assessment proceedings in respect of years in which there had been an assessment already, and (4) that after June 30, 1948, and until April 1, 1950, the Income tax Officer in the retroceded area could re open the assessment under section 34 Of the Mysore Income tax Act, 1923, within a period of four years specified therein, but there was no authority to re open the assessment under section 34 Of the Indian Income tax Act. Held : (1) that the expression " levy, assessment and collection of income tax " in section 13(1) Of the Finance Act, 1950, was wide enough to comprehend re assessment proceedings under section 34 Of the Indian Income tax Act, 1922, and that the financial agreement between the President of India and the Rajpramukh of Mysore, on a true construction of the recommendations of the Indian States Finance Enquiry Committee, did not render the impugned proceedings unconstitutional or void ; Lakshmana Shenoy vs The Incomc tax Officer, Ernakulam, [1959] S.C.R. 751, followed. (2) that the saving provisions in the Mysore Income tax and Excess Profits (Application to the Retroceded Area) (Emergency) Act, 1948, and the Retroceded Area (Application of Laws) Act, 1948, made the prior law available in all cases in which the income was assessed or was assessable according to that law before July 1, 1948, and, therefore, they saved section 34 of the Indian Income tax Act, 1922, with regard to re assessment proceedings ; City Tobacco Mart and Others vs Income tax Officer, Urban Circle, Bangalore, A.I.R. 1955 Mys. 49, overruled. Hirjibhai Tribhuwandas vs Income tax Officer, Rajnandgaon and another, A.I.R. 1957 M. P. 171, approved. (3) that the Income tax Officer had the authority to re open the assessments in the present case because the period of limitation was that laid down in section 34 of the Indian Income tax Act, as it was in force in the retroceded area prior to July 1, 1948.

For the year 1964 65, the assessee, a registered dealer, under the Bihar Sales Tax Act, 1959 returned a gross turn over of Rs.53,39,981 which was accepted by the Assessing Officer. He determined the taxable turnover at Rs.52,79,962 representing the sale of wheat products taxable at 2%. He found that the dealer has sold gunny bags in which wheat products had been packed and determined its turnover at Rs.1,37,150 and assessed the same at 4 1/2%. The First Appellate Authority on assessee 's appeal held that the Assessing Officer was not justified in adding back the price of container in the gross turnover. What he should have done is to tax a portion of the taxable turnover at a different rate or out of the turnover taxable, the price of bags calculated at the rate of 70 paise per 100 kilogram should have been deducted and taxed at the rate of 4 1/2%. The remaining was to be taxed at the rate of 2%. In the revision before the Tribunal the assessee con tended that the demand of sales tax payable at different rates on the calculated turnover of gunny bags was not at all warranted as no price had been charged for the contain ers. The Tribunal held that the lower Courts were justified in levying tax at a different rate on the turnover on ac count of sale of gunny bags in which the wheat products were sold and directed that the Assessing Officer should ascer tain from the accounts, the turnover on account of sale of gunny bags as container of wheat products during the period under consideration and assess tax thereon at the prescribed rate of 4 1/2%. The balance turnover shall be assessed at 2%. In the reference the High Court affirmed this view. Dismissing the appeal, 1048 HELD: 1. The Control Order contemplates a net weight which means that the weight of the bag is included in the price to be charged by the dealer. Under the explanation when packing is done in clothbags, a higher rate is admissi ble. The scheme clearly suggests that the price of gunny bags is inclusive and where cloth bag is used, a higher price over and above what has been provided for ordinary containers is permitted. [1051C D] Commissioner of Taxes vs Prabhat Marketing Company Ltd., 19 STC 84, referred to. 2. The Tribunal rightly came to the conclusion that there was implied agreement of sale of the gunny bags. Admittedly, gunny bags are a different commodity and sale thereof is assessable to tax at 4V1%. It is not disputed that appellant bought gunny bags for packing wheat products for the purpose of sale. [1051C] 3. The question as to whether there was an agreement to sell packing material is a pure question of fact depending upon the circumstances found in each case. [1051G H] 4. The Tribunal and the High Court in the instant case, have recorded a clear finding that there was an implied contract for sale of the gunny bags with the products con tained therein. [1051H]

The appellant was paying a tax at the rate of one anna per unit weight of cotton, under section 66(1)(b) of the Central Provinces Municipalities Act. 1922, from 1936. In all 1941 the rate of tax was increased to 4 as. In 1952, the appellant filed a suit for recovery of the excess,tax paid within 3 years of the date of suit. It was contended that after the coming into force of section 142A of the Government of India Act, 1935, on 1st April 1939, till 25th January 1950, a tax in excess of Rs. 50 per annum could not be imposed by the respondent, and, after the coming into force of the Constitution the upper limit of the tax was raised to Rs. 250 per annum under article 276 of the Constitution; and that as the appellant was already paying more than this amount per year even at the rate of one anna, the enhanced rate of 4 annas was illegal. The trial court decreed the suit for recovery from the Municipal Committee of excess tax paid by the appellant within 3 years of the date of suit but on appeal, the High Court held that the suit was bad for non compliance with the requirements of section 48 of the Act, according to which a suit for anything done or purported to be done under the Act shill be instituted only after the expiration of 2 months after serving a written notice and within six months from the date of the accrual of the alleged cause of action. In its appeal to this Court, the appellant contended that it was a case of recovery of an illegal tax and therefore, a, claim for its refund fell outside the provisions of section 48. The respondent contended that (i) since the ban was not upon the rate of tax but upon the excess collection thereof, the collection of a tax above the constitutional limit was not without jurisdiction but only illegal or irregular and therefore, the suit would be in respect of a matter "Purported to be done under the Act" and the provision of section 48 would apply, and (ii) on the basis of Raleigh Investment Company Ltd. vs Governor. General in Council, (74 I.A. 50) the suit was barred by section 84(3) of the Act, which enacts that no objection shall be taken to any assessment in any other manner than is provided in the Act. HELD (Per K. Subba Rao, J. R. Mudholkar and V. Ramaswami JJ.): (i) Since the respondent had no authority to levy a tax beyond what section 142A of the Government of India Act, 1935, or what article 276 permitted, the assessment proceedings were void in so far as they purported to levy a tax in excess of the permissible limit and authorise. Its collection, and the assessment order would be no answer to the suit for the recovery of the excess amount, and therefore, the suit was maintainable. [522G H] The Constitution is the fundamental law of the land and it is unnecessary to provide in any law that anything done in disregard of the Constitution is prohibited, Such a prohibition has to be read into 500 every enactment, and where such prohibition exists or can be implied, anything done or purported to be done by an authority must be regarded as wholly without jurisdiction, and is not entitled to a protection of the law under colour of which that act was done. [512A B; 516B C] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar.[1964] 8 S.C.R. 178, followed. (ii)A tax can be recovered only if it is "payable" and it would be payable only after it is assessed. It is therefore futile to contend that the ban placed by section 142A of the Government of India Act and article 276 of the Constitution, extends only to recoveries and not to an earlier stage. [513G] It is true that the respondent had jurisdiction to recover an amount up to the constitutional limit. But it cannot be contended that merely because of this, the recovery by the respondent of an amount in excess of the constitutional limit was only irregular or at the worst illegal. Where power exists to assess and recover a tax up to a particular limit and the assessment or recovery of anything above that amount is prohibited, the assessment or recovery of an amount in excess is wholly without jurisdiction. To such a case, the statute under which action was purported to be taken can afford no protection. Indeed, to the extent that it affords protection it would be bad. But it is the duty of the court to so construe it as to avoid rendering the provision unconstitutional, that is, to construe section 48 as affording protection only if what was done was something which could legally have been done by the respondent but was wrongly done by it, and reject a construction which will invalidate the provision. [515B; 516B H] (iii)The appellant 's suit could not be barred even if section 84(3) of the Act is interpreted in the same way as the Privy Council interpreted section 67 of the Income tax Act, in the Raleigh Investment Co. 's case. Unlike the Income tax Act the Act does not provide a machinery for making a claim for refund or repayment on the ground of the un constitutionality of the levy, and the jurisdiction of the civil court in cases of refund is not taken away. Even in the class of cases to which the provisions of sections 83 and 85 of the Act, which are the only provisions providing a machinery under the Act for challenging an assessment, apply, they cannot be said to provide a sufficiently effective remedy to an assessee. A reference to the High Court is only at the discretion of the appellate or revisional authority and the person aggrieved has no right to move the High Court. Besides, in the Raleigh Investment Co. 's case, the expression "assessment made under this Act was given too wide a construction, because, it is difficult to appreciate how taking into account an ultra vires provi sion, which in law must be regarded as not being a part of the Act at all, will make the assessment as one under the Act. [517G; 518B, F, H; 519A B; 520D F; 521H] The exclusion of the jurisdiction of the civil court is not to be readily inferred but such exclusion must either be explicitly expressed or clearly implied. One of the corollaries flowing from the principle that the Constitution is the fundamental law is that the normal remedy of a suit will be available for obtaining redress against the violation of a constitutional provision. Moreover the provisions of article 265 of the Constitution preclude the levy or collection of a tax except by authority of law, which means only a valid law. There was no corresponding provision in the various Acts for the governance of India which preceded the Constitution and the decision in the Raleigh Investment Co. 's case was given in that context. Further under article 501 226, the Constitution has provided a remedy to a citizen to obtain redress in respect of a tax levied or collected under an invalid law, and this remedy will not be affected by any provision like section 67 of the Income tax Act, or section 84(3) of the Act. [520G H; 521C E] Thus, when the question merely is whether the assessment had been made according to law, the respondent having jurisdiction over the subject matter and the assessee, the provisions of section 84(3) may be a bar to a suit. But, where the question raised is as to the jurisdiction of the respondent to proceed against the assessee, and levy on or collect from him an amount in excess of that permitted by the Constitution, the matter would be entirely out of the bar of that provision. [522E G] Per Raghubar Dayal and Bachawat, JJ. (dissenting): The appellant 's suit for the recovery of the tax realized in excess of Rs. 250 a year was rightly dismissed, as the correctness of the assessment of the tax could not be challenged by a suit in a civil court in view of section 84(3) and as the provisions of section 48, requiring the giving of notice to the respondent and the institution of the suit within a certain period, had not been complied with. [534H; 535A B] The suit was in essence a suit for, first, modifying the amount assessed and then to decree the payment of the amount held to have been paid in excess of the tax as modified by the court. But the act of assessing the tax or the consequential act of collecting the amount cannot be broken up into two acts, one, upto the legal limit and the other in excess of it. The act of assessment or of collection therefore was an act done by the respondent under the provisions of the Act, though it acted wrongly in assessing the tax at an excessive figure, and consequently in collecting an amount in excess of that which could have been legally collected. The suit was therefore fully covered by section 48 and had to be dismissed. [526E H] In view of section 84(3), exclusive jurisdiction to determine the correctness of the amount assessed is given to the authorities mentioned in section 83. The result is that no other authority can enter into the question of the correctness of the assessment on grounds of law or fact, and therefore the appellant 's suit was barred from the cognizance of the civil court. [527G] Raleigh Investment Co. Ltd. vs Governor General in Council, L.R. 74 I.A. 50 and Firm of Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , , followed. Poona City MuniciPal Corporation vs Dattatraya Nagesh Deodhar, ; , distinguished.

The business of the appellant consisted in the purchase of copra, manufacture of cocoanut oil and cake therefrom and sale of oil and cake to parties inside the State of Travancore Cochin and sale of oil to parties outside the State. Before the coming into force of the Constitution of India, under the provisions of the Travancore Cochin General Sales Tax Act, 1125, and the rules made thereunder, for the purposes of assessment to sales tax, the appellant wag entitled to include in his gross turnover the total value of the oil sold by him whether inside the State or outside the State and to deduct therefrom the whole of the value of the copra purchased by him. Subsequently, in 1951, the Act was amended by the addition of section 26 which, inter alia, provided: "Notwithstanding anything contained in this Act. a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter ,State trade. . For the year 1951 1952, the Sales Tax Officer assessed the appellant to sales tax on a net assessable turnover by taking the value of the whole of the copra purchased by him, adding thereto the respective values of the oil and the cake sold inside the State and deducting only the value of the copra corresponding to the oil sold inside the State. It was contended for the appellant that in the calculation of the net turnover he was entitled to include the total value of the oil sold by him, both inside and outside the State, and deduct therefrom the total value of the copra purchased by him, and further that, under the overriding provision of the Act under section 26, he was entitled to have the value of the oil sold outside the State deducted. Held, that the calculation made by the Sales Tax Officer of the net turnover was correct. The non obstante provision contained in section 26 of the Act has the effect of taking transactions relating to inter State trade out of the purview of the Act and they are excluded in the calculation 108 838 of the gross turnover as well as the net turnover on which sales tax can be assessed. Aswani Kumar Ghosh vs Arabinda Bose, ; , relied on.

The respondent was a firm carrying on business in different lines. It was assessed to income tax under section 23(4) of the Income tax Act, 1922 for the assessment year 1949 50 on the ground that notices issued under section 22(2) and (4) had not been complied with. Later on, that assessment 412 was cancelled. However, before the cancellation, it was found that an interest income of Rs. 88,737 in the shape of U.P. Encumbered Estates Act Bonds received by the respondent from third parties had escaped assessment as the assessee failed to disclose the same. The Income tax Officer issued a notice for the assessment year 1949 50 on the ground that a sum of Rs. 88,737 had escaped assessment in the said assessment year. After the cancellation of the assessment made under section 23(4), the Income tax officer, ignoring the notice issued by him under section 34(1)(a), included that amount in the fresh assessment made by him for the year 1949 50.The respondent appealed to the Appellate Assistant Commissioner who ordered the deletion of the sum of Rs. 88,737 from the assessment for the year 1949 50 and directed the same to be included in the assesment for the year ending 1948 49. Pursuant to the direction given, the Income tax Officer served a notice on the respondent under section 34(1). Against that notice the assessee filed a writ petition in the High Court for quashing the above mentioned proceeding on the ground that these were initiated beyond the time prescribed by a. 34. The High Court accepted the petition and quashed the notice on the ground that it was issued by the appellant beyond the ordinary period of limitation It also overruled the contention of the appellant that no period of limitation governed the notice in as much as the second proviso to section 34(3) was attracted to the facts of the case. The only direction which the Appellate Assistant Commissioner could give was one which was covered by section 31 of the Act and as the appeal before him was confined to a particular assessment year, the direction must necessarily be limited to a matter falling within that year. if the direction be treated as based on a finding recorded by Appellate Assistant Commissioner, that finding would have to be disregarded when applying the proviso. The appellant came to this Court by special leave. Held: (per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.). The proviso to sub section (3) of section 34 of the Indian Incometax Act, 1922 does not save the time limit prescribed under sub section (1) of section 34 in respect of an escaped assessment of a year other than that which is the subject matter of appeal or revision as the case may be and hence the notice under section 34(1)(a) issued in the present case was clearly barred by time. The jurisdiction of the High Court or the Supreme Court under section 66 or section 66(b) is a limited one and is confined only to the questions referred to them. Moreover, the questions referred by Tribunal cannot exceed its jurisdiction. Therefore the assessment or reassessment made under the said sections or Pursuant to the orders or directions made thereunder must necessarily relate to the assessment of the year under review, revision or appeal as the case may be. 'Me proviso to sub section (3) of section 34 does not confer any fresh power upon the Income tax Officer to make assessment in respect of the escaped incomes without any time limit. It only lifts the ban of limitation in respect of certain assessments made under certain provisions of the Act and the lifting of the ban cannot be so construed as to increase the jurisdiction of the tribunal Under the 413 relevant sections. The lifting of the ban was only to give effect to the orders that may be made by the appellate, revisional or reviewing Tribunal within the scope of its jurisdiction. If the intention was to remove the period of limitation in respect of any assessment against any person, the proviso would not have been added as proviso to sub section (3) which deals with completion of an assessment but would have been added to sub section (1) of section 34. The word 'finding ' covers only the material questions which arise in a particular case for decision by the authority hearing the. case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing. The expression 'direction ' refers to a direction which the appellate or revisional authority is empowered to give under the law. The expression "any person" must be confined to a person intimately connected with the assessment of the year under appeal or revision. Held: per Raghubar Dayal and J. R. Mudholkar JJ. (dissenting): That the notice was not in contravention of the provisions of section 34 and hence could not be quashed on that ground. When an appeal is before an appellate authority, the whole matter is at large before it and there fore when a specific case is put before it by an assessee, it has both the power as well as the duty to give its finding thereon. The ground given by an assessee for claiming a reduction or annulment of assessment may be that the income upon which he had been assessed was not earned in the accounting period of the year to which the assessment pertained but in respect of a specified earlier or later year. The appellate authority is entitled to go into the whole question and come to a finding one way or the other. The finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding, it is not necessary that it should be the final and ultimate conclusion. The contention of respondent that the second proviso to a. 34(3) enabling a notice to issue only to assessee in respect of escaped income without limit of time on the ground that the appellate authority has made a finding or direction in the proceeding before it makes a discrimination against such assessee because it does not lift the bar of limitation with regard to other assessees similarly situated but with regard to whom no finding has been made or direction given by appellate authority, was rejected. It was held that prima facie, there was a reasonable basis for the classification. The ground on which classification was made had a rational relationship with the object which was intended to be achieved by law, ie., to detect and bring to assessment the escaped income. Commissioner of Income tax vs section M. Chitnavis, (1932) L.R. 59 I.A. 290, Sir Kikabhai Premchand vs Commissioner of Income tax (Central), Bombay, pt. Hazart Lal vs Income tax Officer, Kanpur. Lakshman Prakash vs Commissioner of Income 414 tax, U.P., , A. section Khader Ismail vs Income tax Officer, Salem, (1963)48 I.T.R. 16, Simrathmul vs Additional Income tax Officer, Ootachamund, (1959)36 I.T.R. 41, Brindaban Chandra Basak vs Incometax Officer, , K. C. Thomas, First Income tax Officer. Bombay vs Vasant Hira Lal Shah , Prashar & Anr. V. Sasantsen Dwarkadas 49 I.T.R. (S.C.) 1, Kamlapat Hotilal vs Income tax Officer, , Hiralal Amrit Lal Shah vs K. C. Thomas, Income tax Officer, Bombay, , General Construction and Supply Co. vs Income tax Officer (8th) C Ward, Bombay, , Suraj Mal Mohata & Co. vs A. V. Visvanatha Sastri ; , A. Thangal Kunju Mudaliar vs M. Venkatachalam Potti & Anr. ; and Palaji vs Income tax Officer, Special Investigation Circle ; , referred to.

The respondents in each of these three cases was sub jected to assessment under the U.P. Sales Tax Act. In each of these cases the assessee preferred an appeal to the first appellate authority and moved an application for the waiver of any deposit of the tax which was necessary before the appeal could be entertained. The first appellate authority in two of the cases dismissed the application and in the third directed the assessee to deposit 10% of the disputed tax within ten days from the date of the order. Dis satis fied with the orders of the first appellate authority each of the assessees preferred an appeal to the Tribunal. The Tribunal in all the three cases directed the assessee to pay 10% of the assessed tax before the appeal could be enter tained. Each of the assessees preferred a revision petition before the High Court. The High Court held that the condition requiring deposit of tax was not applicable in the instant case of M/s Atma Ram Misra as no returns at all had been filed by the asses see for the relevant assessment year and no turnover stood admitted by the assessee at any stage of the assessment proceedings which was followed in the other two cases with the result that the first appellate authority was held bound to entertain the appeals of the assessee without calling upon it for deposit of any portion of tax. The department has preferred these appeals by special leave against the decision of the single judge of the High Court in all the three cases. This Court while dismissing the appeals made it clear that it did not agree with the High Court 's interpretation of the statutory provisions and, HELD: The provision in question makes two relaxations. It does not make it obligatory on the assessee to deposit the entire amount of assessed tax. It restricts the deposit to 20% of the assessed tax. [1039C] 1032 It empowers the appellate authority to waive or relax the requirements of clause (b). [1039C] The deposit contemplated under clause (b) also covers cases where no returns have been filed and no admission of any turnover has come from the assessee. [1039E] This, however, does not in any way affect the power of the appellate authority to waive or reduce the amount to be deposited, depending on the circumstances of each case, under the proviso to the above subsection. [1039G] Vishamber Nath vs Commissioner of Sales Tax, U.P., [1979] U.P.T.C. 1276.

The assessee collected sales tax from the purchaser but did not pay the collections to the State Government alleging that the sale was interstate sale. The Income Tax Officer treated the sales tax as income of the assessee. The assessee claimed that the sales tax realised from the purchaser did not form part of the sale price of the goods and as such did not constitute taxable receipt. The Income tax Officer held that the sales tax formed part of the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income. The Appellate Assistant Commissioner also rejected the contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee. The Appellate Tribunal held that where a dealer collected sales tax under the provisions of the Orissa Sales tax Act the amount of tax did not form part of the sale price and the dealer did not acquire any beneficial interest in that amount and that the failure of the assessee to deposit the amount with the Government could not transform the character of that amount. The High Court held that if a validly eligible tax was realised by a trader which had been utilised in his business the tax so realised could not form part of the sale price and that the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer ' for the purpose of making profit and was not separated from price simpliciter. On appeal to this Court it was contended that the amount received as sales tax retained its character as such and could not be considered to be a part of trading receipt. Dismissing the appeal,, HELD : It is 'the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive. If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt. If and when the appellant paid the sum or any part thereof either to the State Government or to the purchaser it would be entitled to claim deduction of the sum so paid. In the instant case there is no escape from the conclusion that the amount should be treated as a trade receipt. [632B F; 633C] Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal followed. The purchaser pays what the seller demands, that is, the price, even though it may include tax. That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over. [634F] Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors. (1961) 12 S.T.C. 476 followed, Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall REFERRED TO, Paprika Ltd. & Anr. vs Board of Trade and Love vs Narman Wright (Builders) Ltd. [1944] 1 All E.R. 618, held inapplicable.

riminal Ap. peal No. 82 of 1952. Appeal under article 132 (1) of the Constitution of India from the Judgment and Order dated June 10, 1952, of the High Court of Judicature for the State of Punjab at Simla (Bbandari and Khosla JJ.) in Criminal Writ No. 144 of 1951. M. C. Setalvad (Attorney General for India) and C. K. Daphtary (Solicitor Genera I for India) (B. Gana pathy, with them) for the appellant. J. B. Dadachanji (amicus curice) for respondent No. 1. 1952. November 10. The Judgment of the Court was delivered by DAS J. This appeal arises out of a habeas corpus petition Bled by one Ajaib Singh in the High Court of Punjab for the production and release of one Musammat Sardaran alias Mukhtiar Kaur, a girl of about 12 years of age. 256 The material facts leading up to the filing of that petition may be shortly stated as follows. On the report made by one Major Babu Singh, Officer Commanding No. 2 Field Company, section M. Faridkot, in his letter dated February 17, 1951, that the petitioner Ajaib Singh had three abducted persons in his possession, the recovery police of Ferozepore, on June 22, 1951, raided his house in village Shersingwalla and took the girl Musammat Sardaran into custody and delivered her to the custody of the Officer in charge of the Muslim Transit Camp at Ferozepore from whence she was later transferred to and lodged in the Recovered Muslim Women 's Camp in Jullundur City. A Sub Inspector of Police named Nibar Dutt Sharma was deputed by the Superintendent of Police, Recovery, Jullundur to make certain enquiries as to the facts of the case. The Sub Inspector as a result of his enquiry made a report on October 5, 1951 to the effect, inter, that the girl had been abducted by the petitioner during the riots of 1947. On November 5, 1951, the petitioner filed the habeas corpus petition and obtained an interim order that the girl should not be removed from Jullundur until the disposal of the petition. The case of the girl was then enquired into by two Deputy Superintendents of Police, one from India and one from Pakistan who, after taking into consideration the report of the Sub Inspector and the statements made before them by the girl, her mother who appeared before them while the enquiry was in progress, and Babu alias Ghulam Rasul the brother of Wazir deceased who was said to be the father of the girl and other materials, came to the conclusion, inter alia, that the girl was a Muslim abducted during the riots of 1947 and was, therefore, an abducted person as defined in section 2(a) (1) of the Abducted Persons (Recovery and Restoration) Act LXV of 1949. By their report made on November 17, 1951, they recommended that she should be sent to Pakistan for restoration to her next of kin but in view of the interim order of the High Court appended a note to the effect that she 257 should not be sent to Pakistan till the final decision of the High Court. The matter then came before a Tribunal said to have been constituted under section 6 of the Act. That Tribunal consisted of two Superintendents of Police, one from India and the other from Pakistan. The Tribunal on the same day, i.e., November 17, 1951, gave its decision agreeing with the findings and recommendation of the two Deputy Superintendents of Police and directed that the girl should be sent to Pakistan and restored to her next of kin there. The habeas corpus petition came up for hearing before Bhandari and Khosla JJ. on November 26, 1951, but in view of the several questions of farreaching importance raised in this and other similar applications, the learned Judges referred the following questions to a Full Bench : 1. Is Central Act No. LXV of 1949 ultra vires the Constitution because its provisions with regard to the detention in refugee camps of persons living in India violate the rights conferred upon Indian citizens under article 19 of the Constitution ? 2. Is this Act ultra vires the Constitution because in terms it violates the provisions of article 22 of the Constitution ? 3. Is the Tribunal constituted under section 6 of the Act a Tribunal subject to the general supervision of the High Court by virtue of article 227 of the Constitution ? At the same time the learned Judges made it clear that the Full Bench would not be obliged to confine itself within the narrow limits of the phraseology of the said questions. On the next day the learned Judges made an order that the girl be released on bail on furnishing security to the satisfaction of the Registrar in a sum of Rs. 5,000 with one surety. It is not clear from the record whether the security was actually furnished. The matter eventually came up before a Full Bench consisting of the same two learned Judges 258 and Harnam Singh J. In course of arguments before the Full Bench the following further questions were added: 4.Does this Act conflict with the provision of article 14 on the ground that the State has denied to abducted persons equality before the law or the equal protection of the laws within the territory of India? 5.Does this Act conflict with the provisions of article 15 on the ground that the State has discriminated against abducted persons who happen to be citizens of India on the ground of religion alone ? 6. Does this Act conflict with article 21 on the ground that abducted persons are deprived of their personal liberty in a manner which is contrary to principles of natural justice ? " There was also a contention that the Tribunal which decided this case was not properly constituted in that its members were not appointed or nominated by the Central Government and, therefore, the order passed by the Tribunal was without jurisdiction. By their judgments delivered on June 10, 1952, Khosla and Harnam Singh JJ. answered question 1 in the negative but Bhandari J. held that the Act was inconsistent with the provisions of article 19(1) (g) of the Constitution. The learned Judges were unanimous in the view that the Act was inconsistent with the provisions of article 2.2 and was void to the extent of such inconsistency. Question 3 was not fully argued but Bhandari and Khosla JJ. expressed the view that the Tribunal was subject to the general supervision of the High Court. The Full Bench unanimously answered questions 4, 5 and 6 in the negative. Bhandari and Khosla JJ. further held that the Tribunal was not properly constituted for reasons mentioned above, but in view of his finding that section 4(1) of the Act was in conflict with article 22(2) Harnam Singh J. did not consider it necessary to express any opinion on the validity of the constitution of the Tribunal. 259 The Full Bench with their aforesaid findings remitted the case back to the Division Bench which had referred the questions of law to the larger Beach. The case was accordingly placed before the Division Bench which thereafter ordered that Musammat Sardaran alias Mukhtiar Kaur be set at liberty. The girl has since been released. The State of Punjab has now come up on appeal before us. As the petitioner respondent Ajaib Singh represented to us that he could not afford to brief an advocate to argue his case, we requested Sri J. B. Dadachanji to take up the case as ambicus curiae which be readily agreed to do. He has put forward the petitioners case with commendable ability and we place on record our appreciation of the valuable assistance rendered by him to the Court. In his opening address the learned Solicitor General frankly admitted that he could not contend that the Tribunal was properly constituted under section 6 of the Act and conceded that in the premises the order of the ' High Court directing the girl to be released could not be questioned. He, however, pressed us to pronounce upon the constitutional questions raised in this case and decided by the High Court so that the Union Government would be in a position to decide whether it would, with or without modification, extend the life of the Act which is due to expire at the end of the current month. We accordingly heard arguments on the constitutional questions on the clear understanding that whatever view we might express oh those questions, so far as this particular case is concerned, the order of the High Court releasing the girl must stand. After hearing arguments we intimated, in view of the urgency of the matter due to the impending expiry of the Act, that our decision was that the Act did not offend against the provisions of the Constitution and that we would give our reasons later on. We now proceed to set forth our reasons for the decision already announced. 34 260 In order to appreciate the rival contentions canvassed before us it is necessary to bear in mind the circumstances which led to the promulgation of an Ordinance which was eventually replaced by Act LXV of 1949 which is impugned before us as unconstitutional. It is now a matter of history that serious riots of virulent intensity broke out in India and Pakistan in the wake of the partition of August, 1947, resulting in a colossal mass exodus of Muslims from India to Pakistan and of Hindus and Sikhs from Pakistan to India. There were heart rending tales of abduction of women and children on both sides of the border which the governments of the two Dominions could not possibly ignore or overlook. As it was not possible to deal with and control the situation by the ordinary laws the two governments had to devise ways and means to check the evil. Accordingly there was a conference of the representatives of the two Dominions at Lahore in December, 1947, and Special Recovery Police Escorts and Social Workers began functioning jointly in both the countries. Eventually on November 11, 1948, an Inter Dominion Agreement between India and Pakistan was arrived at for the recovery of abducted persons on both sides of the border. To implement that agreement was promulgated on January 31, 1949, an Ordinance called the Recovery of Abducted Persons Ordinance,. 1949. This Ordinance was replaced by Act LXV of 1949 which came into force on December 28, 1949. The Act was to remain in force up to October 31, 1951, but it was eventually extended by a year. That the Act is a piece of beneficial legislation and has served a useful purpose cannot be denied, for up to February 29, 1952, 7,981 abducted persons were recovered in Pakistan and 16,168 in India this circumstance, however, can have no bearing on the constitutionality of the Act which will have to be judged on purely legal considerations. The Act is a short one consisting of eleven sections. It will be observed that the purpose of the Act is to implement the agreement between the two countries 261 as recited in the first preamble. The second preamble will show that the respective governments of the States of Punjab, Uttar Pradesh, Patiala and East Punjab States Union, Rajasthan and Delhi gave their consent to the Act being passed by the Constituent Assembly a circumstance indicative of the fact that those governments also felt the necessity for this kind of legislation. By section 1 (2) the Act extends to the several States mentioned above and is to re main in force up to October 31, 1952. The expression "abducted person" is defined by section 2(1) (a) as meaning " a male child under the age of sixteen years or a female of whatever age who is, or immediately before the 1st day of March, 1947, was a Muslim and who, on or after that day and before the 1st day of January, 1949, has become separated from his or her family, and in the latter case includes a child born to any such female after the said date. " Section 4 of the Act, which is important, provides that if any police officer, not below the rank of an Assistant Sub Inspector or any other police officer specially authorised by the State government in that behalf, has reason to believe that an abducted person resides or is to be found in any place, he may, after recording the reasons for his belief, without warrant, enter and take into custody any person found therein who, in his opinion, is an abducted person, and deliver or cause such persons to be delivered to the custody of the officer in charge of the nearest camp with the least possible delay. Section 6 enacts that if any question arises whether a person detained in a camp is or is not an abducted person, or whether such person should be restored to his or her relatives or handed over to any other person or conveyed out of India or allowed to leave the camp, it shall be referred to, and decided by , 'a Tribunal constituted for the purpose by the Central Government. The section makes the decision of the Tribunal final, subject, however, to the power of the Central Government to review or revise any such decision. Section 7 provides for the implementation of the decision of the 262 Tribunal by declaring that any officer or authority to whom the custody of any abducted person 'has been delivered shall be entitled to receive and hold the person in custody and either restore such person to his or her relatives or convey such persons out of India. Section 8 makes the detention of any abducted person in a camp in accordance with the provisions of the Act lawful and saves it from being called in question in any court. Section 9 gives the usual statutory immunity from any suit or proceeding for anything done under the Act in good faith. Section ' 10 empowers the Central Government to make rules to carry out the purposes of the Act. The main contest before us has been on question 2 which was answered unanimously by the Full Bench against the State, namely, whether the Act violates the provisions of article 22. If the recovery of a person as an abducted person and the delivery of such person to the nearest camp can be said to be arrest and detention within the meaning of article 22(1) and (2) then it is quite clear that the pro visions of sections 4 and 7 and article 22(1) and (2) cannot stand together at the same time, for, to use the language of Bhandari J., " it is impossible to obey the directions contained in sections 4 and 7 of the Act of 1949 without disobeying the directions contained in clauses (1) and (2) of article 22." The Constitution commands that every person arrested and detained in custody shall be produced before the nearest Magistrate within 24 hours excluding the time requisite for the journey from the place of arrest to the Court of the Magistrate but section 4 of the Act requires the police officer who takes the abducted person into custody to deliver such person to the custody of the officer in charge of the nearest camp for the reception and detention of abducted persons. These provisions are certainly conflicting and inconsistent. The absence from the Act of the salutary provisions to be found in article 22(1) and (2) as to the right of the arrested person to be informed of the grounds of such arrest and to consult and to be 263 defended by a legal practitioner of his choice is also significant. The learned Solicitor General has not contended before us, as he did before the High Court, that the overriding provisions of article 22(1) and (2) should be read into the Act, for t e o vious reason that whatever may be the effect of the absence from the Act of provisions similar to those of article 22(1), the provisions of article 22(2) which is wholly inconsistent with section 4 cannot possibly, on account of such inconsistency, be read into the Act. The sole point for our consideration then is whether the taking into custody of an abducted person by a police officer under section 4 of the Act and the delivery of such person by him into the custody of the officerin charge of the nearest camp can be regarded as arrest and detention within the meaning of article 22(1) and (2). If they are not, then there can be no complaint that the Act infringes the fundamental right guaranteed by article 22(1) and (2). Sri Dadachanji contends that the Constitution and particularly Part III the ereof should be construed liber ally so that the fundamental rights conferred by it may be of the widest amplitude. He refers us to the various definitions of the word "arrest" given in several wellknown law dictionaries and urges, in the light of such definitions, that any physical restraint imposed upon a person must result in the loss of his personal liberty and must accordingly amount to his arrest. It is wholly immaterial why or with what purpose such arrest is made. The mere imposition of physical restraint, irrespective of its reason, is arrest and as such, attracts the application of the constitutional safeguards guaranteed by article 22 (1) and (2). That the result of placing such a wide definition on the the term "arrest" occurring in article 22 (1) will render many enactments unconstitutional is obvious. To take one example, the arrest of a defendant before judgment under the provisions of Order XXXVIII, rule 1, of the Code of Civil Procedure or the arrest of a judgment debtor in execution of a decree under section 55 of the Code will, on this 264 hypothesis, be unconstitutional inasmuch as the Code provides for the production of the arrested person, not before a Magistrate but before the civil court which made the order. Sri Dadachanji contends that such consideration should not weigh with the court in construing the Constitution. We are in agreement with learned counsel to this extent only that if the language of the article is plain and unambiguous and admits of only one meaning then the duty of the court is to adopt that meaning irrespective of the inconvenience that such a construction may produce. if, however, two constructions are possible, then the court must adopt that which will ensure smooth and harmonious working of the Constitution and eschew the other which will lead to absurdity or give rise to practical inconvenience or make well established provisions of existing law nugatory. We have, therefore, to examine the article in question with care and ascertain the meaning and import of it primarily from its language. Broadly speaking, arrests may be classified into two categories, namely, arrests under warrants issued by a court and arrests otherwise than under such warrants. As to the first category of arrest, sections 76 to 86 collected under sub heading B Warrant of Arrest " in Chapter VI of the Code of Criminal Procedure deal with arrests in execution of warrants issued by a court under that Code. Section 76 prescribes that such a warrant must be in writing signed by the presiding officer, or in the case of a Bench of Magistrates, by any member of such Bench and bear the Beal of the court. Form No. II of Schedule V to the Code is a form of warrant for the arrest of an accused person. The warrant quite clearly has to state that the person to be arrested stands charged with a certain offence. , Form No. VII of that Schedule is used to bring up a witness. The warrant itself recites that the court issuing it has good and sufficient reason to believe that the witness will not attend as a witness unless compelled to do so. The point to be noted is that in either case the 265 warrantex facie sets out the reason for the arrest, namely, that the person to be arrested has committed or is suspected to have committed or is likely to commit some offence. In short, the warrant contains a clear accusation against the person to be arrested. Section 80 requires that the Police Officer or other person executing a warrant must notify the substance thereof to the person to be arrested, and, if so required, shall show him the warrant. It is thus abundantly clear that the person to be arrested is informed of the grounds for his arrest before he is actually arrested. Then comes section 81 which runs thus: " The Police Officer or other person executing a warrant of arrest shall (subject to the provisions of section 76 as to security) without unnecessary delay bring the person arrested before the Court before which he is required by law to produce such person. " Apart from the Code of Criminal Procedure, there are other statutes which provide for arrest in execution of a warrant of arrest issued by a court. To take one example, Order XXXVIII, rule 1, of the Code of Civil Procedure authorises the court to issue a warrant for the arrest of a defendant before judgment in certain circumstances. Form No. 1 in Appendix F sets out the terms of such a warrant. It clearly recites that it has been proved to the satisfaction of the court that there is probable cause for belief that the defendant is about to do one or other of the things mentioned in rule 1. The court may under section 55 read with Order XXI, rule 38, issue,a warrant for the arrest of the judgment debtor in execution of the decree. Form No. 13 sets out the terms of such a warrant. The warrant recites the decree and, the failure of the judgment debtor to pay the decretal amount to the decree holder and directs the bailiff of the court to arrest the defaulting judgment debtor, unless he pays up the decretal amount with costs and to bring him before the court with all convenient speed. The point to be noted is that, as in the case of a warrant of arrest issued by a court under the Code of Criminal Procedure, a warrant of arrest 266 issued by a court under the Code of Civil Procedure quite plainly discloses the reason for the arrest in that it sets out an accusation of default, apprehended or actual, and that the person to be arrested is made acquainted with the reasons for his arrest before lie is actually arrested. The several sections collected under sub heading B Arrest without warrant " in Chapter V of the Code of Criminal Procedure deal with arrests otherwise than under warrants issued by a court under that Code. Section 54 sets out nine several circumstances in which a police officer may, without an order from a Magistrate and without a warrant, arrest a person. Sections 55, 57, 151 and 401 (3) confer similar powers on police officers. Column 3, Schedule II to the Code of Criminal Procedure also specifies; the cases where the police may arrest a person without warrant. Section 56 empowers an officer in charge of a police station or any police officer making an investigation under Chapter XIV to require any officer subordinate to him to arrest without a warrant any person who may lawfully be arrested without a warrant. In such a case, the officer deputing a subordinate officer to make the arrest has to deliver to the latter an order in writing specifying the person to be arrested and the offence or other cause for which the arrest is to be made and the subordinate officer is required, before making the arrest, to notify to the person to be arrested the substance of the order and, if so required by such person, to show him the order. Section 59 authorises even a private person to arrest any person who in his view commits a non bailable and cognisable offence or any proclaimed offender and requires the person making the arrest to make over the arrested person, without unnecessary delay, to a police officer or to take such person in custody to the nearest police station. A perusal of the sections referred to above will at once make it plain that the reason in each case of arrest without a warrant is that the person, arrested is accused of having committed or reasonably suspected to have committed or of 267 being about to commit or of being likely to commit some offence or misconduct. It is also to be noted that there is no provision, except in section 56, for acquainting the person to be arrested without warrant with the grounds for his arrest. Sections 60 and 61 prescribe the procedure to be followed after a person is arrested without warrant. They run thus: " 60. A police officer making an arrest without warrant shall without unnecessary delay and subject to the provisions herein contained as to bail, take or send the person arrested before a Magistrate having jurisdiction in the case, or before the officer in charge of a police station." "61.No police officer shall detain in custody a person arrested without warrant for a longer period than under all the circumstances of the case is reasonable, and such period shall, not, in the absence of a special order of a Magistrate under section 167, exceed twenty four hours, exclusive of the, time necessary for the journey from the place of arrest to the Magistrate 's Court. " Apart from the Code of Criminal Procedure, there are other statutes which authorise the arrest of a person without a warrant issued by any Court. Reference may, byway of example, be made to sections 173 and 174 of the Sea Customs Act (VIII of 1878) and section 64 of the Forest Act (XVI of 1927). In both cases, the reason for the arrest is that the arrested person is reasonably suspected to have been guilty of an offence under the Act and there is provision in both cases for the immediate production of the arrested person before a Magistrate. Two things are to be noted, namely, that, as in the cases of arrest without warrant under the Code of Criminal Procedure, an arrest without warrant under these Acts also proceeds upon an accusation that the person arrested is reasonably suspected of having committed an offence and there is no provision for communicating to the person arrested the grounds for his arrest. 35 268 Turning now to article 22(1) and (2), we have to ascertain whether its protection extends to both categories of arrests mentioned above, and, if not, then which one of them comes within its protection. There can be no manner of doubt that arrests without warrants issued by a court call for greater protection than do arrests under such warrants. The provision that the arrested person should within 24 hours be produced before the nearest Magistrate is particularly desirable in the case of arrest otherwise than under a warrant issued by the court, for it ensures the immediate application of a judicial mind to the legal authority of the person making the arrest and the regularity of the procedure adopted by him. In the case of, arrest under a warrant issued by a court, the judicial mind had already been applied to the case when the warrant was issued and, therefore, there is less reason for making such production in that case a matter of a substantive fundamental right. It is also perfectly plain that the language of article 22(2) has been practically copied from sections 60 and 61 of the Code of Criminal Procedure which admittedly prescribe the procedure to be followed after a person, has been arrested without warrant. The requirement of 'article 22(1) that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest indicates that the clause really contemplates an arrest without a warrant of court, for, as already noted, a person arrested under a, court 's warrant is made acquainted with the grounds of his arrest before the arrest is actually effected. There can be no doubt that the right to consult a legal practitioner of his choice is to enable the arrested person to be advised about the legality or sufficiency of the grounds for his arrest. The right of the arrested person to be defended by a legal practitioner of his choice postulates that there is an accusation against him against which he has to be defended. The language of article 22(1) and (2) indicates that the fundamental right conferred by it gives protection against such 269 arrests as are effected otherwise than under a warrant issued by a court on the allegation or accusation that the arrested person has, or is suspected to have, committed, or is about or likely to commit an act of a criminal or quasi criminal nature or some activity prejudicial to the public or the State interest. In other words, there is indication in the language of article 22(1) and (2) that it was designed to give protection against the act of the executive or other non judicial authority. The Blitz case (Petition No. 75 of 1952), on which Sri Dadachanji relies, proceeds on this very view, for there the arrest was made on a warrant issued, not by a court, but, by the Speaker of & State Legislature and the arrest was made on the distinct accusation of the arrested person being guilty of contempt of the Legislature. It is not, however, our purpose, nor do we consider it desirable, to attempt a precise and meticulous enunciation of the scope and ambit of this fundamental right or to enumerate exhaustively the cases that come within its protection. Whatever else may come within the purview of article 22(1) and (2), suffice it to say for the purposes of this case, that we are satisfied that the physical restraint put upon an abducted person in the process of recovering and taking that person into custody without any allegation or accusation of any actual or suspected or apprehended commission by that person of any offence of a criminal or quasi criminal nature or of any act prejudicial to the State or the public interest, and delivery of that person to the custody of the officer in charge of the nearest camp under section 4 of the impugned Act cannot be regarded as arrest and detention within the meaning of article 22(1) and (2). In our view, the learned Judges of the High Court over simplified the matter while construing the article, possibly because the considerations hereinbefore adverted to were not pointedly brought to their attention. Our attention has been drawn to sections loo (search for persons wrongfully confined) and 552 (power to compel restoration of abducted females) of 270 the Code of Criminal Procedure, and it has been urged that neither of those sections contemplates an accusation against the victim and yet such victim, after recovery, has to be brought before a Magistrate. It is to be observed that neither of the two sections treats the victim as an arrested person for the victim is not produced before a Magistrate under sections 60 and 61 'which require the production of a person arrested without warrant, or under section 81 which directs the production of a person arrested under a warrant issued by a, court. The recovered victim is produced by reason of special provisions of two sections,, namely, sections 100 and 552. These two sections clearly indicate that the recovery and taking into custody of such a victim are, not regarded as arrest at all within the meaning of the Code of Criminal Procedure and, therefore, cannot also come within the protection of article. 22(1) and (2). This circumstance also lends support"to the conclusion we have reached, namely, 'that the taking into custody of an abducted person under the impugned Act is not an arrest within the meaning of article 22(1) and (2). Before the Constitution, came into force it was entirely for the Legislature to consider whether the recovered person should be produced before a Magistrate as is provided by sections 100 and 552 of the Criminal Procedure Code in the case of persons wrongfully confined or abducted. By this Act, the Legislature provided that the recovered Muslim abducted person should be taken straight to the officer in charge of the camp, and the Court could not question the wisdom of the policy of the Legislature. After the Constitution, article 22 being out of the way, the position in this behalf remains the same. Sri Dadachanji also argued that the Act is inconsistent with article 14. The meaning, scope and ambit of that article need not be explained again, for they have already been explained by this Court on more than one occasion. [See Chiranjit Lal Chowdhury vs The Union of India (1), The State of Bombay vs F. N. (1) ; 271 Balsara (1), The State of West Bengal vs Anwar Ali Sarkar (2), and Kathi Raning Rawat vs The State of Saurashtra (3)]. There can be no doubt that Muslim abducted persons constitute a well defined class for the purpose of legislation. The fact that the Act is extended only to the several States mentioned in section 1 (2) does not make any difference, for a classification may well be made on a geographical basis. Indeed, the consent of the several States to the passing of this Act quite clearly indicates, in the opinion of the governments of those States who are the best judges of the welfare of their people, that the Muslim abducted persons to be found in those States form one class having similar interests to protect. ' Therefore the inclusion of all of them ' in the definition of abducted persons cannot be called discriminatory. Finally, there is nothing discriminatory in sections 6 and 7. Section 7 only implements the decision of the Tribunal arrived at under section 6. There are several alternative things that the Tribunal has been authorised to do. Each and everyone of the abducted persons is liable to be treated in one way or another as the Tribunal may determine. It is like all offenders under a particular section being liable to a fine or imprisonment. There is no discrimination if one is fined and the other is imprisoned, for all offenders alike are open to the risk of being treated in one way or another. In our view, the High Court quite correctly decided this question against the petitioner. The learned counsel for the respondent Ajaib Singh contended that the Act was inconsistent with the provisions of article 19(1)(d) and (e) and article 21. This matter is concluded by the majority decision of this court in Gopalan 's case (4) and 'the High Court quite correctly negatived this contention. Sri Dadachanji has not sought to support the views of Bhandari J. regarding the Act being inconsistent with article 19 (1)(g). Nor has learned counsel (1) ; (3) ; (2) ; (4) ; 272 seriously pressed the objection of unconstitutionality based on article 15, which, in our view, was rightly rejected by the High Court. Although we hold that the High Court erred on the construction they Put upon article 22 and the appellant has succeeded on that point before us, this appeal will, nevertheless, have to be dismissed on the ground that the Tribunal was not properly constituted and its order was without jurisdiction, as conceded by the learned Solicitor General. We, therefore, dismiss this appeal on that ground. We make no order as to costs.

The Abducted Persons (Recovery and Restoration) Act (Act LXV of 1949) does Dot infringe article 14, article 16, article 19 (1) (d), (e) and (g), article 21 or article 22 of the Constitution and is not unconstitutional on the ground that it,contravenes any of these provisions. The physical restraint Put upon an abducted person in the process of recovering and, taking that person into custody without any allegation or accusation of any actual or suspected or apprehended commission by that person of any offence of a criminal or quasi criminal nature or of any act prejudicial to the State or the public interest, and delivery of that person to the custody of the officer in charge of the nearest camp under section 4 of the Abducted Persons (Recovery and Restoration) Act (LXV of 1949) is not arrest and detention within the meaning of article 22 (1) and (2) of the Constitution. The said Act does not therefore infringe the fundamental right guaranteed by article 22 of the Constitution. 255 The fundamental right conferred by article 22 gives protection ,against such arrests as are effected otherwise than under a warrant issued by a Court on the allegation or accusation that the arrested person has, or is suspected to have,. committed, or is about or likely to commit, an act of a criminal or quasi criminal nature or some activity prejudicial to the public or the State interest. There is indication in the language of article 22 (1) and (2) that it was designed to give protection against the act of the exe cutive or other non judicial authority. The Blitz Case (Petition No. 75 of 1952) explained. Muslim abducted persons constitute a well defined class for the purpose of legislation and the fact that the Act is extended only to the several States mentioned in section 1 (2) of the Act does not make any difference, for a classification may well be made on a geographical basis. The Act does not therefore contravene article 14 of the Constitution. If the language of an article is plain and unambiguous and admits of only one meaning, then the duty of the Court is to adopt that meaning irrespective of the inconvenience that such a construction may produce. If, however, two constructions are possible then the Court must adopt that which will ensure smooth and harmonious working of the Constitution and, eschew, the other which will lead to absurdity or give rise to practical inconvenience or make well established provisions of existing law nugatory.

Labh Singh, respondent No.1 was the owner of certain agricultural lands in three villages situated in the district of Kapurthala, namely, village Karahal Nauabad, village Isherwa and village Brindpur measuring in all 32 8 standard acres. Of them an extent of 7 4 standard acres of land situated in village Brindpur had been mortgaged with possession by him in favour of One Lachman Singh of village Khera Dona before the Pepsu Tenancy and Agricultural Lands Act, 1955 (Pepsu Act 13 of 1955) came into force. The mortgage was subsisting when Chapter IV A was inserted by the (Second Amendment) Act, 1956 (Pepsu Act No.15 of 1956) by which sections 32 A to 32 N were introduced. Clause (f) of section 2 of the Act defines the expression "land owner". The explanation added to the said clause provided that in respect of land mortgaged with possession the mortgagee should be deemed to be the land owner. The permissible limit for the purpose of the Act was fixed at 30 standard acres of land by section 3 thereof. In view of the above, Labh Singh, being in possession of less than 30 standard acres, 7 4 standard acres being in possession of the mortgagee was treated as a small owner not liable to surrender any land as surplus land under the provisions of the Act. But on April 1, 1959, Labh Singh got back the possession of 7 4 standard acres of land by redeeming the mortgage. On redemption the total extent of land in his possession became 32 8 standard acres which was in excess of 30 standard acres which had been prescribed by the Act as the permissible limit. On coming to know that Labh Singh had in his possession land in excess of the permissible limit, proceedings were started by the Revenue authorities to declare the surplus land in his hands 358 and to take possession of the surplus area. The Collector directed Labh Singh to produce a list of Khasara Numbers to be surrendered as surplus land within a fortnight therefrom. Aggrieved by the order of the Collector, Labh Singh preferred an appeal before the Commissioner of Jullandur Division. That appeal was unsuccessful. A revision petition filed before the Financial Commissioner, Punjab against that order also failed. Labh Singh, thereafter, filed a writ petition before the High Court of Punjab and Haryana which was also dismissed. In the Letters Patent Appeal filed before the Division Bench of the High Court by Labh Singh it was held (i) that the acquisition made by Labh Singh of 7 4 standard acres of land on redemption amounted to a transfer within the meaning of that expression in section 32 L of the Act and that being so by virtue of sub section 2 of that section the transfer by which Labh Singh had acquired interest in that land must be deemed to be null and void and therefore non existent; and (ii) the transfer being non existent there was no acquisition in the eye of law and consequently, the transfer had to be ignored and not to be taken into consideration. Hence the State appeal by special leave. Allowing the appeal, the Court ^ HELD: 1.1 Respondent No.1 Labh Singh was in possession of land in excess of the permissible limit after he redeemed the mortgage and he therefore became liable to surrender the surplus land, that is, 2 8 standard acres to the Government by virtue of section 32 A itself. Even though there was no express machinery provided in the Act at the relevant time to deal with the cases of this type, the Court is not competent to refuse to give effect to the plain words of section 32 A. [365 G H, 366 A] 1.2. The scheme of the Act is that no land owner or tenant can hold land in excess of the permissible limit and every such land owner or tenant holding land in excess of permissible limit is liable to surrender the surplus land whatever may be the time at which such surplus land is acquired and whatever may be the mode of acquisition. Chapter IV A of the Act is intended to place a ceiling upon the holding of land for personal cultivation by a landowner or a tenant in excess of the permissible limit not merely on the date on which it came into force but even subsequently. [363 G H, 364 A] Vidya Vati vs The State of Punjab & Ors. followed. 359 2.1 In the context in which the word "transfer" is used in section 32 L of the Act it cannot be construed of including within its scope the re transfer of land which takes place on redemption. [364 H] 2.2 Even though the mortgagee is liable to re transfer the land in favour of the mortgagor on redemption of the mortgage such re transfer cannot be treated as equivalent to transfer contemplated under section 32 L of the Act. When a mortgagor mortgages the land with possession he does not cease to be its owner. The equity of redemption still vests in him and on redemption he gets back possession of the mortgaged land. The present case came within the mischief of section 32 A of the Act, which was all pervasive. [364 F G, 365 A]

The respondent was prosecuted for an offence under section 8 of the Suppression of Immoral Traffic in Women and Girls Act, 1956, and a charge sheet was presented before a First Class Magistrate in Delhi by a sub inspector, who, as the officer in charge of the Police Station, had investigated the case. On an objection raised by the respondent, the Magistrate quashed the charge sheet on the ground that only the special police officer appointed under the Act was competent to investigate the offences under the Act. Held, (Mudholkar, J., dissenting), that since the Suppression of Immoral Traffic in Women and Girls Act, 1956, created new offences and prescribed the procedure for dealing with them, it was a complete code in itself and to that extent the provisions of the Act must prevail over those of the Code of Criminal Procedure, 1898; that as the Act provided for the appointment of a special police officer for dealing with offences under the Act in the area within his jurisdiction, he and his assistant police officers were the only persons who could investigate offences under the Act committed within that area, and that police officers not specially appointed as special police officers could not 695 investigate the offences under the Act even though they were cognizable offences. per Mudholkar, J. A special police officer appointed under the Suppression of Immoral Traffic in Women and Girls Act, 1956, and empowered to deal with offences under the Act under section 13(1) derives the power to investigate into such offences not from that section but only under section 551. of the Code of Criminal Procedure. Even assuming that the words "deal with offences". in section 13(1) confer upon a special police officer the power to investigate into an offence under the Act and present a charge sheet, the powers of an officer in charge of a station house within whose jurisdiction an offence under the Act has been committed are not excluded by any of the provisions of the Act.

On the basis of a First Information Report regarding loss of a buffalo lodged at police station, Chhainsa, the Sub Inspector of that police station sought to search the house of the appellants situated in the jurisdiction of police station, Dankaur. The appellants and several others resisted the search and caused injuries to the police party, for which they were prosecuted under various sections of the Indian Penal Code. The appellants along with certain others were convicted by the trial court and their appeals were disallowed by the High Court. By special leave they appealed to this Court, contending : (i) that the officer of a police station cannot carry out a search in the jurisdiction of another police station without the permission of the Station House Officer of that station; in the present case the reason given by the Sub Inspector for not taking such permission, namely, that the local police was in league with the appellants did not satisfy the terms of section 166(3) of the Code of Criminal Procedure; (ii) that the search was also illegal for the reason that the Sub Inspector before attempting the search did not record his reasons as required by sections 165 & 166 of the Code; (iii) that being illegal the search was not bona fide. (iv) that the appellants were entitled to the right of private defence since they thought that the raiding party were decoits dressed as policemen. HELD : (i) In the case of stolen cattle, time is of the essence, because once the animal is removed and mixed up with others, it is very difficult to spot it in the big herds common in these places. Therefore if the police officer had reason to believe that the police officers at Dankaur would take their own time because they were mixed up with the accused party, he had full jurisdiction in taking recourse to sub section (3) of section 166 and to carry out the search himself. [493 G H] (ii) No questions were put to the Sub Inspector to elicit from him whether the reasons for the search were recorded or not. Regard being had to the regularity of official acts it must be presumed that the Sub Inspector must have taken the precaution to ',record his reasons. [494A] (iii) In the circumstances of the case the search was legal and bonafide. [494 B] (iv) The accused were informed by the Sub Inspector that it was the police party which had come and they had no 'reason to attack the police party either as dacoits or in self defence in any other form. [494 C]

Against their conviction and sentence passed by the Sessions Judge, Gurdaspur, the appellants preferred an appeal to the High Court. The State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was also filed under Section 401 Crl. P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice". Though the High Court made an express order on December 9, 1974 that the revision petition would be heard along with the criminal appeal, the High Court by its impugned judgment dated January 3, 1978, dismissed the appeal filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under Section 304 Part I read with Section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years. While making that order, the High Court observed that the State appeal "for enhancement of punishment" was partly accepted, without reference to the revision petition. Hence the petition for special leave under Article 136 of the Constitution on the ground that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure. Dismissing the petition the Court, ^ HELD: 1. The revision petition under section 401 Crl. P.C. for enhancement of the sentence was maintainable as it was not permissible for the revision petitioner to file an appeal under section 377. The High Court effectively disposed of both the appeals and the revision petition even though there was an inadvertent mistake in not making a reference to the revision petition in the judgment. [647 F G, 648 B] 2. The opportunity for pleading for acquittal was amply furnished to the accused at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for their acquittal or the reduction of the sentence. That, in fact, was the subject matter of their appeal. The fact that the appeal filed by the State 5 625SCI/79 646 against the acquittal of the accused under section 302 I.P.C. was heard along with their appeal against conviction and sentence, itself furnished an opportunity to show cause against the enhancement of the sentence. [648 C D] 3. (a) In the petition filed under section 401 Crl. P.C. for the exercise of the High Court 's power of revision, it was permissible for it to exercise the power of a Court of appeal under section 386 for enhancement of the sentence. [648 E F] (b) It was also permissible for the High Court under Section 397 Crl. P.C., to call for and examine the record of the proceedings before the trial court for purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order recorded or passed by that inferior Court. The High Court 's power of revision under section 401 Crl. P.C. in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge includes the power conferred on a court of appeal under section 386 to enhance or reduce the sentence. So when the record of the case was before the High Court in connection with the two appeals and the revision petition there was nothing to prevent the High Court from invoking its power under section 397 read with 401 Crl. P.C. and to make an order for the enhancement of the sentence. [648 F H]

Appellant was tried by the Sessions judge and a jury on the charge of committing rape. On the question of the age of the girl expert medical evidence was produced but no birth certificate was available. The father of the girl could not be examined as he was dead. According to the Police evidence the whereabouts of the mother were not traceable but the Police Officer who himself made the inquiry was not produced. As regards the commission of the rape the girl herself was examined and there was the evidence of another girl and some circumstantial evidence. The 750 accused filed a written statement but the judge refused to read it out to the jury. The jury returned a unanimous verdict of guilty and the judge, accepting the verdict, convicted the appellant and sentenced him to 5 years rigorous imprisonment. An appeal to the High Court was summarily rejected. But the High Court granted "leave to appeal" on the ground that on account of the summary dismissal of the appeal appellant did not have the satisfaction of feeling that he had been fully heard and that justice should also appear to have been done by a full consideration of the evidence by the appellate court. Held that, the certificate granted by the High Court amounts to a condemnation of the practice of summary dismissal of appeals, especially in jury trials. Such practice prevails in most High Courts and has the sanction of statute law. No certificate should be granted on a mere question of fact nor in a case where there are no complexities of law involved requiring an authoritative interpretation by the Supreme Court. Haripada Dey vs The State of West Bengal, ; , followed. There is no provision in the Code of Criminal Procedure requiring a Session judge to accept a written statement filed by an accused. If such a written statement is allowed to be used at a Sessions trial by jury, it may throw the door open to irrelevant and inadmissible matter and cast an additional burden on the judge of separating admissible from inadmissible statements. The judge had rightly refused the written statement to be read to the jury. There is no rule of law or practice that there must be cor roboration of the testimony of the prosecutrix, before conviction for rape. If the jury had been appraised of the necessity of corroboration, it was for the jury to decide whether or not it would convict on the uncorroborated testimony of the prosecutrix in the particular circumstances of the case before it. Rameshwar vs The State of Rajasthan, , followed. There was no misdirection on the question of the age of the girl. The Session judge had pointed out the several items of evidence to the jury. The failure of the prosecution to examine the Police Officer who actually made inquiry into the whereabouts of the mother does not affect the case as in any case the inquiry would be the result of hearsay.

The appellant was elected to the House of the People from a constituency in the State of Madhya Pradesh. The respondents were the ,other contesting candidates. Respondent No. 1 filed an election petition challenging the election of the appellant. That election petition was dismissed by the Election Tribunal. Against the order of the TribunaL the first respondent preferred an appeal to the High Court under section 116 A 134 159 S.C. 9. 130 of the Representation of the People Act, 1951. Admittedly, the appeal was filed more than 30 days after the order of the Election Tribunal. If the time requisite for obtaining a copy of the order of the Tribunal was excluded, the appeal was filed within 30 days. However, if that was not 'done, the appeal was out of time. The contention of the appellant before the High Court was that the respondent No. 1 was not entitled in law to exclude the time taken by him in obtaining the copy of the order of the Tribunal. That contention was rejected by the High Court. The High Court also found that the appellant was guilty of two, corrupt practices and hence his election was set aside. The appellant came to this Court by special leave. The only question raised before this Court was whether for 'the purpose of computing the period of 30 days prescribed under section 116 A(3) of the Act, the provisions of section 12 of the Limitation Act could be invoked or not. Dismissing the appeal, Held: (per B. P. Sinha, C.J., K. Subba Rao, Raghubar Dayal and N. Rajagopala Ayyangar JJ.) (i) The exclusion of time provided for by section 12 is permissible in computing the period of limitation for filing.the appeal in the High Court. Per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.) (ii) Though the right of appeal is conferred by section 116 A of the Representation of the People Act, 1951, and it is by virtue thereof that the appeal was filed by respondent in the High Court, it is still an appeal " under the Code of Civil Procedure, 1908, to the High Court". To attract article 156 of the First Schedule to the Limitation Act, it is not necessary for an appeal to be an "appeal under the Code of Civil Procedure" that the right to prefer the appeal should be conferred by the Code of Civil Procedure. It is sufficient if the procedure for the filing of the appeal and the power of the Court for dealing with the appeal, when filed, are governed by the Code. Per Raghubar Dayal and Mudholkar JJ. There is no warrant for holding that an appeal which is not given by the Code of Civil Procedure is still an appeal under the Code merely because its procedural provisions govern its course. Where a right of appeal is given by some other law, the appeal must be regarded as one udder that law and not under the Code of Civil Procedure. There is no reason for construing the words "under the Code of Civil Procedure" as meaning "governed in the matter of procedure by the Code of Civil Procedure". Held:(iii) (per B. P. Sinha, C.J., N. Rajagopala Ayyangar and Raghubar Dayal JJ.) The entire sub section (2) of section 29 of the Limitation. Act has to be read as an integrated provision and the conjunction "and" connects the two parts and makes it necessary for attracting cl. (a) that the conditions laid down by the opening words of sub section (2) should be satisfied. 131 Per Subba Rao and Mudholkar JJ. The second limb of sub section (2) of section 29 is wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule. Per Subba Rao J. The use of the word "any" clearly shows that the second part of sub section (2) of section 29 does not depend on the first part or vice versa. The second part of sub section (2) is an independent provision providing for that category of proceedings to which the first part does not apply. Held: (i) that section 116 A does not provide an exhaustive and exclusive code of limitation for the purpose of appeals against orders of Tribunals and also does not exclude the general provisions of the Limitation Act. Section 29(2)(a) of the Limitation Act speaks of express exclusion and there is no express exclusion in section 116 A(3) of the Representation of the People Act, 1951. Moreover, the proviso to section 116 A(3) from which an implied exclusion is sought to be drawn does not lead to any such necessary implication. The proviso only restores the power denied to the Court under section 29(2)(b) of the Limitation Act. If this proviso had not been there, section 29(2)(b) would have excluded the operation of section 5 of the Limitation Act with the result that even if a sufficient cause for the delay existed, the High Court would have been helpless to excuse the delay. (ii)S. 12(2) of the Limitation Act applies to an appeal to the High Court against the order of the Tribunal. An order made under section 98 of the Representation of the People Act, 1951, if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order and thereby attracting the relevant provisions of section 12 of the Limitation Act. Section 12(2) does not say that the order mentioned therein shall be only such order as is defined in the Civil Procedure Code. If a statute provides for the making of an order and confers a right of appeal to an aggrieved party against that order within a prescribed time, the time requisite for obtaining a copy of the order can be excluded. The Act of 1951 empowers the Tribunal to make an order and gives a right of appeal against that order to the High Court and therefore section 12(2) is directly attracted without any recourse to the definition of an order in the Code of Civil Procedure. Per Mudholkar J. The first limb of section 29(2) is concerned only with the proceedings under special or local law for which a period of limitation is prescribed in the First Schedule to the Limitation Act. If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law, certain consequences will follow under the provision. No inconvenience is to be caused by giving a literal and natural interpretation to the expression used by the legislature in the first portion of sub section (2) of section 29 because cases of other kind can easily come under the second portion thereof. Case Law referred to. 132

The respondent was born in India in 1924 and had lived there all along till about the end of 1954. He had been paying rent for his shop in India for ten years upto about 1958 and his family was and had always been in India. At the end of 1954 or the beginning of 1955 lie went to Pakistan from where he returned on January 20, 1955, on a passport granted by the Pakistan Government which had a visa endorsed on it by the Indian authorities permitting him to stay in India up to April, 1955. The respondent applied to the Central Government for extension of the time allowed by the visa but the records did not Show What order, if any, had been made on it. As the respondent had stayed beyond the time specified in the visa, he was on September 3, 1957, served with an order made by the Government of Andhra Pradesh under section 3(2)(C) Of the , i946 requiring him to leave India. The order described him as a Pakisthan National. on his failure to comply with this order 93 738 he was prosecuted under section 14 of the . His defence was that he was an Indian national. The trying magistrate rejected this defence and convicted him holding (a) that the fact that the respondent obtained a Pakistan passport proved that he had disowned Indian nationality and ceased to be an Indian national and (b) that by refusing to extend the time fixed by the visa the Central Government had decided that the respondent was a foreigner and under section 8 of the , such a decision was final. An appeal by the respondent was dismissed by the Sessions judge on the ground that the respondent 's application for extension of the time fixed by the visa proved that he had renounced his Indian nationality and had acquired the citizenship of Pakistan. The High Court of Andhra Pradesh set aside the conviction in revision. On appeal by the State of Andhra Pradesh, Held, that neither the Magistrate nor the Sessions Judge was competent to come to a finding of his own that the respon dent, an Indian national, had disowned his nationality and acquired Pakistan nationality for under section 9(2) of the , that decision could only be made by the prescribed authority which under the Rules framed under the Act was the Central Government. The fact that the Central Government had refused to extend the visa did not show that it had decided under the section that the respondent had renounced his Indian nationality and acquired Pakistan citizenship. In any event, in order that the Central Government might come to a decision under section 9(2) of the an enquiry as laid down in r. 30 Of the Rules framed under the Act had to be made and no such inquiry had been made. On the facts established, the respondent became an Indian citizen under article 5(a) of the Constitution when it came into force. He thereby discharged the onus laid on him by section 9 of the to prove that he was an Indian citizen when that was in dispute. The passport obtained by the respondent from the Pakistan Government would, therefore, only be evidence that the respondent had renounced Indian nationality and acquired Pakistan citizenship. Such evidence was however of no use in a court for no court could in view of section 9(2) of the decide whether an Indian citizen had renounced his citizenship and acquired the citizenship of a foreign country. Section 8 of the had no application to the case as it only applied where a foreigner is recognised as a national by the law of more than one foreign country or where it is uncertain what nationality is to be ascribed to a foreigner and in the present case that was not the question but the question was whether the respondent was an Indian or a foreigner. The respondent 's short visit to Pakistan had not amounted to a migration to that country. Query, whether article 7 of the Constitution contemplates migration from India to Pakistan after January 26, 1950.

Appeal No. 66 of 1959. Appeal by special leave from the judgment and order dated the February 1, 1958, of the Deputy Custodian General, Evacuee Property, New Delhi, in No. 1017 R/ Judl/Punj. Achhru Ram and M. L. Kapur, for the appellants. N. section Bindra and T. M. Sen, for the, respondents. March 8. The Judgment of the Court was delivered by 216 SUBBA RAO, J. This is an appeal by special leave against the order of the Deputy Custodian General of Evacuee Property, India, dated February 1, 1958, setting aside the order dated June 6, 1949, passed by the Custodian of Evacuee Property, Patiala, and remanding the case for enquiry. The facts lie in a small compass and may be briefly stated. One Dafedar Niranjan Singh, the first appellant herein, owned houses Nos. 915 and 916 situate in the town of Patiala. During the latter part of 1948, the Custodian of Evacuee Property, Patiala, took possession of the said houses under the provisions of the Patiala Evacuees (Administration of Property) Ordinance of Samvat 2004 (No. IX of 2004) (hereinafter referred to as Ordinance IX of 2004), on the ground that they were evacuee properties. On January 27, 1949, Dafedar Niranjan Singh filed a claim petition before the said Custodian alleging that the said properties belonged to him by inheritance. The Custodian by order dated June 6, 1949, allowed the claim and released the said properties. This order was communicated to the Assistant Custodian on June 7, 1949, and pursuant to that order the said houses were released. On June 9, 1955, the first appellant sold a part of the said properties to Major Bhagwant Singh, the second appellant herein, for Rs. 6,000. On June 21, 1949, Ordinance IX of 2004 was repealed by the Patiala and East Punjab States Union Ordinance No. XIII of Samvat 2006 (hereinafter referred to as Ordinance No. XIII of 2006) which was in its turn repealed by the Patiala and East Punjab State Union Ordinance No. XVII of 2006 (hereinafter referred to as Ordinance No. XVII of 2006). On October 18, 1949, Ordinance No. XVII of 2006 was also repealed by Central Ordinance No. XXVII of 1949, under which for the first time the office of Custodian General was created. This Central Ordinance was replaced by the Administration of Evacuee Property Act (No. XXXI of 1950). The said Act was amended from time to time. Nothing turns upon the said amendments in the present appeal. On December 24, 1955, i.e., more than six years after the order of the Custodian, the Litigation 217 Inspector of Evacuee Properties filed an application before the Custodian of Evacuee Property, Patiala, for review of the order of the Custodian dated June 6, 1949. During the pendency of that application, the powers of the Custodian and the Additional Custodian of Evacuee Property of review and revision under section 26 of the Act were taken away by the Administration of Evacuee Property (Amendment) Act XCI of 1956. On April 2, 1957, the Additional Custodian submitted the case to the Custodian General of Evacuee Property to enable him to take action suo motu under section 27 of the Act. On May 24, 1957, the Deputy Custodian General, to whom the powers of the Custodian General in that behalf had been delegated, issued notice to the appellants to show cause why the order of the Custodian of Evacuee Property, Patiala, dated June 6, 1949, be not revised. On February 1, 1958, after hearing the parties, the Deputy Custodian General, set aside the order of the Custodian dated June 6, 1949, and remanded the case to the Custodian for further enquiry. The present appeal by special leave was directed against the said order. Learned counsel for the appellants raised before us the following three points: (1) The deeming provisions of the repealing. Ordinances and Acts culminating in section 58(3) of the Act apply only to things done or action taken by the Custodian in exercise of his administrative powers and not to orders made by him in exercise of his judicial powers. (2) The order passed by the Custodian under Ordinance IX of 2004 cannot be deemed to be an order passed under the Act, as the chain of 'fiction was broken when Ordinance No. XIII of 2006 was issued. (3) Section 58(3) of the Act expressly saves the previous operation of Ordinance XXVII of 1949 or any corresponding law, and, therefore, the orders that had become final under the said Ordinance could not be revised under section 27 of the. Learned counsel for the State in addition to countering the said arguments, further submitted that the Custodian under Ordinance IX of 2004 had no jurisdiction to allow the claim of the first appellant and, 28 218 therefore, the said order was non est; with the result, the Custodian General could vacate it at any time under section 27 of the Act. Before considering the arguments advanced by learned counsel, it would be convenient at the outset to give a short history of the legislation relevant to the present enquiry leading to the conferment of plenary powers of revision under the Act on the Custodian General. The earliest Ordinance was the Patiala Evacuee (Administration of Property) Ordinance No. IX of 2004. It extended to the whole of Patiala State. Section 3 thereof enabled the appointment of Custodian of Evacuee Property and also the appointment of one or more Deputy Custodians and Assistant Custodians for such local areas as might be specified. Section 5 enjoined on the Custodian within the area placed in his charge to take possession of evacuee property and to take all measures he considered necessary or expedient for preserving or safeguarding such property. Under the proviso to section 6, the said Custodian, if any owner objected to his taking possession, after the issue of notice for taking possession and before taking possession thereof, should stay proceedings forthwith and should send the record of the case to the claims officer for decision. Section 12 provided for preferring of claims of any kind against evacuees or their property before the claims officer appointed for that purpose. Sub section (2) thereof conferred a right of appeal within 60 days of the date of decision of the said officer to the Custodian, urban areas; and under sub section (4) the decision of the claims officer, and, where an appeal had been filed, the decision of the appellate authority, should be final and conclusive and should not be called in question in an court by way of appeal or revision or in any original suit, execution application or other petition. Section 14 enabled the Custodian, urban areas, either suo motu or on application of any claimant to transfer on sufficient grounds any claim from the claims officer to any other officer appointed in this behalf by the Prime Minister Under section 16, decisions of the claims 219 officer and the Custodian were deemed to be decrees of court. It may be noticed at this stage, as it may have some bearing on an argument for the first time ' advanced on behalf of the State, that none of the provisions of the said Ordinance expressly enabled the Custodian to decide himself at time first instance a claim set up by an evacuee in respect of his property proposed to be taken possession of by him. But it may be contended that such a power was implicit in the power conferred on the Custodian to take possession of an evacuee property. When he could take possession of an evacuee property, if he had reason to believe that it was an evacuee property, he could equally release it if he was satisfied that he made a mistake in that regard. It may also be that the Custodian could withdraw the case to himself under section 14, if he was appointed by the Prime Minister under section 14 of the Ordinance to make an enquiry. Ordinance IX of 2004 was repealed by Ordinance XIII of 2006 which came into force on June 21, 1949. Under section 10 of the said Ordinance, any person claiming any right to or interest in any property of which the Custodian had taken possession or assumed control under section 9 might prefer such claim before the Custodian by an application within 30 day. ,.; from the date on which the possession of the property was taken. The Custodian was empowered to make a summary inquiry and to make an order on the application. Sub section (5) of section 10 conferred a power of revision on the Custodian against the order of an Assistant or Deputy Custodian for the purpose of satisfying himself as to the legality or propriety of any order passed by the said officer. Under sub section (6) thereof, any person aggrieved by an order made under sub section (4) or sub section (5) could prefer an appeal to the District Judge within whose ' jurisdictional limits the property was situate within one month of the date of the said order. Under sub section (7) thereof, all orders passed by the Claims Officer appointed under Ordinance IX of 2004 should be deemed to have been passed under sub section (4) of the said section of this Ordinance for the purpose of appeal or revision, 220 and such appeal could be filed to the District Judge within whose jurisdictional limits the property was situate within one month after the commencement of this Ordinance or the period prescribed under sub section (6) whichever expired later. Sub section (8) conferred revisional jurisdiction on the High Court against orders made under sub section (4), (5) or (6). Under sub section (9), subject to the decision of the District Judge on appeal or the High Court in revision, the order of the Custodian would be final and 'conclusive. One thing that may be noticed in this Ordinance is that no order made by the Custodian under Ordinance IX of 2004 was deemed to continue under this Ordinance. Sub section (7) of section 10 applied only to orders made by a Claims Officer appointed under the earlier Ordinance. Ordinance No. XVII of 2006, which came into force on July 31, 1949, repealed the earlier Ordinance XIII of 2006. Section 40 of this Ordinance read as follows: (1) The Patiala and East Punjab States Union Evacuees ' (Administration of Property) Ordinance, 2006, is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken in the exercise of any power conferred by the Ordinance aforesaid shall be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty incurred or proceeding commenced under the repealed Ordinance shall be deemed to be a penalty incurred, or proceeding commenced under this Ordinance as if this Ordinance were in force on the day when such thing was done, action taken, penalty incurred or proceeding commenced. (3) Notwithstanding anything contained in this Ordinance or in any other law relating to the administration of evacuee property in force in the Union before the commencement of this Ordinance, all claims pending in the court of the Claims Officer appointed under the provisions of the Patiala Evacuee (Administration of Property) Ordinance, 2004 , shall be heard and decided by him in accord ance with the provisions of the aforesaid Ordinance. 221 (4) Any order passed under sub section (3) shall be appealable to or revisable by the Custodian with. in such time and in such manner as is laid down it the Ordinance referred to in sub section (3). Under this Ordinance anything done or an action taken under Ordinance XIIII of 2006 should be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance. If the order of the Custodian under Ordinance IX of 2004 could not be deemed to be an order made under Ordi nance XIII of 2006, sub section (2) of section 40 of this Ordinance could not obviously operate on the said order, for the condition necessary for invoking the deeming provision was that the order should have been made under Ordinance XIII of 2006. Then came the Administration of Evacuee Property Ordinance, 1949 (No. XXV 11 of 1949). This Ordinance came into force on October 18, 1949. This Ordinance for the first time created the office of Custodian General. Under section 5 of this Ordinance, "The Central Government may, by notification in the Official Gazette, appoint a person to be the Custodian General of Evacuee Property in India for the purpose of discharging the duties imposed on the Custodian General by or under this Ordinance. " Section 27 of this Ordinance which dealt with powers of revision of the Custodian General, read as follows: "(1) The Custodian General may at any time, either on his own motion or on application made to him in this behalf, call for the record of any proceeding in which any District Judge or Custodian has passed an order in appeal under the provisions of this Chapter for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit." "(2) Notwithstanding anything contained in subsection (1), where in respect of any proceeding called for under sub section (1), the Custodian General is 222 of opinion that the District Judge is in error in holding any person not to be an evacuee or any property not to be evacuee property, he shall not pass any order in relation thereto but shall refer the matter, with his own opinion thereon, to the High Court to which the District Judge is otherwise subordinate." "(3) Any reference made under subsection (2) shall be heard by a Bench of the High Court consisting of not less than two Judges, and the Custodian General shall dispose of the proceeding in accordance with the decision of the High Court. " Section 28 read: "Save as otherwise expressly provided in this Chapter, every order made by the Custodian General, District Judge, Custodian, Additional Custodian, Authorized Deputy Custodian, Deputy Custodian, or Assistant Custodian shall be final and shall not be called in question in any original suit, application or execution proceeding." A combined reading of sections 27 and 28 indicates that the Custodian General 's revisional jurisdiction was confined only to appellate orders of the District Judge or the Custodian; and, subject to the provisions of the Ordinance, the orders of the respective authorities were made final. Section 55 repealed the Ordinances of the various Provinces and provided under sub section (3) there of as follows: "Notwithstanding the repeal by this Ordinance of the Administration of Evacuee Property Ordinance, 1949, or of any corresponding law, anything done or any action taken in the exercise of any power conferred by that Ordinance or law shall be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty incurred or proceeding commenced under that Ordinance or law shall be deemed to be a penalty incurred or proceeding commenced under this Ordinance as if this Ordinance were in force on the day on which such thing was done; action taken, penalty incurred or proceeding commenced. " The effect of the provisions of this Ordinance may be 223 stated thus: An order made under Ordinance No. XVII of 2006 should be deemed to have been made in exercise of the powers conferred under this Ordinance; any order so made, if it had not become final under the earlier Ordinance would be subject to the appellate or revisional jurisdiction, as the case may be, in the manner prescribed by this Ordinance; but if the said order was not made in appeal by the Custodian or the District Judge, it would not be subject to the revisional jurisdiction of the Custodian General, with the result that, under this Ordinance, even if the said order had not become final under the earlier Ordinance, it would become final under this Ordinance, if no further proceedings as provided under this Ordinance were taken in respect of the said order. Ordinance No. XXVII of 1949 was repealed by the (No. XXXI of 1950) (hereinafter called the Act), which came into force on April 17, 1950. This Act enlarged the revisional jurisdiction of the Custodian General. Section 27 is in the following terms: "(1) The Custodian General may at any time either on his own motion or on application made to him in this behalf call for the record of any proceedings in which any Custodian has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit: The main difference between section 27 of the Act and section 27 of the Ordinance repealed by the Act is that under the. Act the Custodian General may exercise his revisional powers in respect of any proceedings in which any Custodian had passed an order, while under the Ordinance his revisional jurisdiction was confined only to an appellate order made by the Custodian or the District Judge, as the case may be. Section 58 of the Act, which repealed the ordinance provided in sub section (3) as follows: "The repeal by this Act of the Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949), or the, Hyderabad Administration of Evacuee 224 Property Regulation (Hyderabad No. XII of 1359 F.) or of any corresponding law shall not affect the previous operation of that Ordinance, Regulation or corresponding law, and subject thereto, anything done or any action taken in the exercise of any power conferred by or under that Ordinance, Re gulation or corresponding law shall be deemed to have been done or taken in the exercise of the powers conferred by or tinder this Act as if this Act were in force on the day on which such thing was done or action taken. " The second part of section 58(3) of the Act is similar to that of section 55(3) of the Ordinance. But there is an essential difference between the first part of the said sub section in the Act and that in the Ordinance. The difference lies in the fact that under the Act the repeal of the Ordinance or of any corresponding law was not to affect the previous operation of that Ordinance or the corresponding law. Only subject to this qualification, anything done or any action taken in exercise of any power conferred by the Ordinance shall be deemed to have been done or taken in exercise of the powers conferred by or under the Act. One of the questions raised in this appeal turns upon the interpretation of ' the words "previous operation of that Ordinance". This Act was amended from time to time and the latest of the amendments was by Act 91 of 1956. As nothing turns upon the provisions of the ' amending Acts, we need not consider all of them; it would be enough if section 7A which was added by section 4 of Act 52 of 1954 was noticed. Under that section, "Notwithstanding anything contained in this Act, no property shall be declared to be evacuee property on or after the 7th day of May. 1954". There is also a proviso to that section, but that does not concern us here. With this background we shall proceed to consider the arguments advanced by learned counsel. The first argument of learned counsel for the appellant, namely, that the operation of section 58(3) of the Act shall be confined only to administrative acts done by the Custodian under the earlier Ordinances, was specifically raised before this Court and negatived by 225 it in Indira Sohan Lal vs Custodian of Evacuee Property, Delhi(1). There, on February 23, 1948, and application was made to the Custodian of Evacuee s Property for confirmation of the transaction of exchange under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947, as amended in 1948. That application was not disposed of until March 20, 1952, on which date the Additional Custodian passed an order confirming the exchange. Meanwhile Act XXXI of 1950 was passed which conferred by section 27 revisional powers on the Custodian General. The Custodian General, in exercise of his powers under that section, set aside the order of confirmation and directed the matter to be reconsidered by the Custodian. It was contended, inter alia,that the positive operation of the provision that "anything done or any action taken in the exercise of any power conferred by or under that Ordinance. . shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action taken" applied only to purely administrative matters. But this contention was rejected by this Court which held that the said provision applied to the order in question which was admittedly a judicial order. It was further held in that decision that the said application had to be dealt with and disposed of under the said Act and, therefore, the order of confirmation passed in 1952 was subject to the revisional power of the Custodian General under section 27 of the said Act. In view of this decision nothing further need be said on the first point and it is, therefore, rejected. There is force in the second contention. The Custodian General found an unbroken chain of fiction leading to the conclusion that the order dated June 6, 1949, made by the Custodian must be deemed to be an order made by the Custodian in exercise of the powers conferred on him under the Act and, therefore, was subject to the revisional jurisdiction of the Custodian General under section 27 of the Act. But the history (1) ; 29 226 of the legislation in the context of the facts of the present case shows that the said chain had broken even during the period when Ordinance No. XIII of 2006 was in force. In the narration of facts we have pointed out that the order under Ordinance No. IX of 2004 was made by the Custodian and not by the Claims Officer. Sub section (7) of section 10 only provided that orders passed by the Claims Officer under Ordinance No. IX of 2004 should be deemed to have been passed under sub section (4) of section 10 of Ordinance No. XIII of 2006 for the purpose of appeal or revision. This sub section, therefore, had introduced a fiction with two limitations one limitation was that the original order should have been made by the Claims Officer and the other was that it was only for the purpose of appeal or revision. The result was that the said order of the Custodian could not be deemed to be an order made under the said Ordinance, as he was not the Claims Officer and that, even if he was the Claims Officer, his order must be deemed to be an order made under the later Ordinance only for the limited purpose, namely, for the purpose of appeal or revision. If this be so, it follows that the said order could not be deemed to have been passed under the successive Ordinances and the Act. We, therefore, accept this contention. The third contention is based upon the assumption that the order of the Custodian dated June 6, 1949, by the process of fiction shall be deemed to be an order made by the Custodian in exercise of the powers conferred on him by Ordinance No. XXVII of 1949. As we have already indicated at an earlier stage of our judgment, the order of a Custodian under that Ordinance was subject to an appeal under section 25 thereof to the District Judge designated in that behalf by the Provincial Government. The order of the District Judge on appeal was subject to revision by the Custodian General under section 27. Subject to the said provision, the order of the Custodian was final under section 28. In the present case, no appeal was filed against the order of the Custodian to the District Judge and, therefore, the said order had become final under section 28. To put it in other words, by operation of the provisions of the said Ordinance the order of the Custodian 227 made under Ordinance No. IX of 2004 but deemed to have been made under Ordinance No. XXVII of 1949 had become final. What then was the effect of the Sin repeal of that Ordinance by the Act of 1950? We have already noticed the provisions of section 58 which repealed the said Ordinance and which also made certain savings in respect of acts done tinder the Ordinance. Sub section (3) of section 58 dealing with the said savings, as we have stated when considering the history of the legislation, is in two parts. The first part says that the repeal by the Act of the said Ordinance shall not affect the previous operation of the said Ordinance; and the second part says that anything done or any action taken in the exercise of any power conferred by or under that Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action taken. The second part is expressly made subject to the first part. If a case falls under the first part, the, second part does not apply to it. In the present case under the previous operation of the Ordinance the order of the Custodian had become final. If so, the fiction introduced in the second part could only operate on that order subject to the finality it had acquired under that Ordinance. Looking at the section from a different perspective, the same result would flow therefrom. The section does not expressly affect a vested right of a person in whose favour there was a final determination under the Ordinance. Nor does the section imply such retroactivity by necessary intendment. An order which had become final under the Ordinance could be deemed to be an order under the Act without disgorging itself of the attribute of finality acquired by it under the repealed Ordinance. The first part of the section definitely precludes any implication of such intendment. In Delhi Cloth and General Mills vs Incometax Commissioner Delhi (1), a similar question arose for consideration. There, on references made to, the High Court under section 66 of the Indian Income tax Act, (1) Lah. 228 1922, the High Court made orders before April 1, 1926. On April 1, 1926, the Income tax (Amendment) Act, 1926, came into force and under that amendment a right of appeal was given to an aggrieved party against the order of a High Court, subject to certain conditions, to the Privy Council. The question was whether that Act could retrospectively confer a right of appeal against orders which became final before the amendment came into force. The Judicial Committee restated the principle laid down by them in Colonial Sugar Refining Co. Ltd. vs Irving (1) thus at p. 290: " While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." After stating the principle, the Judicial Committee made the following remarks in respect of the question that arose in that case: "Their Lordships can have no doubt that provi sions which, if applied retrospectively, would deprive of their existing finality Orders which, when the statute came into force, were final, are provisions which touch existing rights. Accordingly, if the section now in question is to apply to orders final at the date when it came into force, it must be clearly so provided. Their Lordships cannot find in the section even an indication to that effect. " We respectfully accept the said principle as laying down the correct law on the subject. If so, by the same parity of reasoning, we must hold in the present case that the order of the custodian which had become final under Ordinance No. XXVII of 1949, could not be affected retrospectively under section 58(3) of the Act so as to deprive the order of the Custodian of the finality it had acquired under the said Ordinance. Not only the said provision does not contain any positive indication giving it such (1) 229 retroactivity. but also in express terms it saves the previous operation of that Ordinance. It is said that. this construction of section 58(3) is no longer open in view of the authoritative interpretation placed upon the said sub section by this Court in Indira Sohan Lal 's case (1). We have carefully gone through that judgment and we are of the view that the said decision is not only not against the construction placed by us on the said sub section but also the observations therein support the, same construction. There, unlike here, an application made to the Additional Custodian of Evacuee Property on March 20, 1948, was not disposed of until March 20, 1952 that is, till after the Act of 1950 came into force. The Additional Custodian made the order in that application on March 20, 1952. The Custodian General, in exercise of his powers under section 27 of the Act of 1950, Bet aside the order of the Additional Custodian and directed the matter to be reconsidered by the Custodian. In the present case the order made by the Custodian, as we have earlier pointed out, had become final before the Act of 1950 came into force and no proceeding in respect thereof was pending at the com mencement of the Act. With this difference in mind if one reads the observations of Jagannadhadas, J., at p. 1132 of the above judgment, the legal position will be clear. After considering the decision of the Judicial Committee in Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (2) the learned Judge proceeded to observe thus at p. 1132: "This is obviously so because finality attached to them, the moment orders were passed, prior to the new Act. In the present case, the position is different. The action was still pending when Central Act XXXI of 1950 came into force. No order was passed which could attract the attribute of finality and conclusiveness under section 5 B of the East Punjab Act XIV of 1947. Further the possibility of such finality was definitely affected by the repealing provision in Central Ordinance No. XII of 1949, and Central Ordinance No. XXVII of 1949, (1) ; (2) (927) I.L.R. 230 which specifically provided that a pending action was to be deemed to be an action commenced under the new Ordinance as if it were in force at the time and therefore required to be continued under the new Ordinances. " These observations are certainly in accord with our view. The same distinction can also be discerned in the observations made by the learned Judge at p. 1133: "Nor can this be brought under the ambit of the phrase 'previous operation of the repealed law '.What in effect, learned counsel for the appellant contends for is not the 'previous operation of the repealed law ' but the 'future operation of the previous law '. There is no justification for such a construction. Besides, if in respect of the pending application in the present case, the previous repealed law is to continue to be applicable by virtue of the first portion of section 58(3) the question arises as to who are the authorities that can deal with it. " In that case, therefore, the repealed law could not operate on the subsequent stages of a pending application, for the previous law was repealed; whereas in the present case by operation of the "previous law, the order had become final. We are, therefore, of the opinion that the decision of this Court does not touch the point that arises for consideration in the present case. Reliance is placed by learned counsel for the respondents on a judgment of a division bench of the Punjab High Court in Janki Prasad vs The Custodian, Evacuee Property, Jullundur (1). There, an order confirming the sale effected by an evacuee was made by the Assistant Custodian on February 25,1949, and the said order was confirmed by the Additional Custodian on February 28, 1949. 'the question was whether under the provisions of the East Punjab Act XIV of 1947, the order of the Assistant Custodian could be reviewed by the Additional Custodian in exercise of the powers conferred on him under section 26 of the Act of 1950. The learned Judges hold that by fiction the (1) Punjab 823. 231 earlier order must be deemed to have been made under the Act of 1950 and, therefore, the Custodian would have power to review it under section 26 of the Act of 1950. We think, with respect to the learned Judges, that they have not correctly appreciated the scope of the provisions of section 58(3) of the Act of 1950. In our view, for the reasons already mentioned, that view of the Punjab High Court in the above decision is not correct. We, therefore, accept the third contention of learned counsel. Then remains the point that was raised for the first time before us by learned counsel appearing for the State. The argument was that Ordinance No. XXVII of 1949 was repealed and reenacted by the Act of 1950 in substantially the same terms, and, therefore, a repeal by implication was effectuated only of those provisions which were omitted from reenactment. For this position reliance was placed upon a passage from Sutherland 's Statutory Construction 3rd edn., Vol. 1, at p. 514. Therefore, it was contended that, as there was no provision in the Act correspond. 9 to the proviso to section 6 of the Ordinance No. IX of 2004, that proviso must be deemed to have been repealed; and an order made illegally under that proviso was non est. It is said that under section 27 of the Act, the Custodian General, at any time can ignore that order and proceed with fresh inquiry in respect of the question whether the property was an evacuee property or not. This question was raised for the first time before us and it was not hinted even in the statement of case filed by the State. In the circumstances, we would not be justified in allowing the respondents to sustain the order of the Custodian General on the said basis. Even otherwise it.would be of no avail to the respondent in the present case. We are 'not concerned in this case with the question whether the said order was made by the Custodian illegally or without jurisdiction. We are only concerned with the question whether the Custodian General can, under section 27 of the Act set aside an. order made by the Custodian. We have pointed '. out, that he has no such power to revise 232 orders that had become final before the Act came into force. Nor do we find any force in the argument of learned counsel for the State that under section 27 of the Act, the Custodian General may at any time revise the order of any Custodian and, therefore, the Custodian General can revise without any limit of time any order made by any Custodian under any previous law. Section 27 of the Act can be given retrospective operation only to the extent permitted by section 58(3) of the Act. We have held that section 58(3) does not affect the previous operation of the law and therefore cannot affect the finality of the orders made under the Ordinance. So the words in the section "any time" or "any Custodian" must necessarily be confined only to orders of any one of the Custodians defined in the Act and to orders of Custodians deemed to have been made under the Act but had not become final before the Act came into force. No other point was raised. In the result, the order of the Custodian General is set aside and that of the Custodian dated June 6, 1949, is restored. The respondents will pay the costs to the appellants. Appeal allowed.

The Custodian of Evacuee Property, Patiala, took possession of two houses under the provisions of the Patiala Evacuees (Administration of Property) Ordinance of Samvat 2004 (No. IX of 2004) but on the appellant claiming the houses as belonging to him they were released in his favour by the Custodian by an order dated June 6, 1949. Thereafter several Ordinances relating to evacuee property were passed one after another, the later one repealing the previous one and creating a chain of fictions by which certain provisions of the repealed Ordinance were deemed to continue under the repealing Ordinance. The last Ordinance was replaced by the Administration of Evacuee Property Act No. XXXI of 1950) under the provisions of which the Deputy Custodian General set aside the order of Custodian dated Julie 6, 1949, after giving notice to the present appellants. On appeal by special leave the appellants contended that (1) the deeming provisions of the repealing Ordinances and Acts culminating in section 58(3) of the Act apply only to things or action taken by the Custodian in exercise of his administrative powers and not to orders made by him in exercise of his judicial powers, (2) the order dated June 6, 1949 passed by the Custodian under Ordinance IX of 2004 could not be deemed to be an order passed under the, Act as the chain of fictions was broken when Ordinance No. XIII of 2006, repealing the previous Ordinance IX of 2004 was issued, (3) section 58 (3) of the Act expressly saves the previous operation of Ordinance XXVII of 1949 or any corresponding law and, therefore, the orders that had become final under the said Ordinance could not be revised under section 27 of the Act. Held, that the operation of section 58(3) of the (No. XXXI of 195o) was not confined only to administrative acts done by the Custodian under the earlier Ordinances but the provisions of that section applied also to judicial orders passed by him. 215 Indira Sohan Lal vs Custodian of Evacuee Property, Delhi, , followed. The order dated June 6, 1949, releasing the property in dis pute was passed under Ordinance No. IX of 2004 by the Custodian and not the Claims Officer as provided in the successive Ordinance No. XIII of 2006 and therefore that order could not be deemed to have been passed under the successive Ordinances and the Act. The alleged chain of fiction was broken during the period when Ordinance No. XIII of 2006 was in force. Even if the Custodian was the Claims Officer, his order must be deemed to be an order made under the later Ordinance only for the limited purpose of appeal or revisions. Under section 25 of the last Ordinance namely Ordinance No. XXVII of 1949 the order of the Custodian was appealable but no appeal having been filed it had become final under section 28. The order of the Custodian which had become final under the said Ordinance, could not be affected retrospectively under section 58(3) of the Act so as to deprive the order of the Custodian of the finality it had acquired under the said Ordinance. Section 58(3) does not contain any positive indication giving it such retroactivity but in express terms it saves the previous operation of that Ordinance. Colonial Sugar Refining Co. Lid. vs Irving, , followed. Indira Sohan. Lal vs Custodian of Evacuee property, Delhi; , , considered. Delhi Cloth and General. Mills vs Income tax Commissioner, Delhi, (1027) I.L.R. , referred to. janki Prasad vs The Custodian Evacuee Properly, Jullundur, Punj. 823, disapproved. The words "any time" or "any Custodian" in section 27 of the Act must necessarily be confined only to orders of any one of the Custodians defined in the Act and to orders of Custodians deemed to have been made under the Act but had not become final before the Act came into force.

The proviso to section 7(2)(a) of the Andhra Pradesh Build ings (Lease, Rent and Eviction) Control Act, 1960 prohibits payment of any sum exceeding one month 's rent by way of advance, clause (b) thereto makes any such sum refundable or at the option of the tenant otherwise adjustable, and sub section (3) declares the stipulation for payment of rent in advance beyond that of one month as null and void. The appellant tenant took the demised premises on a thirty year lease beginning from September 9, 1969 and paid a large amount as advance, only a part of which was adjust able towards the stipulated rent in the subsequent months and the balance was to be paid back under a valid receipt after the expiry of the lease period. The lease deed did not have a forfeiture clause. The respondent land lord initiated action for eviction in October 1973 on the plea that the tenant had failed to pay rent for a certain subsequent period. The tenant advanced the plea of payment. The land lord placed the account books of the appellant and claimed the benefit of section 34 of the Evidence Act. All the courts below found that the payment as claimed had not been estab lished. In this appeal by special leave, it was contended that the balance of advance which lay in the hands of the re spondent landlord was either refundable to the tenant or adjustable against rent under section 7 of the Act, and if out of that sum the arrears were available to be adjusted the tenant was not at all in default; that the lease of 1969 being for a term of thirty years certain, eviction could not be claimed against a contractual tenant during the subsist ence of the lease, and that the lease did not have a forfei ture clause so as to bring the matter within the ambit of section 111(g) of the Transfer of Property Act. 726 Allowing the appeal by special leave, HELD: 1. The stipulation in the lease deed that the amount of advance would be refundable at the end of the tenancy was null and void under section 7(3) of the Act. The said amount became payable to the tenant immediately. It was thus held by the landlord on account of the tenant on the date of filing of the petition for eviction. The tenant could not, therefore, be considered a defaulter for a smaller amount by not paying the rent for some months. [730D, 729BC, 730E] Mohd. Salimuddin vs Misri Lal & Anr., ; and M/s. Sarwan Kumar Onkar Nath vs Subhas Kumar Agarwalla, ; referred to. The lease being for a term of thirty years was to expire in September, 1999. The deed did not stipulate a forfeiture clause. In the absence of such a clause the contractual tenancy was subsisting under the provisions of the Transfer of Property Act. There could not, therefore, be any eviction from such a tenancy. [730F]

Under the Punjab Rent Restriction Act, 1949 a landlord can evict a tenant only on the grounds and according to the procedure provided in section 13 of the Act. Section 3 of the Act provides for exemption to be granted by Government from the operation of section 13. By notification dated July 30, 1965 the Government of Punjab granted such ex emption in respect of building constructed during the year 1959 to 1963 for a period of 5 years from the date of their completion, on the .condition that during the aforsaid period of exemption suits for ejectment of tenants in respect of those, buildings "were or are" institutes in civil courts and decrees of ejectment "were or are" passed. The respondent had let out to the appellant a building which was completed in 1960. A suit for ejectment of the appellant was filed in 1963 and decree was obtained in 1969. In proceeding for execution the question was whether the .decree, having been obtained more than 5 years after completion of the building, was exempt from operation of section 13. The High Court in second appeal held in favour of the respondent. In appeal to this Court by special leave, the appellant contended that the decree in the suit having been passed after 1 period of 5 years from the date of construction, exemption from restrictions placed by section 13 will not be available because not only the suit should be filed but the decree for eviction should be obtained within the said period of 5 years. HELD : The filing of the suit within the period of exemption is the only condition that is necessary to satisfy one of the requirements of the exemption, the other requirement being the passing of the decree in respect of which no time has been prescribed. If the degree, as contended by the appointment has to be obtained within the period of 5 years, there was no need to specify the at the suit had to be filed within that period because the exemption from the requirements of section 13 is only in respect of the decree and not the suit. [928 F] The use of the words 'were or are ' in respect of decree ,is A will as suits supports the above interpretation. The suit should have been filed or are her , after, to filed and likewise decrees of ejectment bid been passed or are hereafter to be passed. Further, a suit may conceivably be filed on the last day of the expiry of the 5 years exemption. If so it will be absurd to postulate that a decree would be given immediately thereafter, as that would be the result, if the contention that both the suit.and the decree should be passed within the period of exemption. is accepted. [927 H 928 E] 923 A statue must be interpreted in the light of its object. The very purpose of the exemption of buildings ' from 'the operation of section 13 was to give landlords the light which as owners of buildings they had under the ordinary law, namely, to give them on lease at rents which they thought remunerative and to evict tenant 's during that period without any fetters imposed by the Act. If no provision was made for exempting such decrees in respect of the exempted buildings the exemption granted will be illusory.[1926 H 927 E] Accordingly the appeal must fail.

The respondent a liquor vending licensee defaulted to pay license fee inspite of repeated reminders. Recovery proceedings under the Punjab Land Revenue Act, 1857 were initiated against him. The Collector issued a proclamation prohibiting the transfer or creation of a charge by the respondent on his half share in an immovable property, consisting of a plot of land and a building thereon, and notified the property for auction. The respondent, filed a suit for permanent injuction restraining the appellant State and the collector from auctioning his half share, on the ground that the building was being used by him tor his residence, and he had no other residential house, and that therefore the half share of the residential house was exempt from attachment under clause (ccc) of the proviso to sub section (1) of section 60 of the Code of Civil Procedure, 1908. The trial court dismissed the suit and this order was confirmed in appeal by the District judge. Allowing the respondent 's second appeal, the High Court upheld his contention. and issued a permanent injunction only with regard to that portion of the building in which he was residing; Allowing, the appeal to this Court, ^ HELD: (1) The High Court was wrong both in its criticism of the subordinate courts and in allowing the respondent 's second appeal. [847 E] 845 2. Section 60 of the Code has no application to attachment and sale in any proceedings other than in execution of a decree of a civil court. It applies only to execution of a decree of civil court. It declares what properties are liable to be attached and sold in execution of such a decree and the proviso to sub section (1) of section 60 sets out the properties which are not ' liable to such ' attachment or sale. The expression such attachment or sale" in the proviso refers to the attachment and sale mentioned in sub section (I) of section 60, that is to attachment and sale in execution of a decree of a civil court. The section does not apply to an attachment and sale under any other statute unless made expressly applicable thereto. [847 H; 848 A B] In the instant case the attachment and the auction sale were not in execution of any decree of a civil court but were in pursuance of an order made by an officer authorised adopt proceedings under the Punjab. Land Revenue Act, 1887 for recovery of revenue due to the state. There is no provision in this Act which makes the provisions of section 60 of the Code applicable to attachment and sale for recovery of revenue under the said Act. [848 D E]

The appellant landlord first let out a shop cum flat to the second respondent (tenant) and subsequently leased out the adjoining two flats to him. The second respondent sub let the two flats to the first respondent (sub tenant) prior to the coming into force of the East Punjab Urban Rent Restriction Act, 1949 in the area where the property is situate. The landlord filed a suit seeking eviction of both the respondents, inter alia, on the ground of unauthorised sub letting, who contested the petition. However, there was a compromise between the appellant and the second respondent the appellant giving up his claim for eviction of the second respondent from the shop cum flat in his occupation and the second respondent conceding that he has sub let the two flats to the first respondent without the consent of the appellant landlord. The Rent Controller passed an order of eviction of the first respondent from the two flats sub leased to him. An appeal to the Appellate Authority having failed, the first respondent filed a revision under section 15(5) of the Act. The High Court allowed the revision, set aside the order of eviction and held that no order of eviction can be passed under section 13(2) as the sub tenancy had been created before the Act came into force in the area where the proper ty is situate. In the appeal to this Court on behalf of the appellant it was contended; (i) that when the second respondent had admitted the factum of the unauthorised sub lease and when the Rent Controller and the Appellate Authority had acted on his admission, the High Court was in error in interfering with the order of eviction concurrently passed by 191 the Courts below; (ii) that even without reference to section 13(2) the sublease was not lawful because the lease deed entered into between the parties contained a clause inter dicting any sub lease without the written consent of the landlord; (iii) that the sub lease was not lawful even under section 108(J) of the Transfer of Property Act because the lease deed contained a prohibition; (iv) that even if it is taken that there was no lease deed prohibiting the creation of a sub lease, the sub tenancy had become unlawful from the date when the second respondent was served a notice of termina tion of tenancy by the appellant; (v) that a subtenant does not have rights independent of the tenant and as such when the second respondent suffered an order of eviction, the first respondent was equally bound by the order; (vi) that when there was a surrender of tenancy rights restricted to the two flats in question, the first respondent is bound by the surrender and cannot claim the sub tenancy rights any further; (vii) and that the Act gives protection only to tenants and not to sub tenants against unreasonable eviction and hence the first respondent cannot claim protection under the Act from eviction. Dismissing the Appeal, HELD: 1.1 An order of eviction cannot be passed under section 13(2) of the East Punjab Urban Rent Restriction Act, 1949 if the sub letting was prior to the Act coming into force in the area concerned. [194F] Surjit Singh vs Rattan Lal, AIR 1980P & H 319, approved. Gurcharan Singh vs V.K. Kaushal; , , relied upon. L2 In the instant case, the sub lease had been effected before the notice of termination of tenancy was issued. The notice of termination of tenancy subsequently issued would not make the sub lease created earlier unlawful in any manner. [195C] 2. Against a common decree of ejectment passed against a tenant and the sub tenant, the sub tenant alone can appeal in his own right against the decree and have the same set aside even though the tenant decides not to file an appeal. [195F] Devaraja Bhatt vs V.S. Rala & Ors., AIR 1953 Madras 356 (Vol. 40, C.N. 122), Express Estates Ltd. vs Modern Furnish ing House, AIR 1953 Madras 414 and G.L. Kapoor vs Ramesh Chander Nijhawan & Ors., All India Rent Control Journal , referred to. 192 Karam Singh vs Pratap Chand, AIR 1964 S.C. 1305, followed. 3.1 A lease is a transfer of a right to enjoy the property. It creates an interest in the property by virtue of the contract of lease which may be either oral or writ ten. The interest created in the property can be put an end to by terminating the contract. The contract however, cannot be terminated in part. [195H;196A] 3.2 In this case though the two items of property were given on lease at different times, the parties had treated the lease as a composite one and that was why a common notice had been issued for terminating the tenancy of both the items and furthermore a single petition had been filed under section 13(2) to seek an order of eviction in respect of both the items of the lease property. [196A B] 4. In this case the lease deed has not been filed in Court and marked as an Exhibit in evidence. The explanation given by the appellant that the lease deed was shown to the Rent Controller and the Appellate Authority but it was not filed as an Exhibit because proceedings under the Act are not conducted in meticulous observance of the provisions of Civil Procedure Code cannot be accepted and the Court cannot act on the basis that a valid lease deed had been executed and it contained a contract to the contrary in so far as the tenants ' right to sub lease is concerned. [194G;195A B] 5. The lessee has a right to transfer by sub lease even a part of his interest in the property as provided in section 108(J) of the Transfer of Property Act. A transferee from the lessee has a right to claim the benefit of contract to the lessee 's interest, vis a vis the landlord. Thus a sub lease who has obtained a part of the interest of the head tenant will be entitled to claim the benefit of the contract vis a vis the lessor, as the lessee cannot surrender the lease in part. Section 111(e) contemplates a surrender of the entire interest under the lease and not a part of the interest alone. Moreover, a lease can be determined only by restoring possession in respect of the entire property which was taken on lease (see.) 108(m). [196B D] 6. Section 115 of the Transfer of Property Act provides that the surrender of a lease does not prejudice an under lease of the property or in part thereof previously granted by the lessee. The lessee, having parted with a part of the interest in the property in favour of the sub lessee, cannot surrender that part of the property which is in the posses sion of the sub lessee for he cannot restore possession of the same 193 to the lessor apart from the fact that he can terminate the contract of lease only as a whole and not in respect of a part of it. [196D F]

The Rent Controller passed an order of eviction against the appellant tenant in October, 1960 on the ground of bona fide requirement of the landlord. The appeal against this order was dismissed by the Rent Tribunal in October, 1961. The application of the respondentlandlord for permission to execute the order of eviction under Section 19 of the Slum Areas (Improvement of Clearance) Act, 1956 filed in May, 1962 was dismissed by the Competent Authority in March, 1963. In the meantime in January, 1964 the came into operation. The respondent filed a second application in April, 1978 for permission to execute the eviction order. Permission was granted in June 1979. In September, 1979 the respondent filed an application before the Rent Controller for execution of eviction order. Objections under Section 47, Order 21 Rule 22 and Section 151 of the Code of Civil Procedure were filed on behalf of the tenant. The Rent Controller passed an order on August 22, 1980 holding that the execution application was not barred by limitation, but stayed the execution to decide the question of fresh tenancy. An appeal against this order was filed by the appellant before the Tribunal which held that the execution was main tainable and was not barred by limitation and that supple mentary objections were not maintainable. The High Court confirmed this order by dismissing the second appeal in limine. In the appeal by the tenant before this Court, the question for 1002 consideration was whether the decree for eviction under the Rent Act passed against the respondent was executable by the appellant or whether the same had become barred by limita tion or by res judicata Allowing the appeal, this Court, HELD: 1.1 The claim to execute the order of eviction of the Rent Controller dated 15th October, 1960 had become time barred. [1009G] 1.2 It was not just, equitable and in good conscience to allow such stale claims to be effectuated and that would be contrary to the principles of the as well as the Indian Limitation Act, 1908. [1009E F] 1.3 The execution of the decree for eviction passed on 15th of October, 1960 became time barred on 14th of October, 1960 under Article 182 of the Indian Limitation Act, 1908 as it stood then. Under section 31(a) of the 1963 Limitation Act, the provisions of the 1963 Limitation Act would not be availed of in respect of an application for which the period of limitation had expired before the commencement of the 1963 Limitation Act, that it to say, 1.1.1964. But even if Article 136 of the was attracted it had become barred after 12 years from the date of the decree, i.e. 15th October, 1960. [1007G H; 1008A] 1.4 There was no requirement of permission under the Slum Act and, as such, no impediment in putting the decree dated 15th October, 1960 into execution. Second application for permission was filed after a lapse of more than 15 years; there was, in any event, no legal impediment or legal bar which prevented the respondent from making the applica tion for permission to the competent authority under the Slum Act before. [1009B C] 1.5 The order of eviction passed by the Rent Controller as confirmed by the Tribunal in 1961 had become obsolete in 1978 when the second attempt to execute the same was made. [1009E] Des Raj and another vs Noor Khan, A.I.R. 1985 Delhi 470; Ravi Dutt vs Rattan Lal, ; and Lala Baijnath Prosad and others vs Nursingdas Guzrati, A.I.R. 1958 Calcut ta 1 at p. 8, referred to.

The appellant instituted two suits in the Court of Assistant Collector (a Revenue, Court) against the respondent under sections 60, 61 and 180 of the U.P. Tenancy Act, 1939. The suits were decreed, and the appellant took symbolical possession of the lands. The Assistant Commissioner. affirmed the decrees, and during the pendency of the respondent 's second appeals in the High Court, the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952 came into force. The Board of Revenue held that in view of the Rules. the pending appeals as also the suits had a ate. The respondent filed applications for 'restitution of the lands under section 114 C.P.C. in the Court of Assistant Collector. The Assistant Collector referred the issue whether the appellant had acquired Bhumidari rights to the civil court. He refused to recall the 'reference in spite of the respondent 's Plea that he had no power to pass the order as no question of pro prietary title bad arisen. The civil court answered the issue in the negative, and the Asstt. Collector allowed the applications for restitution. As the appellant was not certain about the proper forum of appeals against these orders of the Assistant Collector, he filed anneals in the revenue court as also in the civil court. The Assistant Commissioner held that the revenue court had no Jurisdiction to entertain appeals and the appeals lay to the civil court under sections 286(4) and 265(3) off the U.P. Tenancy Act. The appellant filed revision petitions against the orders before the Board of Revenue. In the meantime the appeals filed before the civil court came up for hearing:. The respondent submitted to the jurisdiction of the civil court, and did not contend that the civil court had no Jurisdiction to entertain the appeals. The Civil Judge allowed the anneals and dismissed the application for restitution. Because of this decision. the appellant did not proceed with the pending revision petitions 'before the Board of Revenue and there the petitions were dismissed. The respondent filed second appeals in the High Court against the appellate orders of the civil court, without taking the plea that the civil court 'had no Jurisdiction to entertain the anneals. but later on he took the plea by adding a new ground. The High Court held that the appeals lay to the revenue court and the respondent was not estopped from raising the contention. In appeals to this Court the appellant contended that the anneals lay to the civil court and not for the revenue court and in the circumstances of this case, and in view of section 289(2) of the U.P. Tenancy Act. the respondent was precluded from raising the objection that the appeals did not lie to the civil court. Allowing the appeals this Court. HELD : In this case the doctrine of approbate and reprobate could not be pressed into service to preclude the respondent from raising the objection that the appeals did not lie to the civil court as the court in which the proceeding were originally filed suo motu raised the objection. 232 But the effect of upholding his objection would be that the, appellant would be deprived of his right of appeal altogether, and section 289(2) of the U.P, Tenancy Act is intended to prevent such grave miscarriage of justice. [237 F] Section 289(2) applies whenever any suit, application or appeal having been rejected either by the civil court or revenue court on account of want of jurisdiction is subsequently filed in the court of the other description and the latter court disagrees with the finding of the former. In such a case,, a reference to the High Court is compulsory and the conflict of opinion is resolved by a decision of the High Court which is binding on all courts. A court subordinate to the Collector cannot make the reference without the previous sanction of the Collector under section 289(3). It is implicit in section 289(3) that if the Collector refuses to give the sanction, the case will proceed as if there is no disagreement with the finding of the former court. [237 H] In a case falling within section 289(2), only the court in which the proceeding is subsequently instituted can disagree with the finding of the former court on the question of jurisdiction. If it so disagrees, it must refer the matter to the High Court; and only the High Court on such a reference can override the finding. No other court can disagree with the finding and make the reference. If no such reference is made, the finding of the former court on the question of jurisdiction becomes final and conclusive; and the objection that it is erroneous cannot be entertained by the appellate or revisional court or any other court. [238 D] Having regard to the circumstances of this case, it was not open to the respondent to raise the objection in the High Court that the civil court was not competent to hear the appeals. In view of the fact that no reference under section 289(2) was made, the finding of the revenue court that the civil court was competent to entertain the appeals could not be challenged in the High Court. The case must be decided on the footing that the Civil Judge was competent to entertain the appeals. [238 F] On the merits the respondent had no case. The Civil Judge found that the appellant was in possession of the lands on the dates of the institution of the suits. The High Court agreed with this finding. No ground has been made for setting aside this concurrent finding of fact. The appel lant did not obtain possession of the lands by executing the decrees passed in the two suits. Even assuming that the suits had abated and the decrees passed therein had been set aside or reversed, no case for restitution of the lands under section 144 of the Code of Civil Procedure was made out. The applications under section 144 C.P.C., were rightly rejected. Nathan vs Harbans Singh, A.I.R. 1930 All. 264, Mohammad Mehdi Khan vs Mussammat Sharatunnissa, 3 Oudh Cases 32, 35 37, Mahadeo Singh vs Pudal Singh, A.I.R. 1931 Oudh 123 and Saira Bibi vs Chandrapal Singh, I.L.R. 4 Luck. 150, 166, referred to.

The respondent landlord let out the building in question to the appellant tenant in the year 1954, when the Transfer of Property Act was not applicable to Delhi where the property is situated. The Transfer of Property Act was made applicable to Delhi in the year 1962. In 1967, the respondent filed a suit for eviction against the appellant without terminating the tenancy under the Transfer of Property Act on the grounds of unauthorised subletting and acquisition of alternative accommodation by the tenant. A decree for eviction was passed by the Rent Controller which was affirmed by the Appellate Tribunal. In the High Court it was contended by the appellant that neither notice to quit nor notice of forfeiture determining the tenancy was given by the landlord as required by sections 106 and 111 of the Transfer of Property Act. The respondent contended that the lease had expired by efflux of time under section 111(a) and no notice terminating the tenancy was necessary and that forfeiture of the tenancy caused by the subletting contrary to the terms of the agreement can be availed of by the landlord even in the absence of a notice as contemplated by section 111(g). The High Court dismissed the petition filed by the appellant but granted a certificate of fitness under Article 133 restricting it to one ground urged before the High Court. The respondent raised a preliminary objection that since the certificate was granted only on one point the appellant could not be permitted to make any other submissions. The appellant contended that the lease is one where the time is not limited and, therefore, is terminable only by 15 days notice as required by section 106 of Transfer of Property Act. The respondent contended that the lease was for a fixed period and expired by efflux of time. In any evnt a notice in writing is not necessary to terminate the lease. Institution of legal proceedings serves that purpose. ^ HELD: (1) Once a certificate of fitness has been granted under Article 133, the appeal, in all its amplitude, is before the Court and every point may be urged by the appellant provided this Court permits it having regard to the circumstances. It is however, within the court 's discretion not to allow a new point to be taken up. [909D E] (2) The scheme of the Rent Control Law, is to put further fetters on landlords seeking eviction where in the absence of such acute barriers the landlords would be entitled to ejectment. Even where under a particular Rent Control Statute the landlord makes out grounds for eviction he can institute proceedings in this behalf only if de hors the said grounds he has cause of action under the Transfer of Property Act. The landlord cannot secure an order for eviction without first establishing that he has validly determined the lease under the transfer of Property Act. [909G H,911C] (3) A lease merely stating that it is for a period less than one year is ex facie for an indefinite period and as such cannot expire by efflux of time. 907 Nor are we convinced that the acceptance of rent for the period of 11 years does not amount assenting to the holding over of the tenancy by the landlord. [911E F] (4) The Rent Act contemplates no elaborate proceedings but filing out of the particulars in a proforma which takes the place of a plaint. No specific averment of forfeiture and consequent determination of the lease is found in the petition. The question arises whether a written notice of forfeiture for the breach of the condition of the lease is obligatory in terms of section 111(g) or whether written notice of forfeiture can be dispensed with as being no part of the equity or justice but a technical or formal statutory requirement. Before the amendment of Transfer of Property Act in 1929 all that was necessary for the lessor to determine the demise on forfeiture was to do some act showing his intention to determine the lease. The rule of English Law 'before the enactment of the law of Property Act, 1925, appears to be that a suit for ejectment is equivalent to a re entry. The appellant did not urge in the High Court that the Transfer of Property Act was applicable in its own force. We decline our discretion to allow the appellant to travel into the new statutory territory of section 111 (g). [911G H, 913A, D E, 916C] (5) In India and in other colonies throughout the Imperial Era a tacit assumption had persuaded the courts to embrace English Law (the civilizing mission of the masters) as justice, equity and good conscience. Unfortunately, even after liberation, this neo colonial jurisprudence was not shaken off. Free India has to find its conscience in our rugged realities and no more in alien legal thought. So viewed, the basic question is what is the essence of equity in the matter of determination of a lease on the grounds of forfeiture caused by the breach of a condition. The substance of the matter the justice of the situation is whether a condition in the lease has been breached and whether the lessor has by some overt act brought home to the lessee his election to eject on the strength of the breach. The touchstone is simply whether the formal requirement of the law is part of what is necessarily just and reasonable. In this perspective the conclusion is clear that a notice in writing formally determining the tenancy is not a rule of justice or cannon of commonsense. Realism married to equity being the true test, we are persuaded that pre amending Act provision of section 111 (g) is in consonance with justice. The mere institution of the legal proceeding for eviction fulfills the requirements of law for determination of the lease. The conscience of the Court needs nothing more and nothing less. The essential principles, not the technical rules, of the Transfer of Property Act form part of justice, equity and good conscience. [916D, 917A, D, E F,919B C, 920A]

Appeal No. 490 of 1957. Appeal from the judgment and decree dated March 22,1954, of the Allahabad High Court in Civil Misc. Writ No. 7854 of 1951. G. section Pathak, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. C. B. Agarwala, G. C Mathur and C. P. Lal, for respondents Nos. 1 and 3. March 6. The Judgment of section K. Das, M. Hidayatullah, J. C. Shah and N. Rajagopala Ayyangar, JJ. was delivered by J. C. Shah, J. K. C. Das Gupta, J. delivered a separate, Judgment. SHAH, J. In 1981, the appellant was admitted to the police force of the United Provinces and was appointed a Sub Inspector of Police. He was later promoted to the rank of Inspector, and in 1946 was transferred to the Anti corruption department. In 1947, he was appointed, while retaining his substantive rank of Inspector, to the officiating rank of Deputy Superintendent of Police. Shortly thereafter, complaints were received by the Chief Minister and Inspector General of Police ' U. P. charging the appellant with immorality, corruption and gross dereliction of duty. In a preliminary confidential enquiry, the Inspector General of Police came to the conclusion that "a prima facie case" was made out against the 20 154 appellant. He then directed that a formal enquiry be held against the appellant and passed orders reverting the appellant to his substantive rank of Inspector and placing him under suspension. An enquiry was held into the conduct of the appellant by the Superintendent of Police, Anti corruption department. The report of the Superintendent of Police was forwarded to the Government of U. P., and the Governor acting under r. 4 of the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 herein after called the Tribunal Rules referred the case for enquiry to a Tribunal appointed under r. 3 of the Tribunal Rules on charges of corruption, personal immorality and failure to discharge duties properly. The Tribunal framed three charges against the appellant, and after a detailed survey of the evidence recommended on February 4, 1950, that the appellant be dismissed from service. The Governor then served a notice requiring the appellant to show cause why he should not be dismissed from service and after considering the explanation submitted by the appellant, the Governor ordered that the appellant be dismissed with effect from December 5, 1950. The appellant challenged this order by a petition instituted in the High Court of Judicature at Allahabad under article 226 of the Constitution for a writ of certiorari quashing the proceedings of the Tribunal and for a writ of mandamus directing the State of Uttar Pradesh to hold an enquiry under section 55 of the Civil Services (Classification, Control and Appeal) Rules. In support the order dismissing the appellant from High Court dismissing his petition, the appellant has raised three contentions: 1. that the order dismissing the appellant from the police force was unauthorised, because the Governor had no power under section 7 of the Police Act and the regulations framed thereunder to pass that order; 2. that even if the Governor was invested with power to dismiss a police officer, out of two alternative modes of enquiry, a mode prejudicial to the appellant having been adopted the proceedings of the Tribunal which enquired into the charges against him 155 were void, as the equal protection clause of the Con stitution was violated; and 3. that the proceedings of the Tribunal were vitiated because of patent irregularities which resulted in an erroneous decision as to the guilt of the appellant. To appreciate the first two contentions, it is necessary briefly to set out the relevant provisions of the laws procedural and substantive in force, having a bearing on the tenure of service of members of the police force in the State of Uttar Pradesh. The appellant was admitted to the police force constituted under Act V of 1861. By section 3 of that Act, superintendence throughout a general police district vests in and is exercised by the State Government to which such district is subordinate and except as authorised by the Act, no person, officer or court may be empowered by the State Government to supersede or control any police functionary. By section 4, the administration of the police throughout a general police district is vested in the Inspector General of Police. By section 7, it is provided that subject to the provisions of article 311 of the Constitution and to such rules as the State Government may from time to time make under the Act, the Inspector General, Deputy Inspectors General, Assistant Inspectors General and District Superintendents of Police may at any time dismiss, suspend or reduce any police officer of the subordinate rank whom they shall think remiss or negligent in the discharge of his duty, or unfit for the same, or may award any one or more of the punishments (set out therein) to any police officer of the subordinate rank who discharges his duty in a careless or negligent manner or who by any act of his own renders himself unfit for the discharge thereof. Section 46 sub section(2) authorises the State Government to make rules for giving effect to the provisions of the Act, and also to amend, add to or cancel the rules framed. The Government of Uttar Pradesh has framed rules called the Police Regulations under the Indian Police Act. Chapter 32 containing Regulations 477 to 507 deals with departmental punishment and 156 criminal prosecution of police officers and Ch.33 containing Regulations 508 to 516 deals with appeals, revisions, petitions etc. By Regulation 477, it is provided that no officer appointed under section 2 of the Police Act shall be punished by executive order otherwise than in the manner provided in the chapter. Regulation 478A provides that the punishment of dismissal or removal from the force or reduction as defined in Regulation 482 may be awarded only after departmental proceedings. By Regulation 479 cl.(a), "full power" is reserved to the Governor to punish all police officers, and by cl.(b), the Inspector General is authorised to punish Inspectors and ill police officers of "lower ranks". Regulation 489 provides for the departmental trials of police officers and Regulation 490 provides that the departmental trials of police officers must be conducted in accordance with the rules set out therein. Regulation 490 in its various clauses makes provisions about oral and documentary evidence, framing of charges, explanation of the delinquent police officer, recording of statement of defence witnesses, recording of findings by the Superintendent of Police and the making of a report by the enquiry officer if he is of the view that the delinquent Police officer should be dismissed or removed from the force. Clause (9) provides that the police officer may not be represented by counsel in any proceeding instituted against him under the rules. By Regulation 508, every police officer against whom an order of dismissal or removal is passed is entitled to prefer one appeal against an order of dismissal from the police force to the authorities prescribed in that behalf, but against the order of the Governor in exercise of authority reserved under Regulation 479 cl.(a), no appeal is provided. By section 96B of the Government of India Act,, 1915, the tenure of all civil officers including police officers was at the pleasure of the Sovereign. In exercise of the powers conferred by sub.s.(2) of section 96B, classification rules were framed by the local Governments. In the Government of India Act, 1935, ch. 2 of Part X dealt with civil services, their tenure, recruitment and 157 conditions of service. The section corresponding to section 96B of the Government of India Act, 1915, in the later Act was section 240(1) and thereunder all members of the civil service held office during the pleasure of the Sovereign. By the Government of India Act, 1935, to every civil servant a two fold protection was guaranteed by cls.(2) and (3) of section 240(1) that he shall not be dismissed from service by any authority sub.ordinate to that by which he was appointed and that he shall not be dismissed or reduced in rank until be has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. But these provisions did not apply to police officers for whom a special provision was enacted in section 243. That section provided: "Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively. " The conditions of service of the police force of the subordinate ranks were under the Government of India Act, 1935 therefore only such as were prescribed by rules framed under section 7 and section 46(2) of the Police Act. By the Constitution of India, the distinction between police officers and other civil servants in the matter of protection by constitutional guarantees is abolished and as from January 26, 1950, the recruitment and conditions of service of all persons serving the Union or the State are now governed by article 309 and their tenure by article 310 of the Constitution. By Article 311, the protection granted under section 240 cls.(2) and (3) of the Government of India Act is extended to members of the police force as well. By Article 309, the conditions of service of public servants are made subject to the provisions of the Constitution and the Acts of the appropriate Legislature. By Article 310, except as expressly provided by the Constitution, (i.e., except in cases where there is an express provision for dismissal of certain public servants e.g., Judges of the Supreme Court and of the High Courts, Comptroller and Auditor General of India, Chief Election Commissioner) 158 all civil servants who hold office under the Union of India hold office during the pleasure of the 'President and all civil servants who hold office under the State hold it during the pleasure of the Governor. By virtue of article 313 of the Constitution, until other provision is made, all laws in force immediately before the Constitution and applicable to any public service which continues to exist under the Union or a State shall continue in force so far as consistent with the Constitution: the power of the police functionaries to dismiss police officers is therefore preserved. On November 4, 1947, the Governor of U. P. in exercise of, the powers conferred inter alia by section 7 of the Police Act, published the Tribunal Rules. By r. 1 el.(3), these rules apply "to all Government servants under the rule making control of the Governor" and are applicable to any acts, omissions or conduct arising before the date of commencement of the rules as they are applicable to those arising after that date. Clause (e) of r. 2 defines "corruption", el.(d) defines "failure to discharge duties properly" and el.(e) defines " personal immorality". Rule 4 authorises the Governor to refer to a Tribunal constituted under r. 3, cases relating to an individual Government servant or class of Government servant or servants in a particular area only in respect of matters involving (a) corruption, (b) failure to discharge duties properly.(e) irremediable general inefficiency in a public servant of more than ten years ' standing, and (d) personal im. morality. By cl. 2, the Governor is also authorised in respect of a gazetted Government servant on his own request to refer his case to the Tribunal in respect of matters referred to in sub.r. By r. 7, the proceedings of the Tribunal are to be conducted in camera and neither the prosecution nor the defense has the right to be represented by counsel. Rule 8 prescribes the procedure to be followed by the Tribunal and r. 9 deals with the record to be maintained by the Tribunal. Rule 10 states that the Governor shall not be bound to consult the Public Service Commission on the Tribunal 's recommendations and shall paw an order of punishment in the terms recommended by the Tribunal, provided "the Governor may for 159 sufficient reasons, award a lesser punishment". Rule 1 2 provides that nothing in the rules shall be deemed to affect the conduct of disciplinary proceedings 'in ' oases other than those specifically covered by the provisions of the Tribunal Rules. Rule 13 authorises the Governor to delegate the power to refer cases to gazetted officers,in charge of districts and to pass an order of punishment under r. 10 to heads of departments. Enquiry against the appellant, though commenced before the Constitution was concluded after the Constitution, and the order dismissing him from the police force was passed in December, 1950. Under Police Regulation 479(a), the Governor had the power to dismiss a police officer. The Tribunal Rules were framed in exercise of various powers vested in the Governor including the power under section 7 of the Police Act, and by those rules, the Governor was authorised to pass appropriate orders concerning police officers. By virtue of Article 313, the Police Regulations as well as the Tribunal Rules in so far as they were not inconsistent with the provisions of the Constitution remained in operation after the Constitution. The authority vested in the Inspector General of Police and his subordinates by section 7 of the Police Act was not exclusive. It was controlled by the Government of India Act, 1935, and the Constitution which made the tenure of all civil servants of a Province during the pleasure of the Governor of that Province. The plea that the Governor had no power to dismiss the appellant from service and such power could only be exercised by the Inspector General of Police and the officers named in s.7 of the police Act is therefore without substance. But it is urged that the enquiry held by the Tribunal against the appellant and the order consequent upon that enquiry deprived the appellant of the equal protection of the laws and were therefore void as infringing article 14 of the Constitution. It is true that when proceedings were started against the appellant for an enquiry for his alleged misdemeanors, one of two distinct procedures for holding an enquiry, was open for selection by the authorities. The police 160 authorities could direct an enquiry under the Police Regulations under the procedure prescribed by Regulation 490; it was also open to the Governor to direct an enquiry against the appellant, and as the charges against him fell within r. 4 of the Tribunal Rules, the procedure for enquiry was the one prescribed by r. 8 of the Tribunal Rules. Relying upon the existence of these two sets of rules simultaneously governing enquiries against police officers either ' of which could be resorted to at the option of the authorities in respect of charges set out in r. 4 of the Tribunal Rules, it was urged that in directing an enquiry against the appellant under the Tribunal Rules, discrimination was practiced against him, and he was deprived of the guarantee of equal protection of the laws. That an enquiry against the appellant could have been made under the procedure prescribed by Regulation 490 of the Police Regulations appears to be supported by rr.1(3), 4 and 12 of the Tribunal Rules. Rule 1 subr.(3) provides that the Tribunal Rules shall apply to all Government servants under the rule making control of the Governor, and by r. 4, the Governor is authorised to refer cases to the Tribunal, but he if; not obliged to do so. By r. 12, nothing in the Tribunal Rules is to affect the conduct of disciplinary proceedings in oases other than those specifically dealt with under the rules. But the order of the Governor directing an enquiry against the appellant was passed before the Constitution, and article 14 has no retrospective operation: it does not vitiate transactions even if patently discriminatory which were completed before the commencement of the Constitution. In Syed Qasim Razvi vs The State of Hyderabad (1), this court was called upon to decide whether a trial of an offender commenced before the Constitution under the Special Tribunal Regulation promulgated by the Military Governor of the Hyderabad State was, since the Constitution, invalid in view of article 14. Mukherjea J. speaking for the majority of the court observed: (1) 161 is not to obliterate the entire operation of the inconsistent laws or to wipe them out altogether from the statute book; for to do so will be to give them retrospective effect which they do not possess. Such laws must be hold to be valid for all past transactions and for enforcing rights and liabilities accrued before the advent of the Constitution. On this principle, the order made by the Mlitary Governor referring this case to the Special Tribunal cannot be impeached and consequently the Special Tribunal must be deemed to have taken cognizance of the case quite properly, and its proceedings up to the date of the coming in of the Constitution would also have to be regarded as valid." Similarly, Das, J. in Lachhmandas Kewalram Ahuja vs The State of Bombay (1) in dealing with the validity of proceeding before a Special Judge holding a trial before the Constitution observed: "As the Act was valid in its entirety before the date of the Constitution, that part of the proceeding before the Special Judge, which, up to that date, had been regulated by this special procedure cannot be questioned, however discriminatory it may have been. . ". Selection by the authorities of one of two alternative procedures at a time when article 14 was not in operation, does not therefore enable the appellant to contest the validity of the enquiry on the plea of denial of equal protection of the laws. It was also observed in Syed Qasim Razvi 's case(2) by Mukherjea J. at p. 606: "In cases of the type (where the trial commenced before the Constitution) Which we have before us where part of the trial could not be challenged as bad and the validity of the other 'part depends on the question as to whether the accused has been deprived of equal protection in matters of procedure, it is incumbent upon the court to consider, firstly, whether the discriminatory or unequal provisions of law could be separated from the rest and even without them a fair measure of equality in the matter (2) ; (2) 162 of procedure could be secured to the accused. In the second place, it has got to consider whether the procedure actually followed did or did not proceed upon the basis of the discriminatory provisions. In our opinion, a mere threat or possibility of unequal treatment is not sufficient. If actually the accused has been discriminated against, then and then only he can complain, not otherwise. We may mention here that the impossibility of giving the accused the substance of a trial according to normal procedure at the subsequent stage may arise not only from the fact that the discriminatory provisions were not severable from the rest of the Act and the court consequently had no option to continue any other than the discriminatory procedure; or it may arise from something done at the previous stage which though not invalid at that time precludes the adoption of a different procedure subsequently." The proceedings of the Tribunal prior to the commencement of the Constitution are therefore not open to challenge except to the limited extent indicated by Mukherjea J. The question which falls to be considered is whether the procedure followed by the Tribunal after the Constitution was discriminatory and operated to the prejudice of the appellant. Regulation 490 of the Police Regulations sets out the procedure to be followed in an enquiry by the police functionaries, and rr. 8 and 9 of the Tribunal Rules set out the procedure to be followed by the Tribunal. There is no substantial difference between the procedure prescribed for the two forms of enquiry. The enquiry in its true nature is quasi judicial. It is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. It is true that by Regulation 490, the oral evidence is to be direct, but even under r. 8 of the Tribunal Rules, the Tribunal is to be guided by rules of equity and natural justice and is not bound by formal rules of procedure relating to evidence. It was urged that whereas the Tribunal may admit on record evidence which is hearsay, the oral 163 evidence under the Police Regulations must be direct evidence and hearsay is excluded. We do not think that any such distinction was intended. Even though the Tribunal is not bound by formal rules relating to procedure and evidence, it cannot rely on evidence which is purely hearsay, because to do so in ' and enquiry of this nature would be contrary to rules of equity and natural justice. The provisions for maintaining the record and calling upon the delinquent public servant to submit his explanation are substantially the same under Regulation 490 of the Police Regulations and r. 8 of the Tribunal Rules. It is urged that under the Tribunal Rules, there is a departure in respect of important matters from the Police Regulations which render the Tribunal Rules prejudicial to the person against whom enquiry is held under those rules. Firstly it is submitted that there is no right of appeal under the Tribunal Rules as is given under the Police Regulations; secondly that the Governor is bound to act according to the recommendations of the Tribunal and thirdly, that under the Tribunal Rules, even if the complexity of a case under enquiry justifies engagement of counsel to assist the person charged, assistance by counsel may not be permitted at the enquiry. These three variations, it is urged, make the Tribunal Rules not only discriminatory but prejudicial as well to the person against whom enquiry is held under these Rules. In our vie," , this plea cannot be sustained. The Tribunal Rules and the Police Regulations in so far as they deal with enquiries against police officers are promulgated under section 7 of the Police Act, and neither the Tribunal Rules nor the Police Regulations provide an appeal against an order of dismissal or reduction in rank which the Governor may pass. The fact that an order made by a police authority is made appealable whereas the order passed by the Governor is not made appealable is not a ground on which the validity of the Tribunal Rules can be challenged. In either case, the final order rests with the Governor who has to decide the matter himself. Equal protection of the laws does not postulate equal treatment of all persons without 164 distinction:it merely guarantees the application of the same laws alike and without discrimination to all persons similarly situated. The power of the Legislature to make a distinction between persons or transactions based on a real differentia is not taken away by the equal protection clause. Therefore by providing a right of appeal against the order of police authorities acting under the Police Regulations imposing penalties upon a member of the police force, and by providing no such right of appeal when the order passed is by the Governor, no discrimination inviting the application of article 14 is practiced. under r. 10 of the Tribunal Rules, the Governor is enjoined to pass an order of punishment in terms recommended by the Tribunal, whereas no such obligation is cast upon the police authority who is competent to dismiss a police officer when an enquiry is held under Regulation 490 of the Police Regulations. To the extent that r. 10 requires the Governor to accept the recommendation of the Tribunal, the rule may be regarded as inconsistent with the Constitution, because every police officer holds office during the pleasure of the Governor, and is entitled under article 311(2) to a reasonable opportunity to show cause to the satisfaction of the Governor against the action proposed to be taken in regard to him. The partial invalidity of r. 10 however does not affect the remaining rules: that part of the rule which requires the Governor to accept the recommendation of the Tribunal as to the guilt of the public servant concerned is clearly severable. We may observe that in considering the case of the appellant, the Governor exercised his independent judgment and passed an order of dismissal and did not act merely on the recommendation of the Tribunal. The difference between the two sets of rules on the matter under consideration does not relate to the procedure of the enquiring bodies, but to the content of reasonable opportunity guaranteed by article 311 of the Constitution. The rules relating to appearance of lawyers at enquiries under the Police Regulations and under the Tribunal Rules are also not different. Under cl.(9) 165 of Regulation 490 of the Police Regulations, an accused police officer may not be represented by counsel in any proceeding instituted under those Regulations, ' and by r. 7 of the Tribunal Rules, neither the prosecution nor the defence have the right to be represented by counsel. Both the rules deny to the police officer the right to be represented by counsel. The procedure provided in the Police Regulations is substantially the same as the procedure prescribed by the Tribunal Rules, and by continuing the enquiry after the Constitution under the Tribunal Rules and not under the Police Regulations, a more onerous procedure prejudicial to the appellant was not adopted. The Governor appointed the Tribunal for enquiry against the appellant before the Constitution, but the order of dismissal was passed after the Constitution came into force. The appellant was entitled to the protection of article 311(2) of the Constitution. Since the Constitution was enacted, the distinction which was made between members of the police force and other civil servants under sections 240, 241 and 243 of the Government of India Act has disappeared and all civil servants including the police officers are entitled to the protection of article 311(2). The content of the guarantee was explained by this court in Khem Chand vs The Union of India (1). It was observed by "To summarise: the reasonable opportunity envisaged by the provisions under consideration includes (a)an opportunity to deny his guilt and establish his innocence which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based; (b)an opportunity to defend himself by cross examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally (c)an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the enquiry is over and after (1) ; , 1096.166 applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communicates the same to the government servant". To a police officer charged with misdemeanor, opportunity in all the three branches set out in Khemchand 's case (1)is provided under the Tribunal Rules. There is opportunity to the police officer against whom an enquiry is made to deny his guilt and to establish his innocence; there is opportunity to defend himself by cross examination of witnesses produced against him and by examining himself and other witnesses in support of his defence, and there is also opportunity to make his representation as to why the proposed punishment should not be inflicted. The discrimination which is prohibited by article 4 is treatment in a manner prejudicial as compared with another person similarly circumstanced by the adoption of a law, sub stantive or procedural, different from the one applicable to that other person. In Sardar Kapur Singh vs The Union of India (1), this court held that by directing an enquiry against a member of the Indian Civil Service who was charged with misdemeanor under, the and not under r. 55 of the Civil Services (Classification, Control and Appeal) Rules when there was no substantial difference between the material provisions, discrimination was not practiced. It was observed (at p. 581): "Does the holding of an enquiry against a public servant under the , 18,50 violate the equal protection clause of the Constitution? The appellant submits that the Government is invested with authority to direct an enquiry in one of two alternative modes and by directing an enquiry under the which Act it is submitted contains more stringent provisions when against another public servant similarly circumstances an enquiry under r. 55 may be directed, article 14 of the Constitution is infringed. " After considering the ,,special protection given to (1) ; 1096 (2) ; 167 members of the Indian Civil Service and the essential characterised of the procedure for making enquiries under the public Servants (Inquiries) Act,1850, it was observed at p.584. "The primary constitutional guarantee, a member of the Indian Civil Service is entitled to is one of being afforded a reasonable opportunity of the content set out earlier, in an enquiry in exercise of powers conferred by either the or r. 55 of the Civil Services (Classifi. cation, Control and Appeal) Rules, and disorimination is not practised merely because resort is had to one of two alternative sources of authority, unless it is shown that the procedure adopted operated to the prejudice of the public servant concerned. In the case before us, the enquiry held against the appellant is not in manner different from the manner in which an enquiry may be held consistently with the procedure prescribed by r. 55, and therefore on a plea of inequality before the law, the enquiry held by the Enquiry Commissioner is not liable to be declared void because it was held in a manner though permissible in law, not in the manner, the appellant says, it might have been held. " In Syed Qasim Razvi 's case (1), it was held that if the substance of the special procedure followed after the Constitution in an enquiry or trial commenced before the Constitution is the same as in the case of a trial by the normal procedure, the plea of discrimination invalidating a trial must fail, Counsel for the appellant in support of his plea that the enquiry by the Tribunal was vitiated because it was held under a discriminatory procedure relied judgment of this Bench in the State of Orissa Dhirendranath Das (2). In that case, a lower Division Assistant in the Secretariat of the Orissa Government was found guilty of certain misdemeanor by a Tribunal appointed under rules framed by the Orissa Government after an enquiry held in that behalf and was ordered to be dismissed from service. In a petition by the public servant under article 226 of the Constitution praying for a writ declaring illegal the order (1) (2) A.LR.168 of dismissal it was held by the Orissa High Court that ad on the date on which enquiry was directed against the petitioner there were two sets of rules in operation, the Tribunal Rules and the Bihar and Orissa Subordinate Services Discipline and Appeal Rules and it was open to the Government of Orissa to select either set of rules for enquiry against any public servant against whom a charge of misdemeanor was made and that selection of one in, preference to the other set of rules was violative of the guarantee of article 14 of the Constitution. The High Court accordingly declared the order of dismissal inoperative and further declared that the disciplinary proceedings be restored to the stage which they had reached when the case was referred to the Tribunal. Against that order, the State of Orissa preferred an appeal to this court. The relevant rules were not in that case incorporated in the paper book prepared for the hearing nor did counsel for the@ State produce for our consideration those rules. Counsel also conceded that by the adoption of the procedure prescribed by the Tribunal Rules in preference to the procedure in an enquiry under the Service Rules, discrimination would be practiced because there were substantial differences in the protection to which the public servants were entitled under the Service Rules and the Tribunal Rules. The only ground pressed in support of the appeal was that the Service Rules were not in operation at the time when the enquiry in question was directed and by directing an enquiry under the Tribunal Rules, discrimination was not practiced. But this argument raised for the first time questions which were never investigated and this court declined to allow counsel to raise them. It was observed in that case: "If the two sets of rules were in operation at the material time when the enquiry was directed against the respondent and by order of the Governor, the enquiry was directed under the Tribunal Rules which are "more drastic" and prejudicial to the interest of the respondent, a clear case of discrimination arises and the order directing enquiry 169 against the respondent and the subsequent proceedings are liable to be struck down as infringing article 14 of the Constitution." Before us, counsel for the appellants has produced a printed copy of the Disciplinary Proceedings (Administrative Tribunal) Rules, 1951 published by the Government of Orissa. A perusal of these rules may apparently suggest that subject to certain minor differences, these rules are substantially the same as the Tribunal Rules framed by, the State of U. P. We have however not been supplied with a copy of the Bihar and Orissa Subordinate Services Discipline and Appeal Rules, 1935. The judgment of this court in The State of Orissa vs Dhirendranath Das can have no application to this case, because in that case, the order of the High Court was. assailed on the limited ground that the High Court erred in assuming that there were two sets of rules simultaneously in operation, and it was open to the Executive Government to select one or the other for holding an enquiry against a delinquent public servant. That contention was negatived and the judgment of the High Court was confirmed. We do not think that there is any substance in the plea that discrimination was practiced by continuing the enquiry under the Tribunal Rules after the Constitution was brought into force. This appeal is filed with a certificate under article 132 of the Constitution. By ' el.(3) of article 132 the appellant is entitled to appeal to this court only on the ground that the High Court has wrongly decided a substantial question as to the interpretation of the Constitution and unless this court grants leave to him, on no other. Counsel for the appellant has challenged the regularity of the proceedings of the Tribunal and we have heard him to assure ourselves that the proceeding of the Tribunal has not been vitiated by any serious irregularity, or that the appellant was net deprived of the protection under article 311 of the Constitution. We proceed to consider briefly the arguments advanced in support of that plea. It was urged 170 in the first instance that the appellant was not permitted to appear at the enquiry before the Tribunal by a lawyer whereas the State Government was represented by a lawyer. It was averred in paragraph 14 of the affidavit of the appellant that the case for the prosecution was conducted by Jwala Prasad, Deputy Superintendent of Police and Legal Advisor to the Anti corruption Department, and that the Tribunal was told that such a course would be contrary to the Tribunal Rules and in any case contrary to rules of equity and natural justice, because he the appellant was not permitted to appear by counsel. In reply, Hari Shankar Sharma, Deputy Superintendent of Police stated in his affidavit that it was not true that before the Tribunal prosecution was conducted by Jwala Prasad. Ho also, stated that the Tribunal had required the presence of Sri Krishna who had made enquiries, but as Sri Krishna could not remain present, Jwala Prasad attended the sitting of the .Tribunal only on one day as Deputy Superintendent of Police, C.I.D., but he did not take any part in the proceedings, and "examination of witnesses and the cross examination was all done by the members of the Tribunal" and the appellant. It does not appear that Jwala Prasad was a practicing lawyer: he was not in any case permitted to appear as a lawyer and on the affidavit of Hari Shankar Sharma, it is clear that he did not take any part in the examination of witnesses or cross examination. It was then urged that the explanation submitted by the appellant was not considered because the Governor felt bound by the recommendations of the Tribunal. But in para 25 of the affidavit, Hari Shankar Sharma stated that the explanation of the appellant was submitted to the Government by the Inspector General of Police and the Governor duly considered the explanation and was of opinion that the appellant was unable to clear his conduct and therefore under r. 10(1) of the Tribunal Rules the Governor ordered dismissal of the appellant from service after considering the merits of his defence. It was then urged that the application submitted by the appellant for summoning witnesses and 171 calling for certain records was not considered and the appellant had on that account been prejudiced. In para 15 of his affidavit, the appellant stated that the Tribunal refused to call for certain records and though he wanted to summon certain defence witnesses, his application in that behalf was also refused. In answer P to this averment, Hari Shankar Sharma stated that the appellant had given a long list of defence witnesses and the Tribunal asked him to select those witnesses whose evidence in the opinion of the appellant would be relevant and thereupon the appellant " reduced his list to a much smaller number" and all those witnesses were summoned. Then it was urged that the assessor who is required under the rules to assist the Tribunal not having remained present at the hearing, the enquiry was vitiated. In paragraph 16 of the affidavit, the appellant has stated that during the enquiry section N. Agha the assessor was absent on many days on which the case was heard and the evidence was recorded. In reply, Hari Shankar Sharma stated that the contents of paragraph 16 of the affidavit were not correct, that it was true that Agha could not attend on certain dates "due to unavoidable circumstances", but the appellant was specifically asked if he had any objection to the recording of evidence in Agha 's absence and the appellant having stated that he has no objection, the proceedings were continued with his written consent. He further stated that the assessor was explained of the proceedings held on the days on which he had remained absent. The averments made in the affidavit of Hari ShankarSharma were not controverted by the appellant. On the materials placed on record, there is no substance in any of the pleas raised by the appellant relating to the regularity of the proceedings of the Tribunal. It may be pertinent to note that even though the appellant challenged before the High Court the regularity of the proceedings of the Tribunal, no argument was, it appears, advanced before the High Court in support thereof. The judgment of the High Court which is fairly detailed does not refer to any 172 ground on which the contention was sought to be sustained. The appeal fails and is dismissed with costs. DAS GUPTA, J. I have had the advantage or reading the judgment prepared by Shah J.; but while I respectfully agree with the conclusions on all other points, I regret my inability to agree with the conclusion reached there on the main question in controversy, viz. whether the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are void as being in contravention of article 14 of the Constitution, in so far as they do not provide for any appeal against a decision by the Governor under Rule 10. The facts have been fully stated by my learned Brother and need not be repeated, especially as the facts in this particular case do not arise for consideration in the decision of the question of law, whether article 14 is contravened by the above provisions of the Tribunal Rules. Under these rules the Governor may refer to the Tribunal constituted in accordance with rule 3 "cases relating to an individual government servant or class of government servants or government servants in a particular area only in respect of matters involving (a) corruption; (b) failure to discharge duties properly; (c) irremediable general ineffi ciency in a public servant of more than ten year 's standing; and (d) personal immorality." Under cl. 3 of rule 1 these rules apply to all government servants under the rule making control of the Governor. It is not disputed that these rules apply to every member of the police service in Uttar Pradesh and that the Governor may refer to the Tribunal the cases relating to any individual government servant belonging to the police department in respect of any of the matters mentioned 'in cl. (1) of Rule 4. It is also not disputed that if the Governor "does not make any such refe rence, the case of any such member of the police service in respect of any of these matters may be inquired into under the Uttar Pradesh Police Regulations. The co existence of the provisions of Police Regulations on 173 the question of departmental punishment of police officers with the Tribunal Rules, thus results in the position that of two members of the police service holding the same post and rank, one may be proceeded against in respect of any of the matters mentioned in Rule 4(1) of the Tribunal Rules, under the Tribunal Rules and another may be proceeded against for the self same matter under the Police Regulations. Where the inquiry is held under the Tribunal Rules, the Tribunal has to make a record of the charges, the explanation, its own findings and the views of the assessor and where satisfied that punishment be imposed, also formulate its recommendations about punishment. Under Rule 10 the Governor will then decide the case and no appeal shall lie against the order so passed by the Governor. Where the action is taken under the Police Regulations procedure, a police officer against whom an order of dismissal, removal, suspension or reduction is passed has a right of appeal to the authority prescribed in Regulation 508. The question is whether the existence of the right of appeal under the Police Regulation Procedure and the absence of the right, appeal against the decision by the Governor in the Tribunal Rules ' procedure amounts to unequal treatment. On behalf of the respondent it has been urged that there is no unequal treatment as in one case it is the order of the Governor which is made not appealable and in the other case it is the order of a police functionary which is made appealable. The argument seems to be that only if in the Police Regulations an order made by the Governor had been made appealable while under the Tribunal Rules the order made by the Governor was not appealable there could be any scope for a complaint of unequal treatment. With great respect to my learned brethren who have taken the contrary view, I am of the opinion that this argument misses the realities of the position and is really an attempt to slur over the difficulty. The real Position that requires examination appears to me to be this: Suppose A and B are two police officers holding the same rank and post and A is proceeded against under the 174 Tribunal Rules on a charge of corruption while B is proceeded against on a similar charge of corruption under the Police Regulations procedure. In the first case if the Tribunal finds A guilty and recommends, say, dismissal; and the Governor makes an order of dismissal, against this order there is no appeal. Suppose in B 's case also the punishing authority makes an order of dismissal but against this B has a right of appeal. It is obvious that while in the latter case B has some chance of the appellate authority taking a different view either about his guilt or about the quantum of punishment and setting aside or modifying the order, A has no such chance at all. It will be little consolation to A that the order in his case has been passed by such an high authority as the Governor. He can, it seems to me, legitimately complain that there is a real difference between the way he is treated and B is treated because of this existence of B 's right of appeal against the punishing authority 's order while he has no such right. Unless one assumes that the right of appeal is only in name, I do not see how one can deny that there is a legitimate basis for this complaint. I cannot agree that the right of ap. peal is a right without substance. Whenever one authority sits in appeal over another authority there is always a chance that the appellate authority may take a different view of facts or of law and as regards the quantum of punishment requisite, from the authority whose decision is under appeal. It is this chance which is denied, if a right of appeal is taken away. I am therefore of opinion that the absence of the right of appeal under Rule 10 of the Tribunal Rules while a right of appeal is given to a police officer under the Police Regulations, results in unequal treatment in a substantial matter, as between a police officer proceeded against under the Tribunal Rules and an officer who is proceeded against under the Police Regulations procedure. Nor is it possible to discover any principle to guide the discretion of the Government to select some police officers to be proceeded against under the Tribunal Rules while leaving out other police officers to be proceeded against, in respect 175 of similar matters, under the Police Regulations procedure. I have therefore come to the conclusion that the Tribunal Rules in so far as they provide that no appeal shall lie against the decision of the Governor is ultra vires the Constitution, being in contravention of article 14 of the Constitution. As has been noticed by Shah J. a somewhat similar question fell to be considered by us in Civil Appeal No. 103 of 1959 (State of Orissa vs Dhirendranath Das). Comparing the Disciplinary Proceedings (Administrative Tribunal) Rules., 1951 of the Orissa Government under which Dhirendranath Das had been proceeded against and dismissed from service with the Bihar and Orissa Subordinate Service Discipline and Appeal Rules, 1935 this Court held that inasmuch as there was a right of appeal to the authority immediately superior to the punishing authority under the Service Rules. while there is no such appeal against the findings and recommendations of the Tribunal, the pre proeedings were substantially different. The court further pointed out that as inquiries could be directed according to procedures substantially different at the, discretion of the executive authority "exercise whereof is not governed by any principle,% having any rational relation to the purpose to be achieved by the inquiry, the order selecting a prejudicial procedure, out of the two open for selection, is hit by article 14 of the Constitution. " I cannot find anything here that would justify a revision of the view taken by us in that case. As in my judgment the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are hit by article 14 of the Constitution I would allow the appeal and set aside the order of dismissal passed against the appellant By Court. In view of the majority Judgment of the Court, the appeal fails and is dismissed with costs. Appeal dismissed.

There were certain charges of immorality, corruption and gross dereliction of duty against the appellant who was a police officer. After an enquiry, the Governor of U. P. referred the case under section 4 Of the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947, to a Tribunal. The Tribunal recommended on February 4, 1950, that the appellant be dismissed from service. The Governor then served a notice on the appellant to show cause why he should not be dismissed from service and after considering the explanation submitted by him dismissed him with effect from December 5, 1950. The appellant challenged the order of dismissal, inter alia, on the grounds: (i) that the Governor had no power under section 7 of the Police Act and the U. P. Police Regulations framed thereunder to dismiss a police officer and (ii) that the enquiry held by the Tribunal violated 152 article 14 Of the Constitution as of the two parallel procedures available under the Tribunal Rules and under the U. P. Police Regulations, the mode prejudicial to the appellant under the Tribunal Rules was adopted. Held (per Das, Hidayatullah, Shah and Ayyangar, JJ.) that the enquiry by the Tribunal and the order of dismissal passed by the Governor were legal and valid. Under para. 479(a) of the U. P. Police Regulations, framed under section 7 Of the Police Act, the Governor bad the power to dismiss a police officer. Under the Tribunal Rules also, which were framed in exercise of the various powers vested in the Governor including the power under section 7 Of the Police Act, the Governor was authorised to dismiss a police officer. By virtue of article 313 Of the Constitution these provisions remained in operation even after the coming into force of the Constitution. The authority vested in the Inspector General of Police and his subordinates by section 7 of the Police Act, was not exclusive; it was controlled by the Government of India Act, 1935, and the Constitution which made the tenure of all civil servants of a province or state during the pleasure of the Governor. The procedure adopted did not violate article 14 Of the Con stitution. Though at the time when proceedings were started against the appellant two distinct procedures for holding the enquiry were open for selection by the authorities, the order by the Governor referring the case under the Tribunal Rules having been passed before the Constitution, article 14 could have no application to it even if it was discriminatory. The procedure ire scribed in the Police Regulations is substantially the same as the procedure prescribed by the Tribunal Rules, and by continuing the enquiry after the Constitution under the Tribunal Rules and not under the Police Regulations, a more onerous procedure prejudicial to the appellant was not adopted. The fact that an order made by a police authority under the Police Regulations is made appealable whereas an order passed by the Governor under the Tribunal Rules is not made appealable does not amount to discrimination within the meaning of article 14. The Tribunal Rules provide for the giving of reasonable opportunity to a public servant in ill its aspects, viz., opportunity to deny his guilt, opportunity to defend himself and opportunity ,to make his representation against the proposed punishment. The mere existence of two sets of parallel procedures is not discriminatory unless it was shown that one set is more onerous than the other. Syed Qasim Rozvi vs The State of Hyderabad and Lackhmandas Kewalram. Abuja vs The State of Bombay, ; , applied. Khem Chand vs The Union of India and others, [1954] S.C. R. 1080 and Sardar Kapur Singh V: Union of India, (1960) 2 S.C. R. 569, referred to. 153 State Of Orissa vs Dhirendranath Das, A.I.R. 1961 S.C. 1715, distinguished. Per Das Gupta, J. The U.P., Disciplinary Proceedings (Administrative Tribunal) Rules, 1947, are hit by article 14 Of the Constitution. The absence of the right of appeal under the Tribunal Rules while a right of appeal is given to a police officer under the Police Regulations, results in unequal treatment in a substantial matter between police officers proceeded against under the two procedures. Further, there is no principle. to guide the Government in selecting which of the two procedures is to be applied in a particular case.

The appellant was an erstwhile member of the Indian Administrative Service in the cadre of the State of orissa. At the relevant time in the year 1967, he was serving as Commissioner of Land Reforms, orissa. According to the appellant he had disputes, differences and animosity with respondent No. 1, the Chief Secretary to the Government of orissa and respondent No. 2 who was at the relevant time Director of Vigilance and Additional Secretary to the Government of orissa. The First Information Report was lodged against the appellant under section S(2) of the Prevention of Corruption Act, 1947, on 24 11 1967. The appellant 's house was searched on 27 11 1967. An order of suspension was made against the appellant by the Government of orissa on 28 11 1967 under rule 7(3) of the All India Services (Discipline and Appeal) Rules, 1955. The Writ Petition filed by the appellant against his order of suspension and investigation was dismissed by the High Court in limine. This Court allowed an appeal filed by special leave by the appellant against the High Court judgment and directed the High Court to admit and dispose of the petition in accordance with law. The State Government approached the Central Government to accord sanction for prosecution of the appellant. In spite of reminders, the Central Government neither accorded the sanction nor refused it. Appellant was compulsorily retired by the Government in 1971. Thereafter, charge sheet was submitted against him in the Court of the Special Judge, Sambalpur. The trial concluded but because of the stay order passed by this Court judgment could not be delivered. Against the order of the compulsory retirement, the appellant filed a writ petition in the Delhi High Court which was dismissed by a learned single Judge and against which a Letters Patent appeal is pending. The orissa High Court dismissed the writ petition of the appellant on the ground of it having become infructuous since the appellant was no longer in suspension since he was compulsorily retired. The High Court also did not think it necessary to examine the legality of the investigation against the appellant as chargesheet had already been submitted. In an appeal by special leave the appellant contended: The suspension order may be quashed on the following grounds: (1) It was passed without following the various Governmental instructions on the point. (2) The order was in violation of rule 7(3). (3) The order was malafide. ^ HELD: (1) It is true that all the instructions contained in the circulars issued by the Central Government do not seem to have been strictly followed. That would, however, not invalidate or nullify the order of suspension made under rule 7(3). In dealing with the cases of high officers of the Administrative Service care ought to have been taken to follow the instructions as far as possible. On the facts of the present case. however. failure to follow the instructions fully, does not render the order of suspension per se invalid. [353GH] (2) Under rule 7(3) a member of the Service in respect of or against whom an investigation, enquiry or trial relating to a criminal charge is ponding, may at the discretion of the Government be Placed under suspension. The 351 expression investigation, enquiry and trial are well known in the realm of the A criminal law under the Criminal Procedure Code. In the present case, the First Information Report was lodged and the search warrants were issued before the suspension orders were passed. Most of the allegations against the appellant were in relation to his alleged acts of corruption and misuse of his official position. Whether the allegations are true or false is irrelevant. Order under rule 7(3) was, therefore, legal and valid. [354A E] (3) The suspension order came to an end by the compulsory retirement of the appellant. After retirement from service he could no longer be deemed to be under suspension. Since we are remitting the case back to the High Court we permit the appellant to raise the question of his salary and emoluments during the suspension period to be raised in the High Court. The counsel for the appellant, however, assured this Court that if the appellant would be exonerated of the charges levelled against him and acquitted in the criminal proceedings the State Government would pay him his full pay and allowances for the period of suspension. [354G H, 355B C] (4) We do not think it advisable to decide the point of malafide in the absence of the judgment in the criminal cases. Since the two matters are so interwoven and interconnected that it would be expedient for the High Court to decide this issue after the judgment is delivered in the criminal trial. [3 55D E]

The first respondent filed an election petition for an order that the election of the appellant be declared void on the ground that the appellant had committed the corrupt practice under section 123(5) of the Representation of the People Act, 1951, in that he had hired a tractor for conveying women electors from their houses to places of polling and back. By an amendment application the first respondent gave particulars about the conveying of voters, but he did not give any particulars regarding the contract of hiring nor did the appellant ask for such particulars. At the trial t~he first respondent led evidence in respect of t~he contract of hiring and the appellant raised no objection to the relevance of that evidence. The Election Tribunal dismissed the petition but on appeal the High Court held the charge proved and declared the election of the appellant void. The appellant contended that the election petition ought to have been dismissed because particulars of the contract of hiring which was an essential ingredient of the corrupt practice had not been given. Held, (per Sinha Lc. J., jafer Imam, K. N. Wanchoo and J. C. Shah, jj), that the corrupt practice under s~. I23~(5) was the conveying of electors to and from the polling station and not the contract of hiring. If the election petition gave particulars about the use of a vehicle for conveying of electors to ' and from the polling station, the failure to give particulars of the contract of hiring, as distinguished from the fact of hiring, did not render the petition defective. An election petition was not liable to be 92 dismissed in limine merely because full particulars of a corrupt practice alleged were not set out. If an objection was taken and the Tribunal was of the view that full particulars had not been set out the petitioner had to be given an opportunity to amend or amplify the particulars. It was only in the event of noncompliance with the order to supply the particulars that the charge which remained vague could be struck out. Besides, in the present case no material prejudice was caused to the appellant by the absence of the particulars of the contract of hiring. Sarkar J. Under section 123(5) the hiring of the vehicle for conveyance of electors was an essential element of the corrupt practice and it was necessary to give particulars of the contract of hiring. But the failure to give such particulars did not render the petition liable to be dismissed. Section 83 of the Act did not provide for the dismissal of the petition for failure to furnish particulars nor did section 90(3) empower the Tribunal to dismiss a petition for non compliance with the provisions of section 83. The appellant was entitled to apply for particulars but he did not do so; he could not at a later stage complain about the absence of the particulars.

The appellant was tried by a Sessions judge and a jury for offenses under sections 477 A and 408, Indian Penal Code. A large volume of documentary evidence was in English and the statement of one of the principal witnesses was given in English. The main question for decision was the authorship of the forged documents. It was found that the jurors were not well versed in English and were not in a position to decide the main question. The jury returned a unanimous verdict of not guilty and accepting the verdict the Sessions judge acquitted the appellant. The State appealed to the High Court. In the memorandum of appeal only one ground was taken, "that the order of acquittal is against the weight of evidence on the record and contrary to law. " The High Court accepted the appeal and convicted the appellant. The appellant contended that the appeal before the High Court was incompetent as no particular errors of law, upon which alone an appeal lay under section 418, Code of Criminal Procedure, were set out in the memorandum of appeal and that the trial in the Session Court was no trial in the eye of law. 641 Held, that a memorandum of appeal is meant to be a succinct statement of the grounds upon which the appellant proposes to support the appeal. The practice prevailing in the Allahabad High Court of not taking specific grounds either of law or fact is to be disapproved even assuming that section 419 of the Code of Criminal Procedure does not in terms require the setting out of such grounds. Held further, that the trial before the Session judge was coram non judice on account of the incompetence of the jury to decide the question of the authorship of the forged documents. In such a case the question of prejudice does not arise as it is not a mere irregularity, but a case of "mis trial." Ras Behari Lal vs The King Emperor, (1933) L.R. 60 I.A. 354 followed.

In a writ petition filed under article 226 of the Constitu tion impugning his dismissal from service, the respondent contended that since he had not been given a reasonable opportunity of meeting the allegations against him, his dismissal was void. writ petition was dismissed. Thereupon, the respondent flied a suit in a civil court challenging his dismissal on the ground, among others, that since he had been appointed by the Inspector General of Po lice, his dismissal by the Deputy Inspector General of Police was wrong. The State took the plea that the suit was barred by res judicata. Dismissing the suit, the trial court held that it was not barred by res judicata. The first appellate court dismissed the respondent 's appeal. Purporting to follow a line of decisions of this Court, the High Court held that only that issue between the parties would be res judicata which was raised in the earlier writ petition and was decided by the High Court after contest and since in this case the respondent did not raise in the earlier writ petition the plea of competence of the Deputy Inspector General of Police to dismiss him. the parties were never at issue on it and that the High Court never consid ered and decided this issue in the writ petition. On the question of invoking the principle of constructive res judicata by a party to the subsequent suit on the ground that the matter might or ought to have been raised in the earlier proceedings, the High Court held that this question was left open by the Supreme Court in Gulabchand Chhotalal Parikh vs State of Bombay ; , and allowed the respondent 's appeal. Allowing the States appeal to this Court. HELD: The High Court was wrong in its view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in Devi Lal Modi vs Sales Tax Officer Ratlam and Others ; it was not necessary to reiterate it in Gulabchand 's case as it did not arise for consideration in that case. The clarificatory observation in Gulabchand 's case was misunderstood by the High Court in observing that the matter had been left open by this Court. The doctrine of res judicata is based on two theo ries: (i) the finality and conclusiveness of judicial deci sions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be pro tected from multiplication of litigation. [430 D] 2. (a) In certain cases, the same set of facts may give rise to two or more causes of action. In such cases res judicata is not confined to the issues which the Court is actually asked to decide but covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them. This rule has sometimes been referred to as constructive res judicata which is an aspect or amplification of the general principle. [431 A] (b) Section 11 of the Code of Civil Procedure, with its six explanations, covers almost the whole field, but the section has, in terms, no application to a petition for the issue of a high prerogative writ. [431 D] (c) Although in the Amalgamated Coalfields Ltd. and others vs Janapada Sabha, ; this Court held that constructive res judicata being a special and artifi cial form of res judicata should not generally be applied to writ petitions, in Devilat Modi 's this Court held that if the doctrine of constructive 429 res judicata was not applied to writ proceedings, it would be open to a party to take one proceeding after another and urge new grounds every time, which was plainly inconsistent with considerations of public policy. The principle of constructive res judicata was, therefore, held applicable to writ petitions as well. [433 G & 434 D] 3. The High Court missed the significance of these deci sions and relied upon L. Jankirama lyer and 'Others vs P.M. Nilakanta lyer and Others [1962] Supp. 1 S.C.R. 206 which had no bearing on the controversy. In Gulabchand 's case, this Court observed that it did not consider it necessary to examine whether the principle of constructive res judicata could be invoked by a party to the subsequent suit oft the ground that a matter which might or ought to have been raised in the earlier proceeding but was not so raised therein could be raised again relying on which the High COurt concluded that the question was left open by this Court. This in turn led the High Court to hold that the principle of resjudicata could not be made applicable to a writ petition. [435 E F] In the instant case, the respondent did not raise the plea that he could not be dismissed by the Deputy Inspector General of Police. This was an important plea which was within his knowledge and could well have been taken in the writ petition. Instead he raised the plea that he was not afforded a reasonable opportunity of meeting the case in the departmental inquiry. It was therefore not permissible for him to take in the subsequent suit the plea that he had been dismissed by an authority subordinate to that by which he was appointed. That was clearly barred by the principle of constructive res judicata and the High Court erred in taking a contrary view. [436 A B]

The respondent landlord filed a suit for ejectment in the year 1971 and obtained a decree for ejectment against the appellant tenant. By virtue of the provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, the case was transferred to the court of the Judge, Small Causes, who tried the case and passed a decree in favour of the respondent. No appeal or revision was filed against the said judgment. Thereafter, the decree holders filed an execution petition. The appellant, raised a jurisdictional objection on the basis of the judgment of the Allahabad High Court, (K.K. Saksena vs S.N. Misra to the effect that the transfer of the suit before conferment of the jurisdiction to the Judge, Small Causes Court was not competent and therefore, the decree was not executable. The respondent 's counsel contended that the suit would have to be tried all over again and the Court held that the decree was without jurisdiction. Tho decree remained inexecutable, but by virtue of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) (Amendment) Act, 1976 section 9 of the 1972 Act was made applicable with retrospective effect to remove The injustice and remedy the mischief which had been caused to the decree holders. As a result of the amendment, the aforesaid judgment of the Allahabad High Court stood over ruled and effaced. In view of the aforesaid amendment, the respondents filed an application before the Executing Court for revival of the suit and the decree, which was accepted by the Court, and a Civil Revision filed against the said order was dismissed by the High Court. 744 In the appeal to this Court, it was contended on behalf of the appellant, that in view of the Allahabad High Court decision and the 1972 Act, the decree stood set aside and could not be received or made executable even by the 1976 Amendment Act. Dismissing the appeal, ^ HELD: 1. The courts below have rightly decided that after the 1976 Amendment Act the decree became legally executable. [747A] 2. By virtue of the 1972 Act the decree could not have been set aside or invalidated and the only consequence which would ensue is that the decree would be lying dormant and could not be executed. Once the bar placed by the 1972 Act is removed, by virtue of the doctrine of eclipse the decree will revive and become at once operative and executable. [750H; 751A] 3 Even if the 1972 Act were to apply, the utmost consequence would be that the decree would remain inexecutable but could not be struck off from the records of the case. This is clear case where the doctrine of eclipse would apply, and in view of the 1976 Amendment Act, the decree will revive and become executable. This principle has been applied by this Court in several cases and flows from the well known doctrine of eclipse which has been enunciated not only in India but in other countries also. [747G H] Bhikaji Narain Dhakras & Ors. vs Stats of Madhya Pradesh & Anr; ; , Deep Chand vs State of U.P of Uttar Pradesh & Ors; [1963] 1 Supp. SCR 912, section Anbalagan vs B. Devarajan; , Kailash Sonkar vs Smt. Maya Devi; , referred to.

After holding a departmental enquiry on certain charges of contravention of Government Servants ' Conduct Rules, the appellant was reduced in rank. His suit for a declaration that the impugned action was void and inoperative was dismissed. The High Court dismissed his appeal. On appeal, it was contended that the departmental enquiry was vitiated on account of material irregularities, and that, as a result of excessive delay, between the date of hearing and delivery of judgment by the High Court, it did not deal with a number of submissions made by him and thereby caused prejudice. Dismissing the appeal to this Court, ^ HELD: (1)(a) The question whether the appellant was given a reasonable opportunity to lead evidence and was sufficiently heard or hot is largely a question of fact. It is only when an opportunity denied is of such a nature that the denial contravenes mandatory provision of law or a rule of natural justice that it could vitiate the whole departmental trial. Prejudice to the Government servant from an alleged violation of a rule must be proved.[583C] (b) The plea that the appellant had been subjected to trial on allegations which had been the subject matter of previous enquiries overlooks that no charge was framed as a result of any previous enquiry. If an enquiry was held at a particular stage, possibly to determine whether regular proceedings should be drawn up or started, it did not debar a departmental trial. [583D] State of Assam & Anr. vs J. N. Roy Biswas ; and R. T. Rangachari vs Secretary of State, AIR 1937 PC 27, held inapplicable. (c) It was not shown whether any evidence which the appellant tried to produce was really wrongly excluded and at what stage and for what reasons. All these are questions of fact which should be raised in the departmental trial. After that if there was any patent error a writ petition lay. [584A] (d) A suit challenging a departmental proceeding cannot be treated as an appeal from the findings in those proceedings or against a punishment inflicted upon the Government servant even if these were erroneous. A question which could affect the result in a civil suit has to be of such a nature that it goes to the root of the jurisdiction that the conduct of the departmental trial illegally and vitiates the result. It is only if the departmental proceeding is null and void that a plaintiff could obtain the reliefs he had asked for. [584E F] Smt. Ujjam Bai vs State of U.P. & Anr. [1963] 1 S.C.R. 778 @ 835, 836, referred to. (e) Unless a point could be raised on behalf of an appellant which is capable of vitiating the departmental proceedings there could be no declaration that the departmental proceedings were null and void. [585H] 581 (2) The Civil Procedure Code does not provide a time limit for the period between the hearing of arguments and the delivery of a judgment. Nevertheless, an unreasonable delay between the hearing of arguments and delivery of judgment, unless explained by exceptional or extraordinary circumstances, is highly undesirable even when written arguments were submitted. It is not unlikely that some points which the litigant considered important might have escaped notice. But, what is more important is that litigants must have complete confidence in the results of litigation. This confidence tends to be shaken if there excessive delay between hearing of arguments and delivery of judgments.

In respect of an alleged speech made, on May 5, 1974, at a meeting held in Tughlakabad Railway Station Yard inciting workers to go on strike from May 8, 1974, the appellants who were leaders of the Northern Railwaymen 's Union were convicted by the learned Metropolitan Magistrate under Rule 118 and 119 of the Defence of India Rules and sentenced to six months rigorous imprisonment. The order of conviction was upheld in appeal by the Sessions Court but in revision, the Delhi High Court while upholding the conviction re duced the sentence to the period already undergone. In appeal by special leave to this Court, the appellants contended (1) There was no legal evidence to warrant the conviction; (2) The courts below were not justified in taking judicial notice of the fact that on the date when the appellants delivered their speeches a railway strike was imminent and that such a strike. was, in fact, launched on May 8, 1974 and (3) The conduct attributed to the appellants does not fall within the mischief of the order because inciting other workers to go on strike is outside the defi nition of the word "strike" contained in rule 118(3)(b) of the Defence of India Rules, 1971. Allowing the appeal by special leave, the court, HELD: (1) The courts below were justified in assuming without formal evidence that the railway strike was immi nent on May 5. 1974 and that a strike intended to paralyse the civic life of the nation was undertaken by a section of workers On May 8, 1974. [995A B] (2) The purpose of section 57 of the Evidence Act is to provide that the court shall take judicial notice of certain facts rather than exhaust the category of facts of which the court may in appropriate cases take judicial notice. Recog nition of facts without formal proof is an act of expedien cy. Shutting the judicial eye to the existence of such facts and matters is in a sense an insult to commonsense and would tend to reduce the judicial process to a meaningless and wasteful ritual. No court insists on a formal proof by evidence of notorious facts of history past or present and events that have rocked the nation need no roof and are judicially noticed. judicial notice in such matters takes place of proof and is of equal force. [994F H, 995 A] (3) The Government possesses the power to issue an appropriate order under rule 118(1) prohibiting the strike "in connection with any industrial dispute" even if there is no existing industrial dispute because the owner can be exercised prophylactically by preventing a strike in connec tion with an imminent strike. [995C D] (4) In order to maintain a charge under rule 118(1) of the Defence of India Rules, 1971, the prosecution has to establish not only that a strike was imminent or had actual ly taken place of which indicial notice may be taken but further that the strike was in connection with the industri al dispute which is a matter of evidence. [995E F] 992 (5) What is chargeable as contravening the prohibition must under the order issued by the Government of India under Rule 118(1)(a) is, in the circumstances of this case, the words used by the speakers and not the gist of the speeches made by a member of the audience. A summary of speech may broadly and generally not be inaccurate and it may ' not faithfully reflect what the speaker actually said and in what context. [994D E] (6) Rule 118(1)(a) limits the power of the Government to issue an appropriate order, general or special, for prohib iting inter alia, a strike in connection with any industrial dispute. Since the rule does not empower the Government to issue an order prohibiting strikes generally, whet.her it is in connection with the industrial dispute or not, there can be no contravention of the order unless it is established by evidence that the strike was in connection with an industri al dispute. In the instant case, the prosecution did not lead any evidence to prove this important ingredient of the offence and the generalisation made by the witnesses in their evidence is wholly inadequate for accepting that the appellants gave incitement to a strike in connection with any industrial dispute. [995F G] (7) The contention of the prosecution that what is contem plated by rule 118 (1)(a) itself is a strike in connection with an industrial dispute and, therefore, it is not neces sary for the prosecution to establish that the strike was in connection with any industrial dispute is neither warranted nor supported by anything contained in sub rule (3) of rule 118 which defines expressions "industrial dispute" and "strike". [995H, 996A B] [In view of the finding that the evi dence led by the prosecution is insufficient to establish the charge, in the instant case, the court thought it unnecessary to consider the question whether the conduct attributed to the appellants fall within the mischief of the order dated 26 11 1973, since inciting other workers to go on strike may be outside the definition of the words "strike" contained in Rule 118(3)(b) of the Defence of India Rules, 1971. " The court, however, pointed out that the appropriate provision of the Defence of India Rules under which an incitement to strike as in the instant case may be punished in Rule 36(6) read with Rule 43(1)(a).]

Appeal No. 535 of 1958. Appeal from the judgment and order dated March 29,1955, of the Assam High Court in I.T.R. No. 1 of 1954. A.V. Viswanatha Sastri and D. N. Mukherjee, for the appellants. Hardayal Hardy and D. Gupta for the respondent. March 13. The Judgment of the Court was delivered by HIDAYATULLAH, J. This appeal which has been filed with a certificate under section 66(A)(2) granted by the High Court of Assam against its judgment and order dated March 29, 1955, concerns the assessment of the appellants, a Hindu undivided family, for the assessment years, 1945 1946 and 1946 1947. The appellants owned a tea garden called the Sewpur Tea Estate in Assam. They had on the Estate, factories, labour quarters, staff quarters etc. On February 27, 1942, the Military authorities requisitioned all the factory buildings, etc., under R. 79 of the Defence of India Rules. Possession was taken sometime between March land March 8, 1942. The tea garden was, however, left in the possession of the appellants. The possession of the military continued till the year 1945, and though the appellants looked after their tea garden the manufacture of tea was completely stopped. Under the Defence of India Rules, the Military authorities paid compensation. For the year 1944, corresponding to the assessment year, 1945 1946, they paid a total sum of Rs. 2,22,080 as compensation including a sum of Rs. 10,000 for repairs to quarters for labourers and Rs. 144 which represented the assessor 's fee. For the year 1945, corresponding to the assessment year, 1946 1947, the Military authorities paid a sum of Rs. 2,46,794 which included a sum of Rs. 15,231 for other repairs. The sums paid for repairs appear to have been admitted as paid on capital account, and rightly so. The question was whether the two Sums paid in the two 259 years minus these admitted sums, or any portion thereof, were received on revenue or capital account. The assessments for the two years were made by different Income tax Officers. For the assessment year, 1945 1946, the Income tax Officer deducted from Rs. 2,22,080, a sum of Rs. 1,05,000 on account of admissible expenses. He then applied to the balance Rs. 1,17,080, R. 24 of the Indian Income tax Rules, 1922, and brought to tax 40 per cent of that sum amounting to Rs. 46,832. The assessment was made under section 23(4). For the assessment year, 1946 1947, the assessment was made under section 23(3) of the Incometax Act. The Income tax Officer excluded the sum paid on account of repairs and treated the whole of the amount as income taxable under the provisions of the Income tax Act, after deduction of admissible expenditure. The appeals filed by the appellants to the Appellate Assistant Commissioner against both the assessments were unsuccessful. On further appeal, the Income tax Appellate Tribunal (Calcutta Bench) was divided in its opinion. The Judicial Member held that the receipts represented revenue but on account of "use and occupation" of the premises requisitioned. He, therefore, computed the not compensation attributable to such use and occupation at 20 per cent of the total receipts in both the years. He however, observed that if the receipts included income from the tea estate he would have been inclined to apply R. 24 in the same way as the first Income tax Officer. The Accountant Member was of the opinion that the appellants were liable to pay tax on 40 per cent of their receipts in both the years after deduction of the sums paid for repairs of buildings and the admissible expenditure. He accepted the estimate of expenditure for the account year, 1944,. at RE;. 1,05,000, and directed that the admissible expenditure for the succeeding year be determined and deducted before the application of R. 24. It appears that through some inadvertence these two orders which were not unanimous, were sent to the appellants and the Department. The Commissioner of Income tax filed an application under section 66(1) for a 260 reference, while the appellants filed an application under section 35 for rectification of the orders, since many other matters in appeal were not considered at all. When these two applications came before the Tribunal, it was realised that the matter had to go to a third Member for settling the difference. The President then heard the appeal, and agreed with the Accountant Member. Though he expressed a doubt whether the appellants were entitled to the benefit of rr. 23 and 24, he did not give an opinion, because this point was not referred to him. The Tribunal then referred the case to the High Court of Assam on the following two questions: "(1). Whether the sums of Rs. 2,12,080 and RE;. 2 31,563 paid by the Government to the assessee in 1945 and 1946 respectively (exclusive of the sums paid specifically for building repairs) were revenue receipts in the hands of the assessee comprising any element of income? (2). If so, whether the whole of the said sums less the expenses incurred by the assessee in tending the tea bushes constituted agricultural income in his hands exempt from tax under the Indian Income tax Act, 1922?" The reference was heard by Sarjoo Prasad, C.J., and Ram Labhaya, J., along with two writ petitions, which had also been filed. They delivered separate judgments, but concurred in their answers. The High Court answered both the questions against the appellants. The writ petitions were also dismissed. Before we deal with this appeal, we consider it necessary to state at this stage the method of calculation of compensation adopted by the Military authorities. It is not necessary to refer to both the years, because what was done in the first year was also done in the following year except for the change in the amounts. This method of calculation is taken from the order of the Judicial Member, and is as follows: 261 Rs. A. P. Crop 211120 1bs. at 17.85d (half) and at 18.35d (half) 2,12,292 14 0 15480 1bs. at Rs. 0 11 10 11, 449 12 0 52600 1bs. at Rs. 0 15 6 50,956 4 0 2,74, 698 14 0 Less Saving of plucking and manufacturing: Rs. (a) Expenses at annas 3 per lb. 49,209 (b) Sale of export rights, 1,32,935 1bs. 4,924 (c) Purchase of export rights 78,185 lbs. at annas 4. 1,629 (d) Food and clothing concessions 7,000 62,762 0 0 2,11,9360 0 Add For fees of assessors, Rs. 144 Coolie lines repairs, Rs. 10,000 10,1440 0 Rs. 2,22,08000 From the admitted facts which have been summarised above, it is clear that the business of the appellants as tea growers and tea manufacturers had come to a stop. The word "business" is not defined exhaustively in the Income tax Act, but it has been held both by this Court and the Judicial Committee to denote an activity with the object of earning profit. To say that a business is being carried on, means no more than that profit is to be earned by a process of production. The business of a tea grower and manu facturer is not merely to grow tea plants but to collect tea leaves and render them fit for sale. During the years in question, the appellants were tending their tea garden to preserve the plants, but this activity cannot be described as a continuation of the business, 262 which had come to an end for the time being. It would have hardly made any difference to the carrying on of business, if, instead of the factories and buildings, the tea garden was requisitioned and occupied, because in that event also, the business Would have come to a standstill. The compensation which was paid in the two years was no doubt paid as an equivalent of the likely profits in those years; but, as pointed out by Lord Buckmaster in The Glenboig Union Fireclay Co. Ltd. vs The Commissioners of Inland Revenue (1) and affirmed by Lord Macmillan in Van Den Berghs Ltd. vs Clark (2), "there is no relation between the measure that is used for the purpose of calculating a particular result and the quality of the figure that is arrived at by means of the application of that test". This proposition is as sound as it is well expressed, and has been followed in numerous cases under the Indian Income tax Act and also by this Court. It is the quality of the payment that is decisive 1 of the character of the payment and not the method of the payment or its measure '. and makes it fall within capital or revenue. We are thus required to determine what was it that was paid for, or, in other words, what did the two payments replace, if they replaced anything. The arguments at the Bar followed the pattern which has by now become quite familiar to Courts. We were taken to the 12th Volume of the Tax Cases series, where are collected case,% dealing with Excess Profits Duty and Corporation Profits Tax in England follow ing the First World War, and to, other English case, , reported since. These cases have been considered and applied on more than one occasion by this Court, and we were referred to those cases as well. Now, it is necessary to point out that the English cases were decided under a different system of taxation and must be read with care. A case can only be decided on its own facts, and the desire to base one 's decision on another case in which the facts appear to be near enough sometimes leads to error. It is well to (1) (2) ; 263 remember the wholesome advice given by Lord Dunedin in Green vs Gliksten & Son Ltd. (1) that "in these Income Tax Act cases one has to try, as far as possible, to tread a narrow path, because there are quagmires on either side into which one can easily be led. . " The English cases to which we were referred, were used even in England by Lord Macmillan in Van Den Berghs ' case (2) as mere illustrations, and when cited before the Judicial Committee in Income Tax Commissioner vs Shaw Wallace & Co.(3) were put aside by Sir George Lowndes with this observation "their Lordships would discard altogether the case law which has been so painfully evolved in the construction of the English income tax statutes both the cases upon which the High Court relied and the flood of other decisions which has been let loose in this Board". Most of the cases cited before us deal with Excess Profits Duty and Corporation Profits Tax. In the former group, pre war profits had to be determined, so that they might be Compared with post war business for the purpose of arriving at the excess profits, if any. In dealing with the pre war profits, diverse receipts were considered from the angle whether they formed capital or revenue items. The observations which have been made are sometimes appropriate to the nature of the business to which the case related and the quality of the payment in relation to that business. Similarly, the Corporation Profits Tax was a tax intended to be imposed upon the profits of British Companies (which included some other corporate bodies ' carrying on trade or business including the ' business of investments. The profits which were taxed under section 52 of the English, Finance Act were required to be determind according to the principles laid down in that Act. It is thus obvious that though the English cases may be of some help in an indirect way by focussing one 's attention on what is to be regarded as relevant (1) 384 (2) ; (3) (1932) L.R 59 J.A. 206. 264 and what rejected, they cannot be regarded in any sense as precedents to follow. Since this Court on other occasions used these cases as an aid, we shall refer to them briefly; but we have found it necessary to sound a warning, because the citation of these authorities has occasionally outrun their immediate utility. We begin with the oft cited case of The Glenboig Union Fireclay Co. Ltd. (1). That was a case under the Excess Profits Duty. The facts are so well known that we need not linger over them. A seam of fireclay could not be worked, and compensation was paid for it. That the clay was capital asset was indisputable, and the portion lost was a slice of capital. The hole made in the capital was filled up by the compensation paid. It was said that a portion of the capital asset was sterilized and destroyed, and even though the business went on, the payment was treated as on capital account. The case cannot be used as precedent, because here, no doubt, the factories and buildings were apart of fixed capital, but the payment was not so much to replace them in the hands of the appellants as to compensate them for the stoppage of business. The Glenboig case (1) does not apply. The case of Short Bros. Ltd. vs The Commissioners of Inland Revenue (2), another case under the Excess Profits Duty, illustrates a contrary principle. The Company had agreed to build two ship;, 'but the contracts were cancelled and E. 100,000 were paid for cancellation of the contracts. This was held to be a receipt in the ordinary course of the Company 's trade. Rowlatt, J., said that it was "simply a receipt, in the course of a going business, from that going business nothing else". In the Court of Appeal, Lord Hanworth, M.R., affirmed the decision, observing: "Looked at from this (business) point of view it appears clear that the sum received was received in ordinary course of business, and that there was not in fact any burden cast upon the company not to carry on their trade. It was not truly compensation (1) (2) 265 for not carrying on their business; it was a sum paid in ordinary course in order to adjust the relation between the shipyard and their customers. " The payment was by a customer to the shipyard. Whether the amount was paid for ships built or because the contract was cancelled, it was a business receipt and in the course of the business. In the present case, the payment is not of this character, and Short Bros. case (1) does not apply. The next case also of Excess Profits Duty is The Commissioners of Inland Revenue vs Newcastle, Breweries, Ltd. (2). In that case, the admiralty took over one third stock of rum of the Brewery, and paid to the Company the cost plus 1 section per proof gallon. Later, the compensation was increased by an amount of E. 5,309 and was brought to tax in the earlier year, when the original compensation was paid. The observations of Rowlatt, J., though made to distinguish the case from one in which the compensation is paid for destruction of business, are instructive. We shall refer to them later. The learned Judge held that this was a case of compulsory sale of rum, and that a compulsory sale was also a sale. The receipt was held to be a profit. The decision was affirmed by the Court of Appeal. This case also, so far as its facts go, was very different, and the actual decision has no relevance. The Commissioners of Inland Revenue, vs The Northfleet Coal and Ballast Co. Ltd. (3) was a case like Short Bros. case (1). ;E. 3,000 in a lump sum were paid to be relieved from a contract, and as the business was a going business, it was held to be profit. In fact, Short Bros. case (1) was applied. Ensign Shipping Co. Ltd. V. The, Commissioners of Inland Revenue 4 a case of Excess Profits Duty, is interesting. During the Coal Strike of 1920, two ships of the Company were ready to sail with cargoes of coal. They were detained for 15 and 19 days respectively by orders of Government. In April 1924,pound 1,078/were paid as compensation, and were held to be (1) (3) 34 (2) (4) 266 trading receipts. Rowlatt, J., laid down that if there was an operation which produced income, it was none the less taxable, because it was a compulsory operation. The learned Judge then observed that he could not hold that this was a case of hire, like Sutherland vs The Commissioners of Inland Revenue (1), because the ships lay idle and their use was interrupted. The learned Judge then concluded: "Now it is quite dear that if a source of income is destroyed by the exercise of the paramount right. and compensation is paid for it, that that is not income, although the amount of the compensation is the same sum as the total of the income that has been lost. but in this case I have got to decide the case of a temporary interference. Here these ships remained as ships of the concern. they merely could not sail for a certain number of days, and in lieu of the value of the use which they would have been to their owners in their profit earning capacity during those days, in lieu of that receipt, this money was paid to the owners, although they were not requisitioned, as if requisitioned. I think I ought to regard this sum, as the Commissioners have obviously regarded it, as a sum paid which to the shipowners stands in lieu of the receipts of the ship during the time of the interruption. " This decision was approved by the Court of Appeal. Now, the case was one of loss of time during which the ships would have been usefully and profitably employed. It was argued in the Court of Appeal with the assistance of the Glenboig case (2), and it was suggested that the vessels, were `sterilised ' for the period of detention. Lord Hanworth said that that was rather a metaphorical word to use, and that the correct way was to look at the matter differently. The Master of the Rolls observed: "But in the present case it seems to me that, looked at from a business point of view, all that has happened is that the two vessels arrived much later at the ports to which they were consigned than they would have done, with the consequent result (1) (2) 267 that for the certain number of days which they were late they could not possibly make any earnings, and it is in respect of that direct loss by reason of the interference with the rights exercised on behalf of His Majesty that they made a claim and have been paid compensations This ruling was strongly relied upon by the Department as one which laid down a principle applicable here. We do not agree. The, payment there was made towards loss of profits of a going business, which business was not destroyed. As a source of income, the business was intact, and the business instead of being worked for the whole period, was worked for a period less by a few days and the profit of that period was made up. That may be true if one is going to determine standard profits of a particular period, because what is paid goes to profits in the period but is of no significance in a case like the present, where during the whole of the year no business at all was done nor profits made. This case also does not help to solve the problem. Charles Brown & Co. vs The Commissioners of Inland Revenue (1) is yet another case of Excess Profits Duty. In that case, the business of the taxpayer was carried on under the control of the Food Controller from 1917 to 1921, and he was compelled to bay and sell at prices fixed by the Controller . By agreement a 'mill standard ' was fixed, and the tax. payer was allowed to retain profits up to that standard, and if there was a shortfall, it was to be made up by the Controller. This amount which the taxpayer retained together. with the amount paid towards shortfall was regarded as profits. The principle applicable is easily discernible. There can be little doubt that the trade was being carried on, and what was received was rightly treated as profits. Howlatt, J., observed that this was a clearer case than the Ensign case (2). The matter was covered by section 38 of the Finance (No. 2) Act of 1915, Fourth Schedule, Part 1(1), where the words were "The profits shall be taken to be the actual profits arising in the accounting period". (1) (1) 268 In Barr Crombie & Co. Ltd. vs The Commissioners of Inland Revenue (1), the Company 's business consisted almost entirely of managing shipping for another Company. When the shipping Company went into liquidation, a sum was paid as compensation to the managing Company. It was held that this was a capital receipt. The reason for holding thus was that the structure (if the managing Company 's whole business was affected and destroyed, and this was not profit but compensation for loss 'of capital. Kelsall Parsons & Co. vs The Commissioners of Inland Revenue (2), to which we shall refer presently, was distinguished on the ground that, though in that case the agency was cancelled, the payment was for one year and that too, the final year. This case is important in one respect, and it is that if the entire business structure is affected and destroyed, the payment may be regarded as replacing capital, which is lost. These are cases of Excess Profits Duty where profits for a particular period had to be determined and also the character of the payments in relation to the kind of business, to determine whether to treat them as excess profits or not. In the Glenboig case (1), the payment was not regarded as profit, because it replaced lost capital and so also, in Barr Crombie case(1). These form the first group. Short Bros. case Northfleet case (5) and Ensign Shipping CO 's case were of a going business, and what was paid was towards lost profits in a going concern. These form the second group. Newcastle Breweries case (7) and Charles Brown and 60 's case (3) were of business actually done and profits therefrom. None of these rulings is directly in point. In the case with which we are concerned, the payment was not towards any capital asset to attract the first group, there was no going business so as to attract the second, and nothing was bought nor any business done with the taxpayer to make the third group applicable. (1) (2) ; (3) (4) (5) (6) (7) (8) 269 We shall next see some cases which involved Corporation Profits Tax. In The Gloucester Railway Carriage and Wagon Co. Ltd. vs The Commissioners of Inland Revenue(1), the Company was doing business of selling wagons and of hiring them out. The Company then sold all the wagons which it was using for purposes of hiring. The receipt was treated as profit of trade, there being but one business and the wagons being the stock in trade of that business. In Green vs Gliksten & Son Ltd.(2), stocks of timber were destroyed. Their written down value was pound 160,824 but the Insurance Company paid :E. 477,838. The Company credited E. 160,824 in its trading account but not the balance. The House of Lords held that the timber, though burnt, was realised, and that the excess of the sum over the written down book value must be brought into account. These two cases throw no light upon the problem with which we are faced, and any observations in them are so removed from the facts of this case as to be of no assistance. The cases under Sch. D of the Income tax Act like Burmah Steam Ship Co. Ltd. vs The Commissioners of Inland Revenue(3), a case of late delivery of ships sent for overhaul, Greyhound Racing Association (Liverpool) Ltd. vs Cooper(4), which was a case of surrender of an agreement in which the amounts were treated as trading receipts, are not cases of stoppage of a business and are not relevant. Kelsall Parsons case(5), where one of the agreements of a commission agency which was to run for 3 years was terminated at the end of the second year and compensation of pound 1500/ was paid for the last and final year, was held on its special facts to involve taxable profits of trading. Though the business came prematurely to an end, the struc ture of the business was not affected because the payment was in lieu of profits in the final year of the business as if business had been done. The payment was held to be within the structure of the business in the same way as in Shove vs Dura Manufacturing Co. Ltd. (6). The converse of these cases is the well known (1) (3) (5) ; 270 Van Den Berghs Ltd. vs Clark (1), where mutual trade agreements were rescinded between two Companies and pound 450,000 were paid to the assessee Company as ",damages". This was treated as capital receipt and not as income receipt to be included in computing the profits of trade under Sch. D Case 1 of the Income tax Act of 1918. Lord Macmillan observed: "On the contrary the cancelled agreements related to the whole structure of the appellants ' profitmaking apparatus. They regulated the appellant 's activities, defined what they might and what they might not do, and affected the whole conduct of their business. I have difficulty in seeing how money laid out to secure, or money received for the cancellation of, so fundamental an Organisation of a trader 's activities can be regarded as an income disbursement or an income receipt". We have referred to these cases to show that none of them quite covers the problem before us. The facts are very dissimilar, and the observations, though attractive, cannot always be used with profit and often not without some danger of error. We shall now turn to the cases of this Court, which were referred to at the hearing. The first case of this Court is The Commissioner Income Tax and Excess Profits Tax, Madras vs The, South India Pidures Ltd., Karaikudi (2). The South India Pictures, Ltd., held distribution rights for 5 years of three films towards the completion of which they had advanced money to a film producing Company, called the Jupiter Pictures. When the term had partially run out, the agreement for distribution was cancelled, and the South India Pictures, Ltd., received Rs. 26,000/ as commission. The question was whether this sum was on capital or revenue account. Das, C. J., and Venkatarama Aiyar, J., held that it was the latter, while Bhagwati, J., held that it was the former. The learned Chief Justice came to his conclusion on four grounds: (i) that the payment was towards commission which would have been earned; (ii) that it was not the price of any capital (1) ; (2) ; 271 asset sold, surrendered or destroyed; (iii) that the structure of the business, which was a going business, was not affected; and (iv) that the payment was merely an adjustment of the relation between the South India Pictures, Ltd. and the Jupiter Pictures. The learned Chief Justice thus rested his decision on, Short Bros '(1) and Kelsall Parsons '(2) cases and not upon Van den Berghs (3) or Barr Crombie 's case (4). Bhagwati, J., who dissented, judged the matter from the angle of business accountancy. He observed that money advanced to produce the cinema pictures, if returned, would have been credited on the capital side as a return of capital, just as expenditure for distribution work was revenue expenditure and the commission, a revenue receipt. On a parity of reasoning, the learned Judge held that money spent in acquiring distribution rights was a capital outlay, and that when distribution rights were surrendered, it was capital which was returned, since the agreement was a composite one, the films were a capital asset and the payment for their release was a return of capital. With due respect, it is difficult to see how the payment could be regarded as capital in that case. The fact which seems to have been overlooked in the minority view was that the entire capital outlay had, in fact, been previously recouped and even the security held by the South India Pictures had been extinguished. It was a portion of the running business which ceased to be productive of commission and by the payment, the commission which would have been earned and would have constituted a revenue receipt when so earned, was put in the pockets of the South India Pictures. The business of the South India Pictures. was still & going business, one portion of which instead of being fruitful by stages became fruitful all at once. What was received was still the fruit of business and thus revenue. The case, though interesting, is difficult to apply '. in the present context of facts, where no business at all was done and what was received was not the fruit of any business. (1) (3) ; (2) ; (4) 272 The next case of this Court, Commissioner of Income Tax vs Jairam Valji (1), may be seen. The assessee there was a contractor, and received Rs. 2,50,000 as compensation for premature termination of a contract. This was held to be a revenue receipt. The assessee had many businesses including many contracts, and the receipt was considered as one in the ordinary course of business. All the English decisions to which we have referred, were examined in search for principles, but the principle on which the decision 'was rested, was that the payment wag an adjustment of the rights under the contract and must be referred to the profits which could be made if the contract had instead been carried out. The payment not being on account of capital outlay and the assessee not being prevented from carrying on his business, the receipt was held to be revenue, that is to say, related to income from a contract terminated prematurely. In a sense, the case is analogous to The South India Pictures, Ltd. case which it follows. In The Commissioner of Income tax, Hyderabad Deccan vs Messrs. Vazir Sultan & Sons (3), the assessee held the sole selling agency and distribution rights of a particular brand of cigarette, in the Hyderabad State on foot of a 2 per cent discount on all business done. Subsequently, the area outside Hyderabad State was also included on the same terms. Later still, the area was again reduced to the Hyderabad State. Rs. 2,19,343 were paid by way of compensation "for loss of territory outside Hyderabad". Bhagwati, J., and Sinha, J., (as he then was), held that the compensation was on capital account, while Kapur, J., held otherwise. The reason given by the majority was that the agency agreement was a capital asset and the payment was in lieu of the loss of a portion of the capital asset. Kapur, J., on the other Wand, held that the loss which was replaced was the loss of agency commission and bore its character. The case furnishes a difficult test to apply. If what was adjusted was the relationship between the parties and if (1) [1959] Supp. 1 S.C.R. 110. (2) ; (3) [1959] SUPP. 2 S.C.R. 375. 273 there was a going business as, in fact, there was, the case comes within the dicta in The South India Pictures Ltd. case (1) and Jairam Valji 's case (2). The case can only be a decision on the narrow ground that a portion of the 'fixed capital was lost and paid for. In Godrej & Co. vs Commissioner of Income tax(3) the assessee firm, which held a managing agency, released the managed Company from an onerous agreement and inconsideration,, was paid Rs. 7,50,000. It was held that the payment was not made to make up the difference in the remuneration of the managing agency firm bat to compensate it for the deterioration or injury of an enduring kind to the managing agency itself. The injury being thus to a capital asset, the compensation paid was held to be on capital account. The last case of this Court to which reference may be made is Commissioner of Income tax vs Shamshere Printing Press (4). That 'was a very special case. There, the premises of the Press were requisitioned by Government, but the Press was allowed to set up its business elsewhere, the charges for shifting the machines, etc., being paid by Government. In addition, Government paid a sum claimed as loss of profits, which was expected to bring up the profits to the level of profits while the business was in its old place. The ' assessee claimed that this sum was paid as compensation for loss of goodwill arising from its old locality. There was however, nothing to show that the payment was goodwill and it was held that the compensation paid must be regarded as money arising as profits in the course of business. It was like putting money in the till to bring the profits actually made by the level of normal profits. All these cases were decided again on their special facts. Though they involved examination of other decisions in search for the true principles, it cannot be said that they resulted in the discovery of any principle of universal application. To summarise them: South India Pictures ' case (1) was so decided because (1) ; (2) [1959] SUPP. 1 S.C.R. 110. (3) [1960] 1 S.C.R. 527.(4) [1960] 39 I.T.R. go. 35 274 the money received was held to be in lieu of commission which would have been earned by the business which was still going, and the receipt was treated as the fruit of the business. The same reason was given in Jairam Valji 's case (1) and Shamshere Printing Press case (2). In Vazir Sultan 's case (3), the compensation was held to replace loss of capital, and in Godrej 's case (4), the compensation was said not to have any relation to the likely income or profits but to loss of capital. Each case was thus decided on its facts. We have so far shown the true ratio of each case cited before us, and have tried to demonstrate that these cases do no more than stimulate the mind, but none can serve as a precedent, without advertence to its facts. The nature of the business, or the nature of the outlay or the nature of the receipt in each case was the decisive factor, or there was a combination of these factors. Each is thus an authority in the setting of its own facts. Before we deal with the facts of this case and attempt to answer the question on which there is so much to guide but nothing to bind, we will refer to two cases of the Judicial Committee, one of which is Income Tax Commissioner vs Shaw Wallace & Co. (5), to which we have referred in another connection. In that case, all the authorities prior to 1935 to which we have referred (and some more) were used in aid of arguments; but the Judicial Committee, for reasons which are now illustrated by this judgment, declined to comment on them. Shaw Wallace and Co., did many businesses, and included in them was the managing agency of two oil producing Companies. This agency wag terminated, and compensation was paid for it. The usual question arose about capital or revenue. The Full Bench of the Calcutta High Court related the payment to goodwill, but the Judicial Committee rejected that ground because no goodwill seemed to have been transferred. The Judicial Committee also rejected the contention that it was compensation in lieu of notice under section 206, Indian (1) [1959] SUPP. 1 S.C.R. 110. (3) [1959] SUPP. 2 S.C.R. 375. (2) (4) [1960] 1 S.C.R. 527. (5) (1932) L.R. 59 I.A. 206. 275 Contract Act, as there was no basis for it either. The Judicial Committee held that income meant a periodical monetary return coming in with some sort of regularity or expected regularity from a definite source and in business was the produce of something "loosely spoken of as capital". In business, income is profit earned by a process of production, or, in other words, by the continuous exercise of an activity. In this sense, the sum sought to be charged could not be regarded as income. It was not the product of business but some kind of solatium for not carrying on business and thus, not revenue. The case is important, inasmuch as this analysis of 'income ' has been accepted by this Court and has been cited with the further remark made in Gopal Saran Narain Singh vs Income Tax Commissioner (1) that the words "profits and gains" used in the Indian Income tax Act do not restrict the meaning of the word "income" and the whole expression is 'income ', writ 'large. From this case, it follows that the first consideration before, holding a receipt to be profits or gains of business within section 10 of the Indian Income tax Act is to see if there was a business at all of which it could be said to be income. We shall now take up for consideration the facts of our case and see how far any principle out of the several which have governed earlier cases can be usefully applied. The assessee was a tea grower and tea. manufacturer. His work consisted in growing tea and in preparing leaves by a manufacturing process into a commercial commodity. The growing of tea plants only furnished the raw material for the business. Without the factory and the premises, the tea leaves could not be dried, smoked and cured to become tea, as is known commercially, and it could not be packed or sold. The direct and immediate result of the requisition of the factories was to stop the business. That the tea was grown or that the plants were tended did not mean that the business was being continued. It only meant that the source of the raw material was intact but the business was gone. (1) (1935) L.R. 62 I.A. 207. 276 Now, when the payment was made to compensate the assessee, no doubt the measure was the out turn of tea which would have been manufactured; but that has little relevance. The assesee was not compensated for loss or destruction of or injury to a capital asset. the buildings were taken for the time being, but the injury was not So much to the fixed capital as to the business as a whole. The entire structure of business was affected to such an extent that no business was left or was done in the two years. ' This was not a case where the interruption was caused by the act of a contracting party so that the payment could be regarded as an adjustment of a contract by payment. It was a case of compulsory requisition, but the requisition did not involve the buying of tea either as raw material or even as a finished product. If that had been the case, it might have been possible to say that since business was done, though compulsorily, profits had resulted. It ' was not even a case in which the business continued, and what was paid was to bring up the profits to normal level. The observations of Rowlatt, J., in Newcastle Breweries case (1) distinguish a case where business is carried on and one in which business comes to an end. The learned Judge observes: "Now I have no doubt that a Government re quisition, such as took place during the war, could destroy a trade, and anything which was paid would be compensation for such destruction. I can understand, for instance, if they had requisitioned in this case the people 's building and stopped them either brewing and selling or doing anything else, and paid a sum, that could not be taken as a profit; they would have destroyed the trade pro tempore and paid compensation for that destruction; and in fact I daresay if they take the whole of the raw materials of a man 's trade and prevent him carrying it on, and pay a sum of money, that is to be taken, not as profit on the sale of raw materials, which he never would have sold,, but as compensation for interfering with the trade altogether." These observations, though made under a different (1) 277 statute, are, in general, true of a business as such, and can be usefully employed under the Indian Income tax Act. Our Act divides the sources of income, profits and gains under various heads in section 6. Business is dealt with under section 10, and the primary condition of the application of the section is that tax is payable by an assessee under the head profits and gains of a business ' in respect of a business carried on by him. Where an assessee does not carry on business at all, the section cannot be made applicable, and the compensation that he receives cannot bear the character of profits of a business. It is for this reason that the Judicial Committee in Shaw Wallace 's case (1) observed that the compensation paid in that case was not the product of business, or, in other words, profit, but some kind of solatium for not carrying on business and thus, not revenue. It is to be noted that Das, C.J, in South India Pictures ' case (2), in distinguishing Shaw Wallace 's case (1), made the following observation: "In Shaw Wallace 's case the entire distributing agency work was completely closed, whereas the termination of the agreements in question, did not have that drastic effect on the assessee 's business at all. . In Shaw Wallace 's case, therefore, it could possibly be said that the amount paid there represented a capital receipt. " The observation is guarded, but it recognises the difference made in the Privy Council case and others between payment to compensate interference with a going business and compensation paid for stoppage of a business altogether. This distinction was emphasised in the dissenting opinion in Vazir Sutltan 's case (3). Though the payment in question was not made to fill a hole in the capital of the assessee, as in the Glenboig case (4), nor was it made to fill a hole in the profits of a going business as in Shamshere Printing Press case (5), it cannot be treated as partaking the character of profits because a business not having (1) (1932) L.R. 59 I. A. 206. (3) [1959] Supp. 2 S.C.R. 375. (2) ; (4) (5) 278 been done, no question of profits taxable under section 10 arose. The Privy Council described such a payment as a solatium. It is not necessary to give it a name; it is sufficient to say that it was not profit of a business. Once it is held that this was not profit at all, it is clear that Rules 23 and 24 of the Indian Income tax Rules could not apply, and there was no question of apportioning the amount, as laid down in R. 24. The whole of the amount received by the assessee was not assessable. It remains to consider whether the payment could be treated as income from property under section 9 of the Income tax Act. That this was never the case of the Department is clear from the fact that the income was not processed under that section, and even the Judicial Member of the Tribunal, who entertained this opinion, did not express it as his decision in the case. This aspect of the matter not having been considered in the case before, we cannot express any opinion upon it. In our opinion, the answers to the two questions ought to have been: Question (1) no Question (2) does not arise. In the result, the appeal is allowed with costs here and in the High Court. Appeal allowed.

The assessee, a Hindu undivided family, owned a tea estate in Assam comprising a tea garden, factories, labour, quarters, staff quarters etc. On February 27, 1942, the military authorities requisitioned all the factory buildings etc., under the Defence of India Rules but the tea garden, however, was left in the possession of the assessee. The possession of the military continued till the year 1945 and during that period, though the assessee looked after its tea garden, its business as tea growers and tea manufacturers could not be continued. Under the Defence of India Rules, the military authorities paid the assessee as compensation a sum of Rs. 2,22,080 for the year 1944, which included Rs. 10,000 for repairs to quarters for labourers, and a sum of Rs. 2,46,794 for the year 1945, which included Rs. 15,231 for repairs. For the assessment years 1945 1946 and 1946 47 the question arose as to whether the aforesaid sums or any portion thereof were capital receipts or were revenue receipts and liable to tax. The facts showed that the business, which the assessee had been carrying on, consisted in growing tea plants and in making tea out of the leaves by a manufacturing process into a commercial commodity, that without the factory and the premises the tea leaves could not be dried, smoked and cured to become tea, and that the result of the requisition of the factories was to stop the business. Held, that the amounts paid by the military authorities were received by the assessee not as compensation for the loss of profits of the business which it had been carrying on but for the injury to the business as a whole, because the entire structure of business was affected to such an extent that no business was carried on by the assessee during the two years in question. Accordingly, the compensation could not bear the character of profits of a business and was not liable to tax under section Io of the Indian Income tax Act, 1922. Income tax Commissioner vs Shaw Wiallace & CO., (1932) L.R. 59 I.A. 206, referred to and applied. Case law reviewed. 33 258

The appellant company, carrying on business as manufacturer of iron and steel, with its factory and works at Jamshedpur in Bihar, was assessed to sales tax for two periods prior to the Constitution, under the Bihar Sales Tax Act, 1947 (No. XIX Of 1947), enacted by the Bihar Legislature in exercise of its exclusive power under the Government of India Act, 1935. The company used to send its goods from Jamshedpur to various parts of India. In the railway receipt the company itself figured as the consignee, it paid the freight and the receipt was sent either to its branch offices or bankers to be handed over to the purchaser when he paid the price. From the amounts shown as gross turn over in the two returns for the two periods, the company claimed deduction of certain amounts, being the valuable consideration for the goods manufactured in Bihar but sold, delivered and consumed outside, on the ground that in none of the transactions in respect of the said sums did property in the goods pass to the purchasers in Bihar. The appellant claimed further deductions on account of the railway freight paid by it. The Sales Tax Officer disallowed both the claims and added the amounts of sales tax realised by the appellant from its purchasers to the taxable turnover. The company appealed against the orders of assessment, but the Commissioner of Sales Tax dismissed its appeals. The Board of Revenue, in revision, confirmed the orders of the Commissioner with certain modifications and remanded the matters to the Sales Tax Officer. On the appellant 's application for reference of certain questions of law, the Board referred them to the High Court. One of them related to the legality of adding the Sales Tax to the turn over and was answered in favour of the appellant and the respondent did not appeal. The other questions decided by the High Court against the appellant related to the vires of the Act and the validity of retrospective levy of sales tax under section 4(1) of the Act. The appellant 's contentions in the appeals were that the tax levied under section 4(1) read with section 2(g) second proviso, cl. (II), of the Act, was not a sales tax within the meaning of Entry 48 in List II of the Seventh Schedule to the Govern ment of India Act, 1935, but was in the nature of excise duty 172 1356 which a provincial legislature had no power to impose, that the theory of territorial nexus was inapplicable to sales tax and, in any case, there was no real or sufficient nexus in the present cases and that retrospective levy of the sales tax under section 4(1) Of the Act destroyed the indirect nature of the tax, thus making it a direct tax on the dealer which could not be passed on to the consumer: Held, (per Das, C. J., Venkatarama Aiyar, section K. Das and A.K. Sarkar, jj., Bose, J. dissenting), that the contentions raised on behalf of the appellant must be negatived. The provisions of section 4(1) read with section 2(g), second proviso, of the Bihar Sales Tax Act, as amended by the Bihar Sales Tax (Amendment) Act, 1948, (VI Of 1949), were within the legislative competence of the Legislature of the Province of Bihar. Both before and after the amendment, the word 'sale ' as used in section 4(1) and as defined by section 2(g) of the Act, meant the transfer of property in the goods sold. The second proviso added by the amending Act did not extend that meaning so as to include a contract of sale. What it actually did was to lay down certain circumstances in which a sale, although completed elsewhere, was to be deemed to have taken place in Bihar. Those circumstances did not constitute the sale, but only located the situs of the sale. Sales Tax Officer, Pilibhit vs Messrs. Budh Prakash jai Prakash; , , distinguished. Nor was it correct to contend that the tax levied under section 4(1) read with section 2(g) Of the Act was in the nature of excise duty. Under cl. (ii) of the second proviso to section 2(g) of the Act the producer or manufacturer became liable to pay the tax not because he produced or manufactured the goods but because he sold them. Province of Madras vs Boddu Paidanna and Sons, [1942] F.C.R. go and Governor General vs Province of Madras, (1945) L.R. 72 I.A. 91, referred to. There can be no doubt that the theory of territorial nexus does apply to sales tax legislation. Although sales tax can be levied only on a completed sale, this theory has its use in indicating the circumstances in which the tax may be enforced in a particular case. One or more of the several ingredients of a sale may furnish the connection between the taxing State and the sale. State of Bombay vs United Motors (India) Ltd., [1953] S.C.R. 1069, Poppatlal Shah vs The State of Madras, [1953] S.C.R. 677 and The State of Bombay vs R.M.D. Chamarbaugwala, ; , relied on. Bengal Immunity Co. Ltd. vs The State of Bihar, , considered. Case law reviewed. 1357 As in a sale of goods, the goods must necessarily play an important part, the circumstances mentioned in the proviso to section 2(g) of the Act, namely, the presence of the goods in Bihar at the date of the agreement of sale or their production or manufacture there must be held to constitute a sufficient nexus between the taxing province and the sale wherever that might take place. Governor General vs Raleigh Investment, , relied on. Province of Madras vs Boddu Paidanna and Sons, [1942] F.C.R. go, distinguished. It would not be correct to contend that the theory of nexus might lead to multiple taxation or obstruct inter State trade. Article 286(2) of the Constitution and the relevant entries in the Legislative List are a complete safeguard to any such contingency. Although as a matter of economic theory, sales tax maybe an indirect tax realisable from the consumer, it need not be legally so and is not so under the Bihar Sales Tax Act, 1947, which imposes the primary liability on the seller. A buyer, moreover, is not bound to pay sales tax over and above the agreed sale price unless he is by contract bound to do so. There can, therefore, be no scope for the argument that the retrospective enforcement of the tax under section 4(1) of the Act could destroy the character of the tax or that it was beyond the legislative competence of the Bihar Legislature. Love vs Norman Wright (Builders) Ltd., L.R. (1944) 1 K.B. 484, referred to. Per Bose, J. Sales tax can be imposed only on the sale. It is, therefore, wrong to look to the goods or the agreement to sell or any other elements that constitute a sale in order to impose the tax. A State can tax a sale of goods that takes place within its boundary. It has no power to tax extra territorially, and since a completed sale can have only one situs no State Legislature can be allowed to break up a sale into its component parts, which are separate and distinct from the sale itself, and by an application of the theory of nexus claim that ,,he sale wholly took place within it. The nexus can only be in respect of the entire sale, wherever it may take place and not of its several parts.

The respondents in the above appeals are owners of certain lands which are to be compulsorily acquired udder Madras Lignite (Acquion of Land) Act, 1953. This Act came into force on August 20, 53 before article 31 of the Constitution was amended by the Constituion (Fourth Amendment) Act, 1955. By the said Act substantially o provisions which are material to the present appeals were made. ,e first was that compensation for acquisition of lignite bearing lands der the Land Acquisition Act is to be assessed on the market value the land prevailing on August 28, 1947 and not on the date on which notification is issued under section 4(1) of the Land Acquisition Act. condly it was provided that in awarding compensation the value of non agricultural improvements commenced since April 28, 1947 win not taken into consideration. In accordance with the above provisions, after issuing the notices as acquired under sections 4(1) and 6 of the Land Acquisition Act the Land acquisition Officer made awards regarding the lands of the respondents. he respondents thereupon filed petitions under article 226 of the Constition before the High Court of Madras challenging the validity of the ward on the ground that the provisions of the Act relating to the ward of compensation violate article 31(2) of the Constitution [as it food before the Constitution (Fourth Amendment) Act, [955]. The High Court upheld the contention. In appeal, Held: (i) The validity of the Act impugned in the present appeal ,is to be examined in the light of the provisions of article 31 of the constitution as they stood before the Constitution (Fourth Amendment) Act, 1955. Chiranjit Lai Chowdhuri V. Union of India, [1950] S.C.R. 869, State of West Bengal vs Subodh Gopal Bose, ; , and State of lest Bengal vs Mrs. Bela Banerjee, ; , relied. 937 (ii) The principle laid down in Bela Banerjee 's case, that the ceiling on the compensation without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compensation in letter and spirit within the requirement of article 31(2), would apply to the impugned Act. Fixation of compensation for compulsory acquisition of land notified many years after that date on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and spirit of article 31(2) as it stood before the Constitution (Fourth Amendment) Act, 1955. (iii) Any principle for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notice under section 4(1) of the Land Acquisition Act must prima facie, be regarded as denying him the true equivalent of the land which is ex propriated and it is for the State to show that fixation of compensation on the market value on an anterior date does not amount to a violation of the Constitutional guarantee. In the present appeals no materials have been placed by the State which would support any such case. (iv) Denial of compensation for the value of non agricultural improvements would be denying to him just compensation for the loss suffered by him on account of compulsory acquisition of his holding and would amount to infringement of article 31(2) of the Constitution.

The respondent State granted a mining lease to the appellant. The 5th respondent, whose application was rejected moved the Central Government under rule 54 of the, Mineral Concession Rules, 1960, praying (i) for setting aside the grant in favour of the appellant, and (ii) for grant of the area on lease to him. The Central Government asked for the comments of the appellant and the State Government and after receipt of these comments, they were passed to the parties for further comments. The Central Government by an order passed on Sept. 30, 1964 rejected the application of 5th respondent as time barred. Thereafter, the Central Government on Nov. 5, 1964, under the revisionary powers conferred by r, 55, of the Rules and "all the powers enabling in this behalf," set aside the order granting the lease to the appellant, and further directed regrant after issuing fresh notification. The appellant, moved the High Court under article 226 of the Constitution for quashing the order of November, 1964, The High Court dismissed the petition. HELD : The appeal as well as the Writ Petition must be allowed and the order of the Central Government Nov. 5, 1964 must be set aside. The High Court erred in its approach that the two prayers in the application of the 5th respondent were independent, and that the Central Government by its order of Sept. 30, 1964 had disposed of only the prayer of 5th respondent to grant the area on lease to him, but it had not disposed of his other prayer to cancel the grant in favour of the appellant. The two reliefs asked for by the 5th respondent were inter connected reliefs. In the context in which they were mad, they could not be considered as independent prayers. Further by its order dated September 30, 1964, the Central Government dismissed the entire application of the 5th res pondent on the ground that the same was time barred. If his application in respect of one part of his prayer was time barred, it was equally, time barred in respect of the other part. [527 B D] The order of Nov. 5, 1964 of the Central Government does not show that it was made in the exercise of its suo motu powers. It is purported to have been made on the basis of the application made by the 5th respondent. [527 E] If the Central Government wanted to exercise its suo motu power it should have intimated that fact as well as the grounds on which it proposed to exercise that power to the appellant and given him an opportunity to show cause against the exercise of suo motu power as well as 5 2 3 against the grounds on which it wanted to exercise its power. The Central Government had not given him that opportunity. Failure of the Central Government to do so, vitiates the impugned order. [527 H]

The Union of India Respondent No. 1, had to recover certain arrears of taxes from the assessee company Respond ent No. 2. The assessee company informed the Union of India that the tax dues recoverable from it be recovered from the amount which was owed by the appellant company to it. The debt due by the appellant company to the assessee company was shown to the credit of assessee company in the accounts of the appellant company. The appellant company acknowl edged and admitted its liability to the assesseecompany and promised the Union of India to pay the amount of tax dues against the debt due by it to the assessee company. Notices under section 46(2) and section 46(5A) of the Income Tax Act were issued to the appellant company for the recovery of the said amount. The Union of India filed a suit seeking a decree against the appellant company and four other defendants. The appel lant company set up a false theory that the assessee company itself was liable to pay the appellantcom pany and, therefore, it was not liable to pay tax dues of the assessee company. The trial court decreed the suit holding that the Union of India was entitled to a money decree against the appel lant company. The appeal preferred by the appellant company was dismissed by the High Court. In the appeal to this Court on behalf of the appellant company it was contended that a suit as filed by the respondent and the decree granted by the trial court was not permissible in law because proceedings for appointment of 363 receiver can only be contemplated in execution proceedings of a decree against the original debtor. Dismissing the appeal the Court, HELD: 1. The High Court has rightly maintained the decree by coming to the conclusion that the amount of com mission earned by the assesseecompany was admittedly with the appellant. It was withheld by the appellant under the pretext that it had a counter claim against the assessee Under section 46(2) of the Income Tax Act, a prohibitory order attaching the said money of the assessee company was issued and the machinery under S.46(5A) of the Act was no longer effective as the appellant set up a counter claim against the assessee and there was no option for the Union of India but to obtain adjudication from the civil court. [365H 366B] 2. No money decree could be passed against the appel lant company except for the money lying in the deposits with them for the assessee company and it is for that pur pose that the decree for appointment of receiver was made so that the amount be recovered and paid to the plaintiff Union of India. [366C D]

In Income Tax Officer, Kolar Circle and Anr. vs Seghu Buchiah Setty. , this Court held that the recovery proceedings initiated against the assessee respondent on the basis of the original demand notice were had as it was of the view that the amount of tax assessed when reduced as a result of the appellate orders a fresh demand notice had to be served on the respondent before he could be treated as a defaulter. To get over the difficulties in the collection of income tax and other direct taxes created by the decision in Seghu Chetty 's case, the was passed with retrospective effect by an express provision in section 5. The property belonging to two brothers, the certificate debtors in C.A. 1575(NT) 71 and C.A. 1965 (NT) of 1963 respectively were purchased by M/s Jurdine Henderson (Ltd.) on September 20, 1954, i.e. after service of notices under section 7 of the Bengal Public Demands Recovery Act, 1913. The objections raised by the certificate debtors were rejected and the property came to be sold. In both cases the Company received a notice on August 6, 1956 fixing a date for settling the terms of the sale proclamation in respect of the respective one half share of each of the two Certificate debtors. Immediately thereafter the respondent company made an application in each of the two cases that it had purchased the property being unaware of the pendency of any Certificate case against any of its vendors for realization of incometax dues and that the Company was the owner of the property and it was not liable to be sold as that of the Certificate debtor. The Certificate Officer rejected the objection holding that the purchase having been made after service of notice under section 7 of the Bengal Act on the Certificate debtor, was void as against any claim enforceable in execution of the Certificate and hence the Company had no right to object to the sale. The Company went up in appeal before the Commissioner and succeeded in both the cases. Two revisions were filed before the Board of Revenue which were allowed. The respondent company then moved the High Court under Article 227 of the Constitution. The petition giving rise to Civil Appeal No. 1575 was allowed. The other petition giving rise to C.A. 1965 of 1971 was dismissed by the same Bench. 556 Two questions, namely (a) the locus standi of the purchaser Company to prefer a claim objecting to the sale of the property and (b) the effect of section 3(1)(a) and (b) of the Validation Act, 1964 read with Section 35(4) of the Income Tax Act, 1962 arose for decision in these appeals. Allowing C.A. 1575/71 and dismissing C.A. 1965/71 (both by certificates) the Court. ^ HELD: 1. The Company as a purchaser of the property of the certificate debtors had locus standi to prefer the claim. The company preferred a claim objecting to the sale of property on the ground that it was not liable to be sold as it had purchased the property from the two certificate debtors. In the Bengal Public Demands Recovery Act, 1913, there is no express provision enabling a person other than the Certificate debtor claiming an interest in the property to be sold to file any objection. He, of course, under section 22 can take recourse to the said provision by filing an application to set aside the sale of immovable property on deposit of the amounts provided therein. But the rules in Schedule II under section 38 have the effect as if enacted in the body of the Act. In Schedule II is to be found rule 39 which is very much like rule 58 of Order 21 of the Code of Civil Procedure, 1908. [561 F G] (a) It was open to it to show under rule 40 that at the date of the service of notice under section 7 it had some interest in the property in dispute. If the notice served at the beginning of the two Certificate cases under section 7 on the two Certificate debtors was not a valid notice in the sense that in one case on the reduction of the amount of the Certificate it became necessary to give a fresh notice and in the other without a fresh demand notice under the Income tax Act for the enhanced amount, the Certificate case could not proceed, then the Company had validly purchased the property and its purchase was not void. The property purchased by it could not then be sold for realization of the income tax dues against the two brothers. If, however, no fresh notice was necessary to be served in either of the two cases then it is plain that the Company 's purchase was void as against the claim enforceable in execution of the Certificate. [561 H, 562 A C] (b) It is clear from sections 7, 8, 9 and 10 of the Bengal Public Demands Recovery Act, 1913, that if the Certificate is modified or varied by the certificate officer under Section 10, while disposing of the petition of objection filed by the Certificate debtor under section 9, then the Certificate case proceeds further without a fresh notice under section 7.[561 D E] In the instant case, the amount was not reduced on the objection of the Certificate debtor but it was reduced on receipt of the information from the Income Tax Officer. [561 E] 2. The transfer was void against the Certificate claims in both cases under section 8(a) of the Bengal Public Demands Recovery Act, 1913. In both the cases notices under section 7 of the Bengal Act had been served upon the Certificate debtor before the property in question was transferred by them to the company. In neither of the two cases did the certificate proceeding became invalid, in one case by reduction of the demand and in the other by an enhancement, since clause (c) of section 3(1) of the Validation Act clearly and expressly provides that no proceedings in relation to Government dues 557 shall be invalid merely because no fresh notice was served upon the assessee, after the dues were enhanced or reduced in any appeal or proceeding. [566 E F] Ram Swarup Gupta vs Behari Lal Baldeo Prasad and Ors., ; Distinguished. (a) On a plain reading of clause (a) of section 3 of the Validation Act, it is clear that the intention of the Legislature is not to allow the nullification of the proceedings which were initiated for recovery of the original demand. On the basis of another notice of demand for the enhanced amount two courses are open to the department (i) to initiate another proceedings for the recovery of the amount by which the dues are enhanced treating it as a separate demand or (2) to cancel the first proceedings and start a fresh one for the recovery of the entire amount including the enhanced one. In the latter case, the first proceedings started for the recovery of the original amount will lose its force and the fresh proceedings will have to proceed de novo. But in the former, the proceedings are not affected at all. [564 E G] 3. (b) The argument that the effect of sub section (4) of section 35 of the Income Tax Act has not been done away with by clause (a) of section 3 of the Validation Act, 1964 is not correct. Firstly on a correct interpretation of sub section (4) of section 35 it would be noticed that though the expression used is "the sum payable" but in the context it would mean only the "extra enhanced sum payable" and not the whole of the enhanced amount. The expression "sum payable" had to be used in sub section (4) because that sub section was also providing for a contingency where by the rectification order the amount of refund was reduced. In such a case the expression "the sum payable" would obviously mean the difference between the amount refunded and the reduced amount which was liable to be refunded. Secondly, even if it were to be held that in the case of enhancement the expression "the sum payable" in sub section (4) means the whole of the enhanced amount by a rule of harmonious construction it has got to be held that in view of section 3(1)(a) of the Validation Act even in the case of a rectification a notice of demand is to be served now only in respect of the amount by which the Government dues are enhanced. [565 B E] 4. Sub clause (i) of clause (b) of sub section (1) of section 3 of the Validation Act clearly provides that it is not necessary for the Taxing Authority to serve upon the assessee a fresh notice of demand. The only thing which he is required to do that he has to give intimation of the fact of such deduction to the assessee and to the Tax Recovery officer. The purpose of giving intimation to the assessee is to bring it to his pointed knowledge that the demand against him has been reduced, although by other methods also such as by service of a copy of the Appellate Order or the revisional order being served on him he may be made aware of that. The intimation to the Tax Recovery Officer is essential as without that intimation from the Taxing Authority he cannot reduce the amount of the Certificate debt in the proceedings already commenced. [565 E H] (a) The view of the High Court that the provision contained in subclause (ii) of clause (b) of section 3(1) of the Validation Act is mandatory and in absence of a formal intimation to the assessee and to the Tax Recovery Officer as required by the said provision the proceedings initially started could not be continued under sub clause (iii), is not sustainable in law. [565 H, 566 A] 558 (b) On the facts of the case in C.A. 1575(NT)/71, the requirement of sub clause (ii) stood fulfilled and nothing further had to be done in the matter by the Taxing Authority. That being so the proceedings initiated on the basis of the notice of demand served upon the assessee before the reduction of the amount in appeal could be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal as provided for in sub clause (iii). [566 C D]

% Sub section (2) of section 9 of the makes the assessment procedure prescribed under the general sales tax law of the appropriate State applicable to the assessment to be made under the Central Act. Section 13 of the Andhra Pradesh General Sales Tax Act, 1957 requires the dealer to submit returns in such manner, within such period and to such authority as may be prescribed. Sub section (1) of section 14 permits the assessing authority to assess the amount of tax due on the returns submitted under section 13 only within a period of four years from the expiry of the year to which the assessment relates. Sub section (3) permits the assessing authority to make best judgment assessment where a dealer (i) fails to submit return before the date prescribed; (ii) produces the accounts registers and other documents after inspection and (iii) submits a return subsequent to the date of inspection, within a period of six years from the expiry of the year to which the assessment relates. In the main appeal before this Court the assessee respondent filed its return relating to the quarter ending 31st March, 1969 on 7th August, 1969 under the . The last date prescribed by law was 24th May, 1969. The Commercial Tax officer passed the assessment order on 3rd August, 1973, beyond four years from 31st March, 1969, the last day of the assessment year 1968 69. The assessee 's appeals against that order were dismissed by the Assistant Commissioner and the Sales Tax Appellate Tribunal. The High Court in revision, however, held that the assessment made after four years from the last day of the assessment year was not a valid assessment. 737 In the connected appeal the respondent who was the assessee filed the annual return in respect of the assessment year 1968 69 under the A provisions of the Central Act on 19th August, 1969 after the expiry of the prescribed date. The order of assessment was passed on 2nd August, 1973 beyond four years from the last day of the assessment year 196869. An appeal against that order was dismissed by the Assistant Commissioner. The Sales Tax Appellate Tribunal, however, allowed the appeal holding that the assessment had been passed beyond four years from the last day of the assessment year. The revision petition preferred by the State was dismissed in limine by the High Court. In the appeals by special leave filed by the State, it was contended for the respondent that since the returns in the cases had been accepted, even though they had filed been beyond the prescribed date, the assessments made thereon could not be considered as best judgment assessments and, therefore, sub section (3) of section 14 of the Act under which it is permissible to make best judgment assessments would be inapplicable. Allowing the appeals. D ^ HELD: 1.1 on a true construction of sub section (1) and sub section (3) of section 14 of the Andhra Pradesh General Sales Tax Act, 1957 it is apparent that where a return is not filed by a dealer before the date prescribed in that behalf under the Act the assessing authority has jurisdiction to complete the assessment within a period of six years from the expiry of the year to which the assessment relates. [744C] 1.2 The two types of cases which fall under sub section (1) and sub section (3) of section 14 of the Act respectively are mutually exclusive. The return on the basis of which an assessment is to be made under section 14(1) is a return filed within the prescribed period and in such a case the assessment has to be completed within a period of four years from the expiry of the period to which the assessment relates. The Act confers a distinct advantage on such a dealer who is prompt in filing his return inasmuch as he acquires immunity against assessment on the expiry of the said period of four years. All cases where the return is submitted beyond the prescribed date fall under sub section (3) of section 14 of the Act. Assessment in such cases may be completed within six years from the expiry of the year to which the assessment relates. When once it is established in a case that a return has not been filed within the prescribed period such case falls outside section 14(1) of the Act and therefore the period of four years prescribed therein becomes automatically inapplicable. It clearly falls under cl. (i) of sub section (3) of section 14 of the Act and assessment can be H 738 made in such a case within the expiry of the period of six years. In the instant cases the returns were not filed within the prescribed dates. The assessments have, therefore, been rightly made within six years from the expiry of the year to which the assessments relate. [742G H; 743A B; 744C] 2. Whether the assessment made is the best judgment or not has no bearing at all on the period within which an assessment can be made under the Act. It depends upon the other conditions mentioned in sub section (1) and (3) of section 14. Best judgment assessment can be made even in a case falling under sub section (1), as is evident from the latter part of that sub section which reads: "but if the return appears to him to be incorrect or incomplete he shall after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, to assess to the best of his judgment, the amount of tax due from the dealer." Yet such best judgment assessment has to be completed within a period of four years from the expiry of the year to which the assessment relates. Therefore, in the instant case merely because the assessments are not best judgment assessments, it cannot be said that sub section (3) of section 14 is inapplicable. Neither the High Court nor the Tribunal gave adequate attention to the words 'before the date prescribed in that behalf ' in cl. (i) of sub section (3) of section 14. They laid emphasis only on the words 'fails to submit return ' in the said sub clause to arrive at a wrong conclusion. [743C, H; 744A B] State of Andhra Pradesh vs Pyarelal Malhotra, (13 S.T.C. 946), and State of Madras vs S.G. Jayaraj Nadar & Sons, 28 S.T.C. 700, distinguished.

On August 19, 1964, officers belonging to the Department of the appellant raided and searched the premises of a company and foreibly removed certain accounts and goods. The respondents challenged the department 's action by writ petitions filed in the High Court under article 226 of the Constitution praying that the articles seized should be returned. It was contended by the petitioners that on a proper construction of section 41 of the Madras General Sales Tax Act, No. 1 of 1959, the officers of the Department had no authority to search the premises and seize any account books or goods found there; that if section 41(4) authorised seizure and confiscation of goods, it was beyond the legislative competence of the State Legislature, for it was not covered by item 54 of List II of the Seventh Schedule to the Constitution relating to "taxes on the sale or purchase of goods"; and that if various provisions in section 41 were capable of being construed as authorising search and seizure, they were violative of article 19(1)(f) and (g) of the Constitution. The High Court allowed the Petitions holding, inter alia, that section 41 (2) did not permit a search being made and only provided for inspection; the power of seizure or confiscation in section 41(4) was beyond the legislative competence of the State Legislature; and that subsections (2), (3) and (4) of section 41 contained unreasonable res trictions and were violative of article 19(1) (f) and (g). The High Court also found with respect to one of the petitions that the search warrant had been issued without the application of Mind by the magistrate and was bad. On appeal to this Court; Held: dismissing the appeal, (i)Anything recovered during the search must be returned to the petitioners for the safeguards provided by section 165 of the Code of Criminal Procedure were not followed and in one case the finding of the High Court that the search warrant issued by the magistrate was bad on various grounds was not challenged; furthermore anything confiscated must also be returned as sub section (4) of section 41 must fall.[163 B D]. Clause (a) of the second proviso to sub section (4) gives power to the officer ordering confiscation to give the person affected an option to pay in lieu of confiscation, in cases where the goods are taxable under the Act, the tax recoverable and an additional amount and thus provides for recovery of tax even before the first sale in 149 the State which is the point of time in a large majority of cases for recovery of tax. As such it was repugnant to the entire scheme of the Act and sub section (4) must therefore be struck down. As Clause (a) compels the officer to give the option and thus compels recovery of tax before the first point of sale, which cannot have occurred in cases of goods seized from the dealer himself, it is clearly intended by the legislature to go together with the main part of the Section and is not therefore severable. [159F 16OD]. (ii) Although generally speaking the power to inspect does not give power to search, where, as in the case of section 41 (2) the power has been given to inspect not merely accounts registers, records, goods, etc., but also to inspect the offices, shops etc. , these two powers together amount to giving the concerned officer the power to enter and search the offices etc. and if he finds any accounts or goods in the offices, shops, etc., to respect them. The High Court was therefore wrong in holding that there was no power of search whatsoever under sub section (2). [154H 155E]. The proviso to sub section (2) in providing that all searches under "this sub section" shall be made in accordance with the provisions of the Code of Criminal Procedure, bears out the construction that the main part of sub section (2) contemplates searches. Similarly it is clear from sub section (3) which gives power to seize accounts etc., in certain circumstances, that sub section (2) must include the power of search for a seizure under sub section (3) is not possible unless there is a search. [156D E. 158B C]. The contention that as the main part of sub section (2) does not provide for search of a purely residential accommodation and therefore the proviso is otiose must be rejected. Although generally a provision is an exception to the main part of the section, it Is recognised that in exceptional cases, as in the present case, the provision may be a substantive provision itself. [156D F]. Bhonda Urban District Council vs Taff Vale Railway Co., L. R. Commissioner of Income tax vs Nandlal Bhandari & Sons , and State of Rajasthan vs Leela Jain. ; , referred to. (ii)Sub sections (2) and (3) of section 41 are not violative of article 19 as they are protected by clauses (5) and (6) of article 19 of the Constitution. [162F G]. The High Court had wrongly assumed that the provisions of the Criminal Procedure Code did not apply to a search under section 41(2). In view of the safeguards provided in section 165 Cr. P.C. and in Chapter VII of that Code, it cannot be said that the power to search provided in sub section (2) is not a reasonable restriction keeping in View the object of the search, namely, prevention of evasion of tax. [161EG]. The mere fact that the Act gives power to Government to em power any officer to conduct the search is no reason to strike down the provision for it cannot be assumed that Government will not empower officers of proper status to make searches. [160 H], To, exercise the power of seizure under sub section (3) the officer concerned has to record his reasons in writing, has to give a receipt for the accounts seized, and can only retain the items seized beyond a period of 30 days with the permission of the next higher officer. These are sufficient safeguards and the restriction, if any, on 150 the right to hold property and the right to carry on trade by sub section (3) must therefore be held to be a reasonable restriction. [162 D G]. While the court held that the Legislature has power to provide for search and seizure in connection with taxation law in order that evasion may be checked, it did not decide the general question whether a power to confiscate goods which are found on search and which are not entered in account books of the dealer is an ancillary power necessary for the purpose of stopping evasion of tax. [159C D]. K.S. Papanna and another vs Deputy Commercial Tax Officer, Gunkakal, (1967) XIX S.T.C. 506; referred to.

Appeal No. 424 of 1960. Appeal from the judgment and order dated March 25, 1958, of the Madras High Court in case Referred No. 62 of 1957. A.V. Viswanatha Sastri, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. 252 H. N. Sanyal, Additional Solicitor General of India, K. N. Rajagopala Sastri and D. Gupta, for the respondent. March 13. The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Judicature at Madras. The assessee is the appellant and the Commissioner of Income tax is the respondent. A partnership consisting of four persons was formed by a deed of partnership dated March 31, 1949. On July 27, 1951 another partner was taken into partnership and a new deed was drawn up. The previous partnership deed was considered as the principal deed. The new partnership like the old one was to end on March 31, 1954. On March 29, 1954, a new partnership was entered into and a sixth partner was taken and a new deed was executed. The new partner contributed Rs. 40,000 as his share to the capital but in the partnership deed no express provision was made as to the manner in which profits and losses were to be divided between the partners. In order to rectify this, a deed of rectification was executed on September 17, 1955, which was after the close of the account year 1954 55. This deed recited that an error had crept in in typing the partnership deed dated March 29, 1954 by omitting to type el. 21 of the old partnership deed in the new deed. The parties had therefore agreed to rectify the error by adding cl. 20 A as follows: "We hereby agree that for purpose of clarification the following clause shall be added as clause 20 A in the Partnership Instrument, dated 29th March, 1954: "The parties shall be entitled to shares in the profits and losses of the firm in proportion to the contribution of the capital of each of the partners and whenever fresh capital is required for the business, each partner shall be liable to contribute the additional capital in the same proportion as the 253 paid up capital referred to in clause 4 of the deed, dated 29th March 1954". " This is signed by all the partners. Up to the end of assessment year 1954 55 the old firms i.e., the one constituted of four partners and the other constituted of five partners were registered under section 26A of the Income Tax Act (hereinafter termed the 'Act '). The appellant firm then applied for registration for the assessment year 1955 56. The Income Tax Officer pointed out to the appellant firm that there was no specification of shares of the partners in the deed of partnership. Thereupon the appellant submitted the deed of rectification dated September 17, 1955, above mentioned and submitted that the original deed did specify the shares of the partners and the deed of rectification only clarified the position. But the registration was refused by the Income tax Officer and an appeal taken against that order to the Assistant Commissioner was dismissed. Further appeal was taken to the Income tax Appellate Tribunal which also failed. At the request of the appellant the following question was referred to the High Court for its opinion: "Whether the assessee firm is entitled to registration section 26 A of the Income tax Act for the assessment year 1955 56." The High Court held that under section 26 A of the Act the factual existence in the year of account of an instrument of partnership was necessary, a requisite which, in the present case, was lacking and therefore the provisions of section 26 A were not satisfied and that the specification of shares only took place on September 17, 1955 when the deed of rectification was executed. The question was therefore answered in the negative. Against this judgment and order the appellant has come in appeal to this Court by certificate of the High Court. It was contended that cls. 9, 11, 34 and 41(a) sufficiently specified the shares of the partners and satisfied the requirements of the law. These clauses were as follows: 254 Cl. 9 "Such extra contribution made by the partners shall be credited to the respective partners under an account called "Extra Capital Subscription Account" and for the period of the utilisation of the whole or part thereof during the course of the year or years, it shall be treated as capital con. tribution only for the purpose of dividing profit but it shall otherwise in no circumstances be added to the paid up capital. " Cl. 11. "In addition to the shake of profits in proportion to the contribution to the extra, capital subscription account, the amount, so advanced shall carry an interest equal to the highest rate at which the company may have to pay in the event of borrowing the same from Multani money market and shall carry twice the said rate of interest in the year or years of loss. " Cl. 34. "The senior partner may at any time during the subsistence of the partnership bring in one or more of his other sons other than partners of the 5th and the 6th part herein to the partnership and in the event of their so becoming partners they will be liable for the same duties as the other partners herein and shall be entitled to remuneration and profits in proportion to their capital contribution. 41(a). "In the event of the dissolution of partnership the capital available for distribution as per the balance sheet, except for debts outstanding for collection and reserve fund, shall be paid off to the outgoing partner in proportion of the capital contribution of the outgoing partner to the total contribution of all the partners, including extra capital subscription paid, if any, under clause 9. " None of these clauses specify the shares of the partners. Clause 9 has reference to extra contribution made by the partners which was to be treated as capital contribution for the purpose of dividing profits but was not otherwise taken to be paid up capital. Clause 11 provides for interest on the extra capital subscribed . Clause 34 authorises the senior partner during the subsistence of the partnership to bring in 255 one or more of his sons as partners who on being so brought in were entitled to remuneration and profits in proportion to their capital contribution. Clause 41(a) provides that in the event of dissolution of partnership the capital available except for debts etc. was to be paid to the outgoing partners in proportion to the capital contribution of the outgoing partner. But in none of these clauses is it stated what the shares of the partners in the profits and losses of the firm were to be and that in our opinion was requisite for registration of the partnership under section 26 A of the Act and as that was wanting, registration was rightly refused. Registration under section 26 A of the Act confers a benefit on the partners which the partners would not be entitled to but for section 26 A. The right can be claimed only in accordance with the statute which confers it and a person seeking relief under that section must bring himself strictly within the term of that section. The right is strictly regulated by the terms of that statute: Ravula Subba Rao vs The Commissioner of Income tax, Madras Section 26 A provides: S.26A(1) "Application may be made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purpose of this Act and of any other enactment for the time being in force relating to income tax or super tax. " For the purpose of this case the relevant words of that section are "constituted under an instrument of partnership specifying the individual shares of the partners". Therefore unless the instrument of partnership specified the individual shares of the partners the instrument of partnership does not conform to the requirements of the section. In B. C. Mitter & Sons V. Commissioner of Income tax (2) it was held that the instrument of partnership to be registered should have been in existence in the accounting year in respect of which an assessment is being made. At page 202, Sinha J., (as he then was) said: (1) [1956] S.C.R. 577,588. (2) 256 "It is, therefore, essential, in the interest of proper administration and enforcement of the relevant provisions relating to the registration of firms, that the firms should strictly comply with the requirements of the law, and it is incumbent upon the Income tax authorities to insist upon full compliance with the requirements of the law." In the present case an instrument of partnership was in existence but it did not specify the shares which was one of the requirements for registration and that condition was fulfilled by the deed of rectification dated September 17, 1955. Therefore it cannot be said that there was the requisite instrument of partnership specifying the individual shares of the partners during the year of account. The High Court, in our opinion, was right in answering the question in the negative. We therefore dismiss this appeal with costs. Appeal dismissed.

A partnership consisting of four persons was formed on March 31, 1949, which was to come to an end on March 31, 1954. On July 27, 1951, a fifth partner was taken into the partnership. On March 29, 1954, a new partnership was entered into taking in a sixth partner will) contributed Rs. 40,000 as his share to the capital. In the partnership deed no express provision was made as to the manner in which profits and losses were to be divided. A deed of rectification was executed on September 17, 1955, after the close of the account year 1054 5 5, adding a clause to the partnership deed that the partners shall share in the profits and losses in proportion to their contributions to the capital. Upto the end of the assessment year 1954 55, the old firms were registered under section 26A of the Income tax Act. The new firm applied for registration for the assessment year 1955 56, but registration was refused on the ground that there was no specification of shares of the partners. Held, that registration was rightly refused. Section 26A requires that for registration in a particular year there must be an instrument of partnership specifying the shares of the partners in the profits and losses. Though in the present case there was an instrument of partnership in the year of assessment 1955 56, it did not specify the shares. The right of registration can be claimed only in accordance with section 26A and the assessee must bring himself strictly under the terms of that section. Ravula Subba Rao vs The Commissioner of Income tax, Madras, [1956] S.C.R. 577 and R. C. Mitter & Sons vs Commissioner of Income tax, E1959] , referred to.

'B ', who received some agricultural lands and a house in the partition of his ancestral properties, and his minor sons 'H ' and 'R ' (Respondent) mortgaged their properties for a sum of Rs.5,500 by executing a conditional sale deed on 22nd April, 1948 in favour of 'N '. But by a reconveyance deed dated 11th February, 1953 they got their properties reconveyed in their favour by 'N '. On the same"day i.e. 11 th February, 1953 they sold some agricultural lands and the house for Rs.5,500 to 'M ', (Appellant) who was brother of 'N '. Subsequently 'M ' sold the house to 'W ' and others. The remaining land was sold by them on the same date to 'V ' and his brother. 'B 's sons and wife (Plaintiffs) filed a suit against 'M ' (Defendant No. 1), 'V ' and his brother (Defendant No. 2 and 3), 'W ' and others (Defendant No. 4 to 8) and 'B ' (Defendant No. 9) for a decree of possession of the agricultural lands and house which came in their share as members of the Joint Hindu Family contending that alienation made by 'B ' was not binding on them because it was neither for any legal neces sity nor for the benefit of the minors or their Estate, but was for satisfying the personal needs of 'B ' who had the vices of drinking and gambling and was spending everything he used to earn in his business of grain delali. 41 The Trial Court dismissed the suit by holding that (i) 'B ' was not indulging in any vices, (ii) the alienation made by 'B ' was for the satisfaction of ' the antecedent debt due on mortgage '; and (iii) 'B ' was a broker who needed cash capital for his business and (iv) the plaintiffs and 'B ' were estopped from challenging the title of 'W ' and others, since 'W ' and others (Defendant No. 4 to 8) had spent Rs.25,000 on the reconstruction of the house purchased from 'M ' within the knowledge of plaintiffs and without their objection. Plaintiffs preferred an appeal before the High COurt contending that 'M ' and 'N ' ran a family firm of which they were owners and the execution of the conditional sale deed, reconveyance deed and the subsequent sale deed of the same day were nothing but a device and were really a part of one and the same transaction and that if the original transac tion of 22nd April, 1948 of the conditional sale with 'N ' was not valid and binding on the minor sons of 'B ' then the subsequent transaction of 11th February, 1953, for payment of debt or liability due under that alienation cannot be supported. Allowing the appeal, the High Court reversed the judg ment of the Trial Court, had passed a decree for possession of the suit properties in favour of the plaintiffs by hold ing (i) that the transactions dated 22nd April, 1948 as well as all other transactions of 11th February, 1953 were part of the same transaction; (ii) that since transaction dated 22nd April, 1948 was invalid because it was not supported by any legal necessity, then the subsequent transactions of sale and reconveyance of 11th February, 1953 were also invalid. Hence this appeal by special leave by the defend ants. Allowing the appeal in part, this Court, HELD: 1. The doctrine of pious obligation under which sons are held liable to discharge their father 's debts is based only on religious considerations. This doctrine inevi tably postulates that the father 's debts must be vyavaharik. If the debts are not vyavaharik or are vyavaharik the doc trine of pious obligation cannot be invoked. [59E] Luhar Amrit Lal Nagji vs Doshi Jayantilal Jethalal & Ors., ; , relied on. Where the sons are joint with their father, and debts have been contracted by the father even for his own personal benefit, the sons are liable to pay the debts provided they were not incurred for an immoral 42 or illegal purpose and such debts were antecedent to the alienations impugned. [61B] 2.1 Even if any loan is taken by the father for his personal benefit which is found as vyavaharik debt and not avyavaharik, the sons are liable to discharge their father 's debts under the doctrine of pious obligation and if any alienation of the joint family property is subsequently made to discharge such antecedent debt or loan of the father, such alienation would be binding on the sons. [6 ID] Mulla, "Principles of Hindu Law", 15th Edn. Paragraph 295; lrukulapati Venkateshwara Rao vs Vemuri Amayya & Ors. , A.I.R. 1939 Mad. 561, referred to. Vyankates Dhonddeo Deshpande vs Sou. Kusum Dattatraya Kulkarni & Ors., [1979] 1 955, relied on. Atchutaramayya vs Ratanjee Bhootaji, [1926] A.I.R. Mad. 211; Suraj Bansi Koer vs Sheo Prasad Singh, 6 I.A. 88 (PC) cited. Benares Bank Ltd. vs Hari Narain & Ors., LIX I.A. 300, distinguished. "Antecedent debt" means antecedent in fact as well as in time i.e. to say, that the debt must be truly independent and not part of the transaction impeached. To constitute a debt an "antecedent" debt it is not necessary that the prior and subsequent creditors should be different persons. All that is necessary is that the two transactions must be disassociated in time as well as in fact. [53E F] Mulla, "Principles of Hindu Law", 15th Edn. paragraph 295; Brij Narain vs Mangala Prasad, A.I.R. 1924 P.C. 50, referred to. 4. It is necessary to examine each transaction independ ently and then to arrive at a conclusion whether such a transaction or alienation can be held to be valid or not. [52G H] 4.1 The approach of the High Court in considering trans action dated 22nd April, 1948 as well as all the other transactions of 11th February, 1953 being part of the same transaction, is not correct. [57B] 5. The conditional sale deed dated 22nd April, 1948 was not void even if the amount was taken by 'B ' for his person al benefit of starting a 43 new business of grain. It was an independent transaction both in fact as well as in time to the subsequent transac tions of 11th February, 1953. The transaction of reconvey ance deed dated 11th February, 1953 was for the benefit of not only 'B ' but for the entire family including the plain tiffs. There was no consideration for this reconveyance of the property except the transaction of sale made in favour of 'M ' on 11th February, 1953. This sale deed was perfectly valid and was made in order to pay the antecedent debt. [57F G] 6. So far as the house property is concerned, the Trial Court 's finding that defendants Nos. 4 to 8 had spent Rs.25,000 on the reconstruction of the house within the knowledge and without the objection of the plaintiffs Nos. 1 and 2 and as such plaintiffs No. 1 and 2 and defendant No. 9 were estopped from challenging the title of those defendants had not been set aside by the High Court. This finding of the High Court has to be upheld. [61F G] 7. So far as the transactions of sale of the remaining properties in favour of 'V ' and his brother are concerned, they stand on a different footing altogether. The High Court in this regard has recorded a clear finding that the afore said alienations were made neither for any legal necessity nor for the benefit of the State nor for payment of any antecedent debt. [61H; 62B] The evidence in this regard is also fully convincing that the aforesaid transaction had no connection with pay ment of any antecedent debt. The finding of the High Court has to be upheld in this regard. [62C] 8. Accordingly the Judgment and decree passed by the High Court is set aside to the extent of granting a decree for possession of the house property and agricultural lands sold in favour of 'M ' on 11th February, 1953, and the suit with regard to these properties is dismissed. The rest of the Judgment and decree of the High Court in respect of agricultural lands which were alienated in favour of 'V ' and his brother is maintained and 'the suit of the plaintiffs for possession with regard to these properties stands decreed. [62D E]

The respondent who was the karta of his Hindu undivided family entered into partnership with one D to carry on the business of manufacturing and selling pharmaceutical products etc. On July 27, 1946 the partnership was dissolved. The assets of the firm which included goodwill, machinery, furniture etc. were valued on the date of dissolution at Rs. 2,50,000 and the respondent was paid the sum of Rs. 1,25,000 in lieu of his share and the business together with the goodwill was taken over by D. The question in income tax proceedings was whether the transaction was one of sale liable to capital gains tax under section 12B(1) of the Income tax Act. The assessing and appellate authorities held against the respondent. The High Court in reference, however, held in his favour. The revenue appealed. HELD : There was no clause in the partnership agreement providing for the method of dissolution of the firm or for winding up of its affairs. In the course of dissolution the assets of the firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying money value equivalent thereof. This is a recognised method of making up the accounts of the dissolved firm. In that case the receipt of money by a partner is nothing but a receipt of his share in the distributed assets of the firm. The respondent received the money value of his share in the assets of the firm; he did not agree to sell, exchange on transfer his share in the assets of the firm. Payment of the amount agreed to be paid to the respondent under the arrangement of his share was therefore not consequence of any sale, exchange or transfer of assets. [408 C E] James Anderson vs Commissioner of Income tax, Bombay City, and Commissioner of Income tax, Madhya Pradesh and Nagpur & Bhandara vs Dewas Cine Corporation, 68 I.T.R. 240, distinguished.

In 1945 one R who was the thekadar of the proprietary rights of a village, sued the appellants and the respondents, other than the first respondent Board of Revenue, for their ejectment under section 171 of the U.P. Tenancy Act. alleging that the appellants had illegally sub let the lands to the respondents. The appellants and the respondents made a on cm denying the alleged 'sub letting and stating that the entries in the village records about the respondents being sub tenants were erroneous. The suit was dismissed in March, 1946, I.e., towards the end of 1353 F on the ground that there was no sub letting and the entries were not correct No attempt was made by anyone to bring the village records in harmony with this decision and the respondents continued to figure as sub tenants in these records. On his attention being drawn to this, the Lekhpal, on his own authority, removed the entries in favour of the respondents from the records for the year ending 1358 F but the entries for the year 1356 F were left undisturbed as it was not within the Lekhpal 's jurisdiction to alter these. After the U.P. Zamindari Abolition and Land Reforms Act came into force in 1952 i.e., at the beginning of 1360 F, on the strength of the Khasra and Khatauni of 1356F, the respondents claimed Adhivasi rights under section 20(b)(i) of the Act and. file six suits praying for the recovery of possession of the lands under 'section 232 of the Act. They lost the suits before the sub Divisional Officer and Additional Commissioner of Varanasi but succeeded in appeals to the Board of Revenue. The appellants thereafter filed writ petitions for quashing the orders of the Board; and the High Court although of the view that the impugmed orders of the Board of Revenue were wrong, held that the Board had jurisdiction to interpret section 20(b) as it thought proper; and as the orders passed by it were final without being subject to any appeal. they could not be quashed by certiorari as being mere errors of law. In appeal to this Court, it was contended, inter alia, on behalf of the appellants that (i) the correctness of the entry in the record of rights of 1356 F could be gone into and was capable of challenge in a court of law exercising jurisdiction under article 226; (ii) in the present case there was an adjudication in March 1946 that the 'respondents were not subtenants; consequently, unless they showed that they had thereafter become sub tenants, the benefit of the entry in their favor in 1356 F could not be availed of by them; (iii) in the Khasra of 1356 F the respondents were only recorded as sub tenants but not as occupants and could not therefore get the benefit of section 20 (b) (i) of the Act. HELD: Dismissing the appeals. The record of rights for the year 1356F had not been corrected afterwards. The court had to go by the entry in the record of rights and 499 no enquiry need be made as to when the respondents became sub tenants after the decision in the suit filed by R. As between the tenant and the sub tenant, the entry in the record of rights in favour of the sub tenant made him the occupant entitled to the adhivasi rights under section 20 of the Act. [5O4 G H] The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rahman and others; , ; Amba Prasad vs Abdul Noor Khan Sukh Ram & Ors. , ; and Nanakchand vs Board of Revenue U.P. ; applied.

Under the Madhya Bharat Municipalities Act, 1954, the Municipal Corporation determined the house lax payable by the appellant in respect of his house with effect from April 1, 1954. On appeal by the appellant regarding assessment, the Additional District Judge remanded the case to the Corporation for a fresh decision after due enquiry. Ulti mately, by a notice dated October 12, 1965 issued under section 146 of the Madhya Pradesh Municipal Corporation Act, 1956 (as amended in 1961) the Corporation revised the amount of tax payable but maintained the date of liability for payment of tax as April 1, 1954. On appeal by the appellant, the additional District Judge held that the tax was payable with effect from April 1, 1965 and not April 1, 1954 for the reason that the tax was finally fixed after the notice dated October 12, 1965. The Revision Petition of the Corporation was allowed by the High Court holding that tax was payable from April 1, 1954 because the proceedings were started even before the 1956 Act came into force. In appeal to this Court the appellant contended that (1 ) as the fresh notice was issued under section 146 of the 1956 Act on October 12, 1965 after remand of the case by the District Judge, house lax could be imposed only with effect from April 1, 1965 and not retrospectively and (2) the order of the District Judge being final under section 149(2) of the 1956 Act the High Court had no jurisdiction to interfere with that order and in any event the High Court exceeded its power under section 115, C.P.C. Dismissing the appeal. HELD: The proceeding relating to the house tax was a continuous proceeding relating to the tax payable from April 1, 1954 and the notice issued by the Corporation after remand by the District Judge did not amount to notice of fresh assessment or re assessment. [874 E F] 1. There is no force in the contention .that under the 1956 Act the municipality had no power to pursue the pro ceedings regarding the levy of tax for an earlier period. The notice issued by the Corporation to the appellant made it clear that the Commissioner was proceeding to fix the value in pursuance of the remand. The appellant 's plea that the Commissioner was not authorised to determine the value and impose the tax for any period before the date of issue of the notice ignores the fact that the valuation and deter mination of tax from 1954 was pending and the proceedings related to that period. Section 3(3) of the 1956 Act pro vides that all rates, taxes and sums of money due to the Municipalities when this Act was made applicable shall be deemed to be due to the Corporation and sub section (4.) states that all suits and other legal proceedings instituted by or against a Municipality may be continued by or against the Corporation. The proceedings in the instant case were originally taken under the Madhya Bharat Municipalities Act, 1954 and the proceedings regarding the levy of the house tax were not concluded when under the new Act the Corporation became entitled to pursue the proceedings. [874F C, 875A D] 2. (a) Under section 115, C.P.C. the High Court has power to revise the order passed by Courts subordinate to it. The District Court being subordinate to 872 the High Court, is liable to the revisional jurisdiction of the High Court. Moreover, the question of want of jurisdic tion of the High Court was not raised before that Court and cannot be allowed to be raised in this Court for the first time. [875 F G] (b) The principles governing interference by the High Court trader section 115, C.I.C. have been laid down by this Court in a catena of decisions, the last of which is The Municipal Corporation of Delhi vs Suresh Chandra Jaipuria & Anr. (A.I.R. [875H, 876A B] Baldevdas Shivlal & Anr. vs Filmistan Distributors (India) (P) Ltd. & Ors. ; , M/s. D.L.F. Housing and Construction Co. (P) Ltd. vs Sarup Singh and Ors. A.I.R. 1971 S.C. 2324, The Managing, Director (MIG) Hindustan Aeronautics Ltd. Balanagar, Hyderabad and Ant. vs Ajit Prasad Tarway, Manager (Purchase and Stores) Hindu stan Aeronautics Ltd. Balanagar, Hyderabad, A.I.R. 1973 S.C. 76 and The Municipal Corporation of Delhi vs Suresh Chan dra Jaipuria and Anr. A.I.R. 1976 S.C. 2621 referred to.

The respondents as plaintiffs brought the suit, out of which the present appeal arises, under the provisions of 0. 21, r. 63 Of the Code of Civil Procedure for a declaration that the deed of trust executed in favour of the appellant deity was a sham and fictitious document and the properties covered by it were liable to sold in execution of their decree. The courts below dismissed the suit but the High Court, by misplacing the onus on the deity to prove its title, set aside the concurrent findings, of the Courts below and decreed the respondents ' suit. Held, that the question whether a trust deed was a fictitious document or not was essentially a question of fact. Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras, ; , referred to. It was well settled by a long series of decisions of the Privy Council and of this Court that the High Court could not, in a second appeal, interfere with findings of fact arrived at by the Courts below" however erroneous they might be. Even assuming that it was open to the High Court to go behind the findings of fact, it was clear that it had completely misdirected itself on the question of onus. In a suit, such as the present, where the plaintiff sought for a declaration that a document solemnly executed and registered was a fictitious one, the burden lay heavily on him to prove that it was so and that burden became still more heavy where he sought a declaration that an order passed by the court upholding a claim of a third party under 0. 21, r. 60 of the Code was erroneous.

The respondent company was incorporated in 1937 primarily with the object of acquiring and working a match factory. Under the memorandum of association the company was also empowered, inter alia, to manufacture and deal in chemicals. The business of manufacturing matches was carried on by the company till 1941. Thereafter the profits became less and less due to war conditions. On May 9, 1943, the company entered into an agreement with a third party for the sale of the lands, buildings, plant and machinery of its match factory for Rs. 5,75,000. It was agreed that this price would not include manufactured goods, chemicals and other jaw materials or any other asset not shown in the agreement of sale. Later, a fresh agreement was entered into on August 9, 1943, under which the sale included chemicals and paper for manufacture which had not been sold in the first instance and the price was Rs. 7,35,000. In a report to the shareholders dated August 1, 1944, the Directors stated that the price obtained had shown a capital appreciation of about six times the cost price and that the sale of chemicals had resulted in ' substantial profit. In proceedings for assessing income which had escaped assessment the income tax authorities, relying upon the memorandum of association which allowed the 961 company to manufacture and sell chemicals and on the Directors ' report, held that the profit from the sale of the chemicals and other raw materials was liable to income tax on a profit of Rs. 2,00,000 which was reduced later to Rs. 1, 15,259. The company claimed that the stock of raw materials was sold not in the course of ordinary trading but only in a realisation sale after the company had been wound up. The evidence showed that the clause in the memorandum of association giving power to the company to sell chemicals was seldom used and that prior to the sale of chemicals to the purchaser, two transactions of sale of chemicals for small amounts in 1943 were too petty in themselves to afford evidence of trading in chemicals. Held, that though under the second agreement dated August 9, 1943, more price was paid, the transaction was still a winding up sale and no part of this slump price was identifiable as the price of the chemicals and other raw materials. There was no evidence that before the winding up the company had sold chemicals as part of its business, and the two instances cited were too petty in themselves to afford evidence of a continued or sustained trading in chemicals. A winding up sale is not "trading or doing business" and the sale of the raw materials including the chemicals was not part of any business done. Accordingly, the sum of Rs. 1,15,259 was not liable to tax. Doughty v Commissioner of Taxes, (1927) A. C. 327, di. ',Cussed and relied on. Case law reviewed.

% The appellant filed a petition under Sections 397 and 398 read with Section 403 of the in respect of the affairs of the respondent firm which was disposed of in terms of the compromise arrived at between the parties. The parties agreed that no Auditor need be appointed for the determination of the liability, and that the determination as per the 1973 balance sheet should be left entirely to the Court. In accordance with the said compromise, the parties filed their balance sheets regarding the payments made by them which related to liabilities as on 31st December, 1973. Single Judge of the High Court computed the liabilities of the parties on that basis. The appellant preferred an appeal before the Division Bench against the aforesaid decision. The Division Bench held that as no Letters Patent was applicable to the High Court there was no provision for an appeal against the judgment of the Single Judge and dismissed the appeal. On the question: whether an appeal lies to the Division Bench under section 483 of the , against the orders of a Single Judge. Disposing of the appeal, ^ HELD: Sections 397 and 398 read with section 483 of the 1071 indicate that an appeal would lie in the same manner to the same court. Naturally and logically, therefore, an appeal from the decision of the Single Judge would lie to the Division Bench. [1076E F] Shankarlal Aggarwal & Ors. vs S.L. Poddar & Ors. A.I.R. followed. Shanta Genevienve Pommerat & Anr. vs Papers Pvt. Ltd. & Ors., A.I.R. 1983 S.C. 269; M/s. Golcha Investment (P) Ltd. vs Shanti Chandra Bafna, A.I.R. 1970 S.C. 1350 and M/s. Tarapose & Co. vs Cochin Shipyard Ltd., A.I.R. 1984 S.C. 1072 referred to. Absence of procedural rules does not take away a litigant 's right to file appeals against the decision of Single Judge when the statute confers such a right specifically, and the jurisdiction of the High Court to dispose of such an appeal, if so filed. If there are no Rules, they should be framed by the High Court in its jurisdiction of Rule making power for filing and disposal of such appeals. [1076G H] In the instant case, though the present application was relating to sections 397 and 398, and as it arises in respect of the orders passed under those sections, the provisions of section 483 would be attracted and an appeal would lie to the Division Bench. [1073F G] [The High Court found that only a sum of Rs.6,81,299.67 was payable by the appellants to the respondent. The Court is of the opinion that the High Court was right in its determination, and that is the sum which should be the liability of the appellant. Appellant directed to pay the aforesaid amount to the respondent in full settlement of the dues.] [1077E G]

12 of 1959. Petition under article 32 'of the Constitution of India for enforcement of fundamental rights. R.Gopalakrishnan, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the petitioners. C.K. Daphtary, Solicitor General of India, B. Ganapathy Iyer and T. M. Sen, for the respondents. March 14. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. The petitioner is a joint Hindu family firm carrying on business at Berhampur in the State of Orissa, and registered as a dealer under the provisions of the Orissa Sales Tax Act, 1947, hereinafter referred to as the Act. Its business consists in the purchase of castor seeds, turmeric, gingili and other commodities locally, and selling them to demlers outside the State. The Sales Tax Officer, Berhampur, included in the taxable turnover of the petitioner the purchase of goods made by it inside the State but sold, as aforesaid, to dealers outside the State and imposed a tax of Rs. 27,161 13 0 on account of such sales during the sixteen quarters commencing from April 1, 1952, and ending with March 31, 1956. In the present application filed under article 32, the petitioner challenges the validity of the tax on the ground that the purchases in question were made in the course of inter State trade, and that a tax thereon was in contravention of article 286(2) The impugned tax has be en levied under section 5 of the Act, which, omitting what is not relevant, runs as follows: 5. (1) The tax payable by a dealer under this 316 Act shall be levied at the rate of one quarter of an anna in the rupee on his taxable turnover: . . . . . . (2) In, this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting there from: (a) his turnover during that period on . . . . . . (ii) sales to a registered dealer of goods specified in the purchasing dealer 's certificate of registration as being intended for resale by him in Orissa or for use by him in the execution of any contract in Orissa, and on sales to a registered dealer of contai ners or other materials for the packing of such goods: Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration the price of goods so utilised shall be included in his taxable turnover. It will be seen that under this section when a sale takes place, the seller has to include it in his taxable turnover; but when the sale is to a registered dealer who declares that his purchases are for resale in Orissa, then it is excluded from the seller 's turn. If the registered dealer purchaser sells the goods outside the State in breach of the condition, the purchases by him are liable to be included in his turnover, and assessed to sales tax. That precisely is what has happened in this case. The sales to the petitioner were not included in the taxable turnover of the sellers by reason of the registration certificate which the petitioner had obtained on a declaration that the goods were to be resold in 'Orissa. But in violation of this declaration he sold the goods to dealers outside the State, and so he became liable to be taxed under section 5(2)(a)(ii) of the Act. The contention of the petitioner is that these purchases were made in the course of inter State trade, and that the imposition of sales tax thereon is, in 317 consequence, ultra vires The provision applicable is article 286(2), as it stood prior to the sixth amendment, and it ran as follows: "Except in so far as, Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce. " The argument on behalf of the petitioner is that as the goods were purchased for the purpose of being sold to dealers outside the State, and they were in fact so sold, the purchases were in the course of inter State trade, and the levy of tax thereon was within the prohibition enacted by article 286(2). We do not agree with this contention. The transactions of sales which have been taxed were wholly inside the State of Orissa. They were sales by persons in the State of Orissa to persons within the State of Orissa, of goods which were in Orissa. The fact that the purchaser sold those very goods to dealers outside the State is not relevant, as those sales are distinct and separate from the sales on which the taxes in question have been imposed. The present levy is not on the sales by the petitioner to persons outside the State, but on the purchases by him inside the State. The former sales are in the course of inter State trade, and are not taxable under article 286(2), but the latter are purely intrastate sales, and a tax imposed thereon does not offend article 286(2). In support of his, contention that the purchases are hit by Art 286(2), the petitioner relies on the, decision of this Court in Messrs. Mohanlal Hargovind Das V. The State of Madhya Pradesh (1). In that case, the petitioners who were registered dealers under the Central Provinces and Berar Sales Tax Act, 1947, were carrying on business in the manufacture and sale of bidis in Madhya Pradesh. For the purpose of their business, they imported processed tobaco from the State of Bombay in large quantities, rolled them into bidis and sold them to dealers in other States. (1) ; 318 The sales tax authorities imposed a tax on the purchases made by them, on the ground that they had, in breach of the declaration in the registration certificate, sold them to merchants outside Madhya Pradesh. The contention of the petitioners was that the purchases by them were in the course of inter State trade, and that the imposition of tax thereon was therefore repugnant to article 286(2). It was this contention that was accepted by this Court. It will be noticed that the in this case the assessment of sales tax was on very purchases from dealers in Bombay, under which the goods were transported from the State of Bombay to Madhya Pradesh. In the present case, the purchases which are sought to be assessed involved no movement of the goods outside the State of Orissa. In order that a sale or purchase might be inter State, it is essential that there must be transport of goods from one State to another under the contract of sale or purchase. In the Bengal Immunity Company Limited vs The State of Bihar (1) occur the following observations which are apposite: "A sale could be said to be in the course of interState trade only if two conditions concur: (1) A sale of goods and (2) a transport of those goods from one State to another under the contract of sale. Unless both those conditions are satisfied, there can be no sale in the course of interstate trade. " With reference to the analogous provision under article 286(1)(b) prohibiting the imposition of tax on the sale or purchase of goods in the course of import or export, it has been field by this Court that it is only a sale or purchase which occasions the export or import of the goods out of or into the territory of India or a sale in the State by the exporter or importer by transfer of shipping documonts, while the, goods are beyond the customs barrier, that is within the exemption, and that a sale which precedes such export or import or follows it is not exempted, vide State of Travancore. Cochin vs Shannugha Vilas Cashew Nut Factory (2). On the same principles, a purchase, made inside a State, for sale outside the State cannot itself be held (1) 784 785. (2) ; 319 to be in the course of inter State trade, and the imposition of a tax thereon is not repugnant to article 286(2) of the Constitution. In the result this petition is dismissed with costs. Petition dismissed.

The petitioner who was a, registered dealer under the Orissa Sales Tax Act, 1947, was carrying on the business of purchasing and reselling castor seeds, etc., in the State of Orissa. Under a declaration given by him for the purpose of obtaining his registration certificate the goods purchased by him in Orissa were to be resold in that State. He purchased certain commodities inside the State but in contravention of his declaration sold, the goods to dealers outside the State. The Sales Tax Officer included in the taxable turnover of the petitioner the purchase made by him inside the State in accordance with section 5(2)(a)(II) of the Act. The contention of the petitioner was that the purchase was in course of inter State trade and was exempted under article 286(2) of the Constitution of India. Held, that the transaction of sale which has been taxed was wholly inside the State of Orissa and was distinct and sepa rate from the sale made by the purchaser to dealers outside the State. The former transaction was taxable under section 5(2)(a)(II) of the Act while the latter was exempted under article 286(2) of the Constitution. Messrs. Mohanlal Hargovind Das vs The State of Madhya Pradesh, ; , distinguished. In order that a sale or purchase might be inter State, it is essential that there must be transport of goods from one State 315 to another under the contract of sale or purchase. A purchase made inside a State, for sale outside the State cannot itself be held to be in the course of inter State trade and the imposition of tax thereon is not repugnant to article 286(2) of the Constitution. Bengal Immunity Company Limited vs The State of Bihar, and State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory; , , followed.

Held, by (PATANJALI SASTRI C.J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ.) (i) Sales and purchases which themselves occasion the export or import of the goods, as the case may be, out of, or into, the territory of India come within article 286 (1) (b) and are exempt from State taxation. (ii) Purchases in the State by the exporter for the purpose of export as well as sales in the State by the importer after the goods have crossed the customs barrier are not within the exemption. (iii) Sales in the State by the exporter or importer by transfer of shipping documents while the goods are beyond the customs barrier are within the exemption, assuming that the State power of taxation extends to such transactions. The word " course " etymologically denotes movement from one point to another and the expression " in the course of " in article 286 (1) (b) not only implies a period of time during which the movement is in progress but postulates also a connected relation. Consequently, a sale in the course of export out of the country 54 should be understood in the context of article 286 (1) (b) as meaning a sale taking place not only during the activities directed to the end of exportation of the goods out of the country, but also as part of or connected with such activities. But a purchase of goods for the purpose of export is only an act preparatory to their export and not an act done in the course of the export of the goods, The respondents purchased raw cashew nuts within the State of Travancore Cochin, from the neighbouring states and also imported such nuts from Africa, for the purpose of refining them and exporting them to America. Imports from Africa were made in the following ways: (a) purchases were made through intermediaries doing business as commission agents at Bombay who acted as agents for the respondents charging commission; (b) the commission agents at Bombay indented the goods on their own account and they sold the goods as principals to the respondents. In either case the goods were shipped direct from Africa to a port in the Travancore Cochin State. It was found as a fact that the process of the factory was such that the goods were not the same goods commercially after refinement: Held, (i) as regards purchases made in the local markets of the State they were not exempted under article 286 (1) (b); (ii) as regards purchases made in the neighbouring States, if the purchases were effected and delivery was taken by the respondents ' servants outside the Travancore Cochin State, they would be exempt under article 286, cl. (i) (a), and if the purchases were effected by employing firms doing commission business outside the State and deliveries were made through normal commercial channels the transactions would be of an inter State character and would fall under cl. (2) but they would be taxable under the Sales Tax Continuance Order (No. 7 of 1950) issued by the President under cl. (2) as such tax was being levied before the Constitution. (iii) As regards imports from Africa, where the Bombay merchants merely acted as agents, the transactions would be purchases which occasioned the import and would be exempt under article 286 (1) (b), but where the Bombay merchants did not act as agents for the respondents, purchases from them would be on the same footing as local purchases and would not be exempt. Per S.R. DAS J. The Explanation to article 286 (1) (a) is not an exception or a proviso but only explains cl. (1) (a). It does not confer taxing power on any State but only takes away the power of taxation of a State in respect of sales and purchases in which delivery does not take place within the State by enacting that such sales shall be deemed to have taken place outside that State within cl. (1) (a). Consequently, if a sale or purchase takes place outside a State, either under the general law or by virtue of the fiction created by the Explanation, then that State cannot, under (1) (a), tax such sale or purchase. If a sale or purchase takes place within a State, either under the general law or by reason of the Explanation, then, if such a sale or purchase takes place 55 " in the course of " inter State trade and commerce, no State, not even the State where the sale or purchase takes place as aforesaid can tax it by reason of (2), unless and until Parliament by law provides otherwise. A sale or purchase " in the course of " import or export within the meaning of (1) (b) includes (i) a, sale or purchase which itself occasions the import or export as already held by this court, (ii) a sale or purchase which takes place while the goods are on the high seas on their import or export journey. and (iii) the last purchase by the exporter with a view to export and the first sale by the importer to a dealer after the arrival of the imported goods. If a sale or purchase takes place within a State, either under the general low or by reason of the Explanation, then, if it takes place in the course of import or export as explained above, no State, not even the State within which such sale or purchase takes place can tax it by reason of (1) (b). As regards local purchases, as those purchases took place with. in the State they were not entitled to the protection of article 286 (1) (a), since on the findings of the High Court, the goods purchased were so altered that they cannot be deemed to be the same as the goods which were exported, and the purchases cannot be said to have been made "in the course" of export so as to be entitled to immunity from taxation under article 286 (1) (b). As regards purchases from the neighbouring States, if the goods were taken delivery of by the agents of the respondents outside the State, such purchases must, under the Explanation, be regarded as having taken place outside the State and accordingly would be exempt from taxation under article 286 (1) (a). If however, the goods were directly delivered to the respondents in the Travancore Cochin State the Explanation to article 286 (1) (a) will apply in view of the finding of the High Court which implies that the goods are also consumed in the State, and the neighbouring States will not be entitled to tax these sales or purchases, but the purchases are " in the course of " inter State trade and as such will be protected by (2); but as the majority of the Court have taken a different view and as such view must prevail, such purchases will become, as a result of the Explanation to (1) (a), an intra state purchase and will lose the protection of (2). Even if such purchases fall within (2), they would be liable to be taxed under the President 's Order of 1950. They are not protected by (1) (b) as the goods exported are different goods. As regards purchases from Africa (1) where the Bombay merchants act as agents of the respondents and pay the price and take delivery of the shipping documents in Bombay the purchases fall within (1) (a) and also (1) (b) and are not liable to tax as they take place outside the State within (1) (a) and also "in the course of import" within (1) (b); (ii) where the African sellers ship the goods on their own initiation or on that of their agents and while the goods are on the high seas they are 56 purchased by the, respondents ' Bombay agents, the sale or purchase would be exempt under (1) (a) and under (1) (b); (iii) where the respondents place separate orders with the same commission agent at Bombay and the latter places a consolidated order with the African seller on his own responsibility and the Bombay agent after paying for the entire lot, prepares a separate invoice for each of their constituents and the latter receive the delivery orders from a Travancore bank against payment and take delivery from a Travancore warehouse the sale takes place in the Travancore Cochin State and the goods cannot claim exemption under (1) (a), (1) (b) or (2) of article 286.

The appellant sued the State of Orissa for a declaration that the Orissa Estates Abolition Act of 1951 was in its application to the Kanika Raj, of which he was the Raja and owner, invalid, unconstitutional and ultra vires the State Legislature and for an injunction restraining the State of Orissa from taking any action under the Act. It was contended, inter alia, that no notification under section 3(1) of the Act vesting the Kanika Raj in the State of Orissa could issue as the Raj was not an estate as defined by section 2 (g) of the Act. The contrary was asserted by the State of Orissa and its further contention was that the appellant was estopped by a compromise decree between his predecessors in title on the one band and the Secretary of State on the other from denying that the Raj was an estate as defined by the Act. Held, that the Kanika Raj was an estate as defined by the Orissa Estates Abolition Act of 1951 and the appellant was estopped from denying it by the compromise decree. That the real intention of the Act in defining 'estate ' as it has done in section 2(g) of the Act, was to include all lands, such as the appellant 's, which were as a matter of fact included ill the register prepared under the Bengal Land Registration Act Of 1876, and in construing the definition it is wholly unnecessary to consider whether such inclusion was valid or proper or in conformity with the meaning of an estate under that Act. That a judgment by consent is as effective in creating an estoppel between the parties as a judgment on contest and the test is whether the judgment in the previous case could have been passed without the determination of the question which is put in issue in the subsequent case where the plea of estoppel is raised. Held further, that there is no rule corresponding to Rule 4 of Order XIX of the Supreme Court Rules imposing a similar disability on the respondent, and even with regard to the appellant the court may in appropriate cases, give him leave to raise a ground not specified in the Statement of the Case filed by him.

The appellant was a private limited company carrying on business mainly as building contractors in the State of Orissa. It was assessed to sales tax under the provisions of the Orissa Sales Tax Act, 1947 and made payments towards the tax assessed. Subsequently on the basis of the decision of this Court in State of Madras vs Gannon Dunkerley & Co. 119591 S.C.R. 379, the appellant filed a writ petition in the High Court challenging the said assessments. The High Court quashed the assessments and directed refund of that portion of the tax which was not barred by limitation on the date of filing the application The appellant thereupon filed an application before the Sales Tax Officer for refund of the amount payable to him in view of the said decision. The Sales Tax Officer rejected the, application on the ground that it was made by only one of the directors. The Commissioner of Sales Tax in A revision filed against the said order set aside the order of the Sales Tax Officer and held that the appellant was entitled to the refund applied for and directed the said officer to issue refund payment orders as early as possible. Subsequently the Commissioner issued a notice to the appellant under r. 83 of the Orissa Sales Tax Rules, 1947 calling upon it to show cause why the order earlier passed by him should not be reviewed. The Commissioner then reviewed his. previous orders and held that the appellant would be entitled to refund of the taxes paid subject to the disallowances made in his order. The appellant appealed to this Court by special leave. The question for consideration was whether the Commissioner 's Order in review was a proper order under r. 83. HELD: Rule 83 provides a summary remedy within a narrow compass. The jurisdiction of the Commissioner under this rule is a limited one and is confined only to the correction of arithmetical or clerical mistakes or 'errors apparent on the face of the 'record arising or occurring from accidental slip or. omission in an order passed by him. However widely the said expressions are construed they cannot countenance a reargument on merits on questions of fact or law, or permit a party to raise new arguments which he has not advanced in the first instance. B] In the present case the Commissioner reversed his previous order which was passed on merits mainly on two grounds : (i) that the application for refund in respect of certain amounts was barred by limitation , and (ii) the assessee was not entitled to a refund of the amounts paid before the assessment orders were made on the grounds that the said amounts were not the subject matter of the appeals wherein the assessments were set aside. Both the question of limitation as well as the question of construction of the appellate orders and the impact of those orders on the amounts paid towards tax before the assessments were arguable questions of fact and law. The Department should have raised the said questions before the Commissioner at the time he first made the 100 order directing refund of the ammounts claimed by the assessee. The wrong conclusion if any arrived at by the Commissioner in his earlier order, because of the fact that the said two arguments were not advanced before him, cannot be said to be error on the face of the record arising or accruing from an accidental slip or omission. The errors if any arose because the Department did not raise those points before the Commissioner. They were also errors not apparent on the face of the record for the decision depended upon consideration of arguable questions of limitation and construction of documents. Indeed the Commissioner reheard the argument and came to a conclusion different from that which he arrived at on the earlier occasion. That is not permissible under 83 of the Rules. [104 E 105 A]

The petitioner, an associations of dealers engaged in the business of selling dry fruit in North India, who purchase dry fruits either locally or through imports from outside India, challenged the grant of additional licences to the respondents diamond exporters, under Article 32 of the Constitution. On behalf of the petitioners, it was contended: (i) that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy; (ii) that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and, therefore, the diamond exporters are not entitled to import dry fruit; and (iii) that the import of dry fruit is covered by item 121 in Appendix 2 Part B (List of Restricted Items) of the Import Policy 1985 88 and, therefore, the respondents are not entitled to resort to Item 1 of Appendix 6. On behalf of the respondents, it was contended: (i) that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial); (ii) that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86; (iii) that item 121 of Appendix 2 Part B (List of Restricted Items) is not attracted because it refers to "consumer goods", and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6; and (iv) that the petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated, in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8, 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds. Allowing the Writ Petition and the Appeal, ^ HELD: 1. Respondents Nos. 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79. [97F] 2. Under the Import Policy 1978 79, dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence. No Additional Licence was required. By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could, therefore, be said to arise. The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (exluding cashewnuts). The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users (Industrial). Under the Import Policy 1978 79 their import was open to all persons.[94F,C] 3. The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity. Dry fruits (excluding cashewnuts) could be imported by all persons under Open General Licence under the Import Policy 1978 79. But under the Import Policy 1985 88 dry fruits (excluding cashewnuts and dates) are no longer open to import under Open General Licence. If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) is Chapter XIII of the Import Policy 1985 88, which declares that import of dry fruits (excluding cashewnuts and dates) will be allowed against licences issued to dealers engaged in this trade. [94E H] 4. The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates). They are, therefore, not entitled to the advantage of paragraph 181(3) of the Import Policy 1985 88. [95A B] 5. Dry fruits must be regarded as consumer goods of agricultural 90 origin. The words "agricultural origin" are used in the broadest sense. Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88. In as much as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial). "Consumables" are referred to in item 1 of Appendix 6 as goods meant for Actual Users (Industrial) "Consumer goods" in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users (Industrial).[95F H; 96A] 6. The expression "specifically banned" occurring in the order dated April 18, 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences. The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy. Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of the Import Policy 1978 79. Appendix 2 Part B (List of Restricted Items) was also the successor of Appendix 4 (List of Absolutely Banned Items). Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List. [96B E] The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79. The diamond exporters holding Additional Licences were, therefore, not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.[96F G] 7. The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits. The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88. Dry fruits are not included in that List and, therefore, they cannot be imported under Additional Licences. They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985. [97B C] 8. An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities. [97E] 91

The third respondent was declared elected to the Legislative Assembly of Andhra Pradesh in the general election held in 1962. The appellant, a voter of the constituency filed an election petition challenging 214 the election of the third respondent on several grounds including corrupt practices. The petition was accompanied by the requisite number of copies which were true copies and each of them bore the signature of the petitioner. But there was no attestation at the foot of the copies that they were true copies. The third respondent raised various preliminary objections and the Election Tribunal rejected all of them. Thereupon he filed writ petition in the High Court praying for the issue of a writ quashing the Tribunal 's order. His main contention was that since the copies of the petition did not contain an attestation stating that the copies were true copies there has been a violation of the mandatory provision of section 80(3) of the Representation of the People Act, 1951. The High Court accepted the contention and issued a writ as prayed for. The present appeal was filed with special leave granted by this Court. HELD:(i) If there is a total or complete non compliance with the provisions of section 81(3) the election petition might not be "an election petition presented in accordance with the provisions of the part" withins. 80 of the Act. (ii)By the expression "copy" in section 81(3) it was meant not an exact copy but only one so true that nobody by any possibility misunderstands it not being the same as the original. Murarka vs Roop Singh ; , referred to. Noseworthy vs Overseers Buckland etc., L.R. 9 C. P. 233 and Spice vs Bacon, , distinguished. (iii)In the present case the signatures on the copies cannot be held to have been merely intended to be a copy of those on the original, since a signature in original was not needed on the copy and writing or copying out the name of the signatory would suffice. The absence of a writing in the copy indicating the signature in the original would not detract the copy from being a true copy. The facts and circumstance of the case show that there has been a substantial compliance. with the requirement of section 81(3). The wider question whether section 81(3) or as part thereof is mandatory or directory is left open. The appeal is allowed. Murarka vs Roop Singh ; and Kamaraj Nadar vs Kunjer Thevar, followed.

On September 7, 1955, the appellant company entered into a contract with the respondents for the purchase of certain bales of jute cuttings to be delivered by the respondents in equal installments every month in October, November and December, 1955. Under cl. 3 of the agreement the sellers were entitled to receive the price only on their delivering to the buyers the full set of shipping documents. Clause 8 conferred on the sellers certain rights against the buyers such as the right to resell if the latter refused to accept the documents. Clause 14 provided that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. As the respondents failed to deliver the goods as agreed the appellants applied to the Bengal Chamber of Commerce for arbitration. The respondents appeared before the arbitrators and contested the claim, but an award was made in. favour of the appellant. Thereupon the respondents filed an application in the High Court of Calcutta under section 33 of the , 184 challenging the validity of the award on the ground that the contract dated September 7, 1955, was illegal as it was in contravention of the notification of the Central Government dated October 29, 1953, issued under section 17 of the Forward Contracts (Regulation) Act, 1952, which declared that no person shall enter into any forward contract other than a nontransferrable specific delivery contract for the sale or purchase of raw jute in any form. . . The appellant pleaded (1) that on the terms of the arbitration clause the question whether the contract dated September 7, 1955, was illegal was one for the arbitrator to decide and that it was not open to the respondents to raise the same in proceedings under section 33 of the ; (2 ) that the respondents were estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators ; and (3) that, in any case, the contract was a nontransferrable specific delivery contract within section 2 (f ) of the Forward Contracts (Regulation) Act and was not hit by the notification dated October 29, 1933. Held, that : (1) the dispute as to the validity of the contract dated September 7, 1955, was not one which the arbitrators were competent to decide under cl. 14 and that in consequence the respondents were entitled to maintain the application under section 33 of the . When an agreement is invalid every part of it including the clause as to arbitration contained therein must also be invalid. Leyman vs Darwins Lid. , , Union of India vs Kighorilal Gupta and Brothers, ; , Tolaram vs Birla Jute Manufacturing Company Lid., I. L. R. , relied on. (2)the respondents were not estopped by their conduct from questioning the validity of the award. Ex parte Wyld, (1861) 30 Law J. Rep. (N. section) Bank. 10, explained. (3)on the true construction of the contract dated Sep tember 7, 1955, read with the terms of the import licence in favour of the appellant, the agreement between the parties was that the contract was not to be transferred. In construing a contract it would be legitimate to take into account surrounding circumstances and, therefore, on the whether there was an agreement between the parties 185 that the contract was to be non transferable, the absence of a specific clause forbidding transfer was not conclusive. Virjee Daya & Co. vs Ramakrishna Rice & Oil Mills, A. 1. R. , approved. British Waggon Co. vs Lea, , dist inguished. Accordingly, the contract in question was not hit by the notification dated October 29, 1953.

The petitioners registered firm has its head office in Calcutta where its books of account are kept and maintained and where it has its banking account, the members of the firm being citizens of India. Since its inception the firm has all along been assessed to income tax by the Income Tax Officer, District III, Calcutta. The assessments for the years 1948 49 and 1949 50 were made by the Income Tax Officer, District III, Calcutta. Notices under section 22(2) of the Income Tax Act were issued to the petitioner by the Income Tax Officer, District III, Calcutta to submit returns for the years 1950 51, 1951 52, 1952 53, 1953 54 and 1954 55. The Income Tax Officer, District III, Calcutta made assessment for the year 1950 51 on 18 12 1954 being satisfied that the principal place of business of the petitioner was in Calcutta. On the 25th January 1955 the petitioner received a letter from the Income Tax Officer, District III, Calcutta that in pursuance to orders dated 13th December 1954 under section 5(7 A) of the Income Tax Act its assessment records were transferred from that office to the Income Tax Officer, Special Circle, Ranchi with whom the petitioner was to correspond in future regarding its assessment proceedings. The order stated that the Central Board of Revenue "hereby transfers the case of" the petitioner. The petitioner had no previous notice of the intention of the Income Tax authorities to transfer the assessment proceedings from Calcutta to Ranchi nor bad it an opportunity to make any representation against such decision. 'When called upon to submit its return for the assessment year 1955 56 the petitioner by an application under article 32 of the Constitution contended that sub section (7 A) of section 5 of the Indian Income Tax Act, 1922 and the order of transfer made thereunder were unconstitutional in that they infringed the fundamental rights guaranteed to the petitioner under articles 14, 19(1)(g) and 31 of the Constitution. section 64 of the Indian Income Tax Act makes provisions for determining the place of assessment. Sub section (1) of that section provides 268 that where an assessee carried on a business, profession or vocation at any place he shall be assessed by the Income Tax Officer of that area in which that place is situate or where the business, profession, or vocation is carried on at more than one place by the Income Tax Officer of the area in which the principal place of business, profession or vocation is situate. In all other cases, according to sub section (2), an assessee shall be assessed by the Income Tax Officer of the area in which he resides. If any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to represent his views by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board of Revenue. The section is imperative in terms and gives a valuable right to the assessee. By amending the Indian Income Tax Act 1922 by the Indian Income Tax (Amendment) Act, 1940 (Act XL of 1940) by adding to clause (b) of sub section (5) of section 64 the words "in consequence of any transfer made under sub section (7 A) of section 5" and by adding subsection (7 A) to section 5 the benefit conferred by the provisions of subsection (1) and sub section (2) of section 64 is taken away and is to be deemed not to have existed at any time as regards the assessee with regard to whom a transfer is made under sub section (7 A) of section 5. Held that as under section 22(2) of the Act, the notice and the return are to be confined to a particular assessment years sub section (7 A) of section 5 contemplates the transfer of such a "case" i.e. the assessment case for a particular year. The provision that such a transfer may be made "at any stage of the proceedings" obviously postulates proceedings actually pending and "stage ' I refers to a point in between the commencement and ending of those proceedings. Further the transfer contemplated by the sub section is the transfer of a particular case actually pending before an Income Tax Officer of one place to the Income Tax Officer of another place. Accordingly such an omnibus wholesale order of transfer dated 13th December 1954 as was made in the present case is not contemplated by the sub section and therefore the impugned order of transfer which was expressed in general terms without any reference to any particular case and without any limitation as to time was beyond the competence of the Central Board of Revenue and the petitioner was still entitled to the benefit of the provisions of subsections (1) and (2) of section 64. The impugned order is discriminatory against the petitioner and violates the fundamental right guaranteed to it by article 14 of the Constitution in as much as the income tax authorities by an executive order unsupported by law picked out the present petitioner and transferred all his cases by an omnibus order unlimited in point of time,which order is calculated to inflict considerable inconvenience and harassment on the petitioner. BOSE J. Section 5(7 A) of the Indian Income Tax Act is ultra vires article 14 of the Constitution and so is section 64(5)(b) in so far as it 269 makes an order under section 5(7 A) as it now exists, inviolate. The power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced however briefly, to writing so that men may know that the powers conferred on these quasi judicial bodies are being justly and properly exercised. Chiranjit Lal Chowdhury vs The Union of India ([1950] S.C.R. 860), Budhan Chowdhry and others vs The State of Bihar, ([1955] 1 S.C.R. 1045), Dayaldas Kushiram vs Commissioner of Income Tax Central (I.L.R. ; [1940] 8 I.T.R. 139), Eshugbai Eleko 's case ; , The State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284), Ram Prasad Narayan Sahi and Another vs The State of Bihar and Others ' ([1953] S.C.R. 1129), Bowman 's case ([1917] A.C. 406), Coal Control case ([1954] S.C.R. 803), State of Madras vs V. G. Bow ([1952] S.C.R. 597), and Liversidge vs Sir John Anderson ([1942] A.C. 206), referred to.

Appeal No. 754 of 1957. Appeal by special leave from the judgment, and order dated September 29, 1954, of the Deputy Custodian General, Evacuee Property, in Revision Petition No. 321 R/ADCG/53. Achhru Ram and K. L. Mehta, for the appellant. Bishan Narain, T.N. Sethia A. N. Arora and K. R. Choudhury, for respondent No. 1 1961. March 14. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is directed against the order of the Additional Deputy Custodian General of Evacuee Property, New Delhi, dated 'September 29, 1954, setting aside the order dated August 25, 1952 of the Additional Custodian, Rural, Jullundur, confirming that of the Deputy Commissioner, Ambala, dated May 12, 1951. The appellant belongs to a group of evacuees which may for convenience be described as Dhawan Group. Diwan Chaman Lal, respondent No. 1, was a displaced person from West Pakistan where he owned considerable properties. On September 1, 1949, in lieu of land left behind in Pakistan, he was allotted 152.9 acres of land in village Kharwan in Tehsil Jagadhri, District Ambala. The appellant and his 299 group also owned large extents of properties in West Pakistan. Each one of that group was allotted different extents of land in the same village. Before possession was taken by the allottees, two persons, namely, Hari Chand and Khilla Ram, filed applications dated November 14, 1949, and November 11, 1949, respectively for re allotment on the ground that the soil of the village was not of uniform quality and the allotment on the basis of blocks was not justified. The Additional Deputy Commissioner, Ambala, re commended the splitting of the land into four blocks and the said recommendation was accepted by the Director General, Rural Rehabilitation, by his order dated December 2, 1949. Thereupon the village was divided into four blocks and was re allotted. On account of the re allotment, the 1st respondent could not get his entire allotment in village Kharwan in one block and he was given instead land in different blocks and different villages. Aggrieved by this order, the first respondent filed a review application before the Deputy Commissioner, Ambala, on September 27, 1950, praying for the restoration of his original allotment made on September 1, 1949. The Deputy Commissioner, Ambala, rejected that application on May 12, 1951. Against that order the first respondent preferred a revision to the Additional Custodian, who dismissed the same on August 25, 1952. Against that order of dismissal, the first respondent filed a revision to the Custodian General on October 30, 1952. To that revision only the Custodian was made party; but the appellant and the members of his group were subsequently made parties by an order of the Deputy Custodian General dated August 25, 1953. Thereafter notices were issued to them. The appellant and others on their being made parties raised various contentions. The Deputy Custodian General cancelled the allotment made in favour of the Dhawan Group in respect of the excess area allotted to them and directed the land obtained by means of this cancellation to be utilised for the consolidation of the allotment of the first respondent in village Kharwan. He also gave further consequential directions. The present 300 appeal is preferred by Purshotam Lal Dhawan, a member of the Dhawan Group, against the said order. Learned counsel for the appellant raised before us the following two points: (1) The revision to the Deputy Custodian General was barred by time. (2) On the date when the allotment made to the appellant was cancelled, the Deputy Custodian General had no power to cancel the allotment. To appreciate the first contention some relevant dates may be given. The order of the Additional Custodian was passed on August 25, 1952. The said order was communicated to the first respondent on September 11, 1952. The revision was filed on October 10, 1952. On the date of the filing of the revision only the Deputy Custodian was made a party,, but later on the Dhawan Group was impleaded in the revision in October 1953. No application for excusing delay in preferring the revision against the said persons was made. It was contended before the Deputy Custodian General that the revision petition was barred by time against the Dhawan Group, but the Deputy Custodian General rejected that argument and disposed of the petition on merits. The first question for consideration is whether the revision was barred by limitation in so far as the Dhawan Group was concerned. Some of the relevant provisions regulating the power of revision of the Custodian General may be noticed. Section 27 of the Act says, "The Custodian General may at any time either on his own motion or on application made to him in this behalf call for the record of any proceedings in which any Custodian has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit". Under the proviso to that section, "the Custodian General shall not pass an order under the sub section prejudicial to any person without "giving him a reasonable opportunity of being heard. In exercise of the powers conferred by section 56 of theAct, the Central Government made the following rules among others: 301 Rule 31. (5) Any petition for revision when made to the Custodian General shall ordinarily be made within sixty days of the date of the order sought to be revised. The petition shall be presented in person or through a legal practitioner or a recognized agent or may be sent by registered post. The petition shall be accompanied by a copy of the order sought to be revised and also by a copy of the original order unless the Revising Authority dispenses with the production of any such copy. In contrast to the said provisions, rule 31(1) dealing with appeals says, "All appeals under the Act shall when they lie to the Custodian, be filed within thirty days of the date of the order appealed against and when they lie to the Custodian General, within sixty days of such date". Section 27 of the Act confers a plenary power of revision on the Custodian General and it empowers him to exercise his revisional powers either suo motu or on application made in that behalf at any time. The phrase "at any time" indicates that the power of the Custodian General is uncontrolled by any time factor, but only by the scope of the Act within which he functions. The Central Government cannot obviously make a rule unless section 56 of the Act confers on it an express power to impose a time fetter on the CustodianGeneral 's power. We do not find any such power conferred on the Central Government under section 56 of the Act. So the rule can only be read consistent with the power conferred on the Custodian General under section 27 of the Act. That must have been the reason why rule 31(5) does not prescribe any limitation on the Custodian General to exercise suo motu his revisional power. Even in the case of an application for revision filed before him it is said that ordinarily it shall be filed within sixty days. The use of the word "ordinarily" indicates that the period of sixty days is not a period of limitation but only a rule of guidance for the petitioners as well as for the CustodianGeneral. It is within the discretion of the CustodianGeneral to entertain revision petitions after sixty days, 302 but the rule indicates to him that the reasonable period for entertaining a revision is sixty days. The difference in the phraseology of sub rules (1) and (5) of rule 31 of the Rules also leads to the same conclusion, for in the matter of appeals a period of limitation of thirty days when made to the custodian and sixty days when it lies to the Custodian General is prescribed whereas no such rigid period has been laid down in the case of a revision. If rule 31(5) is so read, its provisions will not conflict with those of section 27 of the Act; and in that event they would be valid. The construction suggested by learned counsel for the appel lant may lend scope to the argument that the rule is ultra vires the statute, for when a section says that there is no time limit for entertaining a revision, section rule cannot say that it shall be filed within a particular time. The argument that the principle underlying section 5 of the Limitation Act applies to a petition for revision under section 27 of the Act has no force. Section 5 of the Limitation Act applies to an appeal for which a period of limitation is prescribed and it empowers the court to admit the appeal after the period of limitation, if the applicant satisfied it that he has sufficient reason for not preferring the appeal within the prescribed time. The principle thereunder cannot be made applicable to a revision petition under section 27 of the Act in respect of which no period of limitation is prescribed. At the same time we must make it clear that the powers of the Custodian General under section 27, read with rule 31(5), are not intended to be exercised arbitrarily. Being a judicial power, he shall exercise his discretion reasonably and it is for him to consider whether in a particular case he should entertain a revision beyond the period of sixty days stated in rule 31(5). In this case we cannot say that the Custodian General had acted perversely or unreasonably in entertaining the revision. The revision was filed in time. The Dhawan Group was made party at the subsequent stage as the Custodian General rightly thought that any order he would make in favour of the appellant might prejudice the Dhawan Group. After giving them a reasonable opportunity 303 of being heard within the meaning of the proviso to section 27(1) of the Act, he made the order. The CustodianGeneral, therefore, acted reasonably within his powers. This objection is overruled. The second contention of learned counsel for the appellant is that the Custodian General had no power to cancel an allotment made on or before July 22, 1952. Let us recapitulate the relevant facts. The original order of allotment was made in favour of the appellant 's group and of the first respondent on September 1, 1949. There *as re allotment on December 2,1949. There allotment was cancelled by the Deputy Custodian General by his order dated September 29, 1954. The question is whether the Deputy Custodian General can set aside the allotment made on December 2, 1949. The question raised falls to be decided on the relevant provisions of the Act and the rules made thereunder. Section 11 of the Act confers on the Custodian the power to cancel any allotment made by him, whether such allotment was made or entered into before or after the commencement of the Act. Rule 14 of the Rules narrates the grounds on which an allotment can be cancelled and also the procedure to be followed for cancelling such an allotment. If a custodian makes an order either cancelling or refusing to cancel an allotment, the Custodian General can, under section 27 of the Act, set aside that order, if he is satisfied that it is not legal or proper, and he may pass such order in relation thereto as he thinks fit. But it is said that rule 14(6) limits the power of the Custodian General in respect of allotments made under the Act. As the argument turns upon that rule, it would be convenient to read the material parts of it. Rule 14. (6) "Notwithstanding anything contained in this rule, the Custodian of Evacuee Property in the State of Punjab shall not exercise the power of cancelling any allotment of rural evacuee property on a quasi permanent basis, or varying the terms of any such allotment, except in the following circumstances:. . . . . . ). After narrating the circumstances, with which we are 304 not now concerned, the sub.rule contains a proviso which reads, "Provided further nothing in this sub rule shall apply to any application for revision, made under section 26 or section 27 of the Act, within the prescribed time, against an order passed by the lower authority on or before 22nd July, 1952. " Under this sub rule there is a ban on the exercise of the power of the Custodian to cancel an allotment of a rural evacuee property on a quasi permanent basis except under certain circumstances. his sub rule was substituted for the old sub rule by S.R.O. 1290 of July 22, 1952. A Custodian under the Act cannot set aside an allotment except under the.circumstances mentioned in the sub rule. But the second proviso to that sub rule lifts the ban in the case of an application made for revision under section 26 or section 27 of the Act. It may be mentioned that the words "or section 27" after the words "section 26" were added in the sub. rule on August 26, 1953 i.e., before the order of the Custodian General in the present case. Section 26 of the Act, as it then stood, conferred revisional jurisdiction on the Custodian, Additional Custodian or Authorized Deputy Custodian against the orders of subordinate officers. Section 27, as we have already noticed, confers a similar power of revision on the CustodianGeneral. By reason of the proviso, the CustodianGeneral can, in exercise of his powers under section 27 of the Act, cancel an allotment made by a lower authority on or before July 22, 1952. The only limitation on that power is that he must do so in a revision filed within the prescribed time. What is the prescribed time for a revision under section 27 of the Act? "Prescribed" has been defined in the Act to mean " prescribed by rules made under this Act". Rule 31(5) prescribes that a revision to the Custodian General shall ordinarily be made within sixty days of the order sought to be revised. In considering the first point, we have explained the scope of the rule and we have held that the said rule is only a rule of guidance and that in law a revision can be entertained at any time even after sixty days if the Custodian General in his discretion thinks fit to entertain it. The prescribed time in 305 the context of a revision to the Custodian General can only mean sixty days or such other time within which the Custodian General in his discretion thinks fit to entertain the revision. As the allotment in the present case was made before July 22, 1952, the Custodian General was within his rights in cancelling the same. Before we close, it is necessary to notice another contention raised by learned counsel for the respondents. The argument was that there was no allotment made in favour of the appellant and, therefore, there was no scope for invoking the provisions of rule 14 of the Rules. The basis of the argument is the following observations of the Deputy Custodian General in his order dated September 29, 1954: "The petitioner has rightly contended that the Dhawan Group had no verified claim for the allotment of this excess area and in spite of an opportunity afforded by me to them to produce the copies of their Parcha Claim, they have failed to do so. The reports of the Land Claims Officer dated 7th August 1952, and 11th August 1952, on pages 147 and 151 of the record, show that although the allotment had been made to Dhawan Group but a search had been made for their claims which were not traceable. On page 129 of the record, a report by the Department dated 21st August, 1952, shows that no order of allotment to Dhawan Group was forthcoming." These observation do not record a clear finding that there was no allotment in favour of the appellant. Indeed the factum of allotment to the appellant was never questioned throughout the proceedings. In the circumstances, we must dispose of this appeal on the basis that there was an allotment in favour of the appellant. This contention, is, therefore, rejected. No other point was raised before us. In the result, he appeal fails and is dismissed with costs. Appeal dismissed.

The appellant and the respondent, who were displaced persons from West Pakistan, were allotted lands in the same village. At the instance of certain persons, the first allotment was cancelled and there was a re allotment. The respondent was aggrieved by this order and on September 27, 195o, he filed a review application before the Deputy Commissioner for restoration of the original allotment but it Was dismissed on May 12 , 1951 Against this order the respondent preferred a revision application to the Additional Custodian. who dismissed the same on August 25, 1952. Thereupon, the respondent filed a revision application before the Custodian General on October 30, 1952. To this revision on the Custodian was made a party; but the appellant was made a party by order of the Custodian General on August 25, 1953. After bearing the parties the Custodian General on September 29, 1954, cancelled part of the re allotment made in favour of the appellant. appellant contended: (i) that the revision application to the Custodian General was barred by time, and (ii)that the ' Custodian General had no power to cancel the allotment. Hold, that the revision application was not barred by time. Rule 31(5) provides that :a revision petition to the Custodian General "shall ordinarly be made within sixty days of the 38 298 order sought to be revised". This rule is only a rule of guidance and not one of limitation and in law a revision can be entertained even after sixty days if the Custodian General in his discretion thinks fit to entertain it. In the present case the revision was filed within the time but the appellant was impleaded after the period of sixty days had expired. But it could not be said that the Custodian General acted perversely or unreasonably in entertaining the revision. Held, further, that the Custodian General had the power to cancel the allotment made on December 2, 1949. Under r. 14(6) the Custodian could not, after July 22, 1952, cancel an allotment except under certain specified circumstances; but the second proviso to r. 14(6) permitted the Custodian General, in exercise of his powers of revision under section 27 , to cancel an allotment made by a lower authority on or before July 22, 1952.

The first respondent B purchased a Touzi in 24 Parganas Collectorate at a revenue sale held on 9th January, 1942. As such purchaser he acquired under section 37 of the Bengal Revenue Sales Act, 1859, the right "to avoid and annul all under tenures and forthwith to eject all under tenants" with certain exceptions which are not material here. In exercise of that right he gave notices of ejectment and brought a suit in 1946 to evict certain under tenants including the second respondent herein and to recover possession of the lands. The suit was decreed against the second respondent who preferred an appeal to the District Judge, 24 Parganas, contending that his under tenure came within one of the exceptions referred to in section 37. When the appeal was pending, the Bill which was later passed as the West Bengal Revenue Sales (West Bengal Amendment) Act, 1950, was introduced in the West Bengal Legislative ASsembly on 23rd March, 1950. It would appear, according to the "statement of objects and reasons" annexed to the Bill, that great hardship was being caused to a large section of the people by the application of section 37 of the Bengal Land Revenue Sales Act, 1859, in the urban areas and particularly in Calcutta and its suburbs where "the present phenomenal increase in land values has supplied the necessary incentive to speculative purchasers in exploiting this provision (section. 37) o/the law for unwarranted large scale eviction" and it was, therefore, considered necessary to enlarge the scope of protection already given by the section to certain categories of ,tenants with due safeguards for the security of Government revenue. The Bill was eventually passed as the amending Act and it came into force on 15th March, 1950. It substituted by section '4 the new section 37in place of the original section 37 and it provided by section 7 that all pending suits, appeals and other proceedings which had not already resulted in delivery of possession, shall abate. Thereupon B contending that section 7 was void 588 as abridging his fundamental rights under article 19(1)(f) and article 31 . moved the High Court under article 228 to withdraw the pending appeal and to determine the constitutional issue raised by him. The appeal was accordingly withdrawn and the case was heard by Trevor Harries C.J and Banerjee J. who, by separate but concurring Judgments, declared section 7 unconstitutional and void. They held that B 's right to annul under tenures and evict undertenants being a vested right acquired by him under his purchase before section 37 was amended, the retrospective deprivation of that right by section 7 of the amending Act without any abatement of the price paid by him at the revenue sale was an infringement of his fundamental right under article 19 (1)(f) to hold property with all the rights acquired under his purchase, and as such deprivation was not a reasonable restriction on the exercise of his vested right, section 7 was not saved by cl. (5) of that article and was void. The State of West Bengal preferred the present appeal to the Supreme Court: Held, per PATANJALl SASTRI C.J. Article 19 (1) (f) has no application to this case. The word "hold" in the article means own. The said sub clause (f) gives the citizen of India the abstract right to acquire, own and dispose of property. This article does not deal with the concrete fights of the citizens of India in respect of the property so acquired and owned by him. These concrete rights are dealt with in article 31 of the Constitution. Under the scheme of the Constitution all those broad and basic freedoms inherent in the status of a citizen as a free man are embodied and protected from invasion by the State under cl. (1)of article 19, the powers of State regulation of those freedoms in public interest being defined in relation to each of those freedoms by cls. (2) to (6) of that article, while rights of private property are separately dealt with and their protection provided for in article 31, the cases where social control and regulation could extend to the deprivation of such rights being indicated in para. (ii) of sub clause (b) of cl. (5) of article 31 and exempted. from liability to pay compensation under cl. Held, per PATANJALI SASTRI C.J. (MEHR CHAND MAHAJAN ' and GHULAM HASAN JJ. concurring) (i) Article 31 protects the right to property by defining the limitations on the power of the State to take away private property without the consent of the owner. Clauses (1) and (2) of article 31 are not mutually exclusive in scope and content, but should be read together and understood as dealing with the same subject, namely the protection of the right to property by means of limitations on the State 's power referred to above, the deprivation contemplated in clause (1) being no other than the acquisition or taking possession of the property referred to in cl. The words "taking of . . possession or . . acquisition" in article 31(2) and ' the words "acquisition or requisitioning" in entry 589 No. 33 of List I and entry No. 36 of List II as also the words "acquired or requisitioned" in entry No. 42 of List III are different expressions connoting the same idea and instances of different kinds of deprivation of property within the meaning of article 31(1) of the Constitution. No cut and dried test can be formulated as to whether in a given case the owner is "deprived" of his property within the meaning of article 31; each case must be decided as it arises on its own facts. Broadly speaking it may be said that an abridgement would be so substantial as to amount to a deprivation with in the meaning of article 31, .if, in effect, it withheld the property from the possession and enjoyment of the owner, or seriously impaired its use and enjoyment by him or materially reduced its value . The expression "taking possession" in art 31(2) of the Constitution can only mean such possession as the property taken possession of is susceptible to and need not be actual physical possession. ' (ii) It is difficult to hold that the abridgement sought to be effected retrospectively of the rights of a purchaser at a revenue sale is so substantial as to amount to a deprivation of his property within the meaning of article 31(1) and (2). No question accordingly arises as to the applicability of el. 5(b)(ii) of article 31 to the Per DAs J. (1) The abridgement of the rights of the purchaser at a revenue sale brought about by the new section 37 amounts to nothing more than the imposition of a reasonable restriction on the exercise of the right conferred by article 19(1)(f)in the interests of the general public and is perfectly legitimate and permissible under cl. (5) of that article. It is well settled that the statement of objects and reasons is not admissible as an aid to the construction of a statute but it can be referred to only for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill .to introduce the same and the extent and urgency of the. evil which he. sought to remedy. Those are matters which must enter into the judicial verdict as to the reasonableness of the restrictions which article 19(5) permits to be imposed on the exercise of the right guaranteed by article 19(1)(f). (II) The correlation between article 19(1)(f) and article 31 is that if a person loses his property by reason of its having been compulsorily acquired under article 31 he loses his right to hold that property and Cannot complain that .his fundamental right under article 19(1)(f)has been infringed. The rights enumerated in article 19(1) subsist while the citizen has the legal capacity to exercise them. A.K. Gopalan 's case ; and Chiranjit Lal 's case ; referred to. 590 For the purpose of this appeal the. matter proceeds on the footing that article 19 relates to abstract right as well as to right to concrete property. (III) The true scope and effect of cls. (1) and (2) of article 31 is that cl. (1) deals with deprivation of property in exercise of police power and enunciates the restrictions which our Constitution makers thought necessary or sufficient tO be placed on the exercise of that power, namely, that such power can be exercised only by authority of law and not by a mere executive fiat and that cl. (2)deals with the exercise of the power of eminent domain and places limitations on the exercise of that power. These limitations constitute our fundamental rights ' against the State 's power of eminent domain. (IV) Both these clauses cannot be regarded as concerned only with the State 's power of eminent domain, because then (a) cl (1) would be wholly redundant, for the necessity of a law is quite clearly implicit in cl. (2) itself; (b) deprivation of property otherwise than by taking of possession ' or acquisition of it will be outside. the pale of constitutional protection: (c) there will beno protection against the exercise of police power in respectOf property either by the executive or by the legislature. Chiranjit Lals case ; and The Bihar Zamindari case referred to. (V) The State 's police power is not confined (a) within the ambit of article 19 forto say otherwise ,will mean: (i) that there is no protection for any person, citizen or non citizen, against exercise of police power by the executive over property; (ii) that although in cls. (2) to (6) there is protection against ' (iei) legislature in respect of "restriction" there is no protection against "deprivation"; or (h) within d. (5) (b) of article 31 because to say otherwise will mean :__ (i) that the police power which is inherent in sovereignty and does not require express reservation has been unnecessarily defined and reserved; (ii) that the Constitution does not prescribe any test for the 'validity of the laws which fail within the clause and, therefore, the law failing within the clause may be as archaic, offensive and . unreasonable as the legislature may choose to make it; (iii) that the clause gives no protection against the executive; (iv) that the exercise of the police power by the legislature is confined within ' the very narrow and inelastic limits of the clause and that no beneficial or social legislation involving taking 591 of property can be undertaken by the State if the law falls outside the clause except on terms of payment of compensation; (v) that acqUiSition Of property for which compensation is Usually provided, e.g.; acquisition of land for a public park, hospital Or z 'dearing a slum area will henceforth be permissible without the law providing any compensation; (VI) The argument that if article 31(1) is read as a fundamental right against deprivation of property by the executive and article, 31(2) as laying down the Iimits of State 's power of eminent domain then there will be no real protection. whatever, for the State will deprive a person of his property without compensation by simply making a law is not tenable because (i) there will certainly be protection against the execute just as the 29th clause of the Magna Charts was a protection against the British Crown; (ii)" 'there is protection under article 31(2) against the legislature in the matter of taking of possession Or. acquisition for compensations to be given and under cl. (5) of art, 19 against unreasonable ' restraint: (iii) the absence of protection against the legislature in other cases is not greater than the absence of protection against the legislature in respect of taxation and if the legislature can be trusted in the latter case it may equally he ' trusted in the former case. (VII) Every taking of a thing into the custody of the State or its nominee does not necessarily mean the taking of possession Of that thing within the meaning of art 31(2) so as to call for compensation. The police power is exercised in the interest of the community and the power of eminent domain is exercised to . implement a public purpose and in both cases there is a taking of possession of private, property There is however a marked difference between the exercise of these two sovereign powers. It is easy to perceive, though somewhat difficult to express, the .distinction between the two kinds of taking of possession which undoubtedly exists. In view of the wide sweep of the State 's police power it is neither desirable nor possible to lay down a fixed general test for determining whether the taking of possession authorised by any particular. law falls within one category or the other. Without, therefore, attempting any such 'general enunciation of any inflexible rule it is possible to say broadly that the aim, purpose and the effect of the two kinds of taking of possession are different and that . in each "case the provisions of. the particular law in question" will have to 'be carefully scrutinised in order to determine in which category ' falls the taking of possession authorised by such law. = A consideration of the ultimate aim, the immediate purpose ::and the mode and manner of the taking 'of possession and, the duration". 'for which such possession . is taken, the effect of ' it ' on the rights of 'the person dispossessed and other such like elements must all determine the judicial verdict. 592 (VIII) Treating the right to annul under tenures and to eject under tenants .and decree for ejectment as "property" as used in article 31(2) the State has not acquired those rights for there has been no transfer by agreement or by operation of law of those rights from the respondent B to the State or anybody else. The purchase being at a Revenue sale to. which West Bengal Act VII of 1950 applies, the purchaser of the property has been deprived of this right by authority of law and the case falls within cl. (1) of article 31 and no Within cl. (2) of article 31. If the impugned section is regarded as imposing restrictions on the purchaser, such restrictions in the circumstances of the case are quite reasonable and permissible under article 19(5) and, in the premises, the _plea of unconstitutionality cannot prevail and must be rejected. Pet ' JAGANNADHADAS J. (i) On the assumption that the question raised in this case is one that arisesunder article 19(1)(f)and (5) of the Constitution, the impugned section of the West Bengal Act VII of 1950 is intra vires because the restrictions are reasonable within the meaning of article 19(5) of the Constitution; (ii) that article 19(1)(f) while probably meant to relate tot he natural rights of the citizens comprehends within the scope also concrete property rights. The restrictions on the exercise of rights envisaged in article 19(5) appear to relate normally, if not invariably to concrete property rights; (iii) that cl. (1).of article 31 cannot be construed as being either a declaration or implied recognition of the American doctrine of "police power". It comprehends within its scope the requirement of the authority of law, as distinguished from executive fiat for the exercise of the power of eminent domain, but its scope may well be wider. "Acquisition" and "taking possession" in article 31(2) cannot be taken as necessarily involving transfer of tide or possession. The words or phrases comprehend all cases where the title or possession is taken out of the owner and appropriated without his consent by transfer or extinction or by some other process, which in substance amounts to it, the possession in this context meaning such possession as the nature of the property admits and which the law recognizes as possession. (iv) In the context of article 31(2) as in the cognate context article 19(1)(f) the connotation of the word "property"is limited by the accompanying words "acquisition" and "taking possession". In the present. case the right to annul under tenures cannot in itself be treated as property for it is not capable of independent acquisition or possession. The deprivation of it can only amount to a restriction on the exercise of the fights as regards the main property itself and hence must fall under article 19(1)(f) taken with 19(5). Butchers Union etc. Co. vs Crescent City etc. Co.; , , Punjab Province vs Daulat Singh and Others ([1946] F.C.R. 1), Chiranjit Lal Chauduri vs The Union of India and Others ([1950] S.C.R. 869), A.K. Gopalan vs The State of Madras ([1950] S.C.R. 88), P.D. Shamdasani vs Central Bank of India ([1952] S.C.R. 391), Ministry of State. for the Army vs Dalziel ; , Pennsylvania Coal Co. vs Mahou , Dwarkadas Shrinivas vs Sholapur Spinning and Weaving Mills Ltd. ([1954] S.C.R. 674), ' State of Madras vs V.G. Row ([1952] S.C.R. 597), Ram Singh vs The State of Madras ([1951] S.C.R. 451), State of Bihar vs Maharajadhiraja Kameshwar Singh of Darbhanga ([1952] S.C.R. 889), Noble State Bank vs Haskeli ; , Eubank vs Richmond (226 U.S. 137), Ioseph Hurtado V. People of California (1883) (10 U.S. 516), referred to.

The appellant instituted two suits in the Court of Assistant Collector (a Revenue, Court) against the respondent under sections 60, 61 and 180 of the U.P. Tenancy Act, 1939. The suits were decreed, and the appellant took symbolical possession of the lands. The Assistant Commissioner. affirmed the decrees, and during the pendency of the respondent 's second appeals in the High Court, the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952 came into force. The Board of Revenue held that in view of the Rules. the pending appeals as also the suits had a ate. The respondent filed applications for 'restitution of the lands under section 114 C.P.C. in the Court of Assistant Collector. The Assistant Collector referred the issue whether the appellant had acquired Bhumidari rights to the civil court. He refused to recall the 'reference in spite of the respondent 's Plea that he had no power to pass the order as no question of pro prietary title bad arisen. The civil court answered the issue in the negative, and the Asstt. Collector allowed the applications for restitution. As the appellant was not certain about the proper forum of appeals against these orders of the Assistant Collector, he filed anneals in the revenue court as also in the civil court. The Assistant Commissioner held that the revenue court had no Jurisdiction to entertain appeals and the appeals lay to the civil court under sections 286(4) and 265(3) off the U.P. Tenancy Act. The appellant filed revision petitions against the orders before the Board of Revenue. In the meantime the appeals filed before the civil court came up for hearing:. The respondent submitted to the jurisdiction of the civil court, and did not contend that the civil court had no Jurisdiction to entertain the appeals. The Civil Judge allowed the anneals and dismissed the application for restitution. Because of this decision. the appellant did not proceed with the pending revision petitions 'before the Board of Revenue and there the petitions were dismissed. The respondent filed second appeals in the High Court against the appellate orders of the civil court, without taking the plea that the civil court 'had no Jurisdiction to entertain the anneals. but later on he took the plea by adding a new ground. The High Court held that the appeals lay to the revenue court and the respondent was not estopped from raising the contention. In appeals to this Court the appellant contended that the anneals lay to the civil court and not for the revenue court and in the circumstances of this case, and in view of section 289(2) of the U.P. Tenancy Act. the respondent was precluded from raising the objection that the appeals did not lie to the civil court. Allowing the appeals this Court. HELD : In this case the doctrine of approbate and reprobate could not be pressed into service to preclude the respondent from raising the objection that the appeals did not lie to the civil court as the court in which the proceeding were originally filed suo motu raised the objection. 232 But the effect of upholding his objection would be that the, appellant would be deprived of his right of appeal altogether, and section 289(2) of the U.P, Tenancy Act is intended to prevent such grave miscarriage of justice. [237 F] Section 289(2) applies whenever any suit, application or appeal having been rejected either by the civil court or revenue court on account of want of jurisdiction is subsequently filed in the court of the other description and the latter court disagrees with the finding of the former. In such a case,, a reference to the High Court is compulsory and the conflict of opinion is resolved by a decision of the High Court which is binding on all courts. A court subordinate to the Collector cannot make the reference without the previous sanction of the Collector under section 289(3). It is implicit in section 289(3) that if the Collector refuses to give the sanction, the case will proceed as if there is no disagreement with the finding of the former court. [237 H] In a case falling within section 289(2), only the court in which the proceeding is subsequently instituted can disagree with the finding of the former court on the question of jurisdiction. If it so disagrees, it must refer the matter to the High Court; and only the High Court on such a reference can override the finding. No other court can disagree with the finding and make the reference. If no such reference is made, the finding of the former court on the question of jurisdiction becomes final and conclusive; and the objection that it is erroneous cannot be entertained by the appellate or revisional court or any other court. [238 D] Having regard to the circumstances of this case, it was not open to the respondent to raise the objection in the High Court that the civil court was not competent to hear the appeals. In view of the fact that no reference under section 289(2) was made, the finding of the revenue court that the civil court was competent to entertain the appeals could not be challenged in the High Court. The case must be decided on the footing that the Civil Judge was competent to entertain the appeals. [238 F] On the merits the respondent had no case. The Civil Judge found that the appellant was in possession of the lands on the dates of the institution of the suits. The High Court agreed with this finding. No ground has been made for setting aside this concurrent finding of fact. The appel lant did not obtain possession of the lands by executing the decrees passed in the two suits. Even assuming that the suits had abated and the decrees passed therein had been set aside or reversed, no case for restitution of the lands under section 144 of the Code of Civil Procedure was made out. The applications under section 144 C.P.C., were rightly rejected. Nathan vs Harbans Singh, A.I.R. 1930 All. 264, Mohammad Mehdi Khan vs Mussammat Sharatunnissa, 3 Oudh Cases 32, 35 37, Mahadeo Singh vs Pudal Singh, A.I.R. 1931 Oudh 123 and Saira Bibi vs Chandrapal Singh, I.L.R. 4 Luck. 150, 166, referred to.

The appellant, a Pakistani National originally came over to India on a Pakistani Passport and on the strength of visa. He was found to be overstaying in India and he was deported on April 21, 1957. Subsequently on finding him again in India he was charged with an offence of having entered India without a passport in contravention of section (2)(a) of the . His defence was that he had been in India from his birth and that the person who was said to have been deported in 1957 was some other and riot himself. The trial court accepted this defence and acquitted him. The State appealed to the High Court and the High Court reversed the finding of the lower court and held him guilty of the offence charged. The present appeal was filed on a special leave granted by this Court. The first contention of the appellant was that the High Court was wrong in reversing the finding of the trial court on the issue of the identity of the appellant. Secondly it was submitted that under section 2(2) of the as it stood before the Amendment which came into force on January 19, 1957 the appellant though a Pakistani citizen was not a "foreigner" and hence his entry into India before that date would not constitute an offence. It was contended further that the courts had no jurisdiction to determine whether the appellant was or was not a foreigner by reason of the provision of section 9(2) of the Indian Citizen ship act 1955. Held: The appellant was the person who was deported on April 21, 1957 and the finding of the High Court on the question of his identity was correct. (ii) If on the date when the offence is committed a person is "a foreigner" as defined by the Act, it would be no excuse for him to say that on an earlier date he was not foreigner. Since the appellant was deported in April 1957 and he came back to India subsequently without a passport he was a foreigner under the amendment provision which came into force on January 19, 1957 had committed an offence under s, 3 of the . (iii) Under section 9 of the the onus is upon the person who is accused under the Act to prove that he is not a foreigner. It is only where there is proof that a person is, to start with a citizen of India and it is alleged that he has lost his Indian Citizenship by reason of acquiring the nationality of the foreign State that any question of invoking the provisions of section 9(2) of the Citizenship Act arises. In the present case the appellant a Pakistani national came to India originally with a Pakistani Passport and after his deportation in April 1957 came back to India without a passport and hence he cannot invoke section 9(2) of the Citizenship Act and lie had committed an offence under section 3(2)(a) of the . 442

The respondents in Civil Appeal No. 708/78 Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed a civil suit No. 17,0 of 1964 against the Appellant tenant for recovery of possession and arrears of rent under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The suit was decreed. There was an appeal by the tenant. It resulted in a com promise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises. On April 29, 1969, in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr. ; , this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in regard to the "regulation of house accommodation in Cantonment Areas. " The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc. To get over the situation created by the said decision, on December 29, 1969, the Central Government issued a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957 extending the pro visions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other cantonment areas. In June 2, 1972, the Parliament also enacted Act 22 of 1972 amending the Cantonment (Extension of Rent Control laws) Act 1957, purporting to enable the Central Government to make the Rent Control Laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees. In the meanwhile, taking advantage of the decision in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr., the appellant tenant filed Miscellaneous Application No. 597/70 for a declaration that the decree obtained against him was a nullity and incapable of being executed. This application was allowed by the Court on November, 19, 1971. But, after the enactment of Act 22 of 1972, on January 11, 1973 the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour. The appellant tenant raised three objections, namely, (i) subsequent to the compromise decree there was a 225 fresh agreement of lease between the landlords and himself; (ii) the provisions of the amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967; ,(iii) in any case, the decision in Miscellaneous Application No. 597/70 holding the decree to be a nullity operated as res judicata between the parties. The first objection was left open by all the Courts for future adjudication, as the landlord denied the existence of any fresh agreement. The second and third objections alone were considered. In the judgment under appeal, the High Court overruled them and hence this appeal by special leave and two other similar appeals. Dismissing the appeals the Court, ^ HELD: 1. In Indu Bhushan Bose vs Rama Sundari and Anr., [1970 ] 1 S.C.R. 443, the Supreme Court agreed with the view of the Calcutta and Rajasthan High Courts and held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of the List II, but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. But even before this decision Parliament took the view of the Calcutta Rajasthan High, Courts as the correct view and proceeded to enact the Cantonment (Extension of Rent control Laws) Act, 1957, by section 3 of which the Central Government was enabled, by notification in the official Gazette to extend to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated. Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969. Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court regarding the applicability of the Bombay Act to such areas. In view of the Supreme Court decision in Indu Bhushan 's case, it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued. It was accordingly done on December 29, 1969. But it was realised that the entire problem was not thereby solved since all such notifications as the one issued on December 29, 1969 could only be prospective and could not save decrees which had already been passed. Therefore, Amending Act 22 of 1972 was enacted for the express purpose of saving decree which had already been passed. By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950. Original Section 3 was renumbered as subsection 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted." [229 B G & 230 C D] 2. Under section 3 of the unamended Act, 1957, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of notification. As a result of the introduction of sub section 2 of section 3 the notification can be given effect from an anterior date or a future late but it cannot be made effective from a date earlier than the commencement 226 of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957. Sub section 3 is merely consequential to sub section 2, in that it provides that a State Legislation when extended to a Cantonment area with effect from the date of the notification from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force. Sub section 4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled. One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regulation of house accommodation for the time being in force in the State in which such Cantonment is situated. In other words the decree or order must have been made by the wrong application of the State Legislation to the Cantonment area. If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area it shall be deemed, with enact from the date of the notification to have been properly made under the relevant provisions of the State Legislation. 1231 A H, 232 A BI 3. The applicability of sub section 4 cannot be confined to cases where notifications are issued with retrospective effect under sub section 2. Sub section 4 is not so confined. It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not. The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although. strictly speaking, it was not so in force. Subsection 4 is wide enough to save all decrees and orders made by the wrong application of State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to cantonment areas at the time of the passing of the decrees or order. The decree obtained by the respondent is saved by the pro visions of section 3, sub section 4 of the Cantonment (Extension of Rent Control Laws) Act 22 of 1957, as amended by Act 22 of 1972. [232 E F] 4. If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature. [234 A] In the present case, the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas. That defect having been re moved and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata. [234 B D] Mathura Prasad Bajoo Jaiswal and ors. vs Dessibai N. B. Jeejeebhoy, (@) 836: followed.

The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947. The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree. On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court. The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable. Held, that the decree was not executable at Allahabad. Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure. On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code. None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court. which passed the decree within the meaning of section 39. Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code. The decree could not be executed under the provisions of section 43 of the Code at any time. After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State". There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State". Nor could the decree be executed under section 44 as that section was also inapplicable to this decree. Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective. Per Sarkar and Das Gupta, JJ. Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure. Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. The Allahabad Court was not the court which passed the decree. Section 39 empowers the court which passed the decree to transfer it for execution to another court. The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure. The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code. The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order. Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend. The decree of the Gwalior Court did not fall within this section as it stood before the Constitution. A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State". These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State". The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,. The section after adaptation in 1950 580 applied only to decrees of revenue courts. Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.

Respondent No. 1 in the appeals instituted a suit for partition against his younger brothers and sisters, and the heirs of his deceased brothers. The plaintiff was the eldest among the brothers and sisters. The 1st and 2nd Defendants were his brothers, the 3rd Defendant his sister, the 4th and 5th Defendants, the widow and son respectively of the third brother. Defendant 6 was the widow of the fourth brother, and Defendants 7 to 12 were his children, while Defendant No. 14 was the wife of Defendant No. 1, and Defendants 13, 15, 16 and 17 were their children. The subject matter of the appeals related only to one item of property known as "Naroda Chawl" measuring 7 acres and 2 gunthas of land, where 115 rooms and huts stood con structed, out of which 114 rooms had been let out to ten ants, and one room was retained for the caretaker. According to Defendants No. 6 to 12 this property exclu sively belonged to defendant No. 6 and was not liable to partition. The other defendants however supported the plain tiff 's case that it belonged to the 233 joint family and was liable to partition. Defendants 6 to 12 pleaded that the plaintiff 's father Bapalal orally gifted this property to his daughter in law Defendant No. 6 in March 1946 and made a statement before the Revenue authorities on . the basis of which her name was mutated and she was put in possession thereof, that although she came in peaceful possession, the management which in cluded realisation of rent was in the hands of Defendant No. 1, that as some dispute arose in 1952 she assumed direct charge of the chawl and had remained in possession thereaf ter, and that she had acquired good title therein by adverse possession before the suit was filed in 1960. The City Civil Judge who tried the suit, held that there was a joint Hindu family and a business was carried on for the benefit of the family and the income therefrom was thrown into the common pool and all the properties including the disputed chawl were treated as belonging to the family. As the case of Defendant No. 6 about the gift, the mutation of her name, and her exclusive possession from 1946 till the date of the suit was found correct, it was held that she had acquired title by adverse possession, and the suit was dismissed with respect to the disputed chawl. The plaintiff appealed to the High Court. Some of the defendants also filed appeals in respect of the other items of property. All these appeals were heard and disposed of by a common judgment. The High Court reversed the finding of adverse posses sion in regard to the disputed chawl and granted a decree for partition. It held that Defendant No. 6 remained in exclusive possession of the property only since 1952, the period was thus short of the time required for prescription of title. It further held that since the rents of the chawl from 1952 were collected by her husband and after his death by her son (Defendant No. 7), she was liable to render accounts till the death of her husband, and she along with Defendant No. 7 would be jointly liable for the period thereafter. Separate Appeals were preferred by Defendant Nos. 6 and 7 to this Court. Allowing the Appeals, setting aside the decision of the High Court and restoring that of the Trial Court. 234 HELD: 1. The principle that revenue entry furnishes presumptive evidence of title is inapplicable in the instant case. It cannot be denied that title to Naroda Chawl could not have passed to Defendant No. 6 by virtue of the entry Ext. The value of the chawl even in 1946 was large and no registered instrument of transfer was executed. Besides Ext. 247 describes the plaintiff 's father (Bapalal) and Defendant No. 6 (Chandrakanta) as Kabjedar, that is occu pant. In such circumstances, the presumption which can be raised in favour of Defendant No. 6 from this entry is with respect of her possession and possession only. [238F G] Gangabai and others vs Fakirgowda Somaypagowda Desai and others, AIR 1930 Privy Council 93; and Desai Navinkant Kesarlal vs Prabhat Kabhai, 9 Gujarat Law Reporter 694, referred to. The account books have to be rejected as not reli able. It is apparent from the evidence that nobody takes the responsibility of supporting the correctness of the entries therein. Many of the documents produced by Defendant No. 1 were accepted, but the account books which were section Nos. 123 75 to 123 97 of Ext. 123 were in express terms not admitted. The plaintiff filed his objection Ext. Defendant No. 6 also filed her objection Ext. The books were admitted in evidence and marked as exhibits on the statement of the plaintiff which he made in cross exami nation. The plaintiff by saying that he had written as per the instructions of Defendant No. 1 made it clear that he Could not vouchsafe for its reliability. Defendant No. 1 could not summon courage to support them either personally or through any witness. No reason has been suggested as to why he did not produce other important documents in his possession which could have supported the account books and the joint case of the parties resisting the appellant 's claim. [243B E] 3. Defendant No. 1 cannot be treated to be in joint possession as he was actually collecting the rents from the tenants. it is well settled that the possession of the agent is the possession of the principal and in view of the fidu ciary relationship, Defendant No. 1 cannot be permitted to claim his own possession. [247D E] David Lyeii vs John Lawson Kennedy, [1889] XIV H.L.(E) 437; Williams vs Pott, L.R. XII Equity Cases 149 and Secre tary of State for India vs Krishnamoni Gupta, 29 Indian Appeals 104, referred to. It is the intention to claim exclusive title which makes 235 possession adverse and this animus possidendi must be evi denced and effectuated by the manner of occupancy which again depends upon the nature of the property. The manner of possession depends upon the kind of possession which the particular property is susceptible. That possession to the extent to which it is capable of demonstration must be hostile and exclusive and will cover only to the extent of the owner 's possession. [246E F] (b). The title to the chawl as owner, subject to the tenancy was an interest in immovable property so as to be covered by Article 144 of the Indian Limitation Act, 1908, which specifically mentioned, ". or any interest therein". [246E] In the instant case, the parties have been fighting for the rent from the chawl so long as it continued in posses sion of the tenants. Before the gift of 1946 the Defendant No. 1 was collecting the rent and he continued to do so even thereafter till 1952. The appellant has, however, estab lished her case that the Defendant No. 1 acted as her agent after 1946 and when he repudiated this agency in 1952 he was effectively removed from the management of the chawl. Since 1946 the tenants attorned to the Defendant No. 6 and paid rent to her under printed receipts announcing her ownership, but of course through her agent the Defendant No. 1. The fact that the tenants have been in actual physical posses sion of the chawl is, in the circumstances, of no assistance to the respondents. What is material is that they paid the rent to the Defendant No. 6. Defendant No. 6 was in adverse possession from the period 1946 to 1952 through her agent Defendant No. 1 and thereafter through her husband and son Defendant No. 7 till 1960 when the suit was filed, the total period being more than 12 years. [246G H; 248G] Uppalapati Veera Venkata Satyanarayanaraju and another vs Josyula Hanumayamma and another, and Hari Prasad Agarwalla and another vs Abdul Haw and others, A.I.R. 1951 Patna 160, referred to.

The respondent Municipality issued a notice under sub section (1) Of section 153A of the Bombay District Municipal Act, 1901, as adapted and applied to the State of Saurashtra and as amended by Act XI Of 1955, calling upon the appellant to show cause why it should not be directed to discharge the effluent Of it 's chemical works in the manner specified in the notice. On the appellant objecting to the notice and the requisition contained therein, a Special Officer was appointed by the Government under sub section (3) of that section to hold an enquiry in the matter. The Special Officer treated some of the issues raised,, as preliminary issues of law and held that the question whether the discharge of the effluent polluted the water and adversely affected the fertility of the soil was a matter for the subjective satisfaction of the Municipality and binding on him and was as such beyond the scope of his enquiry. The question for determination in this appeal was whether the Special Officer was right in the view he took of section 153A(3) Of the Act and in restricting the scope of the enquiry in the way he did. 389 Held, that Special Officer took a wrong view of his jurisdiction under section 153A(3) Of the Act and was in error in restricting the scope of the enquiry. There could be no doubt on a proper appreciation of the scheme laid down by the provision of section 153A of the Act, correctly construed, that while the subjective satisfaction of the Municipality as to the existence of the nuisance could not be questioned at the initial stage when it sought to put the machinery provided by sub section (1) in motion or under sub section (2) where such existence was admitted, the situation contemplated by sub section (3) where the notice and the requisition were wholly disputed, and no mere modification of the requisition sought, was entirely different. The language of sub section (3) and particularly the words " to hold an enquiry into the matter " used by it clearly indicated that where there was such a contest, it was the duty of the Special Officer to enquire into the existence of the alleged nuisance and come to a finding of his own. The status of the Special Official and powers conferred on him by the relevant provisions of the Act, clearly indicated that sub section (3) was intended by the Legislature to be a protection against any arbitrary exercise of its power by the Municipality. It was of the utmost importance that such proceedings should in the interest of the community, be disposed of with all possible expedition. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 173 of 1959. Appeal by special leave from the judgment and order dated July 16, 1958, of the Special Officer appointed under section 153(3) of the Bombay District Municipal Act, 1901 (Bombay Act No. 1 1 1 of 1901), as applied to Saurashtra, Zalawad Division, Surendarnagar.

Appeal No. 119 of 1957. Appeal by special leave from the judgment and decree dated March 3, 1955, of the Orissa High Court in Appeal No. 593 of 1950. B. Patnaik, for the appellants. D. N. Mukherjee, for the respondents. March 14. The Judgment of the Court was delivered by SUBBA RAO, J. This is an appeal by special leave against the judgment of the High Court of Judicature for Orissa dated March 3, 1955, setting aside the judgment of the Court of the District Judge, Mayurbhanj, and restoring that of the Subordinate Judge, Baladore. The facts leading up to this appeal may be briefly stated. The land in dispute originally belonged to one Bhagaban Parida. On July 16, 1924, he executed a registered kabala 'for a ' consideration of Rs. 2,000 in favour of one Priyanath Sasmal. On June 2, 1928, Priyanath Sasmal executed a usufructuary mortgage bond (exhibit B) for Rs. 1,500 in favour of 292 Lakshminarayan Pani, the father of the appellants herein. Under the terms of the said usufructuary mortgage, the mortgaged property was put in possession of the mortgagee. One of the terms of the mortgage deed was that the initial responsibility for the payment of rent was that of the mortgagor and that, if for any reason he did not pay the arrears of rent, the mortgagee was under an obligation to pay off the arrears to the landlord and to obtain a receipt acknowledging the payment. The mortgagee did not pay the arrears of rent, with the result that for arrears of rent the said property was brought to sale and ultimately purchased by the mortgagee for a sum of Rs. 300 on September 22, 1936. The sale was confirmed on November 4, 1936, and the mortgagee took possession through Court on December 21, 1938. The mortgagor filed a suit against the mortgagee in the Court of the Subordinate Judge, Balasore, for redemption of the mortgage and for possession. As the mortgagor died after the filing of the suit, his widow and son were brought on record as his legal representatives. The defence of the appellants to that suit was that possession was not delivered to their father, the mortgagee, under the terms of the mortgage deed, that the debt was discharged, that their father had purchased the equity of redemption in execution of the rent decree, and that the mortgagor had no longer any right to sue him for redemption. The learned Subordinate Judge and, on appeal, the District Judge concurrently found that in fact possession was delivered to the mortgagee on the basis of the mortgage deed and that the plea of discharge was not true; but, while the trial court held that after the purchase of the property by the mortgagee in execution of the decree for rent he was holding the, property only on behalf of the mortgagor, the appellate court came to the conclusion that after the said purchase the relationship of mortgagor and mortgagee came to an end; with the result the trial court decreed the suit and the appellate court, setting aside that decree, dismissed the suit. The legal representatives of the mortgagor preferred a second appeal to the High Court against the judgment and 293 decree of the District Judge. A division bench of the High Court agreed with the conclusion of the trial court, set aside the decree of the District Court and restored that of the trial court. Hence the present appeal. Learned counsel for the appellants i.e., the legal representatives of the mortgagee, contended that in execution of the rent decree the mortgagee became the purchaser of the equity of redemption, with the result that the relationship of mortagor and mortgagee ceased to exist and, therefore, the respondents could not sue for redemption and their remedy, if any, was to sue for setting aside the sale on the ground of fraud or otherwise. On the other hand, learned counsel for the respondents contended that, as the sale was the result of manifest dereliction of duty imposed upon the mortgagee by the terms of the transaction, the purchase by the mortgagee would only be in trust for the mortgagor and, therefore, the suit for redemption was maintainable. To appreciate the rival contentions it is necessary to notice briefly the law on the subject. The relevant section governing the facts of the case is section 90 of the (2 of 1882). The material portion of the section reads, "Where a mortgagee by availing him,self of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to the repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage. " Illustration (c) to that section says, "A mortgages land to B, who enters into possession. B allows the Government revenue to fall into arrears with a View to the land being put up for sale and his becoming himself the purchaser of it. The land is accordingly sold to B. Subject to the 294 repayment of the amount due on the mortgage and of his expenses properly incurred as mortgagee, B holds the land for the benefit of A." The following three conditions shall be satisfied before section 90 of the can be applied to a case: (1) the mortgagee shall avail himself of his position as mortgagee; (2) he shall gain an advantage; and (3) the gaining should be in derogation of the right of the other persons interested in the property. The section, read with illustration (c), clearly lays down that where an obligation is cast on the mortgagee and in breach of the said obligation he purchases the property for himself, he stands in a fiduciary relations ship in respect of the property so purchased for the benefit of the owner of the property. This is only another illustration of the well settled principle that a trustee ought not to be permitted to make a profit out of the trust. The same principle is comprised in the latin maxim commodum ex injuria sua nemo habere debet, that is,,convenience cannot accrue to a party from his own wrong. To put it in other words, no one can be allowed to benefit from his own wrongful act. This Court had occasion to deal with a similar problem in Sidhakamal Nayan vs Bira Naik (1). There, as here, a mortgagee in possession of a tenant 's interest purchased the said interest in execution of a decree for arrears of rent obtained by the landlord. It was contended there, as it is contended here, that the defendant, being a mortgagee in possession, was bound to pay the rent and so cannot take advantage of his own default and deprive the mortgagors of their interest. Bose, J., speaking for the Court, observed at p. 337 thus: "The position, in our opinion, is very clear and in the absence of any special statutory provision to the contrary is governed by section 90, Trusts Act. The defendant is a mortgagee and, apart from special statutes, the only way in which a mortgage can be terminated as between the parties to it is by the act of the parties themselves, by merger or by an order of the Court. The maxim "once a mortgage always (1) A.I.R. 1954 S.C. 336. 295 a mortgage" applies. Therefore, when the defendant entered upon possession he was there as a mortgagee and being a mortgagee the plaintiffs have a right to redeem unless there is either a contract between the parties or a merger or a special statute to debar them." These observations must have been made on the assumption that it was the duty of the mortgagee to pay the rent and that he made a default in doing so and brought about the auction sale of the holding which ended in the purchase by him. The reference to section 90 of the supports this assumption. Learned counsel for the appellants relied upon the decision of the Judicial Committee in Malkarjun Bin Shidramappa Padare vs Narhari Bin Shivappa (1) in support of his contention that a mortgagor cannot seek the relief of redemption without first getting the sale set aside. There, a mortgaged property was sold in execution of a decree against the mortgagor and the plaintiff neglected or refused to pray that it might be set aside. The Judicial Committee held that an execution sale could not be treated as a nullity if the court which sold it had jurisdiction to do so; and it could not be set aside as irregular without an issue raised for that purpose and investigation made with the judgment creditor as a party thereto. That was not a case where the mortgagee who had an obligation to discharge under the mortgage deed made a default with the result the. property was sold and purchased by the mortgagee himself. The proposition enunciated by the Judicial Committee would apply to a case where the equity of redemption was extingui shed by the court sale. This may apply to a case, where the mortgagee, after obtaining leave to bid., purchases at a sale in execution of his decree or a decree obtained by a third party. In such a case there may be scope for the argument that the equity of redemption is extinguished and, therefore, the mortgagor cannot get relief till the sale is set aside in the manner known to law. But when the sale is (1) (1900) L.R. 27 I.A. 216. 296 brought about by the default of the mortgagee, the mortgage is not extinguished and the relationship of mortgagor and mortgagee continues to exist and, therefore, there will not be any necessity for setting aside the sale. The legal position may be stated thus: (1) The governing principle is "once a mortgage always a mortgage" till the mortgage is terminated by the act of the parties themselves, by merger or by order of the court. (2) Where a mortgagee purchases the equity of redemption in execution of his mortgage decree with the leave of court or in execution of a mortgage or money decree obtained by a third party, the equity of redemption may be extinguished; and, in that event, the mortgagor cannot sue for redemption without getting the sale set aside. (3) Where a mortgagee purchases the mortgaged property by reason of a default committed by him the mortgage is not extinguished and the relationship of mortgagor and mortgagee continues to subsist even thereafter, for his purchase of the equity of redemption is only in trust for the mortgagor. Let us now apply the aforesaid principles to the concurrent findings arrived at by the courts below. All the courts concurrently found that in fact possession was delivered to the mortgagee on the basis of the mortgage deed, exhibit B. They have also found that the plea of discharge taken by the appellants was not true. The High Court found that under the mortgage deed the mortgagee had a duty to pay the arrears of rent to the landlord, but he made a default in paying the said arrears. The High Court farther held that the sale was the result of manifest dereliction of the duty imposed upon the mortgagee by the very terms of the transaction. The said findings clearly attract the provisions of section 90 of the . In view of the aforesaid principles, the right to redeem the mortgage is not extinguished and in the eye of law the purchase in the rent sale must be deemed to have been made in trust for the mortgagor. In the promises, the High Court was right in holding that the suit for redemption was maintainable. 297 No other point was raised before us. The appeal fails and is dismissed with costs. Appeal dismissed.

Usufructuary mortgage bond was executed in favour of the father of the appellant who was put in possession of the mortgaged property. One of the terms of the usufructuary mortgage was that in case of failure of payment of rent by the mortgagor, the mortgagee was to pay off the arrears of rent to the landlord, which obligation the mortgagee did not honour as a result of which the property was brought to sale and ultimately purchased by the mortgagee. The mortgagor filed a suit against the mortgagee, the appel lant 's father, for redemption of the mortgage and !or possession. , The defence inter alia was that the mortgagee had purchased equity of redemption in execution of the rent decree and that the mortgagor had no longer any right to sue him for redemption and their remedy, if any, was to sue for setting aside the sale on the ground of fraud or otherwise. Held, that section go of the Trusts Act read with the illustration (c) lays down the principle that no one can be allowed to benefit for his own wrongful act. Held, further, that the legal position with regard to mort gagor and mortgagee was that: (1) the governing principle is that "once mortgagee 291 always a mortgagee" till the mortgage is terminated by the act of the parties themselves, by merger or by order of the Court; (2)where a mortgagee purchases the equity of redemption in execution of his mortgage decree with the leave of court or in execution of a mortgage or money decree obtained by a third party, the equity of redemption may be extinguished; and, in that event, the mortgagor cannot sue for redemption without getting the sale set aside; and (3)where a mortgagee purchases the mortgaged property by reason of a default committed by him the mortgage is not extinguished and the relationship of Mortgagor and mortgagee continues to subsist even thereafter, for his purchase of the equity of redemption is only in trust for the mortgagor. In the instant case the right to redeem the mortgage was not extinguished and in the eyes of law, the purchase in the rent sale was deemed to have been made in trust for the mortgagor and the suit for redemption was maintainable. Sidhakamal Nayan vs Bira Naik, A.I.R. 1954 S.C. 336, relied on. Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa, (1900) L.R. 27 I.A. 216, distinguished.

Assessment orders were passed by the Sales Tax Officer allowing the deductions of two amounts claimed by the respondent dealer under section 5(2)(a)(ii) of the Orissa Sales Tax Act in respect of goods sold to a registered dealer. The respondent dealer filed appeals to the Assistant Collector Sales Tax, challenging the assessment on grounds which were not relevant and against those decisions revisions were filed by the dealer. While the revisions were pending the Orissa Sales Tax Act was amended by Orissa Sales Tax (Amendment) Act (Orissa Act, 10 of 1957) with the result that revisions were treated as appeals to the Sales Tax Tribunal, and it enabled the Government to file cross objections. In pursuance, the State filed cross objections challenging the deductions on the ground that the dealer had not produced any declaration as required under r. 27(2) of the Orissa Sales Tax Rules, 1947. The Tribunal upheld this objection and directed that fresh assessments be made. On statement of the case, the High Court answered that the assessing officer was not wrong in allowing the deductions. On appeal by special leave). Held:(i) There is nothing in section 5 (2) (a) (ii) itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer. (ii)The production of a declaration under r. 7(2) is not always obligatory on the part of a selling dealer when claiming the exemption. It is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of section 5(2)(a)(ii). Rule 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory. But the rule must be substantially complied with in every case. It is for the Sales tax Officer to be satisfied that, in fact. the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts. But if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2). before being entitled to a deduction. Member Sales tax Tribunal, Orissa vs Mls. section Lai & Co. (1961) 12 S.T.C. 25, referred to.

The appellant, now represented by his legal representatives, had taken on rent certain premises and was in occupation thereof. On the basis of a usufructuary mortgage executed by the landlord in their favour, the respondents who are the partners, sought the eviction of the appellant under section 21(1)(h) of the Karnataka Rent Control Act, 1961 on the ground that they were bona fide in need of the premises to run their business. The appellant 's defence was that the usufructuary mortgage was a sham and nominal transaction created by the landlord with an oblique motive because he had refused to pay higher rent for the premises and secondly the mortgagees were not bona fide in need of the premises for their business. The Trial Court rejected both the defences and ordered eviction and the said order was affirmed by the appellate court and the High Court. Hence this appeal. Dismissing the appeal, this Court, HELD: The definition of landlord ' in Section 3(h),is an inclusive definition and would take within its fold any per. who for the time being is receiving or is entitled to receive the rent in respect of the leased premises. The person receiving or entitled to receive the rent may do so either on his own account or On account of or on behalf of or for the benefit of any other person or as a trustee, guardian or receiver for any other person. A mortgagee with possession undoubtedly falls under the first category as under Sec. 58(d) of the Transfer of property Act, he is PG NO 505 PG NO 506 entitled to receive the rent on his own account and this factor makes the usufructuary mortgagee stand on a higher and different footing than other persons accorded the status of a landlord under Scction 3(h) because their entitlement to receive rent is on behalf of or for the benefit of others and not on their own account. [5l0F H] V. Baluswamy Servai vs N. Raju Servai, ; T. Ezhumalai vs Padmavathi Ammal, [1971] J Aswatharamiah vs Special Deputy Commissioner, ; section Subramanayaswamy vs Deputy Commissioner, Bangalore, AIR 1981 Karnataka 190; R. Vijendra vs H.R. & A.C., ILR , referred to. If the legislature so wanted, it would have undoubtedly categorised a mortgagee with possession also as one of the excluded class of landlords for the purpose of sec. 21(1)(h) of the Act. Obviously the legislature has not done so as would appear from the explanation to clause 4 of sec. [511D E] A mortgagee with possession, steps into the shoes of the mortgagor and becomes entitled to all the rights of the mortgagor and the only right left with the mortgagor is the redemption. A mortgagee with possession is entitled to be in posession of the mortgage property as long as it is not redeemed. If the mortgagee with possession leases back the property to the mortgagor, he acquires the rights of a lessor and is entitled to enforce the terms of he lease against the mortgagor. [511F G] Mathur Lal vs Keshar Bai & Anr., ; , referred to. There can be no doubt that a mortgagee with possession stands very differently from other kinds of landlords euvisagad under section 3(b) of the Act. He is therefore entitled, as much as the owner himself, to seek recovery of posession of the leased premises from a tenant for him own bona fide requirement of use. [511g H] V.Baluswamy Servai vs N. Raju Servai ; R Vijendra vs H. R. & A . C., ILR , approved. The appellant 's argument that a scheming landlord can adopt the devious method of creating a sham deed of usufructuary mortgage in order to have u tenant evicted has no force because il fails to note that an order of eviction under sec. 21(1)(h) would not be Passed by the court for the PG NO 507 mere asking because, the mortgagee with possession has first get to prove that the premises are reasonably and bona fide required by him for occupation by himself. [512B C]

The appellant was a tenant of the respondents occupying one ,room of a building belonging to them. She was in arrears of rent,. The respondents served a notice on her claiming to recover arrears of rent for a period of two years and two months. A few days after the service of this notice the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which governs this case was amended. The respondents thereafter filed a suit for the eviction of the appellant on the ground that they required the premises for bona fide personal use and on the ground that the appellant was in arrears of rent for more than 6 months. The suit was resisted by the appellant on several grounds but pending the hearing of the suit and before the decree was passed she deposited the entire rent due from her. The trial Judge upheld both the contentions of the respondent and decreed the eviction of the appellant. On appeal the District Judge rejected the contention of bona fide personal use put forward by the respondent but found that the appellant was in arrears of rent and dismissed the appeal. The revision filed by the present 325 appellant failed; the present appeal is by way of special leave granted by this Court. It was contended on behalf of the appellant that the provisions of section 12(1) and (2) were mandatory and that in construing section 12(3) (a) it must be borne in mind that the object of the statute and particularly section 12 was to give protection to the tenant It was further contended that before section 12(3)(a) was amended it was open to the tenant to pay the arrears at any time during the pendency of the suit or even during the pendency of the appeal. In order to avoid hardship to the tenant section 12(3)(a) should be read as requiring the landlord to issue a fresh notice after the amended section came into force. It was also urged that section 12(3)(a) suggests that the neglect or failure of the tenant to make the payment of arrears must be subsequent to the date on which the amendment came into force. Lastly it was argued that the right given to the tenant to deposit arrears was a vested right and therefore section 12(3)(a) should not be construed in such a way as to take away this vested right. Held : (i) section 12(3)(a) refers to a notice served by the landlord as required by section 12(2) and in section 12(2) the legislature has made no amendment when it amended sub section The notice served by the appellant in the present case satisfies the requirements of section 12(2). If the notice has been served as required by section 12(2) and the tenant is shown to have neglected to comply with the notice until the expiry of one month thereafter section 12(2) is satisfied and section 12(3)(a) comes into operation. (ii)S. 12(3)(a) does not confer any right or vested right on tenant and even if such a right is conferred it would not alter the plain effect of the words of section 12(3)(a). The plain meaning of section 12( 3)(a) is that if a notice is served on the tenant and he hap, not made the payment as required within the time specified in section 12(3)(a) the court is bound to pass a decree of eviction against the tenant. The appeal is dismissed. Dayaram Kashiram Shimpi vs Bansilal Ragkunath Marwari, , Laxminarayan Nandkishore Shravagi vs Keshardev Baijnath Narsaria, and Kurban Hussen Sajauddin vs Ratikant Nilkant, A.I.R. 1959 Bom.

The respondent Bank gave a loan to Godavari Sugars Refiners Ltd., of which defendants 1 to 3, as partners, were managing agents. Subsequently the bank filed a suit for the recovery of the loan. The appellant, a brother of defendant No. 1, was impleaded as defendant No. 4 and Godavari Sugars as defendant No. 5. The suit was decreed and the decree was upheld by the High Court. Only Defendant No.4 appealed tothis Court. The decree against the appellant was passed on the basis of Exh. 1 6, a document which was signed by Defendants 1 & 4 and in which it was recorded that the title deeds Exhs. A 7 and Exh. A 8 had been deposited with the respondent bank as security for money due. According to the appellant the said title deeds had been deposited by him as security for a loan given to him by the bank in his individual capacity, and that the signature of defendant No. I had been appended to Exh. A 6 only because he bad an interest in one of the properties covered by Exhs. A 7 and A 8. HELD. If the parties intend to reduce their bargain: regarding the deposit of title deeds to the form of a document the document requires registration. If on the other hand its proper construction and the surrounding circumstances lead to the. conclusion that the parties did not intend to do so, then, there being no express. bargain the contract to create a mortgage arises by implication of the law from the deposit itself with the requisite intention, and the document being merely evidential does not require registration. [220 H 221A] Rachpal Maharaj vs Bhagwandas Daruka & Ors., ; Pranjivandas Mehta vs Chan Ma Phee, L.R. 43 I.A. 123, Shaw vs Foster: ,341 and Subramonian The language of exhibit A 6 was undoubtedly wide and if it governed the agreement between the parties then there could be no doubt that the suit debts were also secured by the deposit of title deeds A 7 and A 8. But exhibit A 6 could not be considered a contract governing the rights of the parties because: (a) it was incomplete inasmuch as certain unnecessary words which were meant to be struck out were not actually struck out; (b) while according to the plaintiff the appellant agreed to secure the debt due from the first defendant to the Bank in consideration of the Bank not pro ceeding against defendants 1 to 3, no such term was found in exhibit A 6; (c) from the recitals of Ex A 6 it was seen that the memorandum in question was intended to 'Put on record ' the terms already agreed upon. If the parties intended that the document should embody the contract between them it would have been necessary to register the same under section 17 of the . [22OA D] 14 1 section C. India/71 210 Exhibit A 6 was not registered. If that document was considered as a contract of mortgage between the Bank and the depositors, the same not having been registered it was inadmissible in evidence. If on the other hand that document was considered as a ' mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract then the correctness of the recitals therein could be gone into without being inhibited by sections 91 and 92 of the Evidence Act. Whichever view was taken the plaintiff 's case must fail. On an overall consideration of the evidence and probabilities of the case it was established that Exbs. A 7 and A 8 were not deposited with the Bank to secure the debts due from defendant No. 1 to the Bank. [222C E] The appeal must accordingly be allowed.

In 1945 one R who was the thekadar of the proprietary rights of a village, sued the appellants and the respondents, other than the first respondent Board of Revenue, for their ejectment under section 171 of the U.P. Tenancy Act. alleging that the appellants had illegally sub let the lands to the respondents. The appellants and the respondents made a on cm denying the alleged 'sub letting and stating that the entries in the village records about the respondents being sub tenants were erroneous. The suit was dismissed in March, 1946, I.e., towards the end of 1353 F on the ground that there was no sub letting and the entries were not correct No attempt was made by anyone to bring the village records in harmony with this decision and the respondents continued to figure as sub tenants in these records. On his attention being drawn to this, the Lekhpal, on his own authority, removed the entries in favour of the respondents from the records for the year ending 1358 F but the entries for the year 1356 F were left undisturbed as it was not within the Lekhpal 's jurisdiction to alter these. After the U.P. Zamindari Abolition and Land Reforms Act came into force in 1952 i.e., at the beginning of 1360 F, on the strength of the Khasra and Khatauni of 1356F, the respondents claimed Adhivasi rights under section 20(b)(i) of the Act and. file six suits praying for the recovery of possession of the lands under 'section 232 of the Act. They lost the suits before the sub Divisional Officer and Additional Commissioner of Varanasi but succeeded in appeals to the Board of Revenue. The appellants thereafter filed writ petitions for quashing the orders of the Board; and the High Court although of the view that the impugmed orders of the Board of Revenue were wrong, held that the Board had jurisdiction to interpret section 20(b) as it thought proper; and as the orders passed by it were final without being subject to any appeal. they could not be quashed by certiorari as being mere errors of law. In appeal to this Court, it was contended, inter alia, on behalf of the appellants that (i) the correctness of the entry in the record of rights of 1356 F could be gone into and was capable of challenge in a court of law exercising jurisdiction under article 226; (ii) in the present case there was an adjudication in March 1946 that the 'respondents were not subtenants; consequently, unless they showed that they had thereafter become sub tenants, the benefit of the entry in their favor in 1356 F could not be availed of by them; (iii) in the Khasra of 1356 F the respondents were only recorded as sub tenants but not as occupants and could not therefore get the benefit of section 20 (b) (i) of the Act. HELD: Dismissing the appeals. The record of rights for the year 1356F had not been corrected afterwards. The court had to go by the entry in the record of rights and 499 no enquiry need be made as to when the respondents became sub tenants after the decision in the suit filed by R. As between the tenant and the sub tenant, the entry in the record of rights in favour of the sub tenant made him the occupant entitled to the adhivasi rights under section 20 of the Act. [5O4 G H] The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rahman and others; , ; Amba Prasad vs Abdul Noor Khan Sukh Ram & Ors. , ; and Nanakchand vs Board of Revenue U.P. ; applied.

% Appellant took the tenancy of the premises in question on an agreed monthly rent of Rs.22 + Rs.2.20 per month on account of Education Cess. Respondent purchased the house on December 3, 1976. Appellant was in arrears of rent from 1.6.1976 to 30.11.76. In response to the notice issued by the Respondent, appellant sent a money order to Respondent treating him as the Muktyar or agent of the previous landlord. The respondent refused the money order. Thereafter the appellant filed an application in the trial court for fixing the standard rent of the premises under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The Respondent filed a suit claiming arrears of rent and possession of the suit premises on the ground of non payment of arrears of rent and bona fide requirement under section 12(3) and section 13(1) of the Act. Trial Court passed an order fixing the interim rent of Rs.20 and directed the appellant to pay all arrears of rent and future rent accordingly. Appellant deposited the arrears and thereafter made payment not monthly but at some irregular intervals. The Trial Court held that the respondent had failed to prove that he was in bona fide need of the suit premises, but passed a decree for eviction on the ground that the Appellant had committed default in payment of rent as contemplated under section 12(3)(b) of the Act. On appeal these findings were confirmed by the Additional District Judge. The Appellant filed a Writ Petition in the High Court, which was dismissed. In the appeal by special leave, it was contended on behalf of the appellant that payments of rents were made with substantial regularity and that no decree for eviction could be passed against the Appellant. The contention of the Respondent was that there was irregularity in the deposit of the rent and that the appellant was liable to be evicted on the ground of default in payment of rent. 462 Disposing of the appeal this Court, ^ HELD: 1. Section 12(3)(a) of the Act will not be applicable since there was dispute regarding the amount of standard rent. Section 12(3)(b) is applicable, which makes it clear that no decree for eviction can be passed in a suit for recovery of possession on the ground of non payment of standard rent or permitted increases instituted by the landlord against the tenant, if on the first day of the hearing of the suit or on or before such a date, as the court may fix, the tenant pays or deposits in court the standard rent and permitted increases then due and thereafter continues to pay or deposits in court regularly such rent and permitted increases till the suit is finally decided and also pays the costs of the suit as directed by the court. [466E F] 2. As ordered by the Trial Court, the monthly rent should have been deposited on the fifth day of each succeeding month. There were a few defaults committed by the Appellant varying from 2 to 3 days into a maximum of 23 days. On the other hand, rent for most of the months had been deposited in advance. In the circumstances of the case the Appellant had been depositing the rent with reasonable punctuality and can be regarded as having deposited the rent 'regularly ' as contemplated in Section 12(3)(b) and it is incorrect to say that exact or mathematical punctuality was required in the deposit of rent by a tenant to take advantage of the provisions of Section 12(3)(b). [467G H; 468A C] (Mranalini B Shah and another vs Bapalal Mohanlal Shah, , followed. [The decree for eviction was set aside and the court directed that the suit filed by the Respondent shall stand dismissed.]

'B ', who received some agricultural lands and a house in the partition of his ancestral properties, and his minor sons 'H ' and 'R ' (Respondent) mortgaged their properties for a sum of Rs.5,500 by executing a conditional sale deed on 22nd April, 1948 in favour of 'N '. But by a reconveyance deed dated 11th February, 1953 they got their properties reconveyed in their favour by 'N '. On the same"day i.e. 11 th February, 1953 they sold some agricultural lands and the house for Rs.5,500 to 'M ', (Appellant) who was brother of 'N '. Subsequently 'M ' sold the house to 'W ' and others. The remaining land was sold by them on the same date to 'V ' and his brother. 'B 's sons and wife (Plaintiffs) filed a suit against 'M ' (Defendant No. 1), 'V ' and his brother (Defendant No. 2 and 3), 'W ' and others (Defendant No. 4 to 8) and 'B ' (Defendant No. 9) for a decree of possession of the agricultural lands and house which came in their share as members of the Joint Hindu Family contending that alienation made by 'B ' was not binding on them because it was neither for any legal neces sity nor for the benefit of the minors or their Estate, but was for satisfying the personal needs of 'B ' who had the vices of drinking and gambling and was spending everything he used to earn in his business of grain delali. 41 The Trial Court dismissed the suit by holding that (i) 'B ' was not indulging in any vices, (ii) the alienation made by 'B ' was for the satisfaction of ' the antecedent debt due on mortgage '; and (iii) 'B ' was a broker who needed cash capital for his business and (iv) the plaintiffs and 'B ' were estopped from challenging the title of 'W ' and others, since 'W ' and others (Defendant No. 4 to 8) had spent Rs.25,000 on the reconstruction of the house purchased from 'M ' within the knowledge of plaintiffs and without their objection. Plaintiffs preferred an appeal before the High COurt contending that 'M ' and 'N ' ran a family firm of which they were owners and the execution of the conditional sale deed, reconveyance deed and the subsequent sale deed of the same day were nothing but a device and were really a part of one and the same transaction and that if the original transac tion of 22nd April, 1948 of the conditional sale with 'N ' was not valid and binding on the minor sons of 'B ' then the subsequent transaction of 11th February, 1953, for payment of debt or liability due under that alienation cannot be supported. Allowing the appeal, the High Court reversed the judg ment of the Trial Court, had passed a decree for possession of the suit properties in favour of the plaintiffs by hold ing (i) that the transactions dated 22nd April, 1948 as well as all other transactions of 11th February, 1953 were part of the same transaction; (ii) that since transaction dated 22nd April, 1948 was invalid because it was not supported by any legal necessity, then the subsequent transactions of sale and reconveyance of 11th February, 1953 were also invalid. Hence this appeal by special leave by the defend ants. Allowing the appeal in part, this Court, HELD: 1. The doctrine of pious obligation under which sons are held liable to discharge their father 's debts is based only on religious considerations. This doctrine inevi tably postulates that the father 's debts must be vyavaharik. If the debts are not vyavaharik or are vyavaharik the doc trine of pious obligation cannot be invoked. [59E] Luhar Amrit Lal Nagji vs Doshi Jayantilal Jethalal & Ors., ; , relied on. Where the sons are joint with their father, and debts have been contracted by the father even for his own personal benefit, the sons are liable to pay the debts provided they were not incurred for an immoral 42 or illegal purpose and such debts were antecedent to the alienations impugned. [61B] 2.1 Even if any loan is taken by the father for his personal benefit which is found as vyavaharik debt and not avyavaharik, the sons are liable to discharge their father 's debts under the doctrine of pious obligation and if any alienation of the joint family property is subsequently made to discharge such antecedent debt or loan of the father, such alienation would be binding on the sons. [6 ID] Mulla, "Principles of Hindu Law", 15th Edn. Paragraph 295; lrukulapati Venkateshwara Rao vs Vemuri Amayya & Ors. , A.I.R. 1939 Mad. 561, referred to. Vyankates Dhonddeo Deshpande vs Sou. Kusum Dattatraya Kulkarni & Ors., [1979] 1 955, relied on. Atchutaramayya vs Ratanjee Bhootaji, [1926] A.I.R. Mad. 211; Suraj Bansi Koer vs Sheo Prasad Singh, 6 I.A. 88 (PC) cited. Benares Bank Ltd. vs Hari Narain & Ors., LIX I.A. 300, distinguished. "Antecedent debt" means antecedent in fact as well as in time i.e. to say, that the debt must be truly independent and not part of the transaction impeached. To constitute a debt an "antecedent" debt it is not necessary that the prior and subsequent creditors should be different persons. All that is necessary is that the two transactions must be disassociated in time as well as in fact. [53E F] Mulla, "Principles of Hindu Law", 15th Edn. paragraph 295; Brij Narain vs Mangala Prasad, A.I.R. 1924 P.C. 50, referred to. 4. It is necessary to examine each transaction independ ently and then to arrive at a conclusion whether such a transaction or alienation can be held to be valid or not. [52G H] 4.1 The approach of the High Court in considering trans action dated 22nd April, 1948 as well as all the other transactions of 11th February, 1953 being part of the same transaction, is not correct. [57B] 5. The conditional sale deed dated 22nd April, 1948 was not void even if the amount was taken by 'B ' for his person al benefit of starting a 43 new business of grain. It was an independent transaction both in fact as well as in time to the subsequent transac tions of 11th February, 1953. The transaction of reconvey ance deed dated 11th February, 1953 was for the benefit of not only 'B ' but for the entire family including the plain tiffs. There was no consideration for this reconveyance of the property except the transaction of sale made in favour of 'M ' on 11th February, 1953. This sale deed was perfectly valid and was made in order to pay the antecedent debt. [57F G] 6. So far as the house property is concerned, the Trial Court 's finding that defendants Nos. 4 to 8 had spent Rs.25,000 on the reconstruction of the house within the knowledge and without the objection of the plaintiffs Nos. 1 and 2 and as such plaintiffs No. 1 and 2 and defendant No. 9 were estopped from challenging the title of those defendants had not been set aside by the High Court. This finding of the High Court has to be upheld. [61F G] 7. So far as the transactions of sale of the remaining properties in favour of 'V ' and his brother are concerned, they stand on a different footing altogether. The High Court in this regard has recorded a clear finding that the afore said alienations were made neither for any legal necessity nor for the benefit of the State nor for payment of any antecedent debt. [61H; 62B] The evidence in this regard is also fully convincing that the aforesaid transaction had no connection with pay ment of any antecedent debt. The finding of the High Court has to be upheld in this regard. [62C] 8. Accordingly the Judgment and decree passed by the High Court is set aside to the extent of granting a decree for possession of the house property and agricultural lands sold in favour of 'M ' on 11th February, 1953, and the suit with regard to these properties is dismissed. The rest of the Judgment and decree of the High Court in respect of agricultural lands which were alienated in favour of 'V ' and his brother is maintained and 'the suit of the plaintiffs for possession with regard to these properties stands decreed. [62D E]

77 of 1958. Petition Under article 32 of the Constitution of India for enforcement of Fandamental Rights. Bhavani Lal and P. C. Agarwala, for the petitioners. C.K. Daphtary, Solicitor General of India, B. Ganapathy Iyer and T. M. Sen, for the respondents. March 14. The Judgment of the Court was delivered by S.K. DAS, J. This is a writ petition under article 32 of the Constitution. The petitioners, Messrs. Nand Lal Raj Kishan, carry on a business of commission agents at Delhi and are liable to pay sales tax in respect of their business under the provisions of the Bengal Finance (Sales Tax) Act, 1941, as in force in Delhi. They filed returns for four quarters of 195455 and claimed exemption in respect of sales of certain goods to the registered dealers under the provi sions of section 5(2)(a)(ii) of the said Act. By his order dated April 11, 1956, the Sales Tax Officer disallowed the exemption claimed by the petitioners mainly on the ground that the alleged sales were made to "those 285 registered dealers whose activities had gone underground." The Sales. Tax Officer issued a demand notice for a sum of Rs. 1,11,890 11 0 on account of sales tax. The petitioners then carried an appeal to the Assistant Commissioner of Sales Tax, Delhi. The Assistant Commissioner set aside the order of the Sales Tax Officer and remanded the case for a fresh decision in the light of certain judgments given by the Chief Commissioner, Delhi, in a number of similar cases. In the meantime the Bengal Finance (Sales Tax) Act, 1941, was amended by the Bengal Finance (Sales Tax) (Delhi Amendment) Act, 1956, being Act No. 17 of 1956. This amending Act which came into force on October 27, 1956, inserted a new section, which is section 8A of the Act. This section reads as follows: "section 8A. Security from certain class of dealers. The Commissioner, if it appears to him to be necessary so to do for the proper realisation of the tax levied under this Act, may impose for reasons to be recorded in writing as a condition of the issue of a registration certificate to a dealer or of the continuance, in effect, of such a certificate issued to any dealer, a requirement that the dealer shall give security up to ail amount and in the manner approved by the Commissioner for the payment of the tax for which he may be or become liable under this Act. " On May 17, 1957, the petitioners asked for a fresh registration certificate on the ground that their original certificate had been lost in transit. They further asked for the addition of some more items of goods in the registration certificate, such as cigarettes, bidis and glass of all kinds. Thereupon the Sales Tax Officer made certain enquiries and found that the petitioners had been frequently shifting their places of business and the sales alleged to have been made by them to some registered dealers were not genuine, because those persons could not be traced at the addresses given. On a report being submitted to the Commissioner of Sales Tax, Delhi, the Commissioner asked the Sales Tax Officer to issue a notice to the petitioners. On 286 July 13,1957, such a notice was issued to the petitioners to show cause why they should not be asked to furnish a security of Rs. 10,000 in accordance with the provisions of section 8A. The petitioners then appeared before the Sales Tax Officer and made a statement that they were not prepared to deposit any amount as security. They also filed a written explanation objecting to the demand of security. The matter was then referred to the Commissioner of Sales Tax who con sidered the explanation of the petitioners and the report of the Sales Tax Officer. The Commissioner expressed his finding in the following words: "In view of the reputation that the dealer enjoys in the market, namely, that he being a commission agent has been engaged in the business of selling goods to other commission agents, all sales being effected to unscrupulous registered dealers, frequent changes in the name and place of busines s without giving specific details, late submission of information regarding the changes: in the name and place of business, non submission of returns for the year 1956 57 within the prescribed time, it appears neces sary to demand security under section 8A of the Bengal Finance (Sales Tax) Act, 1941 as in force in Delhi. " Accordingly, on November 27, 1957, he made an order directing the petitioners to furnish security either in cash or by two personal sureties for a Bum of Rs. 5,000 by December 15, 1957. Against the aforesaid order of the Commissioner the petitioners went in revision to the Chief Commissioner of Delhi. The Chief Commissioner heard Counsel for the petitioners and by his order dated April 15, 1958, dismissed the application in revision. The petitioners then filed a writ petition in the Punjab High Court which was summarily dismissed. On the present writ petition the petitioners have impugned the order of the Commissioner dated November 27, 1957 on the ground that section 8A of the Act under which the order was passed is constitutionally invalid. They have challenged the validity of section 8A on three grounds: firstly, it is contended that section 8A 287 gives an undefined, unlimited and unrestricted power to the Commissioner of Sales Tax; secondly, it is contended that no limit is fixed with regard to the amount of security which may be demanded under the section; and thirdly, it is contended that the section imposes an unreasonable restriction on the right of the petitioners to carry on their business inasmuch as it does not provide for any enquiry before the demand for security is made, nor does it provide for an opportunity being given to the person against whom the order is proposed to be passed of being heard before such order is passed. We do not think that these grounds have any substance. Section 8A does not give unlimited or unrestricted power. to the Commissioner of Sales Tax. It states inter alia that the Commissioner may impose for reasons to be recorded in writing as a condition of the issue of registration Certificate to a dealer, or of the continuance of such a certificate, a requirement that the dealer shall give security up to an amount and in the manner approved by the Commissioner for the payment of the tax for which he may be or become liable under the Act: this power of the Commissioner is, however, subject to the condition that it must "appear to him to be necessary so to do for the proper realisation of the tax levied under the Act". In other words, the Commissioner may exercise his power of demanding security only when he considers it necessary to do so for the proper realisation of the tax levied under the Act. By no stretch of argument can it be suggested that the power is an unlimited or an unrestricted power. Learned Counsel for the petitioners has referred us to the decision of this Court in Messrs. Duarka Prasad Laxmi Narain vs The State of Uttar Pradesh (1). That was a case in which under cl. 4(3) of the Uttar Pradesh Coal Control Order, 1953, the licensing authority was, given absolute power to grant or refuse to grant, renew or refuse to renew suspend, revoke, cancel or modify any licence under the Order. It was pointed out by this Court that there was nothing to regulate or guide the discretion (1)[1954] S.C.R. 803. 288 of the licensing officer and the provision impugned therein committed to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chose. That is not the position here. Section 8A itself gives the necessary guidance when it says that the Commissioner may exercise his power only when it is necessary to do so for the proper realisation of the tax levied under the Act. In a later decision of this Court in Virendra vs The State of Punjab (1) it was pointed out that in Dwarka Prasad 's case (1) the impugned provision prescribed no principles and gave no guidance in the matter of the exercise of the power, but in a case where the exercise of the power is conditioned by the statute itself, the ratio in Dwarka Prasad case (2) does not apply. The same view was reiterated in Kishan Chand Arora vs The Commissioner of Police, Calcutta (3). Section 7(4a)(i) of the Bengal Finance (Sales Tax) Act, 1941, gives the power to the Commissioner to demand reasonable security for the proper payment of tax payable under the Act. This section came in for consideration of the Calcutta High Court in Durga Prasad Khaitan vs Commercial Tax Officer (4) and it was held that the section did not confer unfettered or arbitrary power to the Commissioner. We approve of the view expressed therein that the power to levy a tax includes the power to impose reasonable safeguards in collecting it, and demanding security for the proper payment of the tax payable under the Act is neither an arbitrary nor an unreasonable restriction. As to the contention that there,is no limit to the amount which can be demanded as security, it is only necessary to point out that the amount that can be demanded as security must have relation to the payment of the tax for which the person concerned may be or become liable under the Act. The amount must depend on the nature of the business, its turnover and the amount of tax payable thereon by the person concerned. Furthermore, the order of the Commissioner under section 8A is subject to revision by the Chief (1) ; , 321 (3) ; (2)[1954] S.C.R. 803. (4)[1937] 8 S.T.C. 105. 289 Commissioner and if an arbitrary or unreasonable amount is demanded, the order of the Commissioner will be subject to scrutiny by the Chief Commissioner. We do not think that even in the matter of the amount of security, the power of the Commissioner is unlimited or unrestricted. As to the last contention that the section does not provide for any enquiry or any opportunity being given to the person against whom the order is proposed to be passed of being heard, this point was taken before the Chief Commissioner and the Chief Commissioner rightly pointed out that the principles of natural justice would apply and the person to whose prejudice the order is to be made must be given an opportunity to say whatever he has to say in his defence. In the present case such an opportunity was given to the petitioners. A notice was issued to the petitioners by the Sales Tax Officer. The petitioners appeared before the Sales Tax Officer, submitted a written explanation and also made oral submissions. The Commissioner had before him the report of the Sales Tax Officer, the explanation submitted by the petitioners in reply to the notice issued, and also the statements made by them. It has been contended on behalf of the petitioners that no oral hearing was given to the petitioners by the Commissioner of Sales Tax and learned Counsel for the petitioners has made a grievance that the order of the Commissioner was passed without hearing the petitioners. It may be pointed out here that when the petitioners were heard by the Chief Commissioner in support of their application in revision, they made no grievance on the score that the Commissioner of Sales Tax had not given them a second opportunity of a fresh oral hearing. We do not think that a second opportunity like the one suggested on behalf of the petitioners was either necessary or obligatory. The petitioners had an opportunity of saying what they had to say against the demand of security. They raised their objections which were considered by the Commissioner who, in spite of those objections, came to the conclusion that it was necessary to ask the petitioners 37 290 to furnish security for the proper realisation of the tax levied or leviable under the Act. We agree with the Chief Commissioner that there was no violation of the principles of natural justice in the present case. For the reasons given above we hold that there is no merit in the petition which is accordingly dismissed with costs. Petition dismissed.

The validity of section 8A of the Bengal Finance (Sales Tax (Delhi Amendment) Act, 956, enabling the Commissioner of Sales Tax to demand security from dealers for payment of tax was challenged by the petitioners on the grounds that (i) the section gave undefined, unlimited and unrestricted power to the commissioner, (ii) no limit was fixed for the amount of security, and (iii) the section did not provide for any enquiry before the demand of security, nor did it provide for an opportunity of being heard being given to the person against whom the order was proposed to be passed. Held, that section 8A did not give any unlimited or unrestricted power to the Commissioner of Sales Tax. The power of the Commissioner of Sales Tax was subject to the condition that it (1)[1958] 9 S.T.C. 194. 284 must appear lo him to be necessary to demand security for the proper realisation of the tax. The power to levy a tax includes the power to impose reasonable safeguards for collecting it and demanding security for the proper payment of tax is neither in arbitrary nor an unreasonable restriction. Durga prasad Khaita vs Commercial Tax Officer, [1957] 8 S.T.C. 105, approved. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh, ; , distinguished. Virendra vs The State of Punjab, ; and Kishan Chand Arora vs The Commissioner of police, Calcutta; , , referred to. The power of the Commissioner as regards the amount of security was not unlimited because the order of the Commis sioner was subject to revision and scrutiny by the Chief Commissioner. In the instant case an opportunity having been give to the petitioners for submitting their defence and an explanation having been actually submitted by the petitioners there was no violation of the principles of natural justice. A second opportunity for oral hearing was not obligatory.

On the strength of the permission granted by the Revenue Divisional Officer, as required under clause 6 of the Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 3 of 1956 and Rule 4 made thereunder, to sell his private property to a non scheduled Tribe person for a sum of Rs. 4000/ , Respondent 3 sold his property on January 2, 1964 by a registered deed of sale to the appellant, despite an attachment order passed by the Executing Court on July 13, 1963 on an application dated June 28, 1963 made by Respondent 1 to recover the decretal amount as per the money decree obtained by him on August 18, 1962 against Respondent 3 and his mother Respondent 4. Later, Respondent No. 1 however, produced the copy of the order passed by the R.D.O. dated October 23, 1963, at the instance of appellant in the Executing Court and got the property put to sale on May 15, 1964. In the court auction respondent 2 son of respondent 1 purchased the property. On June 22, 1964, the appellant filed an application under order 21 Rules 89 and 90 and Section 47 and 151 C.P.C. for setting aside the auction sale on the ground that the attachment and the auction sale were void for want of permission from the competent authority under Orissa Regulation 2 of 1956 and also due to fraud committed by the decree holder. The application was allowed followed by confirmation by the appellate judge, in appeal. But the High Court in Second Appeal reversed it accepting the contention of res judicata. Allowing the appeal by special leave, the Court. ^ HELD: 1. Both clauses 6 of the "Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation 2 of 1956, and Rule 4 made thereunder, provide that no immovable property belonging to a member of the scheduled Tribe is liable to be attached or sold except in accordance with the permission granted by the competent authority. Prior to the sale to the private party, the property was undoubtedly attached in execution proceedings on July 13, 1963, but the order of attachment was void, being contrary to the express inhibition contained in clause 6 of Regulation 2 of 1956 read with Rule 4 made thereunder. [200E G] 2. The auction sale is bad and invalid: It is elementary that what can be brought to sale in a Court sale is the right, title and interest of the judgment debtor and therefore, the auction purchaser can get nothing more than that right, title and interest. In the instant case, the appellant having become an owner of the property on account of the 197 Private sale dated January 2, 1964 respondent 3 had no saleable interest left in the property which could be put to auction. The auction sale therefore cannot displace the title of the appellant which is the same thing as saying that as between the title of the appellant and the so called title of the auction purchaser the appellant 's title must prevail. [200G H, 201A] Moreover, as the condition imposed by the R.D.O. regarding the price was violated by the auction sale, the auction purchaser cannot get a valid title to the property under that sale. In the private sale, the appellant purchased the property for Rs. 4,000/ and therefore the condition of the permission was complied with. But the auction sale was held in satisfaction of the decretal dues which were far less than Rs. 4,000/ the decree itself being in the sum of Rs. 1,000/ and odd and the highest bid at the auction being of Rs. 3,000/ only.[201 B C] 3. (a) The basic issue being the validity of auction sale in favour of respondent 2, no question of res judicata can arise. the appellant claims through the judgment debtor and neither the latter nor the decree holder ever disputed that he, the judgment debtor, was a member of the Scheduled Tribe. On the other hand both of them were conscious of the situation that the property could not be sold without the sanction of the R.D.O., Nowrangpur. The decree holder himself apprised The Executing Court of that position. The permission which was granted by the R.D.O., Nowrangpur at the instance of the appellant was produced by respondent 1 in the execution proceedings as if the permission was granted in sis favour for the sale by respondent 3 of his property. The failure, therefore, of the judgment debtor to raise any particular contention cannot operate as res judicata actually or constructively, either against him or against the appellant. [201 D F] (b) Whether "Bhotras" fall within any of the sub groups of the Scheduled Tribes enumerated in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 is a question which could not have been permitted to be raised for the first time in the Second Appeal. Much less can it be allowed to be raised in this Court in an appeal under article 136 of the Constitution.[200C D]

The first respondent was the founder and Managing Director of a company, the second respondent in the appeal, which was incorporated in the State of Mysore and conducted a Prize Competition called the R. M. D. C. Cross words through a weekly newspaper printed and published at Bangalore. This paper had a wide circulation in the State of Bombay, where the respondents set up collection depots to receive entry forms and fees, appointed local collectors and invited the people by advertisements in the paper to participate in the competitions. On November 20, 1952, the Bombay Legislature passed the Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act of 1952, and widened the scope of the definition of 'prize competition ' contained in section 2(1) (d) of the Bombay Lotteries and Prize Competition Control and Tax Act of 1948, so as to include prize competitions carried on through newspapers printed and published outside the State and inserted a new section, section 12A, levying a tax on the promoters of such competitions for sums collected from the State. Thereupon, on December 18, 1952, the respondents moved the High Court of Bombay under article 226 of the Constitution and contended that the Act as amended and the Rules framed thereunder in so far as they applied to such prize competitions were ultra vires the State Legislature and violated their fundamental rights under article 19(1) (g) and freedom of inter State trade under article 301 of the Constitution. The Single Judge who heard the matter in the first instance as also the court of appeal found in favour of the respondents, though on somewhat different grounds, and the State of Bombay preferred the appeal. The principal question canvassed in this Court related to the validity. or otherwise of the impugned Act. It was contended on behalf of the appellant that the impugned Act was a law relating to betting and gambling and as such was covered 875 by Entries 34 and 62 of List II in the Seventh Schedule to the Constitution, whereas the contention of the respondents was that the Act was with respect to trade and commerce and came under Entries 26 and 60 of that List. Held, that in testing the validity of an Act it was necessary, in the first place, to decide whether it was with respect to a topic assigned to the legislature and, secondly, where it was so and the legislature was a State Legislature and the Act purported to operate beyond the State, whether there was sufficient territorial nexus to validate such operation and, lastly, whether the powers of the legislature were in any other way fettered by the Constitution. So judged, the impugned Act was a perfectly valid legislation and its constitutionality was beyond question. Regard being had to the purpose and scope of the Act read as a whole there could be no doubt that all the categories of prize competitions included in the definition contained in section 2(1) (d) of the Act were of a gambling nature. The qualifying ' clause appearing at the end of cl. (1) must apply to each of the five kinds enumerated therein, and the word 'or ' appearing after the word I promoters ' and before the word 'for ' in the clause must be read as 'and '. Similarly, cl. (ii), properly construed, could not include any prize competitions other than those of a gambling nature. Elderton vs Totalisator Co. Ltd., , held inapplicable. The impugned Act was, therefore, a legislation with respect to betting and gambling and fell under Entry 34 of List II of the Seventh Schedule to the Constitution and was within the competence of the State Legislature. Taxes on gambling are a well recognised group of indirect taxes and section 12A of the Act in seeking to tax the gross collections in the hands of the promoters, and not their profits, was only following an easy and convenient way of getting at the gambler 's money in their hands and this made no difference in the character of the tax, essentially one on betting and gambling and not on any trade, and, consequently, the section fell within Entry 62 and not Entry 6o of List II of the Seventh Schedule to the Constitution. A prize competition that did not to a substantial degree depend upon the exercise of skill for its solution would be of a gambling nature and a scrutiny of the prize competitions offered by the respondents clearly showed that there was an element of chance to start with, and, consequently, they must be of a gambling nature and fell within the mischief of the Act. The doctrine of territorial nexus was a well established doctrine and could apply only when (1) the territorial connection between the persons sought to be taxed and the legislating State was real and not illusory and (2) the liability sought to be imposed was pertinent to that connection. The existence of sufficient 876 territorial nexus in a particular case was essentially a question of fact. There could hardly be any doubt in the instant case that the impugned Act satisfied all these tests and, consequently, it was unassailable on the ground of extra territoriality. Gambling activities were in their very nature and essence extra commercium although they might appear in the trappings of trade. They were considered to be a sinful and pernicious vice by the ancient seers and law givers of India and have been deprecated by the laws of England, Scotland, United States of America and Australia. The Constitution makers of India, out to create a welfare State, could never have intended to raise betting and gambling to the status of trade, business, commerce or intercourse. The petitioners, therefore, had no fundamental right under article 19(1) (g) or freedom under article 301 Of the Constitution in respect of their prize competitions that could be violated and the validity of the impugned Act, in pith and substance an Act relating to gambling, did not fall to be tested by articles 19(6) and 304 Of the Constitution. judicial decisions on article 1, section 8, sub section (3) Of the Constitution of the United States and section 92 of the Australian Constitution should be used with caution and circumspection in construing articles 19(1) (g) and 301 of the Indian Constitution. State of Travancore Cochin vs The Bombay Co. Ltd. ; and P. P. Kutti Keya vs The State of Madras, A.I.R. (1954) Mad. 621, referred to. The King vs Connare, ; , The King vs Martin; , , Commonwealth of Australia vs Bank of New South Wales, L.R. (195o) A.C. 235, Mansell vs Beck, Australian Law journal Vol. 3o, NO. , Champion vs Ames, ; , Hipolite Egg Co. vs United States, ; , Hoke vs United States, ; , United States vs Kahriger, ; and Lewis vs United States, 99 L.Ed.475, discussed.

These petitions on behalf of the assessees raised the common question as to the constitutionality of section 5(7 A) of the Indian Income tax Act, which was raised but not decided by this Court in Bidi Supply Co. V. The Union of India, ; Reliance was placed on the observations of Bose, J. in his Minority judgment in that case and it was contended that the section read with the explanation, subsequently added to it as a result of that decision,conferred arbitrary and uncontrolled powers of transfer on the Income tax Commissioner and the Central Board of Revenue, was discriminatory and violative of the provisions of article 14 and imposed an unreasonable restriction on the right to carry on trade or business in contravention of article 19(1)(g) of the Constitution. It was further contended that the omnibus wholesale orders of transfer made without any reference to any particular case or without any limitation as to time were inconvenient and discriminatory and ran counter to the majority judgment in that case. The contention of the Central Board of Revenue, supported by affidavits filed on its behalf, was that the section was intended to minimize administrative inconvenience, there was no discrimination after transfer because the same relevant provisions of the Act as applied to others similarly situated, were applied after the transfer and any resulting inconvenience to the assessee was sought to be minimised by transferring his case either to the nearest area or, where that was not feasible, by examining his accounts or evidence, if required by him, at a place suited to his convenience and that the wholesale omnibus orders of transfer were covered by the explanation: Held, that section 5(7A) of the Indian Income tax Act was a measure of administrative convenience, was constitutionally valid and did not infringe any of the fundamental rights conferred by articles 14 and (19)(g) of the Constitution and the orders of transfer in question were saved by the explanation: to that section and. were constitutionally valid. 30 234 The right conferred on the assessee by section 64(1) and (2) of the Act was not an absolute right and must be subject to the primary object of the Act itself, namely, the assessment and collection of income tax, and where the exigencies of tax collection so required, the Commissioner of Income tax or the Central Board of Revenue had the power under section 5(7A) of the Act to transfer his case to some other officer outside the area where he resided or carried on business and any difference in his position created thereby as compared to that of others similarly situated would be no more than a minor deviation from the general standard and would not amount to a denial of equality before the law. This discretionary power vested in the Authorities by the section to override the statutory right of the assessee must be distinguished from the discretion that has to be exercised in respect of a fundamental right guaranteed by the Constitution and the two tests to judge whether it was discriminatory would be, (I) whether it admitted of the possibility of any real and substantial discrimination and (2) whether it impinged on a fundamental right guaranteed by the Constitution and, so judged, the discretion vested in the Authorities by section 5(7 A) of the Act was not at all discriminatory nor did the section impose any unreasonable restriction on the fundamental right to carry on trade or business. Bidi Supply Co. vs The Union of India, ; M.K. Gopalan vs The State of Madhya Pradesh, (1955) I S.C.R.168 ; The State of West Bengal vs Anwar Ali Sarkay, ; ; Dayaldas Kushiram vs Commissioner of Income tax, (Central),, I.L.R. ; Dayaldas Kushiram vs Commissioner of Income tax, Central, ; and Wallace Brothers & Co., Ltd. vs Commissioner of Income tax, Bombay, Sind & Baluchistan, A.I.R. 1945 F.C. 9, discussed. The explanation added to the section by the Amending Act XXVI Of 1956, was intended to expand the connotation of the ' term 'case ' used in the section and included both pending proceedings as also other proceedings under the Act which might be commenced in respect of any year after the date of transfer and as such the orders in question were not unconstitutional or void. The Income Tax Authorities, however, must be held bound by the statements made in their affidavits and where an assessee could make out a prima facie case of a mala fide or discriminatory exercise of the discretion ' vested in them, the Court will scrutinise the circumstances in the light of those statements and where necessary quash an abuse of the power under articles 226 and 32 Of the Constitution. Ratanlal Gupta vs The District Magistrate of Ganjam, I.L.R. 1951 Cuttack 441 and Brundaban; Chandra Dhir Narendra vs 235 The State of Orissa (Revenue Department), I.L.R. 1952 Cuttack 529, referred to. The Income tax Authorities should follow the rules of natural justice and, where feasible, give notice of the intended transfer to the assessee concerned in order that he may re_ resent his view of the matter and record the reasons of the transfer, however briefly, to enable the Court to judge whether such transfer was mala fide or discriminatory, if and when challenged.

The assessee challenged the jurisdiction of the Income tax Officer, Special Survey Circle, Bangalore, to assess income tax and super tax on his income accruing prior to April 1, 1950, in the State of Mysore, on the ground that the proviso to section 13 of the Indian Finance Act, 1950, by virtue of which he was exercising his power was ultra vires and void as the Parliament had no pow or to make a law authorising any officer appointed under the Indian Income tax Act to levy tax under the Mysore law prior to the Constitution. It was contended (i) that on general constitutional principles the Union Parliament had no power to make a law having retrospective effect with reference to pre Constitution period, (ii) that the Parliament was also prohibited by article 277 from making a law authorising such officers as in the present case to mot in the State of Mysore: Held, (repelling the contentions) (i) that the Parliament had such power vide the judgment delivered in Case No. 296 of 1951, (ii) that while article 277 authorises the continued levy of taxes lawfully levied by the Government of the State before the commencement of the Constitution and their application to the same purposes as before, even after the Constitution came into force, there is nothing in the article to warrant any implication that such taxes should continue to be levied, assessed and collected by the same State authorities as before the Constitution and there is nothing in article 277 to preclude Parliament making a law providing for the levy and collection of income tax and super tax under the Mysore Act 'through authorities appointed under the Indian Income tax Act.

The respondent company was a manufacturer of edible and non edible oils and was registered as a " dealer " under the United Provinces Sales Tax Act, 1948. Its year of account commenced on June 1, and ended on May 31 of the next year. Under section 7(1) of the Act read. with rule 39 of the rules framed thereunder the respondent exercised the option of being assessed on the turnover of the previous year and submitted its return for the assessment year 1948 49 on its taxable turnover of the previous year ending May 31, 1947. The Sales Tax Officer assessed the turnover in respect of edible oil at 3 pies per rupee under section 3, but in respect of non edible oil he held that since a notification dated June 8, 1948, issued under section 3(A) had come into force from June 9, of the assessment year providing for the levy of tax at 6 pies per rupee, the assessee was liable to be assessed at 3 pies per rupee on the turnover during the first 69 days of the year and at 6 pies per rupee for the remaining days of the year. On appeal by the assessee the appellate authority modified the order and directed that the tax be levied at a flat rate of 3 Pies on both edible and non edible oils. This order was set aside by the revising authority and the order of the Sales Tax Officer was restored. On a direction made by the High Court the revising authority submitted a question for opinion. The High Court held that the assessee was liable to pay the tax at a flat rate of 3 pies per rupee. On appeal by the Commissioner of Sales Tax by special leave, Held (per Hidayatullah, Das Gupta and Sliah, jj.), affirming the view of the High Court, that the assessee who elected to submit his return on the turnover of the previous year, is liable to be assessed to sales tax at the rate in force on the first day of the year of assessment because the liability arises on that date, and any subsequent enhancement of the rate by virtue of a notification under section 3(A) does not alter that liability. A taxing statute must be interpreted in the light of what 190 is clearly expressed therein and nothing can be implied nor can provisions be imported into them so as to supply an assumed deficiency. Per section K. Das and Ayyangar, JJ. The rate of tax as applied by the sales tax officer was in accordance with law. Having regard to the scheme underlying the option to elect for a previous year turnover conferred by section 7(1) of the Act the change in the law and in the rate of tax effected during the assessment year must apply to the turnover of the previous year which is deemed to be the turnover of the assessment year and sales effected during that period have to be assessed at the rate prevailing in that year. Although the notification was prospective and was made with the object of changing the rate of taxation during the assessment year, the date mentioned therein did not prevent the application of the assessment year rate to the opted previous year turnover. It is not correct to say that there is absence of machinery for reassessment and refund of tax to justify the conclusion that the basis of the tax liablity for an assessment year is that which prevailed on the first day of that year since there are provisions in the Act such as for instance sections 10 and 22 which provide for reductions, refunds and rectification of errors regarding taxation and even for enhancement of the tax already levied. There was no ambiguity in the notification and the principle of resolving ambiguities in favour of the assessee could not be applied in this case.

The petitioners carry on business as Shroffs and Bankers. The Income tax Department searched various premises of the petitioners and seized a sum of Rs. 12 lakhs in cash from the petitioners, under section 132 and 132A of the Income tax Act. The petitioners contended that the said amount represented the stock in trade of the petitioners. The petitioners also contended that the provisions of section 132 and 132A of the Income tax Act, 1961, as well as rules 112, 112A, 112B and 112C of the Income Tax Rules, 1962, were unconstitutional as violative of Article 14, 19(1)(f) and (g) and 31(1) of the Constitutional. Section 132 and 132A were further challenged on the ground of conferring naked, abitrary, unguided, discriminatory and uncanalised power on the executive authority. Dismissing the petition, ^ HELD: (1) This Court has already upheld in Pooran Mal 's case the validity of section 132 and 132A as well as rules 112 and 112A. [893 A & C] (2) Rules 112B and 112C relate to the release of the articles seized and are therefore beneficial rules and as such cannot be challenged. [893D]

The respondents were dealers assessable to sales tax under the East Punjab General Sales Tax Act, 1948, and, in respect of the assessment years 1955 56 to 1957 58, they claimed an exemption from tax on sales of edible oil produced by them cal process. The assessing authority rejected this claim on the ground that such sales we 're not exempt from tax in view of the amendment of the Schedule to the Act specifying tax free goods by the notification dated August 5, 1954. The respondent 's appeals to the Excise and Taxation Commissioner:. and to the Financial Commissioner were rejected but the High Court, upon a reference. held that the notification was a law made by the State legislature after the enactment of Central Act No. 52 of 1952 which, read with article 286(3) of the Constitution , placed a bar on a State by a law imposing or authorising the imposition of a tax on the sale of essential goods unless the law in question had received the assent of the President; and since the notification had not received such assent, it was ultra vires and invalid; the respondents were, therefore, entitled to exemption under Item No. 57 of the Schedule prior to its amendment by the notification of August 5, 1954. On appeal to this Court, Held: The respondents were not liable to pay tax on sales of edible oils produced in ghanis run by mechanical power effected by them before September 11, 1956; but they were liable to pay tax on such sales made after September 11, 1956, [348E] (i) The amended section 5 inserted in East Punjab Act No. 46 of 1948 by East Punjab Act No. 19 of 1952 authorising the fixation of the rate of tax leviable on the taxable turnover, was a law authorising the imposition of a tax within the purview of the unamended article 286(3) of the Constitution. As the East Punjab Act No. 19 of 1952 was passed after the enactment of Art 286(3) of the Constitution and after Parliament had by Central Act 52 of 1952 declared edible oil to be essential for the life of the community and it was not reserved for consideration of the President and did not receive his assent, it could not take effect during the currency of article 286(3) prior to its amendment in so far as it authorised the imposition of a tax on the sale or purchases of edible oil. It could however take effect in respect of sale and purchases of other goods. [344A C; 348B C] (ii) The effect of the amendment of article 286(3) of the Constitution by the Constitution (Sixth Amendment) Act with effect from September 11, 1956 was that the restriction put by article 286(3) on the operation of the amended section 5 in respect of essential goods was 336 337 lifted and the section thereafter took effect on such goods also. There was no force in the contention that the amended section 5 wag a still born Jaw and that the section was not revived by the removal of the ban. It was inserted by the East Punjab Act No. 19 of 1952 which was passed by a competent legislature and always took effect in respect of nonessential goods. [344D F] Section 3 of Central Act 52 of 1952 had no independent existence and after the amendment of article 286(3) it had no force from September 11, 1956 until its repeal with effect from January 5, 1957 by Central Act 74 of 1954. [345C D,E F] (iii) The notification of August 5, 1954 which amended the Schedule of tax free goods was authorised by section 6(2) which was a pre Constitution law outside the purview of article 286(3). The notification did not require the assent of the President for affecting essential goods. The notification was therefore valid and took effect in respect of edible oil as from August 5, 1954 and thereafter sales of edible oil produced in ghanis run by mechanical power were taxable. But as the amended section 5 could not then affect edible oil, no tax was effectively imposed on it until September 11, 1956 during the currency of the unamended article 286(3). [346A C, E F] (iv) Although the notifications issued by the State Government under the unamended section 5 which was invalid were not authorised by law and also invalid, after the passing of the East Punjab Act 19 of 1952 the result was that from the very commencement of the main Act the amended section 5 was deemed to have authorised the State Government to issue notifications fixing the rate of tax. The notifications issued under section 5 before 1952 must, therefore be deemed to be and always to have been valid and not still born. It was not necessary to pass another Act validating those notifications nor was it necessary for the State Government to issue fresh notifications fixing the rate of tax. Here again, such notifications could not take effect in respect of sales or purchases of essential goods before September 11, 1956. [346H 347C] (v) There was no force in the contention that the present appeals were not maintainable because the Financial Commissioner had already directed disposal of the case under section 22(5) of the East Punjab Act 46 of 1948 in accordance with the judgment of the High Court. Effect had to be given to the order of this Court and the Financial Commissioner must direct disposal of the cases accordingly. [347F 348A] Case law reviewed.

iminal Appeals Nos. 57 and 58 of 1960. Appeals by special leave from the judgment and order dated November 5/6, 1958, of the Bombay High Court at Nagpur in Criminal Appeal No. 94 of 1958. Jai Gopal Sethi and G. C. Mathur, for the appellant (in Cr. A. No. 57 of 1960). G. C. Mathur, for the appellant (in Cr. A. No. 58 of 1960). Gopal Singh and D. Gupta, for the respondent. December 5. The Judgment of the Court was delivered by SUBBA RAO, J. These two appeals raise rather an important question on the interpretation of the provisions of section 207A of the Criminal Procedure Code (hereinafter referred to as the Code). ' The facts that have given rise to these appeals may be briefly stated. The appeals arise out of an incident that took place on November 29, 1957, when one Sadashiv was murdered in the courtyard of his house in village Nimgaon. The case of the prosecution was that the four appellants, armed with sticks, went to the house of the deceased, dragged him 'out of the house and beat him with sticks in the courtyard; and that as a result of the beating he died on the next day at about 5 p.m. at Bhandara Hospital. After investigation, the police submitted their report to the Magistrate under 'section 173 of the Code along with the relevant documents. After forwarding the report, the officer in charge of the; police station furnished 892 the appellants with a copy of the report forwarded under sub section (1) of section 173, the First Information Report recorded under section 154 and all other documents or relevant extracts thereof on which the prosecution proposed to rely, including the statements recorded under sub section (3) of section 161 and also intimated them of the persons the: prosecution proposed to. examine as its witnesses. The Magistrate posted the case for inquiry on February 10, 1958 and on that date the prosecution intimated that it did not intend to examine any witnesses in the Magistrate 's Court., , On behalf of the appellants no objection was raised, to,that course. But the Magistrate adjourned the inquiry to February 12, 1958, as he wanted to consider whether any evidence was necessary to be recorded before commitment. On February 12, 1958, reexpressed his opinion that no witness need. be examined at that stage; thereafter, he framed charges against accused appellants under section 302, read with section 34, of the Indian Penal Code, and also under section 448 thereof and committed the appellants to the Sessions Court. Before the learned Sessions Judge the prosecution led four types of evidence, i.e. (1) eye witnesses, namely, P.Ws. 6, 11, 20 and 25; (2) dying declaration, exhibit P 15, supported by P. Ws. 18,22 and 19; (3) the identification of the appellants in jail by P.Ws. 20 and 25; and (4) recovery of various articles at, the instance of the accused appellants. The defence examined four witnesses. On a consideration of the entire evidence, the learned Sessions Judge held that,the prosecution, case had been amply borne out and that the four appellants entered into the house of the deceased and beat him in the manner described by the prosecution wit nesses. no less than 12 confused wounds were inflicted on the deceased, which resulted in the fracture of his ribs and injury to the lung,. and as the, doctor opined that the death was due to shock and haemorrhage resulting from said fracture, the learned Sessions Judge hold that the accused appellants were guilty of murder and convicted them under s.302, read with a. 34, Indian Penal Code,and he further convicted them, under section 448 of the Indian 893 Penal Code for trespassing into the house of the deceased. On these findings the learned Sessions Judge sentenced the appellants to undergo imprisonment for life on the first count and for 3 months rigorous imprisonment on the second count. The appellants preferred an appeal against their convictions and sentences to the High Court of Bombay at Nagpur. The learned Judges of the High Court, on a resurvey of the entire evidence, agreeing with the learned Sessions Judge, accepted the prosecution case, but they held that the appellants were guilty only under section 304, Part 1, read with section 34, Indian Penal Code, and in the result they reduced the sentence from life imprisonment to 10 years ' rigorous imprisonment in regard to appellant 1 and to 7 years ' rigorous imprisonment in regard to appellants 2 to 4. Against the said convictions and sentences, the appellants have preferred, by special leave, appeals to this Court. Criminal Appeal No. 57 of 1960 has been preferred by the first appellant and Criminal Appeal No. 58 of 1960 by appel lants 2 to 4. Learned counsel for the appellants raised before us the following two points: (1) The Sessions Court and, on appeal, the High Court have not properly appreciated the evidence and the circumstances of the case in holding that the appellants had committed the offences. (2) The trial and conviction of the appellants by the Sessions Court were null and void, as the Magistrate had no jurisdiction to commit the appellants to Sessions without examining witnesses under sub section (4) of section 207A of the Code and that, as the order of 'committal was without jurisdiction, the defect was not cured either under section 532 or section 537 of the Code. The first question does not merit any consideration. Both the courts below have, carefully considered the evidence adduced by the prosecution as well as the accused appellants and have accepted the prosecution case. It is a well established practice of this Court not to interfere on questions of fact, particularly when they are concurrent findings, except under exceptional circumstances. We find, no such exceptional 894 circumstances in this case. We, therefore, reject the first contention. The second contention turns upon the interpretation of the relevant provisions of section 207A of the Code. Before attempting to construe the relevant provisions of the section it would be helpful to notice briefly the history of the said section. Under the Criminal Procedure Code, as it originally stood, in the matter of committal proceedings there was no distinction between the proceeding instituated on a police report and that instituted otherwise than on police report. The main object of the committal proceedings was to hold an inquiry to ascertain and record the case which was to be tried before the Court of Sessions. It was primarily to give an opportunity to an accused to know in advance the particulars of evidence that would be adduced against him in the Court of Sessions so that he could be in a position to prepare his defence. Another object, which was no less important, was to enable the Magistrate to discharge an accused if there was no prima facie case against him. This procedure prevented unnecessary harassment to such accused and at the same time saved the valuable time of the Sessions Court. In practice the committal proceeding, whether intended by the Legislature or not, served another purpose, namely, it gave an opportunity to the accused to test the credibility of witnesses by bringing out the discrepancies between their evidence in the committing court, the statements made by them to the police under section 161 of the Code and the evidence given by them in the Court of Sessions. Though very often accused persons took full advantage of this additional opportunity to test the veracity of the witnesses, as often as not, it had turned out to be duplication of trials with the resultants long delays in the disposal of criminal cases. The advantage of committal proceeding. was not solely for the accused, for the. prosecution by examining the witnesses before the committing Magistrate secured their testimony in the sense that though it was tampered subsequenty it is unfortunately a frequent phenomenon in criminal, cases it could use the said evidence as substantive 895 one under section 288 of the Code. The Legislature, in its wisdom, presumably thought that undue delay in the disposal of sessions cases was due to the elaborate and ' prolonged committal proceedings and stepped in to amend the Code in that respect. The whole of section 207A has been inserted by Act XXVI of 1955. While the section simplified the procedure in regard to commitment proceedings instituted on a police report, it confined the existing procedure to proceedings initiated otherwise than on a police report. This distinc tion between the two classes of cases had a reasonable factual basis. In the case of a police report, a thorough inquiry would have been made and the investigating officer would have sent a report to the Magistrate under section 173 of the Code. The amended section 173 of the Code also enjoins on the officer in charge of the police station a duty to furnish before trial, free of cost, to the accused copies of the report forwarded under that section to the Magistrate, the First Information Report recorded under section 154 and all other documents or relevant extracts thereof on which the prosecution proposes to rely, including the statements, if any, recorded under section 164 of the Code and those recorded under sub section (3) of section 161 and a list of witnesses whom the prosecution proposes to examine as its witnesses. The Magistrate in a proceeding instituted on police report would ordinarily be in a position, on the said material to understand the case of the prosecution and know the nature of the evidence that would be adduced on the basis of which the accused is sought to be proceeded against. The accused also would have an opportunity to know beforehand the case he would have to meet and the evidence that would be adduced against him. But in a proceeding instituted otherwise than on a police report, no such maternal would be available and therefore the old procedure continued to apply to such a case. With this background let us look at the provisions of section 207A of the Code. The relevant provisions of section 207A of the Code may now be read: Section 207A: (1) When, in any proceeding instituted on a police report, the Magistrate receives the 896 report forwarded under section 173, he shall, for the purpose of holding an inquiry under this section, fix a date which shall be a date not later than fourteen days from the date of the receipt of the report, unless the Magistrate, for reasons to be recorded, fixes any later date. If, at any time before such date, the officer conducting the prosecution applies to the Magistrate to issue a process to compel the attendance of any witness or the production of any document or thing, the Magistrate shall issue such process unless, for reasons to be recorded, he deems it unnecessary to do so. At the commencement of the inquiry, the Magistrate shall, when the accused appears or is brought before him, satisfy himself that the documents referred to in section 173 have been furnished to the accused and if he finds that the accused has not been furnished with such documents or any of them, he shall cause the same to be so furnished. The Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged, and if the Magistrate is. of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. The accused shall be at liberty to cross examine the witnesses examined under sub section (4), and in such case, the prosecutor may re examine them. (6) When the evidence referred to in sub section (4) has been taken and the Magistrate has considered all the documents referred to in section 173 and has, if necessary, examined the accused for the purpose of enabling him to explain any circumstances appearing in the evidence against him and given the prosecution and the accused an opportunity of being heard, such Magistrate shall, if he is of opinion that such evidence and documents disclose no grounds for committing the accused person for trial, record his reasons ,and discharge him, unless it appears to the Magistrate 897 that such person should be tried before himself or some other Magistrate, in which case he shall proceed, accordingly. When, upon such evidence being taken, such documents being considered, such examination (if any) being made and the prosecution and the accused being given an opportunity of being heard, the Magistrate is of opinion that the accused should be committed for trial, he shall frame a charge under his hand, declaring with what offence the accused is charged. On the interpretation, of sub section (4), which is the main sub section under scrutiny in the present case, the High Courts in India have expressed conflicting views. It would not be necessary to consider the said decisions in detail, but it would be enough if we state the conflicting views, which areas follow: (1) Under sub section (4) the prosecution is bound to examine all the eye witnesses indicated in the police report, and the discretion of the Magistrate to examine witnesses under the second part of the said sub section is only in respect of witnesses other than the eye wit nesses: vide M. Pavalappa vs State of Mysore (1), State vs Andi Betankar (2), Ghisa vs State (3 ) and Chandu Satyanarayana vs The State (4). (2) The Magistrate 's power to examine eye witnesses under the first part of sub section (4) is confined only to such witnesses as are produced in court by the officer conducting the prosecution and if he has not produced any such witnesses, the Magistrate cannot examine any eye witnesses under the second part of the said sub section, for, according to this view, the second part deals with only witnesses other than eye ,witnesses. (3) If the prosecution has not produced any eye witnesses the court may not in its discretion examine any witness under the second part, but can, if satisfied, discharge or commit the accused to sessions on the basis of the documents referred to in section 178 of the Code: vide State vs Lakshmi Narain (5), State, of U. P. vs Satyavir (6). (4) The first part confers a power on a Magistrate only to examine the eyewitnesses produced, but (1) A.I.R. (3) A.I.R. 1919 Raj. (5) A.I.R. 1960 All. 237. (2) A.I.R. 1958 Orissa 241. (4) A.I.R. 1959 A.P.651. (6) A.I.R. 1959 All. 898 the second part empowers him to examine any witness other than those produced, whether eyewitnesses or not, and in a case where the prosecution failed to discharge its duty to produce any witnesses or any important eye witnesses, the court would not be exercising its judicial discretion if it commits the accused to sessions on the basis of documents referred to under section 173 of the Code without examining at least the important witnesses: vide State vs Yasin (1), In re Pedda Amma Muttigadu (2), A. Ishaque vs The State (3) and Manik Chand vs The State (4). We have gone through the judgments of the High Courts cited at the Bar and derived considerable assistance from them for deciding the question raised. But as the question is to be primarily decided on the interpretation of the relevant provisions, we think, without any disrespect to the learned Judges, that it is not necessary to consider the said decisions in detail. Now let us look at the relevant provisions of section 207A of the Code to ascertain its intendment. Sub section (4) is the most important section vis a vis the taking of evidence. It is in two parts, the first part provides for the examination of witnesses produced by the prosecution and the second part for the examination of other witnesses. One of the fundamental rules of interpretation is that if the words of a statute are in themselves precise and unambiguous "no more is necessary than, to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature". The first part of the sub section reads: "The. Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged. " The word "shall" imposes a peremptory duty on the Magistrate to take the evidence; but the nature of the said evidence is clearly defined thereafter. The clause "as may be produced by the prosecution as witnesses to the actual commission of the offence alleged" governs the words "such persons"; (1) A.I.R. 1958 All. (3) A.I.R. 1958 Cal. (2) A.I.R. 1959 A.P. 469. (4) A.I.R. 1958 Cal. 324. 899 with the result that the duty of the Magistrate to take evidence is only confined to the witnesses produced by the prosecution. Learned counsel for the appellants contends that it could not have been the intention of the Legislature to permit the prosecution to keep back the eye witnesses in the committal court and therefore the word "produced" should be read as "cited". To accept this interpretation is to substitute the word "cited" in place of the word "produced": such a construction is not permissible, especially, when the plain meaning of the word used by the Legislature is clear and unambiguous, and the acceptance of that meaning does not make the section otiose. The phrase "if any" between the words "such persons" and the aforesaid clause emphasizes that the prosecution may not produce any such persons, in which case the obligation to examine such witnesses cannot arise. The wording of the second part of the sub section is also without any ambiguity and it reads: "and if the Magistrate is of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. " No doubt the word "may" in the clause "he may take evidence" imposes duty upon the Magistrate to take other evidence; but that duty can arise only if he is of opinion that it is necessary in the interests of justice to take the evidence. The fulfilment of the condition that gives rise to the duty is left to the discretion of the Magistrate. The duty to take evidence arises only if he is of the requisite opinion. Doubtless the discretion being a judicial one, it should be exercised reasonably by the Magistrate. If he exercises it perversely, it may be liable to be set aside by a superior court. If so, what do the words "other. witnesses" mean? Do they mean witnesses other than eyewitnesses or witnesses, eye witnesses or not, other than those produced before the Magistrate, by the prosecution? The witnesses who will depose to the prosecution case may be of different categories, namely, (i) witnesses who are eye witnesses to the actual commission of the offence alleged; (ii) witnesses who speak to the facts 900 which afford a motive for the commission of the offence; (iii) witnesses who speak to the investigation and to the facts unfurled by the investigation; and (iv) witnesses who speak to the circumstances and facts probablizing the commission of the offence, which is technically described as substantive evidence. Sub section (4) enjoins on the Magistrate a duty to examine the first category of witnesses produced by the prosecution. The word "actual" qualifying the word "commission" emphasises the fact that the said witnesses should be those who have seen the commission of the offence. We have held in interpreting the first part that the Magistrate should examine only such witnesses who are produced before him by the prosecution; but there may not be eyewitnesses in a case, or, if there are, the prosecution may not have produced all of them before the Magistrate. The second part of the sub section therefore confers a discretionary power on the Magistrate to examine any one or more of witnesses of all categories, including the eye witnesses who have not been produced by the prosecution within the meaning of the first part of the said sub section. But it is said that sub sections (6) and (7) indicate that taking of evidence by the Magistrate is a condition precedent for making an order of discharge or of committal and, therefore, the provisions of Sub section (4) must be so construed as to impose a duty on the Magistrate to examine some witnesses. Firstly, we cannot hold that the sub sections impose any such condition. The argument is that the clause in subs. (6), namely, "When the evidence referred to in subsection (4) has been taken" is a condition precedent for making an order of discharge. The adverb "when" in the clause in the context denotes a point of time and not a condition precedent. The clause means nothing more than that an order of discharge can be made under sub section (6) after the events mentioned therein have taken place. Secondly, the two clauses necessarily refer to the corresponding or appropriate situations under the earlier sub sections. The first clause will not come into play if the Magistrate has not taken any evidence. So too, in sub section (7) also the 901 adverb "when" denotes the time when the Magistrate can make the order of committal. If evidence has, not been taken, that sub section is not applicable a the Magistrate proceeds to make an order of committal on other material referred to in the sub section. On the other hand ', if the said two sub sections are construed as imposing a condition precedent for making an order of discharge or commitment, as the case may be, the said two sub sections will directly, come into conflict with the provisions of sub section When one. sub section clearly confers a discretion on the Magistrate to take or not to take evidence, the other subsections take it away. It is not permissible to create conflict by construction, when by an alternative construction all the three sub sections can be harmonized and reconciled. If the construction suggested by learned counsel for the appellants be adopted, it would also lead to an anomaly in that the Magistrate, though the documents referred to in section 173 clearly pronounce the innocence of the accused, has to go through the pretence of examining one or more witnesses to satisfy the provisions of the sub section. Reliance is placed upon section 251A of the Code relating to warrant cases whereunder the Magistrate is authorized, upon consideration of all the documents referred to in section 173 and upon making such examination of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, to discharge the accused, if he considers the charge against the accused to be groundless; but if he is of opinion that there is ground that the accused has committed an offence alleged against him, he shall frame in writing a charge against the accused. By contrasting this provision with section 207A, it is contended that if the construction put forward by learned counsel is not accepted, the obvious difference between the two. procedures indicated by the Legislature would be obliterated. We cannot agree with this contention. The difference between the two procedures is that, in a case covered by section 207A, evidence will have to be taken under certain 902 contingencies, whereas under section 251A no evidence need be taken at all. That distinguishes the different procedures under the two sections and it is not the province of the court to add any further conditions or limitations to those provided by the Legislature. We are fortified in our view by a decision of this Court in Macherla Hanumantha Rao vs The State of Andhra Pradesh (1). There the point in controversy was whether sa. 207 and 207A, inserted in the Code by the Amending Act XXVI of 1955, violated the provisions of article 14 of the Constitution. In support of the contention that they violated article 14 of the Constitution, it was sought to be made out that the provisions of section 207A of the Code, in comparison and contrast with other provisions of Ch. XVIII of the Code, prescribed a less advantageous position for the accused persons in a proceeding started under a police report than the procedure prescribed in other cases in the succeeding provisions of that chapter. This Court held that there was a reasonable classification to support the difference in the procedures. Sinha J., as he then was, who spoke for the Court, in order to meet the argument based on discri mination, considered the scope of the new section. In doing so, the learned Judge observed thus at p. 403: "The magistrate then has to record the evidence of such witnesses as figure as eye witnesses to the occurrence, and are produced before him. He has also the power ' in the interest of justice, to record such other evidence of the prosecution as he may think necessary, but he is not obliged to record any evidence. Without recording any evidence but after considering all the documents referred to in section 1973 and after examining the accused person and after hearing the parties, it is open to the magistrate to discharge the accused person after recording his reasons that no ground for committing the accused 1 for trial has been made out, unless he decides to try the accused himself or to send him for trial by another magistrate. If, on the other hand, he finds that the accused should be committed for trial, he is required to frame a charge (1) ; 903 disclosing the offence with which the accused is charged. " Then the learned Judge proceeded to consider the scope of section 208 of the Code. After having found that there was obvious difference in the procedure, the learned Judge came to the conclusion that "the Legislature has provided for a clear classification between the two kinds of proceedings at the commitment stage based upon a very relevant consideration, namely, whether or not there has been a previous inquiry by a responsible public servant whose duty it is to discover crime and to bring criminals to speedy justice". It will thus be seen that the observations of the learned Judge at p. 403 cannot be said to be obiter, as learned counsel asks us to hold, for the construction of the provisions of section 207A was necessary to ascertain whether there was reasonable classification or not. Assuming that the said observations are obiter, even then, they record the considered opinion of five learned Judges of this Court. The view we have expressed also is consistent with the said observations. Our view could now be expressed in the following propositions: (1) In a proceeding instituted on a police report, the Magistrate is bound to take evidence of only such eye witnesses as are actually produced by the prosecution in court. (2) The Magistrate, if he is of opinion that it is in the interest of justice to take evidence, whether of eye witnesses or others, he has a duty to do so. (3) If the Magistrate is not of that opinion and if the prosecution has not examined any eye witnesses, he has jurisdiction to discharge or commit the accused to sessions on the basis of the documents referred to in s, 173 of the Code. (4) The discretion of the Magistrate under sub section (4) is a judicial discretion and, therefore, in appropriate cases the order of discharge or committal, as the case may be, is liable to be set aside by a superior court. Before closing we would like to make some observations. Rarely we come across cases where the prosecution does not examine important eye witnesses, for such a procedure would entail the danger of the said witnesses being tampered with by the accused, with 904 the result that there will not be any evidence taken by the committing Magistrate which could be used as substantive evidence under section 288 of the Code. Even if the prosecution takes that risk, the Magistrate shall exercise a sound judicial discretion under the second part of sub section (4) of section 207A in forming the opinion whether witnesses should be examined or not, and any perverse exercise of that discretion can always be rectified by a superior court. Rut there may be a case where the Magistrate can make up his mind definitely on the documents referred to in section 173 without the aid of any oral evidence and in that event he would be within his rights to discharge or commit the accused, as the case may be. In this view, it is not necessary to express our opinion whether even if the Magistrate acted illegally in committing an accused without taking any evidence, the said illegality is cured either by section 537 of the Code or any other section thereof. In the result, the appeals fail and are dismissed. Appeals dismissed.

On the date fixed for the inquiry the prosecution intimated to the Magistrate that it did not intend to examine any witness in the Magistrate 's Court. The Magistrate adjourned the inquiry to consider whether it was necessary to record any evidence before commitment. On the adjourned date he expressed his opinion that no witnesses need be examined, framed charges against the appellants and committed them to the Sessions Court. The appellants contended that the Magistrate had ' no jurisdiction to commit them to Sessions without examining witnesses under sub section (4) of section 207 A of the Code of Criminal Procedure. Held, that the order of commitment was valid and the Magistrate had jurisdiction to make it 'Without recording any evidence. The position under section 207 A of the Code is that: (i) the Magistrate is bound to take evidence of only such eye witnesses as are actually produced by the prosecution before the Committing Court; 891 (ii) the Magistrate if he is of opinion that it is in the interests of justice to take evidence whether of. eye witnesses, or of others, he has a duty to do so; (iii). .the Magistrate, if he is not of that opinion and if the prosecution has not examined any eye witnesses, he has jurisdiction to discharge or commit the accused on the basis of the documents referred to in section 173 of the Code; (iv).the discretion of the Magistrate is a judicial dis cretion which is liable to be corrected by a superior Court, Macherla Hanumantha Rao vs The State of Andhra Pradesh, ; , relied on.

A long standing enmity between Baburam and Munnalal, triggered by proceedings u/s 107/117 Cr. P.C., initiated by them against each other, resulted in an attack on Baburam 's party, by Munnalal 's party, in which Baburam died. The appellants were convicted, inter alia, u/s 302/149 I.P.C., and sentenced to imprisonment for life. The factum of the recovery of four live cartridges by the Investigating Officer at the spot, was challenged by the accused at the appellate stage. The High Court examined the Sessions Judge and the Investigating Officer u/s 540 Cr. P.C. but denied the appellants an opportunity to adduce evidence to rebut this fresh evidence. Dismissing the appeals on merits, after completely excluding the, evidence of the witnesses examined by the High Court u/s 540 Cr. P.C., the Court HELD: 1. The principles on the basis of which this Court would interfere in an appeal by special leave are as follows : 1. That this Court would not interfere with the concurrent findings of fact based on pure appreciation of evidence even if it were to take a different view on the evidence; 2. That the Court will not normally enter into a reappraisement or review of the evidence, unless the assessment of the High Court is vitiated by an error of law or procedure or is based on error of record, misreading of evidence or is inconsistent with the evidence, for instance, where the ocular evidence is totally inconsistent with the medical evidence and so on; 3. That the Court would not enter into credibility of the evidence with a view to substitute its own opinion for that of the High Court; 4. That the Court would interfere where the High Court has arrived at a finding of fact in disregard of a judicial process, principles of natural justice or a fair bearing or has acted in violation of a mandatory provision of law or procedure resulting in serious prejudice or injustice to the accused; 5. This Court might also interfere where on the proved facts wrong inferences of law have been drawn or where the conclusions of the, High Court are manifestly perverse and based on no evidence" [68C G] Dalbir Kaur and Ors. vs State of Punjab, [1977] 1 S.C.R. 280; followed. Judges should not be allowed to become witnesses in cases which they decide, otherwise that would lead to most anomalous results and would undermine the confidence of the people in the judiciary. A Judge has to decide the cage according to the evidence and the circumstances before him and it cannot 60 be allowed to fill up gaps left by the prosecution or the defence by giving statement on oath before a Court of law. Under section 540 of the Cr. P.C. the High Court may examine the Sessions Judge or the Trial Court, when very necessary, on very rare occasions where all other remedies are exhausted. [64D H, 65A] The Most Noble the Duke of Buccleuch and Queensberry and the Metropolitan Board of Works (1871 2) V E and 1, Appeal Cases 418; Regina vs Gazard, ; applied. The condition of giving an opportunity to the accused to rebut any fresh evidence sought to be adduced against him either at the trial or the appellate stage, is implicit under section 540 of the Cr. P.C. and a refusal of the same amounts not only to an infraction of the provisions of the Code, but also of the principles of natural justice, and offends the famous maxim Audi Alteram Partem. [65 D E H] Channulal and Anr. vs Rex, A.I.R. 1949 All. 692, Rangaswami Naicker vs Muruga Naicker, A.I.R. 1954 Mad. 169; Shugan Chand and Anr. vs Emperor, A.I.R. 1925 Lahore 53 1; The Queen vs Assanoollah, 13 S.W.R. (Crl.) 15; approved. Documents like the Inquest report, seizure lists or the site plans consists of two parts, one of which is admissible and the other is inadmissible. That part of such documents which is based on the actual observation of the witness at the spot being direct evidence in the case, is clearly admissible, under section, 60 of the evidence Act, whereas the other part which is based on information given to the Investigating Officer, or on the statement recorded by him inadmissible under section 162 Cr. P.C., except for the limited purpose mentioned in that section. [72G H, 73A] Baladin and Ors. vs State of U.P., A.T.R. ; Surian and Ors. vs State of Rajasthan ; Ch. I Rizak Ram vs Ch. J. section Chouhan and Ors. , ; Caetano Piedade Fernandes and Anr. vs Union Territory of Goa. Daman and Diu, Panaji, Goa ; fit Singh State of Punjab, A.I.R., 1976 S.C. 1421; distinguished.

% This Criminal Appeal against the judgment and order of the Gujarat High Court and the connected Special Leave Petitions against the orders of the various Designated Courts in the State constituted under the Terrorist & Disruptive Activities (Prevention) Act, 1987, raised common questions for consideration. It was enough to set out the facts in the appeal. There was an armed clash involving the appellants, as a result whereof the police apprehended the appellants and produced them before the Designated Court. The appellants moved an application for bail which was rejected by the Designated Court. The appellants moved the High Court under section 439 read with section 482 of the Code. The High Court rejected the bail application on the ground that it had no jurisdiction to entertain such an application under section 439 of the Code or by recourse to its inherent powers under section 482. Aggrieved by the decision of the High Court, the appellants appealed to this Court for relief by special leave. On the view the Court took as to the nature of the function of the Designated Courts in dealing with the bail applications within the constraints of section 20(8), it was not necessary to deal with the facts of the connected special leave petitions directed against the orders of the different Designated Courts, rejecting the bail applications. Allowing, the appeal and the special leave petitions partly, the Court, ^ HELD: These cases mainly raised two questions of substantial 226 importance. The first was as to the jurisdiction and powers of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by recourse to its inherent powers under section 482 to a person held in custody for an offence under sections 3 and 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such a person in view of the limitations placed on such power under section 20(8) of the Act. [246G H] The Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482. Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person for an offence punishable under the Act or any rule made thereunder. There is contrariety between the provisions of the Act and the Code. Under the Code, the High Court is invested with the various functions and duties in relation to any judgment or order passed by a criminal court subordinate to it. The Act creates a new class of offences called terrorist acts and disruptive activities and provides for a special procedure for the trial of such offences. The jurisdiction and power of a Designated Court are derived from the Act and it is the Act that must primarily be looked to in deciding the question before the Court. Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code. [239B C; 240A,D] No doubt, the legislature has, by the use of the words 'as if it were ' in section 14(3) of the Act, vested a Designated Court with the status of a Court of Session, but the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, in so far as applicable. [240D F] Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person for an offence punishable under the Act or any rule thereunder, yet that result must, by necessary implication, follow. The source of power of a Designated Court to grant bail is not section 20(8) of the Act, as it only places limitations on such power, but it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code. The 227 Designated Court is a 'court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code. The exercise of the power to grant bail by a Designated Court is not only subject to the limitations placed by section 20(9) which in terms provides that the limitations on grant of bail specified in section 20(8) are in addition to the limitations under the Code or any other law for the time being in force on the grant of bail. It, therefore, follows that the power derived by a Designated Court to grant bail to a person for an offence under the Act is derived from the Code and not section 20(8) of the Act. The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act. [241B E] In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court. It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an inter locutory order, of a Designated Court. While it is true that Chapter XXXIII of the Code is still preserved, as otherwise the Designated Court would have no power to grant bail, still the source of power is not section 439 of the Code but section 437, being a court other than the High Court or the Court of Session. Any other view would lead to an anomalous situation. If it were to be held that the power of a Designated Court to grant bail was relatable to section 439, it would imply that not only the High Court but also the Court of Session would be entitled to grant bail. The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437. It would run counter to the express prohibition contained in section 20(8) of the Act. The Court upheld the view of the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code. [243G H; 244A B,D] As regards the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8), the sub section in terms places fetters on the power of a Designated Court on the grant of bail and limitations specified therein are in addition to the limitations under the Code. In view of these more stringent conditions, a Designated Court should carefully examine every case before it for finding out whether the provisions of the Act apply or not. A prayer for bail ought not to be rejected in a mechanical manner. [244E G] The Designated Courts had not in these cases carefully considered the facts and circumstances and had rejected the bail applications mechanically. In the criminal appeal, the facts were already set out. In 228 the special leave petitions Nos. 2369 and 2469 of 1967, the prosecution had been started at the instance of the management of a textile mill. The other cases had arisen out of communal riots. Normally, such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out. The Designated Courts are under a duty to examine the circumstances closely from this angle. That had not been done. It was, therefore desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration. [246D F] The appeal and the special leave petitions partly succeeded. While upholding the judgment and order of the High Court, dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973, the Court granted leave and set aside the impugned orders passed by the various Designated Courts in the State, dismissing the applications for bail, and directed them to consider each particular case on merits as to whether it fell within the purview of section 3 and/or section 4 of the Act, and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act. Where the Designated Courts find that the acts alleged in the police report or complaint of facts under section 14(1) do not fall within the purview of section 3 and/or section 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts. The accused persons, enlarged on bail by this Court, should continue to remain on bail until their applications for bail were dealt with by the Designated Courts with advertence to the observations made above. [246F H; 247A B] In Re the Special Courts Bill, 1978, [1979] 2 S.C.R. 476; Balchand Jain vs State of Madhya Pradesh, ; ; Ishwar Chand vs State of Himachal Pradesh, I.L.R. (1975) H.P. 569 and V.C. Shukla vs State through C.B.I., , referred to.

The first respondent challenged the appellant 's election to the Sangli City Municipality held in June 1967 under the Maharashtra Municipalities Act, 1965. It was alleged that the respondent had published and circulated pamphlets containing defamatory statements against the respondent and in particular instigating Muslim ' voters to vote against him by arousing their religious sentiments. At the trial of the petition the respondents applied to have two witnesses examined but the Trial Judge rejected the application, Later, however, the same two witnesses were called by the trial judge as court witnesses. The Trial Court allowed the petition and disqualified the appellant from being a member of a Municipality for five years. A petition under articles 226 and 227 of the Constitution by the appellant was rejected in limine by the High Court. In appeal to this Court it was contended inter alia by the appellant (i) that the trial court was wrong in calling as court witnesses the same two witnesses who had been cited as the respondent 's witnesses and having earlier rejected the respondent 's application to call them; (ii) on the evidence the trial court 's finding was not justifiable; (iii) that the result of the election was published in the Gazette on the 8th June as well as 151th June but the limitation of 10 days ran from 8th June and the petition was therefore time barred; (iv) the first issue which was decided against the appellant was confusing and misleading whereby the appellant had been denied a fair trial; (v) the order of the Judge disqualifying the appellant for a period of five years was unduly harsh. HELD: Dismissing the appeal : (i) Although the trial court 's earlier order refusing to issue summons to the two witnesses was not justifiable, ' under section 21(7) of the Maharashtra Municipalities Act, 1965, the Trial Judge is given powers wider than those given by the Code of Civil Procedure under Order 16, Rule 14, as the section does not prescribe any pre requisite to the examination of a person as a court witness as envisaged by the Code of Civil Procedure. The trial Judge therefore had jurisdiction to call the two persons as witnesses under the provisions of the Act. [972 D] R. M. Seshadri vs G. Vasanta Pai, ; , referred to. (ii) On the evidence, no exception could be taken to the trial Judge deciding the issue against the appellant on the facts and circumstances of the case. It could not be said that there was no evidence on which the Judge could have come to that conclusion. When the trial Judge accepted 967 the evidence with regard to the distribution of the pamphlets by the appellant, the High Court, which was not hearing an appeal, could not be expected to take a different view in exercising jurisdiction under articles 226 and 227 of the Constitution and there was no reason shown to this Court to interfere with the order of the High Court. [975 A] (iii) The appellant could have set up the first Gazette publication as the one fixing the period of limitation in which case the trial. Judge would have been required to go into the matter. But the appellant had precluded himself from doing so by his unconditional acceptance of the statement in the petition that the result was published on 15th June. There was no error apparent on the face of the record before the High Court and consequently he jurisdiction under article 226 of the Constitution could not have been exercised on the facts of the case by the issue of a writ of certiorari. Neither could the High Court set aside the order of the trial court under article 227 of the Constitution under which the High Court 's power of superintendence is confined to seeing that the trial court had not transgressed the limits imposed by the Act. On the facts of the case the High Court was not called upon to go into this question. [974 C D] (iv) It could not be concluded that because of the want of preciseness in the issues framed the whole trial was vitiated. The appellant knew the points he had to meet. Although the evidence about the disribution of the pamphlets was not beyond reproach, it was not for the High Court to take the view that the order ought to be quashed on the ground that there was no evidence. [974 F] (v) The allegations of corrupt practices against the appellant were of a serious nature and if be was found guilty, the period of five years ' disqualification could not be considered inappropriate.

The appellant and nine others were tried before the Sessions Judge for offences of rioting and being members of an unlaw ful assembly and causing in furtherance of their common object death of one person and serious injuries to four others. The appellant was also charged for the substantive offence of causing the death by gun shot injuries. All the accused persons were acquitted at the trial. In appeal against acquittal by the State, the High Court set aside the acquittal of the appellant and sentenced him to imprisonment for life under section 302 Indian Penal Code and confirmed the order in respect of the rest. The appellant 's main con tention in this Court was that under section 161 of the Code of Criminal Procedure it was obligatory upon an investigating officer to record the statements of witnesses examined by him and if those statements were not made available to the accused at the trial, a valuable right was lost to the accused, and the trial must on that account alone be regarded as vitiated. 34 2 section C. India/64 522 Held : (i) Where the circumstances are such that the court may reasonable infer that prejudice has resulted to the accused from the failure to supply the statements recorded under section 161, the court would be justified in directing that the convict on be set aside and a proper case to direct that the defect be rectified in such manner as the circumstances, may warrant. It is only where the court is satisfied, having regard to the manner in which the case has been conducted and the attitude adopted by the accused in relation to the defect, that no prejudice has resulted to the accused that the court would, notwithstanding the breach of the statutory provisions, be justified in maintaining the conviction. On the facts of the present case no prejudice was caused to the accused and the plea of prejudice was neither raised in the High Court, nor any substantial argument in support of the same was advanced in this Court. Narayan Rao vs State of Andhra Pradesh, A. I. R. 1957 section C. 737 and Pulukuri Kotyya vs Emperor, L. R. 74 I. A. 65, relied on. Baliram vs Emperor, I.L.R. , Maganlal vs Em peror, I.L.R. and Maroti Mahagoo vs Emperor, I.L.R. , disapproved. (ii) In the present case the Sessions Judge did not found his conclusion upon the demeanour of the witnesses and the High Court rightly observed that the presence of the four injured persons at the scene of offence was assured by the evidence of injuries, and must be regarded as established beyond reasonable doubt. Sheo Swarup vs King Emperor, L. R. 61 I. A. 398, referred to.

Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from, two suits and separate judgements. Civil Appeal No. 931 of 1977 arose out of the suit for possession by the Gram Panchayat against the descendants of the grantee of inam. The suit was dismissed by the Trial Court and was confirmed by the High Court and the High Court granted leave under Art.133. Civil Appeal No. 200 of 1978 arose out of the suit for possession and mesne profits which was laid by the descendants of the grantee of inam. The pleadings are the same in both cases. A Zamindar granted 100 acres of land inam to dig, preserve 532 and maintain a tank in favour of the predecessors of the respondents of C.A. No. 931/77. In 1700 A.D.i.e. , 1190 Fasli, the tank was dug by the villagers and ever since, the villagers were using the tank for their drinking purpose and perfected their right by prescription. In course of time the tank was silted up and fresh water existed only in and around 30 acres. The grantee 's descendants respondents did not make any repairs, Grass and trees had been grown in the rest of the area and was being enjoyed. Under section 3 of the A.P.Inams ( Abolition and Conversion into Ryotwari) Act, ( Act XXXVII of 1956) Ryotwari Patta was granted to the respondents in individuals capacity and on appeal the Revenue Divisional Officer confirmed the same and it became final, as it was not challenged any further. On 7.7.1965, the Gram panchayat the appellant in C.A. No. 931/77 took unilateral possession of the tank and ever since , it was exercising possession, supervision and control over it. After the expiry of three year from the date of dispossession, the respoondents filed a suit for possession based on title. Earlier thereto the appellant Gram Panchayat had filed a suit for possession. The Trial Court found that the tank was a 'public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 and that the respondents had acquired title by adverse possession. Accordingly the suit for possession was decreed relegating the filing of separate application for mesne profit. On appeal, the High Court reversed the decree and held that the tank was a public tank, and the tank and the lands stood vested in the Gram Panchyat under A.P. Gram Panchayat Act,1964. Since, the Gram Panchayat was in possession from July 7, 1966, though dispossessed the respondents forcibly and as the suit was not under section 6 of the , but one based on title, it called for interference and dismissed the suit. This court granted leave to appeal under article 136. 533 The respondents in C.A. No. 931/77 (the appellants in C.A. No. 200/78) contended that in view of the entries of the Inam Fair Register, the tank was a public trust and not a public tank; they could not be dispossessed until recourse made under section 77 of the A.P. Charitable and Religious Institutions and Endowments Act; that under the Gram Panchayat Act, the lands did not vest in the gram Panchayat; and that since the grant of ryotwari patta under the Inams Act had become final, section 14, thereof barred the jurisdiction of the Civil Court to entertain the suit. The appellant Gram Panchayat in C.A. No. 931/77 (the respondents in C.A. No. 200/78) contended that the tank and the appurtenant land was correctly held as public tank by the High Court that by operation of sections 85 and 64 of the Gram Panchayat Act, the land and the tank stood vested in the Panchayat, that the entries in the Inam Fair Register established that the grant of land was for preservation, maintenance and repairs of the tank and therefore, the grant should be in favour of the institution, i. e., the tank and the respondents thereby did not acquire any title, that ryotwari patta was only for the purpose of land revenue; that the Gram Panchayat acquired absolute right, title and interest in the land; and the suit was not a bar in the facts of the case. Dismissing both appeals, this Court HELD: 1.01. Any property or income, which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in Gram Panchayat and be administered by it for the benefit of the villagers or holders. The lands or income used for communal purpose shall either belong to the Gram Panchayat or has been administered by the Gram Panchayat. It is not the case of the Gram Panchayat nor any finding recorded by the courts below to that effect. section 64 is not attracted though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle. [554D F] 1.02. All public water courses, springs, reservoirs, tanks, cisterns, etc. and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those used by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the Gram Panchayat under section 85(1) and be subject to its control. [554F G] 534 2.01. The word`vesting ' in section 85 would signify that the water courses and tanks, lands etc. used by the public to such an extent as to give a prescripvtive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat. It confers no absolute or full title. It was open to the Government, even after vesting, to place restriction upon the Gram Panchayat in the matter of enjoyment and use of such tanks, and appurtenant lands etc. The assumption of management by the Government would be subject to the prescriptive right of the villagers, if any. The vesting of the tanks etc. in the Gram Panchayat was with absolute rights and the village community rights would over ride against rights of the Government. [546C F] 2.02. The tank is a public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section (3) of section 85 of the Act and subject to the prescriptive right in the water, water spread tank for common use. [547A B] Gram Panchayat, Mandapaka & Ors. V. Distt. Collecctor, Eluru & Ors. , approved. Anna Narasimha Rao & Ors. vs Kurra Venkata Narasayya & Ors., , OVER RULED. 3.01. Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Acts like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc. give absolute rights or vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc. free from all encumbrances and the preexisting rights in the other land stood abolished and will be subject to the grant of Ryotwari Patta etc. [546F H] 3.02 Grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment, subject to payment of the land revenue to the State. [546H] 3.03. The entries in the Inam Fair Register are great acts of the State and coupled with the entries in the survey and settlement record 535 furnishes unimpeachable evidence. On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose, though it was in the name of the individual grantee. The grant was for the preservation and maintenance of the tank. [548C D] 3.04. The grant was for the institution. Under section 3 of the Inams Act, the enquiry should be, whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution. In view of the finding that the grant was for the preservation and maintenance of tank, the Inam land in an inam village was held by the institution, namely, the tank. Ryotwari patta shall, therefore, be in favour of the institution. Undoubtedly the ryotwari patta was granted in favour of the descendants. [548D F] 3.05. The pattas were obtained in the individuals name, the trustees of an institution cannot derive personal advantage from the administration of the trust property. The grant of patta was for the maintenance of the trust. [548G] 3.06. The descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank. They rendered the tank disused and abandoned. By operation of section 85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision. [550E F] 3.07. A hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein. Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply. Therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise. [550F G] Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 P.C. 62 at P. 65; Syed Md. Mazaffaral Musavi vs Bibi Jabeda & Ors., AIR 1930 Pc 1031; Bhojraj vs Sita Ram & Ors, AIR 1936 P.C. 60; M. Srinivasacharyulu & Ors. V. Dinawahi Pratyanga Rao & Ors., ; Ravipati Kotayya & Anr. vs Ramaswamy Subbaraydu & Ors., , referred to. 536 K.V. Krishna Rao vs Sub Colletor, Ongole, ; , followed. Nori Venkatarama Dikshitulu & Ors. vs Ravi Venkatappayya & Ors., , approved. Krishan Nair Boppudu Punniah & Ors. vs Sri Lakshmi Narasimhaswamy Varu, ; Bhupathiraju Venkatapathiraju & Ors. V. The President Taluq Board, Narsapur & Ors.; [1913] 19 1.C. 727 (Mad.) (D.B.), distinguished. Tagore Law Lecture, ``Hindu Religious Endowments and Institutions at p. 6, distinguished. In the laws made to restructure the social order creating rights in favour of the citizens and conferring power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and giving finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication Departure in the allocation of the judicial functions would not be viewed with disfavor for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws. Courts have to consider, when questioned, why the legislature made the departure. The reason is obvious. The tradition bound civil courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C. are not suited to the needed expeditious dispensation. The adjudicatory system provided in the new forums is cheap and rapid,. The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law. Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness. {552D H] 4.02. In order to find out the purpose in creating the Tribunals under the statues and the meaning of particular provisions in social legislation, the Court would adopt the purposive approach to ascertain the socials ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them. Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach. The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisa 537 ged in the statute under consideration. [552H 553B] 4.03. The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve ``social promises ' ' set out in the Preamble, Directive Principles and the Fundamental Rights of the Constitution. [553d] 4.04. Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate. In cases where exclusion of the civil court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statue in question and the adequacy of sufficiency of the remedy provided for by it may be relevant, but cannot be decisive. Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and inconceivable circumstances might become even decisive. [553G 554B] 4.05. The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact. Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the Tribunal has to consider. At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not. There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise have except such tribunals of limited jurisdiction when the statue not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly. If it has jurisdiction to do right, it has jurisdiction to do wrong. It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final. [554B F] 4.06. The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the civil court. [561D E] 538 4.07. The glimpse of the object of the Inams Act, scheme, scope and operation thereof clearly manifest that Inams Act is a self contained code, expressly provided rights and liabilities; prescribed procedure; remedies; of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law. The jurisdictional findings are an integral scheme to grant or refuse ryotwari pattta under section 3, read with section 7 and not collateral findings. It was subject to appeal and revision and certiorari under Art 226. The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them. The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive. The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable. The necessary conclusion would be that the civil suit is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act. [561E 562A] Deena vs Union of India, [1984] ISCR, referred to. Kamala Mills Ltd. vs State of Bombay, ; ; Secretary of State vs Mask & Co., [1940] L.R. 67 I.A. 222; Raleigh Investment Co. Ltd. V. Governor General in Council, L.R. 74 I.A. 50; Firm and Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , ; Deesika Charyulu vs State of A.p., AIR 1964 SC 807; Dhulabhai & Ors vs State of M.P. & Anr., ; ; Hati vs Sunder Singh, ; ; Muddada Chayana vs Karam Narayana and Anr. ; , ; T. Munuswami Naidu vs R. Venkata Reddy, AIR 1978 A.P. 200; O. Chenchulakshmamma & Anr. vs D. Subramanya Reddy; , ; A. Bodayya & Anr. V. L. Ramaswamy(dead) by Lrs., ; Doe vs Bridges, at p. 359; Premier Automobiles Ltd. vs Kamlakar Shantaram Wadke and Ors., ; ; State of Tamil Nadu vs Ramalinga Samigal Madam, ; ; Syamala Rao vs Sri Radhakanthaswami Varu, ; Jyotish Tahakur & Ors. vs Tarakant Jha & Ors., [1963] Suppl. 1 SCR 13; Sri Athmanathaswami Devasthanam vs K. Gopalaswami Aiyangar, {1964] 3 SCR 763; Sri VEdagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; ; Shree Raja Kandragula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh, ; ; Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors., ; ; Anne Basant National Girls High School vs Dy. 539 Director of Public Instruction & Ors., ; Raja Ram Kumar Bhargava (dead) by Lrs. vs Union of India, [1988] 2 SCR 352; Pabbojan Tea Co., Ltd., etc. vs the Dy. Commissioner, Lakhimpur, etc. ; , and K. Chintamani Dora & Ors. vs G. Annamnaidu & Ors., ; , distinguished. D.V. Raju vs B.G. Rao & Anr., , approved. P.pedagovindayy vs Subba Rao, , over ruled. The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statue of rule. [545B C] 5.02. The word [vest '], means, to give an immediate, fixed right of present or future enjoyment, to accrue to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff. [545C D] 5.03. The word, `vest ', in the absence of a context, is usually taken to mean, `vest ' in interest rather than vest in possesion '.[545E F] 5.04. `Vest '. ``generally means to give the property in ' '. [545E F] 5.05. The word, `vested ' was defined, `as to the interest acquired by public bodies, created for a particular purpose, in works, such as embankments, whcih are `vested ' in them by statute. ' {545D E] 5.06. ``Vesting ' ' in the legal sense means, to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '. [545C] Chamber 's Mid Century Dictionary at P. 1230; Blacks Law Dictionary, 5th Edition at P. 1401; Stroud 's Judicial Dictionary, 4th Edition Vol, 5 at P. 2938, Item 12, at P 2940, Item 4 at P. 2939; Port of London Authority vs Canvey Island Commissioners, {1932] 1 Ch. 446; Fruit and Vegetable Merchants Union vs Delhi Improvement Trust, ; , referred to. Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession. The need to grant decree for possession in favour of the Gram Panchayat is thus redundant. The suit 540 of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed. Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank whcih stood vested under section 85 of the Act in the Gram panchayat, the descendants are divested of the right and interest acquired therein. Thus the suit of the descendants also is liable to be dismissed. [562A C]

The appellant lived with his father A in a house adjoining that of the deceased G who lived there with his two sons and a daughter. An argument developed one evening between the appellant and one of the sons of G. When G intervened, the appellant 's father A raised a 'lalkara ' asking the appellant to finish him off. Thereupon the appellant shot and killed G. By this time G 's two sons, his daughter and one M who lived nearby had arrived and witnessed the occurrence. At the trial the appellant 's defence was a pica of alibi but the Trial Court rejected the defence and convicted the appellant of G 's murder and sentenced him to death. in appeal, the High Court did not go into the defence evidence because the counsel appearing for the appellant admitted that there was no substance in it. The High Court accordingly dismissed the appeal and confirmed the sentence of death. In appeal to this Court against the conviction and the sentence it was contended that the High Court in not examining the defence evidence for itself, committed an error and did not properly discharge its duties. HELD : (i) Although ordinarily, in a criminal appeal against conviction, the appellate Court, under section 423 of the Code of Criminal Procedure, can dismiss the appeal if the Court is of the opinion that there is no sufficient ground for interference and it is not necessary for the appellate Court to examine the entire record for the purpose of arriving at an independent decision, the position is different where the appeal is by an accused who is sentenced to death, so that the High Court dealing with the appeal has before it, simultaneously with the appeal,a reference for .confirmation of the capital sentence under section 374 of the Code. On a re ference for confirmation of sentence of death, the High Court is required to proceed in accordance with sections 375 and 376 of the Code of Criminal Procedure and the provisions of these sections make it clear that the duty of the High Court, in dealing with the reference, is not only to see whether the order passed by the Sessions Judge Is correct but to examine the case for itself and even direct a further enquiry or the taking of additional evidence if the Court considers it desirable in order to ascertain the guilt or the innocence of the convicted person. [407 D G] Jumman and Others vs The State of Punjab, A.I.R. 1957, S.C. 469; Ram Shanker Singh & Ors. vs State of West Bengal, [1962] Supp. 1 S.C.R. 49 at p. 59; applied. (ii)(Upon an examination of the entire evidence by the Court) : No s had been made out for interference with, the appellants con[409 D E] 405 Maaslti vs State of U.P., ; at p. 144; referred to. (iii) The sentence of death must be set aside and instead the appellant sentenced to imprisonment for life Although ordinarily this Court, in exercise of its power under Art 136, does not interfere with a sentence, in the present case there were some special features which had to be taken into account : even according to the prosecution, the murder of G by the appellant was not premeditated; the act of firing at him a to be that of a hot headed person who was incited to do so by his father; the murder was not in any way cruel or brutal. In all these circumstances, the ends of justice would be met if the lesser penalty prescribed by law was awarded to the appellant. [413 G H]

The appellant was tried by a Sessions judge and a jury for offenses under sections 477 A and 408, Indian Penal Code. A large volume of documentary evidence was in English and the statement of one of the principal witnesses was given in English. The main question for decision was the authorship of the forged documents. It was found that the jurors were not well versed in English and were not in a position to decide the main question. The jury returned a unanimous verdict of not guilty and accepting the verdict the Sessions judge acquitted the appellant. The State appealed to the High Court. In the memorandum of appeal only one ground was taken, "that the order of acquittal is against the weight of evidence on the record and contrary to law. " The High Court accepted the appeal and convicted the appellant. The appellant contended that the appeal before the High Court was incompetent as no particular errors of law, upon which alone an appeal lay under section 418, Code of Criminal Procedure, were set out in the memorandum of appeal and that the trial in the Session Court was no trial in the eye of law. 641 Held, that a memorandum of appeal is meant to be a succinct statement of the grounds upon which the appellant proposes to support the appeal. The practice prevailing in the Allahabad High Court of not taking specific grounds either of law or fact is to be disapproved even assuming that section 419 of the Code of Criminal Procedure does not in terms require the setting out of such grounds. Held further, that the trial before the Session judge was coram non judice on account of the incompetence of the jury to decide the question of the authorship of the forged documents. In such a case the question of prejudice does not arise as it is not a mere irregularity, but a case of "mis trial." Ras Behari Lal vs The King Emperor, (1933) L.R. 60 I.A. 354 followed.